Van Etten v. Manufacturers Nat. Bank of Detroit

• Decision Date: 03 December 1982
• Docket Number: No. 56625,56625
• Citation: 119 Mich.App. 277,326 N.W.2d 479
• Parties: Annie Laurine Dodge VAN ETTEN, Plaintiff-Appellant, v. MANUFACTURERS NATIONAL BANK OF DETROIT, as Trustee under the Will of Frances Dodge Van Lennep, Deceased, Winifred Seyburn Cheston, Suzanne Seyburn Meyers, Edith Seyburn Quintana, Isabel Seyburn Harte and Joseph Freedman, Personal Representative of the Estate of Winifred Dodge Seyburn, Deceased, Defendants-Appellees. 119 Mich.App. 277, 326 N.W.2d 479
• Court: Court of Appeal of Michigan — District of US

Page 479

326 N.W.2d 479

Annie Laurine Dodge VAN ETTEN, Plaintiff-Appellant, v. MANUFACTURERS NATIONAL BANK OF DETROIT, as Trustee under the Will of Frances Dodge Van Lennep, Deceased, Winifred Seyburn Cheston, Suzanne Seyburn Meyers, Edith Seyburn Quintana Isabel Seyburn Harte and Joseph Freedman, Personal Representative of the Estate of Winifred Dodge Seyburn Deceased, Defendants-Appellees.

No. 56625.

119 Mich.App. 277, 326 N.W.2d 479

Court of Appeals of Michigan.

Submitted March 5, 1982.

Decided Sept. 7, 1982.

Released for Publication Dec. 3, 1982.

[119 MICHAPP 278] Fildew, Hinks, Gilbride, Miller & Todd (by Jonathan N. Wayman), Detroit, for plaintiff-appellant.

Dykema, Gossett, Spencer, Goodnow & Trigg, Detroit, for Manufacturers Nat. Bank of Detroit.

Bodman, Longley & Dahling (by Louis F. Dahling and Charles N. Raimi), Detroit, for Joseph Freedman.

Before BEASLEY, P.J., RILEY and MARUTIAK, ^* JJ.

BEASLEY, Judge.

Plaintiff-appellant, Annie Laurine [119 MICHAPP 279] Dodge Van Etten, appeals by leave granted from a circuit court order granting defendants' motion to remove to the probate court plaintiff's chancery proceeding to reform a 1940 settlement agreement on the basis that the issues sought to be raised are ancillary to the pending probate proceedings. Thus, we are called upon to determine whether, under the Revised Probate Code, ¹ the probate court possesses equity jurisdiction to reform a settlement contract and to order restitution of unpaid amounts when the matter is ancillary to the termination distribution of a testamentary trust.

The testator, John F. Dodge, who died in 1920, created a testamentary trust in which four of his children, Winifred Dodge Seyburn, Isabel Dodge Sloan, Daniel George Dodge, and Frances Dodge Johnson Van Lennep, would receive trust income during their lifetimes and, after the death of the last surviving child, the corpus of the trust was to be distributed to the heirs of his named children.

On August 15, 1938, at age 21, Daniel George Dodge drowned while on his honeymoon. His surviving wife, plaintiff, Annie Laurine Dodge (Van Etten), was then still in her teens. She elected to take her statutory share of his estate in lieu of taking under his will. On July 9, 1940, she entered into a so-called Corpus Purchase Agreement and an assignment of corpus with her three sisters-in-law, Winifred Dodge Seyburn, Isabel Dodge Sloan and Frances Dodge Johnson (later Van Lennep), who were the three surviving life beneficiaries of the trust. Under this agreement, they paid plaintiff $1.25 million for:

"All right, title and interest which First Party [Annie [119 MICHAPP 280] Laurine Dodge] may now or at any time hereafter, or upon the happening of any contingencies, have or become entitled to by virtue of being widow and heir of Daniel George Dodge, deceased, or for any other reason or upon any claim whatsoever, in or to any of the principal or corpus of the Estate now held in the residuary Trust under Paragraph 20, sub-paragraph 14(h), of the Will of John F. Dodge, deceased, * * *."

On January 3, 1980, when Winifred Dodge Seyburn, the last surviving child, died, the Dodge trust terminated by its terms. Shortly thereafter, proceedings were commenced in the Wayne County Probate Court for distribution of the trust corpus.

On August 8, 1980, prior to decision by the probate court determining the distribution of the Dodge trust, plaintiff filed a complaint in the Wayne County Circuit Court seeking reformation of the 1940 corpus purchase agreement on the basis of mutual mistake regarding the nature of the interest which plaintiff conveyed to the then three surviving daughters of John F. Dodge.

Defendants filed a motion to dismiss the complaint on the ground that the circuit court lacked subject matter jurisdiction. On October 31, 1980, pursuant to the Revised Probate Code, ² the trial judge found that the probate court had either exclusive or concurrent jurisdiction of the matter. Additionally, the trial judge held that the probate court was empowered to grant the equitable relief sought by plaintiff. Thus, the matter was removed to the Wayne County Probate Court to be consolidated with the pending Dodge trust proceedings. ³ From this order, plaintiff appeals by leave granted.

[119 MICHAPP 281] On appeal, plaintiff claims that the probate court is not vested with equitable power to reform a written instrument and, thus, the trial court erred in removing the action to the probate court.

The Michigan Constitution vests original jurisdiction in the circuit court in all matters not prohibited by law. ⁴ In M.C.L. Sec. 600.601; M.S.A. Sec. 27A.601, the jurisdiction of the circuit court is set forth:

"Circuit courts have the power and jurisdiction

"(1) possessed by courts of record at the common law, as altered by the constitution and laws of this state and the rules of the supreme court, and

"(2) possessed by courts and judges in chancery in England on March 1, 1847, as altered by the constitution and laws of this state and the rules of the supreme court, and

"(3) prescribed by rule of the supreme court."

The jurisdiction and power of the probate court is set forth in M.C.L. Sec. 600.841; M.S.A. Sec. 27A.841 as follows:

"The probate court has jurisdiction and power as follows:

"(a) As conferred upon it under the revised probate code.

"(b) As conferred upon it under chapters 10, 11 and 12a of Act No. 288 of the Public Acts of 1939, as amended, being sections 710.21 to 712a.28 of the Michigan Compiled Laws.

"(c) As conferred upon it under Act No. 258 of the Public Acts of 1974, as amended, being sections 330.1001 to 330.2106 of the Michigan Compiled Laws.

"(d) As conferred upon it under this act.

"(e) As conferred upon it pursuant to any other law or compact."

[119 MICHAPP 282] In Grady v. Hughes, ⁵ the Supreme Court discussed the probate court's jurisdiction:

"The probate court derives none of its jurisdiction or power from the common law, but must find the warrant for all of its doings in the statute. Its jurisdiction, powers, and duties are prescribed by law."

In Johnson v. Douglas, ⁶ it was specifically stated that probate courts do not possess equitable powers:

"Defendant questions the jurisdiction of a court of equity over the claims presented in the probate court and sought to be litigated here. There is no question that the probate court has exclusive jurisdiction over the probate of estates, except where the interposition of chancery is necessary for some auxiliary purpose. Powell v. Pennock, 181 Mich. 588 . Equity has jurisdiction over suits for specific performance of contracts concerning land, especially where there is a dispute in the amount and an accounting is necessary between the parties before specific performance may be decreed. Though the statute, 3 Comp.Laws 1929, Sec. 15673, provides for the conveyance by an executor or administrator of land sold on land contract upon compliance with the contract, the probate court is not an appropriate forum for the determination of disputed questions of fact in relation to the amount due upon the contract. Such questions are cognizable by a court of equity. Dakin v. Dakin, 97 Mich. 284 ."

An action to reform a written contract is not maintainable in an action at law. Equity courts [119 MICHAPP 283] have exclusive jurisdiction in instances where a party seeks reformation of a written instrument. ⁷ Thus, unless the Revised Probate Code provides probate courts with general equitable powers, the circuit court is the only forum which can entertain an action to reform a written instrument.

The Revised Probate Code vests the probate court with exclusive jurisdiction in the following matters:

"(a) Matters relating to the settlement of the estate of a deceased person, whether testate or intestate, who was at the time of death domiciled in the county or was at the time of death domiciled without the state leaving an estate within the county to be administered.

"(b) Trusts and trustees in the execution of wills and administration of estates of deceased persons.

"(c) Proceedings concerning the internal affairs of trusts including proceedings concerning the administration and distribution of trusts and the declaration of rights or the determination of other matters involving trustees and beneficiaries of trusts, including proceedings to:

"(i) Appoint or remove a trustee.

"(ii) Review the fees of a trustee.

"(iii) Review and settle interim or final accounts.

"(iv) Ascertain beneficiaries.

"(v) Determine any question arising in the administration or distribution of any trust, including questions of construction of wills and trusts; instruct trustees, and determine relative thereto the existence or nonexistence of an immunity, power, privilege, duty, or right.

"(vi) Release registration of a trust.

"(d) Appointment of a guardian, limited guardian, or conservator in cases prescribed by law, resolution of any contested matter in respect to the estate or ward, and settlement of the estate." ⁸

[119 MICHAPP 284] When ancillary to the settlement of an estate or trust, the probate court has concurrent jurisdiction of the following:

"(a) To determine the validity of and resolve claims involving title to real and personal property.

"(b) To authorize partition of property.

"(c) To authorize specific performance of a contract in a joint or mutual will or of a contract to leave property by will.

"(d) To ascertain survivorship of parties.

"(e) To bar a mentally incompetent or minor wife from her dower right in the real estate of her living husband as provided in section 2931 of Act No. 236 of the Public Acts of 1961, being section 600.2931 of the Michigan Compiled Laws.

"(f) To determine cy-pres, when an estate or a trust of a decedent is involved, over gifts, grants, bequests and devises in trust or otherwise to religious, educational, charitable, or benevolent uses as provided in Act No. 280 of the Public Acts of...