Case Name: Burton v. May
Court: Michigan Supreme Court
Jurisdiction: Michigan
Decision Date: 1941-05-21
Citations: 297 Mich. 571
Docket Number: Calendar No. 41,534
Parties: Burton v. May.
Judges: Bush nell, Boyles, Chandler, McAllister, Wiest, and Butzel, JJ., concurred with North, J.'
Reporter: Michigan Reports
Volume: 297
Pages: 571–576

Head Matter:
Burton v. May.
1. Receivers — Basis for Apfointment-^WAste.
A cross bill under oath aSords a competent basis for determination of such party’s petition for appointment of a receiver, in suit -wherein defendants sought foreclosure of land contract on ineome property of -which plaintiffs sought reformation, where cross bill alleges default in contract payment, nonpayment of taxes, failure to make necessary repairs, use of property for illegal and immoral purposes, for which padlock proceedings were threatened, and maintenance of a public nuisance on the premises, all of which are alleged to result in impairment of security and to constitute waste (Court Rule No. 23, §7 [1933]).
2. Appeal and Error — Appointment of Receiver — Discretion of Court.
An order appointing a receiver should not be vacated unless it clearly appears the circuit judge was guilty of an abuse of discretion.
3. Receivers — Appointment—Discretion op Court — Cross Bill Under Oath.
Order appointing receiver in suit wherein plaintiff sought reformation of land contract of income property and defendants the foreclosure thereof held, not an abuse of discretion where cross bill, containing allegations sustaining defendants’ claim of impairment of security and commission of waste, was under oath and no oral testimony or eountershowing under oath was made (Court Rule No. 23, § 7 [1933]).
Sharpe, C. J., dissenting.
Appeal from Wayne; Stein (Christopher E.), J., presiding.
Submitted March 25, 1941.
(Calendar No. 41,534.)
Decided May 21, 1941.
Rehearing denied June 30, 1941.
Bill by William M. and Doreatha Burton against Alfred A. and Sylvia S. May to have a land contract declared a mortgage and for reformation thereof. Cross bill by defendants seeking foreclosure and appointment of receiver. From an order appointing a receiver, plaintiffs appeal.
Affirmed.
Maurice D. Smilay (S. Reymont Paul, of counsel), for plaintiffs.
Alfred A. May, in pro per. (Herbert J. Pevos, of counsel), for defendants.

Opinion:
North, J.
This is an appeal from an order of the circuit judge appointing a receiver pending suit.
Plaintiffs filed a bill in chancery seeking correction or reformation of the terms of a land contract in which they are vendees and also that the contract be held to be a mortgage. Defendants, vendors in the contract, answered, denied plaintiffs' right to the relief sought, and filed a cross bill asking foreclosure of the land contract and appointment of a receiver. After the cause was at issue, the circuit judge, on defendants ' petition, appointed a receiver, and this appeal followed. Appellants claim that such appointment of a receiver, under the circumstances of the case, was in violation of law and that in making the order of appointment the circuit judge was guilty of an abuse of discretion.
Defendants' cross bill containing the allegations hereinafter noted was under oath. Plaintiffs answered the cross bill, but their answer was not under oath. While on the hearing of defendants' petition for receiver no sworn testimony was taken, still statements of facts were made by attorneys and the parties were heard at length on the record before' the court. Defendants' cross bill under oath afforded a competent basis for détermination of defendants' petition. Court Rule No. 23, § 7 (1933).
In their cross bill defendants allege default by plaintiffs in payment of money due defendants as vendors in the land contract, and, under the acceleration provision of the contract, defendants elected to declare the full contract' price of $16,609.30 due. Further, defendants allege nonpayment by plaintiffs of taxes, failure to make necessary repairs, use of the property for illegal and immoral purposes, in consequence of which padlock proceedings were threatened, and maintenance of a public nuisance on the premises; all of which defendants allege resulted in impairment of their security and constituted waste. Further, that the property is subject to'a prior mortgage lien and defendants require payment of contract instalments to meet the mortgage payments and prevent foreclosure; and defendants allege "all these facts were understood by plaintiffs" when they entered into the contract.
It also appears from this record'that the property covered by the land contract is income property producing substantially $1,100 per month. And it may be further noted that plaintiffs as contract vendees are entitled to possession under their contract only while not in default.
The order appointing the receiver should not be vacated unless it clearly appears the circuit judge was guilty of an abuse of discretion. See Rolfe v. Burnham, 110 Mich. 660, 664, in which we said: "We cannot interfere with the action of the court [appointing a receiver] unless there has been a clear abuse of discretion."
The allegations of defendants' sworn cross bill were not met in court either by oral testimony or a countershowing of any kind under oath. On such a record we should not and do not hold that the order appointing the receiver was in violation of law or that it exceeded the bounds of discretion vested in the trial judge.
The order entered in the circuit court is affirmed, with costs to appellees.
Bush nell, Boyles, Chandler, McAllister, Wiest, and Butzel, JJ., concurred with North, J.'