BARRY R BESS V WILLIAM J GREERAnnotate this Case
STATE OF MICHIGAN
COURT OF APPEALS
BARRY R. BESS, Receiver of Certain Real Property
of DOUGLAS D. ELLIARD,
June 2, 1998
Oakland Circuit Court
LC No. 96-524069-CH
WILLIAM J. GREER,
Before: Gage, P.J., and Reilly and Jansen, JJ.
In this action to quiet title to real property, defendant appeals by right the order granting
summary disposition for plaintiff under MCR 2.116(C)(10). We reverse.
We reject defendant’s initial argument that plaintiff did not have standing to bring this action
because the Wayne County Probate Court lacked the authority to appoint him as receiver of Elliard’s
assets. This Court reviews questions of law de novo. In re Lafayette Towers, 200 Mich App 269,
273; 503 NW2d 740 (1993). The probate court is a court of limited jurisdiction, deriving all its power
from statutes. MCL 600.841; MSA 27A.841; D’Allessandro v Ely, 173 Mich App 788, 794; 434
NW2d 662 (1988). In the underlying actions, the probate court had jurisdiction over claims by the
representatives of three estates against Elliard to recover the over $100,000 that Elliard
misappropriated from the estates.1 MCL 700.22(1)(a); MSA 27.5022(1)(a); Noble v McNerney, 165
Mich App 586, 591-598; 419 NW2d 424 (1988). The court entered money judgments against Elliard
in these underlying actions. MCL 600.6104; MSA 27A.6104 grants the court specific powers
concerning execution of a judgment. The statute provides in relevant part as follows:
After judgment for money has been rendered in an action in any court of this
state, the judge may, on motion in that action or in a subsequent proceeding:
(4) Appoint a receiver of any property the judgment debtor has or may thereafter
Accordingly, upon entering the judgments in the underlying actions, the probate court had authority
under MCL 600.6104(4); MSA 27A.6104(4) to appoint plaintiff as the receiver of any property Elliard
possessed or thereafter acquired. Therefore, plaintiff had standing to bring the instant action to quiet
title to the property.
Defendant next argues that the trial court erred in granting summary disposition for plaintiff under
MCR 2.116(C)(10)2 because a question of fact existed whether Elliard and defendant intended the
quitclaim deed Elliard gave to defendant to denote an absolute conveyance or security for a debt. We
agree. This Court reviews de novo a trial court’s ruling on a motion for summary disposition.
Omnicom of Michigan v Giannetti Investment Co, 221 Mich App 341, 344; 561 NW2d 138
(1997). A motion for summary disposition under MCR 2.116(C)(10) tests the factual basis underlying
a plaintiff’s claim and permits summary disposition when, except as to the amount of damages, no
genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law.
When deciding the motion, the court considers the pleadings, affidavits, depositions, admissions and
other documentary evidence available to it in a light most favorable to the opposing party. Id.
In Michigan, a court of equity may declare a deed absolute on its face to be a mortgage. Ellis v
Wayne Real Estate Co, 357 Mich 115, 118; 97 NW2d 758 (1959); Taines v Munson, 19 Mich App
29, 36; 172 NW2d 217 (1969). The controlling factor is the parties’ intention. Koenig v Van Reken,
89 Mich App 102, 106; 279 NW2d 590 (1979). Either the grantor or the grantee may assert the
existence of an equitable mortgage. Kellogg v Northrup, 115 Mich 327, 328; 73 NW 230 (1897).
The person asserting that a deed absolute on its face is actually a mortgage, however, bears a heavy
burden of proof and “must furnish a preponderance of evidence whereby it is made ‘very clear’ to the
fact finder that the parties did not contemplate an absolute sale.” Grant v Van Reken, 71 Mich App
121, 126; 246 NW2d 348 (1976). The court may glean the requisite intent from the circumstances
surrounding the transaction, including the conduct and relative economic positions of the parties and the
existence of a discrepancy between the value of the property and the price fixed in the alleged sale.
Koenig, supra at 106; see generally 4 Powell on Real Property, Ch 37, § 37.18, pp 37-117 - 37-120.
Michigan courts have identified the debtor/creditor relationship as one where the court will recognize an
equitable mortgage because the parties’ relative bargaining positions are such that a potential for abuse
exists. Alpert Industries, Inc v Oakland Metal Stamping Co, 379 Mich 272, 278-279; 150 NW2d
765 (1967). In such cases, the adverse financial condition of the grantor combined with the inadequacy
of the purchase price for the property is sufficient to establish that a deed absolute on its face is actually
a mortgage. Koenig, supra at 106.
In this case, defendant testified at his deposition that Elliard, his friend, gave him the quitclaim
deed as security for a debt. Defendant admitted that he did not record the deed, report the property as
income, pay property taxes or insurance premiums, and did not occupy the property. The record also
reflects a discrepancy between the value of the property and the recited purchase price. Elliard owed
defendant between $32,000 and $34,000 for a loan and home improvement services. The estimated
true cash value of the property for tax purposes was $46,400, while defendant estimated its worth at in
excess of $140,000. Defendant further testified that Elliard was experiencing financial difficulties at the
time he transferred the property. Defendant is bound by this clear and unequivocal testimony, and the
trial court appropriately disregarded his contradictory, later-filed affidavit in determining whether an
issue of fact existed because parties may not formulate factual issues by asserting contrary facts in an
affidavit after giving damaging deposition testimony. Kaufman & Payton, PC v Nikkila, 200 Mich
App 250, 256-257; 503 NW2d 728 (1993).
Although we recognize that defendant’s deposition testimony supports plaintiff’s claim of an
equitable mortgage, we nevertheless conclude that a question of fact existed in this case based on
Elliard’s affidavit. The key factual issue concerns defendant and Elliard’s intentions regarding the
underlying transaction because the deed itself is not a contract, but rather is the means of carrying out
the contract to convey the land. 14 Powell on Real Property, Ch 81A, ¶ 898[b], p 81A-46. Elliard
stated in his affidavit that he elected to quitclaim the property to defendant rather than prepare a
promissory note secured by a mortgage. He further stated that he conveyed the property with no
intention of retaining an interest in it. Contrary to plaintiff’s assertion, no authority exists for the
proposition that the court may disregard Elliard’s affidavit because he failed to appear for his scheduled
deposition. 3 Rather, a party’s recourse against a person who is subpoenaed but fails to appear for his
deposition is to initiate contempt proceedings. MCL 600.1701(i)(v); MSA 27A.170(i)(v); MCR
2.313(B)(1). Moreover, we note that the discovery period in this case had yet to close when plaintiff
moved for summary disposition and Elliard prepared his affidavit. Generally, summary disposition is
premature if granted before the parties complete discovery on a disputed issue. State Treasurer v
Sheko, 218 Mich App 185, 190; 553 NW2d 654 (1996). Given Elliard’s testimony regarding the
parties’ intentions and the fact that the deed itself represents an absolute conveyance, the trial court
erred in granting summary disposition for plaintiff because a question of fact existed whether the parties
intended a conveyance or a mortgage.
/s/ Maureen Pulte Reilly
/s/ Kathleen Jansen
The underlying probate proceedings were Estate of Patrick N. Poinsette, deceased, File No. 88
813-344, Estate of Mazel Parker Lockard, deceased, File No. 781,831, and Estate of Christopher
Louis Davis, deceased, File No. 88-816,096-SE.
Although plaintiff filed his motion under MCR 2.116(C)(7), the trial court considered the motion under
the appropriate subrule, (C)(10). We likewise consider plaintiff’s motion as if it was properly labeled
because no prejudice to defendant is alleged or apparent. Wells v Firestone Tire & Rubber Co, 421
Mich 641, 646 n 1; 360 NW2d 670 (1984).
Plaintiff erroneously cites Kaufman, supra at 256-257, to support his assertion that the court may
disregard Elliard’s affidavit. Kaufman states the well established rule that a witness may not contradict
his clear and unequivocal deposition testimony with a later-filed affidavit. This rule does not apply to
Elliard’s affidavit because he never gave deposition testimony.