Opinion
Docket No. 61197.
Decided April 6, 1983.
Condit, McGarry Schloff, P.C. (by Richard P. Condit), for appellees Zwirkoski.
Shifman Goodman, P.C. (by Philip J. Goodman), for appellant Southfield Public Schools.
Before: CYNAR, P.J., and N.J. KAUFMAN and MacKENZIE, JJ.
This appeal involves a cross-claim by Thaddeus and Irene Zwirkoski against the Southfield Public Schools for specific performance of the terms of an alleged land contract. After a nonjury trial, the circuit court ordered specific performance. The terms of the circuit court's order required the schools to bear half the costs of constructing a certain paved road. The Southfield Public Schools appeal by right.
The evidence introduced at trial showed that, in 1969, the Zwirkoskis agreed to purchase four acres of land owned by the schools and adjacent both to a parcel of land already owned by the Zwirkoskis and to the site of an elementary school. A condition of the sale was the transfer by the Zwirkoskis to the schools of a 30-foot-wide strip of land from a road, across the Zwirkoskis' land, to the site of the school. The Zwirkoskis did not deal directly with the school board, but conducted this transaction through the schools' exclusive land agent, Arthur Stephens. Exhibits submitted to the circuit court showed that Stephens represented to the Zwirkoskis that a 60-foot-wide road would be constructed along the 30-foot-wide strip of the Zwirkoskis' land conveyed to the schools and a strip of the Zwirkoskis' land of equal width, that the road would provide access to the site of the school and to the four acres purchased by the Zwirkoskis, and that the schools and the Zwirkoskis would divide the cost of building the road equally. No written contract was ever executed; however, the evidence showed that at the time of trial possession of the four acres and the 30-foot-wide strip had been transferred, that the Zwirkoskis had paid nearly all of the purchase price of the property, and that the Zwirkoskis had paid taxes on the four acres since 1969.
At trial, the schools took the position that a contract had been made and that they were entitled to retain the benefits they received under the contract but that the terms of the contract did not require them to pay any part of the costs of construction of the road.
The schools argue that Stephens was never authorized to agree on behalf of the schools to pay for the construction of a road. The schools rely on Baker v Kalamazoo, 269 Mich. 14; 256 N.W. 606 (1934), in which the Court held that persons who deal with a municipal corporation through its officers must ascertain the limits of the authority of the officers and that the corporation is not bound by actions of its officers beyond the limits of their authority. However, the Court noted that a municipal corporation is nevertheless bound if it ratifies unauthorized actions. See also East Jordan Lumber Co v East Jordan, 100 Mich. 201, 205; 58 N.W. 1012 (1894), and Webb v Twp of Wakefield, 239 Mich. 521, 527; 215 N.W. 43 (1927). The circuit court's decision here was based on ratification.
Unauthorized acts of an agent are ratified if the principal accepts the benefits of the unauthorized acts with knowledge of the material facts. David Stott Flour Mills v Saginaw County Farm Bureau, 237 Mich. 657, 663; 213 N.W. 147 (1927); Langel v Boscaglia, 330 Mich. 655, 659-660; 48 N.W.2d 119 (1951). The evidence showed that the bid submitted to the schools by the Zwirkoskis was prepared by Stephens and contained the following statement:
"If this offer is accepted, we shall be willing to sell you a 60 ft. roadway at the southermost end of our acreage known as Cu 430, Section 29. This roadway would run from Kinsel Road to the adjacent school site. You will pay for the roadway the same price per acre as the above bid price, i.e. $10,000 per acre. Further, the sale of the roadway is subject to the following conditions:
"[*]We would have the right to use said 60 ft. road for ingress and egress to the bid parcel.
"[*]We would have the right to use said road if we so desired for our Kinsel Road land, in which event we would then pay to the school district half the original total cost of said 60 ft. road.
"[*]Said 60 ft. road shall be located to provide access to both the four acres being sold and to the adjacent school site."
The minutes of the school board show a decision to accept the bid if modified by provisions including the following:
"b. The school district be allowed to purchase a 30 foot strip of land for use by the Board for access to Kinsel Street, at the price of $10,000.00 per acre. (approximate cost of strip will be $3600.00)
"c. When the property is developed, owner will develop the adjacent 30 foot strip for use as a road, thus making a road 60 feet in width for access to Kinsel Street."
The circuit judge regarded the foregoing as circumstantial evidence of the knowledge on the part of the school board essential to support a finding of ratification. The circuit judge reasoned that if the board did not know of the representations by Stephens that the schools would pay half the cost of building a 60-foot-wide road, the board could not have expected that a 60-foot-wide road would result from the Zwirkoskis' building of a 30-foot-wide road. Findings of fact by a trial judge sitting without a jury will not be set aside unless clearly erroneous. GCR 1963, 517.1. We cannot say that the finding of ratification here was clearly erroneous.
The schools argue that the contract with the Zwirkoskis was void because it was not in writing. See MCL 566.106; MSA 26.906, and MCL 566.108; MSA 26.908. However, the absence of a writing does not prevent a court from ordering specific performance of a contract which has been partly performed. MCL 566.110; MSA 26.910. By paying nearly all of the purchase price, transferring possession of the 30-foot-wide strip to the schools, taking possession of the four acres, and paying taxes on the four acres, the Zwirkoskis sufficiently performed their obligations under the contract to support an order of specific performance. Compare Vande Berg v Vanden Bosch, 242 Mich. 37; 217 N.W. 905 (1928).
The schools argue that the contract at issue here should have been treated as two separate contracts: one for the sale of the four acres in return for the 30-foot strip and the purchase price, and a second for the building of the road and the exchange of easements. The schools point out that there was no partial performance of the second. However, there is no record of the schools' raising such an argument in the trial court, and under such circumstances, this Court will reverse only to avoid manifest injustice. Deeb v Berri, 118 Mich. App. 556, 561-562; 325 N.W.2d 493 (1982). The schools have not cited, and we have been unable to find, any Michigan authority allowing a contract to be divided in two for the purpose of resolving a statute of frauds issue. Even assuming that such division is sometimes permissible, it is not appropriate here. The evidence supports an inference that the promise to pay for part of a road formed part of the inducement which led the Zwirkoskis to agree to purchase the four acres. Without a road, the Zwirkoskis had no access to the four acres. No manifest injustice is presented.
The schools argue that any promise to pay for part of the construction of the road was void because no time for performance was specified. However, where a contract is silent as to the time of performance or payment, the law will presume a reasonable time. Duke v Miller, 355 Mich. 540, 543; 94 N.W.2d 819 (1959). The schools argue that it was unreasonable to require them to pay their share of the cost of construction at current prices. In its opinion, the trial court pointed out that the schools have agreed all along that a contract had been made and have been accepting the benefits of the contract since 1969. The trial court placed the blame for the delay in determining the terms of the contract on "sloppy procedures" employed by the schools which the court found "border[ed] on the mind boggling". Under such circumstances, we cannot say that the trial court acted unreasonably in requiring the schools to pay at current prices.
The schools argue that the trial court erred by specifying that the road to be constructed would be a paved road constructed in accordance with the specifications of the City of Southfield. However, the exhibits showed that Stephens represented to the Zwirkoskis that "a black top road * * * in accordance with requirements of the City of Southfield" would be constructed. Arguably, knowledge on the part of the board of such representations is shown by the reference in its minutes to a road 60 feet wide; the evidence shows that 60 feet was the required width of a public road. Moreover, a principal who ratifies unauthorized acts of an agent has a duty to inquire into the extent of those unauthorized acts and is bound by all acts of the agent within the scope of the authority the agent assumed. Meeuwsen v Clough Warren Co, 207 Mich. 697, 702; 175 N.W. 408 (1919). The schools were bound by Stephens's representations. We note that, while the schools have argued that a concrete road is more expensive than a blacktopped road, the trial court's order requires merely a paved road constructed in accordance with the city's requirements.
The other issues raised are without merit.
Affirmed.