Jackson v. Estate of Green

• Decision Date: 30 July 2009
• Docket Number: Docket No. 136423.,Calendar No. 3.
• Citation: 771 N.W.2d 675,484 Mich. 209
• Court: Michigan Supreme Court
• Parties: Joan B. JACKSON, Plaintiff-Appellee, v. ESTATE OF Ronald GREEN, Defendant-Appellant.

771 N.W.2d 675

484 Mich. 209

Joan B. JACKSON, Plaintiff-Appellee, v. ESTATE OF Ronald GREEN, Defendant-Appellant.

Docket No. 136423.

Calendar No. 3.

Supreme Court of Michigan.

Argued April 7, 2009.

Decided July 30, 2009.

Laurie S. Longo and Dickinson Wright P.L.L.C., (by John G. Cameron, Jr.), Ann Arbor, for Joan B. Jackson.

Brown Powers, P.L.L.C. (by Bridget Brown Powers and Jennifer J. Schafer), Petoskey, for the estate of Ronald Green.

Opinion

CORRIGAN, J.

We granted leave to appeal to consider whether an action to partition real estate may go forward when the joint tenant who filed the action died before an order of partition entered.¹ We would hold that title vested in the surviving joint tenant on the decedent's death because the mere filing of a partition action does not sever a joint tenancy and no order granting partition was entered before the death. We would thus affirm the trial court's denial of defendant's motion for summary disposition and the judgment of the Court of Appeals on the partition issue.

I. FACTS AND PROCEEDINGS

At issue in this case are two parcels of real estate held by plaintiff and defendant as joint tenants and a series of oral loans from plaintiff to defendant.² In May 1991, defendant negotiated the purchase of a parcel of land on behalf of plaintiff, and the deed conveyed the land to both parties as joint tenants. In September 1991, plaintiff purchased a second parcel of property, which was conveyed to plaintiff and defendant as joint tenants with full rights of survivorship.

In 2004, plaintiff filed a breach of contract action, alleging that defendant had failed to repay the loans. Plaintiff also sought to force defendant to relinquish his right to the two parcels of land. The trial court granted summary disposition for defendant regarding the deeds for the properties, holding that the deeds were properly executed and gave defendant valid property interests. Regarding the loans, the court did not accept defendant's argument that the statute of limitations barred plaintiff's claim. A jury found that each check plaintiff issued to defendant was a loan, and the court entered judgment on the verdict in plaintiff's favor.

Defendant then filed a separate action for partition of the parcels. At plaintiff's request, the partition action was stayed pending the appeal in this case. Defendant unexpectedly died while the appeal was pending in the Court of Appeals. His estate was substituted as the plaintiff in the partition action and as the defendant in this case.

The Court of Appeals affirmed the trial court's ruling that defendant possessed a valid property interest in the two parcels, but held that because no order severing the joint tenancy had issued in the partition action before defendant died, defendant's interests in the parcels reverted to plaintiff upon defendant's death. The Court of Appeals further held that the statute of limitations did not bar plaintiff's breach of contract action for repayment of the loans because the claim did not accrue until plaintiff demanded repayment by filing her complaint in 2004.³

We granted defendant's application for leave to appeal.⁴

II. STANDARD OF REVIEW

Whether a partition action may go forward if a joint tenant dies before the joint tenancy is severed is a question of law that we review de novo. Cardinal Mooney High School v. Michigan High School Athletic Ass'n, 437 Mich. 75, 80, 467 N.W.2d 21 (1991).

III. PARTITION

We agree with the Court of Appeals that defendant's interest in the parcel of land⁵ automatically reverted to plaintiff when defendant died. Thus, defendant's estate has no interest in the property, and even if defendant's partition action survived his death under Michigan's survival statute, MCL 600.2921, nothing remains to partition.

"The principal characteristic of the joint tenancy is the right of survivorship. Upon the death of one joint tenant, the surviving tenant or tenants take the whole estate." Albro v. Allen, 434 Mich. 271, 274-275, 454 N.W.2d 85 (1990). An ordinary joint tenancy⁶ may be severed, and the right of survivorship thereby destroyed, by an act of the parties, conveyance by either party, or levy and sale on an execution against one of the parties. Id. at 275, 454 N.W.2d 85.

A party can sever a joint tenancy by compelling a partition. Smith v. Smith, 290 Mich. 143, 155, 287 N.W. 411 (1939), quoting Midgley v. Walker, 101 Mich. 583, 584, 60 N.W. 296 (1894). Until an order of partition has been entered, however, a partition has not been compelled and, thus, the joint tenancy has not been severed. See anno: What acts by one or more of joint tenants will sever or terminate the tenancy, 64 A.L.R.2d 918, 956 (explaining that "[i]t is not the filing of the partition action which terminates the joint tenancy, but only the judgment in such action which has that effect") (quotation marks and citation omitted).

Indeed, the universal rule in the United States is that a pending suit for partition does not survive the death of one of the joint tenants. See Heintz v. Hudkins, 824 S.W.2d 139, 142-143 (Mo.App., 1992), and cases cited therein. "This rule is based on two related concepts: First, the theory of survivorship—that at the moment of death, ownership vests exclusively in the surviving joint tenant or tenants—and second, the doctrine that severance of the joint tenancy does not occur until the partition suit reaches final judgment." Id., citing Cobb v. Gilmer, U.S.App.D.C. 398, 400, 365 F.2d 931 (1966).

Accordingly, we would hold that the filing of the partition action did not sever the joint tenancy because an order effectuating a partition had not entered at the time of defendant's death. Therefore, regardless whether defendant's partition action survived his death under the survival statute, his interest in the parcel of land did not.

IV. CONCLUSION

We would hold that defendant's filing of the partition action did not sever the joint tenancy because no order granting partition was entered before defendant's death. Thus, title vested in plaintiff when defendant died, and nothing remains to partition. The Court of Appeals correctly analyzed the partition issue, and we would therefore affirm its judgment on that issue.

ROBERT P. YOUNG and STEPHEN J. MARKMAN, JJ.

I agree with the analysis set forth in Justice Corrigan's opinion, which affirms the Court of Appeals on the partition issue. I would further hold that the statute of limitations does not bar plaintiff's claim for breach of contract on the series of oral agreements for loans. Because the loans were made with no fixed time of repayment, they were payable on demand. The period of limitations would not begin to run on such a claim until either a demand was made, expressly or by filing a complaint, or a reasonable amount of time had elapsed without a demand. In this case, no demand was made until the action was filed.

The issue of when a period of limitations begins to run on an oral agreement for a loan that has no fixed date of payment is a question of law that we review de novo. Collins v. Comerica Bank, 468 Mich. 628, 631, 664 N.W.2d 713 (2003).

The applicable limitations period for plaintiff's breach of contract claim is six years. MCL 600.5807(8). The central issue here is when the limitations period began to run. "Except as otherwise expressly provided, the period of limitations runs from the time the claim accrues." MCL 600.5827. Moreover, a claim generally accrues when the wrong is done. Boyle v. Gen. Motors Corp., 468 Mich. 226, 231, 661 N.W.2d 557 (2003).

The general rule governing the commencement of the running of the statute of limitations is that the statutory period is computed from the time when the right of action that the plaintiff seeks to enforce first accrued; ordinarily, in an action based on a contract, accrual occurs as soon as there is a breach of contract, with some courts qualifying this by stating that accrual occurs when the promisee discovers or should have discovered the breach, and others stating that accrual occurs upon breach, whether or not the promisee is then aware of the breach. [31 Williston, Contracts (4th ed.), § 79:14, pp. 303-307 (emphasis added).]

In determining when the period of limitations begins to run on a loan that has no repayment term, we must therefore necessarily determine when a breach of contract occurs.

The oral loan agreements in this case did not set a time for repayment. There is no controlling caselaw that establishes when a borrower is in breach of an oral loan agreement that is silent concerning when repayment must occur. Thus, this Court should articulate a rule of law to determine when a breach occurs under the circumstances in this case.

We do have some established bedrock principles to guide us in formulating such a rule. A loan made with no fixed time of repayment is payable on demand. Colburn v. First Baptist Church & Society of Monroe, 60 Mich. 198, 200, 26 N.W. 878 (1886). As a general matter, because no terms of repayment were specified in the contracts, the oral loan agreements could not have been breached until payment was demanded and the demand was rebuffed.

Nevertheless, the absence of a specific time for repayment does not allow a creditor to withhold this demand for an indefinite period of time. In the absence of an agreement to the contrary, we presume that the parties intended plaintiff's demand for repayment to occur within a reasonable amount of time. See Duke v. Miller, 355 Mich. 540, 542-543, 94 N.W.2d 819 (1959) ("[W]hen a contract is silent as to time of performance or payment, absent any expression of a contrary intent, the law will presume a reasonable time."); Pierson v. Davidson, 252 Mich. 319, 324, 233 N.W. 329 (1930) ("It is a general rule of law that where no time is stipulated, a reasonable time will be presumed. Reasonable time depends upon the facts and circumstances of each case.").¹ Determining what constitutes a reasonable...