Lynder v. Schulkin , 305 Mich. 451 ( 1943 )

This is a suit in chancery for the specific performance of a land contract. On October 30, 1940, defendants entered into a written agreement to sell plaintiff two parcels of real estate for the sum of $4,400 on the following terms: the sum of $100 upon the execution of the agreement to sell and the balance within five days after the abstract had been delivered and approved. Upon refusal of defendant Mrs. Ida Schulkin to carry out the terms of the contract, plaintiff instituted the present suit on November 23, 1940.

Defendant Abraham Schulkin filed an answer and cross bill to the bill of complaint in which he acknowledged his willingness to perform the terms of the written agreement, but alleged that at the time of its execution Ida Schulkin was a mentally incompetent person and still is incompetent to convey her rights. On May 29, 1941, the probate court, upon petition of Abraham Schulkin, declared Ida Schulkin a mentally incompetent person and appointed Abraham Schulkin her guardian. On June 10, 1941, the guardian filed an answer to plaintiff's bill of complaint and alleged that on October 30, 1940, Ida Schulkin was a mentally incompetent person and asked that the bill of complaint be dismissed.

The cause came on for trial and the trial court found "that at the time of the execution of said land contract, namely, October 30, 1940, defendant Ida Schulkin was mentally incompetent to know and understand the significance of the contract that she is alleged to have entered into;" and entered an order dismissing plaintiff's bill of complaint. The decree filed in this cause also provided for the return of the $100 paid by plaintiff together with the payment of the amount expended by him for bringing the abstract to date.

Plaintiff appeals and contends that, assuming Ida Schulkin to have been mentally incompetent when the contract was entered into, the court should have granted specific performance of the contract because defendant Abraham Schulkin was willing to fulfill his agreement and a fair price was being paid for the property.

This is a chancery case. At the time it was instituted there were no proceedings in the probate court to have Ida Schulkin adjudged a mentally incompetent person, but such proceedings were instituted prior to the trial of this case. Of first importance is the determination of the mental status of Ida Schulkin at the time the agreement to sell was entered into. The probate court found Ida Schulkin a mentally incompetent person subsequent to the execution of the agreement to sell; and the trial court found her a mentally incompetent person upon the date that the agreement was entered into. We are concerned only with the finding of fact by the trial court, and while we hear chancery cases de novo, we are convinced that there is competent evidence to sustain the trial court's finding of fact upon this issue. Under such circumstances we do not reverse the findings of the trial court; and for the purposes of the issues involved herein, we shall consider Ida Schulkin an incompetent person at the time the agreement to sell was entered into. Neither of the defendants has appealed from the decree, nor is there any claim of fraud or duress.

The general rule is that contracts or conveyances of mentally incompetent persons made prior to an adjudication of mental incompetency are voidable. In Wolcott v. Connecticut GeneralLife-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.

Such contracts may be enforced or repudiated in a court of equity upon equitable grounds. See Gates v. Cornett, 72 Mich. 420. Where a grantor is incompetent to make a contract and has suffered financially in consequence, courts will set the transaction aside. See Reason v. Jones, 119 Mich. 672.

In the case at bar the burden of proof is upon defendants to show that Ida Schulkin was an incompetent person at the time she entered into the contract and having made such a showing it then becomes the duty of plaintiff to satisfy the trial court that he (plaintiff) is entitled to equitable relief. It is apparent that the trial court concluded that plaintiff was not entitled to specific performance of the land contract. The record satisfies us that plaintiff failed to make such a showing as would entitle him to relief other than that which was granted. The decree is affirmed, with costs to defendants.

BOYLES, C.J., and CHANDLER, NORTH, STARR, WIEST, BUTZEL, and BUSHNELL, JJ., concurred.