Court Opinion

ID: 7954047
Source: CourtListenerOpinion
Date Created: 2022-09-08 23:45:44.906828+00
Date Added: 2024-06-11T16:34:15.473042
License: Public Domain

Fitzgerald, J.
(dissenting). These cases, which were consolidated for purposes of appeal to Wayne Circuit Court, involve the foreclosure of two mortgages subsidized and insured by the Department of Housing and Urban Development. Summary proceedings for possession of premises were commenced by plaintiff against both defendants in the Landlord-Tenant Division of the Common Pleas Court of Detroit at separate dates, and in each case plaintiff was granted its motion for summary judgment. Defendants both filed a claim of appeal in Common Pleas Court. Defendants also moved to have the bond on appeal set in order to stay the execution of writs of restitution. The issue before this Court has been limited to the question of whether the appeal bond, as set in each case by the Common Pleas Court and affirmed by the circuit court, was "reasonable” within the meaning of the applicable court rules. We affirm the bonds as set.
*688I. Facts
On February 28, 1974, defendant Carolyn Win-gate entered into a mortgage agreement with Century Mortgage Corporation (Century). The mortgage was subsidized and insured by the Department of Housing and Urban Development (HUD) pursuant to the national housing act, 12 USC 1715z et seq. After the mortgage was recorded, it was assigned to Continental Acceptance Corporation (Continental) on February 28, 1974, and thereafter assigned to plaintiff Federal National Mortgage Association (FNMA) on March 28, 1974. Pursuant to its agreement with plaintiff, Continental acted as the servicing agent for the mortgage.
Defendant Wingate made her first payment on the mortgage on April 5, 1974, and remained current until September 4, 1974, when she was notified by Continental that her September mortgage check had been returned by the bank for insufficient funds. Mrs. Wingate remained between two and four months in default until April 1975, when she again became current. However, Mrs. Wingate made only two more payments on the mortgage, one in July 1975 and another in October 1975. During this period Continental made numerous attempts to contact Mrs. Wingate regarding the arrearage in mortgage payments. The parties eventually entered into a forbearance agreement, but Mrs. Wingate failed to follow the liquidation plan in the agreement which would have brought her up to date in her mortgage payments.
On April 1, 1976, at which time she was more than nine months in default in her mortgage payments, Mrs. Wingate was sent a certified letter advising her of the commencement of foreclosure proceedings. On April 29, 1976, a public foreclo*689sure sale by advertisement was held, and plaintiff, being the highest bidder, received a sheriff’s deed. Mrs. Wingate was sent a 30-day notice to quit on September 29, 1976, and shortly thereafter she applied to HUD for an acceptance of assignment of a mortgage in default. On January 5, 1977, having received notification that Mrs. Wingate’s application for acceptance of assignment had been rejected, plaintiff commenced summary proceedings for possession of premises. On April 21, 1977, the Common Pleas Court granted plaintiff’s motion for summary judgment.
Defendant Mary Brown entered into a mortgage agreement with Century on November 30, 1973. This mortgage was also insured and subsidized by HUD and, like the Wingate mortgage, the Brown mortgage was recorded and assigned to Continental and thereafter assigned to plaintiff FNMA, with Continental acting as servicing agent.
Defendant Brown made her first mortgage payment on January 24, 1974. During the next two years she was in default on her mortgage payments not less than five times. In February 1976, defendant Brown made her last payment, which brought her up to date through October 1975. Mrs. Brown and Continental entered a forbearance agreement on March 15, 1976, but no further mortgage payments were made.
On June 17, 1976, a certified letter was sent to defendant Brown advising her of the commencement of foreclosure proceedings. A public foreclosure sale by advertisement was held on September 2, 1976, and plaintiff, being the highest bidder, received a sheriff’s deed. On February 1, 1977, defendant Brown was sent a 30-day notice to quit by certified mail. Summary proceedings for possession of premises were commenced on March 15, *6901977. The Common Pleas Court granted plaintiffs motion for summary judgment on April 29, 1977.
Both defendants Wingate and Brown filed claims of appeal, at which time their cases were consolidated. Defendants then moved to set the appeal bond in order to stay the issuance of writs of restitution and filed affidavits that they were unable to obtain sureties or make a cash deposit in lieu thereof. On June 27, 1977, the Common Pleas Court set bond on appeal. Defendant Wingate was ordered to pay 108% of the monthly mortgage payment of $232 for each month since the expiration of the redemption period (October 29, 1976) to be paid as follows: $2,255.04 to be paid by July 5, 1977 (the payments for November 1976 through July 1977 at $250.56 per month), plus $250.56 to be paid by the first day of each subsequent month. Defendant Brown was ordered to pay 110% of the monthly mortgage payment of $194 for each month since the expiration of the redemption period (March 2, 1977) to be paid as follows: $1,067 to be paid by July 5, 1977 (the payments for March 1977 through July 1977 at $213.40 per month), plus $213.40 to be paid by the first day of each subsequent month.
On July 1, 1977, defendants filed a motion in circuit court to amend the order of the Common Pleas Court setting bond on appeal, on the basis that the appeal bond was set in violation of the court rules and was excessive. On July 22, the circuit court denied defendants’ motion to amend the order setting bond on appeal. On August 1, 1977, the Court of Appeals denied defendants’ application for leave to appeal the circuit court order of July 22, 1977. This Court granted defendants’ application for leave to appeal and defendants’ motion for stay of proceedings on October 25, *6911977. 401 Mich 830 (1977). On January 19, 1978, this Court granted plaintiffs motion for clarification of the order granting leave to appeal and limited the issue on appeal to the question of the reasonableness of the appeal bond. 402 Mich 854 (1978).
II. Issue
Defendants argue that the appeal bond set by the Common Pleas Court in each case was excessive and in clear violation of applicable court rules.
Appeals from Common Pleas Court in summary proceedings for possession of premises are governed by MCL 600.5753; MSA 27A.5753, which provides:
"Any party aggrieved by the determination or judgment of the court under this chapter may appeal to the circuit court of the same county. The appeal shall be made in the same manner as an appeal in other civil actions from the same court, with bond and procedure as provided by court rules.”
The applicable court rule to summary proceedings in Common Pleas Court is CPR 46. CPR 46.11(c) pertains to the filing of an appeal bond to stay the issuance of a writ of restitution:
"An appeal shall not stay the issuance of a Writ of Restitution and proceedings pursuant thereto. If a stay of proceedings is desired, a bond shall be filed with the Claim of Appeal. Said bond shall contain a penalty to be fixed by the judge who rendered the decision. If the trial judge has not determined a bond and is not serving at the time of the appeal, another judge of the Landlord-Tenant Division shall determine the reasonable bond. If the appellant is unable to obtain sureties or *692make a cash deposit in lieu thereof, he may have the bond without sureties or cash deposit upon such reasonable conditions as the court may determine. The bond shall be conditioned that the defendant will forthwith pay all rent due or to become due the plaintiff for the premises described in the complaint, or the rental value thereof together with costs, if the plaintiff prevails.”
Defendants contend that the sentence in CPR 46.11(c) in regard to penalties cannot apply to appeal bonds without sureties because such bonds must be set upon "reasonable conditions” and it would be patently unreasonable for such a bond to contain a penalty. Hence, argue defendants, the trial court was in violation of CPR 46.11(c) in fixing a penalty of 8% in the Wingate case and fixing a penalty of 10% in the Brown case.
Defendants cite no authority to support this interpretation of CPR 46.11(c), nor do we find support for such an interpretation in the language of the rule itself. The sentence in CPR 46.11(c) in regard to penalties speaks of bonds in general and makes no reference as to whether such bonds are with or without sureties or a cash deposit. Indeed, the court rule clearly leaves it to the trial court’s discretion to determine the "reasonable conditions” upon which an appeal bond without sureties or cash deposit may be set.
Defendants also assert that the trial court violated CPR 46.11(c) by requiring defendants to make back payments back to the date of the expiration of the redemption period when plaintiff had the right to possession of premises. Defendants argue that the trial court should have set the appeal bonds at the amount of the monthly mortgage payments for each month, beginning May 2, 1977, when each defendant filed claim of appeal. Defendants rely on Kennedy v Nims, 52 Mich 153; *69317 NW 735 (1883), for the proposition that the purpose of an appeal bond is to protect the appellee only against those losses which might accrue during the pendency of appeal. In Kennedy, this Court said:
"The object of the bond is to save all the rights of the appellee, without prejudice or diminution during the pendency of the appeal, and at the same time to prevent frivolous, vexatious and unnecessary appeals. It is not intended as an additional security for the original indebtedness of the delinquent party, but as an indemnity to the appellee against further trouble, expense and costs while the case is undergoing a review in this Court to ascertain whether or not error has been committed or injustice done the appellant by the decree of the court below. I do not think that under the findings in this case the surety in the appeal bond is liable for any portion of the deficit in the mortgage indebtedness.” 52 Mich 153, 156.
While the purpose of an appeal bond was well stated by the Kennedy Court, we find that the facts in that case are clearly distinguishable from those in the instant case. In Kennedy, plaintiff, upon prevailing on appeal from a decree in a foreclosure suit, sought to satisfy the deficiency of the mortgage sale by bringing an action on the appeal bond. This Court held that the sureties were liable only for the costs on appeal and not to make up the deficiency of the mortgage sale. In the instant case, the only issue was whether plaintiff had the right to possession of premises at the expiration of the redemption period.
Defendants misinterpret Kennedy when they argue that that case requires only the protection of those rights which might accrue during the pendency of the appeal. The Kennedy case speaks of saving "all the rights of the appellee” whenever *694those rights were acquired. In the instant case, plaintiff acquired the right of possession of premises, or the fair rental value thereof, at the expiration of the redemption period. Hence, the Common Pleas Court fixed the appeal bond in each case at the amount of the monthly mortgage payments for each month beginning at the end of redemption period.
Further support for the propriety of setting defendants’ appeal bonds to include back payments to the expiration pf the redemption period may be found in GCR 1963, 701, which pertains to appeals to circuit court. Former GCR 1963, 701.7(3) provided in pertinent part as follows:
"Unless exempted by law, the appellant shall file a bond with his claim of appeal, cross appeal, or order allowing appeal. The bond on appeal
(3) shall contain a condition that the appellant will prosecute his appeal with all due diligence, to a decision in the circuit court, and that if a judgment is rendered against him in such court, he will pay the amount of such judgment, including all costs, with interest thereon, and if his appeal is discontinued or dismissed that he will pay the amount of the judgment rendered against him, if any, in the lower court including all costs, with interest thereon and in cases involving the possession of land, he will pay damages from the time of the forcible entry, or detainer, or the notice to quit, or demand for possession as the case may be, and do any other act which shall be expressly named in the statute authorizing appeal as a condition of the appeal bond;”, (emphasis added).
GCR 1963, 701 has been amended, and, effective July 25, 1977, 701.7(3) was replaced by 701.8(a)(2) which provides in pertinent part as follows:
*695"Unless a bond is waived under GCR 1963, 120 or the appellant is exempted by law from filing a bond, the appellant shall file a bond with the claim of appeal, claim of cross appeal, or order granting leave to appeal. The appeal bond must:
"(C) contain a condition that
"(iii) in a case involving the possession of land, he will pay damages from the time of forcible entry, the detainer, the notice to quit, or the demand for possession * * * .”
Defendants also maintain that "reasonable conditions” are not adequately defined by CPR 46.11(c) and urge this Court to consult DCR 754 pertaining to summary proceedings to recover possession of premises. Appeal bonds in summary proceedings are governed by DCR 754.10(3), which provides in pertinent part as follows:
"When it shall appear by affidavit that appellant is unable to obtain sureties or make a cash deposit in lieu thereof, appellant may have the bond without sureties or cash deposit upon such reasonable conditions as may be determined by the court. If a judgment for possession has been entered for plaintiff, the reasonable condition for a defendant-appellant shall be that he shall pay into the trial court within five days of the date rent or payments are due under the lease or contract, a sum equal to the reasonable rental value of the premises, as determined by the court, as it becomes due after the time the appeal is filed and during the pendency of the appeal.”
Defendants rely on the last sentence of DCR 754.10(3) as authority for their argument that their appeal bonds should have only included payments "due after the time the appeal is filed”. We find defendants’ argument with regard to the ap*696plicability of DCR 754.10(3) unpersuasive. Each court is obligated to follow its own court rules, and the procedure in Common Pleas Court for fixing bond in summary proceedings for possession of premises is governed by CPR 46.11(c).
Since we find that the appeal bonds were set in accordance with the applicable court rules, we are faced with the question of whether or not the trial court abused its discretion in setting defendants’ appeal bonds. Appellate review of a trial court’s exercise of judicial discretion has been narrowly limited by this Court. In Spalding v Spalding, 355 Mich 382; 94 NW2d 810 (1959), we said:
"The term discretion itself involves the idea of choice, of an exercise of the will, of a determination made between competing considerations. In order to have an 'abuse’ in reaching such determination, the result must be so palpably and grossly violative of fact and logic that it evidences not the exercise of will but perversity of will, not the exercise of judgment but defiance thereof, not the exercise of reason but rather of passion or bias.” 355 Mich 382, 384-385.
In the instant case, there were a number of factors to be taken into account by the trial court in setting the appeal bond. According to the affidavits filed in the Common Pleas Court, defendant Wingate had an after-tax income of $8,822.84 per year and received $1,924 in child support per year. Defendant Brown had an after-tax income of $11,-440 per year. At the time the trial court fixed the appeal bonds, defendant Wingate had not made a mortgage payment in more than 21 months and defendant Brown had not made a mortgage payment in more than 17 months. Further, one of the primary objects of an appeal bond is to prevent frivolous appeals. We cannot believe that that end *697would be well served by merely requiring defendants to resume making their monthly mortgage payments as of the date they filed claim of appeal, after having lived rent-free for 21 and 17 months respectively.
Based on the standard set forth in Spalding, we perceive no abuse of discretion by the trial court in setting defendants’ appeal bond.
Affirmed.
Ryan, J., concurred with Fitzgerald, J.