Metropolitan Life Insurance v. Foote , 95 Mich. App. 399 ( 1980 )

95 Mich. App. 399 (1980) 290 N.W.2d 158

METROPOLITAN LIFE INSURANCE COMPANY
v.
FOOTE

Docket Nos. 43239, 43342.

Michigan Court of Appeals.

Decided February 6, 1980.

Dickinson, Wright, McKean, Cudlip & Moon (by Judson Werbelow and Gregory L. McClelland), for plaintiff.

Fraser, Trebilcock, Davis & Foster (by Douglas J. Austin and Darrell A. Lindman), for defendant Donald Foote, Trustee of the Lester C. Foote Trust No. 1.

Blackburn & Backus, for defendant Octagon Financial.

Before: R.M. MAHER, P.J., and MacKENZIE and J.H. PIERCEY,^[*] JJ.

PER CURIAM.

Defendants appeal by right from a grant of plaintiff's motion for summary judgment of foreclosure made September 21, 1978, an order entered on January 8, 1979, denying a motion to amend the summary judgment of foreclosure, and an order of confirmation of sale entered on January 24, 1979.

On September 20, 1968, Les Foote, Inc. granted Metropolitan Life Insurance Company (hereinafter Metropolitan), a New York corporation, a mortgage in the amount of $1,365,000 as security for an obligation. The mortgage incumbered four separate parcels of property in Lansing, each of which had a commercial building constructed on it. On October 16, 1973, a second mortgage on this property was granted to Octagon Financial (Octagon), a Michigan limited partnership.

On December 31, 1975, Les Foote, Inc. conveyed the aforesaid encumbered property to Lester C. Foote. On January 20, 1976, Lester C. Foote conveyed the property to the Lester C. Foote Trust No. 1, of which Donald L. Foote was trustee.

On February 23, 1978, Metropolitan filed an action in Ingham County Circuit Court to foreclose the mortgage, alleging that no mortgage installment payments on the principal had been made since August 3, 1977, and no interest payments had been made since December 8, 1977. By reason of an acceleration clause, the entire amount owed on the mortgage became due. Donald L. Foote and Octagon were named as defendants in this suit.

On March 2, 1978, the trial court entered an order appointing a receiver for the mortgaged property. The defendants were enjoined from interfering with the receiver in the discharge of his duties.

In August of 1978, Metropolitan filed a motion for summary judgment of foreclosure and a proposed judgment under GCR 1963, 522.1(2). The defendants filed objections to the proposed judgment contending that the parcels should be sold individually pursuant to MCL 600.3165; MSA 27A.3165, that the judgment should contain a fixed minimum price for each parcel pursuant to MCL 600.3155; MSA 27A.3155 and, finally, that each parcel should be redeemable at its individual bid price.

On September 21, 1978, the trial court held a hearing concerning the defendants' objections to the proposed judgment of foreclosure. The defendants sought to introduce the testimony of Gerald Walsh, an appraiser, to substantiate their contention that the mortgaged premises would provide a higher return if sold individually. The trial judge refused to allow the proffered testimony, based on paragraph 14 of the mortgage which allows a sale en masse upon default. A judgment of foreclosure approving a sale en masse was entered on September 21, 1978.

On October 10, 1978, defendants filed a motion to amend the summary judgment of foreclosure, alleging that this judgment was not in appealable form as a final judgment under GCR 1963, 518. The motion was denied. On January 24, 1979, the circuit court granted Metropolitan's motion for entry of an order of confirmation of sale.

On appeal, the defendants allege that MCL 600.3165; MSA 27A.3165 mandatorily requires a sale by individual parcels where it will not result in injury to the interests of the parties. MCL 600.3165; MSA 27A.3165 provides in pertinent part:

"Sec. 3165. (1) If the defendant does not bring into court the amount due, with costs, or if for any other cause a judgment is entered for the plaintiff, and if it appears that the premises can be sold, in parcels, without injury to the interests of the parties, the judgment shall direct as much of the premises subject to the mortgage or land contract to be sold as is sufficient to pay the amount then due on the mortgage or land contract, with costs, and the judgment shall remain as security for any subsequent default.

* * *

"(3) If it appears to the court that the premises subject to the mortgage or land contract are so situated that a sale of the whole premises will be most beneficial to the parties the judgment shall be entered for the sale of the whole premises in the first instance."

This statute is mandatory in nature, and, absent other circumstances, would have been applicable to the instant case. See Masella v Bisson, 359 Mich 512, 517-518; 102 NW2d 468 (1960).

However, paragraph 14 of the mortgage instrument in question contained the following provision:

"If default shall be made in the payment of the indebtedness secured hereby or any part thereof, or in the performance of any covenants, conditions or agreements of this Mortgage then the whole indebtedness hereby secured with all interest thereon and all other amounts secured hereby shall, at the option of the Mortgagee, become immediately due and payable without demand or notice and this Mortgage subject to foreclosure, the said Mortgagee is hereby authorized and empowered to grant, bargain, sell and convey the property hereby mortgaged, and appurtenances at public sale pursuant to the statute in such case made and provided and out of the proceeds to retain all sums hereby secured and the costs and charges of such sale, as well as the cost of certification of abstract or title search, and the attorneys' fees provided for by law; and such sales or a sale pursuant to a decree in chancery for the foreclosure hereof, may at the option thereof be made en masse."

In Clark v Stilson, 36 Mich 482 (1877), the Court stated that property in a foreclosure sale is required to be sold in parcels in order to protect the right of redemption, but where a party waives his right to redeem in advance and for valuable consideration, he cannot object to the fact that the sale was not made in parcels.

The mortgage instrument in question was an arm's length agreement between businessmen, like any other contract. See generally, Northrip v Federal National Mortgage Ass'n, 527 F2d 23 (CA 6, 1975), where a power of sale in a mortgage was found to be a private contractual remedy. See also, Cramer v Metropolitan Savings & Loan Ass'n, 401 Mich 252; 258 NW2d 20 (1977). If the language of a contract is plain and unambiguous, the intention expressed and indicated in the contract holds. Charles J Rogers, Inc v Dep't of State Highways, 36 Mich App 620, 627; 194 NW2d 203 (1971). The contractual provision agreed to by the parties does not contravene Michigan public policy, as the statute providing for sale by parcels was merely designed to protect the redemption rights of the parties where no other provision for a foreclosure sale is specified. See Macomb v Prentis, 57 Mich 225, 228; 23 NW 788 (1885), Masella v Bisson, supra. There is no indication that Metropolitan acted in bad faith by choosing to exercise its option to sell the property en masse.

Affirmed.

NOTES

[*] Circuit judge, sitting on the Court of Appeals by assignment.