Case Name: SNIDER v. DUNN
Court: Michigan Court of Appeals
Jurisdiction: Michigan
Decision Date: 1968-04-03
Citations: 11 Mich. App. 39
Docket Number: Docket No. 2,681
Parties: SNIDER v. DUNN.
Judges: J. H. Gillis, J., concurred with Quinn, J.
Reporter: Michigan appeals reports; cases decided in the Michigan Court of Appeals.
Volume: 11
Pages: 39–61

Head Matter:
SNIDER v. DUNN.
Opinion of the Court.
1. Appeal and Error — Questions Reviewable — Agency—Breach of Implied Warranty of Authority.
Claim by plaintiff, made for the first time on appeal, that defendant breached her implied warranty of authority by signing an agreement of sale of realty for her mother, the owner of a life interest, when defendant had no authority to bind her mother will not be considered by the Court of Appeals because a ease will not be reviewed on a theory which was neither pleaded nor raised below.
2. Frauds, Statute of — Land Contracts — Signatures.
A contract for the sale of land must be signed by one lawfully authorized in writing to do so (CL 1948, § 566.108).
3. Improvements — Equitable Lien — Knowledge of Improvements.
Plaintiff who made improvements to defendants’ realty in reliance upon a written agreement of sale signed by 1 of 3 defendants, who held 1/2 of a remainderman’s interest subject to a life estate, held, not to be entitled to an equitable lien for his improvements, where the other 2 defendants holding a life estate and 1/2 of a remainderman’s interest were not consulted about the sales agreement and had no knowledge of the improvements.
References for Points in Headnotes
[1] 5 Am Jur 2d, Appeal and Error § 726.
[2] 49 Am Jur, Statute of Frauds § 149 et seq.
[3, 4,15-20] 27 Am Jur, Improvements § 30; 33 Am Jur, Liens § 21.
[5] 41 Am Jur, Pleading § 309 et seq.
[6] 3 Am Jur 2d, Agency § 70.
[7, 9,10] 3 Am Jur 2d, Agency §§ 298, 299.
[8] 3 Am Jur 2d, Agency § 294.
[11,14] 37 Am Jur 2d, Fraud and Deceit § 41 et seq.
[12] 36 Am Jur, Mistake.
[13] 27 Am Jur 2d, Equity § 34; 27 Am Jur, Improvements § 13 et seq.
é. Same — Equitable Lien — Unjust Enrichment.
An equitable lien for improvements placed on another’s property by fraud, accident, or mistake is given only under compelling circumstances to avoid unjust enrichment of the true owner by the person innocently making the improvements.
5. Pleading — Amendment-—Conformance to Proofs.
Amendment of pleadings to conform to the proofs is denied by the Court of Appeals.
Dissenting Opinion.
Levin, P. J,
6. Principal and Agent — Written Authority — Sale of Bealty.
An agent’s authority to aot in behalf of his principal must be in writing in order to bind the principal to an agreement of sale of realty signed by the agent purporting to act for his principal (CL 1948, § 566.108).
7. Same — Breach of Implied Warranty of Authority — Evidence of Authority.
Plaintiff who offered to purchase realty from defendant, who signed an agreement of sale of realty purporting to aet in behalf of her mother, the owner of a life estate in the property, was not obligated to seek evidence of defendant’s authority, where defendant had no authority to bind her mother, in order to hold defendant for breach of implied warranty of authority (CL 1948, § 566.108).
8. Same — Agent As Party to a Transaction Conducted by Himself.
An authorized agent making a contract with another as agent for a disclosed principal does not become liable on the contract.
9. Same — Breach of Implied Warranty of Authority — Tortious Conduct.
An unauthorized agent who purports to make a contract for his principal is liable for breach of implied warranty of authority and, if a tortious misrepresentation of authority can be established, for the tort.
10. Same — Liability of Agent on Contract — Knowledge of Principal’s Incapacity.
One who acts as another’s agent will be held liable when the person who, under the contract made by the agent, is to render the performance does not have the capacity to do s'o and that fact is known to the one acting as agent and unknown to the party with whom he contracts.
11. Torts — Fraudulent Misrepresentation.
A misrepresentation in a business transaction is fraudulent if the maker knows or believes the matter to be otherwise than as represented.
12. Words and Phrases — Mistake.
Mistake means a state of mind not in accord with the facts.
13. Equity — Restitution—Unjust Enrichment — Mistake—Lack op Care.
A person who has conferred a benefit upon another by mistake is not precluded from maintaining an action for restitution by the fact that the mistake was due to his lack of care.
14. Fraud — Misrepresentation.
Defendant, sophisticated in real estate transactions, who represented that she had authority to sell realty knowing she did not, who signed an agreement for sale of realty to plaintiff, and who encouraged plaintiff to believe the transaction would be consummated, was guilty of fraud.
15. Equity — Unjust Enrichment — -Knowledge op Benefits.
Generally, recovery in quasi-contract or unjust enrichment is refused where the party against whom it is sought neither procured nor was aware of the expenditures which represent plaintiff’s loss.
16. Same — Unjust Enrichment — Improvements—Agency.
Plaintiff, who in good faith mistakenly conferred a benefit upon 3 defendants by making improvements on defendants’ realty in reliance upon a written agreement of sale signed by 1 of the defendants who held 1/3 of a remainderman’s interest subject to a life estate, should be allowed to recover under a theory of unjust enrichment, where the defendant who signed was the agent of all the defendants to operate and maintain the realty notwithstanding that she acted in excess of her authority im agreeing to sell it.
17. Same — Unjust Enrichment — Consent.
The doctrine of unjust enrichment is not based on contract or consent, but operates when there is no duty other than one imposed by the conscience of the law ex aequo et bono.
18. Same — Improvements—Equitable Liens.
One entitled to tile value of improvements made by him to realty may have an equitable lien on the realty against the owner for the enhancement in value.
19. Same — Improvements—Unjust Enrichment — Misrepresentation — Equitable Liens.
Plaintiff, who improved the value of defendants’ realty by $5,500 in reliance upon a written agreement of sale of realty signed by 1 of 3 defendants who fraudulently misrepresented her authority to bind another of the defendants who held a life interest, should be allowed to hold the defendant wrongdoer for the entire amount of the unjust enrichment; an equitable lien should be established on defendant wrongdoer’s interest in the property.
20. Same — Improvements—Unjust Enrichment — Breach of Implied Warranty op Authority — Misrepresentations— Amendment op Pleading.
Plaintiff, who improved the value of defendants’ realty m reliance upon a written agreement of sale of realty signed by 1 of 3 defendants who fraudulently misrepresented her authority to bind another of the defendants who held a life interest, should be allowed to amend his pleading from an action for specific performance to an action for breach of implied warranty of authority so as to recover the full value of his improvement from the defendant wrongdoer; but the case should be remanded so that the defendant wrongdoer may have an opportunity to meet the amended pleading with its new measures of damages.
Appeal from Wayne; Bowles (George E.), J.
Submitted Division 1 November 8, 1967, at Detroit.
(Docket No. 2,681.)
Decided April 3,1968.
Rehearing denied May 20, 1968.
Complaint by Norman Snider against Sonia Dunn, Anna Dunitz, and Seymour Dunitz for specific performance of a contract or for damages. Judgment for defendants. Plaintiff appeals.
Affirmed.
Ding ell, Hylton & Zemmol (Harold Goodman, of counsel), for plaintiff.
Josephson é Tennen (Norman L. Zemhe, of counsel), for defendant Sonia Dunn.
M. H. Shillman, for defendants Dunitz.

Opinion:
Quinn, J.
In reliance on a written offer to purchase real estate in Wayne county and the alleged acceptance thereof by defendant Sonia Dunn as seller and defendants' refusal to perforin, plaintiff filed complaint for specific performance or in the alternative for money damages. A nonjury trial resulted in judgment of no cause of action and plaintiff appeals.
Plaintiff was admitted to the practice of law in 1921 and practiced law until 1950, during which time he closed a good many real estate transactions. For reasons of health, he withdrew from the practice of law about 1950 and entered the real estate' business, i.e., purchasing residential property to recondition and modernize for resale.
On August 21,1965, through Benjamin Rich Realty Company, plaintiff offered in writing to purchase the property in question for $3,800 and deposited $100 on such offer with the broker. The property was not listed for sale with the broker. On August 25, 1965, acceptance of the offer, amended as to amount to the sum of $4,150, was executed by "Sonia Dunn P.a. for Anna Dunitz", although Sonia Dunn had no written authority to act for Anna Dunitz. The evening of the same day, plaintiff was notified of such acceptance by the broker. August 28, 1965, plaintiff received a policy of title insurance which disclosed that the State of Michigan was the owner of the premises, subject to the interest of Anna Dunitz, as to a life estate and remainder to Sonia Dunn and Seymour Dunitz. The property had been vacant for some time and had been vandalized. The evening of Arngust 25, 1965, plaintiff was notified of further vandalization to the property, and August 27 or 28,1965, he commenced repairs to stop further vandalizing. These repairs continued until March 4, 1966.
There were further negotiations to close the transaction, and about 2 weeks after August 21, 1965, plaintiff offered an additional $1,750 to the purchase price. It is disputed on the record whether Sonia Dunn ever unconditionally accepted any of plaintiff's offers, but the sale was never consummated, and. October 8,1965 plaintiff filed the complaint.
On appeal, plaintiff does not question the trial court's denial of specific performance but contends that defendant Sonia Dunn is liable individually for damages on theory of breach of implied warranty of authority by an unauthorized agent. This theory was neither pleaded nor raised below, and it is not before this Court. Dwelley v. Tom McDonnell, Inc. (1952), 334 Mich 229. If this theory were before this Court,. plaintiff could not benefit by it. CL 1948, § 566.108 (Stat Ann 1953 Rev § 26.908) requires that a contract for the sale of land must be signed by one lawfully authorized in writing to do so. It is conceded Sonia Dunn had no such authority from Anna Dunitz or Seymour Dunitz. No inquiry was made as to the authority of Sonia Dunn, and plaintiff was content to rely on the broker's representation that Sonia Dunn had such authority and on the alleged representation by Sonia Dunn that she had such authority. The signature disclosed Sonia Dunn's purported principal; plaintiff knew Sonia Dunn was acting for others and she cannot be-personally liable unless she agreed to be. Rail v. Encyclopaedia Brittanica, Inc. (1949), 325 Mich 35. No such agreement appears here.
Plaintiff next claims he is entitled to an equitable lien for the improvements he placed on the premises. With respect to defendants Anna and Seymour Dunitz, such claim is untenable. The record does not disclose that Sonia Dunn ever consulted them about the purchase agreement nor that they acquiesced in the negotiations for purchase. They had no knowledge of the repairs made by plaintiff. There is no equitable basis for granting plaintiff the lien he seeks as to them when plaintiff knew at the time he commenced repairs of the record title interest of Anna and Seymour Dunitz.
In Pakulski v. Ludwiczewski (1939), 291 Mich 502, the Supreme Court stated the basis for an equitable lien:
"An equitable lien for improvements placed on another's property by fraud, accident or mistake is given only under compelling circumstances to avoid unjust enrichment of the true owner by the person innocently making the improvements."
The record before us establishes neither accident nor mistake, and the arguable fraud of Sonia Dunn is not established by clear, satisfactory, and convincing proof. Youngs v. Tuttle Hill Corporation (1964), 373 Mich 145. In addition, the record does not establish that plaintiff innocently made the improvements.
Affirmed, with costs to defendants. Plaintiff's motion to amend to conform to proofs is denied.
J. H. Gillis, J., concurred with Quinn, J.