Township of Big Prairie v. Big Prairie Township Grange No. 935 , 286 Mich. 268 ( 1938 )

In 1903, the voters of Big Prairie township, Newago county, wanted to erect a town hall. They voted to raise $400 to be spread as a tax to enable them to carry out such purpose. In September, 1903, the supervisor, justice of peace and township clerk of the township entered into an agreement with the Big Prairie Grange No. 935, according to the provisions of which the Grange was to help in the erection of the building by contributing $200 in cash, labor or material, in return for which, the Grange would receive a lease of the second floor of the building for 99 years, subject to termination at the "pleasure" of the Grange.

A written instrument purporting to be such contract of lease was signed by the three township officers above mentioned. The building was erected, and no question is raised regarding the fulfillment of the terms of this arrangement by the Grange. There is evidence the Grange contributed two dollars for every one contributed by the township. The lease was not signed by defendant Grange, and there was no evidence presented of any resolution adopted by the township board authorizing the lease; but the lease itself, recorded by the supervisor, was recorded in the office of the register of deeds of Newago county. During the past 33 years the Grange has had the continuous use of the leased premises consisting of the second floor of the said building, while during the same time, the township has used the first floor as the township hall. In 1936, plaintiff township brought proceedings before the circuit court commissioner to oust the Grange from possession. On such hearing plaintiff's proceeding was dismissed, and, on appeal to the circuit court, the decision of the circuit court commissioner was affirmed. Plaintiff now appeals from the determination of the cause in circuit court.

Plaintiff claims that the lease is void under the statute of frauds (3 Comp. Laws 1929, § 13411 [Stat. Ann. § 26.906]) because it was not signed by the lessee; that it is invalid because it was not authorized by the township board and not signed on behalf of the board; and that the lease is unconscionable and a fraud upon plaintiff.

A lease, signed by the lessor, containing covenants on the part of the lessee, is valid, though not signed by the lessee, where such lessee takes and retains possession under the terms of the lease. Bakker v. Fellows, 153 Mich. 428 . The township had authority to build a town hall which might be used in all or in part for township purposes. 1 Comp. Laws 1929, § 2366 (Stat. Ann. § 5.2361). A township has authority to purchase and hold real and personal estate, and to convey, alienate and dispose of the same, as well as to make all contracts that may be necessary for the exercise of its corporate powers, and any orders for the disposal of its corporate property which is judged expedient. I Comp. Laws 1929, § 957 (Stat. Ann. § 5.2). It follows that the township did have authority to lease that portion of its town hall not necessary for township purposes.

The township board having authority to enter into such lease, it is presumed that the officers acted legally in signing the lease. American LaFrance Foamite Industries, Inc., v. Village of Clifford, 267 Mich. 326. The fact that the method of signing the lease and the form thereof may not have been legally proper, although the result was legal, does not permit the township to retain the fruits of the contract and at the same time deny the validity of the lease.Coit v. City of Grand Rapids, 115 Mich. 493.

It is further claimed that the township officers during many years in the past did not know of such a lease arrangement, and that there was no evidence that the township had ever approved it. The lease of this property was recorded in the office of the register of deeds. Any inspection of the record of title would have disclosed the situation. It was or should have been known to the township officers during the 33 years that the Grange was in possession and was not paying rental for the use of such public property. During that time no question was raised as to the right of the Grange to possession. Under these facts, persuasive inferences arise and it must be presumed in such circumstances that the township approved the arrangement.

Where such approval exists over such a period of time as in this case, the township is estopped from denying the authority of its officers to execute such lease. See A. J. SmithConstruction Co. v. City of Marine City,267 Mich. 367.

We are asked to hold that the lease was unconscionable and a fraud upon plaintiff. Defendant contributed more than the agreed amount; it assisted in the building of the town hall, and, in all probability, as appears from the evidence, exceeded the contribution of plaintiff itself for this purpose. It is possible that the building never would have been constructed, especially at the time it was, without the execution of the lease agreement and the subsequent aid from defendant. The transaction was fair and equitable, inspired by sentiments of cooperation and good citizenship. As a result, the interest of the public was thereby benefited.

Judgment affirmed, with costs to defendant.

WIEST, C.J., and BUSHNELL, SHARPE, POTTER, CHANDLER, and NORTH, JJ., concurred. BUTZEL, J., took no part in this decision.