Contracts Commons^™

Future Interests - Effect Of Change Of Conditions On Rights Of Entry And Possibilities Of Reverter Created To Control The Use Of Land, Rinaldo L. Bianchi

Michigan Law Review

It is the purpose of this comment to examine the skills which courts have developed to avoid inequitable results which might arise from forfeiture of estates, and, further, to attempt to demonstrate that judicial opinion may be in a transitional stage, tending to incorporate into law the equitable doctrine of change of conditions in disposing of cases involving rights of entry and possibilities of reverter.

Banks And Banking - Validity Of Exculpatory Clauses In Stop-Payment Orders, Lawrence N. Ravick S.Ed.

Michigan Law Review

Plaintiff, a depositor in defendant commercial bank, in seeking to stop payment of his check, executed and left with the bank a printed form supplied by the bank, entitled ''Request to Stop Payment of Check." Among the terms of the paper was a provision which constituted a release of the bank from all liability should it pay the check through "inadvertence, accident or oversight." The bank subsequently honored the check and charged its amount against the plaintiff's account. Plaintiff demanded that the defendant refund this amount, but the defendant refused to do so. Plaintiff thereupon brought an action against the …

Legal Effect Of Contracts To Devise Or Bequeath Prior To The Death Of The Promisor: I, Bertel M. Sparks

Michigan Law Review

Questions involving the rights, duties, powers, privileges, and immunities of parties to contracts to devise or bequeath are frequently raised prior to the death of the party promising to make the devise or bequest. In essence the problem is one of analyzing the legal relationships existing prior to the date set for performance. An analysis of these relationships is undertaken in this article. Vital questions concerning the formation of such contracts and their enforcement after the promisor's death are considered only when they appear essential to the development of the main theme which concerns the contract's effect prior to the …

Contracts - Usury - Dual Contracts Designed To Evade Usury Prohibitions, Richard W. Young S.Ed.

Michigan Law Review

Plaintiff applied to the defendant finance company for a loan of $100. The lender agreed to advance this amount and accordingly required the plaintiff to execute a note in the sum of $114.04 payable in one year and secured by a chattel mortgage on an automobile, but insisted in addition that plaintiff purchase an investment certificate in the amount of the note, issued by the defendant company and bearing percent interest, which certificate was to be paid for in twelve monthly instalments. Contending that the interest thus exacted was usurious, the plaintiff brought suit for cancellation of the note and …

Corporations - Securities Regulation - Investment Contracts Under Securities Act Of 1933, James W. Beatty S.Ed.

Michigan Law Review

Plaintiffs purchased tracts of twenty acres, part of a larger tract owned by the defendant, for the purpose of developing the tracts into small citrus groves. Plaintiffs also executed with defendant a care and management contract, whereby plaintiff was to give directions as to the marketing of the crops on the tract; the defendant management company was to follow these directions but would still supervise harvesting and marketing and would receive its compensation therefor. Plaintiff brought an action under the Securities Act of 1933 to impose civil liability for fraudulent misrepresentations and material omissions concerning the value of the land. …

Future Interests - Rule Against Perpetuities - Applicability Of The Rule To An Option To Purchase Incident To A Lease, Donald M. Wilkinson, Jr. S.Ed.

Michigan Law Review

Plaintiffs' testator ''leased" certain land to the defendants' assignor for a period of twenty-eight years, the latter contracting to pay $1,200 annually and to pay all taxes and assessments against the land during that period. The instrument also contained a clause whereby plaintiffs' testator contracted to convey in fee to defendants' assignor at the expiration of the twenty-eight year period, upon the latter's making a payment of one dollar. During the twenty-eight year period considerable improvements were made on the land. At the expiration of the period plaintiffs sought a declaration of rights and obligations of the parties under the …

Insurance - Recovery - Rights Of Mortgagee Under Mortgagor's Insurance, Robert B. Fiske, Jr. S.Ed.

Michigan Law Review

Defendant issued a policy of fire insurance on an automobile plaintiff had purchased with money borrowed from one Hansen, to whom a note and a chattel mortgage were given as security for the debt. A week after the policy was issued naming plaintiff as the insured, defendant executed an amendment to the policy in the form of an endorsement reading, "Less if any ... shall be paid to the insured and Charles H. Hansen as their interests may appear." The policy provided that it should not apply while the car was subject to any mortgage or other encumbrance not specifically …

Jacobs: Law Writers And The Courts, Richard. A. Edwards

Michigan Law Review

A Review of Law Writers and the Courts. By Clyde E. Jacobs

Taxation - Federal Income Tax - Deferred Compensation As Affected By Constructive Receipt Doctrine, David D. Dowd, Jr. S.Ed.

Michigan Law Review

Prior to his retirement as a general agent of a life insurance company, the petitioner entered into a new contract with the company by which he was to receive upon retirement fixed monthly instalments for fifteen years in lieu of his original contract rights to receive renewal premium commissions as they were paid into the company. Petitioner, as a cash basis taxpayer, reported as income only the instalments received. The Commissioner assessed deficiencies in the reports, contending that petitioner's taxable income consisted of all renewal commissions received by the company during the taxable year, rather than the instalment payments. Rejecting …

Labor Law--Labor-Management Relations Act--Disparagement Of Employer's Product As Protected Concerted Activity, George B. Berridge S.Ed.

Michigan Law Review

When contract negotiations between an employer, a Charlotte, North Carolina TV station, and a local union representing the station's technicians reached an impasse, the technicians remained on the job but circulated handbills attacking the inferior quality of the employer's programs. These handbills, which were distributed throughout Charlotte as well as on a picket line which the technicians maintained during their off-duty hours, were signed simply "WBT Technicians" and made no reference to the labor dispute. The company discharged the technicians, whereupon the union filed a complaint with the National Labor Relations Board charging a violation of sections 8(a)(1) and 8(a)(3) …

Restitution - Reliance Losses In Contract Within Statute Of Frauds, John E. Riecker S.Ed.

Michigan Law Review

Plaintiff, the owner of a seasonal night club, orally agreed to lease the premises for three years to the defendant. The plaintiff had a written lease prepared but it was not executed. Negotiations by letters and telegrams between the parties proved that the document was not a definite integration of their agreement sufficient to satisfy the statute of frauds governing leases of land for periods longer than one year. During this interval of negotiation, plaintiff at defendant's express request had procured a liquor license for the following year at the night club, hired a watchman, retained counsel to draw the …

The Seaman As Ward Of The Admiralty, Martin J. Norris

Michigan Law Review

The seaman has a peculiar status in American law. He is in most instances a mature individual, sui juris, and therefore capable of entering into his own contracts but nonetheless his contractual dealings with shipmasters and owners are as carefully watched by our admiralty courts as though he were a minor or a young heir. He is in contemplation of the maritime law a ward of the admiralty courts.

The seaman's position in a legal and economic sense is unique. Singled out by the Congress of the United States as one of a class of workers requiring special consideration …

Agency - Apparent Authority Of Sales Agent, William D. Keeler

Michigan Law Review

Defendant's agent, a consignee of automobiles for sale, received from plaintiff a used truck, and agreed to apply the proceeds from the sale of the truck to the purchase price of a new automobile, to be sold and delivered to plaintiff when available. Defendant's agent sold the truck and absconded with the proceeds from such sale. Plaintiff sued for the value of the truck, and the lower court rendered judgment in his favor. On appeal, held, affirmed. The acts of the agent bound the defendant, although the agency contract gave only express authority to sell new automobiles. Correa v. …

Contracts - Consideration - Effect Of Option To Withdraw Government Surplus Property From Sale, Arthur M. Wisehart S.Ed.

Michigan Law Review

The Office of Surplus Property accepted defendant's bid for a quantity of sodium carbonate. Submitted on the appropriate government form, the bid was subject to a condition which gave the government " . . . the right to withdraw from sale any property prior to the removal thereof without incurring any liability except to refund to the purchaser any amount paid with respect to the said property." Although the sodium carbonate had not been withdrawn from sale, the defendant refused to perform his promise to buy it. The government brought an action for damages, and the defense was that no …

Mortgages - Redemption - Right Of Mortgagee To Require Partial Redemption, James S. Taylor S.Ed.

Michigan Law Review

The mortgagor of the premises in question died leaving as his heirs-at-law the plaintiff and eight other children. Shortly thereafter, the mortgagee commenced proceedings to foreclose the mortgage under a power of sale. Pending these proceedings the plaintiff entered the military service of the United States and thus became entitled under the Soldiers and Sailors Civil Relief Act of 1940 to protection against the exercise of the power of sale. The mortgagee purchased at the foreclosure sale and thereafter made extensive improvements on the land. Plaintiff brought a bill to redeem the premises, tendering the entire amount of the mortgage …

Wills - Enforcement Of Parol Contract To Devise Real Property, John S. Slavens S.Ed.

Michigan Law Review

Plaintiffs and decedent made an oral agreement whereby plaintiffs agreed to pay decedent a yearly sum and to make repairs on certain real estate in return for which decedent agreed to devise the real estate to plaintiffs. Plaintiffs had been in possession of the property for several years and had vastly improved its value when decedent died, devising the property to third parties. Plaintiffs brought this action for specific performance against the devisees. The trial court, satisfied that the oral contract had been established, entered the decree for specific performance. On appeal, held, affirmed. A person can make a …

Admiralty - Right To Jury Trial In Certain Cases On Great Lakes - Maintenance And Cure Not Contract Or Tort Matter, Richard B. Barnett S.Ed..

Michigan Law Review

Libelant brought an action for maintenance and cure on the admiralty side of a federal district court in Illinois. He requested a jury trial, relying on the Act of February 20, 1845, which provides that in certain admiralty and maritime cases arising on the Great Lakes relating to any matter of contract or tort, trial shall be by jury on the demand of either party. The trial court heard the case without a jury and dismissed the libel on the merits. The court of appeals held, on appeal, that maintenance and cure was a matter of ancient and established …

Negligence - Proving Inviter's Breach Of Duty By Circumstantial Evidence, Charles E. Oldfather S.Ed.

Michigan Law Review

Plaintiff brought a negligence action for personal injuries suffered when she slipped on a spot of grease in the driveway of defendant's railroad station. The evidence showed that the spot was at least one foot square and was covered with dust and dirt so that it resembled in color and texture the rest of the pavement. The evidence also indicated that vehicles often drove through and parked in the drive, and that there were no marks on the spot other than a deep skid mark left by plaintiff's heel. The trial court allowed the jury to determine from this evidence …

Taxation - Federal Income Tax - Consequences To Seller And Buyer Of Covenant Not To Compete, Richard B. Barnett S.Ed.

Michigan Law Review

The owners of the entire capital stock of a newspaper business received an offer of $1,000,000 for their stock and a covenant not to compete with buyers for ten years. After the offer was accepted and the contract of sale drawn up, buyer asked for a clause in the contract evaluating the covenant not to compete at $50 a share and the stock at $150 a share in order to help him taxwise. The clause was accepted with little discussion. The sellers reported the entire proceeds of the sale on their income tax returns as long term capital gain, but …

Insurance - Insurer's Right Of Restitution For (1) Excessive Payment Made In Discharge Of The Liability Of A Coinsurer And (2) Costs Of Defense, John W. Hupp S.Ed.

Michigan Law Review

The increasing use of the "pro rata" or "other insurance" clause in liability insurance policies has given rise to new instances of coinsurer relationships. Such a clause typically provides that the insurer will not be liable under its policy for a greater proportion of any loss than the applicable limit of liability of its policy bears to the total applicable limit of all valid and collectible insurance against such loss. It has been frequently stated that the existence of such clauses in two policies covering the same loss renders the liability under each of the policies several and not joint, …

Taxation-Federal Income Tax-Payment To Lessee For Surrender Of Lease Taxable As Capital Gain, Theodore J. St. Antoine

Michigan Law Review

Taxpayer, a tenant in possession of premises under a lease, received a payment from the lessor to vacate and surrender the premises before the lease expired. The Tax Court decided that the payment was taxable only as a capital gain. On appeal, held, affirmed. Since the leasehold interest constituted property, its transfer by the lessee to the lessor was a sale of a capital asset under I.R.C., §117. Commissioner v. Golonsky, (3d Cir. 1952) 200 F. (2d) 72.

Corporations-Power Of Legislature To Revive Corporate Charter, John S. Slavens S.Ed

Michigan Law Review

Defendant, a New York corporation, was engaged in operating steamboats for sightseeing purposes below Niagara Falls. Defendant was incorporated in 1892 for a term of fifty years, the maximum then permitted by statute. Through inadvertence the charter was not renewed in 1942. The corporation continued in its regular course of business, and in 1947 when the oversight was discovered, the board of directors, with the approval of three-fourths of the shareholders, immediately revived the corporation under a statutory provision enacted in 1944. Plaintiffs, shareholders of the corporation, claimed that application of the provision was an unconstitutional deprivation of their rights …

Chattel Mortgages In Floor Financing-Validity Of Recorded Chattel Mortgage As Against Purchaser In Ordinary Course-Effect Of Certificate Of Title Act When Certificate Retained By Mortgage, Walter H. Weiner S.Ed

Michigan Law Review

Plaintiff, buyer of an automobile from a used-car dealer, brought suit against the dealer and a bank, to which the dealer had given a duly filed chattel mortgage covering the automobile, to have the mortgage declared invalid as to the automobile in question, and for specific enforcement of the promise by the dealer to deliver the certificate of title to the buyer. The mortgage contained a clause giving the dealer-mortgagor the right to sell automobiles mortgaged to the bank-mortgagee, but the bank retained possession of the certificate of title to the automobile. The Circuit Court in Chancery entered judgment for …

Corporations-Officers And Directors-Effect Of Statutes On Contracts Between Corporations With Common Directors, William K. Davenport S.Ed.

Michigan Law Review

Legislative policy-making on the subject of contracts between corporations having interlocking directorates has required a balancing of the interest of corporate enterprise in the flexibility of business relations against the interest of minority shareholders in protection against self-dealing by corporate managers.

Real Property-Relation Of The Covenants For Title And The Doctrines Of Estoppel By Deed, James W. Callison S.Ed.

Michigan Law Review

The doctrine of estoppel by deed is familiar to all students of real property law. So, too, are the principles of law relating to covenants for title made by a grantor in connection with a conveyance of land. It is the purpose of this comment to discuss the relation between the two areas of law, with particular reference to two problems: (1) what effect does the estoppel doctrine have upon the recovery of damages by the grantee where there has been a breach of the covenant of seisin; and (2) conversely, what effect does recovery of substantial damages by the …

Equity-Specific Performance-Recent Trends In The Specific Enforcement Of Contracts To Sell Securities, Allan Neef S.Ed.

Michigan Law Review

The rise of the corporation, as a form of business organization, to a dominant position in the modern economic scene has attached increased importance to the ownership of corporate securities. As property interests have become more and more represented by such securities, society has promoted such interests by setting up organized procedures for dealing with and in securities. Stock exchanges have been organized to aid the marketability of corporate stocks. A brokerage profession has evolved to bring buyers and sellers together. Underwriting has been developed to aid in the initial disposal of securities by the issuing corporation. Governments have undertaken …

Personal Property-Liens-Artisan's Lien On Unimproved Goods For Improved Goods Delivered Under A Single Contract, Warren K. Urbom S.Ed.

Michigan Law Review

Pursuant to a contract a partnership delivered to defendant a carload of paper upon which defendant had agreed to print certain forms in accordance with instructions to be given by the partnership. Thereafter a corporation succeeded to the assets and assumed the liabilities of the partnership and gave to the defendant instructions for a desired printing. A portion of the paper was printed and delivered to the corporation, the remaining unprinted paper being held by the defendant under a claim of a statutory lien for the printing actually completed. Plaintiff, assignee of the trustee in bankruptcy of the corporation, sued …

Federal Procedure-Removal Denied To Lmpleaded Party Under 28 U.S.C. 1441(C), Robert G. Russell S. Ed.

Michigan Law Review

Plaintiff sued to recover indebtedness of $7000, to foreclose a chattel mortgage, and to enjoin a local bank from permitting the accounts of the debtor to be withdrawn. Defendant then filed a cross-complaint, as authorized by state procedure, against a third party nonresident garnishee to recover damages for breach of contract and money owed in the sum of $35,000. The cross-defendant removed the case to the United States district court. Held, although the cross-complaint stated a separate and independent cause of action, it could not be the basis of removal since 28 U.S.C. §1441 (c) contemplates only the removal …

The Law Of Belligerent Occupation In The American Courts, Morris G. Shanker S.Ed.

Michigan Law Review

This comment will investigate the extent to which the law of belligerent occupation has actually become a part of the American municipal law, and thereby attempt to determine whether it was properly applied in this case.

Promissory Estoppel: Principle From Precedents: Ii, Benjamin F. Boye

Michigan Law Review

It is ancient learning that a person is free to refuse to accept an appointment as agent but that "acceptance must be followed by execution or prompt resignation." Though such was the law of the Romans of Justinian's time, it has taken our courts many years to reach the same conclusion. Indeed, it was not until the Restatement of Agency was published in 1933 that the basis of liability of one who gratuitously undertook to act as agent for another was expressed in approximately the same form.