Court Opinion

ID: 3497371
Source: CourtListenerOpinion
Date Created: 2016-07-05 22:04:58.960457+00
Date Added: 2024-06-11T13:38:09.891779
License: Public Domain

August 13, 1921, Mary Witherspoon made a land contract to convey certain lands in St. Clair county to John Hilgendorf and Mary Hilgendorf, his wife. All parties named in this contract are dead. June 10, 1929, the probate court of Wayne county assigned the residue of the estate of Mary Witherspoon, deceased, including the property in dispute, as follows: One-fourth each to Isabelle M. Baxter, Grace N. Pungs, and Howard C. Witherspoon; and one-eighth each to William H. Witherspoon, and Sydney C. Pungs as testamentary trustee for the benefit of Dorothy May Witherspoon and Howard Witherspoon, minors. Sydney C. Pungs, plaintiff herein, did not file his bond as testamentary trustee until December 29, 1930. June 7, 1929, prior to the order of the probate court assigning the residue of Mary Witherspoon's estate, Isabelle M. Baxter, Grace N. Pungs, Howard C. Witherspoon and William H. Witherspoon conveyed their interest in the property in question to plaintiff, Sydney C. Pungs, trustee for Dorothy Witherspoon and Howard Witherspoon, minors. In the granting *Page 57 
part of the deed it is provided that the conveyance is "unto the said party of the second part, and his heirs and assigns forever." Defendant and appellant is the sole heir at law of the vendees in the land contract and acquired their interest therein July 25, 1930. November 25, 1930, Sydney C. Pungs, as testamentary trustee, was authorized by the probate court to deed the lands in question to the contract purchasers on payment of the amount due on the land contract. The record indicates defendant was ready to pay the balance due on the land contract but that his attorney found certain claimed defects in the abstract of title furnished by plaintiff, and payments on the contract were discontinued. Plaintiff then tendered title insurance for the full amount of the contract, but which contained a reservation as to part of the property. Defendant's attorney refused to accept it and demanded the abstract be cleared. An agreement was made whereby defendant was to be paid $125 to correct the legal description of the property and this was accomplished, but nothing was done about the claimed defect in the abstract which showed a reservation of a five-foot strip of land along the channel bank, to be used for a walk. Defendant made no more payments on the contract, claiming he was not bound to do so because plaintiff could not furnish a clear title. December 17, 1936, plaintiff, Sydney C. Pungs, filed a bill in chancery, as trustee, for an accounting as to the balance due on the land contract and, in default of payment, to foreclose the same, and for a deficiency. Defendant answered, denying he had assumed the obligations of the contract but admitting he was in possession of the premises under an order of the probate court of Wayne county. He claimed the vendees in the land contract were not in default and that plaintiff had not complied with the covenants of the *Page 58 
contract because of failure upon the part of plaintiff to comply with defendant's demand for delivery of a good and marketable title. The trial court, April 7, 1938, entered a decree finding the amount due upon the land contract $4,784.67, directing defendant pay or cause to be paid that amount, together with interest at 7 per cent. per annum from April 7, 1938, or, in default thereof, that the premises be sold to satisfy the amount due upon the land contract, but that no decree for deficiency be entered against defendant, who was given six months from date of sale to redeem.
Defendant appeals, claiming plaintiff was not a proper party to the foreclosure as trustee; that the abstract showed defects in title; that the trial court erred in dismissing defendant's cross-bill; and that the interest upon the contract was erroneously computed.
1. Plaintiff in his bill of complaint describes himself as "trustee, under the will of Mary Witherspoon, deceased, for Dorothy and Howard Witherspoon, grandchildren of said deceased." The residue of the estate of Mary Witherspoon, deceased, was assigned and plaintiff was appointed testamentary trustee by the probate court and his bond as such testamentary trustee fixed at $6,000, June 10, 1929. His bond as such testamentary trustee was not filed until December 29, 1930.
The statute, 3 Comp. Laws 1929, § 15865 (Stat. Ann. § 27.3044), provides:
"Every testamentary trustee before he enters upon his duties as trustee, shall give a bond."
The statute, 3 Comp. Laws 1929, § 15870 (Stat. Ann. § 27.3049), provides:
"Every trustee who neglects to give bond in accordance with law, within thirty days after the *Page 59 
probate court shall fix the penal sum of said bond, shall be considered to have declined or resigned the trust."
The failure of plaintiff to give bond as testamentary trustee within the prescribed time amounted to a disclaimer and he, therefore, never became in law a testamentary trustee entitled to administer the trust estate as such testamentary trustee. The fact that he proceeded to act as a trustee did not change his legal status. Gibney v. Allen, 156 Mich. 301. Plaintiff, under the will of Mary Witherspoon, deceased, has no power and authority as such testamentary trustee to maintain this suit.
2. It does not follow the bill of complaint should be dismissed. Plaintiff was the grantee in the deed dated June 7, 1929, by the grantors above named to him, as trustee of Dorothy and Howard Witherspoon, minors, which deed ran "unto the said party of the second part, and to his heirs and assigns forever." It is claimed because this deed runs to plaintiff, his heirs and assigns forever, it vested the title to such property in plaintiff individually, and that parol testimony is not admissible to show otherwise. Reliance is placed uponSanborn v. Loud, 150 Mich. 154 (121 Am. St. Rep. 614). In that case, plaintiff claimed he held the title to the premises in trust. It was said:
"The claim that the title was held in trust is one which should be made in a court of equity. Under our practice, that is the proper tribunal in which to determine that question and it has authority to grant appropriate relief."
Plaintiff files his bill of complaint as trustee for Dorothy and Howard Witherspoon. He acknowledges in writing in the bill of complaint he holds the title to the premises as trustee for Dorothy Witherspoon and Howard Witherspoon. It is unnecessary *Page 60 
to resort to parol evidence to overthrow the deed. Plaintiff's holding as trustee is admitted. He is not claiming title personally.
A trustee may waive the statute of frauds and acknowledge the existence of the trust, and in such case the trust will be upheld and the statute of frauds deemed to have no application. 65 C. J. pp. 257, 258.
In Patton v. Chamberlain, 44 Mich. 5, a trust in real estate rested in parol. But the grantee defended the suit and avowed the trust in her answer. It was said:
"That is a sufficient declaration of trust in writing to answer the requirements of the statute of frauds."
See, also, Teske v. Teske, 212 Mich. 468; Kerschensteiner v.Northern Michigan Land Co., 244 Mich. 403; Johnson v. Becker,251 Mich. 132.
In fact, the statute of frauds is satisfied if the trust can be proved by any subsequent acknowledgment by the trustee, as by an express declaration, or any memorandum to that effect. 1 Perry on Trusts  Trustees (7th Ed.), § 82; Lewin on Trusts (13th Ed.), p. 62; Kerschensteiner v. Northern Michigan LandCo., supra. There can be no objection to the grantee in the deed in question subsequently declaring that he holds the title to the premises in trust. 65 C. J. p. 276. Plaintiff, as trustee, had a right to maintain the suit. The trial court correctly held that plaintiff, as trustee, could bring this suit.
3. There is some question about plaintiff's ability to convey a clear title to defendant in the event defendant chooses to redeem. This is not sufficient to prevent foreclosure. The contract purchasers cannot withhold from plaintiff his land and enjoy the possession and profits thereof and pay nothing on the contract because they claim plaintiff cannot furnish them with a merchantable title. *Page 61 
Defendant is not without remedy. He may institute suit to rescind for failure of title. Jordan v. Morony, 250 Mich. 593. The rule extends to one who, as assignee or grantee of the vendee, acquires possession from him. 27 R.C.L. p. 546. The trial court should have adjusted the claimed defects in plaintiff's title and the redemption amount in accordance with the difference between what the property would have been worth without such defects and what it is worth with them. Dirr v.Hitchman, 260 Mich. 179; Bonninghausen v. Hall, 267 Mich. 347
. When any matter becomes involved in a chancery suit, the necessities of justice and equity require that all persons and all things concerned in the controversy shall be brought before the court to have their respective interests changed or protected and to end the controversy once and for all. Brown v.Kalamazoo Circuit Judge, 75 Mich. 274 (5 L.R.A. 226, 13 Am. St. Rep. 438). The court having equitable jurisdiction herein will retain it to grant complete relief. Gillen v. WakefieldState Bank, 246 Mich. 158; Bennett v. Haines, 225 Mich. 185;Whipple v. Farrar, 3 Mich. 436 (64 Am. Dec. 99).
4. Dorothy Witherspoon and Howard Witherspoon, the minor heirs, are the beneficial owners of a one-eighth interest in the land contract. Plaintiff, not having filed his bond as testamentary trustee within the prescribed time, and thus disclaimed the trust under the will, had no power and authority to represent them by reason of having been appointed trustee under the will of Mary Witherspoon, deceased. The rule in relation to parties is that all should be made parties whose interests are to be affected or concluded by the decree.Chamberlain v. Lyell, 3 Mich. 448.
"A sentence of a court pronounced against a party without hearing him, or giving him an opportunity *Page 62 
to be heard, is not a judicial determination of his rights."Windsor v. McVeigh, 93 U.S. 274, 277.
"Every man is entitled to his day in court before his rights can be finally disposed of, and even the legislature could not deprive him of the right." Ehlers v. Stoeckle, 37 Mich. 261.
Plaintiff represented the interests of these minors, not as trustee under the will of Mary Witherspoon, deceased, but as grantee in the deed above mentioned. Their interests as beneficiaries under the will of Mary Witherspoon, deceased, were not represented, plaintiff not having filed his qualifying bond as testamentary trustee in accordance with the statute.
"In all equitable actions, all persons having an interest in the subject of the action and in obtaining the relief demanded, may join as plaintiffs, and any person may be made a defendant who has or claims an interest adverse to the plaintiff. Any person may at any time be made a party if his presence is necessary or proper to a complete determination of the cause. Persons having a united interest must be joined on the same side as plaintiffs or defendants, but when any one refuses to join, he may for such reason be made a defendant." 3 Comp. Laws 1929, 14018 (Stat. Ann. § 27.662).
The interests of these minor heirs under the deed are represented by Sydney C. Pungs, plaintiff-trustee. Their interests under the will of Mary Witherspoon, deceased, are represented by Sydney C. Pungs, their guardian ad litem. They should not be plaintiffs and defendants in the same suit. As infants, they may be represented by guardian ad litem only when they are defendants. Their interests as beneficiaries under the deed and under the will are not antagonistic. Such infants should join as plaintiffs, by next friend, so far as their interest herein as beneficiaries under the will of Mary *Page 63 
Witherspoon, deceased, is concerned. 3 Comp. Laws 1929, §§ 14036-14038 (Stat. Ann. §§ 27.680-27.682). They are not so joined. But, "no action at law or in equity shall be defeated by the non-joinder or mis-joinder of parties. New parties may be added and parties mis-joined may be dropped, by order of the court, at any stage of the cause, as the ends of justice may require." 3 Comp. Laws 1929, § 14021 (Stat. Ann. § 27.665).
5. Appellant contends the interest on the contract was not computed by the trial court in accordance with the terms of the contract and the statute. The contract and the statute govern.
6. Defendant should be entitled to credit for the amount plaintiff agreed to advance to clear the title to the premises.
The decree of the trial court should be reversed and the cause remanded for further proceedings in accordance herewith. Costs to appellant.
WIEST, J., concurred with POTTER, J.