author: Per Curiam. D. E. Holbrook, J.

text:
    DAANE v LOVELL
    Docket No. 77-773.
    Submitted November 8, 1977, at Grand Rapids.
    Decided May 10, 1978.
    Leave to appeal applied for.
    Bertha Lehto, plaintiffs ward, executed a deed to her farm granting the remainder to her niece, Angela Lovell, and keeping a life estate for herself. Some 2-1/2 years later Homer Daane, guardian of the estate of Bertha Lehto, brought suit against Angela Lovell for cancellation of that conveyance alleging undue influence and failure of consideration. The Manistee Circuit Court, Charles A. Wickens, J., found the conveyance to be a valid gift. Defendant appeals. Held:

    1. Under the facts in this case the Court of Appeals is not left with the firm and definite conviction that the trial court erred in concluding that there was no undue influence.
    2. Under the facts of this case the trial court rightly concluded that the deed was intended as a gift, valid even in the absence of consideration.
    Affirmed.
    D. E. Holbrook, J., dissented. He would hold that under the facts of this case the plaintiff sustained his burden of proof of undue influence and that the consideration was so inadequate as to shock the conscience of the court and necessitate cancellation of the deed.
    Opinion of the Court
    1. Appeal and Error—Chancery—Judicial Review—Findings of Fact—Clearly Erroneous.
    Chancery cases are reviewed de novo, examining the entire record, weighing all the evidence and subjecting the trial court’s findings of fact to closer scrutiny than would be employed in review of a jury verdict; consideration in such cases is given to the trial court’s opportunity to better judge the credibility of witnesses who appeared before it and the trial court’s findings of fact will not be set aside unless clearly erroneous; that is, unless the Court of Appeals is left with a definite and firm conviction that a mistake has been made.

      References for Points in Headnotes

       27 Am Jur 2d, Equity § 266.

       23 Am Jur 2d, Deeds §§ 148-152, 154.

       23 Am Jur 2d, Deeds § 61 et seq.

      2. Deeds—Undue Influence—Evidence—Presumptions—Fiduciaries.
    A presumption of undue influence in the execution of a deed is brought to life upon the introduction of evidence which would establish (1) the existence of a confidential or fiduciary relationship between the grantor and a fiduciary, (2) the fiduciary or an • interest which he represents benefits from a transaction, and (3) the fiduciary had an opportunity to influence the grantor’s decision in that transaction; establishment of such a presumption creates a "mandatory inference” of undue influence, shifting the burden of going forward with the evidence to the party claiming no undue influence.
    3. Deeds—Gifts—Adequacy of Consideration.
    A deed is valid even absent consideration where the transaction was intended as a gift.
    Dissent, by D. E. Holbrook, J.
    4. Deeds—Undue Influence—Presumptions—Burden of Persuasion.

      A plaintiff alleging that a deed was invalid as the product of undue influence may satisfy the burden of persuasion with the use of the presumption of undue inñuence, which remains as substantive evidence once the elements of the presumption have been proved, where the defendant fails to discharge his duty to produce sufficient rebuttal evidence to overcome the presumption.

    5. Deeds—Adequacy of Consideration—Judicial Review.

      A deed will be set aside if the consideration is so grossly inadequate as to shock the conscience of the court.

      Running, Wise & Wilson (by T. J. Phillips, Jr.), for plaintiff.

      Jennings & DeVries, for defendant.

      Before: R. B. Burns, P. J., and D. E. Holbrook and R. B. Martin, JJ.

       Circuit judge, sitting on the Court of Appeals by assignment.

   Per Curiam.

Plaintiffs ward, Bertha Lehto, gave her niece, Angela Lovell, a deed to her farm, retaining only a life estate. Plaintiff brought suit for cancellation of the deed, alleging undue influence and failure of consideration. The trial court held that the deed was a valid gift. We affirm.

In this chancery case we review de novo, examining the entire record, weighing all of the evidence and subjecting the trial court’s findings of fact to closer scrutiny than we would employ on review of a jury verdict. Kar v Hogan, 399 Mich 529, 546; 251 NW2d 77, 82 (1976), Tuttle v Department of State Highways, 397 Mich 44, 46; 243 NW2d 244, 245 (1976). Consideration is given to the trial court’s opportunity to better judge the credibility of witnesses who appeared before it. GCR 1963, 517.1. The trial court’s findings of fact will not be set aside unless clearly erroneous; that is, unless we are left with a definite and firm conviction that a mistake has been made. GCR 1963, 517.1, Tuttle v Department of State Highways, supra, Mazur v Blendea, 74 Mich App 467, 469; 253 NW2d 801, 802.(1977).

Prior to 1972, Mrs. Lehto lived on the farm with her husband. They had no children, but Mrs. Lehto did have sisters, a brother and numerous nieces and nephews, some of whom lived in the vicinity. Although the Lehtos visited with many relatives and friends, they saw Mrs. Lovell and her husband most, visiting them on holidays and often for dinner on Sundays. Mrs. Lovell was Mrs. Lehto’s favorite "fair-haired niece”.

The Lehtos’ income consisted of social security and soil bank payments. To qualify for soil bank payments, Mr. Lehto kept several acres of the farm in crops each year. Mr. Lehto handled all of the couple’s financial affairs.

Mrs. Lehto suffered a stroke in 1969, and was comatose for nearly a week. During her hospitalization Mrs. Lovell, who worked at the hospital, helped care for her. Mrs. Lehto subsequently made a good physical recovery, but suffered thereafter from forgetfulness. This caused her to have difficulty managing some things, particularly financial matters. Occasionally her imagination would get away from her, causing her to say things which were not true. A doctor who examined her in 1974 concluded that she was alert as to time and place, but exhibited "slight paranoid tendencies” and overconcern with financial matters.

In 1971, Mr. and Mrs. Lehto executed similar wills, leaving to each other the farm, but providing that if either predeceased the other, then Mrs. Lovell would receive the farm. They did so because Mrs. Lovell had shown them more consideration than anyone else, and because she had cared for Mrs. Lehto in the hospital. Mrs. Lovell was informed of the provision they had made for her in the will.

Mr. Lehto died June 6, 1973. Mr. Lovell took Mrs. Lehto to the local social security office in order to adjust benefits. The office suggested that Mrs. Lehto appoint someone to accept and deposit her social security checks for her. Mrs. Lehto appointed Mrs. Lovell, who had not requested the appointment but nonetheless consented to it. She opened a joint account, in order that she would be able to write checks on the account should Mrs. Lehto become incapacitated. Mrs. Lovell thereafter deposited the social security in the account, and Mrs. Lehto wrote checks on the account to pay her bills. For several years after Mr. Lehto’s death, Mr. Lovell helped Mrs. Lehto by planting several acres of crops per year to qualify Mrs. Lehto for soil bank payments, mowed her yard and repaired her barn.

On August 10, 1973, Mrs. Lehto deeded her farm to Mrs. Lovell, retaining a life estate. The circumstances surrounding the transfer were disputed at trial.

Dennis Keleher testified that he was Mrs. Lehto’s attorney, and had had a conference with her several days prior to the transfer, either in person or by telephone. Mrs. Lehto had requested that he draft a new will, eliminating reference to her deceased husband, changing the residuary beneficiaries, naming Mrs. Lovell executrix, and continuing unchanged the grant to Mrs. Lovell of the farm. On August 10 Mrs. Lehto came to his office, in the company of Mr. and Mrs. Lovell, and executed her will. Mrs. Lehto was concerned about avoiding the cost of probating the farm, and "they” had agreed upon an immediate conveyance to Mrs. Lovell, with a life estate remaining in Mrs. Lehto. Mr. Keleher made sure that Mrs. Lehto understood the significance of what she was doing, taking substantial time to explain that the conveyance would be irrevocable, and explaining alternate methods of accomplishing her intent. Someone had mentioned that Mr. Lovell was doing some work for Mrs. Lehto, so he suggested a contract requiring Mr. Lovell to continue the work in exchange for the conveyance. Mrs. Lehto rejected this alternative because the cost of preparing the contract would be too great. The instructions regarding the deed came from Mrs. Lehto, not the Lovells, and he noticed nothing which would indicate incompetency or undue influence.

Mrs. Lehto testified that she had the will made out, but Mr. and Mrs. Lovell didn’t like it, so they rushed her down to Mr. Keleher’s office, not stopping to see if anyone would go with her. On the way there, Mrs. Lovell told her that they would take care of her for the rest of her life. When they arrived, Mr. Keleher had the deed already prepared, so that the Lovells had cooked up the transfer with Mr. Keleher beforehand. She asked Mr. Keleher what was on the paper, but she didn’t understand what he said. All of his advice was so complicated she didn’t understand a word of it. Something was said about the Lovells taking care of her, but Mrs. Lovell spoke up and said she wouldn’t take care of her. Mrs. Lehto was afraid that, if she didn’t sign the deed, she would lose her soil bank money. "I thought they would do that for me, so I signed it.” Indeed, it was her intent that, in exchange for giving Mrs. Lovell the farm in both the 1971 and 1973 wills, the Lovells would care for her for the rest of her life.

Mrs. Lovell testified that, on August 10, Mrs. Lehto called and asked her to take her to Mr. Keleher’s office. Mrs. Lehto had asked Aunt Elsie to take her, but Aunt Elsie had other commitments. They had no conversation regarding either the will or the deed on the way to the office, and she did not know why they were taking Mrs. Lehto to the office until they had arrived.

Mr. Lovell testified that they took Mrs. Lehto to Mr. Keleher’s office to have her will "verified”. Neither he nor his wife told Mrs. Lehto that, if she didn’t sign the deed, she would lose money. They made no promise to care for her.

Mr. Keleher’s secretary testified that she typed out the deed the same day Mrs. Lehto and the Lovells came to the office.

At some point subsequent to the execution of the deed, the relationship between Mrs. Lehto and the Lovells soured. Mrs. Lehto had been writing checks to pay her bills, but was continuously overdrawing her account. Mrs. Lovell determined that a different arrangement was necessary, so she started putting the checks in her own account, paying Mrs. Lehto’s bills, and keeping track of Mrs. Lehto’s money in a ledger. When Mrs. Lehto requested money for a special purpose, she would give it to her. Mrs. Lovell took care of Mrs. Lehto’s bills in this manner from December 1974 to February 1976.

Mrs. Lehto became dissatisfied with this economic relationship. First, she did not have readily available "pin” money, and could not give money at her church. She had to ask Mrs. Lovell for everything, and Mrs. Lovell seemed unresponsive. Further, she was unhappy that she had to continue to pay taxes and insurance on the property, even though the Lovells "owned it”.

Perhaps the culmination of Mrs. Lehto’s dissatisfaction was an incident involving the sale of some Christmas trees. Mrs. Lehto testified that a man came to her and asked to buy some Christmas trees. He went out and marked some trees, and later returned and removed them. She didn’t recall how many trees he took, or how much he paid. When the Lovells came over and she told them about the man, they "gave me heck”, pinched her, and pulled at her clothes, saying she had no business selling the trees. The Lovells testified that Mrs. Lehto had previously become confused regarding payment on the sale of a tractor. They did not object to the sale of the Christmas trees, but asked her why she did not confide in them so they could help account for the trees. Mrs. Lehto became very belligerent, and it became necessary for Mr. Lovell to restrain her by holding her arms down. They didn’t pinch her or pull at her clothes.

Mr. Keleher saw Mrs. Lehto again September 30, 1974, and determined that Mrs. Lovell was no longer the "fair-haired niece”. It seemed that Mr. Lovell had not plowed, so that Mrs. Lehto did not receive payment from the soil bank. Mrs. Lehto was also dissatisfied with Mrs. Lovell’s handling of her money, and wanted to manage her own affairs.

The trial court found that the deed was intended as a gift, and that there was no contract for the Lovells to care for Mrs. Lehto. There was no undue influence exerted. After the deed was legally executed, Mrs. Lehto simply changed her mind, and that was not a proper basis for relief.

"To establish undue influence it must be shown that the grantor was subjected to threats, misrepresentation, undue flattery, fraud, or physical or moral coercion sufficient to overpower volition, destroy free agency and impel the grantor to act against his inclination and free will. Motive, opportunity, or even ability to control, in the absence of affirmative evidence that it was exercised, are not sufficient. Nelson v Wiggins, 172 Mich 191; 137 NW 623 (1912). However, in some transactions the law presumes undue influence. The presumption of undue influence is brought to life upon the introduction of evidence which would establish (1) the existence of a confidential or fiduciary relationship between the grantor and a fiduciary, (2) the fiduciary or an interest which he represents benefits from a transaction, and (3) the fiduciary had an opportunity to influence the grantor’s decision in that transaction.” Kar v Hogan, 399 Mich 529, 537; 251 NW2d 77, 78-79 (1976).

The presumption was brought to life in the instant case. Mrs. Lovell was Mrs. Lehto’s favorite niece, and had her trust and confidence. Because of her faulty memory, Mrs. Lehto was dependent upon Mrs. Lovell to handle her financial affairs. Mrs. Lehto was dependent upon Mr. Lovell for a substantial portion of her income. There was, therefore, a fiduciary relationship between Mrs. Lovell and Mrs. Lehto. Mrs. Lovell benefited from the transaction, by acquiring an immediate interest in the property. Mrs. Lovell had an opportunity to influence Mrs. Lehto’s disposition of her property during the trip to Mr. Keleher’s office.

Establishment of the presumption created a "mandatory inference” of undue influence, shifting the burden of going forward with the evidence to defendant. Kar v Hogan, supra at 541-542; 251 NW2d at 80-81. Mr. and Mrs. Lovell testified that they did not attempt to influence Mrs. Lehto’s disposition of her property. This rebuttal evidence turned the presumption into a "permissible inference”. The presumption is substantive evidence of undue influence; specifically, the factors giving rise to the presumption are circumstantial evidence that undue influence occurred. Kar v Hogan, supra, In re Wood Estate, 374 Mich 278, 290-291; 132 NW2d 35, 43-44; 5 ALR3d 1, 15 (1965). The burden of persuasion remains on plaintiff throughout. Kar v Hogan, supra. We therefore weigh the evidence of undue influence pro and con, to determine whether plaintiff has met his burden of persuasion.

There are corroborative facts tending to support the permissible inference of undue influence. Mrs. Lehto did not request her attorney to prepare a deed during the initial conference, but left the disposition of the property in the will intact, except for reference to her deceased husband. This would seem to indicate that she thought of the deed between the time of the initial conference and the time when she arrived at the office with the Lovells. This in turn suggests that the Lovells requested or pressured her for the disposition. The reason advanced by Mrs. Lehto to her attorney, of avoiding the cost of probate, would seem to be a factor of greater concern to the Lovells than Mrs. Lehto. Mrs. Lehto testified that the Lovells were to care for her, and she was afraid that she would lose income if she did not sign the deed. Finally, it seems illogical for Mrs. Lehto to attempt to dispose of the same property by two different methods, the will and the deed, on the same day.

There are, however, substantial factors tending to counter the inference. First, Mrs. Lovell was the natural object for such a gift. She was Mrs. Lehto’s favorite niece, had cared for her in the hospital, and showed concern for her welfare. She was kind enough to handle Mrs. Lehto’s financial affairs, an apparently thankless task. Mrs. Lovell’s husband was directly responsible for a substantial portion of Mrs. Lehto’s income, repaired her barn, and kept her lawn mowed. Mrs. Lehto had obviously intended Mrs. Lovell to eventually get the property, as evidenced by the 1971 and 1973 wills.

Second, although Mrs. Lehto was forgetful, and thus incapable of handling her day to day financial affairs, there is no indication that she lacked the capacity to decide to make a gift, or understand the significance of making such a gift. Mr. Keleher testified that she understood what she was doing, and took pains to explain her actions to her to insure that she understood. Mr. Keleher did not see any sign of incompetency or undue influence.

Third, it appears the decision was left to Mrs. Lehto. Mr. and Mrs. Lovell testified that they did not know why they were taking Mrs. Lehto to Mr. Keleher’s office, and did not attempt to influence her. Mr. Keleher testified that Mrs. Lehto indicated what she wanted, and it was with Mrs. Lehto that he discussed alternatives, which she rejected.

We must discount Mrs. Lehto’s testimony of a conspiracy to do her out of her property, and of undue influence. First, her story that the deed was prepared before she arrived, and hence a result of an agreement between Mr. Keleher and the Lovells, appears conjectural and conflicts with that of the other witnesses, including the disinterested secretary of Mr. Keleher. Mrs. Lehto was not "rushed” to the office, but driven there at her request. Although Mr. Keleher’s advice may have seemed incomprehensible by the time of the trial, Mr. Keleher was satisfied that she understood it at the relevant time.

Upon reviewing the entire record, we are satisfied that the transaction was intended as a gift. Although Mrs. Lovell or her husband may have suggested a present conveyance to avoid probate costs, rather than wait to receive the property through the will, such suggestion would not have amounted to undue influence. All concerned anticipated that Mrs. Lovell would receive the property upon Mrs. Lehto’s death, and Mrs. Lehto discounted the irrevocability of the gift or the need for a contract to bind the Lovells to her. Although the desire to be cared for by the Lovells may have been Mrs. Lehto’s motivation, it was uncontroverted that Mrs. Lovell indicated in Mr. Keleher’s office that she would not be bound to care for Mrs. Lehto for the rest of her life. Mrs. Lehto eventually became resentful of the Lovell’s interference in her financial affairs, and her poor memory, resentfulness, tendency to paranoia, and her predisposition to say things which just are not true resulted in the allegations leading to this action.

We have not been left with a firm and definite conviction that the trial court erred in concluding that there was no undue influence.

The deed was valid even absent consideration. Cf. Kar v Hogan, supra at 545; 251 NW2d at 82.

Affirmed. Costs to defendant.

D. E. Holbrook, J.

(dissenting). This writer respectfully disagrees with the result required by the opinion of the majority in this case. The reasons for this dissent appear in the following opinion.

The instant appeal involves an action by the plaintiff-appellant, Homer Daane, guardian of his ward, Mrs. Bertha E. Lehto, for the rescission of a deed from her to her niece, Angela Lovell, defendant-appellee. The trial court denied relief to the plaintiff, and plaintiff has appealed as of right.

It is necessary to relate the facts as they appear to this writer from the record which shows that Bertha E. Lehto arid her husband, Theodore, at the time of the beginning of World War II, lived on the property, the subject of this chancery action. Mr. Lehto had previously received the farm from his parents. Friends of the Lehtos’ asked them to go to the Chicago area for the reason that a good job would be there for Mr. Lehto. They left the farm and moved to the vicinity of the new job and lived there for 18 years and then moved back to the farm. Mr. Lehto at that time was unable to work because of disabling arthritis and he qualified for social security benefits. In 1969, Mrs. Lehto suffered a serious stroke, was hospitalized for a month, was in a coma for a number of days and suffered brain damage as a result of the stroke. Mrs. Lovell, the defendant, was a nurse in the hospital at the time and helped to take care of Mrs. Lehto.

Mr. and Mrs. Lehto, after returning to the farm, executed individual wills in favor of each other and further provided that, eventually the subject farm be devised to defendant, Angela Lovell. She was a favorite niece of the Lehtos and she was later advised of what they had provided for her in their wills. After Mrs. Lehto suffered her stroke, not being a driver of an automobile and not being a self-reliant person, she depended upon her husband to take care of the business and her personal affairs. On June 6, 1972, Mr. Lehto passed away and Mrs. Lehto continued to be in need of help in her personal and business affairs. Shortly after Mrs. Lehto’s husband died, Angela’s husband took Mrs. Lehto to the social security office at Traverse City for two reasons, because (1) the last checks from social security had been made out in both Mr. and Mrs. Lehto’s names, and, (2) it was necessary for Mrs. Lehto to have someone manage her financial affairs in relation to her social security benefit checks. Mrs. Lehto asked that Angela be designated as that person and she accepted. Angela Lovell set up a joint bank account with Mrs. Lehto and Mrs. Lehto wrote checks on this account. Mr. Lovell, Angela’s husband, helped Mrs. Lehto with managing the farm and qualifying it for soil bank payments from the government. Mrs. Lehto had difficulty living within her limited income of social security benefits and soil payment receipts. It appears that on August 6, 1973, Mrs. Lehto called attorney Dennis Keleher at Manistee, to have her will changed, i.e., delete her husband’s name on the will as a devisee and to change the names of the legatees of her personal property. An appointment was made for the morning of August 10, and the Lovells took Mrs. Lehto to attorney Keleher’s office for that appointment.

It is apparent from the testimony of the witnesses that Mrs. Lehto and Angela Lovell, with her husband, had a discussion previous to arriving at the attorney’s office, and that Mrs. Lehto had agreed she would deed the property to Angela Lovell, her niece.

Bertha E. Lehto, when she reached the attorney’s office, was with both Mr. and Mrs. Lovell. The revised will was executed and also a deed was executed from Mrs. Lehto to Angela Lovell of the 240 acres of land, the subject of this action. Certain parts of the deed as originally drafted were márked out and a clause inserted reserving a life estate in the property to Mrs. Lehto. Attorney Keleher testified that he took 45 minutes to explain to Mrs. Lehto the matter of the various transactions by which she could dispose of her property. Bertha Lehto, however, testified that she did not understand what attorney Keleher was talking about during the conference. It is noted that attorney Keleher had represented the Lovells and the Lehtos separately on previous occasions and, of course, he had drawn up the original wills for Mr. and Mrs. Lehto. The evidence shows that the discussion at the conference between Mr. Keleher and Mrs. Lehto was at all times in the presence of the defendant Angela Lovell and her husband. Attorney Keleher testified that Mrs. Lehto was concerned about the cost of probating an estate and also the cost of preparing a contract as compared to the deed in question. Attorney Keleher testified that he did not know that Mrs. Lehto had suffered a very serious stroke in 1969, had been hospitalized for 30 days, and in a coma for a number of days and suffered brain damage as a result of the stroke. It is also important to note that Mrs. Lehto was not informed of the gift taxes required to be paid by her as a result of the deeding of her property to Angela Lovell, neither was she advised that she would still have to pay the taxes and insurance on the property and to repair and maintain the property. She was also not advised that she would be restricted in the use of the property, i.e., she would not be able to dispose of trees, gravel and other appurtenances as it would be committing waste. The limited knowledge of Mrs. Lehto of such business transactions and her dependence on the Lovells for help and guidance permitted the full import of the giving of the deed in question to be hidden and not known to Mrs. Lehto.

The stated consideration for the deed was, "One Dollar ($1.00) and other valuable considerations less than Ten Dollars ($10.00)”. At the time of the giving of the deed, Mrs. Lehto was 66 years old and a widow for a little over a year.

The defendant, Angela Lovell, was not able to explain what consideration was paid for the property other than love and affection. It is also noted that the will providing for the property to go to Mrs. Lovell was not changed after it was drafted; however, the deed contained certain portions which were stricken out and the reservation of a life estate to Mrs. Lehto inserted. This all took place at the one conference with the attorney. Testimony was admitted regarding Bertha Lehto’s mental and physical health following her stroke in 1969. Doctor Long, who treated Mrs. Lehto both before and after the conveyance, testified in part as follows:

”Q. [Mr. Phillips, plaintiff’s attorney] Now, Doctor, maybe I can refresh your recollection again. At the time of the deposition, the question was asked regarding whether Mrs. Lehto was having any difficulty in managing her personal affairs since ’69, and I will show it to you, Page 18, Line 4.
"A. 'Question: Now, reviewing the whole file, are you still of the opinion that Mrs. Lehto would have had difficulty managing her personal affairs since 1969?’ 'Answer: I believe so.’ Is that what you wanted?
”Q. Yes, Doctor. Do you still believe so?
"A. Yes, I believe she would have difficulty managing her personal affairs.”

Angela Lovell received Mrs. Lehto’s social security checks after Mr. Lehto died in 1972 and the facts as to this arrangement was testified to by Mrs. Lovell, as follows:

”Q. [Mr. Running, plaintiff’s attorney] And that is, as far as you know, when she said, 'My niece can take care of this.’?
"A. Yes.
”Q. Now, did you agree to do it?
"A. Yes, I did.
”Q. And did you sign certain papers?
"A. Yes, I did.
"Q. And did you then start to receive her checks?
"A. Yes.
"Q. Now, when you received the checks, what did you do with them?
"A. I opened an account with Bertha’s and my name together at the Kaleva Bank and deposited the checks completely in the bank.
"Q. When you undertook this arrangement, did you have an agreement with Bertha of some kind as to what you were going to do?
"A. Yes.
"Q. And what was this agreement?
"A. To put my name with hers, just in case there was something, that I would be somewhere or something, that I could take a check and pay a bill for her, or this type that I could help pay her bills if she—so that she couldn’t, or whatever.
”Q. And you opened the checking account in both names, so the checks could be deposited and. . .
"A. Yes, sir.
”Q. And checks be written by either of you, is that right?
"A. Right.
"Q. But it is true, isn’t it, that you didn’t always deposit the checks in the account?
"A. I did up to a certain year. Or time. But always, when the checking account was made in her and my name, it was put in every time, sir.
”Q. Well, what caused you to stop this arrangement and start cashing them?
"A. Because she was overdrawing her account many times, and I requested her not to do this if she could. The last time, I can’t remember how many checks she had overdrawn, and I said, 'Aunt Bertha, you. . .’—she had done this many times, and I explained to her, 'Please don’t overdraw it. If you need money, let me know and we will try to make some arrangement to pay them.’ Or let them, you know—or let me know how much—see, she had the checks. She went out and paid all her own bills, so I didn’t know how much really she had written out. Then I would have to go back and correct all these bills. So the last time, I said, T think I better help you.’
”Q. And do you recall when you started, and you did, didn’t you, just start cashing the checks?
"A. And paying her bills, yes.
”Q. About when would that have been?
"MR. JENNINGS: [defense attorney] Your Honor, we filed an accounting which would indicate the exact time on that.
"WITNESS: I don’t remember.
"THE COURT: Gentlemen, maybe you can refer to the accounting and then if there is some question as to whether it is accurate as to its date, then follow it through with testimony.
"MB. RUNNING: Your Honor, I have examined it and I don’t find what Mr. Jennings suggests on the accounting.
"WITNESS: I think it would be 1974, but I am not positive on the dates.
"MB. JENNINGS: Your Honor, the accounting which was filed and signed by my client, and which she stated was correct, indicates that the accounting is from December, the receipts from Social Security from December of ’74, on until she was relieved, through February of ’76.
’’THE COURT: His question is, when did she go from checks to cash? If she can recall.
’’WITNESS: That’s the time.
"MB. JENNINGS: December 1, 1974.”

On January 6, 1976, Homer Daane was appointed by the probate court of Manistee County as guardian for Mrs. Lehto, because she was incapable of the care, custody and management of her person and estate.

On February 13, 1976, this action was commenced in chancery for the rescission of the August 10, 1973, deed of Mrs. Lehto to Mrs. Angela Lovell.

Two appraisers gave detailed appraisals as of August 10, 1973, of the value of the subject property which were introduced into evidence. Lawrence M. Mackin of Manistee valued the property at $58,000. Arthur J. Swager of Manistee placed a value of $58,600 on the property.

Neither appraisal included any value related to oil, gas or other subterranean minerals.

Mr. Mackin described the home as being in fair condition and, "The home does need maintenance and cosmetic improvements”.

Plaintiff raises two issues on appeal, claiming that the trial court erred in not rescinding the deed of August 10, 1973, from Bertha E. Lehto to Angela Lovell (1) for the reason that the grantee exercised undue influence upon the grantor and (2) for the reason that there was inadequate consideration.

As to the issue of undue influence, the facts show that Bertha E. Lehto was an elderly lady, who had suffered a serious stroke in 1969, requiring her to be hospitalized for about a month and that she was in a coma for several days. She suffered brain damage as a result of the stroke and was unable to remember happenings well. Her doctor testified that in his opinion after her stroke Mrs. Lehto would have difficulty in managing her personal affairs. It is undisputed that Mrs. Lehto after her stroke was dependent upon her husband in all her business and personal affairs, until his death in June of 1972. Thereafter Mrs. Lehto was dependent upon her niece Mrs. Lovell and her husband for help and guidance in her personal and business affairs. Even the social security personnel knew of this condition for they had Mrs. Lehto select someone to act and help her concerning the social security benefits. Mrs. Lehto selected Mrs. Lovell and she signed papers and accepted this trust. It was during this time that the deed in question was executed. The question arises under these facts: was there a fiduciary relationship between Mrs. Lehto and defendant Mrs. Lovell. In the case of Van’t Hof v Jemison, 291 Mich 385, 393; 289 NW 186 (1939), our Supreme Court adopted the definition found in Black’s Law Dictionary (3d ed), Fiduciary or Confidential Relation, p 775, as follows:

" 'One founded on trust or confidence reposed by one person in the integrity and fidelity of another. * * * The term is a very broad one. * * * The rule embraces both technical fiduciary relations, and those informal relations which exist whenever one man trusts in and relies upon another.’ ”

In the later case of LaForest v Black, 373 Mich 86; 128 NW2d 535 (1964), our Michigan Supreme Court quoted the definition of fiduciary found in Van’t Hof, supra, with approval and found therein a fiduciary relationship based upon the facts, as set out at 90:

"The trial court found that a fiduciary relationship existed between plaintiffs ward and defendant Geraldine Black. The court based this finding upon the showing that Mrs. Black was a close confidante of Jewell Brink, that she assisted her in banking and the payment of bills, in financial matters and in personal problems. Business problems were discussed with Mrs. Black, money was given to her, legal services were obtained by Mrs. Black for Mrs. Brink, and a variety of other services, business and personal, were entrusted to Mrs. Black.”

The facts in the instant case are very similar in the following respects: (1) there was a close relationship between Mrs. Lehto and Mrs. Lovell; (2) the defendant assisted Mrs. Lehto in the payment of her bills; (3) the defendant had a joint checking account with Mrs. Lehto, which allowed Mrs. Lovell access to Mrs. Lehto’s funds to assist her in financial matters; (4) the defendant Mrs. Lovell and her husband gave Bertha Lehto advice regarding business matters pertaining to the soil bank; and (5) the defendant Mrs. Lovell and her husband aided in the obtaining of legal services for Mrs. Lehto. In addition, it is clear from the testimony of the witnesses, especially the testimony of Dr. Long, that Mrs. Lehto was unable to handle her own business matters since her stroke in 1969. It is further clear from all the facts in the instant case that a fiduciary relationship existed between the defendant Mrs. Lovell and Mrs. Bertha E. Lehto. Our Supreme Court in Kar v Hogan, 399 Mich 529; 251 NW2d 77 (1976), recently clarified the burden of proof and persuasion pertaining to a claim of undue influence. The Court stated the following at 537:

"The presumption of undue influence is brought to life upon the introduction of evidence which would establish (1) the existence of a confidential or fiduciary relationship between the grantor and a fiduciary, (2) the fiduciary or an interest which he represents benefits from a transaction, and (3) the fiduciary had an opportunity to influence the grantor’s decision in that transaction.”

As previously determined, the defendant Angela Lovell clearly had a fiduciary relationship with her aunt, Bertha Lehto. Also, she stands to benefit greatly from the transaction if it is not set aside. Finally, it is clear that the defendant Mrs. Lovell had the opportunity on August 10, 1973, to influence Bertha Lehto to convey the property in question to her. The record establishes the presumption of undue influence in favor of the plaintiff Mrs. Lehto.

The significance of establishing the presumption is set out in the Kar case, supra, at 542, wherein the Court stated the following:

"If the trier of fact finds the evidence by the defendant as rebuttal to be equally opposed by the presumption, then the defendant has failed to discharge his duty of producing sufficient rebuttal evidence and the 'mandatory inference’ remains unscathed. This does not mean that the ultimate burden of proof has shifted from plaintiff to defendant, but rather that plaintiff may satisfy the burden of persuasion with the use of the presumption, which remains as substantive evidence, and that the plaintiff will always satisfy the burden of persuasion when the defendant fails to offer sufficient rebuttal evidence.”

Reviewing the facts of the instant case, this writer believes that it is clear that the defendant Mrs. Lovell has not rebutted the presumption. The defendant Mrs. Lovell, relies upon the fact that Bertha Lehto executed a deed during a conference with attorney Keleher.. However, it is clear that this is not significant because attorney Keleher had represented both parties separately in the past. Moreover, the Lovells were present during the entire discussion and thereby inhibited any independent and meaningful consultation between Mrs. Lehto and attorney Keleher. Also, it appears that Bertha Lehto hád already agreed to a conveyance prior to her discussion with the attorney. Finally, it appears from the record that Bertha Lehto had little understanding of the significance of the deed which she executed on August 10, 1973, and at the time was under apparent influence of defendant Mrs. Lovell. As stated previously in this opinion, Mrs. Lehto was not informed of the gift tax that she would be required to pay because of the transferring of the property to Mrs. Lovell, nor was she advised that she would have to pay the taxes and insurance on the property and that she would be restricted from that point forward in exercising complete control of the property even though she had retained a life estate. Further, the attorney, Mr. Keleher, did not know that Mrs. Lehto had had a serious stroke in 1969, that her brain had been damaged, that she had difficulty in managing her personal and business affairs and that she had trouble in remembering events and other things. Also, he did not have the benefit of Dr. Long’s testimony.

It appears to this writer that plaintiff sustained her burden of proof as to the first issue and should have prevailed in her prayer for rescission of the deed.

As to the issue of failure of consideration for the execution of the deed, it appears to this writer that there was a failure of consideration in this cause for the reasons hereinafter stated.

The value of the 240 acres of land was established by the only two appraisers as between $58,000 and $58,600—not considering the oil and gas and other minerals in and under the land. Further, there was no mention as to her continued responsibilities to pay the taxes and insurance, maintain the property, nor was she instructed to her limited use of the property that she would be confined. The gift tax was not discussed and there was no money consideration stated on the deed except one dollar and other considerations less than ten dollars. Mrs. Lovell was unable to define any money paid to her aunt, Mrs. Lehto, for the execution of the deed. There was testimony of love and affection between the aunt and the niece, but it appears that it dissipated shortly after the deed was executed. The advantage of the circumstances was all in Mrs. Lovell’s favor, which she utilized to her own personal benefit.

It is also interesting to note that the defendant Mrs. Lovell had the deed recorded a few minutes after it was executed. It is marked as being recorded at 11:35 a.m., August 10, 1973.

While it is clear from the record that at the time of the execution of the deed that there was no formal obligation by Mrs. Lovell to support and maintain Mrs. Lehto, Mrs. Lehto surely believed that her niece would continue to show kindness, service and consideration for Mrs. Lehto’s welfare. It would seem that Mrs. Lehto was traveling under a wrong hope or belief. When Mrs. Lovell was asked if she would convey the property to her aunt, she replied, "no”.

There is a principle of law in Michigan that a deed will be set aside if the consideration is so grossly inadequate as to shock the conscience of the court. Albright v Stockhill, 208 Mich 468; 175 NW 252 (1919), Hake v Youngs, 254 Mich 545; 236 NW 858 (1931), Olson v Rasmussen, 304 Mich 639; 8 NW2d 668 (1943), Low v Low, 314 Mich 370; 22 NW2d 748 (1946). In the case of Clement v Smith, 293 Mich 393; 292 NW 343 (1940), our Supreme Court in upholding the rescission of a deed of an elderly widow stated the following regarding inadequacy of consideration at 396:

"It is said that equity will set aside a conveyance executed for a grossly inadequate consideration when there is great weakness of mind in the person executing it from age, sickness, or any other cause, which would not amount to an absolute disqualification. Allore v Jewell, 94 U.S. 506; Bilman v Kolarik, 234 Mich. 689 [209 NW 88 (1926)]; Beattie v Bower, 290 Mich. 517 [287 NW 900 (1939)]. Though the grantor may have been capable of understanding the nature of a business transaction, if there was inability fairly to appreciate its consequences which resulted in overlooking many considerations which would lead to sounder judgment, there is an exposure to imposition by those in confidence. Where the confidence has been abused, as under the facts before us, equity will not stand by with folded arms. Seeley v Price, 14 Mich 541 [1866]. The conclusion of the trial judge is fortified by the fact that the conveyance left plaintiff without any security for her future support, for her life estate in the property would be practically unmarketable. It has been said that such facts demonstrate beyond question 'either incapacity or dishonest management or both.’ Thorn v Thorn, 51 Mich 167 [16 NW 324 (1883)]; Beattie v Bower, supra.”

The facts in the instant case are analogous to those in the foregoing Clement case. The Clement case is nearly on all fours with our instant case and is applicable to our case.

Mrs. Lehto did not have sound judgment in this transaction and this Court of equity should not stand by with folded arms. This conveyance left plaintiff Mrs. Lehto without security for her future support. Her life estate in the property was practically unmarketable. In the place of its being an asset with great value, it became a liability requiring the payment of taxes, insurance, repair and maintenance costs. Her title was limited to only surface possession. She was unable to sell or dispose of trees, gravel and other appurtenances of value. In the opinion of this writer, the consideration paid for this deed, if any, considering the physical and mental condition of Mrs. Lehto was grossly inadequate and shocks the conscience of this dissenting member of the Court.

This cause of action being in equity, we review it de novo on the record. We do not reverse or modify the decision of the trial court unless we feel we would have been compelled to rule for a different result had we been sitting in the position of the trial chancellor in the matter. This writer under the facts in this case, had he been sitting as trial chancellor, would have been compelled to rule that plaintiff had sustained her burden of proof as to both issues and, further, would have granted relief to plaintiff rescinding the deed of August 10, 1973, together with costs. This writer so votes.

       “The South Half of the Southeast Quarter of Section 33, Town 24 North, Range 13 West, Cleon Township, Manistee County, Michigan
      "The North Half of the Northeast Quarter of Section 4, Town 23 North, Range 13 West, Marilla Township, Manistee County, Michigan
      "The East Half of the Northwest Quarter of Section 4, Town 23 North, Range 13 West, Marilla Township, Manistee County, Michigan."


source: Caselaw Access Project

author: Per Curiam. M. J. Kelly, P. J.

license: Public Domain

text:
    PEOPLE v HATCHER
    Docket No. 77-851.
    Submitted February 8, 1978, at Detroit.
    Decided May 10, 1978.
    Robert L. Hatcher, Jr., pled guilty to one count of first-degree criminal sexual conduct as part of a plea bargain. After the plea was accepted, but before sentencing, defendant moved to withdraw the plea, asserting that he had not committed the offense with which he was charged. The Lapeer Circuit Court, Martin E. Clements, J., denied the motion for withdrawal. Defendant appeals. Held:

    The denial of the motion to withdraw the guilty plea was an abuse of discretion where the motion was made before sentencing, with an assertion of innocence, and was not obviously frivolous. Motions made in such circumstances are to be treated with great liberality.
    Remanded for entry of an order allowing withdrawal of the plea.
    M. J. Kelly, P. J., would affirm the denial on the basis that the request was made only after the defendant had been refused a one-month delay in sentencing and without the prior knowledge of the defendant’s attorney.
    Opinion op the Court
    1. Criminal Law—Plea of Guilty—Withdrawal of Plea.
    A motion by a defendant to withdraw a previously accepted plea of guilty should be granted when a defense of innocence is asserted at the time of the request, when the request is not obviously frivolous and when the request is made before sentencing.
    Dissent by M. J. Kelly, P. J.
    2. Criminal Law—Plea of Guilty—Withdrawal of Plea.

      A defendant’s request to withdraw his plea of guilty because of his asserted innocence, made after the plea had been accepted

      but before sentencing, should be denied where the request was made after the defendant was refused a one-month delay in sentencing, and where the defendant’s attorney was not previously made aware that the defendant was going to request withdrawal of the plea.

      Reference for Points in Headnotes

       21 Am Jur 2d, Criminal Law §§ 503-506.

      Frank J. Kelley, Attorney General, Robert A. Derengoski, Solicitor General, and Edward B. Meth, Prosecuting Attorney, for the people.

      Taylor, Carter, Butterfield, Riseman & Clark, P. C. (by John G. Strand), for defendant on appeal.
    Before: M. J. Kelly, P. J., and T. M. Burns and R. M. Maher, JJ.
   Per Curiam.

Defendant was arraigned on two counts of first-degree criminal sexual conduct. A plea bargain was reached whereby defendant agreed to plead guilty to one count of first-degree criminal sexual conduct provided that the maximum sentence the court could impose would be 15 years. On January 10, 1977, the court took the guilty plea under advisement.

On February 7, 1977, the date set for acceptance of the plea and sentencing, defendant moved, after the plea was accepted but before sentencing, to withdraw his plea. He asserted he had not committed the offense with which he was charged. The trial court denied the motion.

Withdrawal of a guilty plea must be considered with great liberality. People v Lewandowski, 394 Mich 529; 232 NW2d 173 (1975). The motion to withdraw a plea should be granted when a defense of innocence is asserted at the time of the request, when the request is not obviously frivolous and when the request is made before sentencing. People v Flanagan, 72 Mich App 613; 249 NW2d 872 (1976), People v Thomas, 66 Mich App 594; 239 NW2d 427 (1976). Cf. People v Bencheek, 360 Mich 430; 104 NW2d 191 (1960).

In the instant case, the defendant’s motion to withdraw was made before sentencing and was made with an assertion of innocence. It was not obviously frivolous. Since motions made in such circumstances are treated with great liberality, it was an abuse of discretion not to grant the motion to withdraw the plea. The case is remanded for an order allowing withdrawal of the plea and a new trial.

We are not persuaded that the Supreme Court’s order in People v McClain, 402 Mich 824; 260 NW2d 287 (1977), reversing the judgment of this Court appearing at 81 Mich App 84; 264 NW2d 1 (1976), requires a different result in this case. In McClain the obvious reason for the defendant’s sudden desire to withdraw his plea was the change in sentencing judges. Defendant’s reason in McClain bordered on the frivolous. It was certainly not legitimate. Defendant’s reason here was not frivolous. The factual pattern in McClain is unique and should not be used to fashion new rules concerning the withdrawal of guilty pleas.

Remanded for proceedings consistent with this opinion.

M. J. Kelly, P. J.

(dissenting). I would affirm. I think the reason given in People v McClain, 81 Mich App 84; 264 NW2d 1 (1976), reversed, 402 Mich 824; 260 NW2d 287 (1977), was far more substantive than the reason given in the case at bar. This first came up after the defendant was refused a one-month delay in sentencing. It was the first time his attorney was made aware of it. See People v Bovee, 60 Mich App 727; 231 NW2d 529 (1975).


author: Per Curiam.

text:
    CITY OF WARREN v MACCABEES MUTUAL LIFE INSURANCE COMPANY
    Docket No. 77-1212.
    Submitted March 13, 1978, at Detroit.
    Decided May 10, 1978.
    Leave to appeal applied for.
    The City of Warren requested bids for occupational disability insurance for a three year term from July 1, 1973, to June 30, 1976. Maccabees Mutual Life Insurance Company was awarded the insurance contract as the lowest responsible bidder with a monthly rate of $.50 for each $10 of disability benefits. The master policy submitted by the insurance company differed from the specimen policy which had accompanied the bid in that it called for annual adjustments of rates. The City of Warren objected to the master policy arguing that it had requested a quaranteed three-year rate. The City of Warren commenced an action against Maccabees for a declaratory judgment on the contract, claiming that the defendant knew or should have known that a guaranteed rate was requested and for damages. The trial court found the defendant responsible for flagrant mishandling of the entire bid process and entered judgment for plaintiff, Macomb Circuit Court, Raymond R. Cashen, J. Defendant appeals. Held:

    The reasonable interpretation of the specifications was that the city was requesting a guaranteed rate and term. The defendant was grossly negligent in interpreting the city’s bid request. Because of the defendant’s gross negligence, which led to the mutual mistake between the two parties, there was a valid contract, despite the mutual mistake. Also, the defendant, because of its gross negligence, cannot avoid the contract on the basis of unilateral mistake.
    Affirmed.
    References for Points in Headnotes

       13 Am Jur 2d, Cancellation of Instruments § 34.

       56 Am Jur 2d, Negligence § 521 et seq.

       5 Am Jur 2d, Appeal and Error §§ 674, 825, 826, 839.

       17 Am Jur 2d, Contracts § 146.
    54 Am Jur 2d, Mistake, Accident, or Surprise §§ 3, 7, 16-22

       57 Am Jur 2d, Negligence § 1.
    54 Am Jur 2d, Mistake, Accident or Surprise § 22.

       5 Am Jur 2d, Appeal and Error §§ 517, 602, 668 et seq.

      1. Contracts—Mutual Mistake—Negligence.
    No contract will be held to exist where each party to the "contract” is mistaken as to the meaning of the other party; however, this general rule is of no force or effect where one of the parties has been found negligent.
    2. Contracts—Mutual Mistake—Negligence—Finder of Facts.
    The determination of negligence, in a contract action wherein it is claimed that there was a mutual mistake, is properly a question for the finder of fact.
    3. Appeal and Error—Trial Courts—Findings of Fact.
    Factual findings by a trial court are not to be set aside unless they are clearly erroneous; a finding of fact will be deemed clearly erroneous when, although there is evidence to support the finding, the reviewing court on the entire evidence is left with a definite and firm conviction that a mistake has been committed.
    4. Contracts—Unilateral Mistake—Negligence.
    A unilateral mistake will cause a contract formation to fail where the mistake is of so fundamental a character that the minds of the parties have never met, or where an unconscionable advantage has been gained by mere mistake or misapprehension, and there was no gross negligence on the part of the party making the mistake, either in falling into the error or in not sooner claiming redress, and no intervening rights have accrued and the parties may still be placed in status quo.
    5. Contracts—Negligence—Mistake—Gross Negligence—Words and Phrases.
    The term "negligence”, for purposes of deciding whether a party who has made a mistake in his negotiations when entering into a contract should be relieved of his obligation because of the mistake or should be bound by the contract because the mistake was a result of his negligence, generally means ordinary negligence, which will not necessarily bar granting equitable relief; otherwise qualified, it generally means carelessness or lack of good faith in calculation which violates a positive duty in making up a bid, so as to amount to gross negligence, or wilful negligence, when it takes on a sinister meaning and will furnish cause, if established, for holding a mistake of the offending bidder to be one not remediable in equity; it is thus distinguished from a clerical or inadvertent error in handling items of a bid, either through setting them down or transcription.
    6. Appeal and Error—Preserving Issue—Evidentiary Issues.
    Questions relating to evidentiary issues will not be reviewed on appeal unless there is an objection at trial.

      W. Thomas Marrocco, Jr. (by John J. Murray), for plaintiff City of Warren.

      Cooper, Shifman & Gabe, for plaintiff Republic Underwriters, Inc.

      Alexander B. Ritchie, Patricia S. Fletcher and Michael A. McGrath, for defendant.
    Before: R. M. Maher, P. J., and V. J. Brennan and N. J. Kaufman, JJ.
   Per Curiam.

The Maccabees Mutual Life Insurance Company appeals the judgment entered April 4, 1977, after a bench trial, in which the court awarded the City of Warren $120,223.71 plus interest.

The issue in this case is who should bear the loss for the misunderstanding between the parties over the interpretation of an insurance bid request.

In May, 1973, Warren submitted a request for public bidding on its occupational disability insurance. The city specified that the term of the insurance was to be from July 1, 1973, to June 30, 1976. Defendant insurer was the lowest bidder with a monthly rate of $.50 for each $10 of disability benefits. Maccabees Mutual was awarded the contract by the City of Warren as the lowest responsible bidder.

Shortly after the policy took effect, defendant sent plaintiff a master policy to replace the specimen policy which had been submitted with the bid. Contrary to practice in the insurance industry, the master policy differed from the specimen policy: the new policy contained an additional clause calling for annual adjustment of premiums.

Plaintiff objected on the grounds that the bid specification had requested a three year guaranteed rate. Defendant responded that all plaintiff city had requested was a three year guaranteed term, not a guaranteed three year rate, and, accordingly, the bid had been submitted with that understanding.

When the parties’ differences could not be resolved through negotiations, plaintiff filed a complaint for declaratory judgment. In December, 1974, Maccabees was ordered to continue coverage on Warren employees until the City of Warren could get a new carrier. The judge further ordered Warren to pay $.98 per $10 of benefits, defendant’s rate for the second year. Plaintiff switched companies for the third year and obtained a one year policy with Northwestern National Life Insurance Company for $.83 for $10 of disability benefits.

At trial plaintiff claimed that defendant knew or should have known that a guaranteed rate was requested. At the trial’s conclusion, the court found defendant "responsible for flagrant mishandling of the entire bid process”. It held that there had been no mutual mistake and that due to defendant’s negligence, defendant’s unilateral mistake in misinterpreting the contract did not serve to invalidate it. Defendant appeals from the judgment entered for plaintiff City of Warren.

Maccabees contends that the bid specifications issued by the City of Warren were inherently ambiguous and susceptible to two different interpretations; that since each party interpreted the bid language differently, there was no "meeting of the minds”. Under the doctrine of mutual mistake, Maccabees claims, the contract was not enforceable and defendant cannot be held liable for damages.

Corbin discusses the nature of mutual mistake in his treatise on contracts.

"A case that occurs more frequently is one in which each party misunderstands the expressions of the other. An offer is made in terms that the offeree misunderstands; and the latter accepts in terms that the former understands as an assent to the offer that he meant to make. In a case like this, each party is mistaken as to the meaning of the other; and sometimes this is not discovered until after important changes of position have taken place. It is very clear that no contract should be held to exist unless one of the parties so negligently expressed himself that the other was caused reasonably to believe that agreement existed. For performance rendered in such a case, recovery must be quasi-contractual in character, generally based upon the value of benefits actually received by the other party.” Corbin on Contracts (One Volume ed), § 599, p 544.

Each side in this dispute offered witnesses expert in the field of insurance. James McKay, produced by the City of Warren, testified that the fixed three year term language of the bid request could be interpreted only one way—as a request for a guaranteed three year term rate. Defendant’s expert, Paul Arthur, stated that the specification in the bid was capable of two interpretations: first, that plaintiff requested only a guaranteed term or, second, that plaintiff requested both a guaranteed term and a guaranteed rate. Under defendant’s first interpretation, the insurer would guarantee plaintiff insurance for three years but could vary the rate annually to reflect its experience with the insured.

According to Corbin, when each party is mistaken as to the meaning of the other, as in this case, no contract will be held to exist. However, this general rule is of no force or effect where one of the parties has been found negligent.

"When one party, in expressing his assent, so negligently chooses his words that the other reasonably gives them a meaning different from the one intended, a valid contract is often held to have been made, in spite of the fact that * * * both parties are making a mistake. * * * [B]oth parties believe that there is agreement in meaning, that the other party means the same as himself. * * * [T]he parties are mutually mistaken, though their mental errors are not quite identical. In spite of this "mutuality,” there is a contract, due to the negligence of the one and the reasonableness of the other.” 3 Corbin on Contracts, § 608, p 671.

The trial court in this case found defendant grossly negligent. If the trial court’s finding is correct, a contract does exist, despite the mutual mistake of the parties.

At the outset, we recognize that the determination of negligence is properly a question for the fact finder. Ingram v Henry, 373 Mich 453; 129 NW2d 879 (1964). Here the trial court sat as the finder of fact. Factual findings by the trial court will not be set aside unless they are clearly erroneous. Eberhard Manufacturing Co v Brown, 61 Mich App 268; 232 NW2d 378 (1975), Muskegon v Lipman Investment Corp, 66 Mich App 378; 239 NW2d 375 (1976). A finding of fact will be deemed "clearly erroneous” when although there is evidence to support it, the reviewing court on the entire evidence is left with a definite and firm conviction that a mistake has been committed’ ”. Tuttle v Dept of State Highways, 397 Mich 44, 46; 243 NW2d 244 (1976), quoting United States v United States Gypsum Co, 333 US 364; 68 S Ct 525; 92 L Ed 746 (1948).

We are unable to say that the trial court’s findings were erroneous. The record amply supports the finding that Maccabees was grossly negligent.

Defendant’s own witness said that defendant’s underwriting was sloppy. According to the witness, language of the sort found in the bid request could just as easily be interpreted to mean guaranteed rate and term, as to mean merely guaranteed term. He stated that the insurer should have clarified the term before bidding or that a deviation from the specification should have been written into the bid.

The testimony given by the insurer’s witness discloses there is little reason for a city to request a three year guaranteed term without also requesting a guaranteed rate, since in simple guaranteed term contracts the benefits flow almost exclusively to the insurer without any correlative benefit to the city. The city, beyond the first year, would be at the mercy of the insurance company, which could raise rates in subsequent years if it found that it had underestimated its rates in the first year. This is, in fact, precisely what Maccabees Mutual did in this case, almost doubling its rates for the second year.

It is only to be expected that one versed in the language of insurance would realize that a city would not volunteer to be put in as precarious a position as Warren found itself. It would, therefore, seem reasonable that the insurer require its interpretation of the city’s bid request to be carefully checked and verified. It is just such reasoning which may have led defendant’s own witness to declare that although two interpretations of the specifications are possible, he would assume that if there were a three year contract, there would also be a three year rate.

The reasonable interpretation of the specifications was that the city was requesting a guaranteed rate and term. Defendant was negligent in interpreting the city’s bid request otherwise. The doctrine of mutual mistake is not applicable in this case.

Defendant Maccabees also contends that a valid contract does not exist because of a unilateral mistake on its own part. It is true that a unilateral mistake will, at times, cause contract formation to fail.

In Kutsche v Ford, 222 Mich 442; 192 NW 714 (1923), the Supreme Court propounded the test for determining when a mistaken bid would invalidate a contract.

" 'Where a mistake is of so fundamental a character that the minds of the parties have never, in fact, met, or where an unconscionable advantage has been gained, by mere mistake or misapprehension; and there Was no gross negligence on the part of the plaintiff, either in falling, into the error or in not sooner claiming redress; and no intervening rights had accrued; and the parties may still be placed in statu quo; equity will interfere, in its discretion, to prevent intolerable injustice.’ ” Kutsche at 449, quoting 1 Story, Equity Jurisprudence (12th ed) § 138.

See, also, Union & People’s National Bank v Anderson-Campbell Co, 256 Mich 674; 240 NW 19 (1932).

Gross negligence has been defined in subsequent cases.

" 'The term "negligence”, or its equivalent, in this connection generally means ordinary negligence, which will not necessarily bar granting equitable relief. Otherwise qualified, it generally means carelessness or lack of good faith in calculation which violates a positive duty in making up a bid, so as to amount to gross negligence, or wilful negligence, when it takes on a sinister meaning and will furnish cause, if established, for holding a mistake of the offending bidder to be one not' remediable in equity. It is thus distinguished from a clerical or inadvertent error in handling items of a bid, either through setting them down or transcription. ’ ” Fraser Public Schools Dist v Kolon, 35 Mich App 441, 445; 193 NW2d 64 (1971), quoting Anno: Rights and remedies of bidder for public contract who has not entered into a contract, where bid was based on his own mistake of fact or that of his employees, 52 ALR2d 792, 794. (Emphasis in 52 ALR2d.)

As discussed above, defendant was guilty of gross negligence. Maccabees carelessly misinterpreted the language of the bid request. It is thus foreclosed from relying upon the unilateral mistake rule set forth by this Court. Clinton County Department of Public Works v American Bank & Trust Co, 83 Mich App 259; 268 NW2d 367 (1978).

In addition, unlike the party in Kutsche, the City of Warren, because it had already lost the opportunity to award the contract to the second lowest bidder, cannot be returned to the status quo. All the other bids had been cancelled. The city would have had to reopen the bidding procedure and absorb the costs inherent in such a process. Nor was there any guarantee that the bids received after a new procedure would have been as favorable as the ones cancelled. After the error was discovered, the parties could not have been placed in the status quo. See Fraser Public School District v Kolon, supra. Since Maccabees is guilty of gross negligence and since the city of Warren cannot be placed in the status quo, under the two-pronged test of Kutsche, Maccabees cannot rescind the contract because of its unilateral mistake.

Maccabees cites two other issues through which it seeks to avoid the lower court’s award of damages. First, it claims that the City of Warren failed to make its bid specifications sufficiently clear so that defendant insurer could intelligently bid on the contract. While a clearer bid specification could have been written, the specification given was sufficiently clear to apprise the average insurance bidder of the nature of the contract requested.

Defendant’s own expert stated that although the specification could be interpreted to mean either a guaranteed rate and a guaranteed term or simply a guaranteed term, it was at least sufficiently clear to put defendant on notice to inquire about the intended interpretation and defendant performed an inadequate job by not doing so. Defendant’s expert stated that although two interpretations were possible he would assume that such specifications requested a guaranteed rate. The bid specification was sufficiently clear. No reversal is required on this ground.

Finally, defendant argues that the trial court’s judgment be reversed because the plaintiffs expert witness was allowed to testify without being qualified as an expert. Moreover, the expert erroneously used parol evidence, custom and usage to vary the terms of an otherwise unambiguous contract. These issues, however, are raised for the first time on appeal. Defendant never objected at trial to the witness’s qualifications or to his testimony. Unless there is an objection at trial, questions relating to evidentiary issues will not be reviewed on appeal. Chaney v Lake Drive Garage, 252 Mich 412; 233 NW 602 (1930).

Affirmed.


author: Per Curiam:.

text:
    WECHSLER v AETNA LIFE INSURANCE COMPANY
    Docket No. 77-1563.
    Submitted February 22, 1978, at Detroit.
    Decided May 10, 1978.
    Leave to appeal applied for.
    Louis Wechsler, administrator of the estate of Frances Gentile, deceased, brought suit against Aetna Life Insurance Company, Philip Ozrovitz, and William Bobrin to recover for the estate the proceeds of a life insurance policy which had been paid by Aetna to the other defendants. The policy in question was a group policy covering the employees of Fairlane Drugs, Inc., a corporation of which Ozrovitz and Bobrin were sole shareholders and of which they were officers and of which Gentile was an employee. Plaintiff contended that Ozrovitz and Bobrin, as employers of the deceased, were precluded by statute from being designated as beneficiaries of the policy and that Aetna paid the proceeds knowing of the relationship between Gentile and the other defendants. The Wayne Circuit Court, James Montante, J., granted a motion for summary judgment in favor of defendants, denied summary judgment to plaintiff, and dismissed the complaint. Plaintiff appeals. Held:

    Defendants Ozrovitz and Bobrin, as shareholders and officers of the corporation which employed the deceased, were not "employers” of the deceased within the meaning of a section of the Insurance Code which prohibits an employer from being designated by an employee as a beneficiary in a policy of life insurance under a group plan which covers the employer’s employees. Aetna’s payment to Ozrovitz and Bobrin, the beneficiaries named by Gentile, was proper.
    Affirmed.
    1. Appeal and Error—Statutes—Ordinary Meaning—Employer— Words and Phrases.
    The Court of Appeals is bound to give the words of a statute their ordinary meaning; the ordinary meaning of "employer” is one who employs the services of others or one for whom employees work and who pays their wages or salaries.
    References for Points in Headnotes

       73 Am Jur 2d, Statutes §§ 204-208.

       44 Am Jur 2d, Insurance §§ 1874,1875.

      2. Master and Servant—Insurance—Group Life Insurance—Corporations—Shareholders and Officers—Employer—Employee—Statutes.
    The individual shareholders and officers of a corporation are not the employers of an employee who works for the corporation for purposes of a statute which precludes an employee from designating his or her employer as beneficiary of a group life insurance policy covering the corporation’s employees because a corporation is a legal entity separate from its shareholders (MCL 500.4404, 500.4439; MSA 24.14404, 24.14439).

      Saul Levin, for plaintiff.

      Dickinson, Wright, McKean, Cudlip & Moon (by James A. Samborn), for defendant Aetna Life Insurance Company.

      Sommers, Schwartz, Silver, Schwartz & Tyler, P. C. (by Richard D. Toth and A. Albert Sugar), for defendants Philip Ozrovitz and William Bobrin.
    Before: Beasley, P. J., and Bashara and D. C. Riley, JJ.
   Per Curiam:.

During her lifetime, plaintiffs decedent, Frances Gentile, was employed by Fairlane Drugs, Inc., a Michigan corporation, which was solely owned by defendant William Bobrin, who was president and secretary, and by defendant Philip Ozrovitz, who was vice president and treasurer.

On March 19, 1974, plaintiffs decedent designated defendants Bobrin and Ozrovitz as beneficiaries of a group life insurance policy in the sum of $15,000 on her life issued by Aetna Life Insurance Company covering employees of Fairlane Drugs, Inc. After she died on December 23, 1974, defendant Aetna paid the proceeds to defendants Bobrin and Ozrovitz who were described in the life insurance policy as "friends”.

On February 18, 1976, plaintiff started suit against all three defendants, claiming that the Michigan Insurance Code prohibits an employer from being designated as beneficiary of a group life insurance policy on the life of an employee and that defendants Bobrin and Ozrovitz were, in fact, her employer, that the corporation was a mere sham, and therefore, the proceeds of the policy should be paid to plaintiff’s decedent’s estate. Plaintiff claimed defendant Aetna paid with full knowledge of the facts, and, therefore, was liable for paying contrary to the statute which prohibited naming an employer as beneficiary of a group policy on their employees.

All parties moved for summary judgment. The trial court granted summary judgment in favor of defendants Bobrin, Ozrovitz and Aetna Life, and denied plaintiff’s petition for summary judgment.

Plaintiff appeals as of right.

Plaintiff claims that under § 4439 of the Michigan Insurance Code, defendants Bobrin and Ozrovitz are, for purposes of the statute, employers of plaintiff’s decedent, and as such, not permitted to be beneficiaries. Section 4404 provides:

"Group life insurance may be issued covering not less than 10 employees with or without medical examination, written under a policy issued to the employer, the premium on which is to be paid by the employer or by the employer and the employees jointly, and insuring only all of his employees, or all of any class or classes thereof determined by conditions pertaining to the employment, for amounts of insurance based upon some plan which will preclude individual selection, for the benefit of persons other than thé employer: Provided, however, That when the premium is to be paid by the employer and employee jointly and the benefits of the policy are offered to all eligible employees, not less than 75% of such employees may be so insured.” MCL 500.4404; MSA 24.14404.

Plaintiff also refers to § 4439 in support of his interpretation of the statute, which provides:

"A person whose life is insured under a group insurance policy may, subject and pursuant to the terms of the policy, or pursuant to an arrangement between the insured, the employer and the company, assign (other than to the employer) all or any part of his incidents of ownership, rights, title and interests, both present and future, under such policy including specifically, but not by way of limitation, the right to designate and redesignate a beneficiary or beneficiaries thereunder, the right to make any requisite contributions to maintain the insurance in force, and the right to have an individual policy issued to him in case of termination of employment. Such an assignment by the insured, made either before or after the effective date hereof, is valid for the purpose of vesting in the assignee, in accordance with any provisions included therein as to the time at which it is to be effective, all of such incidents of ownership, rights, title and interests so assigned, but without prejudice to the company on account of any payment it may make or individual policy it may issue prior to receipt of notice of the assignment. This section is not intended to alter the law of this state but is intended only to confirm in express statutory form the law as it exists presently.” MCL 500.4439; MSA 24.14439.

Plaintiff admits that Fairlane Drugs, Inc. was the de jure employer of plaintiffs decedent, but claims that the word "employer”, as used in the above quoted § 4439, is intended to mean a de facto employer as well. Plaintiff says the purpose of the statute is to preclude an employer from using his superior position over an employee to coerce or intimidate an employee into naming him a beneficiary. Plaintiff says that statutory purpose applies to a case where two individuals own all the stock and hold the top management positions just as much as if the two individuals were, say, partners.

In this case, the undisputed evidence is that decedent voluntarily named defendants Bobrin and Ozrovitz beneficiaries, telling an independent insurance agent she named them beneficiaries because they were the only friends she had in the world and they had treated her better than anybody else. The agent stated under oath that he was advised by defendant Aetna to insert the word "friends” after the beneficiary to indicate the actual relationship she expressed.

There is no evidence here, nor even an allegation, that defendants overreached, coerced or intimidated plaintiff’s decedent so as to have them named as beneficiaries. Neither is there a claim of fraud, sham, subterfuge or other facts indicating improper use of the corporate form in any way connected with the naming of defendants Bobrin and Ozrovitz as beneficiaries of the group life insurance on plaintiff’s decedent’s life.

The insurance code does not define the word "employer”; consequently, we look to the common and approved usage of the word "employer”.

In Veterans Airport Service, Inc v Public Service Commission, this Court said in this connection:

"We are bound to give words of a statute their ordinary meaning.”

The common, ordinary meaning of "employer” is "One who employs the services of others; one for whom employees work and who pays their wages or salaries”. Under this definition, Fairlane Drugs, Inc. was the employer of plaintiffs decedent. A corporation is a legal entity separate from its shareholders. Defendants Bobrin and Ozrovitz, as shareholders and officers, do not fall within this definition of employer.

Affirmed.

       MCL 8.3a; MSA 2.212(1) provides:
      "All words and phrases shall be construed and understood according to the common and approved usage of the language; but technical words and phrases, and such as may have acquired a peculiar and appropriate meaning in the law, shall be construed and understood according to such peculiar and appropriate meaning.”

       5 Mich App 602, 605; 147 NW2d 455 (1967).

       Black’s Law Dictionary, Rev 4th ed, 1968, p 618.

        Schusterman v Employment Security Commission, 336 Mich 246; 57 NW2d 869 (1953).


text:
    PEOPLE v ADAN
    Docket No. 77-1566.
    Submitted February 7, 1978, at Lansing.
    Decided May 10, 1978.
    Alberto G. Adan wás convicted in Midland Circuit Court, James R. Rood, J., of the unlawful manufacture of marijuana. Defendant appeals contending that it was error for the trial court to allow the prosecution on cross-examination to ask him over objection if he ever cultivated marijuana plants at or near his residence. Defendant denied that he had done so. The people called a rebuttal witness who testified he found marijuana plants on defendant’s porch and marijuana seeds in his apartment and the jury was also told that defendant had pled guilty to possession of marijuana. The trial court admitted this rebuttal testimony after ruling that it was admissible to impeach defendant and that it had a bearing on potential motive, intent, scheme or design. Held:

    Evidence of a defendant’s misconduct other than the charged offense is only admissible where there is a showing that the facts or circumstances of other bad acts are probative of the defendant’s motive, intent, absence of mistake or accident, scheme, plan or system in committing the charged offense. Where the requisite showing is not made the admission of such testimony is error. The people’s failure to make the requisite showing of a connection with the charged offense and the admission of the rebuttal testimony constituted error. Such error, as in this case, is reversible on appeal where the court can say that it is reasonably possible that in a trial free of the error even one juror might have voted to acquit the defendant.

      References for Points in Headnotes

       29 Am Jur 2d, Evidence §§ 320, 321.
    Admissibility at trial of criminal case, of evidence of defendant’s criminal acts other than those charged—Supreme Court cases. 93 L Ed 185.

       29 Am Jur 2d, Evidence §§ 320-326.

       5 Am Jur 2d, Appeal and Error §§ 776-802.
    Supreme Court cases determining whether admission of evidence at criminal trial in violation of Federal constitutional rule is prejudicial error or harmless error. 31 L Ed 2d 921.

      Reversed and remanded.
    1. Criminal Law—Evidence—Misdemeanor Convictions—Admissibility—Impeachment—Statutes.
    Misdemeanor convictions may not be used for the purpose of impeachment, but misdemeanor convictions may be admissible as evidence of similar acts (MCL 768.27, MSA 28.1050).
    2. Criminal Law—Evidence—Other Bad Acts—Admissibility—Requirements—Statutes.
    Evidence of a defendant’s misconduct other than the charged offense'is only admissible at trial if it satisfied judicially-imposed requirements: (1) there must be substantial evidence that the defendant actually perpetrated the bad act sought to be introduced, (2) there must be some special circumstances of the misconduct which tend to prove motive, intent, the absence of mistake or accident, or that there was a common scheme, plan or system with the charged offense, and (3) defendant’s motive, intent, absence of mistake or accident, scheme, plan or system must be material to the determination of defendant’s guilt of the charged offense (MCL 768.27; MSA 28.1050).
    3. Criminal Law—Evidence—Other Bad Acts—Motive—Intent Mistake—Scheme Plan System—Admissibility—Appeal and Error.
    The facts or circumstances of other bad acts must be probative of a defendant’s motive, intent, absence of mistake or accident, scheme, plan or system in committing the charged offense before such evidence is admissible and where the requisite showing is not made, the admission of such testimony constitutes error.
    4. Appeal and Error—Criminal Law—Harmless Error—Reversible Error—Jury.
    The standards for determining whether error committed during a criminal trial is reversible on appeal or merely harmless are: (1) was the error so offensive to the maintenance of a sound judicial system as to require reversal, and (2) if not, was the error harmless beyond a reasonable doubt; an error is not harmless where it is reasonably possible that in a trial free of the error even one juror might have voted to acquit the defendant.

      Frank J. Kelley, Attorney General, Robert A.

      Derengoski, Solicitor General, Doyle A. Rowland, Prosecuting Attorney, and Gerald L. White, Chief Assistant Prosecuting Attorney, for the people.

      F. Martin Tieber, Assistant State Appellate Defender, for defendant on appeal.
    Before: N. J. Kaufman, P. J., and D. E. Holbrook, Jr. and D. F. Walsh, JJ.
   Per Curiam.

Defendant was convicted of unlawful manufacture of marijuana, MCL 335.341(1)(c); MSA 18.1070(41)(1)(c). Sentenced to two years’ probation with the first 30 days to be spent in the county jail, defendant appeals as of right.

On appeal, defendant raises seven issues—one of which is dispositive.

The prosecutor’s case against defendant comprised of the following. A Midland County Sheriffs Department Sergeant, Mark Bush, observed defendant and Nancy Jo Morrison drive up to the area he had under observation. Bush testified that defendant got out of the car with Ms. Morrison and checked some plants which were growing in a patch near where they had parked. He further testified that defendant then took some material from a bag he was carrying and packed it around the base of the plants. Bush recalled that he then walked over to where the two were standing and talked to Ms. Morrison for a short while. Bush then testified that when he started walking toward defendant, Ms. Morrison shouted that there was a police officer present and defendant discarded the bag which contained the material he had packed around the plants. Bush said that he retrieved the bag and placed both defendant and Ms. Morrison under arrest. The bag and plants were confiscated. Bush also stated that he did not see either defendant plant anything and he did not know who planted the confiscated plants.

At trial, Bush described the plants as marijuana —which he had seen before. He stated that he believed that the confiscated bag contained fertilizer.

The prosecution presented other evidence. Then, the defense called defendant as its first witness. He testified that he went to pick berries at the place where he was later apprehended. Defendant denied planting, cultivating or fertilizing any of the marijuana plants which were found in the area. He further testified that the bag of fertilizer was already at the scene when he arrived.

On cross-examination, defendant was asked, over objection, if he "ever cultivated marijuana plants at or near [his] residence”. The trial court indicated it would "allow the testimony as bearing on the design, plan, scheme, so forth”. To the jury, the trial court explained:

"I will permit the asking of the question. I will say to the jury that the Court is allowing evidence here or at least questions as to previous knowledge or previous possible—I don’t know exactly what the question is going to be nor what the answer is going to be, but such questions are permissible for the purpose of showing motive, intent, scheme or design. In other words, in connection with the offense that’s charged here, evidence of other like type of things are admissible for that purpose. They are not admissible, however, for the purpose of showing his guilt of this particular offense.”

Defendant denied the allegation and the defense rested.

The prosecutor then called as a rebuttal witness, Detective James Wesolowski. Detective Wesolowski testified outside the presence of the jury so that the trial court could rule on the admissibility of his testimony.

Wesolowski testified that on May 22, 1975, he found marijuana plants growing on the porch of defendant’s residence. The detective stated that he then went up to the apartment. Upon admittance, he stated that he noticed an ashtray with marijuana seeds in it. Detective Wesolowski testified that after a positive field test, he arrested defendant and Ms. Morrison. Eventually, they both pleaded guilty to possession of marijuana.

The trial court admitted the testimony after ruling that it was also admissible to impeach defendant as well as bearing on potential motive, intent, scheme or design.

On appeal, defendant renews his objection to the admissibility of the Wesolowski rebuttal testimony. Unless the testimony, including that of the misdemeanor conviction for possession of marijuana, is somehow admissible as "similar acts” evidence, its inclusion was error. See People v Renno, 392 Mich 45; 219 NW2d 422 (1974), forbidding the use of misdemeanor convictions solely for the purpose of impeachment. We believe that to the extent defendant’s objection goes to "similar acts” testimony, this issue is controlled by People v Nathaniel Wilkins, 82 Mich App 260; 266 NW2d 781 (1978). Wilkins sets out the analytical process to be followed in determining the admissibility of evidence of this type. Application of that process to the facts of this case leads inexorably to the conclusion that the rebuttal testimony of Detective Wesolowski concerning the May 22, 1975, incident and its aftermath and the initial question to defendant—which prompted the Wesolowski rebuttal —should not have been allowed into evidence.

Initially for a proper foundation to our discussion of similar acts, it is instructive to note Wilkins, 82 Mich App at 265:

"In Michigan, evidence of a defendant’s other bad acts is generally inadmissible because its probative value is outweighed by the likelihood that it will prejudice the jury against the defendant, preventing an objective determination of the disputed factual issues. People v Oliphant, 399 Mich 472; 250 NW2d 443 (1976), People v DerMartzex, 390 Mich 410; 213 NW2d 97 (1973).
" 'This rule of law guards against convicting an accused person because he is a bad man. Barring such evidence prevents the trier of fact from inferring that the accused person is guilty of the charged offense because he has committed other similar acts or crimes.’ People v Matthews, 17 Mich App 48, 52; 169 NW2d 138 (1969).”

Wilkins further notes that "a limited number of statutory and judicial exceptions” have developed. As in Wilkins, supra, this case involves the exceptions enumerated in MCL 768.27; MSA 28.1050:

" 'In any criminal case where the defendant’s motive, intent, the absence of, mistake or accident on his part, or the defendant’s scheme, plan or system in doing an act, is material, any like acts or other acts of the defendant which may tend to show his motive, intent, the absence of, mistake or accident bn his part, or the defendant’s scheme, plan or system in doing the act, in question, may be proved, whether they are contemporaneous with or prior or subsequent thereto; notwithstanding that such proof may show or tend to show the commission of another or prior or subsequent crime by the defendant.’ ” 82 Mich App at 266.

"Similar acts” evidence, though, is only admissible if it satisfies judicially-imposed requirements, catalogued in Wilkins, supra: 1) there must be substantial evidence that the defendant actually perpetrated the bad act sought to be introduced, 2) there must be some special circumstances of the prior bad act which tends to prove one of the statutory items, and 3) defendant’s motive, intent, absence of mistake or accident, scheme, plan or system must be material to the determination of defendant’s guilt of the charged offense.

Although we find that the first requirement was met here, we must conclude that the nature of the proposed evidence was not in compliance with the second requirement. Regarding that requirement, Wilkins, supra, offers the following example:

"* * * if a defendant were charged with robbery, another robbery committed by the defendant would not be admissible to prove intent merely because it also involved specific intent to rob.” 82 Mich App at 267.

,

This case is but a factual variation on the Wilkins hypothetical. One incident, arguably involved with marijuana cultivation, is being used to show defendant’s inclination to commit the charged offense. Thus, we quote with approval from Wilkins, supra, 82 Mich App at 267:

"The law requires an additional showing that the facts or circumstances of the other bad acts are probative of the defendant’s motive, intent, absence of mistake or accident, scheme, plan or system in committing the charged offense.” (Footnote omitted; emphasis in original.)

The requisite showing was not made here. Thus, as in Wilkins, supra, fn 4:

"The result of admitting such evidence without the requisite connection with the charged offense is to admit precisely the kind of evidence condemned in the cases quoted at the beginning of this discussion, i.e., evidence relevant only to the defendant’s propensity to commit the offense. McCormick, Evidence (1972), § 190, at 453 (2d ed), Stone, The Rule of Exclusion of Similar Fact Evidence America, 51 Harv L Rev 988, 1007 (1938).”

Therefore, the admission of testimony regarding the May 22 incident constituted error on the part of the trial court.

Having found error on the part of the trial court in admitting testimony of the May 22 incident and its legal aftermath, it is still necessary to determine whether the error requires reversal. Wilkins, supra, at 272, notes:

"The pertinent standard involves a dual inquiry: (1) Was the error so offensive to the maintenance of a sound judicial system as to require reversal? (2) If not, was the error harmless beyond a reasonable doubt? People v Sherman Hall, 77 Mich App 456; 258 NW2d 517 (1977).”

We conclude for the reasons stated in Wilkins, supra, that the error was not so intrinsically offensive to the maintenance of a sound judicial system as to require reversal.

However, we cannot find the error harmless beyond a reasonable doubt. We quote with approval this Court’s construction of the phrase in People v Christensen, 64 Mich App 23, 33; 235 NW2d 50 (1975):

"If it is reasonably possible that in a trial free of the errors complained of, even one juror might have voted to acquit the defendant, then the error was not harmless, and the defendant must be retried.”

Without the rebuttal testimony, the prosecution’s case against defendant is largely limited to the testimony of the arresting officer. We cannot find his testimony (which included the admission that he did not see either defendant plant anything) so persuasive that we can conclude that not even one juror might have voted to acquit' had the assailed testimony not been admitted.

Thus, this case must be reversed and remanded to the trial court for a new trial. Resolution of the above issue being dispositive, it is unnecessary to discuss the remaining issues raised on appeal.

Reversed and remanded.

       An expert witness testified that his analysis of the confiscated plants indicated that they were marijuana. Additionally, the officer who impounded defendant’s vehicle stated that the confiscated plants appeared to be marijuana.

       We disapprove of the prosecution’s characterization of the substance of the bag as "fertilizer”, without eithér having the substance analyzed or qualifying Bush as an expert for purposes of identification of fertilizer. Defendant may have characterized the bag as fertilizer precisely because Bush had so testified.