Rosenthal v. Construction Realty Co. , 262 Mich. 91 ( 1933 )

While I concur in the result reached by Mr. Justice McDONALD, I am not fully in accord with the statement of law as made by him and assigned in support of his conclusion. I think decision should rest on the proposition that, after notice of forfeiture and an adjudication based thereon before the circuit court commissioner, the contract must be considered as entirely abrogated and all rights of the respective parties thereunder terminated.

The portion of Justice McDONALD'S opinion to which attention should be challenged reads:

"If the defendant (vendor) had breached the contracts he could not have maintained summary proceedings, for if there was a breach there was no cause for forfeiture and no right to possession. The breach was a proper defense in the action before the commissioner for possession."

The exact question presented is this: Can the breach of an executory land contract by the vendor, not resulting in liquidated damages, be pleaded by the vendee as a defense in summary proceedings instituted before a circuit court commissioner to recover possession after forfeiture? Has a circuit court commissioner jurisdiction to hear and determine such issues?

The Constitution expressly vests the judicial power in the Supreme Court, circuit courts, probate courts, justices of the peace, and such other courts of civil and criminal jurisdiction as the legislature may establish by general law (article 7, § 1). Acting under the above-noted constitutional authority the legislature created the judicial office of circuit court commissioner and vested it with limited judicial powers. The grant of such jurisdictional powers is covered in part by 3 Comp. Laws 1929, § 14964 et seq. The jurisdiction in a circuit court commissioner is limited to that conferred by the legislature. In summary proceedings, as in other proceedings before him, the commissioner's jurisdiction is purely statutory. Davis' Michigan Practice before Circuit Court Commissioners, § 22. Where the vendee under a land contract holds over after breaching the contract, by express statutory provision the circuit court commissioner may entertain jurisdiction of summary proceedings instituted by the vendor or the person entitled to possession.

"The person entitled to any premises may recover possession thereof in the manner hereinafter provided, in the following cases:

"(1) When any person shall hold over any lands or tenements, * * * contrary to the conditions or covenants of any executory contract for the purchase of lands or tenements." 3 Comp. Laws 1929, § 14975.

But the statute does not give the commissioner jurisdiction in a cause of action by the vendee who may have elected to cancel or rescind his contract with a vendor because of the latter's breach of the contract. Such a suit, usually involving an accounting, as well as cancellation, is within the jurisdiction of the circuit court in chancery. Puziol v.Kastle, 231 Mich. 100; German Bundesheim Society v. Schmidt,242 Mich. 139. If the vendee merely seeks damages for breach of the contract, his remedy is by a suit at law. Such an issue is not within the jurisdiction of a circuit court commissioner, because he has no power to render a money judgment in a summary proceeding. It follows that a cause of action of the above character cannot be pleaded by a defendant vendee in a summary proceeding before the commissioner as in bar of the proceedings instituted by the vendor for the sole purpose of securing possession. The fact that the vendor, as well as the vendee, has breached an executory land contract has no bearing upon the jurisdictional question. That is controlled by the statute. Such was the holding of Justice COOLEY in McSloy v. Ryan, 27 Mich. 110. The syllabus reads:

"In proceedings under this statute evidence of the landlord's breach of covenants to repair and make improvements, which are independent of the covenant to pay rent, is irrelevant; this proceeding is not one in which, even if the amount of the rent due be in issue, there can be any deduction of offsets, or by way of recoupment."

Again in Fuller v. Metcalf, 189 Mich. 520, it was held:

"A tenant cannot plead an independent set-off in defense of an action brought by the landlord to dispossess him for nonpayment of rent; and no presumption of law can arise against the tenant for failure to insist upon such set-off as against the rent when it falls due."

If we are to follow the above-noted decisions of this court, and respect the limited statutory jurisdiction of circuit court commissioners, I think it cannot be said: "The breach (by the vendor) was a proper defense in the action before the commissioner for possession."

CLARK, POTTER, SHARPE, and BUTZEL, JJ., concurred with NORTH, J.