Brown v. Khoury , 346 Mich. 97 ( 1956 )

Dethmers, C. J.

Plaintiffs appeal from an order to dismiss entered on defendant’s motion before trial. The trial court found and his decision was predicated upon the finding that defendant was a bona fide purchaser for value of the premises in question without notice of any infirmity of title. The record filed in this Court, unfortunately, does not disclose the basis for that finding, but its correctness is not questioned nor brought in issue by plaintiffs’ statement of reasons and grounds for appeal nor by the statements of questions involved and of facts, or argument contained in their brief. It follows that there is no question as to the correctness of that finding before us (Michigan Court Rules No 65, §§ 1, 3; No 66, § 3; No 67, § 1 [1945]) and, hence, that we need not determine whether, within the meaning of Culbertson v. Witbeck Co., 92 Mich 469, defendant enjoys the benefit of a presumption, absent allegations in the pleadings or proofs either way, that he was such bona fide purchaser. We proceed, therefore, to determination of the question presented on the merits.

Plaintiffs’ decedent was the owner of real estate. Pour days before death, while mentally incompetent but not so adjudicated, he joined his wife in a conveyance thereof to a third party who reconveyed to them as tenants by the entireties. After his death the 2 deeds were recorded. The wife, as survivor and holder of record title, then conveyed to defendant, a bona fide purchaser for value without notice of infirmity of title. Contending that the conveyance by their decedent was void ab initio by reason of his mental incompetence, plaintiffs brought this suit to have it set aside. Query: Is it valid as to defendant?

Plaintiffs rely on Rogers v. Blackwell, 49 Mich 192. There, this Court affirmed a decree setting aside a deed given by an insane person and certain mortgages given by the grantee to mortgagees who took in good faith for value. The reasoning in that case is fairly expressed in the syllabus, as follows:

“An insane grantor’s deed is not merely voidable, but is void, as against third persons, if he never recovers his reason, or conducts himself, when he does, so as to ratify the deed. And after his death bis heirs-at-law can have the deed declared void by a court of equity.”

Since then the views of this Court have developed and crystallized, to find apt expression in Lynder v. Schulkin, 305 Mich 451, 454, as follows:

“The general rule is that contracts or conveyances of mentally-ineompetent persons made prior to an adjudication of mental incompetency are voidable. In Wolcott v. Connecticut General Life Insurance Co., 137 Mich 309, we held that a conveyance by an insane person not under guardianship is not absolutely void, but merely voidable. See, also, Moran v. Moran, 106 Mich 8 (58 Am St Rep 462); Dodds v. Purdy, 277 Mich 593.”

This Court went on to say in that case (p 454):

“Such contracts may be enforced or repudiated in a court of equity .upon equitable grounds. See Gates v. Cornett, 72 Mich 420.”

In the mentioned Gates Case this Court held that, even though the mortgages given by the mentally-incompetent' person were held by one who had taken them directly from him with knowledge of the mental incompetence of which he had taken advantage, nonetheless, upon equitable grounds, the mortgage for which the incompetent had received value was valid and enforceable and only those which were fraudulently obtained by overreaching and not for value should be cancelled. In holding in that case that the conveyances of a mentally-incompetent person are “not absolutely void” this Court said:

“To so hold would be to unsettle titles, and overthrow a long series of business transactions in which complainant was engaged during 8 years, without securing any benefit to Gates, and to the detriment of a great many persons who dealt with him in the utmost good faith, and without cheating him.” Gates v. Cornett, 72 Mich 420, 435:

Under the holdings in Gates and in Lynder and the cases therein cited, it is clear that the view in Rogers has been modified, that such conveyances are not absolutely void but voidable,- and that a court of equity will in some instances enforce and in others cancel them, as the-equities of the case may require.

• Passing the question of whether a husband’s creation of an estate by the entireties in his wife works a fraud on his heirs-at-law, application of the equitable principles recognized in Gates and Lynder and the cases therein cited requires a holding that, under the facts and circumstances of this case, the conveyance is valid as to the defendant, an innocent third party, bona fide purchaser for value without notice.

Affirmed, with costs to defendant.

-Sharpe, Boyles, Kelly, and Carr, JJ., concurred with Dethmers, C. J.