Court Opinion

ID: 4700906
Source: CourtListenerOpinion
Date Created: 2021-07-02 17:08:31.085508+00
Date Added: 2024-06-11T08:06:13.990685
License: Public Domain

If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
                 revision until final publication in the Michigan Appeals Reports.

                           STATE OF MICHIGAN

                            COURT OF APPEALS

CINDY SCHAAF, COLLEEN M. FRYER, and                                  FOR PUBLICATION
GWEN MASON,                                                          July 1, 2021

               Plaintiffs/Counterdefendants-
               Appellees,

v                                                                    No. 343630
                                                                     Antrim Circuit Court
CHARLENE FORBES, also known as ANGIE                                 LC No. 2016-009008-CH
FORBES,

               Defendant/Counterplaintiff-
               Appellant.

                                          ON REMAND

Before: TUKEL, P.J., and SERVITTO and RIORDAN, JJ.

RIORDAN, J. (concurring in part and dissenting in part).

         I concur with the majority that the circuit court had subject-matter jurisdiction over this
case, that it did not abuse its discretion by considering more than 300 pages of documentation
offered by plaintiffs, and that it did not err by requiring contribution to plaintiffs. However, I
respectfully dissent from the majority’s conclusion that the circuit court did not err by ruling that
a trust cannot hold title to real property as a joint tenant with rights of survivorship.1

        “The common law, which has been adopted as part of our jurisprudence, remains in force
until amended or repealed.” Wold Architects & Engineers v Strat, 474 Mich 223, 233; 713 NW2d
750 (2006). See also MCL 554.43 (“Estates, in respect to the number and connection of their
owners, are divided into estates in severalty, in joint tenancy, and in common; the nature and
properties of which respectively, shall continue to be such as are now established by law, except
so far as the same may be modified by the provisions of this chapter.”). It is true that the common

1
 Because I would conclude that the circuit court erred in this regard, I also disagree with the
majority that the circuit court’s corresponding partition ruling should be affirmed as well.

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law provided that neither corporations nor sovereigns may hold title as a joint tenant because “king
and corporation can never die.” 2 Blackstone, Commentaries on the Laws of England, p *184.
That is, “because a corporation can survive indefinitely, which is contrary to the right of survival
of a joint tenancy,” a corporation may not hold title as a joint tenant under the common-law rule.
6A Fletcher, Cyclopedia of the Law of Corporations § 2816.

        However, as the majority acknowledges, a trust could not exist in perpetuity under the
common law. See Scudder v Security Trust Co, 238 Mich 318, 320; 213 NW 131 (1927). Thus,
the basis for the common-law rule precluding a corporation from holding title as a joint tenant is
inapplicable here. Indeed, the majority does not cite any authority providing that a trust may not
hold title as a joint tenant under the common law. Rather, the majority offers “common sense”
arguments to reach its conclusion. In my view, the common law and statutory framework provide
to the contrary, and that is what we should follow to resolve the matter before us.

         “A trust is a right, enforceable solely in equity, to the beneficial enjoyment of property the
legal title to which is vested in another.” Fox v Greene, 289 Mich 179, 183; 286 NW 203 (1939).
“ ‘Trusts’ in the broadest sense of the definition, embrace, not only technical trusts, but also
obligations arising from numerous fiduciary relationships, such as agents, partners, bailees, etc.”
Id. (cleaned up). See also Restatement (Third) of Trusts § 2 (“A trust . . . is a fiduciary relationship
with respect to property, arising from a manifestation of intention to create that relationship and
subjecting the person who holds title to the property to duties to deal with it for the benefit of
charity or for one or more persons . . . .”).

         Our common law recognizes that a trustee may hold title as a joint tenant. See, e.g., Norris
v Hall, 124 Mich 170, 176; 82 NW 832 (1900) (“The deed from Dyson to the five trustees expressly
stated that they were to hold ‘as joint tenants, and not as tenants in common.’ ”); Fox, 289 Mich at
184 (“[P]roperty held by a trustee who is a joint tenant, or tenant in common with another, may be
partitioned at the instance of the trustee, or of any person beneficially interested in the trust.”).2 If
a trustee may hold title as a joint tenant, it seemingly follows that the trust itself may be deemed
as holding title as a joint tenant to the same extent. See Ford v Wright, 114 Mich 122, 124; 72
NW 197 (1897) (explaining that a trustee holds trust property). The conclusion that a trust may
hold title as a joint tenant is consistent with the Restatement (Third) of Trusts § 40, which explains
that “a trustee may hold in trust any interest in any type of property.” Comment b to that section
further explains:

        [L]egal or equitable present interests in real or personal property for life or for a
        term of years, and presently existing future interests, whether legal or equitable,
        whether reversionary interests, executory interests, or remainders (contingent,
        vested, or vested subject to being divested), may be held in trust.

2
  I acknowledge that Norris and Fox concerned properties in which the joint tenants were all
trustees. Nonetheless, such cases illustrate that there was no blanket common-law prohibition
against a trustee holding title as a joint tenant.

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         Accordingly, in my view, the common-law authorities cited above weigh in favor of a rule
that a trust may hold title as a joint tenant, or at a minimum, fail to establish a contrary rule.

        Alternatively, even if there was a common-law rule providing that a trust may not hold title
as a joint tenant, I would conclude that such a rule has been superseded and replaced by statute.
The Michigan Trust Code, which is set forth as Article VII of the Estates and Protected Individuals
Code, MCL 700.1101 et seq., is a comprehensive scheme with dozens of provisions addressing
virtually every aspect of trust law. “In general, where comprehensive legislation prescribes in
detail a course of conduct to pursue and the parties and things affected, and designates specific
limitations and exceptions, the Legislature will be found to have intended that the statute supersede
and replace the common law dealing with the subject matter.” Trentadue v Buckler Lawn
Sprinkler, 479 Mich 378, 390; 738 NW2d 664 (2007) (quotation marks and citations omitted).
Thus, for example, this Court has held that the Michigan Trust Code sets forth the exclusive
grounds for removal of a trustee and that a trustee cannot be removed for additional grounds at
common law. In re Gerald L Pollack Trust, 309 Mich App 125, 161-163; 867 NW2d 884 (2015).

         Relevant to this case, there is no provision within the Michigan Trust Code that precludes
a trust from holding title to real property in the same manner as a natural person. This absence is
noteworthy because the Michigan Trust Code includes several provisions otherwise limiting trusts
and trustees. See, e.g., MCL 700.7404 (“A trust may be created only to the extent its purposes are
lawful, not contrary to public policy, and possible to achieve.”); MCL 700.7815(3)(b) (“A trustee
may not exercise a power to make distributions pursuant to a discretionary trust provision in a
manner to satisfy a legal obligation of support that the trustee personally owes another person.”).
Further, the Michigan Trust Code includes several provisions conferring broad powers upon trusts
and trustees to hold, manage, and distribute trust property. See, e.g., MCL 700.7816(1)(b)(ii) (“A
trustee, without authorization by the court, may exercise all of the . . . [p]owers appropriate to
achieve the proper investment, management, and distribution of the trust property.”); MCL
700.7817(g) (“[A] trustee has . . . [the power to] acquire property, including property in this or
another state or country, in any manner for cash or on credit, at public or private sale; and to
manage, develop, improve, exchange, partition, or change the character of trust property.”). In my
view, the express conferral of such powers, coupled with the absence of any express limitation that
would be controlling here, shows the Legislature’s intent to supersede and replace any common-
law rule that may have existed to prohibit a trust from holding title as a joint tenant.

          I respectfully disagree with the majority that “[c]ommon sense and relevant law establish
that . . . a trust may not hold property as a joint tenant with rights of survivorship.” The common-
law rule against a corporation holding title as a joint tenant—which the majority extends here to
trusts—is, according to one court, “universally criticized and generally ignored in the United
States.” Bank of Delaware v Bancroft, 269 A2d 254, 255 n 1 (Del Ch 1970).3 Indeed, the rule

3
  In Bancroft, the Delaware Court of Chancery ruled that a trust company may hold title as a joint
tenant with rights of survivorship because a Delaware statute conferring the powers of “a legally
qualified individual” upon such companies superseded the common-law rule to the contrary.

                                                -3-
was revoked in England in 1899 by the Bodies Corporate (Joint Tenancy) Act, 1899, 62 & 63
Vic.C. 20. Id. As illustrated by this case itself, application of the rule results in a division of
interests that, in all likelihood, was completely unforeseeable by both the grantor and the grantees
at the time of the trust’s creation. Even if such a peculiar outcome is compelled by the common
law applicable to corporations and joint tenancies, our Legislature has sensibly abrogated that
common law with respect to trusts in order to provide stability and certainty to trustees and those
who engage with them.

         Accordingly, I respectfully dissent from the majority’s conclusion that a trust cannot hold
title to real property as a joint tenant with rights of survivorship.

                                                                /s/ Michael J. Riordan

See also Bogert, Trusts & Trustees (2d ed) § 145 (“In the United States, where a trust company or
bank is made co-trustee with an individual, it is usual to provide in the trust instrument for
survivorship in the corporate trustee. If such a provision is not made, . . . the ancient law with
regard to the inability of corporations to act as joint tenants is deemed to be still in force . . . .”).

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