Sloman v. Cutler

This suit by plaintiffs, husband and wife, named as vendors of property, owned by husband, in an executory land contract, against defendant Cutler, assignee of the purchaser, Rose M. Braidel, is in assumpsit to recover instalments of the purchase price. Defendant had judgment. Plaintiffs have appealed.

The contract provides against assignment by the purchaser without written consent of the vendor, and this is coupled with a provision for forfeiture for breach.

Defendant accepted the contract by assignment from the purchaser, the vendors consenting thereto, and the assignee assuming performance of the contract, and this is asserted to establish contract relations between plaintiffs, vendors, and defendant, assignee. On the other hand, it is urged that the contract provision against assignment is void as a restraint on alienation, that the asserted contract between the parties is without consideration, and that, therefore, there is no privity of contract.

On the question of whether the contract provision against assignment by the purchaser is void as a restraint on alienation, our investigation proved the correctness of the statement, in 27 R. C. L. p. 564, that the law on the question is not clear. We invited Professor Edwin C. Goddard of the law faculty of the University of Michigan to file brief amicuscuriæ. We have been aided by his excellent brief, as we gratefully acknowledge.

If one's interest in property is absolute, as a fee simple, restriction on his right of alienation is void as repugnant to the grant. This is because violation of the restriction affects no interest but his own. Mandlebaum v. McDonell, 29 Mich. 78 (18 Am. Rep. 61). Where the grantor retains an interest in the property granted, such as reversionary interest to him as lessor, the interest generally will support the imposing of a restriction on alienation.

The interest remaining in a vendor in a land contract is not a reversion, but it is an important interest, commonly the greater interest and near the value of the property, and his imposing such restriction is sustainable as within his right to preserve his security under the contract. In Peters v.Canfield, 74 Mich. 498, such restriction was, by implication, treated as valid. As pointed out in the mentioned brief, many cases have assumed validity of such a stipulation, often holding that it may be waived. Maday v. Roth, 160 Mich. 289 (136 Am. St. Rep. 441), cited in 39 Cyc. p. 1646; Foley v.Dwyer, 122 Mich. 587; Rodenhouse v. De Golia, 198 Mich. 402;Shively v. Semi-Tropic L. W. Co., 99 Cal. 259 (33 P. 848);Laguna L. W. Co. v. Greenwood, 92 Cal.App. 570 (268 P. 699); Wilson v. Reuter, 29 Iowa, 176;McPheeters v. Ronning, 95 Minn. 164 (103 N.W. 889); Spilman v.New Rockford Inv. Co., 52 N.D. 169 (201 N.W. 691); Park v.McCoy, 121 Wn. 189 (208 P. 1098).

Others have sustained validity: Olcott v. Heermans, 3 Hun, 431; Cranston v. Wheeler, 37 Hun, 63; Farone v. Hall,128 Misc. Rep. 794 (220 N.Y. Supp. 1); Smith v. Martin,94 Ore. 132 (185 P. 236); Boyd v. Bondy, 113 Wn. 384 (194 P. 393).

In neither Cutler v. Lovinger, 212 Mich. 272, nor Hull v.Hostettler, 224 Mich. 365, is there a denial that, as against the vendor, the restriction is valid. In the first case the vendor was not a party. In both cases the assignment by vendee was treated as valid, and such assignments are generally so regarded as between assignor and assignee as are assignments by lessees, it being considered that the restriction is in favor of the vendor or the lessor, his enforcing it is optional, he may waive it, and it is considered waived in many cases on rather slight evidence.

While the contract remains executory and the vendor has interest in preserving his security, the validity of the restriction as against the vendor is sustained by the great weight of authority, and in justice it ought to be sustained.

Plaintiffs here, vendors, were not required by law to consent to the assignment, the restriction was valid as against them, and consent is consideration for defendant's acceptance of assignment and assumption of performance of contract.

Blanks were left in the brief form of assignment to defendant, in the brief form of Mr. Sloman's consent, and in the brief form of defendant's assumption of performance, all of which were in effect indorsed upon the contract. When the documents are read together, the blunders are so evident as to correct themselves (Smith v. Lloyd, 29 Mich. 382; Peck v.Houghtaling, 35 Mich. 126), and the blanks may be supplied from the writings as a whole. 13 C. J. p. 308.

And, as this was Mr. Sloman's property and his wife joined in execution of the contract solely to bar dower, Mr. Sloman's consent to the assignment was sufficient. Marshall v. Reed,237 Mich. 336.

No other question requires discussion.

Reversed, with costs, and remanded for judgment for plaintiffs.

McDONALD, POTTER, SHARPE, NORTH, FEAD, WIEST, and BUTZEL, JJ., concurred.