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R. B. Burns, P. J.
The defendant was convicted of the crime of assault with intent to rape. MCLA 750.85; MSA 28.280'.
Defendant’s objection to the use of testimony from a preliminary examination transcript is without merit. The record shows an exercise of due diligence and a good faith effort by the prosecutorial authorities to obtain trial attendance of the missing witness. Barber v Page, 390 US 719; 88 S Ct 1318; 20 L Ed 2d 255 (1968); People v Nieto, 33 Mich App 535 (1971).
In fact, the missing witness was discovered the evening of the trial. Although proofs had been closed neither side had presented their final arguments to the jury when the prosecutor informed de fense counsel that the missing witness was in the courtroom and offered the defense, the opportunity to cross-examine the witness. The offer was denied.
Affirmed.
T. M. Burns, J., concurred. | [
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Danhof, P. J.
After a nonjury trial the defendant was convicted of larceny over $100. MCLA 750.356; MSA 28.588. He now appeals and we affirm.
The defendant’s first contention is that GCR 1963, 517.1, which requires the trial court to make findings of fact in eases heard without a jury, applies to criminal cases and that a reversal is required because of tbe failure of the trial court to make specific findings of fact.
The question of whether rule 517.1 applies to criminal cases has not been definitively decided. This Court has held that the rule does apply to criminal cases. People v Beaudoin, 7 Mich App 461 (1967); People v George Scott, 21 Mich App 217 (1970). In the case of People v Thomas, 384 Mich 804 (1971), the Supreme Court entered the following order:
“Leave to appeal granted February 9,1971, and the Court of Appeals is summarily affirmed for the reason that GCE 1963, 517.1 does not apply to criminal cases.”
Subsequently, in People v Thomas, 384 Mich 828 (1971), the following order was entered:
“Motion for reconsideration granted, order of February 9, 1971, affirming the Court of Appeals is hereby vacated, and application for leave to appeal granted April 15,1971.”
In this case we find it unnecessary to determine whether or not the rule applies to criminal cases. Assuming for purposes of decision that the rule does apply we believe that the judgment can be affirmed on the authority of People v Green, 32 Mich App 482 (1971). In Green the Court explained the holdings of Beaudoin,and Scott, supra, stating at p 485:
“Each tacitly holds, therefore, that a general verdict of guilty by the court may be affirmed where the elements of the offense are uncomplicated, there is some evidence tending to prove each element of the offense, and where it appears that the trial court must have found such evidence credible.”
This case is controlled by Green. The elements of larceny are not unduly complicated. There was evidence that tended to prove each element of the offense and the trial judge expressly indicated that he found the prosecution’s evidence credible.
The defendant’s second contention is that the record shows that the victim voluntarily relinquished possession of the stolen property and thus there was a failure of proof on one of the elements of the.offense. The defendant argues that because of this, if an offense was proven, it was either larceny by trick or larceny by conversion, and thus, a conviction of lar-, ceny over $100 was improper. This issue was raised’ in the trial court and the trial judge ruled as follows:
“If the event took place, it would be very similar to somebody lifting something of yours in your presence and then leaving with it, and I find it is larceny.”
It is true, as the defendant contends, that to constitute larceny the taking must be without the consent and against the mil of the owner. People v Anderson, 7 Mich App 513 (1967). However, an examination of the. record reveals that this element was proven and that the ruling of the trial court was correct.
In order to discuss this issue we must briefly state the relevant facts. The property involved in this case is a ring. The owner of the ring, one Robinson, had discussed selling it to the defendant while they were both present at a skating rink. It appears that the defendant indicated that he would like to purchase it. Robinson then left the skating rink but returned and' asked the defendant for a ride home, explaining that he had missed his ride. The defendant, Robinson, and one Brown then drove to Robinson’s home. After Robinson had gotten out of the car the defendant asked him to show the ring to Brown. Robinson removed the ring from his finger and handed it to Brown. Brown held the ring for a short time and then the defendant reached over and took the ring from him. The defendant then started to drive his car away. Robinson shouted to him to stop and return the ring. The defendant then said something to the effect that he would settle up with Robinson later and drove off. The defendant never paid Robinson or returned the ring.
The record does not show that Robinson ever voluntarily relinquished possession of the ring. There is a distinction between surrendering possession and giving mere custody. In State v Smitherman, 187 Kan 264, 266-267; 356 P2d 675, 677-678 (1960), the Kansas Supreme Court explained this distinction:
“Courts have generally drawn an important distinction based upon the wrongdoer’s original relation to the res. Thus, where the accused has the mere custody of the property and the legal possession is still in the owner, if the wrongdoer makes away with the property with intent to deprive the owner of it permanently his offense is larceny.
# # #
“What amounts to possession and what to mere custody within the meaning of the rules probably cannot be determined according to any settled formula, but the question in any particular case must' depend largely upon the capacity in which the defendant was given access to or dominion over the property taken, and upon the powers or duties which the owner gave or imposed upon him with respect thereto. For example, one to whom property is delivered by the owner for some limited, special or temporary purpose may be regarded as having its custody only, and as capable of committing larceny thereof.”
In this case the testimony of the prosecution’s witnesses, which the trial judge indicated he be lieved, clearly shows that Robinson only handed the ring to Brown to allow Brown to make a brief examination. This was merely a giving of custody and not a surrender of possession.
Since we have found that Robinson did not surrender possession to anyone, any discussion of a possible distinction between surrender of possession to Brown and surrender of possession to the defendant is irrelevant. Furthermore, since we hold that larceny over $100 was clearly established, a discussion of the distinctions between that offense and other theft offenses is unnecessary.
Affirmed.
All concurred. | [
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Memorandum Opinion.
Defendant was convicted by a jury of the crime of breaking and entering of an occupied dwelling with intent to commit a larceny therein and appeals such conviction.
An examination of the record and briefs discloses no prejudicial error.
Affirmed. | [
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Memorandum Opinion.
Defendant-appellant, upon his plea of guilty, was convicted of larceny in a building, MCLA 750.360; MSA 28.592. He was sentenced and appeals. An examination of the record discloses no reversible error.
Affirmed. | [
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Quinn, J.
Plaintiffs appeal from the judgment of the circuit court which affirmed the referee and appeal board of the Employment Security Commission in their determination that plaintiffs were disqualified for unemployment compensation benefits under MCLA 421.29(8); MSA 17.531(8).
The referee found that plaintiffs were employees of defendant company and worked as laborers at the Fenton high school job site. A labor dispute arose between the carpenter and operating engineer unions and defendant company which resulted in á strike by those unions. Plaintiffs were not members of those unions. The referee further found:
“The referee finds that the establishment involved here is the Sorensen-Gross company, that the labor disputes of the carpenters, operating engineers, and cement finishers' was in active progress in that establishment on the dates the claimants were laid off, that those striking trades were a unit or group of workers in that establishment, and that claimants were laid off as a result of their labor disputes. Accordingly, the act requires claimants’ disqualification for benefits even though he and his trade were not engaged in a labor dispute of their own.”
(The record indicates that the referee made similar findings with respect to each claimant.) The appeal board of the Employment Security Commission affirmed these findings.
Reviewing courts are bound by findings of the administrative agency if the findings are supported by competent, material, and substantial evidence on the whole record, Const 1963, art 6, § 28. The same test is provided by statute in court review of pro ceedings before the appeal board of the Employment Security Commission, MCLA 421.38; MSA 17.540.
In its opinion affirming the referee and appeal board, the reviewing trial court stated the issue as: “Whether the findings of an administrative tribunal may be so disturbed by an appellate court where the record contains evidence, though conflicting, which supports a determination?”
In its opinion, the trial court found:
“A review of the record of this cause, and specifically the testimony of David B. Satchell submitted in the matter of Lonnie C. Sutton (made applicable to all oases) supports the findings of fact by the referee and the affirmation of those findings by the appeal board. For that reason, this court is powerless to second-guess those determinations.”
The test employed by the trial court was erroneous.
Defendant company bore the burden of proving plaintiffs’ disqualification, Michigan Tool Company v Employment Security Commission, 346 Mich 673 (1956). This required competent, material, and substantial proof on the whole record that plaintiffs were laid off due to a labor dispute. The testimony of the claimants established that there was much grading and masonry work which they could have done despite the strike by the carpenters and operating engineers. The defendant offered no evidence to contradict this testimony. On such a record, we cannot say that the defendant has met its burden of proof.
Reversed and remanded for entry of an order granting plaintiffs’ unemployment compensation benefits for the period involved with costs to plaintiffs.
All concurred. | [
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J. H. Gillis, J.
The appellant is the administrator of the estate of William 0. Freedland who died possessed, inter alia, of $11,500 in series H United States Treasury bonds. These bonds were purchased by the decedent in 1961 and registered as follows: “William C. Freeland P.O.D. Beverly Hall Foundation”. Beverly Hall Foundation is a nonprofit corporation organized under the laws of Pennsylvania. The administrator of the estate of William C. Freedland informed Beverly Hall Foundation of the registration and informed it of his intention to cash the bonds and treat them as an asset of the estate. The administrator proceeded to cash the bonds and petitioned probate court for an order authorizing the amendment of the inventory to include the proceeds of these bonds. Beverly Hall Foundation filed an objection to the court’s entry of such order contending it was the owner of said proceeds by virtue of the registration, or, in lieu thereof, praying that said administrator be determined to hold said proceeds as constructive trustee for Beverly Hall Foundation. The probate court awarded the proceeds to the foundation and on appeal the circuit court, on January 30, 1970, affirmed. The parties are now before us upon grant of leave to appeal.
The appellant has consistently maintained that, under the treasury regulations controlling the issu anee of United States bonds, a corporation may not be named as a P.O.D. beneficiary. Tbe courts below were not convinced that sucb a prohibition could be distilled from the regulations and read the language of the regulations in a light favorable to the Beverly Hall Foundation. Both parties have agreed that the relevant treasury regulations involved are those contained in the ninth revision of the department’s circular No. 530, issued December 23, 1964. The foundation alternatively argues, should the regulations not be found to support its position, for a constructive trust upon the proceeds.
We begin our discussion of this case with a few observations concerning the status to be accorded to the treasury regulations. The authority of Congress to issue bonds derives first from the US Const, art I, § 8:
‘‘The Congress shall have power * * * to borrow money on the credit of the United States * # # 5>
Congress, through 65 Stat 26 (1951), 31 USC 757(c), has passed this power on to the Secretary of the Treasury:
“The Secretary of the Treasury, with the approval of the President, is authorized to issue, from time to time, through the Postal Service or otherwise, United States savings bonds and United States Treasury savings certificates, the proceeds of which shall be available to meet any public expenditures authorized by law, and to retire any outstanding obligations of the United States bearing interest or issued on a discount basis. The various issues and series of the savings bonds and the savings certificates shall be in such forms, shall be offered in such amounts, subject to the limitation imposed by section 757b of this title, and shall be issued in such manner and subject to such terms and condi tions consistent with subsections (b)-(d) of this section, and including any restrictions on their transfer, as the Secretary of the Treasury may from time to time prescribe.”
The regulations issued by the Secretary of the Treasury, insofar as they are consistent with the statutory powers delegated to him, have the force of Federal law, and, by virtue of the “supremacy clause”, US Const, art VI, become the supreme law of the land. Yiatchos v Yiatchos, 376 US 306; 84 S Ct 742; 11 L Ed 2d 724 (1964); Free v Bland, 369 US 663; 82 S Ct 1089 ; 8 L Ed 2d 180 (1962); United States v Janowitz, 257 US 42; 42 S Ct 40; 66 L Ed 120 (1921); Ervin v Conn, 225 NC 267; 34 SE 2d 402 (1945); Harvey v Rackliffe, 141 Me 169; 41 A2d 455; 161 ALR 296 (1945); In re Cochran Estate, 398 Pa 506; 159 A2d 514 (1960); Parkinson v Wood, 320 Mich 143 (1948).
State statutes inconsistent with treasury regulations properly promulgated must yield. Yiatchos, supra. Thus, state laws of inheritance and succession are inapplicable to United States bonds for fear that making such bonds subject to state law would “lead to a great diversity of rules regulating title and redemption and would subject the entire financing plan of the Federal Government to exceptional uncertainty by making identical transactions subject to the vagaries of the several states and would tend to retard the sale of these bonds”. Succession of Tanner, 24 So 2d 642 (La App, 1946).
The purchase of United States bonds has often been held to create a contract between the United States Government and the purchaser. Ervin v Conn, supra; In re Chase Estate, 82 Idaho 1; 348 P2d 473 (1960). Under this contract theory a co-owner or P.O.D. beneficiary has the status of a third-party beneficiary. In re Cochran Estate, su pra; In re DiSanto Estate, 142 Ohio St 223; 51 NE 2d 639 (1943); Parkinson v Wood, supra. The terms of the contract oblige the Government to pay the proceeds of such bonds to the purchaser or the named beneficiary. Roman v Smith, 228 Ark 833; 314 SW2d 225 (1958); Tanner v Ervin, 250 NC 602; 109 SE2d 460 (1959). Attempts by the primary registrant to bequeath the bonds to another does not defeat the named beneficiary’s rights under the contract. Davies v Beach, 74 Cal App 2d 304; 168 P2d 452 (1946); Edds v Mitchell, 143 Tex 307; 184 SW2d 823 (1945); Ex Parte Little, 259 Ala 532; 67 So 2d 818 (1953). Likewise attempts by the primary registrant to make gifts of the bonds inter vivos will not defeat these rights, Moore’s Administrator v Marshall, 302 Ky 729; 196 SW2d 369; 168 ALR 241 (1946); and as to gifts causa mortis, see, Fidelity Union Trust Co. v Tezyk, 140 NJ Eq 474; 55 A2d 26; 173 ALR 546 (1947).
These cases and others suggest the necessity of looking to the treasury regulations, as a contract, to determine the respective rights and obligations of the parties whose names appear upon a United States bond. Occasionally the rules prescribed by the Secretary of the Treasury will be modified by equitable considerations, a factor to be discussed further infra. Generally, however, the courts- will not wander too far afield from the text of department circular 530. Our present problem is deciding what the regulations say, so that we may after-wards discover from the regulations the rights of the parties involved. To this end we are aided by the general rules of statutory construction.
The courts below recognized the importance of the treasury regulations to this issue, and also sought to interpret the regulations in accord with a general rule of statutory construction. They specifically found that the word “may” in an important section of the regulations was indicative of a permissive, rather than restrictive, rule concerning corporations as P.O.D. beneficiaries. That section, 315.6(a), reads:
“Registration of bonds is restricted on original issue, but not on authorized reissue, to persons (whether natural persons or others) who are:
“(1) residents of the United States, its territories and possessions, the Commonwealth of Puerto Rico, and the Canal Zone;
“(2) citizens of the United States temporarily residing abroad; and
“(3) civilian employees of the United States or members of its Armed Forces, regardless of their residence of citizenship.
“However, other natural persons may be designated as coowners or beneficiaries with natural persons of the above classes, whether on original issue or reissue, except that registration is not permitted in any form which includes the name of any alien who is resident of any area with respect to which the Treasury Department restricts or regulates the delivery of checks drawn against funds of the United States or any agency or instrumentality thereof.”
Yet a closer reading of this section makes one wary of placing too much emphasis upon the word “may”. For reasons we shall discuss, we believe that the lower courts were straining the interpretation of the regulations when they concluded that a corporation could be a P.O.D. beneficiary upon the rather shallow footing of one ambiguous word. We are disposed to give an interpretation to the regulations in accord with that urged by the appellant. We do so upon an analysis of the regulations as a whole rather than relying upon any single section.
The regulations provide for, and carefully distinguish, two basic types of bond registration. One type is designed for use by corporations, trust companies, fiduciaries, and so forth — in general for persons other than “natural persons”. The regulations allow only a single ownership form for these bonds, which means that on bonds that are issued to corporations only one named owner shall appear, the corporation itself. The corporate owner of a United States savings bond may not (or shall not) join another person, natural or not, as a coowner or beneficiary. Section 315.7 (b).
A separate type of bond registration is provided for the use of “natural persons”. Section 315.7(a):
“Subject to any limitations or restrictions contained in these regulations on the right of any person to be named as owner, coowner, or beneficiary, bonds may be registered in the following forms:
“(a) Natural persons. — In the names of natural persons in their own right.
“(1) Single owner. Example: John A. Jones [ XXX-XX-XXXX ].
“(2) Coownership form — two persons {only). In the alternative as co owners. Examples :• John A. Jones [ XXX-XX-XXXX ] or Mrs. Ella S. Jones. Mrs. Ella S. Jones or John A Jones [ XXX-XX-XXXX ].
“No other form of registration establishing co-ownership is authorized.
“(3) Beneficiary form — two persons {only). Examples: John A. Jones [ XXX-XX-XXXX ] payable on death to Mrs. Ella S. Jones. John A. Jones [ XXX-XX-XXXX ] P.O.D. Mrs. Ella S. Jones.
•“ ‘Payable on death’ may be abbreviated to ‘P.O.D.’ as indicated in the last example. The first person named is hereinafter referred to as the owner and the second named person as the beneficiary.”
The appellee would point4o the last sentence of the above section as allowing any “person” to be named a beneficiary. It is pointed out that in § 315.11 there is the following definition of person:
“The term ‘person’ for purposes of this section shall mean any legal entity and shall include but not be limited to natural persons, corporations * * * and trust estates.”
But this definition is self limiting, serving only “for the purposes” of § 315.11. We think that the first sentence of subsection 315.7(a) is more definitive of the meaning to be given to words in that subsection. We note especially that the phrase “names of natural persons” is in plural form, indicative that the “names” of coowners and beneficiaries, as well as the name (singular) of a sole owner, are to. be “names of natural persons” rather than the names of any persons, natural or not.
Returning to the section mentioned previously upon which the courts below placed so much reliance, we can now suggest a different interpretation. In light of the different ways of registering bonds which are available to a natural person, the use of the word “may” in that section is not so bizarre as to be conclusive as to any general policy favoring or disfavoring corporate beneficiaries. All § 315.6 (a) can be understood to mean is that a natural person may register a bond in his own name, or he may, if he so desires, register bonds in his name with another natural person designated as a coowner or beneficiary (providing that they all meet the residency requirements enumerated in that section).
Admittedly all that has been noted up to this point does not definitely exclude corporations as P.O.D. beneficiaries. There is not to be found in the 1964 edition of these regulations a clear and concise limitation to the effect that, “only a natural per son may be designated as a beneficiary”. On tbe ether hand, there is to be found no statement clearly allowing corporations to be named P.OJD. beneficiaries. Bather, what can be read from these sections is an emphasis upon “natural persons” whenever beneficiaries are referred to, which is more logically consistent with the exclusion, as opposed to inclusion, of corporations.
Other sections lend further support to an inference excluding corporations as beneficiaries. Sections 315.65 through 315.66 of the regulations come under the bond print heading “Subpart N — Two Natural Persons as Owner and Beneficiary”. The regulations contain no subpart heading indicative of a bond issuance to a natural person as owner with a nonnatural person as beneficiary. However, under this subpart, § 315.65(b) ambiguously reads:
“(1) The bond will be reissued on a duly certified request of the owner: * * *
“(iii) To eliminate the beneficiary, to substitute another person as beneficiary, or to name another person as coowner, if the request of the owner is supported by the beneficiary’s duly certified consent to elimination of his name or by proof of his death * * * .”
Just about any inference can be read out of this language, so we will not struggle with it. More important is the section which follows, § 315.66:
“If the registered owner dies without the bond having been presented and surrendered for payment or authorized reissue and is survived by the beneficiary, upon proof of death of the owner the beneficiary will be recognized as the sole and absolute owner, and payment or reissue will be made as though the bond were registered in his name alone (see subpart L).” (Emphasis supplied.)
Subpart L is headed “Natural Person as Sole Owner”. We will look further into subpart L presently. However, it would seem that if a beneficiary could be a person other than a natural person, then § 315.66 should not only refer us to subpart L, but also, as an alternative, to subpart Q, which concerns private organizations as owners of bonds (§§315.80 through 315.88). But §315.66 does not so cross refer.
Bonds may be obtained upon an original issuance or upon a reissue. In the latter procedure, used whenever an owner wishes to change the registration form of his bonds, the old bonds are returned to the Treasury Department and new bonds, containing the new registration, are tendered. The regulations impose certain restrictions upon reissue; some have already been noted in § 315.65 under subpart N. The restrictions placed upon the reissue of bonds held by a sole owner, under subpart L, specifically § 315.56, are particularly interesting:
“A sayings bond registered in the name of a natural person in his own right may be reissued upon appropriate request by him * * * upon presentation and surrender during his lifetime, for the following purposes:
“(a) Addition of a coowner or beneficiary. To name another natural person as coowner or as beneficiary.” (Emphasis supplied.)
Here we have the expressed and unequivocal intent of the Secretary of the Treasury set out before us that a P.O.D. beneficiary under subpart L must be a natural person. Thus if person A purchases bonds as a sole owner and later desires to name a beneficiary, he may not, under the reissue provisions of subpart L, name anyone other than a natural person as a beneficiary. We cannot see why one who makes an original purchase of bonds should be any less restricted; in fact, we must read this same restriction into the sections concerning the original issue of bonds in order to give validity to subpart L. Otherwise person A can defeat the restrictive intent of subpart L by first cashing his bonds and then, with the proceeds, purchase new bonds in a beneficiary form inconsistent with the restrictions. We cannot believe that a section of the regulations as definite as is 315.56 was meant to be rendered meaningless by a forced, and inconsistent interpretation of its sister sections.
We are thus persuaded to read into the treasury regulations a general policy against the naming of a corporation as a P. O. D. beneficiary. We cannot point to any one section, nor, as did the courts below, to any one word, which clearly states this policy, but we can reach our conclusion upon a careful consideration of each of the sections mentioned herein, as well as others, and upon a view of the general scheme the Treasury Department has created for the issuance of bonds. We need not go into the reasons for this policy, for once having determined what the Federal law is, we are bound to follow it in the present case. However, recognizing that United States Treasury bonds stand outside the general state laws of distribution, many of which are designed for the protection of heirs, we do sug gent that a strict interpretation of the treasury regulations is to be favored. In the present case this means limiting the persons who might be named as P.O.D. beneficiaries to only natural persons.
Having navigated through the labyrinth of the regulations in order to reach this conclusion, we look back to find that the questions raised on appeal have not. yet been answered. Although under our interpretation of the regulations Mr. Freedland should not and could not have named the Beverly Hall Foundation as a P.O.D. beneficiary, the fact of the matter is, he did. Under the treasury regulations no interest in the bonds themselves could pass to the appellee. But the bonds have long since been cashed and transformed into proceeds. We must now consider whether or not the appellee is entitled to any interest in these proceeds.
Normally proceeds arising from the liquidation of United States Treasury bonds registered in beneficiary form are payable to the estate of the deceased owner if at the time of his death the P.O.D. beneficiary is not entitled to ownership of the bonds, as is the case, for example, when the beneficiary predeceases the owner. Myers v Hardin, 208 Ark 505; 186 SW2d 925 (1945). Under the regulations the appellee was never entitled to the bonds as an owner, the beneficiary clause being invalid. Section 315.8. In practical effect Mr. Freedland held his bonds under a sole ownership registration. When a sole owner dies without directing the disposition of his United States Treasury bonds, the regulations direct that payment be made to the administrator of his estate. Sections 315.70 and 315.72. Thus no legal title to the bonds nor to the proceeds therefrom vested in the Beverly Hall Foundation.
The appellee, however, urges us to consider his equitable interests so as not to defeat the obvious intent of Mr. Freedland to make some sort of bequest to the foundation. The appellee has directed our attention to, and our own research has disclosed, numerous cases where courts have imposed constructive or resulting trusts upon the proceeds of United States Treasury bonds. Yiatchos v Yiatchos, supra; Roman v Smith, supra; Chase v Leiter, 96 Cal App 2d 439; 215 P2d 756 (1950); In re Chase Estate, supra; Oster v Oster, 414 Ill 470; 111 NE2d 319 (1953); Thibeault v Thibeault, 147 Me 213; 85 A2d 177 (1952); Ibey v Ibey, 93 NH 434 ; 43 A2d 157 (1945); In re Barletta Estate, 2 Misc 2d 135; 150 NYS2d 479 (1956); Tanner v Ervin, supra; Katz v Lockman, 356 Pa 196; 51 A2d 619 (1947); Makinen v George, 19 Wash 2d 340; 142 P2d 910 (1943). In all of these oases constructive or resulting trusts were imposed to prevent fraud or inequitable results.
In these above-mentioned oases the creation of a constructive or resulting trust was encouraged by an obvious equity resting with the party in whose favor the trust was to run — generally the monies with which the bonds were purchased could be traced to some valuable consideration provided by the prevailing parties. In the present case such equities are equal, neither the administrator nor the foundation had given anything towards the purchase of the bonds by Mr. Freedland from which an equitable obligation to reimburse, upon a theory of unjust enrichment, might now arise. However, the facts do reveal a clear and convincing intent on the part of Mr. Freedland to make a gift to the foundation which was frustrated solely by the legal technicalities of the treasury regulations. That such intent was not carried out may be attributed to a “mistake” by Mr. Freedland, a mistake encouraged by the issuing bank. Mr. Freedland mistakenly believed that he could name the foundation as the recipient of $11,500 worth of bonds by naming the foundation as a P.O.D. beneficiary. An anonymous clerk of the issuing bank obviously shared this mistaken belief and complied with Mr. Freed-land’s request that the bonds be so registered. No doubt Mr. Freedland died convinced by this compliance that he had done all that was necessary and proper to effectuate a valid bequest to the foundation.
Michigan has for many-years accepted the doctrine of constructive trusts as a means of fulfilling the intent of a party where such intent has been frustrated through no fault of the party himself. In Ellis v Secor, 31 Mich 185 (1875), the Supreme Court considered the case of a dying woman who left beside her bed a slate upon which she had written “ ‘I wish. Dr. L. S. Ellis to take possession of all, both personal, real and mixed. Rachael Hill. I am so sick, I believe I shall die; look in valise.’ ” The Court awarded, upon a trust theory, the securities found in the valise to Dr. Ellis, saying at 193:
“There can be no doubt concerning the meaning of the memorandum left by the deceased. It is unconditional and unequivocal. We think it clear that Rachael Hill did all she could to create a gift causa mortis and fully intended it, and that her written declaration should prevail as a valid appointment of the uses indicated, as fully as if there had been a manual delivery of the securities.”
In Love v Francis, 63 Mich 181 (1886), in which a promissor on a note made payable to the deceased’s heirs four years after his death sought a determination as to whether he was liable to the heirs or to the administrator of the estate, the Court held, at 191:
“By directing the note to be made payable to his heirs, he [the deceased] placed the title in them at once, and it was unimportant in whose possession or custody the paper might remain. Whoever might hold such possession would do so in trust for them, and they alone could enforce payment.”
The Court in Love further approved of an Indiana case:
“In Wyble v McPheters, 52 Ind 393, where A. delivered several United States bonds to B., with directions for the latter to give the same to certain of his children at his death, B. received them, and agreed to execute the trust. It was held that this was a sufficient delivery to constitute a gift inter vivos, and that, upon the death of A., an action would lie against B. in favor of the children of A. to compel him to execute the trust, and also against tbe administrator of A., to whom B. bad delivered the bonds.”
We see no reason,An the light of the fact that under certain recognized circumstances a constructive trust can be imposed upon the proceeds of United States savings bonds, why such an action should not be taken here in order to carry out the clear intent of Mr. Freedland.
Affirmed. Costs to appellee.
All concurred.
Such. a limitation existed in the treasury regulations from 1937 to 1964. In a letter dated June 21, 1954, a commissioner of the United States Treasury Department explained the necessity for this limitation so as to prevent an owner from naming as a beneficiary an organization, which, by its very structure or nature, would not readily allow a change in beneficiaries at a later time. How valid this reason is, in light of the fact that the owner of a bond, registered to him and another, can cash it at anytime without liability to the beneficiary, we cannot determine. There has been presented no evidence or explanation as to why this provision was left out of the 1964 regulations. We decline to speculate.
Some examples, MCLA 702.12; MSA 27.3178(82) providing for distribution of a portion of the decedent’s estate to a child born after and not provided for in a will; MCLA 702.13; MSA 27.3178(83) concerning children inadvertently omitted from a will; and, of course, there are always the dower rights to be considered. MCLA 702.69: MSA 27.3178(139).
Under § 315.8 a bond registered in an unauthorized form is considered invalid. The appellee has argued that since the Treasury Department, through the issuing Federal Reserve Bank, allowed Mr. Freedland to register these bonds naming the Foundation as the beneficiary, and continued to pay interest to Mr. Freedland during his life, that we should conclude from this that the Department recognized the validity of the Foundation’s beneficiary interest. However, these facts are neutralized by the further fact that after Mr. Freedland’s death the Treasury Department allowed the administrator of his estate to cash the bonds. Had the Treasury Department recognized the validity of the Foundation’s interest, then under their regulations, §§ 315.35 and 315.66, no payment could have been made to the administrator.
We cannot read into the present facts an attempt by a sole owner, Mr. Freedland, to make a gift of the bonds inter vivos, there being no delivery of the bonds to the Foundation, nor a testamentary gift in accordance with the general laws of probate.
Justice Clark, joined by Justice Douglas, dissenting.
In a sense, insofar as the administrator represents the estate of Mr. Freedland, his clairqt to the bonds upon this approach is the stronger one, as the bonds were purchased by Mr. Freedland during his life by monies within, and removed at the expense of, his estate.
We have seen how difficult it is even for the Court to interpret the regulations, how much more so for the inexperienced layman! | [
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Per Curiam.
Defendant Edward Lee Darden was convicted upon his plea of guilty of attempted breaking and entering, MCLA 750.110; MSA 28.305.
On appeal defendant urges that the trial court committed error in accepting his guilty plea when it failed to apprise him of the possible effect that his plea of guilty might have upon a subsequent sentencing in a previously-tried case in which he was found guilty on another charge before another judge.' Defendant hypothesizes that he might have received a lesser sentence on the other charge if he had refrained from pleading guilty in this cause until sentencing had taken place on his prior conviction.
The trial court advised the defendant of the consequence of his plea and complied with GCR 1963, 785.3 when it informed the defendant that he faced a possible prison sentence of up to five years if he pled guilty to attempted breaking and entering. The court had no duty to apprise defendant of the complained-of collateral consequences of his plea. A trial judge is not required to engage in speculation as to the hypothetical effects of a plea of guilty on a later sentencing proceeding in another matter.
Affirmed. | [
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V. J. Brennan, J.
David and Patricia Gamble, as owners of certain land on Hart Lake in Oceana County, caused this land to be platted and recorded under the name of “Bloomfield Shores”. On November 17, 1967, while still the sole owners of this property, Mr. and Mrs. Gamble executed and recorded a document entitled “Statement of Covenants, Restrictions and Conditions Regarding the Use and Occupancy of the Plat of Bloomfield Shores”. Paragraph 4 of this document provides:
“4. No dwelling unit or part of any dwelling unit, or other structures, shall be located on any lot or building site nearer than 20 feet from the crest of the land approaching the lake, nor nearer than 30 feet from the front line of said lot as surveyed, nor nearer than 10 feet from any side lot line. The front line of any lot shall be deemed to be any lot line abutting upon any street in said plat. ‘Dwelling house’ or ‘structure’, as used in this paragraph, shall be defined to any extreme projection, including porches and eaves.”
While defendant, Eldora Hannigan, was investigating the possibility of purchasing lot 12 of Bloomfield Shores from the Gambles, she was assured that, because of the nature of this lot, some concession would be made regarding the requirements of paragraph 4, supra; defendant was specifically concerned with the covenant requiring struc tures to be no nearer than 20 feet to the crest of the bank approaching the lake. Figure 1, infra, displays lot 12 of Bloomfield Shores, and the surrounding lots. Defendant’s exhibit “A”, an aerial photograph of the property in question, reveals that the crest of the bank is not accurately represented by figure 1. Actually, the bank follows a crescent-like course which closely approaches the lake in the center of lot 11, passes immediately in front of defendant’s house on lot 12, and then approaches the lake again near the far side of lot 13.
Given the lay of the land, defendant’s view of the lake would be interrupted by construction on the immediately adjacent property if she had to abide by the 20-foot set-back rule. Subsequent to defendant’s purchase of lot 12 on May 15, 1968, the building committee (a group created by the covenants and empowered to alter them), on October 10, 1968, approved defendant’s construction plan with the following special provision:
“The committee agrees that the owners [sic] North building line should not exceed beyond the point one foot South or back of the cement marker located 25' feet east of the NW Comer of Lot 12. The owner should consider maintaining a continuity of grade with lots 12 & 13.”
The cement marker which the committee attempted to describe is located at the turning of the random traverse line on lot 12. If, by the “NW corner” the committee was referring to the intersection of the line dividing lots 12 and 13 and the lakeshore, the point described would be somewhere in the lake. If they were referring to the intersection of the random traverse line and the line dividing lots 12 and 13 as the “NW corner”, the point described would be quite a distance closer to the lake than the actual location of the concrete marker. The committee’s description of the location of the con erete marker was, to be charitable, slightly erroneous. When construction of defendant’s home was nearing completion, a dispute arose regarding the porch (seen as the protrusion in figure 1).
The dispute culminated in a lawsuit; plaintiffs prevailed and defendant was enjoined from building the porch and ordered to remove the already completed portion; defendant appeals.
This Court feels that the most sensible manner in which to resolve cases of this nature is to consider each case on its peculiar merits. As Judge B. B. Burns stated in Altese v Neill, 1 Mich App 437, 439-440 (1965):
“In Polk Manor v. Manton (1936), 274 Mich 539, the thrust of the opinion indicates that building restriction cases present such a wide difference in fact that, in equity, but few rules can be applied generally, and in the main each case must be determined on its own facts.
“And so they must. Each factor, though separately of little significance, must be weighed and considered; each a makeweight for one of the adversaries, until finally the balance of the scales of justice tip one way or the other.”
While in cases of an equitable nature, such as this, this Court is not bound by the conclusions of fact made by the court below (the review here is de novo), it will not disturb them unless the Court is convinced it would have reached a different result had it been in the lower court’s position. Georges v Ballard, 20 Mich App 554 (1969); Rose v Fuller, 21 Mich App 172 (1970).
In this case the trial court found that there is only one concrete monument on lot 12 of Bloomfield Shores and that defendant’s porch extends beyond that marker in violation of the building committee’s permission. With these conclusions of fact we agree. We do not, however, feel that these facts compel the result reached below. Given the building committee’s inept description of the concrete marker’s location and the fact that a significant amount of the construction of the offending porch has been completed, we are disposed to resolve this case on grounds other than the technical violation of the building committee’s permission.
The Court chooses to look to the stated purposes behind the covenants and restrictions and then determine the impact of defendant’s porch on the achievement of those purposes. The purpose of the covenants and restrictions, as stated in that document, are as follows:
“for the purpose of insuring the use of the entire Plat for single residential purposes, and for the purpose of preserving and improving the attractive features of the property in the community, and securing to each lot owner the full benefit and enjoyment of his home and property with no greater restrictions upon the use of such home and property than is necessary to insure the same advantages to other lot owners.”
After reviewing the record and exhibits in this case, we have come to the conclusion that defendant’s porch would not obstruct the view of the lake from adjoining property, as was claimed below, any more than pre-existing structures affect the view. The closest protrusion of defendant’s porch toward the lake is behind a line formed by joining the northerly corner of the structure on lot 11, and the easterly comer of the structure oh lot 14. Therefore, any future purchaser of lot 13 would be able to secure an ample view of the lake without obstructing the view from the pre-existing structures on lots 11, 12, and 14. On this basis we reverse.
Reversed. Costs to appellants.
All concurred. | [
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Per Curiam.
This is an appeal, by leave granted, from the denial of respondent State Tax Commission’s motion for accelerated judgment. On October 6, 1970, Republic Development Corporation petitioned the Wayne Circuit Court for judicial review of the final orders by the State Tax Commission on September 8 and 9 of 1970, with regard to the assessments of certain parcels of land owned by Republic. On October 14, 1970, the State Tax Commission moved for accelerated judgment alleging that the circuit court lacked jurisdiction to review the assessment decisions of the commission. The motion was denied on November 6, 1970. The Tax Commission sought leave to appeal to this Court from the denial of the motion for accelerated judgment on November 16,' 1970. Leave was granted on January 15, 1971. The claim of appeal was filed on January 22, 1971.
The question raised in this appeal is whether the circuit court has jurisdiction to review final decisions of the Tax Commission with regard to the fixing of assessment values.
Petitioner asserts that the circuit court is vested with jurisdiction to hear appeals from the State Tax Commission by virtue of judicial review, provisions of the Administrative Procedures Act of 1969. Section 102 of that act, MCLA 24.302; MSA 3.560(202), provides:
“Judicial review of a final decision or order in a contested case shall be by any applicable special statutory review proceeding in any court specified by statute and. in accordance with the general court rules. In the absence or inadequacy thereof, judicial review shall be by a petition for review in accordance with sections 103 to 105.”
Section 103 provides that the petition be filed in circuit court.
The Attorney General contends that the decisions of the Michigan State Tax Commission are exempt from the Administrative Procedures Act of 1969 even though no express exemption is contained in the act itself. This conclusion is based upon § 152 of The General Property Tax Act which was amended in pertinent part in 1969 to provide :
“In all of its proceedings the contested case provisions of Act No. 197 of the Public Acts of 1952 as amended, shall not be applicable to the state tax commission, and in its determination, article VI, section 28, of the constitution of the state of Michigan shall apply.”
The effect of this amendment was to exempt the decisions of the Michigan State Tax Commission from the contested case provisions of the Administrative Procedures Act then in effect. It was shortly after this amendment that the Administrative Procedures Act was completely revised and the present act was passed. Section 112 of the present act provides :
“A reference in any other law to Act No. 88 of the Public Acts of 1943, as amended, or Act No. 197 of the Public Acts of 1952, as amended, is deemed to be a reference to this act.” MCLA 24.312; MSA 3.560-(212).
Therefore, although § 152 of The General Property Tax Act refers to a previous Administrative Procedures Act, by virtue of § 112 of the present act, the reference to the previous act is deemed to “be a reference to this act”.
Clearly then, the State Tax Commission is exempt from the provisions in the Administrative Procedures Act dealing with contested cases. It there fore follows that the provisions for judicial review of contested cases are equally inapplicable.
It is our opinion that the Legislature intended to eliminate judicial review of actions taken by the State Tax Commission at the circuit court level. Accordingly, the decision of the trial court must be reversed and the cause remanded for an order granting an accelerated judgment to the respondent State Tax Commission.
MCLA 211.152; MSA 7.210. | [
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Memorandum Opinion.
Defendant pleaded guilty to assault with intent to rob being armed and he appeals. A motion to affirm has been filed by the people.
Upon an examination of the briefs and record it is manifest that the question sought to be reviewed is so unsubstantial as to need no argument or formal submission.
Motion to affirm is granted. | [
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Fitzgerald, P. J.
This is a zoning case involving defendant’s proposal to establish a year-round trailer coach park on Green Lake, in Allegan County, adjacent to a small seasonal trailer coach park which he operates. The seven-acre tract to be thus utilized is zoned to permit trailer coach parks. Defendant was granted permission by the Leighton Township Board to construct the proposed park. The proposal provided for 61 trailer coach sites laid out so as to provide 15 to 30 feet of distance between trailers.
On May 11,1970, plaintiffs, owners of property on Green Lake, commenced suit, seeking to enjoin the proposed development. They alleged violations of the Trailer Coach Park Act of 1959, the zoning ordinances of Leighton Township, and public nuisance. The trial court issued a temporary restraining order.
Defendant responded by motion for summary judgment. Plaintiffs likewise moved for summary judgment. After oral argument, the trial court rendered its opinion granting defendant’s motion for summary judgment, and dissolving the temporary restraining order.
Plaintiffs having moved for rehearing, the trial court entered a second opinion, reiterating the holdings in the first opinion and ordering summary judgment for defendant. Plaintiffs bring this appeal as of right, contending the trial court erred in failing to apply § XIV, paragraph 10, of the Leigh-ton Township zoning ordinance to the instant case.
On appeal, plaintiffs contend that defendant’s proposed development is in direct contravention of § XIV, paragraph 10, of the Leighton Township zoning ordinance, which provides:
“(a) All buildings occupying four-hundred (400) or more square feet of ground area shall be located not less than fifty feet (50') from the next adjoining building occupying four-hundred (400) square feet or more of ground area.
“(b) In all instances^ all smaller buildings and structures shall be so spaced, one from the other and from larger buildings, as to lessen fire hazard and to promote efficiency in extinguishing fires.”
They simultaneously contend that the above quoted provision is not in conflict with § V, paragraph 13(d). Section V, paragraph 13(d), of the Leighton Township zoning ordinance provides:
“No trailer coach or housetrailer shall at any time, either when being occupied or not, be parked between the established setback line and the front line of any lot or parcel of land; nor shall such coach he used or occupied unless there is a clear unoccupied space of at least ten feet (10') on all sides thereof.” (Emphasis added.)
Defendant argues that, properly construed, § XIV, paragraph 10, supra, is not applicable to trailer coach parks.
Complete resolution of this issue requires close scrutiny. Defendant’s argument, adopted by the trial court, that § V, paragraph 13, is a specific pro vision which overrides the general provisions of § XIV, paragraph 10, is not correct as applied in the instant case.
Upon a full reading of § V, paragraph 13, we find at the beginning:
. “Automobile trailer coaches: (a) Trailer coaches or housetrailers shall not be used and occupied in the Township as a permanent dwelling; nor as a temporary dwelling except as hereinafter provided, outside of licensed trailer coach parks.” (Emphasis added.)
It is thus clear that this section and paragraph, with its ten subparagraphs, deals with the use of trailer coaches or housetrailers outside of licensed trailer coach parks. It has no application to the defendant’s proposed trailer coach park.
It would seem to follow then that plaintiffs are correct that, as between the two provisions of the township ordinance, only § XIV, paragraph 10, is applicable; however, as will be discussed hereinafter, this ordinance appears to be in conflict with state law.
The question we consider, then, is whether the Trailer Coach Park Act of 1959 precludes the imposition of stricter spacing requirements by the Leighton Township zoning ordinance.
The Trailer Coach Park Act, 1959 PA 243, MCLA 125.1001 et seq.; MSA 5.278(31) et seq., provided in § 53 thereof, at the time of the commencement of this action, as follows:
“Trailer coaches shall not be permitted to occupy single or full multiple sites if the trailer coaches are either longer or wider than would permit compliance with the following requirements:
“(a) The boundaries of the sites shall be clearly and permanently designated according to the dimensions and locations shown on the approved plot plan.
“(b) Space between trailers may be used for the parking of motor vehicles if the space is clearly designated and the vehicle is parked at least 10 feet from the nearest adjacent site boundary.
“(c) There shall be unobstructed open spaces of at least 10 feet between the sides or end and sides of adjacent trailer coaches for the full length of the coaches, and at least 3 feet of unobstructed open space between the ends of adjacent trailer coaches. Hitches shall not extend beyond the boundary lines of the sites.
“(d) Trailer coaches shall not be parked less than 10 feet from a public street or alley, nor less than 3 feet, from the boundary of any trailer coach park if the abutting property is improved property.” MCLA 125.1053; MSA 5.278(83).
The act further provides in § 16, MCLA 125.1016; MSA 5.278(46):
“Nothing in this act nor any act of the commissioner shall relieve the applicant for a permit to construct a trailer coach park or relieve the person owning or operating an existing park from responsibility for securing any building permits or complying with all applicable codes, regulations or ordinances not in conflict with this act. Compliance with an ap proved plan shall not authorize the person constructing or operating a trailer coach park to create or maintain a nuisance or a hazard to health or safety.”
Defendant has argued that the establishment in the Trailer Coach Park Act of 1959 of boundary requirements signifies the preemption by the state of this area of regulation. He further contends that any conflicting ordinance must fail as void. However, specific authority has been granted to townships in the Township Rural Zoning Act (MCLA 125.271 et seq.; MSA 5.2963[1] et seq.) to regulate trailer coaches:
“For each such district, provisions may also be adopted designating or limiting the location, the height, number of stories, and size of dwellings, buildings and structures that may hereafter be erected or altered including tents and trailer coaches, and the specific uses for which dwellings, buildings and structures including tents and trailer coaches may hereafter be erected or altered; the area of yards, courts, and other open spaces, and the sanitary, safety and protective measures that shall be required for such dwellings, buildings and structures, including tents and trailer coaches; and the maximum number of families which may be housed in buildings, dwellings and structures including tents and trailer coaches hereafter erected or altered.” MCLA 125.271; MSA 5.2963(1). (Emphasis added.)
As the trial court observed, to conclude that the Trailer Coach Park Act preempts the regulation of trailer coaches is to draw it into direct conflict with the Township Rural Zoning Act. This result is to be avoided wherever possible.
The trial court consequently determined that the Trailer Coach Park Act of 1959 does not preclude a township from imposing by ordinance higher standards regarding trailer spacing in the interests of public safety, morals, or general welfare. Thus, the trial court concluded, the Trailer Coach Park Act of 1959 is not preemptive and exclusive but rather merely establishes minimum standards.
This conclusion appears to be clearly erroneous. The Michigan Supreme Court, in Richards v Pontiac, 305 Mich 666 (1943), considered the predecessor of the Trailer Coach Park Act of 1959 stating that the purpose of that act was the regulation of house-trailer camps in all parts of Michigan. The Court said at p 672:
“Its intent and purpose is to. take over the entire field of regulation and supervision of trailer parks in the State.”
See, also, Moorman v State Health Commissioner, 2 Mich App 446 (1966).
The record reveals that, in the instant case, defendant’s proposed trailer coach park plans provide for spacing between trailers in excess of the minimum requirements set forth in § 53 of the Trailer Coach Park Act of 1959. The plans for the proposed park are therefore' in conformity with the act.
Section XIV, paragraph 10, of the township zoning ordinance, if construed so as to apply to trailer coach parks, imposes spacing requirements greater than those imposed by the Trailer Coach Park Act of 1959. However, that act, with its specific provisions, controls over the township ordinance.
Plaintiffs having shown no reversible error, the judgment entered below is affirmed. No costs, a public question.
All concurred.
Section 53 of the act has subsequently been amended by 1970 PA 172. | [
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Memorandum Opinion.
Defendant was convicted of carrying a concealed weapon without a license in violation of MCLA 750.227; MSA 28.424. He was sentenced and he appeals.
Examination of the record and briefs discloses no error, prejudicial or otherwise.
Affirmed. | [
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Reid, J.
The defendant and appellant was arrested in the city of Flint, Michigan, on March 2, 1941, charged with a violation of Act No. 214, Pub. Acts 1931 (Comp. Laws Supp. 1940, § 17115-500a, Stat. Ann. § 28.661), for an injury that day inflicted upon Kenneth Stange. The portion of the act which is important for the purposes of this appeal is as follows:
“Every person who drives any vehicle upon a highway carelessly and heedlessly in wilful and wanton disregard of the rights or safety of others, or without due caution and circumspection and at a speed or in a manner so as to endanger or be likely to endanger any person or property and thereby injuring so as to cripple any person, but not causing death, shall be guilty of the offense of felonious driving.”
The appeal requires a judicial construction of the word ‘ ‘ cripple ’ ’ as contained in the act. Appellant waived trial by jury and was tried before the circuit judge without a jury. On May 5, 1942, he was found guilty and sentenced under the act cited. Defendant’s claim is that the injuries actually inflicted upon Kenneth Stange were not such as to cripple him within the meaning of the act.
The only portions of the testimony in the record pertain to the nature and extent of the injury suffered by Kenneth Stange. Under a concession made by the parties to this case, the other facts need not be considered. The important portions from the testimony of Dr. Don L. Bishop are as follows:
“A. * * * He (Kenneth Stange) had severe bruises on the left side of his body; * * most marked about the left shoulder, over the left hip; and there was some up and down the left leg; particularly over the foot. * * * He had a fracture of the outer third of the collar bone or clavicle. * * * In the X-ray there were several fragments to this outer third that had been broken off from . the shaft * * * a so-called comminuted fracture. * * * There was apparently some tissue and muscle * * * that had gotten in between the fragments, necessitating a longer period of healing [than?] that you normally see * * * it lessens, of course, the strength of the shoulder. * * * The man is still under treatment. * * * The cast * * * was left on about seven weeks * * * which was a little longer than we generally like to leave them on * * * for which time, of course * * * it was impossible for him to use that arm * * * I feej pe should have been restricted, as far as using the arm, for approximately three months. * * * I am inclined to believe that that shoulder will be all right. * * * I am inclined to doubt that there will be (permanent effects). * * *
“Q. Doctor, is there a possibility that there will be permanent effects of some nature resulting from this injury? * * *
“A. Well, I think there is always a possibility of something of that kind happening.”
The following is from the testimony of Kenneth Stange:
“I was in the hospital from the 2d to the 11th,— nine days.,
“Q. For how long a period of time did you lay around the house?
“A. Well, just about three weeks before I could ever get up to go outside.
“Q. Now, how long was it before you returned to your employment?
“A. It was four months. * * * I go to work but I cannot work on my operation I was doing before I got hurt. They have given me easier operations; and of course now during the day, well, it gets tired at night, I don’t know what to do with it when I get to bed; it gets tired.”
Defendant contends that the word “cripple” should be given the same force and effect as though the word “maim” had been used, and that therefore the prosecution must show a permanent injury. There is nothing in the statute to indicate that the legislature intended to use the word “maim” instead of “cripple.”
The word “cripple,” used in this statute as a verb, originated from the verb “creep.” The ancient meaning of the word was, to cause to creep, thus referring, of course, to the use of the legs. The transitive verb is defined in Webster’s New International Dictionary (2d Ed.), as follows:
“(1) to deprive of the use of a limb, particularly of a leg or foot; to lame.
“ (2) to deprive of strength, activity or capability for service.”
“Word ‘crippling’ is equivalent of words, ‘physical disability’ and is defined as to deprive of use of limbs, particularly of leg or foot, to deprive of strength, activity or capability for service or use, and to disable.” 10 Words & Phrases (Perm. Ed.), p. 544.
While the first portion of the first cited definition of the verb does not necessarily bring the injuries described in this case within its meaning, the second portion clearly does include such injuries. The correct construction includes an injury which totally disabled the person injured for four months, not •withstanding that after a year complete recovery is found probable.
Criminal statutes must be strictly construed but even under a strict construction of this statute it was properly determined that a person who was injured as Kenneth Stange was described as having been injured was crippled within the meaning of the statute.
Conviction affirmed.
North, C. J., and Starr, Wiest, Butzel, Bushnell, Sharpe, and Boyles, JJ., concurred. | [
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Reid, J.
Plaintiff brings this suit on a certificate of insurance as a member of the Chrysler Industrial Association, Employees Mutual Benefit Division, providing that in the event plaintiff became permanently and totally disabled prior to the time the insured became 60 years of age, the said defendant would pay to the insured the sum of $3,000 in instalments in accordance with certain settlement options therein designated. The plaintiff further alleges and shows that on or about July 1, 1942, while so insured he became totally and permanently disabled as a result of a cardiac condition.
Defendant denies the cardiac condition and denies that plaintiff on the day alleged was totally and permanently disabled or has become such at any time before filing of suit or to the time of trial. ■.
The issue is purely a question of fact and was tried by the circuit judge without a jury. Plaintiff was sworn as a witness and testified that in November, 1940, while he was in the line of his employment in the factory, when he used his left hand to lift a pump out of an empty barrel he suffered a sharp pain across his heart area and it made him let go immediately and he held his breath, couldn’t catch his. breath, for about 30 seconds, his arm fell limp at his side and he felt sick for half a minute. Just before that he had not been feeling well but stayed on his job. About two weeks later in his apartment when he walked to the back end of the building he received a sharp pain and couldn’t go any farther and was exhausted. He went to bed and rested, had several attacks the next day, and the next afternoon when he started out from the apartment walking toward the back end of the building, he received a third attack but went to work. He received no medical attention- or advice until he saw Dr. Walter Wilson the third week in November. It was a period of seven months before he returned to work. During this period he felt very badly. He was called back to work in the middle of June, 1942, and was given an extra heavy production job because it paid a nickel more than ordinary production. He was not given a physical examination on his return. He stayed on the job about three weeks handling heavy ■work. After a layoff of three weeks he thought he would try it again and went to work and remained at his employment about a week or 10 days. Since July, 1942, he has not done any work although he tried little light tasks such as turning two screw nails into his bed post about 2% inches long with a screw driver, which caused him to become over-exhausted. He then tried a job as an upholstery salesman, but could not. continue in this employment!
All he can do for recreation is to go to a neighborhood pool room and play the game of pool. After two games he has to quit. The pain starts from both arms and goes up to the shoulder down to the arm and hand, the whole arm seems paralyzed. At times he gets pain in his right arm. Sometimes pain comes on after physical exertion. The capacity to walk is about two blocks. He cannot recall when he has had a decent night’s sleep.
Dr. Walter J. Wilson, witness sworn on behalf of the plaintiff, testified that he attended the plaintiff November 22,1940, that on the fluoroscope examination there was shown moderate enlargement of the aorta and upon listening carefully he occasionally found a murmur in the aortic area. His diagnosis was angina pectoris.
“Q. What were your subsequent findings after the December finding?
“A. The general situation was the same, as far as the history was concerned, the diagnosis was angina pectoris, qnd we can believe that he had continuous disability which made it unable for him to work, that he was totally disabled. * * *
“Q. Tour recommendation to him was that he stop and take it easy?
“A. Take it easy and we had him rest a long time, then he tried again but every time he .tried to, he found he was unable to carry on work. ’ ’
On cross-examination.
Q. Did you any time find congestion of bis lungs ?
“A. No. #
# “Q. Did you find enlargement of bis liver?
“A. No.
“ Q. Did you any time observe any edema of Ms ankles ?
“A. No, sir.
■ “Q. Did you any time observe any alteration either in the rate or rhythm of the heart?
“A. No, his rhythm was always good, the rate hasn’t been bad.
“Q. You have testified in reference to a permanent disability condition?
“A. Yes, sir.
“Q. Without any of the facts in this case being-before you, that is, the contract itself, what do you mean in your testimony, doctor, by finding that this man is totally and permanently disabled at ■ this time?
“A. What I mean is that the history, his personal history is such that gives me that impression, sir. Of course, I have not been able to follow it up. We don’t go with our patients to see them at work.
“Q. From the very beginning you have been taking this man’s word for what he has been doing and what he has not been doing and the symptoms that he has told you about?
“A. That is all right to. a certain extent but not entirely so.”
Dr. Stuart Wilson was sworn for the defendant and testified that having examined him April 26, 27, 28, 1943, he found no evidence .of objective physical signs or finding of any disease of the heart or circulation. An electrocardiogram was identified as taken by him and a copy of it is attached to the record.
“Q. Is that cardiograph in any degree sngges-. tive of posterior coronary infarction ? ■
“A. There is no evidence in this electrocardiograph at present of any posterior coronary infarction and no evidence that I could see that in the past that such a thing had occurred.”
Defendant’s witness also testified that.he found evidence of sugar diabetes and also found disease in plaintiff’s left shoulder underneath the shoulder joint, a bursal sac enlarged, thickened and very tender to pressure.
For rebuttal plaintiff called two physicians who testified to examining plaintiff, finding no evidence of bursal sac, and being silent in their testimony as to cardiac condition.
The trial judge was impressed with the accuracy and fairness of the testimony given on plaintiff’s behalf by Dr. Walter J. Wilson. While the showing taken in its entirety is not in the highest degree convincing, still the trial judge had better means to consider the apparent reliability of the testimony given by plaintiff, plaintiff’s wife, and by his physician than this court has now the means of ascertaining the same matters from a mere printed record. Under these circumstances it is to be considered that the finding of the trial judge is based on the testimony and it will be left undisturbed.
Judgment for plaintiff is affirmed, with costs.
North, C. J., and Starr, Wiest, Butzel, and Sharpe, JJ., concurred with Reid, J. Bushnell and Boyles, J J., concurred in the result. | [
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Ryan, J.
We are required in this case to address the difficult question whether, in a wrongful death action, the deceased’s siblings may recover damages for loss of the society and companionship of their sister.
We hold that they may.
Jackie Lynn Hubbard died when the automobile driven by her husband, defendant Steven Hubbard, in which she was riding, collided with another operated by defendant Steven T. Komar. Ms. Hubbard’s father was named administrator of her estate, and he filed this action under the wrongful death provisions of MCL 600.2922; MSA 27A.2922. His complaint sought damages for funeral and burial expenses, for Ms. Hubbard’s pain and suffer ing preceding her death, and for the personal losses of society and companionship sustained by Ms. Hubbard’s five surviving brothers and sisters, her father and her mother.
The defendants admitted liability, and the case was tried to a jury on the issue of damages. At trial, defendants objected to plaintiffs claims on behalf of Ms. Hubbard’s siblings, asserting that the statute precluded them from recovering. The trial judge disagreed, permitted the plaintiff to submit evidence of the loss suffered by all family members and submitted a special verdict form to the jury which was returned after having been completed as follows:
"Form of Verdict
"We, the Jury, Find the Following Damages:
"1. Funeral and burial expense $ 1,433.55
"2. Reasonable compensation for the pain and suffering by Jackie Lynn Hubbard, while she was conscious during the time between her injury and her death $10,000.00
"3. Loss of society, companionship and nurture suffered by her father Larry Crystal as a result of his daughter’s death $25,000.00
"4. Loss of society, companionship and nurture as a result of her daughter’s death suffered by her mother Delores Hess $_
"5. Loss of society and companionship as a result of their sister’s death suffered by: Deborah Weis (sister) $ 1,000.00
Larry Wayne Crystal (brother) $ 1,000.00
Donald Crystal (brother) $ 1,000.00
Cindy Tucker (sister) $20,000.00
Kimberly Crystal (sister) $20,000.00”
In conformance with this verdict, a judgment of $79,433.55 was entered in plaintiffs favor.
Defendants appealed, claiming 1) that the damages awarded in item 5 of the verdict form are not permitted under § 2922(2); 2) that use of a special verdict form apportioning damages among individuals is precluded by the apportioning provisions of § 2922(2); and 3) that the $10,000 award for pain and suffering was excessive.
As to defendants’ first claim, the Court of Appeals concluded that § 2922(2) permitted only actual heirs at law and nearest of kin to seek recovery for a wrongful death and that since Ms. Hubbard’s siblings were related under civil law only in the second degree, while her parents were first-degree kin, the plaintiff’s judgment must be reduced by $43,000, the amount awarded to Ms. Hubbard’s siblings.
In the dispositional part of its published opinion, the Court of Appeals stated:
"That portion of the judgment representing the claims of the siblings is shown by the jury’s verdict to total $43,000. Taking into account the unchallenged post-judgment remittitur of $5,000, the amount of the greatest judgment supported by the law is $31,433.55.9
"9 The statute is silent on the propriety of such individualized jury 'verdicts’ as were employed in the case at bar. Clearly, such a statement from a jury can never be more than advisory. The trial judge is never released from his obligation to 'advise the probate court by written opinion’ of the proportion of losses suffered by each surviving next of kin. Nor is the probate court ever freed from its obligation to finally determine that apportionment. MCL 600.2922; MSA 27A.2922. Because the courts’ duties of apportionment do not appear to be for the benefit of defendants or of administrators qua administrators, the trial court’s practice can have done no harm to the parties before the court in the case at bar. Cf. Hix v Besser Co, 386 Mich 499; 194 NW2d 333 (1972).” 92 Mich App 249.
As is evident from the quoted footnote, the Court of Appeals considered defendants’ second claim of error and rejected the contention that the trial judge erred in submitting the special verdict form to the jury.
By the same token, the Court of Appeals statement that "the amount of the greatest judgment supported by law is $31,433.55” is at least an implicit indication of the Court’s rejection of defendants’ claim that the $10,000 award for pain and suffering was excessive and unreasonable.
Defendants have done nothing to pursue either of these latter two claims since the submission of their brief to the Court of Appeals. Contrary to the assertions made in their brief to this Court, nothing in our order granting leave precluded them from advancing those claims here. Because they are not asserted here, we do not consider these claims.
I
We turn then to decide whether the brothers and sisters of a person suffering death wrongfully at the hands of another are entitled to seek damages for loss of society and companionship in cases where the decedent has left a surviving spouse and parent.
Resolution of the issue begins with an interpretation of the meaning of the following statutory passage from § 2922:
"(2) Every such action shall be brought by, and in the names of, the personal representatives of such deceased person, and in every such action the court or jury may give such damages, as, the court or jury, shall deem fair and just, under all of the circumstances to those persons who may be entitled to such damages when recovered including damages for the reasonable medical, hospital, funeral and burial expenses for which the estate is liable and reasonable compensation for the pain and suffering, while conscious, undergone by such deceased person during the period intervening between the time of the inflicting of such injuries and his death. The amount of damages recoverable by civil action for death caused by the wrongful act, neglect or fault of another may also include recovery for the loss of the society and companionship of the deceased. Such person or persons entitled to such damages shall be of that class who, by law, would be entitled to inherit the personal property of the deceased had he died intestate. The amount recovered in every such action shall be distributed to the surviving spouse and next of kin who suffered injury and in proportion thereto. Within 30 days after the entry of such judgment, the judge before whom such case was tried or his successor shall certify to the probate court having jurisdiction of the estate of such deceased person the amount and date of entry thereof, and shall advise the probate court by written opinion as to the amount thereof representing the loss suffered by the surviving spouse and all of the next of kin, and the proportion of such total loss suffered by the surviving spouse and each of the next of kin of such deceased person, as shown by the evidence. After providing for the payment of the reasonable medical, hospital, funeral and burial expenses for which the estate is liable, the probate court shall determine as provided by law the manner in which the amount representing the total loss suffered by the surviving spouse and next of kin shall be distributed, and the proportionate share thereof to be distributed to the surviving spouse and the next of kin. The remainder of the proceeds of such judgment shall be distributed according to the intestate laws.” MCL 600.2922(2); MSA 27A.2922(2). (Emphasis added.)
Our focus is directed primarily toward the emphasized damage entitlement and distribution language, creating a right to seek damages on behalf of that "class who * * * would be entitled to inherit * * * had [the deceased] died intestate” and providing for distribution of damages to the "surviving spouse and next of kin” who suffered injury "and in proportion thereto”.
The primary and generally understood meaning of that critical statutory language, construed in light of the effect of its practical application taken together with our assessment of the historical development of § 2922, and the case law construing its evolving provisions, including the legislative reaction thereto, lead us to conclude that the Legislature’s purpose would be defeated by the Court of Appeals interpretation of § 2922. We are convinced that the Legislature never intended, in a case such as this one, to limit the right to seek damages for wrongful death to the actual "heirs at law” by which is meant those persons who are the nearest of kin actually surviving decedent who would be entitled to inherit pursuant to our law of descent and distribution.
A satisfactory answer to the stated issue is not plainly evident merely upon examination of the naked and somewhat opaque language of the statute. The critical language quoted and emphasized is abstruse and uninstructive, for although it iden tifies the persons who are entitled to damages for the wrongful death of another as "the class” who, by law, would be entitled to inherit had the decedent died intestate, it provides no enlightenment to determine when that class is to be identified. Does the statute itself establish the class? In other words, should the language be interpreted as establishing, at the time of enactment, a class of persons entitled to seek recovery which includes all those who, under the countless varying possibilities which might exist in the future at the time of a decedent’s wrongful death, would be eligible to inherit under Michigan’s intestacy laws? If that is the case, Ms. Hubbard’s brothers and sisters are entitled to the recovery awarded to them for Ms. Hubbard’s death. Or does the statute mean that the "class” named in the statute is left open to be defined only in the future at the actual time of decedent’s death and depending upon the particular legal relationship of the surviving relatives in a particular case? If that is the case, Ms. Hubbard’s surviving parents alone would be entitled to seek damages;
A
The search for an answer to these questions is not benefited by resort to the expressions "surviving spouse” and "next of kin” which immediately follow the statute’s use of the term "class” and are repeated throughout the statute’s distribution provisions. Alone or in context, those terms, without more, are unenlightening.
We are convinced that the statutory language in question, construed in the light of its legislative history and read against the illuminating background of this Court’s decisions, means that the "class” entitled to seek damages includes at least the "surviving spouse and next of kin” to whom distribution was ordered in this case.
We conclude, first of all, that the Legislature intended that the term "class” includes at least "the surviving spouse and next of kin who suffered injury” as a result of the wrongful death of another. We think that much is plain from the Legislature’s reaction in 1939 to the decision in In re Venneman’s Estate, 286 Mich 368; 282 NW 180 (1938), in amending the death act, 1939 PA 297, in a way clearly designed to authorize the distribution of an award to the individual who actually suffered a pecuniary loss as a result of the wrongful death.
In Venneman, the deceased’s adult son by a former marriage, who made no claim of pecuniary injury, was entitled to share half of a $4,000 settlement paid to the surviving widow. The prior statute, which was in effect at the time Venneman was decided, provided:
"Whenever the death of a person shall be caused by wrongful act, neglect or default, and the act, neglect or default is such as would (if death had not ensued) have entitled the party injured to maintain an action and recover damages, in respect thereof, then and in every such case, the person who, or the corporation which would have been liable, if death had not ensued, shall be liable to an action for damages, notwithstanding the death of the person injured, and although the death shall have been caused under such circumstances as amount in law to felony.
"Every such action shall be brought by, and in the names of, the personal representatives of such deceased person, and the amount recovered in every such action, shall be distributed to the persons and in the proportions provided by law in relation to the distribution of personal property left by persons dying intestate; and in every such action the jury may give such damages as they shall deem fair and just, with reference to the pecuniary injury resulting from such death, to those persons who may be entitled to such damages when recovered.” 1929 CL 14061, 14062. (Emphasis added.)
In a unanimous opinion for the Court in Venneman, Justice North interpreted this statute as first requiring a determination of the amount of the pecuniary injury resulting from a wrongful death, then requiring distribution of that amount to intestate heirs without regard to actual injury. As Justice Adams pointed out some time later in his dissent in Breckon v Franklin Fuel Co, 383 Mich 251, 282; 174 NW2d 836 (1970):
"In effect, the Court determined [in Venneman] that the damages recovered under the provisions of the death act as then in force were to be distributed among the beneficiaries not according to damage suffered by each of them but according to the proportions fixed by the statute of descent and distribution.”
As indicated, in apparent response to the perceived injustice of the result in that case, the Legislature, in 1939, amended the damages and distribution portion of § 2922 to authorize distribution of an award only to those persons actually injured by a wrongful death and entitled to seek a recovery.
If we were now to construe the "surviving spouse and next of kin” entitled to the distribution of any injury award as consisting of a category of persons different than those entitled to seek wrongful death damages — the "class who * * * would be entitled to inherit * * * had [the deceased] died intestate” — we would be resurrecting a dichotomy between those entitled to generate a wrongful death award and those entitled to its distribution, which was abrogated by legislation in 1939.
Therefore, we are inclined to believe that the expression "next of kin”, as used in the statute, was intended by the Legislature to mean such persons within the eligible "class” as can prove a compensable injury.
That is not the end of our task, however, because the expression "next of kin” is an inexact, even ambiguous phrase. Does it mean nearest relatives or all relatives? The ambiguities inherent in the expressions "class” and "next of kin” as contextually employed by the Legislature in § 2922(2) requires us to turn elsewhere to discern the will of the Legislature.
B
All parties and the Court of Appeals recognize the importance of what was said in MacDonald v Quimby, 350 Mich 21; 85 NW2d 157 (1957), as bearing on the proper interpretation of §2922(2). We find that opinion to be of major significance to the resolution of the issue presented in this case.
Plaintiff claims that MacDonald clearly "negated the contention that recovery in a wrongful death action is limited * * * to qualifying [as opposed to potential] 'heirs at law’ ”, since that Court permitted the decedent’s mother to intervene in the wrongful death action despite the survival of the decedent’s spouse and children. He assigns special significance to the passage by Justice Kelly in MacDonald which states:
"The petitioning mother was of a class who would be entitled to inherit the personal property of the deceased had he died intestate. The fact that she would not inherit if he died intestate leaving a wife and children would not eliminate her from that class.” 350 Mich 32.
While at first glance the Court’s statement seems confusing, even contradictory, its meaning becomes clearer when considered in light of the specific issue facing the MacDonald Court and indeed facing us in this case, viz., what is the frame of reference which defines the category of persons the Legislature has called "the class * * * entitled to inherit the personal property of the deceased had he died intestate”? Is "the class” a universal legal concept intended by the Legislature to mean the broadest group of persons legally authorized to inherit the property of an intestate deceased in a theoretical case, or only those persons who, by reason of the fortuitous circumstances of the size and composition of a particular family and the legal relationship of its members, are actually eligible to inherit the deceased’s property to the exclusion of other relatives lesser ranked in the table of descent and distribution?
Writing for the majority in MacDonald, Justice Kelly plainly was of the view that "the class” meant the broader, theoretical group of potential heirs. Since, in that case, the deceased’s mother was a member of that category, she was entitled to attempt to prove her pecuniary loss, despite being actually excluded from the category of those entitled to inherit her son’s property because of the happenstance in that case of the existence of a closer heir, the deceased’s wife.
Justice Kelly went on to write:
"There is no ambiguity in the words of the statute which provide 'the amount recovered in every such action for pecuniary injury resulting from such death shall be distributed to the surviving spouse and next of kin who suffered such pecuniary injury and in proportion thereof.’ * * *.
"Nor is there ambiguity in the provision that 'the judge before whom such case was tried * * * shall certify to the probate court * * * the amount thereof representing the total pecuniary loss suffered by the surviving spouse and all of the next of kin, and the proportion of such total pecuniary loss suffered by the surviving spouse and each of the next of kin of such deceased person. ’ ” (Emphasis in original.) 350 Mich 32-33.
Having so concluded, Justice Kelly found at least two compelling reasons to justify the decision to recognize the petitioner-appellant’s claim:
First, decedent’s survivors in that case, besides his wife, were his children and his mother, all of whom qualify as first-degree kin. Thus, under MacDonald’s specific facts, there was no need to consider whether "next of kin” means nearest relative or all relatives included in our laws of descent and distribution. Second, Justice Kelly recognized that the "next of kin” distribution language of § 2922(2) was written into the statute in response to Venneman and was intended to ensure that distribution was made to those within the "class” who were actually damaged by the wrongful death. Therefore, having found the decedent’s mother to be in the "class” entitled to seek damages, the Court concluded that she was a "next of kin” for purposes of distribution of an award attributable to her loss.
We do not agree with the Court of Appeals characterization of MacDonald as involving
"the Court’s deliberate adoption of the civil law meaning of 'next of kin’ in contrast with [separately concurring] Mr. Justice Black’s preferred 'blood relative’ equivalent of that term”,
and its conclusion
"that while the 'class of persons who, by law, are entitled to inherit’ was 'opened’ by the legislative employment of 'next of kin’ in the same paragraph, that class was expanded only to include those persons who are next of kin according to the civil law meaning of the term.” 92 Mich App 248-249.
Nowhere in MacDonald did the Court expressly adopt a "nearest relative” interpretation of "next of kin”. The opinion refers to both possible meanings of "next of kin”; that is, nearest relative or simply relative, but does not clearly adopt or approve one meaning in preference to the other, probably because such a choice was not necessary to the decision. Similarly, there is no basis to conclude that the MacDonald Court interpreted the "class” as one of actual intestate heirs "opened” by the legislative employment of "next of kin”. Instead, the majority opinion merely concluded that the mother was not eliminated from the statutory "class” simply because of the survival of decedent’s wife and children. Such a conclusion can only be understood as a finding that the "class” is one of potential heirs of the intestate’s property, not actual heirs only identifiable at the time of decedent’s death.
Concurring separately in MacDonald, Justice Black wrote:
"Any 'next of kin,’ i.e., blood relative, is a rightful beneficiary in such case provided he or she is shown to have been dependent in fact or law on the decedent when death occurred and is a member of the statutory 'class’ from which, in the variant circumstances of succession, the inheritor or inheritors of the personal estate of one dying intestate are selected.” 350 Mich 34.
It is apparent that Justice Black interpreted the majority opinion as opening the door to any "blood” relative, as he put it, who could demonstrate the appropriate pecuniary injury. That same interpretation can be attributed to Justices Talbot Smith and Voelker, who signed the concurring opinion, as well as to Justice Edwards who signed both the majority opinion and Justice Black’s opinion.
We are in agreement with the MacDonald Court’s assessment of the meaning of the statutory language there and here in issue, and the views expressed by visiting Court of Appeals Judge Quinnell when, in Scott v Burger King Corp, 95 Mich App 694, 701; 291 NW2d 174 (1980), he wrote:
"[The class] as interpreted in MacDonald expresses the class of beneficiaries, i.e., potential (as distinct from actual) inheritors of personal property, who are entitled to recover damages. * * * Read within the structure of the paragraph, the [sentence first referring to] and all later references to 'surviving spouse and next of kin’ concern the manner of distribution of the damages. The 'surviving spouse and next of kin’ are to recover those damages owing to them individually, certain creditors of the estate are to be paid, and the remainder of the estate passes by the laws of intestacy. Under our reading of the statute, 'surviving spouse and next of kin’ is a shorthand expression — albeit an inartful one — for 'such person or persons who, by law, would be entitled to inherit the personal property of the deceased had he died intestate.’ ”
While obedient application of the doctrine of stare decisis alone would justify our adherence to the MacDonald Court’s holding as we understand it, in order to determine who is entitled to seek wrongful death damages in the present case, we have further, and we think, compelling reasons for approving the Court’s holding in MacDonald and reaching the decision we do in this case.
C
In the first place, we share Justice Kelly’s personal observation concerning the 1939 amendment to § 2922(2):
"The amendment was brought about because of the Venneman decision, supra, which brought into focus the injustice of taking from the surviving wife part of the damages collected and dividing said damages with a son of the deceased by a former marriage who did not suffer pecuniary damages because of the tortious act.
"It is impossible for the writer of this opinion to conclude that in meeting such injustice the legislature created another injustice — namely, to hold blameless, as far as damages are concerned, one who brought to his death a son who was contributing to the support of his mother.” 350 Mich 33.
A generalized view of fundamental notions of distributive justice alone does not support the view that the Legislature intended to permit any potential intestate heir to establish a loss under our wrongful death provisions. We discern that intent as well from the historical development of this state’s wrongful death legislation and the irrationally arbitrary results of a contrary interpretation.
Before 1971, all forms of our wrongful death legislation employed the term "pecuniary injury” to describe the only compensable loss which could be suffered by a person other than the decedent. Until 1960, it was a term consistently associated with notions of dependency and actual lost monetary support or maintenance occasioned by the wrongful death. It is safe to say that the 1939 amendments which first used the terms "class” and "next of kin”, and which undoubtedly were a reaction to the perceived unfairness of Venneman where a non-dependent son was found entitled to share in the $4,000 settlement made with the surviving widow, re-emphasized the need to show some kind of financial dependency before a surviving spouse or next of kin could recover for the wrongful death.
Dependency arising out of financial support was the historical key to recovery of a "pecuniary loss”. "Dependency” became such an important concept in this Court in understanding what constituted a pecuniary injury that it began to take on the added role of defining who was entitled to seek damages for wrongful death. On two occasions Justice Black cited Poff v Pennsylvania R Co, 327 US 399; 66 S Ct 603; 90 L Ed 749 (1946), to emphasize that the degree of relationship was a less important criterion for establishing a right to seek wrongful death damages than dependency between related individuals. In his view, dependency was the controlling factor, and he used Poff to support that view. In Poff, the United States Supreme Court interpreted the Federal Employers Liability Act, which provided that the employer’s liability, in the case of an employee’s death, runs " 'to his or her personal representative, for the benefit of the surviving widow or husband and children of such employee; and, if none, then of such employee’s parents; and, if none, then of the next of kin dependent upon such employee’ ”. The deceased left surviving him as kin two sisters, a nephew, and a cousin, of whom only the cousin was dependent on him. Justice Douglas, speaking for the majority, reversed the Second Circuit Court of Appeals and held that within the class "next of kin”, Congress had not intended to distinguish between degrees of kinship but meant to entitle any dependent kin to seek recovery so long as there were no survivors in the preferred classes. Again, the fact of dependency defined the right to recovery.
Justice Black’s reliance on Poff is illustrative of the prevailing judicial understanding that the legislative purpose in using the term "pecuniary injury” to define compensable losses was to compensate financially dependent kin. Given that prevailing and highly restrictive understanding of "pecuniary injury” and the fact that after 1939 and before 1971, despite a number of legislative reenactments and revisions of the death statute, the Legislature never deleted or explained the term, we are led to believe that the Legislature never intended to preclude any financially dependent relative from seeking damages for the wrongful death of his benefactor.
The harshness of the restrictive financial dependency interpretation of "pecuniary injury” was recognized and judicially abandoned in Wycko v Gnodtke, 361 Mich 331; 105 NW2d 118 (1960), when the Court upheld a $14,000 jury award to the parents of a wrongfully killed minor son. While it marked neither the beginning nor the end of judicial debate over the appropriateness of attributing to the Legislature agreement with the broader judicial interpretation of "pecuniary injury”, Wycko did represent, for the first time, an interpretation of "pecuniary injury” broad enough to encompass the loss of "mutual society and protection, in a word, companionship”. No longer were damages for wrongful death tied strictly to lost wages or financial support. There was now recognition that the life of a deceased might have been intrinsically valuable to others besides the deceased, although the extent and nature of that value awaited further judicial clarification.
D
In his dissent in Heider v Michigan Sugar Co, 375 Mich 490, 510; 134 NW2d 637 (1965), Justice Adams explained his views on the meaning and extent of "pecuniary injury” suffered by the family of two young brothers, James and David, who drowned in the defendant’s pond. Although the majority disposed of the case on a finding of no liability, Justice Adams’ disagreement led him to discuss the measure of damages. Joined by Justices T. M. Kavanagh and Souris, he found a right to seek recovery for loss of society and companionship on behalf of siblings and grandparents, despite the survival of the boys’ parents. He wrote:
"MacDonald v Quimby is applicable yet to the extent that it was there held, by all members of the Court, that the persons whose 'pecuniary injury’ is compensable under the death act are those who, in the variant circumstances of intestate succession, might be entitled to inherit the personal property of one dying intestate.
"The restriction of the class to Donald Heider, father of James D. Heider, by the trial judge was improper, since, in this case, there were other members of the class who should have been considered.
"Since the court did not make an award to cover the pecuniary injury to all of James’ next-of-kin, it will be necessary to remand the case for a reconsideration of such award.
"Some further comment is appropriate with regard to the assessment of damages which the trial judge did make. He awarded $10,989.65 for the cost of raising James. The sum was incorrectly allocated to Donald Heider, father of James, who did not provide such cost. It should have been allocated to James D. Heider’s grandfather, who incurred the cost, and who, being within the statutory class, would be entitled to recover.
"The loss of companionship in David’s case runs not only to the father and mother but also to a younger brother and sister.” 375 Mich 513-515.
These statements, although expressed in dissent, are the only recorded observations by a member of this Court addressed to the issue of the validity of a claim for damages by a relative other than nearest of kin in a wrongful death action. Justice Adams’ analysis, albeit in dissent, is enlightening to us in ascertaining the meaning of "the class who * * * would be entitled to inherit * * * had [decedent] died intestate”, but its more important significance is in the fact that some of Justice Adams’ views were promptly adopted by the Legislature, as will be seen below.
The majority in Breckon limited Wycko to its facts and held that Wycko did not authorize an expanded interpretation of "pecuniary injury” which would include loss of society and companionship. Justice Adams, again in dissent, discussed the history of wrongful death legislation both before and after Wycko and concluded:
"The legislature was familiar with the opinions of this Court dealing with the recovery of damages in cases of wrongful death and the manner of distribution to surviving spouse and next of kin when it had under consideration in 1960 a bill calling for a revised judicature act. The fact that a substitute provision was rejected and the existing provisions retained in the wrongful death section as enacted in the Revised Judicature Act of 1961 with subsequent amendment in 1965 shows more than passive acquiescence in the Court’s interpretations of the statutes. It shows actual re-enactment of the statutes after this Court’s interpretive opinions had been published for a sufficient time to permit their consideration by the members of the legislature, as well as by the bench and bar.” 383 Mich 298.
In the course of his Breckon dissent, Justice Adams twice made reference to what he had said in Heider and once made reference to Justice Black’s concurrence in MacDonald in an effort to support his belief that the Legislature was aware of the view that "pecuniary injury” had evolved in meaning to encompass loss of society and companionship attributable to potential intestate heirs.
Legislative reaction to the Breckon opinions, majority and dissenting, was swift and decisive and is embodied in 1971 PA 65, now codified in MCL 600.2922; MSA 27A.2922, the statutory provision presently at issue. The major revision, which can only be viewed as a clear rejection of the Breckon majority’s limited interpretation of "pecuniary injury”, was to delete the term "pecuniary injury” in § 2922, and add "loss of society and companionship”.
In thus addressing an aspect of the wrongful death act which had divided this Court for over ten years, the Legislature vindicated at least that part of Justice Adams’ Breckon dissent which argued legislative acquiescence in the judicially announced view
"that life has value not only to the person who has been deprived of its enjoyment by a wrongful death but to the spouse and next of kin who have lost those benefits of association we summarize in the word 'companionship’ 383 Mich 299.
We are not inclined to the view that in explicitly adopting the lost companionship measure of damages long accepted and advanced by Justice Adams, the Legislature at the same time rejected the Justice’s intimately related view that such lost companionship could run to any potential, as opposed to actual, intestate heir.
We note that since the 1939 death act amendments there cannot be found any clear statement from any Justice of this Court which would preclude a potential intestate heir, who is not nearest of kin to the deceased, from seeking to recover damages, provided that that potential heir had suffered a compensable "pecuniary injury” or now, lost "companionship”. On the contrary, Justice Black, in his concurrence in MacDonald, and Justice Adams in his unopposed views expressed in his dissent in Heider and reaffirmed in his dissent in Breckon, were clearly of the mind that such potential intestate heirs constituted the "class” entitled under the statute to prove a compensable loss. Furthermore, we think that in Smith v Detroit, 388 Mich 637, 649; 202 NW2d 300 (1972), by explicitly adopting the whole of Justice Adams’ dissent in Breckon as the correct statement of law in Michigan, this Court at least implicitly accepted his view that the wrongful death statute, in seeking to compensate for lost "companionship”, speaks to all those extended family members identified in our intestacy provisions.
E
Given the fact that there is no record of legislative debate on the subject, we acknowledge a measure of uncertainty as to the specific intention, if any, of the Legislature concerning the meaning of the term "class” as it appears in § 2922. We cannot say with absolute certainty that the Legislature has consciously acquiesced in the interpretation of the "class” we have attributed to MacDonald, especially in light of the more restricted interpretation given MacDonald by the Court of Appeals panel in this case. Nevertheless, because every Justice of this Court who has expressed himself on the issue has interpreted the "class” language of § 2922 as encompassing potential intestate heirs, because none of those judicial statements has ever been expressly opposed by any Justice of the Michigan Supreme Court, because the Legislature has never undertaken to "clarify” the meaning of the "class” despite ample opportunity to consider the apparently prevailing and historic judicial view, and because the Legislature in 1971 expressly adopted a measure of damages (lost society and companionship) for wrongful death advocated by Justice Adams, a measure that he felt was inextricably bound to a broad interpretation of the "class”, we are satisfied that the interpretation which we have given to § 2922 is within the intendment of the Legislature, if indeed it has given any thought to the matter at all.
II
As a final matter, and apart from the inferences to be drawn from the judicial and legislative his tory of § 2922, we do not think it was the intention of the Legislature to arbitrarily restrict the right to seek compensation to actual heirs at law and nearest of relatives while expanding the measure of damages to lost companionship. To do so would make the vagaries of familial survival the touchstone of recovery instead of the loss of the society and companionship which ordinarily exists among family members and, generally, to an even greater degree among more closely related individuals.
Instead, we are convinced that the boundary we recognize today, establishing the right to seek compensation for the wrongful death of another, is in accord with the probable legislative judgment concerning human relationships inherent in our intestate succession laws. Those laws presume, as indeed is generally established by common experience, that certain intrafamily relationships are stronger than others and seek to distribute intestate property accordingly. There exists here an assumption that some positive relationship exists between almost all relatives. The wrongful death act, with its emphasis on compensating lost companionship, appears designed to compensate for the destruction of family relationships — those implicitly assumed to exist by our intestacy laws among family members identified as potential intestate takers.
It may be true that in individual cases it may seem arbitrary to permit recovery for lost companionship where one’s close relative is wrongfully killed but to preclude recovery where one’s equally close friend is wrongfully killed. It may have appeared to the Legislature that a boundary line drawn to distinguish between friends and relatives is considerably more logical than one drawn to distinguish between subclasses of family members recognizing only the nearest of kin as likely to suffer sufficiently from a decedent’s wrongful death to entitle them to damages. Limiting the right to recover for lost relationships only to relatives included in our laws of descent and distribution is a logical reflection of the natural ordering of emotional, psychological, creedal, intellectual, and economic sharing upon which strong relationships are built and which is considered common to our society. The natural distinction between "family”, i.e., relative, and non-family affords additional weight to our view that the Legislature intends to permit more than the nearest of kin to seek recovery.
Accordingly, the decision of the Court of Appeals is reversed.
Kavanagh, Williams, Levin, Fitzgerald, and Blair Moody, Jr., JJ., concurred with Ryan, J.
Coleman, C.J.
(for affirmance). The issue in this case is whether the decedent’s brothers and sisters were entitled to damages for loss of society and companionship under the wrongful death statute, MCL 600.2922; MSA 27A.2922. The pertinent part of that statute provides:
"The amount of damages recoverable by civil action for death caused by the wrongful act, neglect or fault of another may also include recovery for the loss of the society and companionship of the deceased. Such person or persons entitled to such damages shall be of that class who, by law, would be entitled to inherit the personal property of the deceased had he died intestate. The amount recovered in every such action shall be distributed to the surviving spouse and next of kin who suffered injury and in proportion thereto.” MCL 600.2922(2); MSA 27A.2922(2). (Emphasis added.)
Because the decedent was survived by a spouse and both parents, the brothers and sisters would not have been entitled to inherit any personal property under the intestate laws. Under the unambiguous language of the statute, I believe this ends our inquiry — the brothers and sisters are not within the class identified by the statute.
Our colleague concludes, however, that in any wrongful death action every brother, sister, grandparent; grandchild, aunt, uncle, nephew, niece, and cousin, give or take a few, will be entitled to testify to the society and companionship that they shared with the deceased and have the trier of fact determine a dollar value for their loss. This is more than the language of the statute will bear. While this conclusion does find support in the reasoning of MacDonald v Quimby, 350 Mich 21; 85 NW2d 157 (1957), that decision appears to be clearly erroneous and should be overruled. Before considering MacDonald, and the arguments our colleague advances in its behalf, a brief summary of the pertinent legislative history and prior case law is necessary.
I
The common law had no cause of action for wrongful death. Hyatt v Adams, 16 Mich 180 (1867). Although the reasons for the common-law rule were not always clearly articulated, Justice Christiancy attributed the rule to a "natural and almost universal repugnance among enlightened nations to setting a price upon human life, or any attempt to estimate its value by a pecuniary standard”. 16 Mich 191. Statutory remedies, however, were created, the repugnance perhaps being tempered by the need to encourage safety on the part of those to whom individuals were increasingly being required to entrust their lives — because of new modes of travel and business — and by the desire to provide relief to close family members in cases of hardship. 16 Mich 192.
The original wrongful death act in Michigan was enacted in 1848 and provided that any recovery for pecuniary loss would be
"for the exclusive benefit of the widow and next of kin of such deceased person and shall be distributed to such widow and next of kin in the proportions provided by law in relation to the distribution of personal property, left by persons dying intestate”. 1848 PA 38.
See Breckon v Franklin Fuel Co, 383 Mich 251, 281; 174 NW2d 836 (1970) (Adams, J., dissenting). This provision was amended in 1873 to provide that
"the amount recovered in every such action, shall be distributed to the persons and in the proportions provided by law in relation to the distribution of personal property, left by persons dying intestate.” 1873 PA 94.
This amendment allowed a husband an opportunity to seek a recovery for the death of a wife. The husband, not being a next of kin because the husband was not a blood relative of the wife, was precluded from seeking any recovery under the 1848 act. Hyatt, 16 Mich 195. This portion of the statute remained unchanged until after this Court’s decision in In re Venneman’s Estate, 286 Mich 368; 282 NW 180 (1938).
In In re Venneman’s Estate, a widow had obtained a settlement of $4,000 for the pecuniary loss she suffered as a result of the wrongful death of her husband. An adult son of the deceased from a former marriage, who admitted suffering no pecuniary loss from the death of his father, sued the widow for one half of the $4,000. He claimed that the wrongful death act required that such settlement be distributed according to the laws of intestate succession, and that under such laws he was entitled to one half of the decedent’s estate.
The statute, part of which was quoted above, provided:
"Every such action shall be brought by, and in the names of, the personal representatives of such deceased person, and the amount recovered in every such action, shall be distributed to the persons and in the proportions provided by law in relation to the distribution of personal property left by persons dying intestate; and in every such action the jury may give such damages as they shall deem fair and just, with reference to the pecuniary injury resulting from such death, to those persons who may be entitled to such damages when recovered.” 1929 CL 14062.
Despite the Court’s apparent reservations concerning the wisdom of this legislative scheme, it considered the statute clear in providing that the persons entitled to recovery and the proportions which they would receive were to be calculated solely according to the intestate laws despite the fact that the amount of the total recovery was dependent upon a showing of pecuniary loss. The injustice which the Court sensed was clear: the pecuniary loss was solely the widow’s, but the recovery for that loss had to be shared equally with a son who suffered no loss.
After the Venneman’s Estate decision, the Legislature amended the statute changing, inter alia, the manner in which any recovery would be distributed. The amended statute provided in pertinent part,
"That such person or persons entitled to such damages shall be of that class who, by law, would be entitled to inherit the personal property of the deceased had he died intestate. The amount recovered in every such action for pecuniary injury resulting from such death shall be distributed to the surviving spouse and next of kin who suffered such pecuniary injury and in proportion thereto.” 1939 PA 297.
This portion of the statute has remained unchanged except that under the present statute recovery is not limited to pecuniary injury but may also be obtained for "the loss of the society and companionship of the deceased”. MCL 600.2922(2); MSA 27A.2922(2).
II
In MacDonald v Quimby, 350 Mich 21; 85 NW2d 157 (1957), the case most pertinent to the present case, the Court was required to determine whether under the 1939 act the mother of the decedent, who had been supported by the decedent, was entitled to damages for her son’s wrongful death. Because the decedent had a wife and children who survived him, his mother was not an heir under the laws of intestate succession. The Court concluded that the term "next of kin” as used in the statute was not confined to those who would be entitled to inherit under the intestate laws:
"We cannot agree with appellees’ contention that 'heirs at law and next of kin are synonymous terms,’ or that for this Court to rule otherwise would delete and make inoperative the words found in the first half of the amended section 'that such person or persons entitled to such damages shall be of that class who, by law, would be entitled to inherit the personal property of the deceased had he died intestate.’
"The petitioning mother was of a class who would be entitled to inherit the personal property of the deceased had he died intestate. The fact that she would not inherit if he died intestate leaving a wife and children would not eliminate her from that class.
"There is no ambiguity in the words of the statute which provide 'the amount recovered in every such action for pecuniary injury resulting from such death shall be distributed to the surviving spouse and next of kin who suffered such pecuniary injury and in proportion thereof.’ [Emphasis in original.]
"Nor is there ambiguity in the provision that 'the judge before whom such case was tried * * * shall certify to the probate court * * * the amount thereof representing the total pecuniary loss suffered by the surviving spouse and all of the next of kin, and the proportion of such total pecuniary loss suffered by the surviving spouse and each of the next of kin of such deceased person. ’ [Emphasis in original.]
"The amendment was brought about because of the Venneman decision, supra, which brought into focus the injustice of taking from the surviving wife part of the damages collected and dividing said damages with a son of the deceased by a former marriage who did not suffer pecuniary damages because of the tortious act.
"It is impossible for the writer of this opinion to conclude that in meeting such injustice the legislature created another injustice — namely, to hold blameless, as far as damages are concerned, one who brought to his death a son who was contributing to the support of his mother. Neither can we justify the statement in defendants’ answer to the mother’s petition to intervene that she had no such right because she 'is not included among that class of persons entitled to recover for pecuniary injuries resulting from the wrongful death of plaintiff’s decedent.” 350 Mich 32-33.
Although the Court concluded that the phrase "next of kin” as used in the statute was not limited to the actual heirs under the laws of intestate succession, it did not determine whether "next of kin” included all blood relatives, see 350 Mich 34 (Black, J., concurring), or only those within the nearest degree under the civil-law meaning of the term. See 350 Mich 31-32. Under either alternative the mother would have been "next of kin” to the deceased.
The error committed by the MacDonald Court was that of removing the phrase "next of kin” from its context, hence ignoring the fact that the statute was not using a phrase that required judicial definition. As is obvious from the context, the "surviving spouse and next of kin” as referred to in the statute are those in a clearly delineated class: "Such person or persons entitled to such damages shall be of that class who, by law, would be entitled to inherit the personal property of the deceased had he died intestate.” The language of the statute leaves no room for doubt. Anyone not "entitled to inherit the personal property of the deceased had he died intestate” is not within the class. The mother in MacDonald was not within this class. Under the laws of intestacy, the decedent’s wife and children were the only ones entitled to inherit the personal property of the deceased. In two unexplained sentences, however, the Court ignored the clear statutory language:
"The petitioning mother was of a class who would be entitled to inherit the personal property of the deceased had he died intestate. The fact that she would not inherit if he died intestate leaving a wife and children would not eliminate her from that class.” 350 Mich 32.
Because the deceased did in fact leave a wife and children, the Court was interpreting the class to include those who might, under some other conceivable set of circumstances, have taken by the laws of intestacy. Certainly, the statutory language defining the class as those who "would be entitled to inherit * * * had he died intestate” gives no reason to suppose that it is referring to anything but the actual situation existing at the time of decedent’s death.
The focus of the MacDonald Court was on the phrase "next of kin”, which is used in the statute several times after the identification of the class entitled to damages. The Court put the cart before the horse when it considered whether the meaning of "next of kin” was synonymous with heirs at law prior to identifying the constituency of the class entitled to damages. Given a class identified in the statute as those entitled to inherit under the laws of intestacy, it was sensible for the statute in the next sentence to refer to the constituency of the class as "surviving spouse and next of kin”. Anyone entitled to inherit if the decedent had died intestate would be either a surviving spouse or next of kin, regardless what definition one attached to next of kin. One sentence refers to who will receive and the next to the amount to be apportioned.
The reasonableness of the Legislature’s reference to the class it had created as "surviving spouse and next of kin” is shown by the use of the term "next of kin” in an identical way in the original wrongful death act in Michigan. It provided, as previously noted, that any damages would be
"for the exclusive benefit of the widow and next of kin of such deceased person and shall be distributed to such widow and next of kin in the proportions provided by law in relation to the distribution of personal property, left by persons dying intestate”. 1848 PA 38.
The statute clearly allows damages to be distributed only to those entitled to inherit under the laws of intestacy and this group, apart from the widow, is merely designated as next of kin. What precise meaning "next of kin” might have was not an issue under the 1848 act and is not an issue under the present act because in both instances the phrase is merely used as a label for a class explicitly identified elsewhere in the act.
In MacDonald, the Court also looked to the legislative action following Venneman, supra, as supporting its statutory interpretation. The injustice present in Venneman, however, to which the Legislature responded, was not that the class of those entitled to damages was too small, but rather that it was too large — it included a son who, though suffering no pecuniary loss, was entitled to an equal share of the loss suffered by the widow. Of the amendment following Venneman, the MacDonald opinion stated that it was impossible to conclude that in correcting the injustice present in Venneman,
"the legislature created another injustice — namely, to hold blameless, as far as damages are concerned, one who brought to his death a son who was contributing to the support of his mother”. 350 Mich 33.
While one may certainly be sympathetic to the view that it would be kind to provide compensation to the mother in such a situation, it was inaccurate to say that by the amendment following Venneman "the legislature created another injustice”. There was no common-law cause of action for wrongful death, and all of the legislative enactments prior to the 1939 act were expressly conditioned on one’s being entitled to inherit under the laws. as if the deceased died intestate. Thus, the most that one could say concerning the 1939 amendment was that it could have gone further, so as to assure that a dependent mother was provided for in the circumstances present in MacDonald. Nevertheless, whether a clearly delineated class of beneficiaries of the act should be expanded to include other deserving beneficiaries is a matter for legislative, not judicial, determination.
Ill
Our colleague advances essentially two reasons, besides those articulated in MacDonald, why the MacDonald decision should be followed. The first is that the Legislature has seemingly acquiesced in MacDonald. The second is that he cannot attribute such a "unjustifiably arbitrary purpose” to the Legislature as that of limiting recovery to actual heirs at law. Neither of these reasons, however, is convincing.
A
Since MacDonald, the legislative changes in the wrongful death act have been few. 1939 PA 297, the act as it existed at the time of the MacDonald decision, remained unchanged until editorial changes were made when it was re-enacted as § 2922 of the Revised Judicature Act of 1961. 1961 PA 236; see Breckon, supra, 383 Mich 294 (Adams, J., dissenting). In 1965, the last sentence of the act was amended. 1965 PA 146; see Breckon, p 294. An amendment allowing for damages for the loss of the society and companionship of the deceased was enacted following the Breckon decision. 1971 PA 65.
Was the Legislature endorsing the 1957 MacDonald decision when it left unchanged the statutory language construed in that decision in the later re-enactmént and amendments of the statute? One can only speculate. We, however, are not inclined to the view that legislative inaction concerning one clearly erroneous statutory construction decision should be treated with the same deference as that accorded legislative enactments. Therefore, we conclude that MacDonald should be overruled.
However, even under the reasoning of our colleague that the nonalteration of the pertinent portion of the statute shows acquiescence in the MacDonald decision, that acquiescence should not be assumed to apply beyond the specific holding of that case. One should not conclude that legislative inaction constitutes an endorsement of all the reasoning and ramifications of the reasoning contained in a judicial interpretation of a statute. This is especially true with respect to the MacDonald decision for two reasons. First, because the opinion left open the possibility that "next of kin” would be defined according to its civil-law definition, the. opinion cannot be read as clearly inform ing the Legislature that this Court had concluded that essentially all relatives are entitled to damages under the wrongful death statute. Secondly, because of the amendment since MacDonald allowing for damages for loss of society and companionship, the ramifications of my colleague’s interpretation of MacDonald are far beyond its ramifications at the time it was decided. The decision was then limited by the statutory requirement of pecuniary injury — a requirement that would limit the beneficiaries of the wrongful death statute. Thus, because of the limited and uncertain scope of the MacDonald decision — both because of the possibility that "next of kin” would be given a civil-law definition and because of the pecuniary injury requirement — the opinion cannot tenably be a basis for legislative acquiescence in the broad interpretation of the statute now advocated.
B
Our colleague also asserts that he cannot conclude that our Legislature intended to "arbitrarily restrict the right to seek compensation to actual heirs at law and nearest of relatives while expanding the measure of damages to lost companionship”. To do so would be to limit recovery by the "vagaries of familial survival”. (What else are the laws of descent and distribution?) He nevertheless concludes that there is a rational basis for limiting recovery to relatives, thereby excluding whatever close friends the decedent may have had who were not relatives. Essentially, then, he agrees that it is possible to draw a rational line between those who should be entitled to damages for the loss of the companionship of the decedent and those who should not, but that it is arbitrary and irrational to draw that line at the decedent’s heirs at law. He asserts:
Dissenting Opinion by Coleman, C. J.
"The natural distinction between 'family’, i.e., relative, and non-family affords additional weight to our view that the Legislature intends to permit more than the nearest of kin to seek recovery.”
The dividing line between relatives and non-relatives is no more significant or rational than the line between, for example, one’s children and one’s cousins. Certainly, in most people’s lives there are friends closer than some relatives.
That some line must be drawn between those entitled to recover damages for the lost companionship of the deceased and those not so entitled is apparent. It is true that to allow all friends and acquaintances of a deceased to have a jury put a dollar value on their lost companionship would lead to endless litigation of a potentially very unseemly nature. There might be no end to the number of people trying to establish a friendship with the deceased. Petty jealousies and rivalries would surely be highlighted by defendants seeking to lower the monetary value of particular relationships. If the common-law concern against placing a pecuniary value on one’s life has any merit at all, its fears would be fully realized by asking juries to establish the net worth of all of one’s human relationships.
Given the express statutory limitation that wrongful death damages are recoverable only by those persons entitled to inherit under the intestate laws, it is not for us to question the wisdom of failing to extend further the benefits for loss of society and companionship. The unique nature of damages for lost companionship makes it far more difficult than my colleague would suggest for this Court to assert that the clearly necessary line demarcating those entitled to such damages from those who are not, rationally should have been drawn elsewhere than where it has been drawn. Whether the line should have been drawn narrowly or broadly was a question for the Legislature, and a question clearly answered by the statute we are called on to construe in this case.
Conclusion
Although our predecessors must be credited with compassion in trying to fashion a means to provide wrongful death benefits for a mother outside of the laws of intestate succession, the Court’s continued attempt to follow that route can predictably lead from statutes of certainty into a prickly tangle of uncertainties. One cannot underestimate the ingenuity of lawyers.
From what appears on its face to have been straightforward legislation, we would not veer into the proposed thicket. It is commendable to respect precedent, but it is foolish to compound error in so doing.
The statute now in effect retains the historic words describing the class to which distribution is intended. It added to the damages "loss of the society and companionship of the deceased” and provided that those benefits should be divided among the persons in that class — those who would take had the deceased died intestate — in proportion to the injury suffered.
The disposition of an estate does not allow for speculation regarding the "what ifs” of life and death as suggested. Regardless of emotional ties up and down the ladder of succession, the statutes do not permit such introspection as "What if the parents of the deceased had died a day earlier than Ms. Hubbard?”, or "What if she had a child, but an aunt was especially devoted to her?” — and so on and on.
Understandably, the laws of descent and distribution are exact. They do not rest on dependency per se. They do not encompass the loss of society and companionship per se, except, as specifically carved out by the wrongful death act, the damages to be distributed in proportion to the injury to those "entitled to inherit the personal property of the deceased had he died intestate”.
The Court of Appeals correctly decided that brothers and sisters of the deceased who were not entitled to inherit under the laws of intestacy are not entitled to damages for loss of society and companionship.
Affirmed.
Defendants succeeded in obtaining a post-trial order of remittitur reducing the $79,433.55 award by $5,000. That order is not at issue in this case.
Crystal v Hubbard, 92 Mich App 240; 285 NW2d 66 (1979).
The substance of our order granting leave to appeal contained no restrictive language. It reads in relevant part:
"On order of the Court, the application for leave to appeal is considered, and it is granted. The parties are directed to include among the issues to be briefed: are brothers and sisters of the deceased entitled to damages for loss of society and companionship under Michigan’s wrongful death act where both parents of the deceased are still living?” (Emphasis added.)
Defendants’ failure to make application for leave to appeal or to cross-appeal on these issues precludes our review. GCR 1963, 852.2 and 853.2.
Section 2 of the 1939 act provided:
"Sec. 2. Every such action shall be brought by, and in the names of, the personal representatives of such deceased person, and in every such action the court or jury may give such damages, as, the court or jury, shall deem fair and just, with reference to the pecuniary injury resulting from such death, to those persons who may be entitled to such damages when recovered and also damages for the reasonable medical, hospital, funeral and burial expenses for which the estate is liable and reasonable compensation for the pain and suffering, while conscious, undergone by such deceased person during the period intervening between the time of the inflicting of such injuries and his death.”
According to civil law, the degree of kinship between A and B is computed by counting the intervals from A through A’s lineal descendants or ancestors to that ancestor or descendant common to A and B and then back to B. Thus, as between cousins, the degree of kinship would be four, between siblings, two, between uncle and nephew, three, and so on.
Under our intestacy laws, not all relatives are potential intestate heirs. MCL 700.106; MSA 27.5106 which identifies potential intestate heirs excludes one’s great-grandparents and their issue as potential takers of intestate property as well as all lineal ancestors and their issue beyond great-grandparents.
We are satisfied that despite his use of the familiar expression "blood relative”, Justice Black and the Justices who signed his opinion did not intend to exclude lawfully adopted children from the category of "rightful beneficiarles]” to which reference is made in the concurring opinion, since then, as now, adopted children inherit as if born to the adoptive parents. See MCL 700.110; MSA 27.5110.
See, for example, In re Olney’s Estate, 309 Mich 65; 14 NW2d 574 (1944); Grimes v King, 311 Mich 399; 18 NW2d 870 (1945); and MacDonald v Quimby, 350 Mich 21; 85 NW2d 157 (1957).
For a brief history detailing part of the judicial struggle with the wrongful death statute, see Justice Adams’ dissent in Breckon v Franklin Fuel Co, 383 Mich 251, 280; 174 NW2d 836 (1970). That dissent was adopted as the law in Michigan in Smith v City of Detroit, 388 Mich 637, 649; 202 NW2d 300 (1972).
Justice Black first cited Poff in his separate concurrence in MacDonald which gained the approval of Justices Talbot Smith and Voelker as well as Justice Edwards, who also signed the lead opinion.
The second citation to Poff occurred in Justice Black’s majority opinion in Breckon v Franklin Fuel Co, 383 Mich 251, 273; 174 NW2d 836 (1970), which marked a short-lived return from Wycko v Gnodtke, 361 Mich 331; 105 NW2d 118 (1960), to the restrictive financial dependency interpretation of pecuniary injury.
See the footnote on page 37 of Justice Black’s concurrence in MacDonald.
The prevalence of this view is indicated by the agreement of Justices Talbot Smith, Voelker, and Edwards in MacDonald, and of Justices Brennan, Dethmers, and Kelly in Breckon with Justice Black, and of Justices Adams and T. M. Kavanagh, who in the dissent in Breckon, at page 296, expressly agreed with Justice Black’s view in MacDonald,
For a more comprehensive examination of legislative action and inaction, see the discussion by Justice Adams in his dissent in Breckon, 383 Mich 291-295.
For an insight into the considerable disagreement on this point see: Courtney v Apple, 345 Mich 223; 76 NW2d 80 (1956); Wycko v Gnodtke, 361 Mich 331; 105 NW2d 118 (1960); Burns v Van Laan, 367 Mich 485; 116 NW2d 873 (1962); Currie v Fiting, 375 Mich 440; 134 NW2d 611 (1965); Heider v Michigan Sugar Co, 375 Mich 490; 134 NW2d 637 (1965); Reisig v Klusendorf, 375 Mich 519; 134 NW2d 634 (1965); Wilson v Modern Mobile Homes, Inc, 376 Mich 342; 137 NW2d 144 (1965); Mosier v Carney, 376 Mich 532; 138 NW2d 343 (1965); Breckon v Franklin Fuel Co, 383 Mich 251; 174 NW2d 836 (1970).
"We are,” wrote Justice Talbot Smith for the Wycko majority, "restricting the losses to pecuniary losses, the actual money value of the life of the child”. 361 Mich 340.
Breckon, supra, 383 Mich 289-290, 294, 295-296.
See fn 13.
As the Court of Appeals in Scott v Burger King Corp, 95 Mich App 694, 703-704; 291 NW2d 174 (1980), pointed out:
"Consider the case of a decedent who lived with and supported his sibling for many years. If this decedent happened to have a child, the sibling would have no rights under the act, according to the Crystal Court. Yet it would be abundantly clear that the sibling, and possibly the child as well, would have suffered a loss. In a similar situation in which no child existed, the sibling could recover. Such a result would be nothing more than capricious and we cannot believe it was intended by the Legislature.”
In similar fashion, under the Court of Appeals approach in this case, had Ms. Hubbard’s parents died the day before she did there would be no question as to her siblings’ right to seek recovery. If the intent (as it clearly is) is to compensate for the wrongful destruction of certain relationships by permitting recovery for loss of society and companionship, it would be adventitious to permit her parents, but prevent her siblings, from recovering on Monday for her wrongful death and, on the other hand, permit her siblings to recover on Tuesday provided she lived that extra day and her parents predeceased her. The nature of the loss to her siblings is no different on Monday than it is on Tuesday. Yet, under the Court of Appeals approach, the intervening death of her parents would make a complete difference.
The statute applicable at the time of decedent’s death was MCL 702.93; MSA 27.3178(163). Our present intestate statutes provide:
"The intestate share of the surviving spouse shall be 1 of the following:
"(a) If there is not a surviving issue or parent of the decedent, the entire intestate estate.
"(b) If there is not a surviving issue but the decedent is survived by at least 1 parent the first $60,000.00, which shall be reduced in case of partial intestacy by any amount given the spouse by will, plus 1/2 of the balance of the intestate estate.
"(c) If there are surviving issue all of whom are issue of the surviving spouse also, the first $60,000.00 plus 1/2 of the balance of the intestate estate.
"(d) If there are surviving issue, 1 or more of whom are not the issue of the surviving spouse, 1/2 of the intestate estate.” MCL 700.105; MSA 27.5105.
"The part of the intestate estate not passing to the surviving spouse under section 105 or the entire intestate estate if there is not a surviving spouse, shall pass as follows:
"(a) To the issue of the decedent. If they are all in the same degree of kinship to the decedent they shall take equally, but if of unequal degree, then those of more remote degrees take by representation.
"(b) If there is no surviving spouse, to his or her surviving parents equally.
"(c) If there is no surviving issue or parent, to the brothers and sisters and children of deceased brothers and sisters of the decedent. If they are all in the same degree of kinship to the decedent they shall take equally, but if of unequal degree, then those of more remote degree take by representation.
"(d) If there is no surviving issue, parent, brothers or sisters, or children of deceased brothers and sisters of a decedent, but the decedent is survived by 1 or more grandparents or issue of grandparents, 1/2 of the estate shall pass to the surviving paternal grandparents, or to the issue of the paternal grandparents if both are deceased, the issue to take equally if they are all of the same degree of kinship to the decedent, but if of unequal degree then those of more remote degree shall be excluded; and the other 1/2 shall pass to the maternal relatives in the same manner; but if there is no surviving grandparents or issue of grandparents on the paternal or maternal side, the entire estate shall pass to the relatives on the other side in the same manner as the 1/2.
“(e) If an eligible survivor is not then known or determinable to take under subdivisions (a) to (d), then to the state by escheat.” MCL 700.106; MSA 27.5106.
The class of persons that our colleague would recognize as entitled to prove damages under the wrongful death statute is described as "potential intestate heirs”. The meaning to be attached to this phrase is subject to uncertainty. It has at least two alternative meanings. First, it could describe anyone actually identified in any provision of the intestate laws at the time of decedent’s death. Secondly, it could mean anyone who might have been identified by any provision of the intestate laws at the time of decedent’s death. The difference arises because of the definition of "issue” applicable to the intestate provisions. Issue is defined as "all of the person’s lineal descendants of all generations, except those who are descendants of a living descendant”. MCL 700.7(6); MSA 27.5007(6). Under the former possible definition of "potential intestate heir”, a grandchild of the deceased would not be within the meaning of issue in the intestate act, and hence not a "potential intestate heir”, if his or her parent — the one who was a child of the decedent — was still alive. Similarly, a cousin would be excluded if the cousin’s parent or grandparent — the relatives of the decedent — were still alive. Under the second possible definition of "potential intestate heirs” both of these relatives would be included within the class of those eligible for damages, because their parents might have died prior to the decedent.
Overruled in Smith v Detroit, 388 Mich 637, 651; 202 NW2d 300 (1972).
The Court of Appeals concluded that the civil-law meaning of the term "next of kin” should be applied. Because the degree of kinship between decedent and her brothers and sisters was not as close as the degree of kinship between the decedent and her parents, the Court of Appeals held that the brothers and sisters were not entitled to damages. Crystal v Hubbard, 92 Mich App 240; 285 NW2d 66 (1979).
Although not really in the form of an argument, our colleague also asks:
"Does the statute itself establish the class? In other words, should the language be interpreted as establishing, at the time of enactment, a class of persons * * * who, under the countless varying possibilities which might exist in the future at the time of a decedent’s wrongful death, would be eligible to inherit under Michigan’s intestacy laws?” Although it is not clear to me what the implications of this suggestion might be, it needlessly throws confusion into an otherwise seemingly clear legislative enactment. Why should the date of enactment of a statute be significant in determining the class of people to be benefited thereby? Surely, it would not be plausible to assert that persons born after this statute was enacted (or re-enacted or amended?) were not to be entitled to any wrongful death damages. The only reasonable date for forming the pertinent "class” is the date of decedent’s death.
Whether children should be entitled to damages for the loss of society and companionship of their parents is subject to dispute in our sister states. Salin v Kloempken, 322 NW2d 736 (Minn, 1982). But see Berger v Weber, 411 Mich 1; 303 NW2d 424 (1981). While our wrongful death statute clearly provides that intestate heirs are entitled to such damages, we would follow a very uncertain course to interpret our statute as applying to all potential intestate heirs. | [
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Levin, J.
Ziebart International Corporation notified Anthony S. Lichnovsky of its intention to terminate for cause Lichnovsky’s franchise under a license agreement with Ziebart.
Lichnovsky commenced this action and sought an injunction against the threatened termination. The trial court found that Lichnovsky had not breached the license agreement and restrained Ziebart from terminating the agreement on the basis of the evidence adduced at the hearing.
The Court of Appeals agreed that Ziebart had failed to prove a breach of the performance standards of the agreement. It said, however, that the agreement was for an unspecified or indefinite term or duration and that, in consequence, Ziebart could terminate it at will without assignment or proof of cause, subject to Lichnovsky’s right (under the so-called Missouri rule) to enforce the agreement for such time as would provide a reasonable opportunity to recoup the expenditures incurred by him in preparing to perform his obligations under the agreement. The cause was remanded to the trial court to determine what time would be required to protect Lichnovsky’s right of recoupment.
We reverse because the license agreement is terminable only for cause. We remand to the Court of Appeals to consider other issues not dealt with in the appeal to that Court.
I
The predecessor of Ziebart, Auto Body Rustproofing Company, and Lichnovsky entered into a license agreement dated June 13, 1963. The agreement granted Lichnovsky the exclusive right to use the Ziebart process for rustproofing automobiles in Genesee County, including the City of Flint.
Ziebart notified Lichnovsky on April 6, 1976, that he had failed to perform in accordance with Ziebart’s quality standards and of its intention to terminate the agreement by June 30. Lichnovsky filed a complaint seeking injunctive relief on April 21, 1976. Ziebart answered, stating that Lichnovsky had failed to perform "his rustproofing activities” in accordance with the standards required by Ziebart. Ziebart filed a cross-complaint seeking the termination of the agreement and injunctive relief against Lichnovsky’s use of the name "Ziebart”. The cross-complaint stated that Lichnovsky was notified of Ziebart’s intention to terminate "because” of his breach of contract and because his failure to conform to Ziebart standards confers on Ziebart the right and duty under trademark laws to terminate the franchise.
The trial court found that in November, 1973, Ziebart had submitted a new license agreement which Lichnovsky rejected, and that in January, 1975, Ziebart sent a revised company policy manual to Lichnovsky stating standards of performance "beyond those standards stated in its new license agreement”, and that the letter of April, 1976, sought to require Lichnovsky to maintain still higher standards.
The trial court concluded that "[t]he witnesses who testified for Ziebart lacked * * * experience in body work or rustproofing”. The court, adverting to differences between the license agreement and the policy manual, found that they were "totally inconsistent”. The court said that Ziebart’s effort in 1973 to change the license agreement "speaks to the motive of this cause of action”. The court concluded that Lichnovsky had not breached the agreement and that Ziebart would be restrained from terminating the agreement, and a judgment to that effect was entered.
The Court of Appeals affirmed the trial court’s determination that Lichnovsky had not breached the performance standards of the license agreement but said that that "does not end our examination of this troubled relationship”.
The Court of Appeals said that Lichnovsky, in asserting that he was entitled to prevail on the ground that he was not in breach of the license agreement, was necessarily asserting a perpetual right under the agreement. The Court was of the opinion that such an obligation is "so inaptly fitted to the always changing commercial world that courts find them only when the language of an agreement allows no other reasonable construction”. It was persuaded that there was "nothing in the terms of this agreement that indicates a perpetual duration was not intended by the parties” but found that the agreement was for an unspeci fied or indefinite term or duration and that there was no "forceful indication of intent” favoring construction of a perpetual relationship and that such agreements are generally cancellable "at the will of either party”.
After so concluding, the Court of Appeals then adopted the so-called Missouri rule which it said provides that "in agreements for an unspecified duration the principal’s otherwise unfettered right to terminate the arrangement at will is limited by the agent’s right to enforce the agreement for such a time as will afford him a reasonable opportunity to recoup the expenses he has incurred in preparing to perform his obligations”. The Court of Appeals remanded for an evidentiary hearing directed to the recoupment question.
The opinion of the Court of Appeals expresses decisionally views regarding the rules of construction applicable to franchise and other agreements which prompted our decision to grant leave to appeal and with which we disagree. We have concluded that we should address the constructional issue decided by the Court of Appeals without further scrutiny of the record on the disputed question whether the terminable-at-will argument was timely raised by Ziebart and, if not, whether Lichnovsky waived his right to object on that ground.
II
The license agreement granting Lichnovsky a Ziebart franchise provided that it would remain in "full force and effect indefinitely, unless terminated at an earlier date” "[s]hould licensee fail to perform any of the terms, conditions or provisions” of the agreement and "remain in default for a period of 30 days after the receipt of a notice” from Ziebart.
Ziebart focuses on the word "indefinitely” and asserts that "since the license agreement is of an 'indefinite’ duration, it is terminable at will by either party upon reasonable notice”. Lichnovsky, focusing on the provisions permitting Ziebart to terminate for breach of the agreement after notice of default and Lichnovsky’s failure to cure the default, asserts that the agreement is terminable only in the event of default, the giving of such notice, and failure to cure the default.
Ziebart’s argument is based on a rule of construction applicable where there is no provision concerning the term or duration of an agency, employment, or license agreement or the manner in which it may be terminated. Agreements containing no such provision are often characterized as being for an "indefinite term”. The rule of construction is that such an agreement is terminable at the will of either party.
We reverse because the rule of construction relied on by Ziebart does not apply where the agreement, although of uncertain duration, contains a provision specifying the manner of termination.
A
The inclusion in this agreement of a specific right to terminate for cause, especially a right limited by the requirement that the licensee be given notice of the asserted breach and an opportunity to remedy the default, militates against a construction of the agreement that the licensor can terminate at will. If the agreement were construed as authorizing Ziebart to terminate the relationship without assigning cause, then the provisions permitting termination "should the licensee fail to perform”, requiring notice of default and receipt thereof by the licensee, and permitting the licensee to cure the default within 30 days and authorizing the licensor to terminate "thereafter” (i.e., in the event that default is not cured) are rendered virtually meaningless. An elaborate procedure for termination for cause would not have been included in the agreement if it were intended that the agreement could be terminated without cause merely by delivering notice.
The practical construction of the parties was that Ziebart did not have a unilateral right to terminate. When Lichnovsky declined in 1973 to sign a new license agreement, Ziebart took no action to terminate, possibly in recognition that the 1963 agreement was not terminable at the will of Ziebart. The April, 1976, notice of intention to terminate did not assert a right to cancel at will, but rather asserted that Lichnovsky had failed to perform in accordance with the requirements of the license agreement. Ziebart’s counterclaim did not assert a right of termination at will, but stated that the franchise was being cancelled "because” of Lichnovsky’s breach of contract and, alternatively, because, in light of Lichnovsky’s non-performance, Ziebart had the right and obligation to terminate under the trademark laws.
To construe this agreement as permitting termination at will would also be inconsistent with other provisions in the agreement. Paragraph 7(f) prohibits Lichnovsky from assigning or transferring the agreement "without first obtaining thereto the consent of licensor in writing,” but continues that "licensor will not unreasonably refuse to consent to the sale or transfer of the license agreement by licensee”. A construction that the agreement is terminable at will would be at odds with the concept that Lichnovsky’s interest is marketable and with the assurance that Ziebart will not unreasonably block transfer of the franchise. If Ziebart could terminate at will, it could always prevent a purchaser from acquiring Lichnovsky’s interest, whether its opposition was reasonable or not, or alternatively could insist upon negotiation of a new and more favorable agreement with a purchaser simply by threatening termination. This view of the matter is reinforced by paragraph 17 which states that "Subject to the provisions of subparagraph (f), this license agreement shall inure to the benefit of and be binding upon heirs, executors, administrators, successors or assigns of each of the parties hereto”. While this clause might not alone be persuasive that a marketable interest was created, the reference to subparagraph (f) reinforces the impression that a marketable interest and, hence, one not terminable at will, was created.
This agreement, drafted by Ziebart’s predecessor, sets forth with some specificity and care a number of obligations imposed upon Lichnovsky and expressly reserves certain rights to Ziebart, including "the absolute right to change the formula and name” of the compounds used in rustproofing.
When the instant agreement was drafted, the business of Ziebart’s predecessor was in its formative stage and it was seeking licensees. It appears that Lichnovsky, in addition to the financial investment he made, gave up another business in which he was then engaged when he entered upon this new relationship. Despite the use of the word "indefinitely” he did, we think, fairly understand that his franchise under the license agreement could not be terminated except for cause and then only after notice and an opportunity to cure the default.
Any ambiguity in the expression must be construed against Ziebart, as its predecessor drafted the agreement.
Ziebart sought to terminate this agreement for cause. The circuit judge found that it failed to establish the requisite cause. The Court of Appeals affirmed that conclusion. Ziebart does not assign error in that regard.
B
The word "indefinitely” does not stand alone in the agreement. The license agreement provides that it "shall be in full force and effect indefinitely, unless terminated at an earlier date” for cause as provided for in the next succeeding paragraph of the agreement. (Emphasis supplied.) The agreement, thus, even in terms, is not altogether indefinite; it is "indefinite unless”. The "unless” provides definition by stating the means by which the licensor can terminate the agreement; it is terminable for cause.
It is not the law that an agreement must have a definite term or duration and that therefore an agreement which does not have a definite term or duration is terminable at the will of either party. A franchise agreement need not, any more than an employment or an agency agreement, have an outside time limit to be valid.
The rule is rather that where the parties have not agreed upon the term, duration, or manner of termination of such an agreement it is generally deemed to be terminable at the will of either party because they have not agreed otherwise. The intent of the parties is determinative. An agreement which the parties have agreed is terminable only for cause, and which is thus by their agreement to endure until so terminated, is legally enforceable until terminated on that ground.
The word "indefinite” is used in different senses. In one sense, the duration of an agreement is indefinite if it does not specify the term, duration, or manner of termination. That is the sense in which the word is used in the constructional rule relied on by Ziebart. The rule is generally applicable in such a case because neither party has expressed an agreement to be bound any longer than he wishes to maintain the agreement. If the parties had wished to bind each other for a longer period, they were free to so specify at the time they made the agreement.
But an agreement can be indefinite in another sense. In this second sense the duration of an agreement is indefinite if the precise date of its termination cannot be calculated at the time the agreement is entered into, even though the conditions under which it is to terminate are clearly spelled out. When an agreement is only indefinite in this second sense, a court may not properly supply a durational term. The parties have already done so.
An agreement which fails to provide for the term, duration, or manner of termination is terminable at the will of either party not because the word "indefinitely” appears in the agreement or because the term or duration of such an agreement can properly be characterized as indefinite but because there is no agreement concerning term, duration, or manner of termination, and it is generally thought to be reasonable in such a case to infer that the parties intend that the agreement be terminable at the will of either party.
Where, however, there is an agreement concerning the manner of termination, the agreement is enforceable unless terminated in that manner although there is no fixed time for termination, and the term or duration is consequently indefinite in the second sense. Here the agreement acknowledges that kind of indefiniteness by stating that the term of the agreement is "indefinite” unless (and until) the agreed-upon method of termination is invoked, resulting in termination of the agreement and thereby definitely fixing its term.
In sum, an agreement without a fixed term or duration but which provides nevertheless that it is terminable only for cause has indeed an indefinite term or duration, but a provision that the agreement continues unless terminated for cause is enforceable. Although the agreement is, in one sense, "indefinite” as to term or duration, it is not the kind of agreement with an "indefinite term” subject to the rule of construction that such an agreement is terminable at will.
Ill
The concern of the Court of Appeals that this license agreement might last in perpetuity is misplaced. There are relatively few enterprises that last even fifty or a hundred years, let alone forever. Just as an agreement for life employment (terminable for cause) is subject to the vicissitude of human mortality, so too a franchise agreement is subject to the vicissitudes of the market. Advances in the art or in technology, competition of other processes, consumer preferences, all place practical limitations on the duration of most franchises.
Ziebart’s business will in time change. At some point, that which Ziebart and Lichnovsky agreed upon may no longer be viable. The life of the subject matter of their agreement will be at an end. Neither party will find it profitable, or, alternatively, rustproofing processes may have so changed that perhaps the agreement should not be deemed to include or extend to the changed processes.
The absence of a specific provision for termination upon the conclusion of viability because of such changed circumstances does not justify the licensor in terminating while the process is still viable.
The question whether and when a franchise should be deemed terminated because the circumstances under which the parties contracted have so far changed that they can no longer be expected to continue to have obligations to each other does not arise until that in fact occurs.
This litigation arose within less than 15 years after the license agreement was entered into, and it is now not quite 20 years since the franchise was granted. The concern expressed by the Court of Appeals about perpetual agreements might need to be addressed in respect to this license agreement 20 or 40 years from now, or sooner or later, but does not justify termination of this agreement at this time.
IV
Our conclusion that the license agreement was not an agreement terminable at will makes it unnecessary for us to consider whether the Mis souri rule, so-called, should be incorporated into our jurisprudence.
Ziebart raised issues in the Court of Appeals which have not been resolved. Accordingly, we remand to the Court of Appeals for further proceedings not inconsistent with this opinion.
Reversed and remanded to the Court of Appeals.
Coleman, C.J., and Kavanagh, Williams, Fitzgerald, Ryan, and Blair Moody, Jr., JJ., concurred with Levin, J.
Some 13 years had already intervened between the signing of the agreement and the notice of termination.
The agreement provided that Lichnovsky "may from time to time move his business location within [the] territory without first obtaining permission from [Ziebart]”.
One of Ziebart’s witnesses testified that he received five days’ training in the Ziebart system and became a firm representative and district sales manager. He had no previous experience with automobiles, but had performed at least 150 quality evaluations. Another witness testified that he had received one week of technical training and one week of sales training and had operated a Ziebart shop since August, 1975. Another Ziebart witness testified that he was employed as a district sales manager for Ziebart, but the trial court found that he had neither the experience nor training to qualify as a quality control evaluator.
The trial court found that Lichnovsky "has many years experience as a body repairman and body shop owner”. Lichnovsky "refused, based upon his experience, to rustproof the center portions of the outer door panels, the rear portions of hoods and the cowl of automobiles”. Two persons experienced in the body repair business "corroborated Lichnovsky’s testimony that automobiles do not rust in the areas that Ziebart’s manual states must be rustproofed”.
The trial court’s opinion did not refer to or make findings concerning the claim that Ziebart has a right and duty of cancellation under the trademark laws.
The Court of Appeals stated that the circuit court was "correct in limiting the defendant’s right to enforce performance standards to those standards contemplated by the agreement. While the matter was apparently decided below on the grounds that defendant’s post-1963 requirements were not shown to be reasonably related to effective rustproofing, we affirm the decision upon our observation that the defendant never attempted to prove what body coverage and shop upkeep standards were ordinarily observed by the defendant and its dealers in 1963. It may be assumed that this proof was in the possession of the defendant. Without it, no breach of the contract in this regard can be shown.” Lichnovsky v Ziebart International, 93 Mich App 60, 69-70; 285 NW2d 795 (1979).
Id., p 70.
Id., pp 70-71.
It said, "[t]his limitation on the principal’s power applies only when the agent has actually and foreseeably expended capital or given up an otherwise profitable business in his preparations, and allows recoupment only of those expenditures directed to this end; it does not include ordinary operating expenses and does not guarantee the franchisee a profit.” 93 Mich App 72-73.
While it was apparent that Lichnovsky had made substantial expenditures in readying himself to perform the license agreement, the Court of Appeals was of the opinion that, "it is impossible to determine from this record the amount of the expenditures that the plaintiff has made or whether, despite the long period which has elapsed since the performance started, plaintiff’s 'reasonable time’ has passed”. 93 Mich App 74.
In granting leave to appeal, we directed the parties to include among the issues to be briefed: "(1) did the parties intend that this franchise contract be terminable by the licensor only if the licensee breached the contract?; and (2) if the parties did so intend, may this franchise contract of indefinite term nevertheless be terminated at will by the licensor after the licensee has had a reasonable opportu nity to recoup the expenses he incurred in preparing to perform his duties under the contract?” 408 Mich 930 (1980).
Ziebart argued in the Court of Appeals that the agreement was for "an 'indefinite’ duration” and was "terminable at will”. The trial court had not considered that argument. Lichnovsky contends that this argument was not raised in the trial court. Ziebart counters that it was raised in the trial court and, whether it was or not, Lichnovsky responded on the merits in the Court of Appeals and, thus, waived any right to object at this time.
"10. This license agreement shall be in full force and effect indefinitely, unless terminated at an earlier date in accordance with the provisions of paragraph 11.
"11. Should licensee fail to perform any of the terms, conditions or provisions of this license agreement, and shall remain in default for a period of 30 days after the receipt of notice by licensor by registered letter setting forth the reasons and grounds for default, licensor shall thereafter have the right to terminate this agreement forthwith by registered letter to licensee”.
The rule was stated in the context of an employment contract in O’Connor v Hayes Body Corp, 258 Mich 280, 282; 242 NW 233 (1932).
The O’Connor case, cited by the Court of Appeals, involved a plaintiff who was hired as an efficiency expert for "no definite period”. 258 Mich 282. The parties in that case did not specify the manner of termination of the contract.
" 'Every word in the agreement must be taken to have been used for a purpose, and no word should be rejected as mere surplusage if the court can discover any reasonable purpose thereof which can be gathered from the whole instrument.’ ” 6 RCL 838, quoted in McIntosh v Groomes, 227 Mich 215, 218; 198 NW 954 (1924), Draper v Nelson, 254 Mich 380, 383; 236 NW 808 (1931), and Laevin v St Vincent de Paul Society of Grand Rapids, 323 Mich 607, 610; 36 NW2d 163 (1949).
"If the contract has been in part performed, the construction placed by the parties themselves on terms in it which are indefinite and uncertain may be shown and should be considered by the court. It will always be assumed that the parties themselves understood what was meant by the language used and are not liable to be mistaken about it, and if, in performing under it, they have treated the uncertain or ambiguous terms as having a particular meaning, the construction thus placed upon it by them will have great weight with a court.” McIntosh v Groomes, supra, 220, citing Switzer v Pinconning Manufacturing Co, 59 Mich 488, 493; 26 NW 762 (1886), and Farnsworth v Fraser, 137 Mich 296, 300; 100 NW 400 (1904).
Presumably paragraph 7(f), the only paragraph which contains subparagraphs.
"Courts are inclined to construe a contract so as not to allow a party to terminate, it at will without cause.” Miller v O B McClintock Co, 210 Minn 152, 160; 297 NW 724 (1941), cited in Gellhorn, Limitations on Contract Termination Rights — Franchise Cancellations, 1967 Duke L J 465, 473, fn 25.
93 Mich App 69.
Veenstra v Associated Broadcasting Corp, 321 Mich 679, 691; 33 NW2d 115 (1948); Bonney v Citizens Mutual Automobile Ins Co, 333 Mich 435, 438; 53 NW2d 321 (1952); Ladd v Teichman, 359 Mich 587, 592; 103 NW2d 338 (1960).
Ziebart’s statement of questions involved concerns only (a) its assertion that the issue of its right to terminate the agreement was properly before the Court of Appeals; (b) its contention that the parties did not intend that the agreement be terminable by the licensor only if the licensee breached the agreement; and (c) its claim that if the parties intended termination only on the licensee’s breach, the agreement "of indefinite term” may nevertheless be terminable at will after the licensee has had a reasonable opportunity to recoup the expenses incurred in preparing to perform its duties under the agreement.
The cases cited by the Court of Appeals all concern situations where the agreement did not specify the time, duration, or manner of termination.
In Holt v St Louis Union Trust Co, 52 F2d 1068, 1069-1070 (CA 4, 1931), a property owner sold some lots to a person and agreed as one of the conditions of sale not to sell any other lots on that block for less than a given price. The agreement did not state how long the obligation was to continue. Upon the death of the property owner, the executors of his estate sought to sell the remaining lots at their present market price — a price below the price agreed upon. Since the contract fixed "no period for the duration of [the seller’s] obligation”; the Court held that the contract “was intended to last only for a reasonable time”.
Paisley v Lucas, 346 Mo 827; 143 SW2d 262 (1940), concerned a contract under which the plaintiff would serve as an agent for an insurance company. The contract did not specify the time, duration, or manner of termination. The insurance company became insolvent, went into receivership, and ultimately entered into a re-insurance agreement with another company. When the second insurance company attempted to cancel any contractual relationship with the agent, he filed suit, claiming that the contract was for life employment and that the second company had assumed the contract. The court held that since there was no evidence that the original parties had intended this contract to be for life, "the employment was to continue only so long as it was mutually satisfactory to the parties”. Id., p 842.
In Adkisson v Ozment, 55 Ill App 3d 108, 112; 12 Ill Dec 790; 370 NE2d 594 (1977), a city entered into an agreement with the water board association of a neighboring county to provide water service to that county. Here again, the agreement made no provision for termination. The Court held that, absent such a provision, the parties could terminate the agreement after a "reasonable time”.
"The cardinal rule in the interpretation of contracts is to ascertain the intention of the parties. To this rule all others are subordinate.” McIntosh v Groomes, supra, 218; Goodwin, Inc v Orson E Coe Pontiac, Inc, 392 Mich 195, 209; 220 NW2d 664 (1974).
An agreement that is to continue for the life of one of the parties is indefinite in this sense because it cannot be determined, at the time the agreement is made, when the party will die. Such an agreement, although indefinite in this sense, is not terminable at will.
The Court of Appeals made reference to Professor Williston’s statement that contracts will not often "be interpreted as calling for perpetual performance”. 1 Williston, Contracts (3d ed), §38, p 113, cited in 93 Mich App 70-71. Neither Professor Williston’s statement nor the cases cited in the third edition in support conflict with the view here expressed. Professor Williston states that policies regarding indefinite contracts only come into play when the parties have not agreed concerning the manner in which the agreement will come to an end:
"In such a case it is necessary first to interpret the promise in the light of all surrounding circumstances, and with reference to its subject matter, in order to ascertain the intention of the parties. It may be that so interpreted the promise means perpetual performance; but it may mean performance is to begin in a reasonable time or to be continued for a reasonable time; or it may mean that the time was simply left indefinite with the expectation that the parties might continue performance as long as they pleased or that they would subsequently settle that term of the promise. It is only in this last class of cases that the question of inde&niteness can arise.
"[CJourts will, where the contract contemplates a single act or exchange of acts, unless the circumstances show a contrary intention, interpret a promise which does not in terms state the time of performance as intending performance in a reasonable time.” (Emphasis supplied.) Williston, pp 112-113.
The cases cited are in accord. In Town of Readsboro v Hoosac Tunnel & W R Co, 6 F2d 733 (CA 2, 1925), a town contracted with a railroad shipping company to share the cost of building and maintaining a bridge to be used by both. The agreement did not provide for the manner in which it was to terminate. When it became impractical for the shipping company to continue using the bridge, it refused to pay for any further maintenance. Absent a termination provision, the court held that the parties’ purpose had been to share the maintenance costs only for as long as the company continued to use the bridge.
In McCaffrey v B B & R Knight, Inc, 282 F 334 (D RI, 1922), it appeared from the complaint that the defendant agreed to purchase barrels from the plaintiff "as long as the said plaintiff made the same”. The defendant agreed to purchase "30 barrels of said size every week thereafter”. The court held the contract to be unenforceable because it was of the opinion that a promise that is cancellable at will by one party creates only an illusory obligation, and the contract was void for want of consideration. Iri the instant case, the parties did not agree that the contract was to be terminable at the will of either one.
The Missouri rule does not supersede an express provision concerning term, duration, or method of termination.
The Court of Appeals statement of the Missouri rule and the cases cited by it indicate that the rule is a limitation fashioned by some courts to prevent a manufacturer or licensor from exercising an unrestricted power to terminate an agreement which does not specify time or duration or the manner of termination under circumstances which would create undue hardship for the other party.
The Missouri rule has no application to an agreement which is not terminable at will by the licensor. Because the question need not be decided, we need not consider what would be an appropriate judicial response if a licensor sought to reserve or exercise a harsh power of termination. | [
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Per Curiam.
In this case the Court of Appeals reversed the defendant’s conviction of being an habitual offender because the trial court did not comply with the requirements of GCR 1963, 785.7 in accepting the defendant’s plea of guilty to that charge. We agree with the disposition of the Court of Appeals.
I
On May 29, 1980, the defendant was convicted by a jury of larceny in a building. Immediately thereafter the defendant was arraigned on a supplemental information charging him as a third-felony offender. Both defendant and his attorney acknowledged that it was the defendant’s desire to plead guilty to this charge. The following colloquy then took place between the trial court and the defendant:
"[The Court:] Now you have a right to be tried as to the truth of these allegations, the two previous felony convictions and the third felony conviction on which the jury returned a verdict today. Do you understand that?
"The Defendant: Yes, sir.
"The Court: You have a right to a trial by jury or to a trial by this court sitting without a jury. Do you understand that?
"The Defendant: Yes, sir.
"The Court: Are you the person named in the information?
"The Defendant: Yes, sir.
"The Court: With respect to all three of these charges?
"The Defendant: Yes, sir.
"The Court: Do you want a trial by jury with respect to this charge of being a third-felony offender?
"The Defendant: No. I wish to waive that.
"The Court: Do you want a trial by this court sitting without a jury with respect to the charge of being a third-felony offender?
"The Defendant: Yes, sir.
"I’m sorry. I didn’t understand exactly what you’re saying.
"The Court: Do you want a trial by this court sitting without a jury with respect to this charge of being a third-felony offender?
"The Defendant: No.
"The Court: Do you wish to waive your right to a trial by jury or a trial by this court sitting without a jury and enter a plea to the charge that has been read to you?
"The Defendant: Yes, sir.
"The Court: How do you plead with respect to the charge of being a third-felony offender?
"The Defendant: Guilty.
"The Court: Do you understand with respect to this charge that you could be sentenced to up to eight years in prison?
"The Defendant: Yes, sir.
"The Court: Knowing and understanding that, do you wish to maintain your plea of guilty?
"The Defendant: Yes, sir.
"The Court: All right. I will accept your plea of guilty. I will defer imposition of sentence pending a presentence investigation by the probation department.”
On September 4, 1980, the defendant was sentenced to a term of two to eight years in prison.
The defendant appealed to the Court of Appeals. He also filed a motion for peremptory reversal, citing the failure of the trial court to comply with the provisions of GCR 1963, 785.7 when it accepted his plea of guilty. The Court of Appeals issued an order which provided in relevant part:
"It is ordered that the motion for peremptory reversal be, and the same is hereby granted. The defendant’s conviction as an habitual offender is vacated. The cause is remanded for further proceedings in accord with People v Murry, 108 Mich App 679; 310 NW2d 836 (1981), and People v Stevens, 88 Mich App 421; 276 NW2d 910 (1979).”
The prosecutor has applied for leave to appeal.
II
In People v Stevens, 88 Mich App 421; 276 NW2d 910 (1979), the Court of Appeals ruled that the admonitions set forth in GCR 1963, 785.7, which prescribes the advice which must be given to a defendant who pleads guilty of an offense, must also be given to a defendant who pleads guilty to a charge of being an habitual offender. The Court of Appeals contrasted a plea of guilty to a charge of being an habitual offender with a plea of guilty of probation violation, reasoning:
"The habitual offender proceeding, like an ordinary criminal trial, is a critical stage of a criminal prosecution. See People v Johnson, 386 Mich 305; 192 NW2d 482 (1971); People v Burton, 44 Mich App 732; 205 NW2d 873 (1973). Defendants in both instances have the right to a trial by jury, MCL 769.13; MSA 28.1085, and the prosecution must prove the charges by proof beyond a reasonable doubt. People v Covington, 70 Mich App 188, 191; 245 NW2d 558 (1976), lv den 402 Mich 843 (1977). Furthermore, the habitual offender proceeding is subject to the same evidentiary and procedural rules as a regular trial, MCL 769.13; MSA 28.1085. A probation revocation hearing is not a stage of a criminal prosecution [People v Rial, 399 Mich 431, 435; 249 NW2d 114 (1976)]. Defendant does not have the right to a jury trial, People v Gladdis, 77 Mich App 91, 96; 257 NW2d 749 (1977), and the violation need only be proven by a preponderance of the evidence. People v Miller, 77 Mich App 381, 387; 258 NW2d 235 (1977). Moreover, the revocation proceeding is deemed to be summary and informal, and the normal evidentiary and procedural rules of a criminal trial are not applicable. Rial, supra, 436.” 88 Mich App 426-427.
The Court then went on to conclude that with the exception of the advice set forth in subsections (1)(c) and (e) of GCR 1963, 785.7, the advice contained in the rule must be given in an habitual offender context where the defendant elects to plead guilty.
The Court of Appeals decision in Stevens was followed by another panel of the Court of Appeals in People v Murry, 108 Mich App 679; 310 NW2d 836 (1981). In the earlier decision of People v Parker, 50 Mich App 537; 213 NW2d 576 (1973), however, a panel of the Court of Appeals had concluded that a trial court need not advise a defendant who pled guilty to an habitual offender charge of the rights which a defendant who pled guilty to some other charge would be notified of.
Ill
We have said that the habitual offender provisions of the Code of Criminal Procedure do not create a distinct criminal offense, but rather provide for enhanced punishment for the current offense. People v Hendrick, 398 Mich 410; 247 NW2d 840 (1976). Nevertheless, as the Court of Appeals noted in Stevens, supra, a defendant must be charged with being an habitual offender; he must enter a plea in response to the charge; he has a right to a jury trial; the prosecution must prove its case beyond a reasonable doubt; and the same evidentiary and procedural rules which are applicable at a trial are also applicable in the habitual offender situation. Furthermore, the end result of an habitual offender proceeding is very often a lengthy prison sentence.
In light of the foregoing factors, we are convinced that the Court of Appeals panels in Stevens, Murry, and the instant case reached the correct result in applying GCR 1963, 785.7 to habitual offender proceedings. Moreover, we agree with the conclusion of the Court of Appeals in Stevens that because of the nature of habitual offender proceedings, the advice set forth in subsections (l)(c) and (e) of GCR 1963, 785.7 need not be given.
Pursuant to GCR 1963, 853.2(4), in lieu of granting leave to appeal, we affirm the judgment of the Court of Appeals.
Coleman, C.J., and Kavanagh, Williams, Levin, Fitzgerald, Ryan, and Blair Moody, Jr., JJ., concurred.
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Blair Moody, Jr., J.
The plaintiff, John Fritz, orally agreed to sell 20,000 bushels of corn to the defendant, Bud Marantette, who purchased for resale to a Chicago broker. Defendant subsequently realized that it was not possible to obtain the contract price on the Chicago market, because the corn was not of the expected grade. Defendant checked the prevailing prices on the Toledo market and notified plaintiff that he could receive more on the Toledo market. The contract price for the Toledo market, to which the parties agreed, was approximately $24,000, $1.24 or $1.25 per bushel.
After the corn was delivered, defendant sent plaintiff a check for $15,252.21 ($24,000 less the Chicago damages), containing the standard printed statement:
"By endorsement this check when paid is accepted in full payment of the following account.”
The following phrase was handwritten under the printed form language: "corn contract paid in full”.
After fruitless conversations with the defendant, plaintiff crossed out the handwritten phrase and deposited the check. He then commenced this action in district court for the balance of the contract price. Defendant answered the complaint and counter-claimed for breach of a separate alleged contract.
Defendant claimed that plaintiff was aware of the contractual obligation to the Chicago dealer and agreed to a deduction of the cost of making good on that contract. Plaintiff denied that agreement. Plaintiff claimed that when defendant notified him that a deduction would be made from the net contract price, he refused to let defendant remove the remaining 10,000 bushels of corn. Plaintiff further claimed that defendant then agreed to pay the $1.24 or $1.25 per bushel, implying that there would be no deductions for the losses suffered on the Chicago agreement.
Defendant argued in district court that an accord and satisfaction occurred as a matter of law when plaintiff negotiated the conditioned check for $15,252.21. The district court disagreed; the jury returned a verdict for plaintiff and found no cause of action on defendant’s counter-claim. On appeal, the circuit court agreed with the defendant and reversed the jury award. The Court of Appeals, in an unpublished per curiam opinion, affirmed the circuit court. We granted leave to appeal. 402 Mich 825 (1977).
I
The issue on appeal is whether the negotiation of a check, after striking part of a restrictive condition and protesting the amount received, acts as an accord and satisfaction. Under Michigan case law the answer to this question depends upon the facts of the individual case. In most cases a jury-submissible question of fact is presented. The case of Urben v Public Bank, 365 Mich 279; 112 NW2d 444 (1961), is enlightening in deciding the instant dispute as it also involved a conditioned check.
Plaintiff Urben deposited, without endorsing, defendant bank’s check which stated, "salary and overtime pay through August 14, 1958, plus 2 weeks’ severance pay in lieu of notice”. Urben verbally protested the amount received, as being less than that to which he was entitled, before depositing the check. In his suit against the bank for back pay, the trial court found that the testimony presented a question of fact as to the establishment of an accord and satisfaction. The jury found no accord and satisfaction, awarding the plaintiff the disputed amount.
This Court affirmed the jury award, recognizing the following legal principle:
"[LTJnless the evidence is insufficient to submit to the jury, or is undisputed and not open to opposing inferences — accord and satisfaction, including the various elements thereof, is a question of fact to be determined by the jury or by the court where it is the trier of the facts”. Urben, supra, 286.
Another illustrative case is Gitre v Kessler Products Co, Inc, 387 Mich 619; 198 NW2d 405 (1972). The plaintiffs in that case received checks with the notation "Endorsement and payment of the within check constitutes a full release by the payee of all claims for commission or otherwise against the drawer and its affiliates”, and another notation using almost identical language. The checks were endorsed with the plaintiff corporation’s rubber stamp and deposited in its account.
In plaintiffs’ suit to recover contract damages and commissions still due, the trial court granted defendants’ motion for accelerated judgment based upon the doctrines of release and accord and satisfaction. This Court remanded for trial on all disputed claims, noting:
"As to whether a rubber-stamped endorsement operates as an automatic accord and satisfaction by virtue of restrictive conditions on a check, we note that since an accord is a contract, an essential requisite is a 'meeting of the minds.’ Obremski v Dworzanin, 322 Mich 285 [33 NW2d 796] (1948). Whether these plaintiffs and defendants had a 'meeting of the minds’ regarding the purported effect of the restrictive endorsements on the reverse side of the checks, we could not say, as a matter of law, that the mere rubber stamp endorsement, without more, constituted a full agreement to accept such restrictive conditions.” (Emphasis added.) Gitre, supra, 624.
Review of yet another case is helpful in resolving the instant dispute. In Melick v Nauman Vandervoort, Inc, 54 Mich App 171; 220 NW2d 748 (1974), rev’d by order 393 Mich 774; 224 NW2d 280 (1974), the plaintiffs sued for an amount they claimed was still due, after endorsing defendant corporation’s checks which carried the notations "Final Payment” and "Final Payment re purchase Capital Stock”. The trial court specifically found that the parties had not intended an accord and satisfaction. Melick, supra, 174. Nevertheless, the Court of Appeals reversed, finding an accord and satisfaction.
This Court, by order, reinstated the trial court’s judgment "for the reason that the trial court’s finding of fact that the parties did not intend an accord and satisfaction is adequately supported by the record and is not clearly erroneous”. 393 Mich 774.
Therefore, it is clear that whether a particular set of facts amounts to an accord and satisfaction is generally a question of fact for the fact finder. One of the key elements, which the trier of fact must find to reach the conclusion that an accord and satisfaction exists, is a "meeting of the minds”.
In the instant case, plaintiffs conduct and the testimony of the parties presents a question of fact as to whether the negotiation of the conditioned check constituted an accord and satisfaction. We find, therefore, that the trial court was not in error in submitting the question to the jury.
Two interpretations of the facts could support the jury determination in favor of the plaintiff. First, the jury could find that the debt was liquidated and undisputed. Testimony indicated that when defendant stated he was deducting a particular amount from the agreed contract price, plaintiff refused to ship the rest of the corn. Defendant then agreed to the original bushel amount, implying that no deductions would be made. Under the majority rule, where the debt is liquidated, payment of less than the full amount does not discharge the balance even though the amount paid was tendered and accepted as full payment. 6 Corbin, Contracts, § 1289, p 163; Calamari and Perillo, Contracts, § 65, p 129.
Alternatively, the jury could find that the amount paid represented the undisputed portion of the corn contract. The facts indicate that the so-called "dispute” concerned only the amount to be deducted for damages assertedly suffered because of the delivery of inferior corn. The defendant deducted the full amount of the asserted damages and thus the amount deducted does not represent any compromise or settlement. The defendant "merely paid what both sides acknowledged was due”. See Gitre, supra, 624, to support the proposi tion that payment of the undisputed portion of a contract will not support an accord and satisfaction discharging the balance.
Accordingly, we hold that it was not error for the district court to allow the case to go to the jury. The circuit court and Court of Appeals decisions to the contrary are reversed and the jury award in favor of the plaintiff is reinstated.
II
In 1962, the Legislature enacted the Uniform Commercial Code. MCL 440.1101 et seq.; MSA 19.1101 et seq. Section 1-207 of the UCC, MCL 440.1207; MSA 19.1207, provides:
"A party who with explicit reservation of rights performs or promises performance or assents to performance in a manner demanded or offered by the other party does not thereby prejudice the rights reserved. Such words as 'without prejudice’, 'under protest’ or the like are sufficient.”
This section of the code has been interpreted as permitting a payee to endorse a conditional check with the words "without prejudice” or "under protest” or similar reservation and thereby avoid the condition and the operation of the doctrine of accord and satisfaction:
"In summary the tender of a check in full satisfaction of a disputed amount will still constitute an offer of an accord and satisfaction. If the payee indorses without 'protest’ or similar reservation, he will be bound by the accord and satisfaction (at least if there was a bona fide dispute and the drawer is offering some concession). We believe that the enactment of 1-207 has substantially changed the outcome when the payee adds words of 'protest’ to his indorsement. Certainly the post-Code case law indicates that 1-207 authorizes the payee who signs under protest to accept the amount of the check without entering an accord and satisfaction or otherwise forsaking his claim to any additional sum allegedly due him.” White & Summers, Handbook of the Law Under the Uniform Commercial Code, § 13-21, pp 453-454.
Notwithstanding the UCC hornbook and the limited judicial authority supporting this interpretation, academicians disagree as to whether § 1-207 applies to a full-payment check. A recent, scholarly law review article illustrates the deluge of problems that would be created by adopting this application of § 1-207. See Rosenthal, Discord and Dissatisfaction: Section 1-207 of the Uniform Commercial Code, 78 Columbia L Rev 48 (1978).
The article sets forth reasons for refusing to apply the language of UCC § 1-207 to the full-payment check. It suggests such an interpretation of § 1-207 would make informal settlements of disputes considerably more difficult and would have the potential to substantially increase litigation. Accordingly, commercial transactions between businessmen, dealing at arm’s length, would lack finality.
Furthermore, the legislative history of the UCC is not supportive of such interpretation according to the article, since the presence of both § 1-207 and §3-802(3) in the 1952 Official Draft of the UCC, without any cross-referencing to each other, suggests that § 1-207 was not conceived as affecting the efficacy of the full-payment check:
"[I]f so fundamental a change in the law of accord and satisfaction had been intended it seems likely that it would have been articulated — particularly during the critical years in the mid-fifties, when the fate of the Code probably hung in precarious balance.” Rosenthal, supra, 61.
The UCC has been adopted in almost every state since 1968, and yet only four cases have addressed the applicability of § 1-207 to the full-payment check. In view of this limited precedent and the lack of agreement among legal scholars, we withhold adopting a particular judicial interpretation of § 1-207 at this time. Accordingly, the instant case is decided on the common-law principles enunciated in part I of this opinion.
The Court of Appeals decision is reversed. Costs to plaintiff-appellant.
Kavanagh, C.J., and Williams, Levin, Coleman, Fitzgerald, and Ryan, JJ., concurred with Blair Moody, Jr., J.
Only four cases have been found in which the question of the applicability of § 1-207 to the full-payment check has ever been mentioned. Scholl v Tallman, — SD —; 247 NW2d 490 (1976); Baillie Lumber Co v Kincaid Carolina Corp, 4 NC App 342; 167 SE2d 85 (1969); Hanna v Perkins, 2 UCC Rep Ser 1044 (Westchester Co Ct, NY, 1965); Kilander v Blickle Co, 280 Or 425; 571 P2d 503 (1977). The first three cases are treated analytically in Rosenthal, Discord and Dissatisfaction: Section 1-207 of the Uniform Commercial Code, 78 Columbia L Rev 48 (1978).
Section 3-802(3) read:
"Where a check or similar payment instrument provides that it is in full satisfaction of an obligation the payee discharges the underlying obligation by obtaining payment of the instrument unless he establishes that the original obligor has taken unconscionable advantage in the circumstances.” | [
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Levin, J.
Plaintiffs, who own subdivision lots facing Higgins Lake, commenced this action to enjoin the defendants, who own interior lots in the subdivision, from using the beach and water.
A strip of land between the lake and the lots owned by plaintiffs and others ("front lots”) is designated on the plat as Michigan Central Park Boulevard; "streets and allies [sic] as shown on” the plat were "dedicated to the use of the public”. The boulevard has not been developed or maintained as a roadway or "opened” to vehicular traffic; it is covered with underbrush and trees except along the water’s edge where it is a wide sand beach.
Defendants contend that the riparian rights in the Higgins Lake frontage were vested in the public by the dedication of the boulevard to public use. The public at large and, hence, owners of interior lots ("back lots”) may use the beach and water for lounging, swimming and boating purposes.
Plaintiffs contend that the dedication granted the public only the right to use the boulevard for street purposes, e.g., pedestrian and vehicular travel. Although the front lots are separated from the lake by the boulevard, the riparian rights remain an incident of front lot ownership. The general public (including back lot owners such as defendants) may not use the boulevard and adjoining waters for beach purposes.
The parties stipulated the issues on appeal from the circuit court:
—To whom do the riparian rights along Michigan Central Park Boulevard belong?
—Whether lounging, picnicking, bathing, swim ming, launching and anchoring boats, and erecting or maintaining docks and boat hoists are all riparian rights.
The circuit court had enjoined the defendants from engaging in the activities described in the second issue. The Court of Appeals vacated the injunction except insofar as it bars the defendants from erecting and maintaining docks and boat hoists and from using plaintiffs’ docks and boat hoists. We affirm the decision of the Court of Appeals but vacate a portion of its opinion, and remand to the circuit court for further proceedings not inconsistent with this opinion.
I
Erecting or maintaining docks or boat hoists near the water’s edge is a riparian or littoral right, and the parties are in agreement in that regard.
The circuit court concluded that in the instant case the riparian or littoral rights are an incident of front lot ownership, and enjoined the defendants from, among other activities, erecting or maintaining docks and boat hoists. The Court of Appeals affirmed that aspect of the judgment, stating that "[o]nly the plaintiffs may construct docking facilities and permanent mooring devices in front of their lots”.
While this Court granted the defendants permission to add a question, they did not seek leave to cross-appeal. Accordingly, they may not obtain a decision more favorable to them than was rendered by the Court of Appeals. Therefore, whether the riparian or littoral rights are an incident of front lot ownership or belong to the public because of dedication of the boulevard, there is no basis for review of the judgment of the circuit court or decision of the Court of Appeals regarding erecting, maintaining or using docks and boat hoists.
II
The circuit judge additionally enjoined the defendants from, bathing, swimming and temporarily anchoring boats in front of plaintiffs’ property. Although those may indeed be riparian or littoral rights, we conclude that plaintiffs do not have the right to exclude the general public from also engaging in those activities in the waters in front of their property.
The Attorney General intervened in the Court of Appeals in behalf of the state to assert the right of the general public to use the waters of Higgins Lake and the land lying beneath such waters for the purposes of boating, swimming, wading and fishing, which he asserts is an incident of the right of navigation.
Plaintiffs, in their brief in this Court, state that they have never argued that the general public does not have a right of navigation on the waters of Higgins Lake and that they "take no exception whatsoever” to the Attorney General’s argument that the public has a right to navigate and to exercise the incidents of navigation on waters of this state which are capable of being navigated by oar- or motor-propelled craft, small craft, so long as members of the public have lawful means of access to such waters.
The Court of Appeals stated: "Assuming lawful access, that portion of the lower court’s order which prohibited the defendants from 'bathing, swimming, * * * [temporarily] anchoring boats or similar activities’ must be vacated [deletion and addition by the Court of Appeals].”
The public, as plaintiffs acknowledge, may lawfully enter the waters of Higgins Lake from the points where the other streets of the subdivision terminate at the water’s edge, and may use the waters in front of plaintiffs’ lots, provided they have so or otherwise lawfully gained access, for bathing, swimming and temporarily anchoring boats.
Ill
There remain the questions whether the public i) may lounge and picnic on the boulevard and ii) has a right, via the boulevard, of access to and from the water for swimming and boating.
Lounging and picnicking on this wide boulevard, activities which need not involve use of the water, are not riparian or littoral rights. We agree with the Court of Appeals that "[tjhose activities are in no way directly related to a true riparian use of the waters of Higgins Lake; even assuming that the defendants choose to lounge and picnic on the boulevard because of the lake’s proximity. In that context, the only 'use’ of the water is the enjoyment of its scenic presence”.
Just as clearly, access to and from the water is a riparian or littoral right. Assuming, arguendo, that the plaintiffs own the riparian or littoral rights as an incident of front lot ownership, it does not follow necessarily that the public does not have the right to enter and leave the water from the boulevard. The question to which the parties have devoted most of their attention in this litigation (ownership of the riparian or littoral rights) is, again, not dispositive. The question whether the public has the right to enter and leave the water from the boulevard, like the question whether they may lounge and picnic on the boulevard, depends, rather, on the scope of the dedication.
Plaintiffs rely on Croucher v Wooster, which recognized riparian or littoral rights as an incident of ownership of land separated from a lake by a roadway, and on Meridian Township v Palmer, which declared that the public there did not have a right of access to and from a lake via a roadway along the lake. Defendants assert that those cases are distinguishable because there the roadway was only an easement, the owner retaining the fee, and in the instant case the boulevard was dedicated pursuant to a plat act providing that the recording of a plat "shall be deemed a sufficient conveyance to vest the fee of such parcels of land as may be therein designated for public uses in the city or village * * * or * * * township * * * in trust to and for the uses and purposes therein designated, and for no other use or purpose whatever”. (Emphasis supplied.)
In an early case, Backus v Detroit, the Court concluded that the city could build a wharf in the Detroit River at the end of a street dedicated in a plat governed by a statute substantively the same as the statute in force when the instant plat was recorded. Recognizing that if an individual had acquired the fee to the street he would have acquired riparian rights, including the right to construct a wharf, the Court declared that the question of the city’s right to construct a wharf did not depend on whether, by reason of the plat act, "title passed instead of a mere easement”. The Court also declared that the fee passed from the plattor "by the dedication, and the street became subject to all the ordinary uses of city streets. And one of these uses is for a ferry landing when a franchise for the purpose has been obtained”. The Court concluded that the scope of the dedication included public access to the river; "that the city derives its authority from the dedication of the public way, and that the construction of a wharf which shall give the means of access from the highway by land to the highway by water, is not inconsistent with the gift”.
In Meridian Township the question was whether there was a right of access to and from a lake via a roadway running beside it. The Court declared that cases like Backus, "involving a street which terminates upon a navigable body of water” (emphasis in original), were distinguishable from those where access is sought from a roadway parallelling the water. The Court’s conclusion was again based on its perception of the scope of the dedication:
"In the instant case, however, plaintiff has failed to show that the public acquired any interest beyond a 66-foot easement of passage for roadway purposes. When an easement is given for roadway purposes, the grantors of the easement do not part with their rights to property adjoining the road or to relicted land. There was a total lack of proof showing that the easement in the 66-foot strip included the right in the public to go onto the lake; nor is the lake front a terminus of the road as in Backus v Detroit, supra. ^
Backus was described thus in Meridian Township:
"The opinion states that in thus dedicating the way to the river it was the intention of the grantor to give the public access to the river and not merely to a wall on its bank or some other obstruction put up to preclude access; and that it must have been understood by the grantors that:
"' "the purpose was to provide means of access for the public to navigable waters,” and that "such was the scope and purpose of the dedication.’”” (Emphasis supplied.)
In Cass County Park Trustees v Wendt, the Court, speaking of Backus, said:
"It will be noted that the decision was based on the conclusion of the Court as to the scope of the dedication of the street as shown on the plat, and in support of its conclusion the Court cited decisions from other states and also decisions of the Federal supreme court.” (Emphasis supplied.)
In the instant case, the right of the public to enter and leave the water from the boulevard thus depends on the scope of the dedication, not on who owns the riparian or littoral rights. The plaintiffs may own such rights (including, for example, the right to erect and maintain docking and mooring facilities), and yet there may have been a dedication to the public of a right to lounge and picnic, on the boulevard and to enter and leave the water for swimming and boating purposes.
IV
The Court of Appeals held that lounging, picnicking and access to and from the water were within the scope of the dedication. While the Court of Appeals perceived the pertinent inquiry, we agree with the plaintiffs that the scope of the dedication was not within the stipulated issues. The Court of Appeals should not have reached the question whether the boulevard was dedicated not only for pedestrian and vehicular uses but additionally for park or beach uses such as lounging, picnicking and access to and from the water for swimming and boating.
It does not appear from the stipulation of facts and issues on which this appeal is presented whether the scope of dedication issue was addressed in the circuit court. Few facts are presented; we are told only that this is a sandy, overgrown strip of land, named a boulevard, dedicated as a "street”, used as a beach, "taken over” under the McNitt act by the Roscommon County Road Commission, not opened or maintained for vehicular traffic although other streets in the subdivision have been. The issues concerning the scope of the dedication, and its acceptance or abandonment mentioned in the briefs should be first addressed in the circuit court.
Because we agree with the Court of Appeals that lounging and picnicking on the boulevard are not riparian or littoral rights, and because even if the plaintiffs own such rights they could not, on that basis alone, bar the public from entering or leaving the water (if such activities were within the scope of the dedication), we affirm the decision of the Court of Appeals insofar as it vacates the judgment of the circuit court barring the defendants from lounging and picnicking on the boulevard and entering and leaving the water. Because the Court of Appeals should not have addressed the scope of dedication issue, we vacate so much of its opinion as decides that lounging and picnicking on the boulevard and entering and leaving the water are within the scope of the dedication.
Since both plaintiffs and defendants were in error in asserting that the public’s right to enter and leave the water from the boulevard depended on who owns the riparian or littoral rights, we remand the cause to the circuit court for further proceedings not inconsistent with this decision.
In sum, the decision of the Court of Appeals vacating the injunction (except insofar as the injunction bars the defendants from erecting and maintaining docks and boat hoists and from using plaintiffs’ docks and boat hoists) and modifying it, is affirmed. No costs.
Kavanagh, C.J., and Coleman, Fitzgerald, Ryan, and Blair Moody, Jr., JJ., concurred with Levin, J.
Williams, J., took no part in the decision of this case.
See McCardel v Smolen, 71 Mich App 560, 572; 250 NW2d 496 (1976), for a reproduction of the plat.
The other streets shown on the plat have been "opened and maintained”.
"The words 'riparian owner’ have been frequently applied * * * to ownership on the shores of the sea or of a lake, a condition more accurately expressed by the phrase 'littoral owner.’ Strictly speaking, a riparian owner is one whose land abuts upon a river and a littoral owner is one whose land abuts upon a lake or sea.” 78 Am Jur 2d, Waters, § 260, pp 703-704.
See Grand Rapids v Powers, 89 Mich 94, 102; 50 NW 661 (1891); Hilt v Weber, 252 Mich 198, 225; 233 NW 159; 71 ALR 1238 (1930); Backus v Detroit, 49 Mich 110, 112; 13 NW 380 (1882) ("if a private individual were owner of the bank, his right to construct the wharf would be conceded”); 79 Am Jur 2d, Wharves, § 4, p 176.
McCardel v Smolen, supra, p 570.
"In the absence of a cross appeal, errors claimed to be prejudicial to appellee cannot be considered nor may appellee have an enlargement of relief.” Pontiac Twp v Featherstone, 319 Mich 382, 390; 29 NW2d 898 (1947).
"In the absence of a cross appeal, errors claimed to be prejudicial to appellee ordinarily cannot be considered, nor can affirmative relief to appellee be granted.” 7A Callaghan’s Michigan Pleading & Practice (2d ed), § 57.54, p 320.
"While a decision below may be sustained, without a cross-appeal, although it was rested upon a wrong ground, see Helvering v Gowran [302 US 238; 58 S Ct 154; 82 L Ed 224 (1937)], an appellee cannot without a cross-appeal attack a judgment entered below.” Helvering v Pfeiffer, 302 US 247, 250-251; 58 S Ct 159; 82 L Ed 231 (1937).
"A respondent or an appellee may urge any matter appearing in the record in support of a judgment, but he may not attack it even on grounds asserted in the court below, in an effort to have this Court reverse it, when he himself has not sought review of the whole judgment, or of that portion which is adverse to him.” LeTulle v Scofield, 308 US 415, 421-422; 60 S Ct 313; 84 L Ed 355 (1940).
Hilt v Weber, supra, p 225.
78 Am Jur 2d, Waters, § 266, p 711.
McCardel v Smolen, supra, p 566.
The plaintiffs’ brief states that the public has access to the lake from the dedicated streets, e.g., Hoffman, Kelly, Gallagher, Newman and Sly: "The rule enunciated in the Backus case has been followed scrupulously and all of those streets are considered public access to the waters of Higgins Lake.”
Backus v Detroit, fn 4, supra, is discussed in Part III, infra.
The injunction barred the defendants from lounging, picnicking, bathing, swimming and launching boats.
McCardel v Smolen, supra, p 567.
Hilt v Weber, supra, p 225; 78 Am Jur 2d, Waters, § 265, p 710.
Defendants rely on Potomac Steamboat Co v Upper Potomac Steamboat Co, 109 US 672; 3 S a 445, 4 S Ct 15; 27 L Ed 1070 (1884), discussed in Meridian Twp v Palmer, 279 Mich 586, 591; 273 NW 277 (1937).
There has been extensive litigation concerning the ownership of the riparian or littoral rights in Higgins Lake. The most recent decision of the Court of Appeals, except the instant case, is Kempf v Ellixson, 69 Mich App 339; 244 NW2d 476 (1976), which, like the Court of Appeals decision in this case, lists the other reported decisions of that Court.
Croucher v Wooster, 271 Mich 337; 260 NW 739 (1935).
Meridian Twp v Palmer, fn 14, supra.
"The map so made and recorded in compliance with the provisions of this act shall be deemed a sufficient conveyance to vest the fee of such parcels of land as may be therein designated for public uses in the city or village within the incorporate limits of which the land platted is included, or if not included within the limits of any incorporated city or village, then in the township within the limits of which it is included in trust to and for the uses and purposes therein designated, and for no other use or purpose whatever.” 1887 PA 309, §2.
The substance of the quoted language is found in 1839 PA 91, § 2, and was repeated without substantive change in later enactments and compilations. See, e.g., 1859 PA 35, § 2; How Stat 1474; 1915 CL 3351; 1929 PA 172, §50; 1929 CL 13247; MCL 560.50; MSA 26.480. The current statute is MCL 560.253; MSA 26.430(253).
Backus v Detroit, fn 4, supra.
Backus, 49 Mich, p 115.
"If, therefore, according to the law as it exists and is recognized in this state, the strip of land which constitutes a street extending to the river bank between lots 33 and 34, had been granted by [the plattor] to an individual, the grantee, or any one claiming under him, would have had an undoubted right to construct the wharf in question. As before stated, it interferes in no manner with the navigation, and the ostensible purpose in constructing it is to aid navigation, not to hinder or embarrass it. But the strip of land was not granted to an individual, but was dedicated to the use of the public as a street. The city is not the public, though it represents the public for all the purposes of control, repair and improvement of the street. The plat, under the statute which was in force when it was made and recorded, passed the fee in all streets marked upon it to the county in which the city is situated: 1871 CL 1345 [1839 PA 91 as amended by 1859 PA 35]; but this was only in trust for street purposes. We attach no special importance to the fact that the title passed instead of a mere easement. The purpose of the statute is not to give the county the usual rights of a proprietor, but to preclude questions which might arise respecting the public uses, other than those of mere passage, to which the land might be devoted. The common-law dedication would be sufficient to estop the owner from setting up any claim or asserting any right to the prejudice of the easement.”
Id., p 117.
Id., p 120.
See In re Vacation of Cara Avenue, 350 Mich 283, 291; 86 NW2d 319 (1957), where the Court declared:
"Where a public highway, such as this one, ends at a navigable body of water, public access to said body of water is provided. Backus v Detroit, 49 Mich 110 (43 Am Rep 447).”
Meridian Twp v Palmer, supra, p 591.
Meridian Township can be distinguished on the ground that there, by reason of gradual reliction, there was a strip of land 20 to 25 feet wide between the roadway and the water’s edge and it would thus have been necessary for the public to cross defendant’s land between the water and the roadway. That was not, however, the basis of decision.
In Cass County Park Trustees v Wendt, 361 Mich 247, 252; 105 NW2d 138 (1960), Justice Black declared that ''Meridian should be overruled, and Backus should be reinstated for general application where it is shown that a street or highway actually and in the natural state of things contiguously borders or ends in navigable public waters”. The Court, however, predicated decision on a judgment in earlier litigation concerning the land that "the public had acquired an easement by user for highway purposes across any lands of the plaintiffs”. Id., p 253.
In the instant case the circuit court rejected the defendants’ claim that they had rights acquired by user, stating that they had not established "a private claim of adverse possession to said riparian rights”. The defendants did not appeal that determination to the Court of Appeals.
Meridian Twp v Palmer, supra, p 590.
Cass County Park Trustees v Wendt, supra, p 256.
In deciding that lounging and picnicking are appropriate uses of the boulevard, the Court of Appeals said: "It is difficult to believe that any proprietor would plat a lake resort subdivision in a manner which would deny lake access to three-fourths of his intended purchasers. Nor can we readily accept the idea that the proprietor would destroy his development’s most valuable asset by barring recreational use of the beach in order to create another street.” McCardel v Smolen, supra, pp 567-568. Building on that conclusion, it further declared that its recognition of the public’s right to lounge and picnic would be "meaningful only if they may continue to enter and leave Higgins Lake via the boulevard”. Id., p 569.
1931 PA 130; 1948 CL 247.1 et seq.; MSA 9.141 et seq.; superseded by 1951 PA 51; MCL 247.651 et seq.; MSA 9.1097(1) et seq.
The Court of Appeals declared:
"(1) Only the plaintiffs may construct docking facilities and permanent mooring devices in front of their lots.
"(2) The defendants may engage in the other disputed activities provided that they do not unreasonably interfere with the plaintiffs’ private and public rights. McCardel v Smolen, supra, p 570. | [
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Coleman, J.
We agree that the convictions of Willie and Lindsay Pearson should be affirmed. We also concur in the result that the convictions of Willie Wynn and John J. Schwartz should be reversed. In Schwartz, reversal is required because the prosecutor failed to exercise sufficient diligence in his attempts to produce Don Cager (one of two on-the-scene witnesses), regardless of the "good faith” on the part of the prosecution. Reversal in Wynn is predicated upon the prosecution’s lack of diligence in attempting to produce Moore and its apparent disregard for its responsibility to present to the judge and jury the "whole transaction” of the alleged crime.
A separate opinion is necessary, however, to set forth the points of departure from Justice Levin’s opinion. We do not agree that in all cases where there has been a hearing during the course of trial concerning the prosecution’s obligation to produce a given res gestae witness and its diligence in the attempt, the defendant should be able to raise missing res gestae witness issues on appeal without first presenting them to the trial judge in a Robinson (post-trial) hearing. As Justice Levin notes: "The purpose of a Robinson hearing, however, is twofold. It is not only to determine the reason for a failure to indorse or a failure to produce but also to determine whether the defendant has been prejudiced by non-production of the witness.”
In cases where the trial judge has determined that the prosecution failed to exercise due diligence when attempting to produce a missing res gestae witness (e.g., Wynn), the issues of the existence of prejudice (if any) and the appropriate remedy remain to be resolved. These issues should be raised in a post-trial hearing in order to perfect them for appeal. In cases where the trial court has ruled that a missing witness is not a res gestae witness or that the prosecution was sufficiently diligent in its efforts to produce (e.g., Schwartz), a Robinson hearing would be superfluous and is not required prior to an appeal.
Furthermore, we are unable to accept our brother’s standards for determining whether a defendant has been prejudiced by the prosecution’s lack of due diligence. While we agree that the defendant should be presumed prejudiced unless and until the prosecution overcomes this presumption, utilization of the standard "possible” (i.e., the witness could not "possibly” have been produced or his testimony would have been of no "possible” assistance to defendant) makes rebuttal of the presumption virtually impossible. Also, it could be read as eliminating the "cumulative evidence” and "harmless error” exceptions to the res gestae rule. Therefore, in Wynn and Schwartz, post-remand hearings and Robinson hearings, the determination of the existence of prejudice to the defendant as a result of a violation of the prosecution’s obligation to indorse, produce and call all known res gestae witnesses should be in accordance with the standards delineated infra.
I
John J. Schwartz was convicted of delivery of heroin. MCL 335.341(l)(a); MSA 18.1070(41)(l)(a). The testimony establishes that the defendant delivered heroin to a police officer who had been introduced to the defendant by Don Cager, an informant. Cager was present during the transaction, but was not produced at trial. Consequently, Cager was clearly a missing res gestae witness. He was indorsed on the information. The defense was entrapment.
During the course of the trial, the defendant raised the issue of non-production. The prosecution recalled the police officer who had worked with Cager. The officer testified that the last time he had seen Cager was about six months prior to trial. In the interim, and particularly over the five weeks preceding trial, he had made several unsuccessful (vaguely described) attempts to find Cager regarding other matters. In preparation for the Schwartz trial (which was to begin the next day), the officer went to Cager’s residence in Algonac, Michigan, spoke to several people on the street in Cager’s age group, and spoke to a local police officer. He was unsuccessful in locating Cager. On the morning that he was recalled to the witness stand, the same officer had been sent out in search of Cager armed with a subpoena. The officer returned to Algonac and checked Cager’s residence, a boathouse, a firehouse, a pool hall, two bars and two restaurants. The court ruled that these efforts constituted a "good faith” attempt to locate and produce Cager.
The Court of Appeals reversed on the grounds that the trial judge used the wrong standard (good faith versus due diligence) and that the prosecution did not exercise sufficient diligence in its attempts to produce Cager. 62 Mich App 188; 233 NW2d 517 (1975). We agree.
It is clear that the standard is one of due diligence and not good faith. We also believe that the standard of due diligence was not met. Prior to trial there was no attempt to subpoena Cager, nor did anyone keep track of his whereabouts between defendant’s arrest and trial. It was clear that Cager was a res gestae witness who would have to be produced. Consequently, a diligent attempt would have included serious pretrial efforts to locate and subpoena Cager.
We must agree with Justice Levin’s assessment of the police officer’s efforts during the two trips to Algonac. A thoughtful, serious attempt, even at that late date, would have included prior telephone inquiries (particularly in the evening) to Cager’s residence, his parents, the local police, an inquiry of neighbors, etc. Of particular concern to this Court, however, is that no serious effort was made sufficiently in advance of trial to allow for the difficulties which occurred. Therefore, we agree that the defendant’s conviction be vacated, but subject to the prosecution’s right to seek relief in a post-remand hearing consistent with the procedures and standards set forth infra.
II
Willie Wynn was convicted of assault with intent to do great bodily harm less than murder. MCL 750.84; MSA 28.279. The testimony establishes that Earl Berry had beaten Wynn’s ex-girlfriend and threatened Wynn. James Moore (the girlfriend’s brother), Wynn and an unknown third person went to the Berry family’s home in an alleged attempt to straighten out matters and pacify Earl Berry. A rifle was brought along.
Moore entered the Berry house first. Earl Berry was not home so Moore spoke to Floyd and Arm-stead "Rudy” Berry (Earl’s brothers) in a back bedroom. A few minutes later Wynn ran in the house with the rifle and a shot was fired, narrowly missing Rudy Berry.
Wynn was charged with assault with intent to commit murder. The key element of the proofs was Wynn’s intent. Wynn testified that he entered the house with the rifle, that he saw Rudy Berry coming toward him, that he ordered Rudy to halt while raising the rifle and that the rifle accidently discharged. The prosecution’s witnesses testified that Wynn aimed and ñred at Rudy. All parties agree that Moore was an eyewitness to the incident.
We cannot agree, however, with Justice Levin’s characterization of the importance of Moore’s testimony. It is stated:
"Moore was standing about two feet in front of and to the side of the complainant when the shot was fired, and may have been the only person who had an unblocked view of the incident.”
Rudy Berry testified that Moore preceded him out of a back bedroom as Wynn ran in the front door with a rifle in his hands. Rudy Berry said that when he and Wynn saw each other they both stopped still and Wynn then aimed at him from a distance of 7 or 8 feet. Berry then said:
”Q. What happened then?
"A. He pulled the trigger, you know, and as he fired, you know, I ducked, you know, I seen he fired and I ducked the bullet, and after he ñred it, I grabbed James Moore.
"Q. Okay, where was James Moore standing?
”A. He was standing about two feet in front of me to the left, next to the wall, so all I had to do was jump out and grab him, so I grabbed him, because if he shot again I wanted him to hit James Moore instead of me since they were together.” (Emphasis added.)
We understand this and other testimony to place Moore to one side of Rudy Berry when the shot was fired. Because the defendant’s intent was the key issue, his actions before the shot were of paramount importance. Further, the evidence establishes that Floyd Berry and Doris Smith also had unobstructed views of the entire transaction. Floyd Berry, Doris Smith and Rudy Berry were produced and called by the prosecution.
Thus, we do not believe it is fair to depict Moore as the crucial eyewitness. However, given that the only witnesses produced by the prosecution were friends or relatives of the Berrys, it is fair to conclude that Moore may have provided a different picture of the event.
Moore was not indorsed prior to trial, but in response to a defense motion the court ordered. Moore indorsed and produced during trial. The police located Moore and he said he would appear. No attempt to serve a subpoena was ever made. Moore did not come to court and the prosecution made no further efforts to produce him. The court found that this constituted a lack of due diligence and instructed the jury that it could infer Moore’s testimony would have been unfavorable to the prosecution.
The Court of Appeals reversed. 60 Mich App 636; 231 NW2d 269 (1975). We agree that there was a lack of due diligence. Of particular concern is the fact that an obvious res gestae witness was not indorsed, no pretrial efforts to subpoena him were made and no serious attempt to comply with the prosecution’s obligations in this regard was ever established. Consequently, the defendant’s conviction should be vacated, subject to the prosecution’s right to seek relief in a post-remand hearing consistent with the procedures and standards set forth later in this opinion.
We do not read the record to suggest that Moore’s testimony was intentionally withheld. Although the prosecutor may have appeared recalcitrant and less than diligent in his efforts to produce Moore, we still find an insufficient basis to infer "that the prosecution’s lack of due diligence was purposeful”. To the contrary, there is no record support for the assumption that Moore’s testimony would have been detrimental to the prosecution’s case beyond the fact that Moore probably was not favorably disposed toward the Berry family. Indeed, the defense was not interested in helping to locate Moore on the basis that he would testify against Wynn.
Therefore, we would not grant the defense the many depositions and other discovery aids provided by Justice Levin. Discovery is always available through traditional means.
Ill
Central to the judicious and efficient administra tion of criminal justice are procedures allowing the trial court to decide all the issues necessary to dispose of a case prior to appeal, whenever possible. Moreover, factual questions should be resolved while the testimony is fresh and available, not after the delays of the appellate process leave only a stale record and failing memories to be assessed by the trier of fact. Whether a defendant has been prejudiced by the prosecution’s failure to exercise due diligence is a factual issue which should be resolved by the trial court. Whether due diligence was employed and whether a person, in fact, is a res gestae witness are similar factual issues.
It is our opinion that the following procedures provide a fair and effective resolution of these problems without repeatedly traveling up and down the judicial ladder.
If the question of a missing res gestae witness is raised during the course of trial, it is our opinion that the court should hold a hearing and decide first whether the witness is in fact a res gestae witness. 5If it is determined that the person is a res gestae witness, the court should order the prosecution to produce him or her. If the witness is not produced, then the court should hold a hearing on the issue of whether the prosecution was duly diligent in its attempts to produce the witness.
Assuming the trial judge decides that there was a lack of due diligence, as in Wynn, then the judge should instruct the jury that it may infer that the missing "witness’s testimony would have been unfavorable to the prosecutor’s case”. CJI 5:2:14(3). However, determination of the existence of prejudice to the defendant and possible remedies must await the verdict. Assuming a verdict of guilty, the defendant must raise the issue of prejudice and seek a remedy in a Robinson-type procedure or be foreclosed from raising these issues on appeal. If the defendant is dissatisfied with the results of the Robinson hearing, review may be sought in the defendant’s appeal as of right.
In cases like Schwartz, where the missing person is determined to be a res gestae witness but the court finds the attempts to produce sufficiently diligent, there is no purpose in forcing the defendant first to seek a remedy in a Robinson proceeding. The defendant may seek a review of the court’s ruling on the due diligence issue in an appeal without first bringing a post-trial motion. Identical procedures should be followed when the issue of a missing witness is raised at trial, but the court determines the person is not a res gestae witness.
The third type of case is the typical Robinson scenario. There, the issue of a possible missing res gestae witness is not raised during the course of trial. We would still require the issues to be raised in a Robinson hearing in order to perfect them for appeal. However, we would refine the procedure to require that the trial court reach all the issues necessary to dispose of the case. In summary, and consistent with our earlier analysis, the order of inquiry should be as follows:
1. The court shall ascertain whether the claimed missing person is a res gestae witness;
2. If so, the prosecutor shall produce the witness or explain why the witness cannot be produced and why the witness was not indorsed and produced at trial;
3. If the witness is not produced, the court shall determine whether the prosecution was duly diligent in its attempts to produce the witness;
4. If a lack of due diligence is found or if the witness is produced, the court shall ascertain whether the defendant has been prejudiced by the failure to produce the witness at trial;
5. If the defendant is found to be prejudiced the court shall fashion an appropriate remedy.
Except in cases where the court finds in favor of the prosecution on the issues of whether a person is a missing res gestae witness or whether due diligence was exercised, these procedures will make it more likely that the missing witness ultimately will be produced and result in a maximum of one appeal, removing the need for a remand and continuing appellate jurisdiction. In the Schwartz type of case, if the defendant is successful on appeal a new trial should be conditioned upon the prosecutor’s right to establish a lack of prejudice. Consequently, we would hold that in Wynn, Schwartz, and future similar cases the prosecutor shall have 30 days to seek a hearing to determine the existence of prejudice. The Court of Appeals shall be deemed to have retained jurisdiction to review the hearing record upon application of either party within 30 days of the entry of the judge’s order. Should the prosecutor fail to seek a post-remand hearing, within 30 days, the conviction shall be deemed vacated and the prosecutor may proceed with a new trial.
IV
A new trial is not automatically warranted simply because the prosecution has failed to exercise due diligence in the production of a missing res gestae witness. The key issue in determining the proper remedy for the defendant when the prosecution has failed to fulfill its responsibilities is whether the defendant is prejudiced. Our area of disagreement with Justice Levin primarily resides in the standards for determining the existence of prejudice.
In effect, his approach rebuttably presumes that the defendant was prejudiced upon a finding of a lack of due diligence. This presumption could be rebutted only "[i]f the prosecutor establishes that the witness could not possibly have been produced at the trial or his testimony would have been of no possible assistance to the defendant * * * .” (Emphasis added.) Moreover, it is stated that: "If the witness cannot be produced for a post-remand hearing (unless the prosecutor establishes further that the witness could not possibly have been produced at the trial), the conviction must be reversed because there is no way of knowing whether at the trial he might possibly have given testimony of assistance to the defendant.” The motivation for fashioning such restrictive standards appears to be that they will discourage prosecutorial failure to employ due diligence. Unfortunately, these standards will also result in many unnecessary new trials.
Such an approach confuses two concepts. New trials should be awarded because of prejudicial error, whereas professional misconduct should be remedied by the Attorney Grievance Commission (e.g., deliberate withholding of res gestae testimony favorable to the defendant).
At either a post-remand hearing or a Robinson hearing, we would have the trial court assess whether the defendant actually suffered any prejudice and fashion appropriate remedies. The burden should be on the prosecution to establish that its failure to exercise due diligence in the production of a res gestae witness did not adversely affect the defendant’s right to a fair trial (i.e., the defendant is presumed prejudiced until the contrary is established). If the prosecution can establish that the missing testimony would have been of no assistance to the defendant, that it merely constitutes cumulative evidence, that its absence constitutes harmless error or that the witness could not have been produced at trial, then this burden has been met and the conviction should be affirmed. A failure to meet this burden should result in a new trial.
V
In summary, the procedures delineated in Part III of this opinion provide a means for judiciously and efficiently disposing of missing res gestae witness issues. Emphasis is placed upon disposition of issues prior to appeal in order to avoid post-remand hearings and continuing appellate jurisdiction.
We prefer a less extreme standard than that chosen by Justice Levin for determining whether a defendant has been prejudiced by the prosecution’s lack of due diligence in attempting to produce res gestae witnesses.
If it appears to the judge that there has been professional misconduct but that defendant’s right to a fair trial has not been adversely affected, then the sanctions should rest upon the individual prosecutor rather than upon society. If professional misconduct also results in prejudice, the defendant should have his remedy and the code violation should be referred to the Grievance Commission for appropriate action.
However, it is worth noting that although the state is ultimately responsible for the lack of due diligence in the production of res gestae witnesses, not all such failures are the result of prosecutorial negligence or misconduct. For example, it is arguable that the failure to produce Cager in Schwartz is more a result of the lack of diligence of the police officer than the prosecutor. There are many possible fact situations which would amount to a lack of due diligence and yet not rise to the level of professional misconduct proscribed by the Code of Professional Responsibility. The preferred course, however, would be for the trial judge to refer a proper case to the Grievance Commission for investigation.
We affirm in Pearson. In Wynn and Schwartz, we reverse subject to the prosecution’s right to seek a post-remand hearing, concerning the existence of prejudice, within 30 days from the issuance of this opinion. Should the prosecutor seek such a hearing in either case, within 30 days from the entry of the judge’s order either party may seek review of the hearing from the Court of Appeals. The Court of Appeals shall be deemed to have continuing jurisdiction for the purpose of reviewing such hearings. If the prosecutor does not seek a post-remand hearing within 30 days, then the conviction(s) shall be deemed vacated and the prosecutor may commence a new trial.
Fitzgerald, Ryan, and Blair Moody, Jr., JJ., concurred with Coleman, J.
People v Robinson, 390 Mich 629; 213 NW2d 106 (1973).
Justice Levin focuses on the standard a prosecutor would have to meet to rebut a presumption of prejudice. He says:
"If the prosecutor establishes at such a post-remand hearing that the defendant was not so prejudiced because the witness could not possibly have been produced or because his testimony would have been of no possible assistance to the defendant, upon the trial judge’s •entry of an order so finding the defendant’s conviction shall be deemed affirmed.” (Emphasis added.)
The good faith or bad faith of the prosecution is simply irrelevant when deciding whether the prosecution has fulfilled its obligation to present the "whole transaction” of an alleged crime. Due diligence is the standard. Good faith-bad faith becomes relevant when prejudice and professional misconduct are considered.
To prevent a repetition of evidence, this hearing should be held at the close of the prosecution’s proofs in most cases. However, the exact point during trial when this hearing and the hearing on due diligence (if necessary) are to be held should be within the trial court’s discretion.
The court may want to consider a continuance to allow the prosecution time to produce the witness, particularly when the witness was unknown to the prosecution prior to trial. Clearly, it is preferable that this testimony be presented to the jury whenever possible.
Footnote 6 on next page.
For discussion of the cumulative evidence rule see, e.g., People v Raider, 256 Mich 131, 134; 239 NW 387 (1931), People v Bartlett, 312 Mich 648, 654-655; 20 NW2d 758 (1945), People v Cooper, 326 Mich 514, 523; 40 NW2d 708 (1950), People v Reynold, 20 Mich App 397, 399; 174 NW2d 25 (1969), People v Harrison, 44 Mich App 578, 588-590; 205 NW2d 900 (1973), People v Sims, 62 Mich App 550, 554-555; 233 NW2d 645 (1975), People v Saunders, 68 Mich App 546; 243 NW2d 679 (1976).
For discussion of the harmless error rule see, e.g., Chapman v California, 386 US 18; 87 S Ct 824; 17 L Ed 2d 705 (1967), People v Shirk, 383 Mich 180, 195-197; 174 NW2d 772 (1970), People v Robinson, 386 Mich 551, 560-564; 194 NW2d 709 (1972), People v Mobley, 390 Mich 57, 65-66; 210 NW2d 327 (1973), People v Wichman, 15 Mich App 110; 166 NW2d 298 (1968), People v Swan, 56 Mich App 22, 30-35; 223 NW2d 346 (1974), People v Hadley, 67 Mich App 688; 242 NW2d 32 (1976). See, generally, Saltzburg, The Harm of Harmless Error, 59 Va L Rev 988 (1973).
It is clear that the Disciplinary Rules encompass and proscribe prosecutorial misconduct. E.g., Code of Professional Responsibility, DR 7-103; DR 7-109, subds (A), (B); DR 7-106, subds (A), (C)(7); DR 7-102, subds (A)(1), (A)(3), (A)(6)-(A)(8); DR 1-102.
Standard Criminal Jury Instruction 5:2:14 allows the judge to submit the issue of due diligence to the jury. We believe that this procedure should not be utilized. Such a determination is essential to resolve cases where the missing witness is a res gestae witness and there is a guilty verdict. Because the jury would not ordinarily disclose its decision on the issue, we believe that the court must hold the hearing, make a record and state its determination of the issue so that the parties and the court may know whether due diligence was exercised and the reasons for this finding. | [
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Ryan, J.
We are asked in this case to decide whether the operation of the Kalamazoo State Hospital constitutes the exercise or discharge of a governmental function for purposes of the statutory grant of immunity to the state from tort liability found in MCL 691.1407; MSA 3.996(107). We hold that it does and affirm the trial court’s grant of defendant’s motion for summary judgment.
I
James Herschel Perry was a resident of Kalamazoo State Hospital on November 14, 1972. On that day, a hospital attendant, in the course of performing his routine duties, found it necessary to restrain Mr. Perry. In so doing, the attendant rendered Mr. Perry unconscious. The attendant then laid Mr. Perry on his back which caused the aspiration of his stomach contents and resulted in his death.
Plaintiff, administratrix of the estate of James Herschel Perry, filed a complaint in the Court of Claims alleging that defendant breached its duty to provide for the care, treatment and custody of Mr. Perry.
Defendant moved for summary judgment on the basis that it was immune from liability under the governmental immunity statute, MCL 691.1407; MSA 3.996(107).
Following argument, the trial court granted defendant’s motion for summary judgment. The Court of Appeals affirmed in a memorandum opinion.
We granted leave to appeal. 399 Mich 894 (1977). We affirm.
II
The governmental immunity statute provides:
"Except as in this act otherwise provided, all governmental agencies shall be immune from tort liability in all cases wherein the government agency is engaged in the exercise or discharge of a governmental function. Except as otherwise provided herein, this act shall not be construed as modifying or restricting the immunity of the state from tort liability as it existed heretofore, which immunity is affirmed.” MCL 691.1407; MSA 3.996(107).
The historical context in which this statute was enacted suggests that the Legislature’s intent in adopting this act was to codify the existing common-law or judge-made immunity of the state. Thomas v Dep’t of State Highways, 398 Mich 1, 10; 247 NW2d 530 (1976).
The phrase "governmental function” was a term of art at common law. It was used to both describe the nature and define the limits of the state’s immunity from tort liability. By utilizing that same term of art in creating statutory immunity, the Legislature has directed the courts to look to the common law for guidance when faced with determining whether the state may invoke the protection of the statute in any given case.
A review of the case law of governmental immunity that existed prior to the legislative affirmation of the state’s immunity provides guidance to this Court in two respects. First, the factual questions resolved in those decisions provide concrete examples of the specific activities contemplated by the Legislature when employing the term "governmental function”. Second, that case law provides a definition of the term "governmental function”.
Reference to the pre-statutory immunity cases reveals that this Court has held that the operation of a public hospital to promote the general public health is a governmental function. Martinson v Alpena, 328 Mich 595; 44 NW2d 148 (1950).
Furthermore, the operation of a public hospital comes clearly within the frequently cited "common good of all” definition of governmental function.
This leads to the conclusion, therefore, that the operation of a public hospital was a "governmental function” at common law in Michigan and consequently is a governmental function for purposes of the immunity statute. Defendant’s operation as a state mental hospital is generally within the statute’s immunity because its operation is in the "exercise or discharge of a governmental function”.
Ill
The remaining question in our analysis is whether plaintiff has alleged tortious activity by defendant which falls within the scope of its immunity.
Plaintiff’s complaint alleges that defendant negligently breached its duty to provide for the care, treatment and custody of its patient, Mr. Perry. The facts as pled and explained in oral argument allege that this breach occurred when a hospital attendant improperly restrained Mr. Perry.
The care, treatment and custody of mental patients at a public hospital are activities intended to promote the general public health and are exercised for "the common good of all”. The restraint and control of certain patients in a mental ward is required at certain times in the exercise of the care, treatment and custody of those patients. Consequently, the alleged tortious activity of defendant is within the governmental function of operating a public mental hospital. The defendant is immune from liability for its negligence, if any, in performing that function, by reason of MCL 691.1407; MSA 3.996(107).
The trial court was correct in dismissing the action. GCR 1963, 117.2(1).
Affirmed. No costs, a public question being involved.
Williams and Coleman, JJ., concurred with Ryan, J.
Plaintiffs amended complaint sets forth the following allegations:
"5. That defendant hospital has a duty to provide for the care, treatment and custody of its patients.
"6. That defendant hospital breached its duty in that on or about the evening of November 14, 1972, an employee of defendant hospital caused the death of James Herschel Perry by applying such force to the deceased’s neck as to produce unconsciousness. Further, this force caused aspiration of the stomach contents and hemorrhages in the bronchial alveoli area thereby causing the death of James Herschel Perry.”
In Thomas v Dep’t of State Highways, 398 Mich 1; 247 NW2d 530 (1976), we recognized because past precedent is less than clear in many areas, we are effectively forced to decide on a case-by-case basis which activities may be classified as a governmental function and thus entitled to immunity. We invited the Legislature to relieve the uncertainty and potential for confusion in this area by enacting more specific guidelines. However, to this date the Legislature has not chosen to respond.
" 'The underlying test is whether the act is for the common good of all without the element of special corporate benefit or pecuniary profit. If it is, there is no liability, if it is not, there may be liability. That it may be undertaken voluntarily and not under compulsion of statute is not of consequence.’ ” Gunther v Cheboygan County Road Commissioners, 225 Mich 619, 621; 196 NW 386 (1923), citing Bolster v City of Lawrence, 225 Mass 387; 114 NE 722 (1917).
This conclusion gains further support in this case from Const 1963, art 4, § 51, which provides:
"The public health and general welfare of the people of the state are hereby declared to be matters of primary public concern. The legislature shall pass suitable laws for the protection and promotion of the public health.”, and from Const 1963, art 8, § 8, which provides:
"Institutions, programs and services for the care, treatment, education or rehabilitation of those inhabitants who are physically, mentally or otherwise seriously handicapped shall always be fostered and supported.”
The State Department of Mental Health controls and operates the Kalamazoo State Hospital pursuant to a statute enacted to effectuate these constitutional declarations of public policy. MCL 330.1116; MSA 14.800(116). | [
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Williams, J.
This case involves a unique fact situation. For 16 years plaintiff David Hairston worked two concurrent full-time jobs. From 1955 until August 6, 1971 he worked at Firestone Tire & Rubber Company; from 1948 until March 2, 1972 he worked at Ford Motor Company. On August 6, 1971, Firestone told plaintiff he could no longer work for Firestone because of a medical examination and report indicating that plaintiff had a heart condition. Plaintiff continued working his full-time job at Ford until March 2, 1972, when he "blacked out” while at work.
The issue in this case is whether the Worker’s Compensation Appeal Board (the "WCAB”) erred in ordering both Firestone and Ford to compensate plaintiff at the maximum rate for total disability under the Worker’s Disability Compensation Act.
We hold that the WCAB did not err in its "dual” award of worker’s compensation benefits to plaintiff. Accordingly, we affirm the decisions of the Court of Appeals and the WCAB.
I
The facts in this case are complicated and important, thereby necessitating a relatively lengthy exposition. The reason for this is the unique "dual nature” of plaintiff’s employment and worker’s compensation claims.
For 16 years plaintiff worked two full-time jobs.
From June 27, 1948 to March 2, 1972, plaintiff worked an average of over 40 hours per workweek for Ford Motor Company ("Ford”). From 1955 to August 1971, plaintiff worked a steady 48-hour week at Firestone Tire & Rubber Company ("Firestone”).
The WCAB, looking to the record, accurately described the nature of plaintiff’s employment at Ford as follows:
"For the first 10 to 12 years, he worked as a group two cleaner. The job involved moving heavy material, moving skids weighing 50 to 60 pounds, climbing ladders, and dusting in high places. Plaintiff was then switched to a classification as a group one cleaner. He indicated that this was supposed to be light work and that he was given strict orders to do all light work. However, the duties assigned to plaintiff were not all light, and plaintiff testified that he did what he was told to do. As a group one cleaner in the crash lab, plaintiff worked in both the office area and the shop area. He dusted anything within reach, emptied ashtrays, moved books, cleaned restrooms, and emptied wastebaskets. The wastebaskets were filled usually with IBM cards, and plaintiff estimated the filled weight to be approximately 50 pounds. Fifty to 60 wastebaskets were emptied each shift into bags which then had to be taken to a disposal area and thrown into the opening in the top of a dumpster which was 9 to 10 feet high. No ladder was available so that all items had to be thrown up and in. In addition, plaintiff was responsible for disposing of parts cut off automobiles being used in crash research. These included, each day, 5 to 6 car bumpers weighing 30-40 pounds, car doors, and smaller parts which had been thrown into three foot by four foot containers. The parts also had to be taken to the disposal area and had to be thrown into the dumpster. Plaintiff testified that the task he, personally, found most difficult was operating a 2000 pound Lincoln floor scrubbing machine. Plaintiff ran this machine in the shop area two to three days per week for about three hours each time. * * * Plaintiff testified that, in the crash lab, he had to maneuver the machine in the narrow aisleway between cars.”
On March 2, 1972, while turning the Lincoln floor scrubbing machine in a small area, plaintiff had trouble breathing, felt weakened, and then "blacked out”. He was taken to first aid and then to Oakwood Hospital, where he remained for five days. After this, plaintiff did not continue his employment at Ford; nor was he able to secure employment elsewhere. On October 17, 1973, plaintiff returned to "favored work” at Ford.
The WCAB, looking to the record, accurately described the nature of plaintiff’s employment at Firestone as follows:
"* * * for most of the period of his employment at Firestone he was classified as a tire changer, working mostly with truck tires averaging approximately 200 pounds. He also changed bus and automobile tires, with the largest and heaviest tire being taller than he was at 5 foot 9 inches and weighing about 300 pounds and with the smallest tire weighing 25 to 30 pounds. Plaintiff changed tires both in the store and out on the road. In 1969, he apparently was assigned to spend more time in the store, and he changed fewer truck tires and more automobile tires. He also stacked tires, including truck tires, and unloaded and stacked stoves weighing 200 to 300 pounds and refrigerators weighing up to 600 pounds, as well as power lawn mowers.”
Plaintiff last worked at Firestone on August 6, 1971. Before this date, plaintiff had gone to University Hospital in Ann Arbor for an examination of a heart condition. Firestone requested a written report of this examination. After the report was received, plaintiff’s supervisor at Firestone informed him that the physician who conducted his heart examination believed that plaintiff’s heart was not strong enough to permit him to continue working at his Firestone job. Consequently, plaintiff was told that Firestone could not continue to employ him because his job involved work which was too heavy for his heart condition.
Following his employment termination at Firestone, plaintiff continued to work at his full-time job at Ford until his heart attack on March 2, 1972.
In October 1971, plaintiff filed a claim for workmen’s compensation benefits against Firestone and Ford. In March 1972, plaintiff amended his petition against Ford, alleging a personal injury which occurred "on or about March 2, 1972”. In January 1973, the hearing referee found that plaintiff had become disabled on August 6, 1971, as the result of the aggravation of a pre-existing heart condition by the work plaintiff performed for defendant Firestone. The referee also found that on March 2, 1972, plaintiff was disabled by an "underlying heart condition” which caused a "specific stress or injury”. The referee awarded plaintiff the maximum compensation ($102) for total disability against defendant Firestone from August 6, 1971 until March 2, 1972. The referee also ordered that after March 2, 1972, when plaintiff became disabled at Ford, Firestone’s liability to plaintiff would be reduced by one-half (to $51) and Ford’s liability would be one-half of the maximum due plaintiff for his disability in its employ ($53.50, one-half of the $107 maximum to which plaintiff was entitled). The referee stated as a rationale for this unorthodox compensation award:
"Under the circumstances, it appears proper and equitable to apportion liability subsequent to March 2, 1972, bringing about a reduction of the liability of Firestone and its insurer to one-half of the maximum rate of $102.00, or $51.00, and to impose upon Ford Motor Company liability for one-half of what would be its maximum rate for total disability.”
Firestone appealed and plaintiff cross-appealed this award to the WCAB. In June, 1975, the WCAB issued its opinion. The board observed that "no legal basis exists for the 'equitable’ apportionment of benefits [by the hearing referee] after March 2, 1972”, and, further, that "the 'equitable’ nature of this approach is open to question since plaintiff actually received less in compensation than he would have had he sought relief solely against defendant Ford ($104.50 per week as opposed to $107.00 per week)”. After finding that
"[h]ere the record allows no other conclusion than that, since March 2, 1972, plaintiff has suffered two concurrent total losses of wage earning capacity as the result of two separate and distinct injuries which occurred while concurrently employed by two separate and distinct employers”
The board modified the hearing referee’s award, ordering that Firestone should compensate plaintiff at the maximum rate for total disability from August 7, 1971 "until further order of the Bureau” and that Ford should compensate plaintiff at the maximum rate for total disability from March 3, 1972 until October 17, 1973, when, according to the stipulation noted supra, plaintiff returned to "favored work” at Ford.
Firestone appealed the WCAB decision solely on the question of whether the board awarded compensation against Firestone at the correct rate. In October, 1975, the Wayne County Circuit Court entered judgment against Ford pursuant to the WCAB order. Ford appealed this judgment. Ford had also filed a delayed application for leave to appeal the WCAB order and a motion to consolidate this delayed application for leave to appeal with its appeal from the circuit court’s judgment. In November 1975, the Court of Appeals granted both Ford’s delayed application for leave to appeal and its motion to consolidate, i.e., the Court of Appeals consolidated Ford’s appeal from the circuit court’s judgment and its appeal from the WCAB order vis-á-vis Ford.
On December 13, 1975, plaintiff Hairston died. His widow was substituted as party plaintiff.
In August, 1976, the Court of Appeals affirmed the decision and order of the WCAB. Defendants Ford and Firestone appealed. This Court granted leave on April 22, 1977.
II
Because there are two defendants in this case, the issue is two-fold. We must determine:
(1) whether the WCAB erred in ordering defendant Firestone to compensate plaintiff at the maximum rate for total disability from August 7, 1971 until December 13, 1975;
(2) whether the WCAB erred in ordering defendant Ford to compensate plaintiff at the maximum rate for total disability from March 2, 1972 until October 17, 1973 (when, according to stipulation between plaintiff and defendant Ford, plaintiff returned to "favored work” at Ford).
We begin our discussion of this issue by reiterating the findings of fact made by the WCAB. We emphasize, as did the Court of Appeals, that in the absence of fraud these findings are conclusive. Const 1963, art 6, §28; MCL 418.861; MSA 17.237(861).
The WCAB, after careful review of the record, found that plaintiff suffered two separate injuries. With respect to defendant Firestone the board found:
"[P]laintifF became disabled on August 6, 1971, because the heavy work which plaintiff had performed for defendant Firestone accelerated the progression of his pre-existing heart condition to the point of total disability from performing his full time job at Firestone on that date.”
With respect to defendant Ford, the board found that "plaintiff suffered a single event injury [a heart attack] on March 2, 1972, which disabled him from his * * * full-time employment with defendant Ford”.
The board summarized its findings of fact as follows:
"Here the record allows no other conclusion than that, since March 2, 1972, plaintiff has suffered two concurrent total losses of wage earning capacity as the result of two separate and distinct injuries which occurred while concurrently employed by two separate and distinct employers.”
Our first question is whether, in light of these findings, the WCAB erred in ordering Firestone to compensate plaintiff at the maximum rate for total disability from August 7, 1971 until December 13, 1973.
Our answer is no.
Plaintiff’s totally disabling injury at Firestone, described supra, is clearly a "personal injury” under MCL 418.401(c); MSA 17.237(401)(c). The compensation to which plaintiff is entitled for his injury is determined by MCL 418.351(1);. MSA 17.237(351X1) and MCL 418.355; MSA 17.237(355).
We next ask whether the WCAB erred in ordering Ford to compensate plaintiff at the maximum rate for total disability from March 2, 1972 until October 17, 1973.
Our answer is, as with defendant Firestone, no.
As stated supra, the WCAB found, as a matter of fact, that plaintiff suffered a "single event injury” at Ford on March 2, 1972. Accordingly, plaintiff is entitled to compensation from Ford (see MCL 418.301[1]; MSA 17.237[301][1]), the amount of which is determined by MCL 418.351(1); MSA 17.237(351)(1) and MCL 418.355; MSA 17.237(355).
Ill
Both defendants argue against this conclusion. At bottom they assert that plaintiff had only one "wage-earning” capacity because the Firestone and Ford jobs were "similar” or "in the same line of work”.
Defendant Ford argues, under the so-called "similarity test”, that earnings in concurrent employments may be considered as a unity in establishing "wage earning capacity” if the employments are "related” or "similar”. 2 Larson on Workmen’s Compensation Law, § 60.31. Both defendants also rely on Wolanin v Chrysler Corp, 304 Mich 164, 172; 7 NW2d 257 (1943), which states:
"Our statute does not provide for concurrent compensation for total disability in the same line of work.” (Emphasis added.)
We find these arguments irrelevant. This Court does not recognize the "similarity rule”. Lahay v Hastings Lodge, 398 Mich 467; 247 NW2d 817 (1976), especially fn 8 at 479.
Furthermore, as noted supra, the WCAB found as a matter of fact that plaintiff had two separate earning capacities.
IV
One final observation: in addition to the above stated "legal” bases for our decision, we add that the "equities” in this case favor plaintiff. As the controlling opinion of the WCAB declared, the "equitable nature” of the hearing referee’s approach "is open to question since plaintiff actually received less in compensation than he would have had he sought relief solely against defendant Ford ($104.50 per week as opposed to $107.00 per week)”. Also, as the concurring opinion of the WCAB forcefully and correctly argued in light of general worker’s compensation principles:
"If, for purposes of analysis, we assume that plaintiff worked at Firestone and someone else ('Joe’) held plaintiff’s job at Ford, what results would occur if we assume the same injuries? Both plaintiff and 'Joe’ would each receive compensation due them. Each would suffer a separate personal injury according to the dictates of Section 301.
"Then, the question should be asked, should a different result occur merely because plaintiff holds down two full-time jobs with two different and unrelated employers neither of whom have any connection with the other? Logically and legally the answer seems to be no. Both plaintiff and defendants are subject to the same act and no compelling reason appears which would call for a different result. Defendants are in no worse position than if they had hired two employees and not plaintiff alone. The only one who seems to be reaping a windfall by way of the occurrence of the personal injuries is plaintiff. But plaintiff is not reaping a windfall. He has received two hurts, each of which have resulted in the loss of his two wage-earning capacities. Plaintiff is entitled to two whole awards of compensation — one from Firestone and one from Ford. Under the facts, this cannot be called a windfall. He merely obtains what Section 301 says he should have.”
V
For the reasons articulated supra, we affirm the Court of Appeals and WCAB decisions.
Costs to plaintiff.
Kavanagh, C.J., and Levin, Ryan, and Blair Moody, Jr., JJ., concurred with Williams, J.
Coleman, J.
We are presented with the question of whether the Worker’s Disability Compensation Act of 1969 (the act), MCL 418.101 et seq.; MSA 17.237(101) et seq., provides maximum compensation for total disability from each employer when a claimant suffers separate injuries in concurrently held employments. The Workmen’s Compensation Appeal Board (WCAB) awarded maximum benefits for total disability from each employer on the basis that plaintiff lost two different wage-earning capacities as a result of two distinct job-related injuries. The Court of Appeals affirmed.
We also affirm but for different reasons. The case essentially concerns the proper amount of benefits owed by each employer. There is no question of entitlement, only a dispute as to amount.
Prior decisions of this Court have held that the aggregate amount of benefits receivable in any given period of time, regardless of the number of separate disabling injuries arising from different occupational accidents, was limited by the statu tory máximums of §§ 351 and 361 and previous versions thereof. In order to circumvent this interpretation of the compensation laws, subsequent cases engrafted the exception that multiple awards (the total of which exceeded the statutory limits) were allowable if more than one "wage-earning capacity” was affected. Such a finding also has given birth to other artificial criteria.
The WCAB, in its opinion below, expressed its disagreement with these interpretations and referred to Member Storie’s exhaustive analysis in his dissent in Gismondi v Darin & Armstrong, Inc, 1975 WCABO 599. After much reflection and study, we are convinced that the maximum limits of §§ 351 and 361 should be applied only to the results of each specific occupational accident. 6The plain wording of the statute must be given meaning. Compensation should be available for the effects of an occupational accident without consideration of the benefits being provided (or available) as a result of a . different occupational accident, unless consideration of other benefits is compelled by § 371(1). Section 371(1) reads in pertinent part:
"* * * The compensation payable, when added to his wage earning capacity after the injury in the same or another employment, shall not exceed his average weekly earnings at the time of such injury.”
Furthermore, we abandon the use of the concept. of "wage-earning capacity” as an analytical tool in such circumstances. To the extent that prior decisions of this Court are inconsistent with this opinion, those decisions are overruled.
I
Factually, this case presents a compelling argument for our decision today. Claimant worked a minimum of 40 hours per week for Ford Motor Company (Ford) from June 27, 1948 to March 2, 1972. He also worked 48 hours per week at Firestone Tire & Rubber Company (Firestone) from 1955 to August 6, 1971. For a period of 16 years claimant had worked a minimum of 88 hours per week for two employers. We note that the current economic situation has forced many other Michigan citizens also to hold a second job, be it either on a full- or part-time basis. Thus, these facts are not so unique as one might initially think.
The record reflects that claimant’s duties at both employments involved physical labor. At Firestone, Mr. Hairston changed (both in the store and on the road) and stacked tires with weights varying between 25 and 300 pounds (bus, truck, and automobile tires). He also unloaded and stacked lawn mowers, stoves and refrigerators weighing as much as 600 pounds.
Claimant’s duties at Ford were less strenuous but not necessarily characteristic of light work. Although his previous duties at Ford were more exacting, for the last seven or eight years claimant worked as a janitor-cleaner. He dusted, emptied ashtrays and wastebaskets, cleaned restrooms and scrubbed floors with a machine. The wastebaskets were usually full of IBM cards and weighed approximately 50 pounds when full. These wastebaskets, as well as auto parts weighing up to 40 pounds each, had to be carried and thrown nine or ten feet upwards into the top of a Dumpster. Plaintiff also operated the scrubbing machine, which weighed 2000 pounds, two or three days per week for about three hours at a stretch. He had to struggle to maneuver the scrubber in the shop area.
As a result of rheumatic fever and arteriosclerosis, claimant had a non-occupationally created heart condition. After Mr. Hairston had undergone an examination of his heart, Firestone requested a copy of the medical report. Because it was believed that his heart was not strong enough for him safely to continue his duties, plaintiff was discharged from his job at Firestone. His last day of work there was August 6, 1971, but he still continued to work at Ford. While struggling with the scrubbing machine, plaintiff suffered a heart attack at Ford on March 2, 1972.
During October of 1971, plaintiff had filed a workmen’s compensation claim against both Firestone and Ford. His petition against Ford was amended in March of 1972 following his heart attack. On January 17, 1973, the hearing referee found that as a result of the aggravation of claimant’s preexisting heart condition by his work at Firestone, Mr. Hairston became totally disabled as of August 6, 1971. The referee further found that as a result of the aggravation of his underlying condition by his duties at Ford, claimant suffered a totally disabling single-event injury (the heart attack) on March 2, 1972. Firestone was ordered to pay $102 per week (the statutory maximum based on an average weekly wage of $174.20 and four dependents) from August 7, 1971 to March 2, 1972. Thereafter, benefits from Firestone were reduced to $51 per week. Ford was ordered to pay $53.50 per week (50 percent of the statutory maximum based on an average weekly wage of $175 and four dependents) from March 3, 1972. The referee’s apportionment presumably was based on the statutory máximums and a belief that each job contributed equally to plaintiff’s ultimate condition.
Firestone appealed to the WCAB and the plaintiff cross-appealed. On June 20, 1975, the WCAB rejected the referee’s "equitable” apportionment of benefits and awarded compensation against each defendant at the maximum rate. The factual basis for this decision was that:
"Here the record allows no other conclusion than that, since March 2, 1972, plaintiff has suffered two concurrent total losses of wage earning capacity as the result of two separate and distinct injuries which occurred while concurrently employed by two separate and distinct employers.”
Both Firestone and Ford appealed this decision to the Court of Appeals. On December 13, 1975, Mr. Hairston died and his widow was substituted as the party plaintiff. The Court of Appeals affirmed the WCAB.
II
The focus of the arguments in our Court has been upon the legal implications of "wage-earning capacity” and their application to these facts. In the situation where a worker is disabled from two concurrently held employments as a result of different occupational accidents, we see no reason in law or policy for distinguishing between plaintiffs on the basis of wage-earning capacities. The only utility of such an arbitrary and amorphous concept is to avoid this Court’s harsh construction of the application of the statutory maximum in such circumstances. Because we believe those sections of the act were misconstrued in 1919, we see no further benefit to be derived from compounding the subsequent creativity deemed necessary to read into the statute the concept of wage-earning capacities.
The holding that the statutory máximums apply to the aggregate benefits available from multiple accidents in any given period of time was first set forth in O’Brien v Albert A Albrecht Co, 206 Mich 101; 172 NW 601 (1919), and most recently given consideration in Jones v Cutler Oil Co, 356 Mich 487; 97 NW2d 74 (1959), and Harrison v Lakey Foundry Co, 361 Mich 677; 106 NW2d 521 (1960). Between 1919 and 1959, this Court created the "wage-earning capacity” concept as a means of circumventing O’Brien. E.g., Hebert v Ford Motor Co, 285 Mich 607; 281 NW 374 (1938), Wolanin v Chrysler Corp, 304 Mich 164; 7 NW2d 257 (1943).
The statute at issue in O’Brien was markedly similar to the language of §§ 351 and 361. Sections 351 and 361 now begin:
"While the incapacity for work resulting from the injury is * * * [total or partial], the employer shall pay, * * * to the injured employee, a weekly compensation * * *, but not more them * * * [specified limits depending upon the number of dependents]. Compensation shall be paid for the duration of the disability.” MCL 418.351, 418.361; MSA 17.237(351), 17.237(361). (Emphasis added.)
The plain words of the act provide compensation for the results of a specific occupational injury (accident) and make no reference to the results of other accidents. The usage is singular and not plural. Each employer is statutorily responsible for the incapacity to work and earn wages caused by an occupational injury. There is no legislatively created mechanism for limiting the benefits Mr. Hairston would receive from Ford because he was previously entitled to receive compensation from Firestone. Furthermore, there is nothing in the sections which even suggests that results would vary depending upon the "wage-earning capacity” involved.
Although the Harrison case involved altogether different facts, we find the observations of Justice Smith’s dissenting opinion pertinent. Referring to a nearly identical statute, he wrote:
"Does the above, as defendant argues, mean that 'the maximum payable for any and all injuries’ shall be only so much? If so, only the first accident need be paid for. The next is free. Or does it, as plaintiff argues, mean that 'the maximum payable for any one injury’ shall be as specified? If this is its meaning, then no covered disability shall be without compensation, whether it runs concurrently with another or not.” 361 Mich 677, 682.
Subject to the set-off mandated by § 371(1), the analysis above is applicable whenever the claimant suffers two separate injuries. It is particularly relevant to the facts of this case.
The effects of the O’Brien construction are inequitable and contrary to the purposes of the act when applied to the case at bar. As noted by the concurrence to the WCAB opinion below, if benefits from both Firestone and Ford are aggregated when computing the maximum compensation allowable, the result is to provide the employers with a windfall simply because Mr. Hairston was injured twice, once in each of two separate employments.
It is also inconsistent with the purposes of workmen’s compensation legislation to follow the O’Brien interpretation where occupational accidents occur at concurrently held jobs. The act contemplates that a worker should receive compensation for the impairment of future earning capacity occasioned by an occupational injury. Actual wage loss is used as the gauge of impairment of earning capacity. See, generally, 2 Larson, Workmen’s Compensation Law, §§ 57.10, 57.20.
Assuming that a claimant’s pre-injury wage level is comprised of earnings from jobs A and B, if an injury in job A affects only job A wages, then claimant would be entitled to benefits from job A plus job B wages. If claimant receives a second injury at job B, we find him entitled to benefits from job B regardless of whether the total benefits from jobs A and B exceed the statutory maximum. Claimant has suffered two injuries and has lost two separate parts of his established earning capacity. This approach does not work any hardship upon employers and provides the disabled worker with just compensation. As can be gleaned from a close reading of the act, the key to resolving the situation is the fact that two different injuries are involved. Sections 351 and 361 refer to "the injury” for which "the employer” shall provide compensation.
Ill
Although rejection of the O’Brien approach renders the "wage-earning capacity” concept superfluous, we discern several other contrived criteria calling for its abandonment. While multiple wage-earning capacities have been found to exist on the basis of skilled and unskilled employment, e.g., Hebert v Ford Motor Co, 285 Mich 607; 281 NW 374 (1938), Thumser v Lakey Foundry Corp, 84 Mich App 319; 269 NW2d 583 (1978), fact finders have also looked to whether the same "lines of work” were involved. E.g., Wolanin v Chrysler Corp, 304 Mich 164; 7 NW2d 257 (1943), Tidey v Riverside Foundry & Galvanizing Co, 7 Mich App 40; 151 NW2d 198 (1967), aff'd 381 Mich 551; 164 NW2d 3 (1969). The WCAB below made a finding that plaintiff’s duties at Firestone and Ford constituted different lines of work, although arguably the only discernible material difference was the degree of effort required.
Although the skilled-unskilled dichotomy is a workable if illogical basis for distinguishing claimants, the WCAB determination below only accentuates the arbitrary nature of the concept. It suggests that the existence of multiple wage-earning capacities is dependent upon the nature of the duties of a particular employment. Continued utilization of this concept has led to arbitrary decisions on the part of the referees and the WCAB because it does not provide means for fairly distinguishing fact situations. Furthermore, lawyers and decision-makers have been (and are in this case) involved in hairsplitting arguments over the relative similarities and dissimilarities between jobs, especially those requiring degrees of physical exertion.
It is noted that this Court recently rejected the "similarity” test for resolving the situations where there is one disabling injury and two concurrent employments. Lahay v Hastings Lodge No 1965 BPOE, 398 Mich 467, 479, fn 8; 247 NW2d 817 (1976). Wages from both jobs are now considered when computing benefits only if the injury "affects” the second "earning capacity”. Work similarity has no more relevance to whether the benefits from injuries in concurrent employments should be aggregated when computing the statutory maximum than it does in the Lahay situation.
IV
In summary, our holding today concerns situations where multiple occupational accidents affect a worker’s capacity to perform in multiple employments. Those employments may be concurrent or successive and involve one or more employers without changing this analysis. Successive employments, even if at the same job, would require compliance with the set-off provision of § 371(1); yet, our construction of §§ 351 and 361 would still be applicable.
This construction is also consistent with the purposes of disability compensation and is justified on the basis of fairness to all parties. No unjust burden is placed upon employers or the consuming public and workers are given more equitable treatment. The interpretation above employs a more literal reading of the act than that of O’Brien and its progeny and is likely to curtail progressively creative circumvention of illogical precedent. The possibility of arbitrary and inconsistent applications is reduced. Judicial juggling and contrived exceptions, such as the multiple wage-earning capacities concept, are no longer necessary to achieve a fair result.
It is also noteworthy that our decision today will not induce workers to malinger. See, generally, 2 Larson, Workmen’s Compensation Law, § 59.41. The disparity between benefits and wages is sufficient to encourage as prompt a recuperation as possible.
We hold, therefore, that a claimant is entitled to compensation for the results of each occupational accident without regard to the benefits available for the effects of a different accident, unless consideration of other benefits and set-off is required by § 371(1).
The WCAB found that plaintiff suffered a distinct job-related injury in each concurrently held employment. Such findings are binding upon us in the absence of fraud. Const 1963, art 6, § 28; MCL 418.861; MSA 17.237(861). Consequently, the Court of Appeals and the WCAB are affirmed as to result, but for a different reason. Prior inconsistent decisions of this Court are overruled effective with this decision which shall be applied prospectively to all cases commenced after this date and to cases on appeal in which the issue has been preserved.
Affirmed.
Fitzgerald, J., concurred with Coleman, J.
During his first five years of employment at Ford, plaintiff worked seven days per week; thereafter, for six or seven years, he worked six days per week. By 1971 his workweek had been reduced to 40 hours per week.
This is reflected in the record by stipulation entered by plaintiff and defendant Ford in June, 1975, subsequent to the WCAB opinion:
"It is hereby stipulated that David Hairston, appellee herein, returned to favored work on October 17, 1973, at which time he earned wages equal to or greater than he was earning on March 2, 1972, except for the period from November 5, 1973 through November 25, 1973, inclusive.”
Prior to 1971 (it is not clear from the record when), it was discovered that plaintiff had a heart condition. There is no evidence in the record that plaintiff lost any time at his work as a result of this.
The WCAB awarded plaintiff partial compensation for the period November 5, 1973 to November 25, 1973 because during this period he did not earn wages equal to or greater than he was earning in March 2, 1972. See also, fn 2, supra.
Our relatively detailed discussion of the appeals Ford made from the WCAB order and the circuit court judgment is necessitated by plaintiffs argument that:
"Ford does not question the validity of that judgment here. The time limit provided for perfecting appeal to this Court from the affirmation by the Court of Appeals of this judgment has passed. Therefore, plaintiffs entitlement to the monies awarded by the Appeal Board as against Ford is not really an issue here.
"Ford apparently asks this Court for an advisory opinion as to the correctness of the decision of the Court of Appeals and the Workmen’s Compensation Appeal Board * *
We reject this argument. We agree with defendant Ford’s response that:
"Defendant properly appealed both the Circuit Court judgment and the Workmen’s Compensation Appeal Board Order to the Court of Appeals which consolidated the cases. Defendant then applied for leave to appeal in this Court on both cases. This Court granted leave on both case numbers 25910 and 26291.
"It is errant [sic] nonsense for plaintiff to represent to this Court that defendant Ford Motor Company is not properly before it, has no stake in the outcome of this litigation, and cannot appeal the verdict of the circuit court.”
As indicated supra, plaintiff died on December 13, 1975. The question of benefits under a "death claim” is not at issue in this case.
MCL 418.401(c); MSA 17.237(401)(c) provides:
" 'Personal injury’ shall include a disease or disability which is due to causes and conditions which are characteristic of and peculiar to the business of the employer and which arises out of and in the course of the employment.”
MCL 418.351(1); MSA 17.237(351X1) provides in pertinent part:
"While the incapacity for work resulting from the injury is total, the employer shall pay, or cause to be paid as hereinafter provided, to the injured employee, a weekly compensation of 2/3 of his average weekly wages, but not more than $64.00 * *
Under MCL 418.355; MSA 17.237(355), plaintiff is entitled to compensation higher than the maximum stated in § 351.
MCL 418.301(1); MSA 17.237(301X1) provides:
"An employee, who receives a personal injury arising out of and in the course of his employment by an employer who is subject to the provisions of this act, at the time of such injury, shall be paid compensation in the manner and to the extent provided in this act, or in case of his death resulting from such injuries the compensation shall be paid to his dependents as defined in this act. Time of injury or date of injury as used in this act in the case of a disease or in the case of an injury not attributable to a single event shall be the last day of work in the employment in which the employee was last subjected to the conditions resulting in disability or death.”
See fn 8, supra, with respect to the amount of compensation due plaintiff under §§ 351 and 355 of the act.
MCL 418.351; MSA 17.237(351) reads, in pertinent part:
“(1) While the incapacity for work resulting from the injury is total, the employer shall pay, or cause to be paid as hereinafter provided, to the injured employee, a weekly compensation of 2/3 of his average weekly wages, but not more than $64.00, if such injured employee has no dependents; $69.00 if 1 dependent; $75.00 if 2 dependents; $81.00 if 3 dependents; $87.00 if 4 dependents; and $93.00 if 5 or more dependents; except as provided in section 355. Compensation shall be paid for the duration of the disability. Weekly payments shall not be less than $27.00 if there are no dependents; $30.00 if 1 dependent; $33.00 if 2 dependents; $36.00 if 3 dependents; $39.00 if 4 dependents; and $42.00 if 5 or more dependents; except as provided in section 355. Compensation shall be paid for the duration of the disability. ’ * *”
MCL 418.361; MSA 17.237(361) reads, in pertinent part:
"(1) While the incapacity for work resulting from the injury is partial, the employer shall pay, or cause to be paid to the injured employee a weekly compensation equal to 2/3 of the difference between his average weekly wages before the injury and the average weekly wages which he is able to earn thereafter, but not more than $64.00 if such injured employee has no dependents; $69.00 if 1 dependent; $75.00 if 2 dependents; $81.00 if 3 dependents; $87.00 if 4 dependents; and $93.00 if 5 or more dependents; except as provided in section 355. Compensation shall be paid for the duration of the disability. * * *”
E.g., O’Brien v Albert A Albrecht Co, 206 Mich 101; 172 NW 601 (1919), Magnuson v Oliver Iron Mining Co, 270 Mich 482; 259 NW 317 (1935), Wolanin v Chrysler Corp, 304 Mich 164; 7 NW2d 257 (1943), Harrison v Lakey Foundry Co, 361 Mich 677; 106 NW2d 521 (1960).
E.g., Hebert v Ford Motor Co, 285 Mich 607; 281 NW 374 (1938), Wolanin, supra, Harrison, supra, Tidey v Riverside Foundry & Galvanizing Co, 7 Mich App 40; 151 NW2d 198 (1967), aff'd 381 Mich 551; 164 NW2d 3 (1969), Thumser v Lakey Foundry Corp, 84 Mich App 319; 269 NW2d 583 (1978).
We are aware that the statute refers to the results of a particular "injury” rather than a particular "accident”. In the situation where an occupational accident results in several injuries, no one would seriously contend that separate compensation should be provided for each injury. Rather, benefits are provided for the total result of the accident — the "incapacity to work” — and they continue for the duration of the disability. See, generally, Bommarito v Fisher Body Corp, 273 Mich 1, 4; 262 NW2d 329 (1935).
We do not mean to suggest, however, that multiple maximum awards are available for injuries arising from one employment, just because the origins of the injuries are unrelated. Our holding only applies to cases where multiple employments are involved, although multiple employments can be created when performance of one job is interrupted by an occupational injury and the worker subsequently returns to that job. If the injuries occur in the same employment, and are unrelated but concurrent, for example, there is no basis for a double recovery. See, generally, Tidey v Riverside Foundry & Galvanizing Co, 7 Mich App 40; 151 NW2d 198 (1967), aff'd 381 Mich 551; 164 NW2d 3 (1969). See, also, Harrison v Lakey Foundry Co, 361 Mich 677; 106 NW2d 521 (1960).
MCL 418.371; MSA 17.237(371) reads:
"(1) The weekly loss in wages referred to in this act shall consist of such percentage of the average weekly earnings of the injured employee computed according to the provisions of this section as shall fairly represent the proportionate extent of the impairment of his earning capacity in the employment in which he was working at the time of the injury, the same to be fixed as of the time of the injury, but to be determined in view of the nature and extent of the injury. The compensation payable, when added to his wage earning capacity after the injury in the same or another employment, shall not exceed his average weekly earnings at the time of such injury.” (Emphasis added.)
The language emphasized above has been held to apply only to replacement or successive employment and not to concurrent employment. Lahay v Hastings Lodge No 1965 BPOE, 398 Mich 467; 247 NW2d 817 (1976), Bowles v James Lumber Co, 345 Mich 292; 75 NW2d 822 (1956). Thus, § 371(1) would require a set-off in the successive employment circumstances which would obviate any incentive to malinger caused by our holding today.
We use the phrase "wage-earning capacity” concept to refer to the legal theory that a person may have multiple wage-earning capacities. Under this theory, different earning capacities are established by holding different types of jobs or jobs in different "lines of work”. If a claimant establishes different wage-earning capacities then, under this theory, benefits resulting from separate occupational accidents are not aggregated when computing the statutory maximum. See, e.g., the cases cited in footnotes 3, 4, supra. It is this contrived analytical concept which we reject.
At some time prior to 1971, plaintiff discovered that he had a heart problem. The record is not clear as to exactly when this knowledge was acquired or if either defendant had prior knowledge of plaintiff’s condition. It appears that Firestone learned that plaintiif was being extensively examined at University Hospital in Ann Arbor and requested a copy of the medical report.
Firestone was ordered to pay $102 per week from August 7, 1971 until further order of the WCAB. Ford was ordered to pay $107 per week from March 3, 1972 to October 17, 1973 and compensation for partial disability from November 5, 1973 to November 25, 1973. Beginning October 17, 1973, and except for the period in November of 1973, plaintiff returned to favored work at Ford at wages equal to or greater than the wages he was earning on March 2, 1972.
Ford did not appeal to the WCAB and a judgment was taken against it in circuit court pursuant to the WCAB order. Ford filed an appeal of this judgment and a motion for delayed appeal from the WCAB order with the Court of Appeals. The Court of Appeals consolidated both of Ford’s appeals with Firestone’s appeal and heard the cases together. We granted leave to appeal in both cases. On this record, we reject plaintiffs argument that Ford has not properly preserved all of its issues presented on appeal.
The Jones and Harrison eases present an unusual precedent. Justice Carr’s opinions in the cases follow the O’Brien view — in any given period of time no claimant may receive more benefits than those prescribed by the statutory máximums. Justice Smith would provide maximum compensation for the results of each injury. Justice Smith’s approach prevailed in Jones on the basis of a 4 to 4 affirmance. The next year Justice Carr’s view won a 5 to 3 majority.
Various reasons could be given to explain these seemingly inconsistent decisions — e.g., a change in the membership of the Court, general versus schedule disability benefits, one employer versus two employers. Regardless of whether the two cases are reconcilable, however, we believe that both results were proper under our present interpretation of the law. Pursuant to the interplay of §§ 351, 361 and 371(1), we would have reached the same results today although for different reasons.
The claimant in O’Brien suffered disabling injuries as a carpenter while working for two successive employers. He received compensation for total disability from the first injury ($9.45 per week), but it was reduced to partial disability benefits of $7 per week as he recovered. While still receiving those benefits, claimant suffered his second injury and was awarded $10 per week for total disability from the second employer. The second employer successfully argued that because the statutory maximum was $10 per week, claimant could not receive $7 from the first employer and $10 from it simultaneously. It was held that:
"Both injuries occurred while plaintiff was following his trade as a carpenter. His disabilities are disabilities to continue in that line of employment. * * * It must be obvious that a man cannot be more than totally disabled. It should be equally obvious that he cannot receive compensation for more than total disability. Our statute does not provide for concurrent compensation. It fixes a maximum for total disability of $10 per week, and it cannot exceed that sum whether it is paid by one employer or by several.” 206 Mich 101, 106.
Much of the subsequent interpretation resulted from this language. However, we find no basis in the statute at issue in O’Brien for that Court’s holding. The language was markedly similar to §§ 351 and 361 and read:
"While the incapacity for work resulting from the injury is total, the employer shall pay, * * * to the injured employee a weekly compensation equal to one-half his average weekly wages, but not more than ten dollars nor less than four dollars a week; * * 1915 CL 5439. (Emphasis added.)
The need for distinguishing between the results of one injury caused by one accident and the results of multiple injuries also caused by one accident is explained in footnote 5, supra.
That statute, a predecessor to § 351, read:
"While the incapacity for work resulting from the injury is total, the employer shall pay, * * * to the injured employee, a weekly compensation of 66-2/3% of his average weekly wages, but not more than * * * [specified máximums varying with the number of dependents] * * 1948 CL 412.9.
Member Oldstrom’s concurring opinion below explains:
"If, for purposes of analysis, we assume that plaintiff worked at Firestone and someone else ('Joe’) held plaintiffs job at Ford, what results would occur if we assume the same injuries? Both plaintiff and 'Joe’ would each receive compensation due them. Each would suffer a separate personal injury according to the dictates of § 301.
"Then, the question should be asked, should a different result occur merely because plaintiff holds down two full-time jobs with two different and unrelated employers neither of whom have any connec tion with the other? Logically and legally the answer seems to be no. Both plaintiff and defendants are subject to the same act and no compelling reason appears which would call for a different result. Defendants are in no worse position than if they had hired two employees and not plaintiff alone. The only one who seems to be reaping a windfall by way of the occurrence of the personal injuries is plaintiff. But plaintiff is not reaping a windfall. He has received two hurts, each of which have resulted in the loss of his two wage-earning capacities. Plaintiff is entitled to two whole awards of compensation— one from Firestone and one from Ford. Under the facts, this cannot be called a windfall. He merely obtains what § 301 says he should have.”
We also cannot embrace the skilled-unskilled division. Within each category there are occupations characterized by duties which are so different that they would require different treatment.
We see no reason for a different result had Mr. Hairston worked each job for the same employer. There would be, however, a different result if he had worked the same job 16 hours per day or if one injury had disabled him from both jobs. The crucial variance in those situations would be that only one accident would be involved, rather than two accidents as in the case at bar.
A particularly untenable finding in avoidance of O’Brien and Harrison occurred in Herrala v Jones & Laughlin Steel Corp, 43 Mich App 154; 203 NW2d 752 (1972). Claimant had suffered a back injury and a heart attack in separate accidents. He sought benefits for both injuries but the WCAB only awarded benefits for the first injury. Claimant redeemed that award and then refiled for the second injury. The Court of Appeals held that he could recover for the second injury because, as a result of the lump-sum redemption, there was no overlap of weekly payments. | [
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Per Curiam.
This is a medical malpractice case. At approximately 11 p.m. on March 20, 1967, the plaintiff received an electrical shock while at work. This shock allegedly caused the plaintiff to suffer a dislocated shoulder. After initially visiting a clinic for treatment, the plaintiff went to the defendant Mt. Clemens General Hospital where he was admitted. He was initially examined by Dr. Gerald Hoffman, an internist, who sought to ascertain whether the plaintiff had suffered any cardiac damage. Dr. Hoffman sought consultation from Dr. Robert O. Fagen, an orthopedic surgeon with staff privileges at the hospital. Dr. Fagen’s examination revealed, inter alia, that the plaintiff had sustained a dislocated right shoulder.
Dr. Fagen designated Dr. Michael Fugle, an orthopedic resident, to attempt to reduce, at least partially, the dislocation of plaintiff’s shoulder. Thereafter, Dr. Fugle made several unsuccessful attempts to do so.
After one of these unsuccessful attempts, Dr. A. Lewis Katzowitz, Dr. Hoffman’s associate, who also had staff privileges at the hospital and who, like Dr. Hoffman, was also an internist, observed that the plaintiff was in considerable discomfort and himself attempted to reduce the dislocation by placing his foot on the plaintiff’s chest and pulling his arm. He too was unsuccessful in reducing the dislocation. Significantly, Dr. Katzowitz testified that he did not view the X-rays before attempting the reduction.
The plaintiff was to argue at trial that these attempts at reducing his shoulder dislocation resulted in a brachial plexus injury and a fracture of the greater tuberosity. The plaintiff claimed that these injuries were the result of medical malpractice performed on him while he was in the hospital.
In any event, the plaintiff eventually had to undergo surgery for the removal of bone fragments in repair of the biceps tendon and joint capsule.
The plaintiff subsequently filed a lawsuit against the hospital and Dr. Michael Fugle, claiming negligence. Verdicts of no cause of action as to both defendants were returned by a jury which heard the evidence of the case in 1971. The plaintiff pursued an appeal to the Court of Appeals, and that Court reversed and remanded for new trial because the trial court had restricted cross-examination from medical textbooks. 47 Mich App 111; 209 NW2d 309 (1973); lv den 390 Mich 811 (1973).
On remand, the plaintiff once again alleged negligence on the part of Dr. Fugle, the hospital, and the hospital’s "agents and servants”. The case proceeded to trial, and the jury returned a verdict of no cause of action against Dr. Fugle but found for the plaintiff against the hospital in the amount of $120,000 in damages. The hospital moved for new trial or judgment notwithstanding the verdict. The motion was denied.
The hospital pursued an appeal to the Court of Appeals. The Court of Appeals affirmed. 74 Mich App 479; 253 NW2d 805 (1977).
We granted the hospital leave to appeal, limited to three issues: (1) whether the jury’s verdict of no cause of action as to Dr. Fugle but in favor of the plaintiff against the hospital was inconsistent; (2) whether the trial court erred in refusing to strike certain testimony given by an expert witness in response to a hypothetical question and in its instructions to the jury with regard to the opinions of experts; and (3) whether the trial court erred in failing to sua sponte give the jury an instruction on SJI 34.03 — reduction of damages to "present, worth”.
I
The hospital argues that the jury verdict against it should be set aside because it is internally inconsistent. The hospital contends that the plain tiffs complaint, the proofs adduced at trial, and the instructions given to the jury predicated the liability of the hospital solely on the alleged negligence of Dr. Michael Fugle. Since the jury found by virtue of its verdict of no cause of action against Dr. Fugle that he was not negligent, and since the theory of liability against the hospital was based on Fugle’s negligence, the verdict in the plaintiffs favor against the hospital cannot stand. In conjunction with this argument, the hospital further contends that even if the plaintiff’s theory did encompass a charge of negligence on the part of other physicians practicing medicine at the hospital, there is no showing that the other physician (Dr. Katzowitz) was an agent of the hospital. Finally, the hospital avers that there was no evidence to establish the standard of care with reference to an internist and therefore, if the jury predicated the hospital’s liability on the liability of Dr. Katzowitz, the verdict cannot be maintained.
Both the trial court, in its opinion denying the hospital’s motion for new trial, and the Court of Appeals were convinced that the plaintiffs pleadings were sufficiently broad to encompass an allegation of derivative liability on the part of the hospital by virtue of the negligent actions of physicians practicing medicine at the hospital in addition to the claimed negligence of Dr. Fugle. We agree. As we have noted, supra, the plaintiff’s complaint alleged negligence on the part of the hospital’s "agents”. Moreover, the plaintiffs "theory” at trial was not merely limited to alleged negligence on the part of Dr. Fugle. Counsel for plaintiff extensively cross-examined Dr. Katzowitz both as to his relationship with the plaintiff and his attempt to reduce the dislocation of the plaintiff’s shoulder.
The hospital’s argument draws some support from the instructions given by the trial judge to the jury. Our review of these instructions does indicate that the plaintiff’s primary theory with regard to the derivative liability of the hospital apparently was that Dr. Fugle was negligent and, since Dr. Fugle was an orthopedic resident at the hospital and was paid by the hospital, the hospital should be vicariously liable for the negligent acts of Dr. Fugle. However, the instructions which were given to the jury are not entirely bereft of any articulably distinct basis for finding the hospital vicariously liable. For example, the trial judge instructed the jury:
"[I]f you find that the defendant hospital, as well as their agents, servants and Dr. Fugle did breach the standard of practice of this and similar communities in their reducing of the shoulder, then you are to compute such damage as you feel resulted from the departure of the standard of practice.”
And:
"I further charge you, members of the jury, that the hospital was under a duty to a patient to see that he was provided with competent medical care and treatment while he was confined there. If the hospital does not provide him with proper and competent medical care and treatment, the hospital will be liable for the negligence of the person that they so provided who was on their staff or who is a resident in training or internist.”
And finally, the trial judge instructed the jury that they could return a verdict in favor of Dr. Fugle but against the hospital. The jury did just that. Thus we find that there is ample record support to conclude that the plaintiff had articulated a theory of derivative liability independent of the theory which depended on an initial finding of negligence on the part of Dr. Fugle.
The hospital, however, argues that even if such a theory was presented, there is no basis for concluding that Dr. Katzowitz was an agent of the hospital so as to render it vicariously liable for his negligent treatment of the plaintiff. The hospital vigorously contends that Dr. Katzowitz merely had staff privileges at the hospital, and was not in the employ of the hospital; and that therefore no agency relationship can be found to exist. The hospital further asserts that it exercised no control over Dr. Katzowitz’ treatment of the plaintiff and should not be held accountable for his actions.
The Court of Appeals, after rejecting the hospital’s argument that the jury’s verdict was inconsistent, did not deal directly with this aspect of the hospital’s argument. The Court merely noted that:
"The plaintiff pleaded and argued that the hospital was liable for the negligence of a person or persons other than Dr. Fugle. Evidence in support of the theory was introduced. The trial court correctly instructed the jury that it could hold the hospital liable for the negligence of a staff member and that they could return a verdict for Dr. Fugle and against the hospital. The jury did exactly that.” 74 Mich App 484.
Generally speaking, a hospital is not vicariously liable for the negligence of a physician who is an independent contractor and merely uses the hospital’s facilities to render treatment to his patients. See Anno: Hospital-Liability-Neglect of Doctor, 69 ALR2d 305, 315-316. However, if the individual looked to the hospital to provide him with medical treatment and there has been a representation by the hospital that medical treatment would be af forded by physicians working therein, an agency by estoppel can be found. See Howard v Park, 37 Mich App 496; 195 NW2d 39 (1972), lv den 387 Mich 782 (1972). See also Schagrin v Wilmington Medical Center, Inc, 304 A2d 61 (Del Super Ct, 1973).
In our view, the critical question is whether the plaintiff, at the time of his admission to the hospital, was looking to the hospital for treatment of his physical ailments or merely viewed the hospital as the situs where his physician would treat him for his problems. A relevant factor in this determination involves resolution of the question of whether the hospital provided the plaintiff with Dr. Katzowitz or whether the plaintiff and Dr. Katzowitz had a patient-physician relationship independent of the hospital setting.
In the landmark case of Bing v Thunig, 2 NY2d 656; 143 NE2d 3 (1957), the New York Court commented on the changing roles of hospitals in our society as follows:
"The conception that the hospital does not undertake to treat the patient, does not undertake to act through its doctors and nurses, but undertakes instead simply to procure them to act upon their own responsibility, no longer reflects the fact. Present-day hospitals, as their manner of operation plainly demonstrates, do far more than furnish facilities for treatment. They regularly employ on a salary basis a large staff of physicians, nurses and interns, as well as administrative and manual workers, and they charge patients for medical care and treatment, collecting for such services, if necessary, by legal action. Certainly, the person who avails himself of 'hospital facilities’ expects that the hospital will attempt to cure him, not that its nurses or other employees will act on their own responsibility.
"Hospitals should, in short, shoulder the responsibilities borne by everyone else. There is no reason to continue their exemption from the universal rule of respondeat superior. The test should be, for these institutions, whether charitable or profit-making, as it is for every other employer, was the person who committed the negligent injury-producing act one of its employees and, if he was, was he acting within the scope of his employment.”
The Delaware Superior Court in the Schagrin case, supra, quoted Bing, supra, and, while acknowledging that the Bing case dealt with medical personnel who were clearly employees of the hospital in question, concluded that the rationale of the New York Court was nonetheless applicable to a situation where medical personnel such as physicians and nurses, though independent contractors, were performing medical services ordinarily performed by the hospital. We agree with this analysis.
The relationship between a given physician and a hospital may well be that of an independent contractor performing services for, but not subject to, the direct control of the hospital. However, that is not of critical importance to the patient who is the ultimate victim of that physician’s malpractice. In Howard v Park, supra, the Court of Appeals quoted with approval from the opinion in Stanhope v Los Angeles College of Chiropractic, 54 Cal App 2d 141; 128 P2d 705 (1942). We too find the California Court’s analysis of this area enlightening:
" 'An agency is ostensible when the principal intentionally or by want of ordinary care, causes a third person to believe another to be his agent who is not really employed by him.’ §2300, Civ Code. In this connection it is urged by appellant that 'before a recovery can be had against a principal for the alleged acts of an ostensible agent, three things must be proved, to wit:’ (quoting from Hill v Citizens National Tr & Sav Bank, 9 Cal 2d 172, 176; 69 P2d 853, 855 [1937]); '[First] The person dealing with the agent must do so with belief in the agent’s authority and this belief must be a reasonable one; [second] such belief must be generated by some act or neglect of the principal sought to be charged; [third] and the third person relying on the agent’s apparent authority must not be guilty of negligence. 1 Cal Jur 739; Weintraub v Weingart, 98 Cal App 690; 277 P 752 [1929].’
"An examination of the evidence hereinbefore referred to which was produced on the issue of agency convinces us that respondent has met the requirements enumerated in the Hill case. So far as the record reveals appellant did nothing to put respondent on notice that the X-ray laboratory was not an integral part of appellant institution, and it cannot seriously be contended that respondent, when he was being carried from room to room suffering excruciating pain, should have inquired whether the individual doctors who examined him are employees of the college or were independent contractors. Agency is always a question of fact for the jury. The evidence produced on this issue is sufficient to support the jury’s implied finding that Dr. Joyant was the ostensible agent of appellant college.” 54 Cal App 2d 141, 146; 128 P2d 705, 708.
Turning to the facts of the instant case, we see nothing in the record which should have put the plaintiff on notice that Dr. Katzowitz, when he attempted to reduce the plaintiff’s shoulder separation, was an independent contractor as opposed to an employee of the hospital.
The plaintiff’s testimony convincingly demonstrates that he went to the hospital for treatment and expected to be treated by the hospital:
”Q. Mr. Grewe, when you went to the Mt. Clemens General Hospital that evening the 21st, or the morning of the 21st, did you know any doctor there that you were going to ask for treatment?
"A I never knew of a doctor, D.O. doctor, before in my life that I can recall of.
"Q. Do you know how Dr. Hoffman happened to see you at the hospital?
"A. Well, no. I don’t know who he assigned to me. The only thing that I know that somebody had said that the doctor the night before refused to take the case and the next thing I know, Dr. Hoffman was on the scene.
"Q. You didn’t know Dr. Hoffman before you got there?
"A. No, I did not.
”Q. Did you know that Dr. Hoffman and Dr. Katzowitz were partners in the specialty of internal medicine?
"A. Not at this time, I didn’t, no.
”Q. Did you subsequently find that out?
"A. Yes, I did.
”Q. Who provided you with Dr. Fugle, who did these reductions?
"A. That, I couldn’t answer you.
”Q. Did Dr. Fugle tell you, when he came into your room, that he was not an orthopedic specialist?
"A. No, he did not.
”Q. Did you know that Dr. Fugle, at the time he attempted to reduce the dislocated shoulder, was merely a resident with nine months into training to be an orthopedic surgeon?
"A. No, I did not at that time.
"Q. What did you know of Dr. Fugle at all?
"A I didn’t know nothing of Dr. Fugle.”
We are convinced, as the jury must have been, that the plaintiff, when he entered the hospital, was seeking treatment from the hospital itself. There is no record of any preexisting patient-physician relationship with any of the medical personnel who treated the plaintiff at the hospital. In fact, Dr. Hoffman, the internist, did not see the plaintiff until approximately 12 hours after the plaintiff had been admitted to the hospital. Dr. Hoffman’s relationship with the plaintiff comes into clear focus in Dr. Hoffman’s testimony:
”Q. Do you know how he [plaintiff] happened to be referred to you or placed under your care for examination on this particular day?
"A. Yes, sir, I do.
”Q. And for what reason, Doctor?
"A. Mr. Grewe had presented himself to the emergency room there earlier that day with his particular problem, at which time the emergency room doctor had referred Mr. Grewe to myself for my particular investigation and management.”
Dr. Katzowitz also testified:
"Q. Doctor, can you tell us as to what occurred during the course of that reduction on March 21, 1967?
”A. As I remember, I was told that Dr. Hoffman and I were in care of this patient. I don’t recall who told me at the time, but it was years ago, but I was told.”
It is abundantly clear on the strength of this record that the plaintiff looked to defendant hospital for his treatment and was treated by medical personnel who were the ostensible agents of defendant hospital. Accordingly, a jury verdict against defendant hospital on this theory is supported by the record. We make no intimation that the hospital would escape liability even if plaintiff knew or should have known the relationship of Dr. Katzowitz with the hospital.
The final allegation of error in conjunction with this issue raised by defendant hospital is that in order for there to have been a basis on which the jury might find liability of the hospital premised on the negligence of Dr. Katzowitz, it would have been necessary that there be introduced at trial evidence of the standard of care relative to internists rather than individuals trained in orthopedics. It is argued that the standard is not the same and that therefore the jury’s verdict cannot be upheld.
The testimony of Dr. Katzowitz himself undermines defendant hospital’s position:
"Q. Doctor, let’s talk about the standard of practice. Are you familiar with the standard of practice, Doctor, in regard to the reducing of dislocated shoulders?
"A. I think so.
"Q. And Doctor, does the standard of practice, in regard to the reducing of a dislocated shoulder, vary from an internist, such as yourself, and general practitioners or an orthopedic specialist or a resident in orthopedics, or is the standard the same?
"A. I would presume that in a simple reduction it would be the same.
”Q. And in this case, Doctor, it was felt that you had a simple reduction, is that correct?
"A. Yes.
”Q. So the standard would be the same whether you were an internist, specialist, general practitioner, right?
"A. Yes.”
Defendant hospital’s position on this point is without merit.
II
Defendant’s next allegation of error is based on the trial court’s refusal to instruct the jury to disregard an expert witness’s answer to a hypothetical question. The expert witness, Dr. Paul Navarro, admitted on cross-examination that when he had earlier responded to a hypothetical question he took into account facts in addition to those which were stated in the question. Dr. Navarro indicated that his answer to the hypothetical question was based on all the information which he had available to him in the case, including hospital records. Dr. Navarro’s opinion was that the injuries suffered by the plaintiff were the result of the attempted reductions which had been performed without benefit of a general anesthetic. Dr. Navarro testified that this practice did not conform to the appropriate standard. The hospital contends that it was greatly prejudiced by allowing Dr. Navarro’s answer to the hypothetical question to stand because part of the hospital records which Dr. Navarro had access to included an X-ray report which was not admitted into evidence. The hospital relies on Bosch v Damm, 296 Mich 522; 296 NW 669 (1941).
The plaintiff responds by conceding that generally a hypothetical question posed to an expert witness must be premised on facts already in evidence. However, the plaintiff takes the hospital to task for not developing a record as to exactly what facts not in evidence were relied on by Dr. Navarro in formulating his opinion. Particularly, says the plaintiff, the hospital failed to cross-examine Dr. Navarro concerning the question of whether he relied on the X-ray report which was not admitted. In view of the hospital’s failure in this regard, the plaintiff contends that the hospital should not be heard to complain on appeal.
The general rule has undoubtedly been that the trial court is required to strike the testimony of an expert witness when the answer to the hypothetical question is based on facts not contained therein, and when the testimony is based on matters not in evidence. See Bosch, supra, and Rivard v Rivard, 109 Mich 98; 66 NW 681 (1896). However, we are not disposed to reverse on this basis. First, we agree with the plaintiff that it would have been a simple matter for counsel, on cross-examination, to ferret out what facts not contained in the hypothetical question were relied on by the expert in formulating his answer. The hospital’s main complaint is that the expert may have relied on an X-ray which was not admissible. Obviously, we have no way of knowing whether he did. Secondly, there was other expert testimony in this case which reached the same ultimate conclusion as that reached by Dr. Navarro. Accordingly, we decline to reverse the jury’s finding on this basis.
Since we decline to find reversible error in the trial court’s refusal to strike portions of Dr. Navarro’s testimony, we are concomitantly disinclined to predicate reversible error on the trial court’s refusal to give a defense-requested jury instruction which would have accomplished the same purpose.
Ill
The hospital contends that the trial court’s failure to give Standard Jury Instruction 34.03 man dates reversal and remand for a new trial. The hospital did not request that this instruction be given. However, it is urged that this failure should be excused since counsel for the hospital was of the opinion that this instruction would be given because it was given in the original trial in 1971. Furthermore, the hospital cites the decision of our Court of Appeals in Freeman v Lanning Corp, 61 Mich App 527; 233 NW2d 68 (1975). In that case, the Court of Appeals decided that the trial court must instruct the jury to reduce damages to present value whether requested to do so or not.
The plaintiff responds by arguing that absent a specific request that the trial court give SJI 34.03, this Court should not reverse and remand for a new trial. Plaintiff also contends that even if the trial court should have instructed, sua sponte, on the question of reduction to present worth, the present pace of inflation is a sufficient countervailing factor to render the error negligible.
This Court has held that the trial judge is under an obligation to instruct the jury that they are to reduce their award of damages to present worth even in the absence of a request for such an instruction. See Nagi v Detroit United Railway, 231 Mich 452; 204 NW 126 (1925). However, we are not inclined to reverse and remand for a new trial on this point. Counsel for defendant was aware that the instruction in question was given in the 1971 trial but did not request this instruction at the 1974 trial and did not object when the trial court failed to give it.
On balance, we do not believe that either a new trial or a remand for remittitur is appropriate under the circumstances of this case.
Affirmed. Costs to appellee.
Kavanagh, C.J., and Williams, Levin, Fitzgerald, Ryan, and Blair Moody, Jr., JJ., concurred.
Coleman, J.
(to reverse). The critical problem with the majority opinion is that we must retry the case in the Supreme Court in order to find Mount Clemens General Hospital liable. It is understandable that the Court wishes to write "finis” to a case already seven years in the state courts, after a first appeal by a totally unsuccessful plaintiff, a reversal by the Court of Appeals on a point regarding the use of textbooks, a new trial in which plaintiff was unsuccessful against the defendant doctor but successful against the defendant hospital and subsequent appeals by the hospital to the Court of Appeals and now to this Court.
Although I join in that concern, the means to the end adopted requires the establishment of unhealthy legal precedent and an unfair rationalization of a case tried on one theory and considered on another on appeal. The defendant hospital had no opportunity to defend "our” case at the trial level. The unsuspecting, unsubpoenaed witness whom we have belatedly transformed into. the villain of the piece had no warning and so no way to defend his sudden involvement at the appeal level. His reputation is maligned. We cannot know how this will affect his malpractice insurance. All participants in adversary proceedings should be able to find justice.
I would reverse, agreeing with Court of Appeals Judge Quinn writing in dissent.
I
The original complaint named the hospital, Dr. Hugo and Dr. Hoffman as defendants. The first amended complaint substituted the name of Dr. Fugle for Dr. Hugo. The second amended complaint continued the hospital and the same doctors as defendants, claiming that the hospital as principál of and employer of the said doctors was "charged with the consequences of the performance of the said other defendants” (emphasis added) within the scope of their duties as agents of the hospital. The legal theories advanced were (1) failure to perform their (defendant’s) duties in accordance with the standard of practice of that and similar communities, and (2) breach of contract.
Dr. Hoffman was dismissed from the case by order of the court on February 3, 1971, leaving the hospital and Dr. Fugle as defendants.
The case was straightforward from the complaint through the court’s initial instructions to the jury. After the complaint against Dr. Hoffman, an internist, was dismissed, plaintiffs case was pursued and argued on the theory of vicarious liability of the hospital resulting from the negligence of its "agent or servant” Dr. Fugle, an orthopedic resident. The hospital could not be found liable unless Dr. Fugle was found to be negligent.
The judge instructed on this theory, but after all instructions were completed, he was persuaded by plaintiffs counsel to reinstruct as to permissible verdicts. Without offering any further instructions, the jury was told to disregard prior instructions as to permissible verdicts. A different instruction then was given whereby the jury could find in favor of the doctor and against the hospital. The jury did just that, upon what reasoning we cannot know, for it was inconsistent with prior instructions.
It is my opinion that a fair reading of neither plaintiff’s theory of the case — written by plaintiff’s own counsel — nor of the other instructions could support such a verdict.
The Court, however, has found a new culprit, a Dr. A. Lewis Katzowitz, who was not a defendant, who was subpoenaed by plaintiff, but (after an interview) was not called upon to testify by plaintiff. He, in fact, came voluntarily to court when asked to testify by defense counsel.
Nowhere in the complaint or plaintiff’s theory of the case was his name even mentioned, nor was it mentioned in the instructions to the jury regarding the hospital’s liability.
II
Looking first to plaintiff’s theory of the case as presented by plaintiff and related to the jury by the court in its instructions, we must find it to be consistent with the complaints as to negligence. The instruction was:
"According to the plaintiff, the position of the plaintiff is as follows: This is an action for personal injuries arising out of malpractice and/or negligence of the Mount Clemens General Hospital and Doctor Michael Fugle who attempted to reduce a dislocated shoulder of the plaintiff on the 21st day of March, 1967, when the plaintiff, Laverne Grewe, was hospitalized and confined to the Mount Clemens General Hospital. It is the plaintiff’s claim that the said defendant hospital, as well as Doctor Fugle, did depart from the standard of practice of this and similar communities and were negligent in the treatment of the plaintiff in the following particulars: * * *.” (Emphasis added.)
The instruction then recapitulated the facts as plaintiff would have them appear and followed that recitation with:
"It is the plaintiff’s claim that failure of Doctor Fugle to administer the general anesthetic and in attempting to set his shoulder without using a general anesthetic was a departure from the standard of practice.” (Emphasis added.)
And
"Further, it is the plaintiff’s further claim that since the fracture of the tuberosity, which was not visible upon X-rays before but was visible after the reduction as a result of Doctor Fugle’s pulling of the arm and raising the arm over the man’s head, it caused a fracture of the tuberosity which subsequently had to be removed and is causing disability in the arm and hand today.” (Emphasis added.)
(It is underscored that this is only plaintiff’s version of facts in support of his theory. Dr. Fugle’s testimony was that the initial X-ray was "very, very light” but that it indicated a fracture at the time of admission to the hospital in the same area as appeared on a better X-ray after reduction of the dislocation.)
Ill
The majority leans heavily on the following parts of subsequent instructions, taken out of context:
"I further charge you, members of the jury, that if you find that the defendant hospital, as well as their agents, servants and Doctor Fugle did breach the standard of practice of this and similar communities in their reducing of the shoulder, then you are to compute such damages you feel resulted from the departure of the standard of practice.”
However, the next sentence says:
"I further charge you that the hospital is responsible for the acts of its agents and servants, that being Doctor Fugle, who is a resident and on their payroll. That the defendant hospital in this case held out Doctor Fugle as a person who is competent as a physician and did provide the plaintiff with Doctor Fugle who they claim was competent as a physician and was a proper person who could reduce the dislocation and was going to reduce the dislocation in accordance with the standard of practice.” (Emphasis added.)
The court continued to instruct as to the hospital’s duty to provide competent care. In addition to the portion cited above, the per curiam employs the following general statement to net Dr. Katzowitz as the negligent agent or servant:
"If the hospital does not provide him with proper and competent medical care and treatment, the hospital would be liable for the negligence of the person that they so provided who was on their staff or who is a resident in training or internist.”
Again, however, that statement does not stand alone. The court proceeded to instruct on the elements of master-servant or employer-employee relationship. The four elements were said to be "the selection and management of the servant or employee, the payment of wages, the power of dismissal and the power of the control of the servant or employee’s conduct”. The court then instructed:
"In this matter, the question has been raised that the Mount Clemens General Hospital is vicariously liable for certain alleged acts of negligence on the part of Doctor Fugle. It is, of course, the burden of the plaintiff to establish that the relationship of this doctor to the Mount Clemens General Hospital was one of master and servant, or employer and employee, as I have defined same to you, in order that the hospital would be vicariously liable for his acts.
"I charge you that the hospital is not licensed to practice medicine and that the Mount Clemens General Hospital cannot be held liable in this matter unless you find each of the following facts:
"That Doctor Fugle, in treating Laverne Grewe at the Mount Clemens General Hospital was under the control and direction of the hospital in his practice of medicine as it related to Laverne Grewe.
"That Doctor Fugle, while under the control or direction of the hospital, violated the standard of practice.
"That the negligence of Doctor Fugle was a proximate cause of, or was causally related to, the damages allegedly suffered by the plaintiff.
"This is an action based on the claim of medical malpractice on the part of the defendant, Doctor Michael Fugle. In this respect, there are three things which the plaintiff must prove:
"That the acts of Doctor Fugle were negligent, as negligence has been defined to you.
"That such negligence was a proximate cause of any alleged injury.
"That damages have resulted.
"We are talking about the degree of care. We are talking about negligence, as applied to Doctor Fugle, means a failure to exercise that degree of care, skill and knowledge ordinarily exercised by residents in Mount Clemens and similar communities on March 21, 1967. In other words, Doctor Fugle is not held to the highest degree of skill, knowledge and ability in render ing services, but to what the standard of care was and existed at the time on the date stated to you.
"The defendants are not responsible in any event for the alleged damages suffered by plaintiff, should they be as a result of any other cause than that related to conduct in violation of the standard of practice among residents and hospitals in Mount Clemens and similar communities, under similar circumstances in the year 1967.” (Emphasis added.)
The hospital’s liability is firmly attached to alleged negligence of Dr. Fugle and its proximate cause of an alleged injury. The judge clearly says that the hospital cannot be found liable unless Dr. Fugle is found negligent.
IV
In 41 plus pages of instructions, the four or five vague words upon which the per curiam relies and which are taken standing alone amid extensive, precise instructions cannot, in my opinion, reasonably be interpreted as a basis for our guesswork.
What is clear is that the jury was understandably and seriously confused by the last minute, inconsistent instruction. It could not have been otherwise. After having been told over and over again that it could only find the hospital liable if it found Dr. Fugle liable and then having been told at the very end that it could return a verdict opposite to the instructions, the jury could only have been left to speculate as to what all of it meant. Obviously, we also are speculating.
Defense counsel objected in the trial court both before and after the instruction was given. He said:
"I do not believe that this jury could, in fact, based on the pleadings and the issues that went forward in this particular case, possibly return a verdict against the hospital without returning it against the agent against [sic] whom it was contended they were vicariously liable.”
Nor do I. The challenged instruction was clear error.
It also was error to allow an answer to a hypothetical question to be based in important part upon "facts” not of record. It further was error to fail to instruct the jury that it must reduce the award of future damages to present cash value as set forth in SJI 34.03, but I would not reverse on this error alone.
V
Most importantly, the entire case against the hospital was based on vicarious liability for Dr. Fugle’s alleged negligence. That was the plaintiffs case and that was the case the hospital and Dr. Fugle defended, not the one contained in the per curiam.
It is my opinion that the hospital did not receive a fair trial and that we have failed to right the wrong on appeal.
In final resolution, we find the hospital standing as a lone defendant. There has been no cross-appeal on the issue of Dr. Fugle’s lack of negligence. Plaintiff made no objection to the instructions to the jury that the hospital could only be vicariously liable if the jury found Dr. Fugle liable. Dr. Fugle was found not negligent, therefore, the hospital cannot fairly be found negligent.
I would reverse and remand to the circuit court for entry of a judgment notwithstanding the verdict.
In this vein see the recently adopted Michigan Rules of Evidence, particularly MRE 703 and 705:
"Rule 703. Bases of Opinion Testimony By Experts. The facts or data in the particular case upon which an expert bases an opinion or inference may be those perceived by or made known to him at or before the hearing. The court may require that underlying facts or data essential to an opinion or inference be in evidence.”
"Rule 705. Disclosure of Facts or Data Underlying Expert Opinion. The expert may testify in terms of opinion or inference and give his reasons therefor without prior disclosure of the underlying facts or data, unless the court requires otherwise. The expert may in any event be required to disclose the underlying facts or data on cross-examination.”
Allegedly, the X-ray report.
SJI 34.03:
"If you decide plaintiff will sustain damages in the future, you must reduce that amount to its present cash value. The amount of damages
you determine he will sustain the first year is to be divided by 1.05. The amount of damages you determine he will sustain the second year is to be divided by 1.10. The amount he will sustain in the third year is to be divided by 1.15. You then continue to use a similar procedure for each additional year you determine he will sustain damages. The total of your yearly computations is the present cash value of plaintiffs future damages.” | [
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Per Curiam.
The Judicial Tenure Commission (hereinafter the Commission) has recommended that this Court, pursuant to its constitutional authority, publicly reprimand the Honorable Clar ence Laster, Detroit Recorder’s Court Judge. Pursuant to GCR 1963, 932.24, Judge Laster, the respondent, has petitioned this Court to reject the recommendation of the Commission claiming that:
1. A de novo review of the entire record does not support the Commission’s recommendation of a reprimand.
2. He acted in "good faith” at all times as a recorder’s court judge and "good faith” stands as an absolute defense to any allegation of judicial misconduct.
3. The existence of appellate review to remedy a judge’s conduct divests the Commission of its jurisdiction to review that same conduct for the existence of judicial misconduct.
We have reviewed the entire record de novo and conclude that the conduct attributed to Judge Laster, and found by the Commission, is established. Furthermore, we do not find that either Judge Laster’s "good faith” intentions or the existence of an appellate avenue for review of Judge Laster’s conduct negates the Commission’s unanimous conclusion that he should be reprimanded.
I. Facts
There is no dispute regarding the essential facts in this case. Only the conclusion to be drawn from those facts is disputed.
Beginning in December, 1973, the respondent entered a series of 58 orders directing payment to bail bondsman Charles Goldfarb of amounts totaling $35,640 in bond money previously forfeited and paid to Wayne County. In all 58 cases in which the respondent ordered forfeitures set aside and penalties remitted, the bond had originally been forfeited by another recorder’s court judge. All of the orders were on photocopied forms and were based upon photocopied form petitions with only the names, dates and amounts written in individually.
Most of the remissions took place on Sunday, but only on those Sundays Judge Laster was sitting as Sunday judge. No notices of any of the petitions of remission were served on the prosecuting attorney or corporation counsel for Wayne County. The respondent acted on petitions in open court, but no stenographic records were made of these proceedings. In two or three instances the judge who had ordered the bond forfeiture had denied a previous motion for refund. No judge of recorder’s court, other than the respondent and suspended Judge Del Rio, repeatedly ordered refunds on forfeited bonds that were more than four years old.
Judge Laster testified that, before acting on the bond remissions in question, he read the statute on bond remission and discussed the matter with two former presiding judges of recorder’s court, the court’s judicial assistant and a member of the Supreme Court’s staff. The respondent also testified that he did not believe he was usurping the power of other judges in granting such remissions. Evidently, the practice in recorder’s court concerning bond remissions, as distinguished from other bond procedures, was shrouded in uncertainty.
Respondent testified that the late Chief Judge Murphy told him that he was empowered to remit forfeitures. He also testified- that the late Chief Judge Leonard had even considered proposing a court rule to clarify matters. The judicial assistant apparently recognized that confusion existed, and still exists, concerning these procedures.
The respondent instructed that copies of the remission orders be given by the Goldfarb Bonding Agency to the prosecuting attorney upon disposition. It is unclear whether copies of the orders were ever delivered to the prosecuting attorney’s office. No member of the prosecuting attorney’s staff ever requested a rehearing in the cases involved in these proceedings. It was the view of the respondent that bond remission was a ministerial action, involving judicial discretion, and as such given no attention by the prosecuting attorney. Respondent testified that, as a prosecuting attorney for 17 years, he never was consulted by a recorder’s court judge on bond remissions. Thus, he believed the absence of prior notice immaterial.
The bondsman, Charles Goldfarb, was a longtime acquaintance of the respondent. There is no evidence of record that the respondent was motivated by a scheme to promote the interests of the Goldfarb Bonding Agency. The examiner also acknowledges that there is no evidence of record which shows any personal enrichment of Judge Laster. Judge Laster testified that he was not a social friend of Mr. Goldfarb, and he never solicited Mr. Goldfarb for campaign contributions. Judge Laster did admit that Mr. Goldfarb "judge shopped” him in order to obtain the remissions.
It appears, however, that no judges other than the respondent and Judge Del Rio entered multiple refund orders on a group or wholesale basis. Other judges remitted bond payments; certain judges entered more such orders than others. But these judges almost uniformly remitted only those bonds previously forfeited by them or their predecessors in office. The total dollar figure on bonds remitted by Judge Laster was slightly less than twice the total of any judge other than Judge Del Rio. *8
A formal complaint in this matter was filed with the Judicial Tenure Commission on January 12, 1977. On February 8, 1977, this Court denied the Commission’s petition for interim suspension and the respondent’s motion to dismiss. A master, Judge William Weipert, Jr., of the 38th Judicial Circuit, was appointed. The master conducted a prehearing conference and ordered the formal hearing, which took place on April 25 and 26, 1977. The master filed his report with the Commission on August 18, 1977. He concluded that the respondent should not be suspended and the complaint should be dismissed. On September 30, 1977, the Commission adopted the findings of fact made by the master. The Commission agreed there was no evidence of criminality, but nonetheless found judicial misconduct from facts which gave the appearance of impropriety, and recommended a public reprimand.
II. Issues
The respondent initially claims that a de novo review of the entire record does not support the Commission’s recommendation of a reprimand. We cannot agree.
Canon 2 of the Code of Judicial Conduct provides:
"Public confidence in the judiciary is eroded by irresponsible or improper conduct by judges. A judge must avoid all impropriety and appearance of impropriety. He must expect to be the subject of constant public scrutiny. He must therefore accept restrictions on his conduct that might be viewed as burdensome by the ordinary citizen and should do so freely and willingly.” (Emphasis supplied.)
Pursuant to Const 1963, art 6, § 30(2), this Court adopted GCR 1963, 932.4, which provides:
".4 Standards of Judicial Conduct.
"(a) A judge shall be personally responsible for his own behavior and for the proper conduct and administration of the court or tribunal in which he presides.
"(b) A judge shall be deemed guilty of misconduct in office if:
"(iv) His conduct is clearly prejudicial to the administration of justice.
"(d) Conduct in violation of the code of judicial conduct or code of professional responsibility and canons, whether the conduct complained of occurred before or after the respondent became a judge or was or was not connected with his judicial office, may constitute mis conduct in office or conduct that is clearly prejudicial to the administration of justice or other cause delineated in Const 1963, art 6, § 30. The question in every case is whether the conduct complained of constitutes misconduct in office or conduct that is clearly prejudicial to the administration of justice or there is other cause delineated in Const 1963, art 6, § 30, not whether a particular canon or disciplinary rule has been violated. All the circumstances are to be considered in deciding whether action by the commission is warranted.”
We conclude that the respondent persisted in a course of action which gave the "appearance of impropriety” and was thus "clearly prejudicial to the administration of justice”.
Several factors specifically give rise to this "appearance of impropriety”:
1. the ex parte discussion with Goldfarb and the agreement to hear motions wherein Goldfarb, a potential litigant, was seeking the return of a large sum of money from the county treasury;
2. the fact that Goldfarb began sending wholesale groups of petitions to the respondent;
3. the fact that, with rare exception, no judges other than Judge Laster and suspended Judge Del Rio remitted bonds which were more than three years old while 90 percent of the Laster remissions were older than three years;
4. the fact that almost all the bonds remitted by Judge Laster were originally forfeited by another judge or that judge’s predecessor;
5. the remissions on the old bonds were accomplished without the prior knowledge of the prosecutor, corporation counsel or court clerk; and
6. the fact that the respondent did not assess costs against Goldfarb in any of the 58 cases, but instead merely accepted Goldfarb’s blanket statement that there were none.
Judge Laster’s activities give the appearance of impropriety in that they "appear” to have involved favoritism and partiality. Regardless of his motivations, respondent created an atmosphere in which Goldfarb could continue to bring to him old bonds for remission and thus effectively by-pass the judges who originally forfeited the bonds. This ongoing pattern of conduct also gives rise to the appearance of "cronyism” and "judge shopping”.
This Court, as well as the Commission, acknowledges many of the mitigating factors which the respondent presents. The Commission’s recommendation took into account all the mitigating factors, including "good faith”. Nevertheless, we agree that these factors do not counterbalance the respondent’s persistent abandonment of statutory procedures, court rules and simple fair play.
The respondent next claims, in a series of interrelated issues, that he acted in "good faith” at all times during these bond remission proceedings and his good faith stands as an absolute defense to any allegation of judicial misconduct. Again, we cannot agree.
There is no doubt that "good faith” should be considered as a mitigating factor to acts of misconduct but not as an affirmative defense to charges of misconduct. See, for example, Spruance v Commission on Judicial Qualifications, 13 Cal 3d 778; 119 Cal Rptr 841; 532 P2d 1209 (1975). The Commission has duly weighed the mitigating factors in recommending a public reprimand rather than a more severe penalty. We agree with the Commission’s recommendation in this matter.
Finally, the respondent asserts that the existence of appellate review to remedy a judge’s conduct divests the Commission of its jurisdiction to review that same conduct for the existence of judicial misconduct. We do not agree. Judicial conduct creating the need for disciplinary action can grow from the same root as judicial conduct creating potential appellate review, but one does not necessarily exclude the other. One path seeks to correct past prejudice to a particular party; the other seeks to prevent potential prejudice to future litigants and the judiciary in general. See In re Judges of Cedar Rapids Municipal Court, 256 Iowa 1135; 130 NW2d 553 (1964).
III. Conclusion
This Court has cited In re Greenberg, 442 Pa 411, 416; 280 A2d 370 (1971), and Tamm, Are Courts Going the Way of the Dinosaur?, 57 ABA J 228 (March, 1971), in two recent opinions concerning judicial misconduct:
"For generations before and since it has been taught that a judge must possess the confidence of the community; that he must not only be independent and honest, but, equally important, believed by all men to be independent and honest. A cloud of witnesses testify that justice must not only be done, it must be seen to be done/ Without the appearance as well as the fact of justice, respect for the law vanishes in a democracy.” (Emphasis added.)
See In the Matter of Del Rio, 400 Mich 665, 725; 256 NW2d 727 (1977), and In the Matter of Bennett, 403 Mich 178, 198; 267 NW2d 914 (1978).
We believe Judge Laster’s conduct in these bond remission proceedings has fallen short of this standard. His conduct in these matters has displayed, at the very least, an appearance of impropriety. An image of favoritism, cronyism and judge shopping is readily discerned. A strong, independent and honest judiciary cannot allow such an image to exist.
Therefore, Judge Laster is forthwith reprimanded for his conduct.
Coleman, Fitzgerald, and Blair Moody, Jr., JJ., concurred.
Const 1963, art 6, § 30(2).
In the Matter of Del Rio, 400 Mich 665; 256 NW2d 727 (1977); In the Matter of Mikesell, 396 Mich 517; 243 NW2d 86 (1976); In re Somers, 384 Mich 320; 182 NW2d 341 (1971).
Judge Del Rio was suspended from the recorder’s court bench for five years. The misconduct involving Judge Del Rio was much more serious and extensive than that of Judge Laster. However, it also included the clandestine remission of forfeited bail bonds. See In the Matter of Del Rio, supra, 713.
MCL 765.15; MSA 28.902.
If any such evidence were present, the penalty imposed would be much harsher. Today’s action is only premised upon the "evidence of record”.
From December, 1973, to September, 1976, Judge Laster remitted 65 bonds previously forfeited. Judge Del Rio remitted 44 bonds. No other recorder’s court judge remitted more than 11 bonds during this same period.
Canons of Judicial Ethics (applicable prior to October 1, 1974):
"Judicial Canon 4. Avoidance of Impropriety.
“A judge’s official conduct should be free from impropriety and the appearance of impropriety; he should avoid infractions of law; and his personal behavior, not only upon the bench and in the performance of judicial duties, but also in his everyday life, should be beyond reproach.”
See, inter alia, MCL 726.2; MSA 27.3552, MCL 765.15; MSA 28.902, GCR 1963, 772.4, and Recorder’s Court Rule 18. | [
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Coleman, J.
(to reverse). Section 3109(1) of the Michigan No-Fault Insurance Act requires that the amount of benefits payable under any no-fault insurance policy must be reduced by the amount of benefits payable to a beneficiary by the state or Federal government, but it does not also require an analogous set-off of benefits payable to a beneficiary by private health or accident insurance programs, which persons may voluntarily add to the basic no-fault insurance. The principal question presented is whether § 3109(1) discriminates against the recipients of government benefits in violation of the Equal Protection Clause of the state or Federal Constitutions. The Court of Appeals ruled in a 2 to 1 decision that § 3109(1) was unconstitutional. We reverse the decision of the Court of Appeals. The Legislature’s judgment that the recipients of private benefits should be treated differently from the recipients of government benefits is supported by a rational basis and should therefore be sustained. This distinction rationally promotes the legitimate legislative objectives of enabling persons with economic needs and/or wages exceeding the maximum benefits permitted under the No-Fault Act to obtain the supplemental coverage they need and of placing the burden of such extra coverage directly on the shoulders of those persons, instead of spreading it throughout the ranks of no-fault insureds.
A subsidiary question is whether § 3109(1) requires a set-off of Federal social security survivors’ benefits such as those received by the plaintiffs as a result of decedent’s death and, if so, whether this is totally arbitrary and thus violative of the Due Process Clause of the state or Federal Constitutions. We conclude that § 3109(1) does require a set-off of these government benefits but is not arbitrary because the benefits are paid as a result of the same accident and duplicate in varying degrees the no-fault benefits otherwise due. All persons who receive redundant government survivors’ benefits arising from one accident are treated the same and all are guaranteed a maximum survivor’s loss benefit of $1000 per month for three years. It therefore does not violate the Due Process Clause of the state or Federal Constitutions.
This opinion is confined to the facts before the Court and does not purport to encompass other possible government benefits.
I
Plaintiffs’ decedent was killed in an automobile accident in 1974. Plaintiffs qualified for survivors’ benefits under certain subdivisions of § 202 of the Federal Social Security Act which provide for the payment of secondary benefits to the dependents of a wage earner who is fully qualified to receive primary social security benefits at the time of death. Plaintiffs also qualified for survivors’ benefits under the no-fault insurance policy issued by the defendant to the decedent.
Section 3109(1) of the No-Fault Act requires the subtraction of government benefits from no-fault benefits otherwise due:
"Benefits provided or required to be provided under the laws of any state or the federal government shall be subtracted from the personal protection insurance benefits otherwise payable for the injury.”
The no-fault policy issued by the defendant to the decedent incorporated this legislatively mandated provision:
"Any amount payable by the company under the terms of this insurance shall be reduced by (a) the amount paid, payable or required to be provided under the laws of any state or the federal government * * * >>
Pursuant to this provision, the defendant subtracted the amount of survivors’ benefits payable by the Federal government to the plaintiffs from the amount of survivors’ benefits payable under the decedent’s no-fault policy and sent the plaintiffs a monthly check for the difference. The actual amount received by the plaintiffs from the Federal government and the defendant totaled $1000 per month, the maximum amount authorized by § 3108 of the No-Fault Act.
Plaintiffs sued the defendant in circuit court, alleging a breach of the insurance contract and contending that § 3109(1) violated the Due Process and Equal Protection Clauses of the Michigan and United States Constitutions. The circuit court granted a defense motion for summary judgment. The plaintiffs appealed to the Court of Appeals and that Court reversed in a 2 to 1 decision, the majority declaring that § 3109(1) was unconstitutional. The defendant appealed and we granted leave to appeal.
II
In Shavers v Attorney General, 402 Mich 554; 267 NW2d 72 (1978), Justice Williams explained the proper approach this Court must take when confronted with an equal protection or due process challenge to socioeconomic legislation such as the No-Fault Act:
"[I]n the face of a due process or. equal protection challenge, 'where the legislative judgment is drawn in question’, a court’s inquiry 'must be restricted to the issue whether any state of facts either known or which could reasonably be assumed affords support for it’. United States v Carolene Products Co, 304 US 144, 154; 58 S Ct 778; 82 L Ed 1234 (1938). * * * [Wjhere the legislative judgment is supported by ’any state of facts either known or which could reasonably be assumed’, although such facts may be 'debatable’, the legislative judgment must be accepted. Carolene Products Co v Thomson, 276 Mich 172, 178; 267 NW 608 (1936).”
In a footnote at the very end of this passage, further guidance was offered as to the limited nature of the Court’s role:
"See Ferguson v Skrupa, 372 US 726, 730-731; 83 S Ct 1028; 10 L Ed 2d 93 (1963), where the United States Supreme Court stated:
" '[C]ourts do not substitute their social and economic beliefs for the judgment of legislative bodies, who are elected to pass laws. As this Court stated in a unanimous opinion in 1941, "we are not concerned * * * with the wisdom, need, or appropriateness of the legislation.” Legislative bodies have broad scope to experiment with economic problems * * * . We refuse to sit as a "super-legislature to weigh the wisdom of legislation.” ’ ”
The proper test for judging socioeconomic legislation such us the No-Fuult Act was also stated in Shavers:
"The test to determine whether legislation enacted pursuant to the police power comports with due process is whether the legislation bears a reasonable relation to a permissible legislative objective. See Michigan Canners v Agricultural Board, 397 Mich 337, 343-344; 245 NW2d 1 (1976).
"The test to determine whether a statute enacted pursuant to the police power comports with equal protection is, essentially, the same. As the United States Supreme Court declared in United States Dep’t of Agriculture v Moreno, 413 US 528, 533; 93 S Ct 2821; 37 L Ed 2d 782 (1973):
" 'Under traditional equal protection analysis, a legislative classification must be sustained, if the classification itself is rationally related to a legitimate governmental interest.’ ”
This test recognizes and preserves the constitutional principle of separation of powers, which forms the fundamental framework of our system of government. Its purpose is to make certain that the judiciary does not substitute its judgment for that of the Legislature as to what is best or what is wisest. So long as the Legislature’s judgment is supported by a rational or reasonable basis, the choices made and the distinctions drawn are constitutional. The United States Supreme Court and our Court have instructed:
"If the classification has some 'reasonable basis’, it does not offend the Constitution simply because the classification 'is not made with mathematical nicety or because in practice it results in some inequality’. * * * 'The problems of government are practical ones and may justify, if they do not require, rough accommodations * * * ’ ”.
"If it be said, the law is unnecessarily severe, and may sometimes do injustice, without fault in the sufferer under it, our reply is: these are considerations that may very properly be addressed to the legislature, but not to the judiciary — they go to the expediency of the law, and not to its constitutionality.”
The responsibility for drawing lines in a society as complex as ours — of identifying priorities, weighing the relevant considerations and choosing between competing alternatives — is the Legislature’s, not the judiciary’s. Perfection is not required:
"[T]he drawing of lines that create distinctions is peculiarly a legislative task and an unavoidable one. Perfection in making the necessary classifications is neither possible nor necessary.”
Nor is it necessary that the Legislature deal with every aspect of a problem at the same time:
"[W]e are guided by the familiar principles that a 'statute is not invalid under the Constitution because it might have gone farther than it did,’ * * * that a legislature need not 'strike at all evils at the same time,’ * * * and that 'reform may take one step at a time, addressing itself to the phase of the problem which seems most acute to the legislative mind’ * * * »
In short, we do not sit "as a superlegislature to judge the wisdom or desirability of legislative policy determinations”. We sit as a court to determine whether there is a rational basis for the Legislature’s judgment. If there is, then that judgment must be sustained:
"It is not this Court’s role to decide whether the Legislature acted wisely or unwisely in enacting this statute. We will not substitute our own social and economic beliefs for those of the Legislature, which is elected by the people to pass laws.”
Ill
In order to facilitate analysis of whether § 3109(1) violates the Equal Protection Clause of the state or Federal Constitutions, we will first discuss the question of whether it requires a set-off of the social security survivors’ benefits received by the plaintiffs and, if so, whether this violates the Due Process Clause of the state or Federal Constitutions.
Section 3109(1) states:
"Benefits provided or required to be provided under the laws of any state or the federal government shall be subtracted from the personal protection insurance benefits otherwise payable for the injury.”
One of the most important principles of statutory interpretation is that the words of the statute should be construed in light of the Legislature’s intent. See, e.g., Moore v Dep’t of Military Affairs, 398 Mich 324; 247 NW2d 801 (1976). The history of § 3109(1) indicates that the Legislature’s intent was to require a set-off of those government benefits that duplicated the no-fault benefits payable because of the accident and thereby reduce or contain the cost of basic insurance.
In a letter to the Governor from the Commissioner of Insurance analyzing a series of proposed no-fault bills introduced in 1971, none of which contained a set-off provision, the Commissioner criticized the bills because they tended to "increase the duplication and overlap between auto insurance and other insurance programs, sick leave programs and social security”. Subsequent bills did contain set-off provisions. The final version of § 3109(1) was similar to an amendment suggested by the Commissioner. According to the Commissioner, the purpose of the amendment was "to provide a more complete and effective coordination of benefits between Michigan auto insurance and the benefits provided by the laws of all the states and the federal government”. As noted by Justice Williams in his opinion in this case, the Commissioner’s comments "make clear that the purpose of the § 3109(1) statutory scheme was framed in terms of maintaining or reducing premium costs for all insureds through the elimination of duplicative benefits recovery”.
The survivors’ benefits received by the plaintiffs pursuant to § 402 of the Federal Social Security Act duplicated the survivors’ benefits they received pursuant to the decedent’s no-fault insurance policy. The survivors’ benefits received pursuant to the no-fault policy were paid as a result of the decedent’s death and were based on § 3108 of the No-Fault Act, which states:
"Personal protection insurance benefits are payable for a survivors’ loss which consists of a loss, after the date on which the deceased died, of contributions of tangible things of economic value, not including services, that dependents of the deceased at the time of his death would have received for support during their dependency from the deceased if he had not suffered the accidental bodily injury causing death * * * ,”
The survivors’ benefits received pursuant to § 202 of the Social Security Act were likewise paid as a result of the decedent’s fatal accident and served substantially the same purpose as the no-fault benefits:
"As originally enacted in 1935, the Social Security Act authorized a monthly benefit for qualified wage earners at least 65 years old and a death benefit payable to the estate of a wage earner who died at an earlier age. 49 Stat 622-624. In 1939 Congress created secondary benefits for wives, children, widows, and parents of wage earners. See 53 Stat 1362, 1364-1366. The benefits were intended to provide persons dependent on the wage earner with protection against the economic hardship occasioned by loss of the wage earner’s support. Mathews v De Castro, 429 US 181, 185-186 [97 S Ct 431; 50 L Ed 2d 389 (1976)]. Generally speaking, therefore, the categories of secondary beneficiaries were defined to include persons who were presumed to be dependent on the wage earner at the time of his death, disability, or retirement.” (Emphasis added.)
Thus, the benefits received by the plaintiffs from the Federal government fell within the scope of § 3109(l)’s set-off.
This set-off is not arbitrary and it does have a rational basis. It promotes the valid legislative objectives of insuring payment for economic loss up to $1000 per month for three years and of attempting to reduce or contain the cost of no-fault insurance by eliminating some of the benefit duplication that would otherwise occur. The means chosen, a set-off of duplicative government benefits, is rationally related to that end. It reduces the amount that the insurance companies must pay out, making it possible for them to reduce the amount that they must charge, and it does so only in those situations where the benefits are redundant. Thus, as in the case at bar, all beneficiaries are eligible for up to $1000 per month for three years of survivors’ benefits to compensate for their loss. Social security survivors’ benefits are never interrupted. Having a rational basis, § 3109(1) does not violate the Due Process Clause of the state or Federal Constitutions.
IV
The remaining question is whether § 3109(1) discriminates against the recipients of government benefits in violation of the Equal Protection Clause of the state or Federal Constitutions.
It is undisputed that § 3109(1) treats the recipients of government benefits differently than it treats the recipients of private health or accident insurance benefits. It does not require that private benefits be set off against no-fault benefits otherwise due. Unlike the government benefit recipient, the recipient of private benefits can receive full no-fault survivors’ benefits up to the maximum of $1000 per month, plus full private benefits as well.
The mere fact that the Legislature has chosen to draw a distinction between government benefit recipients and private benefit recipients does not mean that § 3109(1) is unconstitutional. If this distinction is supported by a rational basis, then it passes constitutional muster.
The Legislature had to wrestle with several competing considerations when it was deciding whether the act should contain any set-offs and, if so, what kind of set-offs it should encompass. Because the first-party insurance proposed by the act was to be compulsory, it was important that the premiums to be charged by the insurance companies be maintained as low as possible. Otherwise, the poor and the disadvantaged people of the state might not be able to obtain the necessary insurance. Thus, there was a viable need for cost- cutting measures of some kind. Set-offs were one possibility. Another consideration was that the $1000 per month maximum established by § 3108 would leave many persons with economic losses and needs greater than that amount without adequate compensation. Large families would be especially hard hit by this cap on survivors’ benefits. Of course, the maximum recovery could be raised to some higher amount, but this would increase the cost of the program and spread higher premiums over all purchasers.
Faced with this dilemma, the Legislature chose to experiment with a compromise solution. First, all persons would be guaranteed up to $1000 per month survivors’ loss benefits under § 3108. This would provide adequate compensation for most people. Second, by virtue of § 3109(1), duplicative government benefits would be set off against no-fault benefits otherwise due. This would make it possible for all persons needing no-fault insurance to obtain it at less cost. Third, no set-off would be required for private health or accident insurance benefits. This would enable the persons with incomes or needs exceeding $1000 per month to purchase the extra coverage their families required by paying extra premiums without the hardship of (1) purchasing no-fault insurance, for the basic $1000 coverage and (2) purchasing another $1000 coverage to be set off against the basic insurance and then finally (3) purchasing whatever amount of private insurance in excess of that set-off $1000 required to cover income loss and family needs — all to be purchased with after-tax — as opposed to tax — dollars. It was finally resolved that these persons with extra needs would directly bear the burden of those needs; none of that burden would be borne by the no-fault system. The payment of extra premiums would pay in full for the extra coverage. Therefore, there would be no discrimination in this totally voluntary option.
This solution promotes several valid legislative objectives. It attempts to reduce the cost of basic no-fault insurance for everyone and make it possible for most persons to obtain most of the coverage they need. (It could, in fact, be discriminatory to prevent it.) Section 3109(1), the means chosen by the Legislature, is, as outlined above, rationally related to these legitimate objectives.
It is not necessary that we agree with the wisdom of the judgments made by the Legislature in order to uphold this section of the act. (We may or we may not agree, but that makes no difference.) Nor is it necessary that the supposed beneficial effects envisioned by the Legislature be verified at this time. As stated just a few months ago in Shavers with respect to other supposed benefits of the act:
"The fact that these effects are not yet evident does not diminish the legitimacy of the goals sought to be achieved or the reasonableness of the means adopted. At this early stage in the functioning of the No-Fault Act these long-term developments cannot yet fully be assessed. Indeed, this litigation itself, with its resulting uncertainty as to the viability of the No-Fault Act, may slow the achievement of the act’s goals. Our decision in Manistee Bank [& Trust Co v McGowan, 394 Mich 655; 232 NW2d 636 (1975)] is particularly relevant to this aspect of the case: it is precisely because regulation in the economic field often deals with long-term developments that the Court treats such -legislation with great deference.”
In time the Legislature may decide that the benefits originally associated with § 3109(1) have not materialized or that although they have materialized they are not worth the social and economic costs. However, the rational basis for the distinctions drawn by the Legislature between the recipients of government benefits and the recipients of private benefits — primarily the desire to make it possible for persons with requirements exceeding the benefits assured by the No-Fault Act to obtain the extra coverage they need without burdening other no-fault insurance purchasers— requires us to hold that § 3109(1) is constitutional.
V
Section 3109(1) did not attempt to address the problem of overlapping no-fault and private health or accident insurance benefits. Soon after the No-Fault Act was passed by the Legislature, however, an attempt was made to fine-tune the set-off provisions so that this kind of duplication could be reduced .while, still permitting persons with needs exceeding the benefits provided by no-fault insurance to obtain the extra coverage they required. The Legislature enacted § 3109a which states:
"An insurer providing personal protection insurance benefits shall offer, at appropriately reduced premium rates, deductibles and exclusions reasonably related to other health and accident coverage on the insured. The deductibles and exclusions required to be offered by this section shall' be subject to prior approval by the commissioner and shall apply only to benefits payable to the person named in the policy, the spouse of the insured and any relative of either domiciled in the same household.”
Although the Legislature did not choose to make this set-off mandatory, as it had done with § 3109(l)’s government benefit set-off, this distinction is justified by the perceived necessity of making it possible for persons with greater needs to obtain the coverage they require and pay reduced rates on the no-fault insurance through deductibles and exclusions approved by the Commissioner. That some persons can still slip through the colander of § 3109a and receive additional benefits does not mean the statute is unconstitutional. Mathematical precision is neither possible nor required.
Section 3109a promotes the valid legislative objective of reducing duplicative benefits; the means chosen is rationally related to that end; and the distinctions drawn are supported by a rational basis. This statute is also constitutional.
VI
Our brethren have raised the specter of Boettner v State Farm Mutual Ins Co, 388 Mich 482; 201 NW2d 795 (1972), and Blakeslee v Farm Bureau Mutual Ins Co, 388 Mich 464; 201 NW2d 786 (1972), in a footnote to their opinion. Neither of these cases was raised in the application for leave to appeal or briefed by any of the numerous parties who have participated in this case — and for good reason. Both are inapposite to the case. The question in each was whether certain set-off provisions created by insurance companies violated the Legislature’s statutorily declared public policy in favor of full recovery. In the case at bar, the Legislature has statutorily declared that the public policy of this state now favors certain set-offs. We have no authority to invalidate that legislative decision so long as it is supported by some rational basis.
VII
In Richardson v Belcher, 404 US 78; 92 S Ct 254; 30 L Ed 2d 231 (1971), the United States Supreme Court was faced with a challenge to a statute similar to the challenge that we face today. The Federal Social Security Act required a set-off of workers’ compensation benefits from the social security benefits otherwise due, but did not also require an analogous set-off of private benefits. The plaintiff claimed this distinction violated the equal protection guarantee implicit in the Due Process Clause of the Federal Constitution. The Court found that there was a rational basis for the distinction and affirmed the constitutionality of the set-off. The Court’s closing words provide an appropriate conclusion for the case at bar:
"We have no occasion, within our limited function under the Constitution, to consider whether the legitimate purposes of Congress might have been better served by applying the same offset to recipients of private insurance, or to judge for ourselves whether the apprehensions of Congress were justified by the facts. If the goals sought are legitimate, and the classification adopted is rationally related to the achievement of those goals, then the action of Congress is not so arbitrary as to violate the Due Process Clause of the Fifth Amendment.”
Reverse. No costs, a public question being involved.
Kavanagh, C.J., and Levin and Ryan, JJ., concurred with Coleman, J.
Williams, J.
This summary judgment case squarely raises both the facial equal protection and due process viability of § 3109(1) of the No-Fault Insurance Act, MCL 500.3101 et seq.; MSA 24.13101 et seq. Section 3109(1), commonly referred to as the governmental "set-off” provision, reads as follows:
"(1) Benefits provided or required to be provided under the laws of any state or the federal government shall be subtracted from the personal protection insurance benefits otherwise payable for the injury.” MCL 500.3109; MSA 24.13109.
A similar set-off, however, is not likewise mandated with respect to an insured’s directly financed private, collateral insurance benefits. As Federal Social Security survivors’ benefits supported by wage deductions are at issue in this case, we are not called upon to determine whether a set-off of free governmental transfer payments is constitutionally permissible.
The present controversy arose when defendant no-fault insurer sought to reduce its liability on the no-fault fund due plaintiffs, the no-fault insured’s statutory dependents, by the amount of Federal Social Security survivors’ benefits for which contributions had been made through Social Security wage deductions.
Plaintiffs first contend that the § 3109(1) statutory scheme operates to deny equal protection of the laws to the arbitrarily drawn class of governmental benefit no-fault insureds. Distilled to its essence, plaintiffs’ argument proceeds as follows. All no-fault insureds pay the same premium dollar for presumably identical no-fault coverage. No-fault insureds entitled to the receipt of certain governmental benefits, particularly Federal , Social Security survivors’ benefits, monetarily contribute to that governmental insurance system. No-fault insureds entitled to the receipt of private, collateral insurance benefits likewise monetarily contribute to that private insurance system. Further, the nature of those injuries compensable by tide governmental insurance system are frequently also compensable by funds emanating from the private insurance system. Based on these premises shared by both governmental and private, collateral insureds, plaintiffs conclude their syllogism with the contention that §3109(1) affords these two artificially created classes of similarly situated no-fault insureds widely divergent treatment without rational basis, as the disputed statutory scheme mandates the set-off of certain collateral benefits while not requiring the set-off of other similar collateral benefits solely on the basis of the source or fund from which those benefits spring. In short, plaintiffs contend that there exists no signif icant difference between a contributory governmental benefit program and a contributory private benefit program; both, therefore, should be treated similarly.
Formulating their analysis with reference to the traditional equal protection test, plaintiffs elaborate that there exists no rational relation between these two legislatively created classes of no-fault beneficiaries, on the one hand, and the admittedly permissible legislative purposes of duplicative benefit elimination or premium cost reduction, on the other, sufficient to constitutionally uphold the difference in treatment afforded these two similarly situated classes under this scheme. Plaintiffs allege that this conclusion is inescapable as duplicative benefit elimination is neither realized practically nor legally through the operation of § 3109(1) since the private beneficiary is permitted to retain duplicative benefits. Further, since the legislatively desired reduction in premium rates, if any, flows equally to both classes of no-fault insureds, its achievement is discriminately borne exclusively by the governmental benefit class of no-fault beneficiaries.
Plaintiffs additionally contend that § 3109(1) denies governmental benefit no-fault beneficiaries due process of law insofar as it mandates the set-off of all governmental benefits paid for by the recipient whether or not that benefit is casualty related as no-fault is. It is plaintiffs’ position that this statutory scheme does not bear a reasonable relation to an otherwise admittedly permissible legislative purpose. For example, according to its literal language, § 3109(1) would permit the set-off of a contributory governmental longevity pension benefit against a no-fault casualty benefit which is patently not duplicative of the longevity award.
Our opinion, in its simplest form, concludes that it is neither logical nor constitutionally permissible to either eliminate benefit duplication or accomplish premium reduction by subtracting personally paid-for Social Security survivors’ benefits from personally paid-for no-fault benefits while not likewise requiring a subtraction of analogous, personally paid-for private insurance benefits. We reach this conclusion on the following specific grounds: (i) § 3109(1) requires the reduction of alleged duplication in a patently discriminatory manner as it focuses its burden solely on one class of similarly situated no-fault insureds; (ii) the disputed statutory scheme operates to place the burden of commonly shared premium cost reduction, if any, on the Social Security survivor beneficiary class alone; and (iii) there exists no rational basis for subtracting paid-for longevity benefits from a paid-for casualty benefit since in no sense are such paid-for benefits duplicative. In reaching this conclusion, we are mindful that we are not dealing with the elimination of duplicative ex gratia governmental transfer payments.
We agree that, while a superficial distinction may exist between a contributory governmental insurance system and a contributory private insurance system, there exist no logically distinguishable characteristics relevant to the permissible legislative judgment which constitutionally justify the disparate treatment afforded those persons receiving collateral governmental benefits and those persons receiving collateral private benefits, where both classes have received a common premium reduction, if any, and both, at least in the case of Federal Social Security survivors’ benefits, have made payments to secure the coverage authorizing the governmental and private benefits. See 42 USC 401. As such, the §3109(1) statutory scheme is facially unconstitutional insofar as it creates two differently treated classes based solely on the source from which the collateral compensation emanates. We, therefore, affirm the Court of Appeals reversal of the trial court’s grant of summary judgment to defendant insurer with respect to the constitutionality of this scheme.
I. Facts
Gary O’Donnell was fatally injured in an automobile collision on February 19, 1974. Plaintiffs are the wife and children of decedent.
The decedent was insured under a "no-fault” automobile policy issued by defendant State Farm Mutual Automobile Insurance Company, pursuant to the Michigan No-Fault Insurance Act, 1972 PA 294 (hereinafter referred to as the "No-Fault Act” or "the Act”).
Plaintiffs are dependents of decedent for purposes of Social Security survivors’ benefits under defendant’s insurance policy as well as under § 3110 of the No-Fault Act.
Decedent’s insurance policy with defendant provided that plaintiffs, as dependents, were entitled to recover survivors’ benefits not to exceed $1,000 per 30-day period. Section 3108 of the No-Fault Act provides that plaintiffs are entitled to a maximum survivors’ benefits recovery of $1,000 per 30-day period for three years following decedent’s death.
Decedent’s insurance policy further provided, in relevant part, that:
"(5) Any amount payable by the company under the terms of this insurance shall be reduced by (a) the amount paid, payable or required to be provided under the laws of any state or federal government * * * .”
This reduction in payments mandated by paragraph (5)(a) of defendant’s insurance policy is similarly mandated by § 3109(1) of the No-Fault Act, which states:
"Benefits provided or required to be provided under the laws of any state or the federal government shall be subtracted from the personal protection insurance benefits otherwise payable for the injury.” MCL 500.3109(1); MSA 24.13109(1).
Plaintiffs qualified for Federal Social Security survivors’ benefits totaling $556 per month. Pursuant to both paragraph (5)(a) of the insurance policy and § 3109(1) of the No-Fault Act, defendant reduced plaintiffs’ $1000-maximum recoverable personal protection insurance benefits by $556 (the amount of Federal Social Security survivors’ benefits owing plaintiffs) and paid plaintiffs $444 per month. During the pendency of this litigation, plaintiffs’ survivors’ benefits have increased approximately 35% thereby reducing defendant’s no-fault liability to $243.20 per month.
Plaintiffs filed a two-count complaint in circuit court. Count I alleged that defendant had breached the insurance contract by not paying plaintiffs the full $1,000 per month in benefits. Count II requested declaratory judgment with respect to the question of whether the statutory scheme relating to § 3109 of the No-Fault Act violated the Due Process and Equal Protection Clauses of the Michigan and United States Constitutions. Plaintiffs’ complaint requested declaratory relief as follows:
"a. That MCLA 500.3109 [MSA 24.13109] is a denial of due process of law as provided in the Fifth and Fourteenth Amendments to the United States Constitution and Article I, Section 17 of the Michigan Constitution for the reason that said act bears no reasonable relationship to the purpose of the act and that said act deprives those who are receiving governmental benefits from receiving the no-fault benefits for which premiums were paid.
"b. That MCLA 500.3109 [MSA 24.13109] is a denial of equal protection * * * for the reasons that said act is arbitrary and discriminatory in that it creates two different classes (governmental benefit recipients and non-governmental benefit recipients) solely upon the source from which the extra compensation is paid.”
Defendant moved for summary judgment on both counts; defendant did not file supporting affidavits. The trial court properly restricted its inquiry to whether the complaint failed to state a claim upon which relief could be granted. GCR 1963, 117.2(1).
The trial court granted defendant’s motion for summary judgment. The court held in its order:
"1. That count I of plaintiffs’ complaint fails to state a cause of action for the reason that plaintiffs’ complaint fails to state facts which allege that the defendant breached any of the provisions of said contract.
"2. That count II of plaintiffs’ complaint fails to state a cause of action in that State Farm Mutual Automobile Insurance Company, in entering a contract of insurance which conforms to the requirements of the Michigan statutes, and- in particular MCLA 500.3109 [MSA 24.13109], is not itself engaged in state action; consequently, any claim that the contract is itself unconstitutional is unsupportable as a matter of law.”
On August 4, 1976, the Court of Appeals in separate opinions written by Judge T. M. Burns and Judge V. J. Brennan (Presiding Judge Bashara dissenting) affirmed the trial court’s summary judgment as to count I and reversed the trial court’s grant of summary judgment as to count II. Although referring to "a fundamental due process issue” inherent in the statutory scheme under § 3109(1), the majority opinions essentially concentrated on plaintiffs’ equal protection challenge. The thrust of the Court of Appeals holding was that the classification matrix created by the statutory scheme of § 3109(1) — allowing the full receipt of both no-fault personal injury protection insurance benefits and private insurance benefits to one class of persons while deducting from the no-fault personal injury protection benefits of another class of persons any benefits received under the laws of any state or the Federal government — did not bear a rational relationship to a "legitimate purpose” and arbitrarily discriminated "against those who receive certain governmental benefits”. 70 Mich App 487, 498.
Judge Bashara, in his dissent, would: (1) uphold the trial court’s ruling as to count I of plaintiffs’ complaint; (2) overrule the trial court’s ruling that there was no "state action” involved in this case; and (3) hold that, with respect to the constitutional questions raised by plaintiffs, "the proper procedure is to remand to the trial judge”. 70 Mich App 487, 503.
Defendant appealed the Court of Appeals decision. On August 27, 1976, this Court granted defendant leave to appeal and ordered such appeal to be submitted to this Court with Shavers v Attorney General, 402 Mich 554; 267 NW2d 72 (1978). In light of our detailed consideration of the no-fault insurance scheme undertaken in Shavers, we are now prepared to decide this case on grounds of facial unconstitutionality.
II. General Issues Presented
After a thorough review of the exhaustive pleadings submitted in this case, we perceive the following issues:
(1) whether the trial court erred in granting for defendant a summary judgment with respect to count I of plaintiffs’ complaint (alleging that defendant had breached the insurance contract in issue by not paying to plaintiffs $1,000 per month in benefits) on the ground that "plaintiffs’ complaint fails to state facts which allege that the defendants breached any of the provisions of said contract”;
(2) whether the trial court erred in granting for defendant a summary judgment with respect to count II of plaintiffs’ complaint (requesting declaratory judgment with respect to whether the statutory scheme established by § 3109[1] is violative of due process and equal protection) on the ground that defendant "is not itself engaged in state action”;* and
(3) whether the trial court erred in its rationale for disposing of issue (2), supra, with respect to whether the statutory scheme established by § 3109(1) violates the Due Process and Equal Protection Clauses of the Michigan and United States Constitutions. More specifically, based on the facts of this case we will consider whether the § 3109(1) statutory scheme operates to deny that class which has paid for its governmental benefits, including Federal Social Security survivors’ benefits, both equal protection and due process of law. We do not express any opinion with respect to the constitutionality of a set-off of non-contributory, ex gratia governmental transfer payments.
We answer the first issue in the negative and the latter two constitutional issues in the affirmative.
III. Breach of Contract and State Action Issues
Issues (1) and (2), supra, need not detain us long. As Judge Bashara stated with respect to these issues in his dissenting Court of Appeals opinion:
"I am of the opinion the trial judge correctly ruled that count I failed to allege breach of contract. The facts pled do not allege breach of contract because the insurance contract provided for a reduction in no-fault benefits to the extent of government benefits received.
"The heart of this lawsuit is count II. The proscriptions of the Fourteenth Amendment, US Const, Am XIV, apply to actions of the state and not merely private conduct. Shelley v Kraemer, 334 US 1; 68 S Ct 836; 92 L Ed 1161 (1947). The Fourteenth Amendment applies to all state legislation which impairs all due process or denies equal protection. Civil Rights Cases, 109 US 3, 11; 3 S Ct 18; 27 L Ed 835 (1883).
"It is undisputed that the basis for paragraph (5)(a) of the insurance policy is the legislative enactment of MCLA 500.3109(1); MSA 24.13109(1). This is a state action. See Peterson v City of Greenville, 272 US 244; 83 S Ct 1119; 10 L Ed 2d 323 (1963). I believe the trial judge erred in determining there was no state action, and consequently failing to consider the constitutional questions raised.” 70 Mich App 487, 502-503.
We are persuaded by the majority’s conclusion as well as dissenting Judge Bashara’s reasoning in this regard. We specifically adopt Judge Bashara’s analysis as to issues (1) and (2) of this opinion. Accordingly, we need only further address issue (3), supra, i.e., the consideration of plaintiffs’ request for declaratory relief with respect to the question of whether the statutory scheme under § 3109(1) violates the Due Process and Equal Protection Clauses of the Michigan and United States Constitutions.
IV. Plaintiffs’ Constitutional Attack on the § 3109(1) Statutory Scheme: The Applicable Equal Protection and Due Process Tests
Since this final issue involves both facial due process and equal protection challenges to a statu tory scheme of the Michigan No-Fault Insurance Act, our discussion in Shavers concerning the appropriate constitutional standards in this area is apposite. In Shavers, this Court held that the "traditional” substantive due process and equal protection tests espoused by this Court in its consideration of other social welfare and general economic legislation were the applicable standards by which to consider constitutional challenges to the various statutory schemes of the No-Fault Act. 402 Mich 554, 611-618. Manifestly, these tests must likewise be applied in the case at bar.
We articulated the applicable "traditional” due process test in the following terms:
"The test to determine whether legislation enacted pursuant to the police power comports with due process is whether the legislation bears a reasonable relation to a permissible legislative objective.” 402 Mich 554, 612.
Further, citing the United States Supreme Court’s admonitions in United States Dep’t of Agriculture v Moreno, 413 US 528, 533; 93 S Ct 2821; 37 L Ed 2d 782 (1973), this Court articulated the "traditional” equal protection standard to be applied in this area of concern. We stated:
" 'Under traditional equal protection analysis, a legislative classification must be sustained, if the classification itself is rationally related to a legitimate governmental interest.’ ” 402 Mich 554, 613.
The details of this test were elaborated upon by Justice Ryan in his separate opinion in Shavers:
"Reduced to its simplest, the equal protection guarantees of both constitutions mean that the Legislature may not take what may be termed a 'natural class of persons’, split that class in two, and then arbitrarily designate the severed factions of the original unit as two classes and thereupon enact different rules for the treatment of each. However, when there is a natural difference between the situation or circumstances of the two classes of persons, the Legislature may be justified in treating them differently. The state enjoys a wide range of discretion in distinguishing, selecting, and classifying, and it is sufficient if a classification is practical and not palpably arbitrary. Orient Ins Co v Daggs, 172 US 557; 19 S Ct 281; 43 L Ed 552 (1899).” 402 Mich 554, 662.
In deference to the legislative wisdom, we made clear that in the application of these tests, "it is axiomatic that the challenged legislative judgment is accorded a presumption of constitutionality”. 402 Mich 554, 613.
Recognizing that the presumption of constitutionality to be accorded judgments of the Legislature is rebuttable in nature, we indicated that:
"a party challenging the legislative judgment may attack its constitutionality in terms of purely legal arguments (if the legislative judgment is so arbitrary and irrational as to render the legislation unconstitutional on its face) *. * * .” 402 Mich 554, 614.
Cognizant of the bifurcated analytic approach and general principles established in Shavers, our task in deciding the constitutional questions presented herein must be as follows:
In considering plaintiffs’ due process and equal protection challenges to the statutory scheme under § 3109(1), this Court must (i) determine whether plaintiffs have overcome the "presumption of constitutionality” by establishing through legal argument or otherwise that the evil identified by the statutory scheme under § 3109(1) is entirely without basis; and (ii) determine whether either the statutory scheme or classification matrix drawn under § 3109(1) is reasonably related to the legislative purpose of correcting the evil that is rationally identified.
We are of the opinion that while the first prong of this analysis has been satisfied, the statutory scheme is deficient on its face as to the second prong, thereby rendering § 3109(1) unconstitutional on its face at least insofar as the subtraction of Federal Social Security survivors’ benefits is concerned.
V. Discussion: Legislative Purpose and Statutory Classification
As indicated, supra, in testing both equal protection and due process attacks to statutory schemes under the No-Fault Act, the Court must first determine whether the challenged scheme has a valid legislative purpose.
In Shavers v Attorney General, supra, we opined that "[t]he goal of the no-fault insurance system was to provide victims of motor vehicle accidents assured, adequate, and prompt reparation for certain economic losses”. 402 Mich 554, 578-579. Consistent with this legislative objective was the apparent legislative determination to either reduce or contain presently rising levels of premium costs borne by all insureds.
The Court of Appeals reasoning in this case, handed down prior to our decision in Shavers, implicitly recognized this comprehensive legislative judgment. Judge T. M. Burns, writing for the majority of that Court, further discerned the purpose of § 3109(1) in the following manner:
"Presumably, the purpose of § 3109(1) is to reduce the overall cost of the no-fault program by eliminating duplicative recovery. If the insurer has to pay less, he can charge less. As recognized in Shavers [65 Mich App 355; 237 NW2d 325 (1975)], the reduction of the cost of insurance is a proper basis for classification, and prohibitive cost was a problem that needed solution.” 70 Mich App 487, 495.
We are satisfied that the legislative objective sought to be achieved by the promulgation of the disputed statutory scheme encompasses either the objectives of duplicative benefit elimination or premium cost reduction, or both. This characterization of the disputed scheme’s purpose finds support in both the legislative history of § 3109(1) and the majority of those cases considering the constitutionality of this scheme.
Considering the comprehensive legislative objective sought to be effectuated by the promulgation of this Act, we find the purpose of the statutory scheme under consideration to be both an exercise of permissible legislative judgment and rationally based. In deference to this legislative judgment, we must conclude that the first requirement of the traditional equal protection test has been fulfilled; plaintiffs have not overcome the presumption that the challenged statutory scheme has a valid legislative purpose.
Having so concluded, as did the Court of Appeals, we must now address ourselves to whether the challenged classifications and means engineered under the §3109(1) statutory scheme are reasonably related to this legitimate governmental purpose. We conclude, as did the jurists in the analogous principal cases of Fox v Employment Security Comm, 379 Mich 579; 153 NW2d 644 (1967), and Bowser v Jacobs, 36 Mich App 320; 194 NW2d 110 (1971), that the classification matrix drawn by the Legislature is without the force of requisite logic and is therefore both unconstitutionally arbitrary and discriminatory where contributions have been made by the insured for those governmental benefits, including Federal Social Security survivors’ benefits, sought to be set-off by § 3109(1). This conclusion is occasioned whether we perceive the purpose of the statutory scheme to be one of duplicative benefit elimination, or premium cost reduction.
VI. Equal Protection Challenge
The gravamen of plaintiff’s equal protection challenge to § 3109(1) is that, while the purpose of the statutory scheme may be a permissible one, there exist no naturally distinguishable characteristics relevant to the permissible legislative judg ment which rationally justify the disparate treatment afforded these two classes. The only apparent distinction between these classes — the source of the collateral benefits — does not constitutionally justify the disparate treatment afforded those no-fault insureds receiving collateral governmental benefits and those no-fault insureds receiving collateral private insurance benefits.
On the contrary, the identity of class characteristics is patent. Both classes have received the same premium cost reduction, if any, both classes have paid the same premium dollar for identical no-fault coverage, and both, at least in the case of Social Security survivors’ benefits, have made monetary contributions to secure the coverage authorizing both the governmental and private benefits. Further, plaintiffs cite persuasive legal authority in support of their contentions.
Defendants, on the other hand, allege that there exist distinguishing characteristics between governmental fund coverage and private insurance fund coverage which justify the disparate treatment afforded these two classes of no-fault recipients in furtherance of what defendant perceives to be the legislative objective of the No-Fault Act, i.e., the structuring of no-fault insurance as a secondary rather than as a primary source of compensation. Additionally, defendant attempts to distinguish and rebut plaintiffs’ legal authority on the basis of Richardson v Belcher, 404 US 78; 92 S Ct 254; 30 L Ed 2d 231 (1971), attempts to factually distinguish mandatory governmental and voluntary private insurance benefits, and alleges that the amendment of the No-Fault Act with the addition of § 3109a operates to cure the disputed statutory scheme of any constitutional violations otherwise arguably involved.
In the instant case, we are not called upon to consider whether the absence of monetary contribution by an insured to a governmental insurance system would have a favorable impact on the legislative justification for separate classification. Rather, we are here confronted with the Legislature’s attempt to set off those benefits emanating from a contributory governmental scheme. Especially because of this significant distinction, we are persuaded by plaintiffs’ arguments that § 3109(1) is arbitrary and discriminatory insofar as it treats similarly situated no-fault insureds differently through its creation of two distinct classes solely upon the source from which the extra compensation is paid.
In view of the facts here that (i) both classes of no-fault insureds pay the same premium dollar for identical maximum personal protection no-fault coverage, (ii) both classes have received a common premium cost reduction, if any, and (iii) both classes have monetarily contributed to secure the coverage authorizing both governmental and private benefits, we must find this statutory scheme facially violative of traditional equal protection mandates. Our conclusions in this regard are supported by analogous Michigan precedent: Fox v Employment Security Comm, 379 Mich 579; 153 NW2d 644 (1967); Bowser v Jacobs, 36 Mich App 320; 194 NW2d 110 (1971).
A. Duplicative Beneñt Elimination
If the legislative purpose of the statutory scheme before us is considered to involve the elimination of duplicative recovery, it is apparent that this permissible purpose is neither practically nor constitutionally realized by the § 3109(1) classification matrix as the distinction in classes is based solely on the source from which the collateral compensation is paid. Section 3109(1) irrationally permits the retention of duplicative no-fault and private insurance benefits by that class which has directly engaged such collateral, private insurance. Yet, it concurrently mandates the reduction of insurer-paid no-fault benefits by the amount of benefits likewise directly paid for by the no-fault insured yet fortuitously received under the auspices of a governmental program. We cannot sanction this irrational class differentiation.
This finding of unconstitutionally disparate classification is further emphasized when one notes that § 3109a, MCL 500.3109a; MSA 24.13109(1), provides for an optional set-off of private, collateral insurance benefits at the election of the in sured, while § 3109(1) mandates such a set-off whether the governmental benefit recipient desires such a subtraction or not. There is no logic to support this difference in an attempt to eliminate duplicative recovery.
B. Premium Cost Reduction
Similarly, pursuant to the classifications drawn by the Legislature in enacting § 3109(1), all Michigan motorists pay the same uniform premium rate for no-fault coverage but all do not receive the same benefits. It is urged by defendant that such classifications are permissible means for achieving the lowering of premium rates. We do not agree as § 3109(1) focuses the burden of premium cost reduction on governmental benefit recipients alone. That class is confronted with a set-off while similarly situated private insureds who benefit from this premium reduction are not. This conclusion obtains whether we review § 3109(1) alone or in conjunction with § 3109a.
Section 3109a, MCL 500.3109a; MSA 24.13109(1), provides in relevant part:
"An insurer providing personal protection insurance benefits shall offer, at appropriately reduced premium rates, deductibles and exclusions reasonably related to other health and accident coverage on the insured. * * *
The effect of this section is to permit a no-fault insured who has engaged collateral, private insur anee to receive a reduction in premium rates if that insured has elected a set-off of private, collateral benefit amounts. Section 3109(1), on the other hand, compels an insured to pay the full premium rate while concurrently requiring acquiescence to a mandatory set-off of governmental benefits for which the insured has paid.
In a real sense, both classes of insureds have paid for their collateral benefits whatever form those benefits have assumed. Yet, those who have engaged private, collateral benefits are permitted to recoup some of their collateral benefit costs through an appropriate premium reduction pursuant to § 3109a while those who receive governmental benefits are denied a similar recoupment of some of their out-of-pocket collateral benefit costs through an equally appropriate premium reduction. In effect, private collateral benefit no-fault insureds are disproportionately permitted larger no-fault benefits for their elected full or reduced premium rate payment than are similarly situated governmental benefit recipient-insureds at the mandatory full premium rate.
Further, proceeding from an analysis of § 3109(1) alone, we are similarly convinced that the burden of effectuating the permissible premium cost reduction objective unconstitutionally rests solely upon the governmental benefit class of no-fault insureds. Unlike the collateral private insured class, the governmental recipient insured class is first compelled to purchase no-fault insurance, denied full no-fault coverage on claims compensable by governmental programs ostensibly for the purpose of reducing premiums, and is then denied the full benefit of the savings in premiums while the similarly situated private benefit class is not. In essence, this scheme operates both arbitrarily and discriminately to compel those insureds entitled to both government and no-fault benefits to subsidize premium savings for the greater class of all insureds including those entitled to receive and hold private insurance benefits.
C. Equal Protection Case Analysis
We find support for our conclusion of facial unconstitutionality in the case law as developed by the courts of this state. Indeed, both this Court and the Court of Appeals have earlier been faced with equal protection challenges to analogous governmental set-off schemes; these challenges were presented in both Fox v Employment Security Comm, 379 Mich 579; 153 NW2d 644 (1967), and Bowser v Jacobs, 36 Mich App 320; 194 NW2d 110 (1971).
In Fox, weekly unemployment benefits were statutorily denied to those employees receiving total permanent, partial permanent, or temporary disability workers’ compensation benefits. Recipients of workers’ death benefits, "specific loss” benefits, and those employees who elected to accept a "lump sum” workers’ compensation award, how ever, were statutorily permitted to receive weekly unemployment compensation.
Justice T. M. Kavanagh, writing for the majority, opined that the object of the disputed statutory scheme was to preclude the possibility of benefit duplication; this object was identified by the Court as a permissible legislative purpose. The distinction drawn by the Legislature between the two classes of potential weekly unemployment compensation recipients on the basis of a worker’s eligibility for either permanent or temporary compensation as opposed to death benefits, "specific loss” benefits, and "lump sum” benefits, however, was held to be an impermissible, arbitrary classification scheme. This was so, the Court opined, because under the statutory scheme certain workers were permitted to obtain unemployment benefits while others similarly situated were not. Citing People v Chapman, 301 Mich 584; 4 NW2d 18 (1942), which quoted from Haynes v Lapeer Circuit Judge, 201 Mich 138; 166 NW 938 (1918), the Court stated:
"' "Legislation which, in carrying out a public purpose for the common good, is limited by reasonable and justifiable differentiation to a distinct type or class of persons is not for that reason unconstitutional because class legislation, if germane to the object of the enactment and made uniform in its operation upon all persons of the class to which it naturally applies; but if it fails to include and affect alike all persons of the same class, and extends immunities or privileges to one portion and denies them to others of like kind, by unreasonable or arbitrary subclassification, it comes within the constitutional prohibition against class legislation.” ’ ” 379 Mich 579, 589.
Under the auspices of the "traditional” equal protection test, the Court held that the disputed statutory classification scheme denied plaintiffs equal protection despite its attempt to effectuate a permissible legislative objective of duplicative benefit elimination.
While we are cognizant that Fox is not a direct analogue of the present action, we believe it persuasively offers support for the proposition that the classifications drawn here are violative of equal protection. In fact, we are of the opinion that the Fox Court went further than we are presently required to proceed in finding a governmental set-off scheme constitutionally infirm in that neither the unemployment nor workers’ compensation beneficiaries made any financial contribution for their benefit rights whereas in the instant case the beneficiaries made contributions for all benefit rights.
Further support for our ruling of facial unconstitutionality is found in the closely analogous case of Bowser v Jacobs, 36 Mich App 320; 194 NW2d 110 (1971) (now-Justice Levin, dissenting and recommending remand for further findings of fact). In Bowser, the Court of Appeals considered the equal protection viability of a statutory scheme under the Motor Vehicle Accident Claims Act. The disputed scheme operated to totally bar those employees entitled to workers’ compensation from applying for benefits under that act. Those claimants similarly situated, but who had nonetheless secured voluntary collateral, private insurance, however, were permitted recourse against the fund. The majority agreed with the plaintiffs’ concern that the classification was violative of "traditional” equal protection mandates. Writing for the Court, Chief Judge Lesinski stated:
"The legislative aim of this social legislation * * * is to compensate those injured by uninsured tortfeasors who would otherwise have had no source of recovery. But, as we have seen, some persons who have available avenues of recovery are permitted to reach the Fund but injured employees are not. We are constrained to agree that the legislature has arbitrarily carved out this class from those who have recourse to the Fund. This classification is one made without the force of compelling logic; we find it unconstitutionally discriminatory.” 36 Mich App 320, 328.
Defendant characterizes Bowser as inapt on the ground that the statutory scheme presently under consideration merely mandates a set-off in recovery while the Bowser statutory scheme required a total bar to recovery. We do not find this distinction persuasive, especially in view of the fact that in both Bowser and the case at bar the concern is one of statutory classification rather than the aggregáte amount of an insured’s recovery. We find the basis of the Bowser court’s reasoning appropriate for consideration in the matter before us.
Defendant’s principal rebuttal to the Court of Appeals ruling of unconstitutionality rests upon the decision of the United States Supreme Court in Richardson v Belcher, 404 US 78; 92 S Ct 254; 30 L Ed 2d 231 (1971) (Justices Douglas, Marshall and Brennan dissenting). We find this arguable, but distinguishable and not persuasive.
The facts presented in Richardson required the United States Supreme Court to consider a "traditional” equal protection challenge to § 224 of the Social Security Act. The disputed statutory scheme required the set-off of state and Federal workers’ compensation benefits against Federal Social Security disability benefits. Those similarly situated but entitled to voluntary, private benefits, however, were not required to maintain a similar set-off. The Supreme Court, in a 4 to 3 decision, ruled that the difference in treatment accorded these two classes was not constitutionally infirm considering the peculiar legitimate legislative purpose sought to be furthered by the scheme, i.e., the affirmance and encouragement of state workers’ compensation schemes. Justice Stewart writing for the majority in Richardson stated:
"It is self-evident that the offset reflected a judgment by Congress that the workmen’s compensation and disability insurance programs in certain instances served a common purpose, and that the workmen’s compensation programs should take precedence in the area of overlap.
" * * * The original purpose of state workmen’s compensation laws was to satisfy a need inadequately met by private insurance or tort claim awards. Congress could rationally conclude that this need should continue to be met primarily by the States, and that a federal program that began to duplicate the efforts of the States might lead to the gradual weakening or atrophy of the state programs.” 404 US 78, 82-84.
We are convinced that Richardson is manifestly distinguishable from the case at bar.
First, the United States Supreme Court’s ruling specifically relied on the Federal-state relationship and the congressional desire not to encroach upon a state program. That policy is obviously not present in the instant case.
Second, factually the two situations under comparison markedly differ. This is so in two pivotal respects.
The first significant factual distinction centers on the fact that Richardson concerned the set-off relationship of two non-beneficiary contributory systems from which the insured would benefit gratuitously, whereas the instant case concerns the set-off relationship of two beneficiary contributory systems. Unlike the situation posed in Richardson, this Court is not required to rule on a legislative classificatory attempt to eliminate redundant, free transfer payments; rather, we are faced with a manifestly distinguishable attempt to set off insured-financed governmental benefits against insured-financed private no-fault coverage.
The second significant factual distinction involves the circumstance that the Richardson scheme sought to set off a disability benefit against a disability benefit, whereas the scheme under review seeks to set off a longevity benefit against a disability benefit. We find this dissimilarity compelling.
Third, we find Richardson distinguishable in terms of the legislative purposes sought to be accomplished by the statutory schemes engineered by the United States Congress and the Michigan Legislature. Reduced to their common denominator, both schemes have as an apparent legitimate purpose the elimination of duplicative recovery. This elimination was sought to be achieved by these two legislative bodies, however, through two entirely different vehicles. Indeed, in Richardson, Congress enacted a set-off provision as a vehicle to reduce the Federal government’s risk on its own Federal, governmental fund. Here, unlike Richardson, the Michigan Legislature has enacted a set-off as a vehicle to reduce the private insurance industry’s risk on a private insurance fund. In essence, the § 3109(1) scheme operates to either partially or completely discharge private contractual, no-fault obligations while the Richardson scheme operated to discharge public obligations created and controlled by Congress pursuant to its general welfare powers.
On the basis of the foregoing analysis of Richardson, we are persuaded that the majority’s reasoning and holding therein is not dispositive of the case before us as suggested by defendant. We are further persuaded that the conceptual analysis offered in both Fox and Bowser is both appropriate for our present consideration and supportive of our finding of facial unconstitutionality.
VII. Due Process Challenge
Plaintiffs additionally contend that the § 3109(1) statutory scheme is facially unconstitutional as it confiscates property in the form of personally financed premium payments without due process of law. In support of this contention, plaintiffs forward essentially the same analysis as provided in their equal protection challenge to § 3109(1). Defendant similarly rests upon the same analysis it proffered to rebut plaintiffs’ equal protection challenges.
We have consistently opined that the over-all objective of the No-Fault Act is to adequately, assuredly, and promptly compensate victims of automobile accidents for certain economic losses. We have likewise determined that the statutory scheme engineered by § 3109(1) has as its permissible purpose either the elimination of duplicative recovery or the reduction of premium costs for all insureds.
It is beyond peradventure that payment of personal protection insurance benefits as well as the payment of governmental benefits under the no-fault scheme are triggered by an injury arising from a compensable automobile accident and resulting in economic loss to the insured. Yet, the broad statutory language of § 3109(1) irrationally permits the set-off of non-accident as well as accident related governmental benefits.
Indeed, the unqualified, overbroad language of § 3109(1) indicates the absurd result that not only may the insurer subtract insured subsidized accident-related Social Security benefits as here, but the insurer may also set off e.g., Federal, state, municipal and employee pension and disability plans, veterans’ benefits, and other non-automobile casualty related benefits paid from a governmental fund and financed by the recipient insured. No doubt, were we to hold this section constitutional, we could envision an insurer setting-off an insured’s governmental pension benefits awarded because of the insured’s employment longevity, against the insurer’s no-fault liability for injury occasioned in an automobile accident.
It is clear from the above example that the language of this scheme is unconstitutionally over-broad and devoid of means rationally related to an otherwise legitimate legislative purpose.
VIII. Conclusion
We find that the elimination of duplicative benefits and the maintenance or reduction of premium costs are permissible exercises of the legislative judgment. We are not persuaded, however, that either the classifications drawn or the means selected by the Legislature to effectuate this judgment through the enactment of § 3109(1) reasonably relate to these otherwise legitimate governmental purposes.
Accordingly, we find the statutory scheme of § 3109(1) to facially deny plaintiffs both due process and equal protection of the laws.
Having found § 3109(1) facially unconstitutional, we likewise find the contract provision invalid as offensive to public policy. See, e.g., State Farm Mutual Automobile Ins Co v Shelly, 394 Mich 448; 231 NW2d 641 (1975).
Although the Court of Appeals found § 3109(1) to be of no effect as of the date of its enactment, we hold that in the interests of justice our declaration of unconstitutionality must be given only limited retroactive effect. We, therefore, hold the ruling announced today to be applicable to: (i) the instant case and all lower court cases presently pending which have raised this issue but in which a decision has not been rendered; (ii) all appropriate future cases in which this section is disputed subsequent to the date of this opinion; (iii) those cases in which a retrial is to occur after the date of this opinion because of remand on any other issue where the § 3109(1) set-off issue has been raised; and (iv) those cases pending on appeal or eligible for appeal after the date of this opinion in which this issue has been adequately preserved.
We affirm the Court of Appeals finding of unconstitutionality and order entry of judgment consistent with this opinion. No costs, a public question being involved.
Fitzgerald and Blair Moody, Jr., JJ., concurred with Williams, J.
MCL 500.3109(1); MSA 24.13109(1).
MCL 500.3101 et seq.; MSA 24.13101 et seq.
Const 1963, art 1, § 2; US Const, Am XIV.
70 Mich App 487; 245 NW2d 801 (1976).
Const 1963, art 1, § 17; US Const, Am XIV.
42 USC 402.
42 USC 401 etseq.
The pleadings do not indicate the specific subdivisions of § 402 under which the plaintiffs qualified for secondary benefits. We assume that they qualified under subdivision e, widow’s benefits, and/or subdivision g, mother’s benefits.
MCL 500.3109(1); MSA 24.13109(1).
Appellant’s appendix, p 12a.
MCL 500.3108; MSA 24.13108.
70 Mich App 492-500; 245 NW2d 802-806.
397 Mich 848 (1976).
Shavers, supra, 613-614.
Id., fn 38, p 614.
Id, 612-613.
Dandridge v Williams, 397 US 471, 485; 90 S Ct 1153; 25 L Ed 2d 491 (1970), Weinberger v Salfi, 422 US 749, 769; 95 S Ct 2457; 45 L Ed 2d 522 (1975).
Sears v Cottrell, 5 Mich 250, 254 (1858).
Massachusetts Board of Retirement v Murgia, 427 US 307, 314; 96 S Ct 2562; 49 L Ed 2d 520 (1976), Ohio Bureau of Employment Services v Hodory, 431 US 471, 489; 97 S Ct 1898; 52 L Ed 2d 513 (1977).
Katzenbach v Morgan, 384 US 641, 657; 86 S Ct 1717; 16 L Ed 2d 828 (1966), New Orleans v Dukes, 427 US 297, 305; 96 S Ct 2513; 49 L Ed 2d 511 (1976).
New Orleans v Dukes, supra, 303.
McAvoy v H B Sherman Co, 401 Mich 419, 439; 258 NW2d 414 (1977).
MCL 500.3109(1); MSA 24.13109(1).
Gretzinger, O’Donnell v State Farm Mutual Insurance Co: A Judicial Attempt to Amend Michigan’s No-Fault Act, 1977 DCL Rev 187, 192, fn 36.
Id., 192-193.
Id., 194.
Ibid.
Opinion of Williams, J., p 568, fn 13.
MCL 500.3108; MSA 24.13108.
Califano v Jobst, 434 US 47, 50; 98 S Ct 95; 54 L Ed 2d 228 (1977).
See, generally, A Judicial Attempt to Amend Michigan’s No-Fault Act, supra, 192-195.
Shavers, supra, 628-629.
MCL 500.3109a; MSA 24.13109(1).
Opinion of Williams, J., p 575, fn 20.
Richardson, supra, 84.
US Const, Am XIV; Const 1963, art 1, § 3 (equal protection); Const 1963, art 1, § 17 (due process).
As indicated infra, plaintiffs must bear the burden of rebutting the presumption of a statute’s constitutionality. That task may be accomplished by one or both of two methods: plaintiffs may either forward persuasive legal arguments indicating that the legislative judgment culminating in the enactment of the statutory scheme under §3109(1) is unconstitutional on its face, see Borden’s Farm Products Co, Inc v Baldwin, 293 US 194; 55 S Ct 187; 79 L Ed 281 (1934); Pinnick v Cleary, 360 Mass 1; 271 NE2d 592 (1971) (Tauro, C.J., concurring), or plaintiffs may offer facts justifying a judicial declaration that the scheme is equally unconstitutional, see Borden’s Farm Products Co, Inc v Baldwin, 293 US 194; 55 S Ct 187; 79 L Ed 281 (1934); People v Poucher, 398 Mich 316; 247 NW2d 798 (1976). While we have expressed our preference for the latter offer in our consideration of certain constitutional attacks to other disputed no-fault statutory schemes in Shavers v Attorney General, 402 Mich 554; 267 NW2d 72 (1978), we have not expressed that preference in absolute terms. Indeed, we are of the opinion that in cases such as the one at bar presenting a facially unconstitutional no-fault statutory scheme, the presentation of compelling legal arguments is alone sufficient to support a judicial declaration of unconstitutionality.
This set-off is made against an insured’s § 3108 no-fault personal protection benefits.
Compare MCL 500.3109a; MSA 24.13109(1) which provides in pertinent part:
"An insurer providing personal protection insurance benefits shall offer, at appropriately reduced premium rates, deductibles and exclusions reasonably related to other health and accident coverage on the insured. * * * ”
In Shavers, supra, this Court held that plaintiffs therein lacked standing under GCR 1963, 521.1 to seek declaratory relief regarding § 3109(1) because "[tjhere is no proof in the record that any plaintiff had a claim for an injury which had been denied or reduced [in amount pursuant to § 3109(1)]”. 402 Mich 554, 592, fn 12. Justice Levin similarly addressed this principle in Advisory Opinion re: Constitutionality of 1972 PA 294, 389 Mich 441, 484; 208 NW2d 469 (1973):
"It is not properly within our function to hypothesize particularized claims or to set up, speculatively, strawmen classes of persons who might claim to be disadvantaged in various ways by the classifications and provisions of the act.”
We clearly have no such problem here. It is undisputed that plaintiffs herein "[have] a claim for an injury which [has] been * * * reduced [in amount pursuant to § 3109(1)]”. The Social Security Act provides for the payment of Social Security survivors’ benefits to four categories of individuals if their decedent was statutorily "insured”. 42 USC 402 et seq. While the pleadings presented to this Court for review do not indicate under which section of the Social Security Act plaintiffs have secured their survivors’ benefits, we can assume without conclusively finding that plaintiffs have been provided benefits pursuant to 42 USC 402(g) and 42 USC 402(e).
It is undisputed that plaintiffs herein, the statutory dependents of decedent no-fault insured, did not personally contribute to the Social Security fund authorizing the survivors’ benefits to which they are entitled. Rather, plaintiffs collected this governmental benefit through their deceased father and husband against whom the wage deduction was levied. Under this set of facts, we are of the opinion that plaintiffs should be considered as having made the Social Security fund contribution in the same manner as we would have considered the no-fault insured decedent’s contributions had he survived the automobile accident. Obviously, there is no difference in principle, insofar as contributions are concerned, between the present instance and the instance where the actual payor has not been killed in an automobile accident but personally institutes suit for disability benefits personally financed. Additionally, plaintiffs herein suffer further disparate treatment through the operation of this set-off scheme when compared with survivors of a privately insured whose benefits would not similarly be subject to set-off.
O’Donnell v State Farm Mutual Automobile Ins Co, 70 Mich App 487; 245 NW2d 801 (1976) (Bashara, P.J., dissenting and recommending remand).
Section 3110 of 1972 PA 294 provides:
"(1) The following persons are conclusively presumed to be dependents of a deceased person:
"(a) A wife is dependent on a husband with whom she lives at the time of his death.
"(b) A husband is dependent on a wife with whom he lives at the time of her death.
"(c) A child while under the age of 18 years, or over that age but physically or mentally incapacitated from earning, is dependent on the parent with whom he lives or from whom he receives support regularly at the time of the death of the parent.” MCL 500.3110; MSA 24.13110.
Section 3108 of the No-Fault Act provides:
"Personal protection insurance benefits are payable for a survivors’ loss which consists of a loss, after the date on which the deceased died, of contributions of tangible things of economic value, not including services, that dependents of the deceased at the time of his death would have received for support during their dependency from the deceased if he had not suffered the accidental bodily injury causing death and expenses, not exceeding $20.00 per day, reasonably incurred by these dependents during their dependency and after the date on which the deceased died in obtaining ordinary and necessary services in lieu of those that the deceased would have performed for their benefit if he had not suffered the injury causing death. The benefits payable for survivors’ loss in connection with the death of a person in a single 30-day period shall not exceed $1,000.00 and is not payable beyond the first 3 years after the date of the accident.” MCL 500.3108; MSA 24.13108.
Appellant’s Appendix, p 14a.
Appellant’s Appendix, p 15a.
As to the Act’s personal injury protection scheme, we elaborated that its "comprehensive and expeditious benefit system”, was reasonably related to curing certain pronounced deficiencies of the tort liability system of recovery, including evidence that: "minor injuries were overcompensated, serious injuries were undercompensated, long payment delays were commonplace, the court system was overburdened, and those with low income and little education suffered discrimination”. 402 Mich 554, 579.
Michigan’s No-Fault Insurance Act was signed into law by Governor Milliken on October 31, 1972. 3 Mich Senate J (1972) 2032. After two years of substantial alteration and modification undertaken by both the Michigan House of Representatives and Senate, § 3109(1) as it presently appears was adopted in that enactment.
In April of 1971, four House Bills were introduced detailing a proposed no-fault scheme of automobile insurance. 1 Mich House J (1971) 783-784. None of these bills, however, specifically provided for governmental benefit set-off. It was in response to the absence of such a provision that then-acting Commissioner of Insurance Van Hooser voiced his concern to Governor Milliken that these House Bills adversely tended to increase remedial duplication and overlap between automobile insurance benefits and other benefit programs (e.g., Social Security and Medicare) receivable by an insured. In an attempt to remedy this apparently undesirable result, the Commissioner opined that the general language, "shall be payable without regard to entitlement to any other program providing wage continuation benefits”, should be deleted from the bill’s format. Letter from Russell E. Van Hooser, Michigan Commissioner of Insurance, to Governor Milliken (June 4, 1971) concerning analysis of House Bills 4734, 4735, 4736 and 4737, p 3 reproduced in Defendant’s Exhibit No. 212, Joint Appendix submitted to this Court in Shavers v Attorney General. These House Bills subsequently died in committee with no action having been taken on the Commissioner’s recommendation.
On April 26, 1971, the Michigan Senate introduced Senate Bill 520. 1 Mich Senate J (1971) 663. Unlike the above House drafts, § 3520, subds (A) and (B) of that bill provided for an expansive governmental benefit set-off scheme. Indeed, this bill mandated the subtraction of both public and private benefits — with the exception of Social Security benefits — from the amount otherwise payable by an insurer. Section 3520 of Senate Bill 520 provided in pertinent part:
"Sec. 3520. In Calculating Net Loss:
"(A) Except as otherwise provided in this chapter, all benefits and advantages a person receives or is entitled to receive because of an injury, from sources other than complete and added protection insurance are subracted from loss.” Mich Senate Bill 520 (1971).
Commissioner Van Hooser summarized the arguments for this draft legislation, stating: "It would reduce the cost of automobile insurance. * * * It would eliminate duplication of benefits (and the resulting double premiums) by coordinating benefits from automobile insurance with all other benefits”. Letter from Russell E. Van Hooser, Michigan Commissioner of Insurance to Governor Milliken (June 4, 1971), p 2 concerning analysis of Senate Bill 520 reproduced in Defendant’s Exhibit No. 212, Joint Appendix submitted to this Court in Shavers v Attorney General.
Approximately two months after the introduction of Senate Bill 520, another bill was introduced in the Senate which directed a contrary set-off result to that expressed in Senate Bill 520. Section 9 of Senate Bill 782, 1 Mich Senate J (1971) 1000-1001, provided in pertinent part:
"Sec. 9(1). The amount of disability and survivor benefits a claimant recovers or is entitled to recover under the social security act, United States Code, title 42, sections 301 et seq., because of accidental bodily injury shall be subtracted from the personal protection insurance benefits otherwise payable for the injury.” Mich Senate Bill 782 (1971).
Unlike Senate Bill 520, this set-off provision mandated payment to the insured of both personal protection insurance benefits as well as other private and public benefits with the exception of social security benefits.
Commissioner Van Hooser noted that while Senate Bill 782 "would assure prompt and adequate compensation of persons injured in auto accidents in this state for medical expenses, rehabilitation expenses, wage loss and survivor’s loss”, it would likewise encourage an increase in the cost of auto insurance as it failed to eliminate duplication of benefits. Letter from Commissioner Van Hooser to Governor Milliken (June 4, 1971), p 2 concerning Senate Bill 782 reproduced in Defendant’s Exhibit No. 212 in Shavers v Attorney General. Accordingly, the Commissioner proposed an amendment to Senate Bill 782 which he determined would reduce the cost of auto insurance. Letter, p 4. The Van Hooser amendment substantially mirrored the final version of § 3109(1) as adopted.
Admittedly addressed only to Governor Milliken, Commissioner Van Hooser’s comments make clear that the purpose of the § 3109(1) statutory scheme was framed in terms of maintaining or reducing premium costs for all insureds through the elimination of duplicative benefits recovery. We accept the Commissioner’s comments as indicative of, if not substantially mirroring, the legislative judgment in this regard. See, generally, Note, O’Donnell v State Farm Mutual Insurance Co: A Judicial Attempt to Amend Michigan’s No-Fault Act, 1977 DCL Rev 187.
Greene v State Farm Mutual Automobile Ins Co, 83 Mich App 505; 268 NW2d 703 (1978); Hawkins v Auto-Owners Ins Co, 83 Mich App 225; 268 NW2d 534 (1978); Smart v Citizens Mutual Ins Co, 83 Mich App 30; 268 NW2d 273 (1978); Mielke v Michigan Millers Mutual Ins Co, 82 Mich App 721; 267 NW2d 165 (1978); Pollock v Frankenmuth Mutual Ins Co, 79 Mich App 218; 261 NW2d 554 (1977); Wysocki v Detroit Automobile Inter-Ins Exchange, 77 Mich App 565; 258 NW2d 561 (1977).
As Justice Levin posited for this Court in Manistee Bank & Trust Co v McGowan, 394 Mich 655, 680; 232 NW2d 636 (1975);
"Courts should proceed cautiously and should defer to legislative judgments which are reasonable. The Legislature must be free to experiment without being required to attain 'mathematical nicety’ in its formulation of remedies to social and economic problems.”
In its brief, defendant asserts yet a third purpose allegedly justifying the classification matrix employed by § 3109(1). Proceeding from the premise that the No-Fault Act was enacted to "achieve full compensation for all economic losses so defined and limited by the Legislature”, defendant concludes that the evident purpose of § 3109(1) was designed (i) to "assure that no more and no less than actual economic loss is recovered from any source * * *” and (ii) as "[a]n ancillary effect * * * to reduce no-fault insurance carriers’ exposure and, consequently, to keep the cost of no fault coverage within manageable limits”. Appellant’s Brief, p 18. The primary thrust of defendant’s argument in this regard, therefore, is that the classifications drawn by § 3109(1) rationally promote the alleged legitimate purpose of the statutory scheme under consideration: the legislatively mandated provision of secondary rather than primary insurance coverage by economic loss. We are of the opinion that this purpose asserted by defendant was not embraced by the Legislature in view of the fact that the "subtractions” mandated by § 3109(1) include benefits enjoyed prior to the automobile casualty. Since these benefits were enjoyed wholly apart from the casualty compensable by no-fault, they could not be considered a component of the compensable economic loss resulting from the automobile casualty.
We have reviewed the legislative development of the statutory scheme under consideration as well as the No-Fault Act as a whole in our Shavers decision and can nowhere find support for defendant’s assertion of this legislative purpose. Unpersuaded by defendant’s particular characterization of the disputed scheme’s purpose, we need not further address defendant’s contentions in this regard.
Actually, it is difficult to conceive of no-fault benefits as "secondary”. Since all drivers in this state are required to be covered by no-fault insurance, and since a significant fraction of these drivers are either not members of the work force from which most governmental benefits arise, or have not been in the work force long enough to be so entitled, no-fault insurance is most frequently a primary rather than a secondary source of compensation.
Defendant cites two principal characteristics which defendant alleges distinguish governmental benefits from private insurance benefits and thereby justify the "modest difference in treatment between such benefits necessary to accomplish the Legislature’s objective [of making no-fault insurance a secondary, rather than a primary, source for compensating auto crash victims for economic loss]”. In brief, these two characteristics are: (i) governmental benefit programs are universal and involuntary whereas private insurance programs are not; and, (ii) benefits received from governmental programs are uniform and readily determinable while private insurance benefits are not.
Defendant’s alleged distinctions justifying disparate treatment are unpersuasive. Indeed, governmental benefits are not necessarily universal as contended by defendant. For example, all no-fault insureds are not necessarily entitled to the receipt of either military benefits or even Social Security benefits although some no-fault insureds are so entitled. Further, we have found that the legislative purpose to be furthered by the disputed statutory scheme is different from that stated by defendant; defendant’s distinctions are thereby rendered inapposite.
Section 3109a, MCL 500.3109a; MSA 24.13109(1) provides in pertinent part:
"An insurer providing personal protection insurance benefits shall offer, at appropriately reduced premium rates, deductibles and exclusions reasonably related to other health and accident coverage on the insured. * * * ”
This section of the No-Fault Act provides for an optional set-off of private, collateral insurance benefits at the election of the insured. In contrast, § 3109(1) provides for a mandatory set-off of governmental benefits whether the insured desires such a subtraction or not, and is significantly devoid of any similar provision such as "at appropriately reduced premium rates”.
Defendant asserts that the injection of § 3109a into the composition of the general set-off scheme alleviates any constitutional infirmity of that scheme. Defendant’s principal argument in this regard appears to center on the notion that, read in conjunction, §§ 3109(1) and 3109a operate to treat all no-fault insureds in an identical manner as both governmental and private, collateral benefits are confronted with a set-off. As stated by defendant in its brief at page 27:
"The only difference between government benefits and benefits from other private insurance is that government benefits are required to be subtracted from no-fault benefits while the insured has the option of electing to deduct or exclude his other private health and accident coverages or, if he be willing to bear the added cost, to receive duplicative benefits from private sources.”
We cannot agree with defendant that the conjunctive consideration of § 3109a cures the equal protection deficiency of the appealed scheme by creating uniformity of treatment between governmental benefit and collateral, private benefit recipients. In fact, we are of the opinion that defendant’s above-quoted statement of essential similarity between the disputed classifications bears out this very opposite point.
Indeed, rather than creating similarity between the government and private, collateral benefits classes and furthering their uniform treatment, these sections read in conjunction emphasize the arbitrary and discriminatory treatment afforded the governmental recipient class of insureds. Our conclusion first finds support in the fact that while § 3109a permits the insured to elect a set-off, § 3109(1) requires a set-off. While in many instances a set-off may be encountered in both the governmental benefit and private, collateral benefit spheres, it is not the case that such a scenario will consistently present itself under the terms of this legislation. Thus, we are still forced to deal with that situation where private insureds, not having elected a set-off, are permitted full recovery from the no-fault insurer’s fund in addition to the full receipt of collateral benefits while governmental benefit recipients, not even permitted to consider a set-off, are denied full recovery from the no fault insurer’s fund as that fund is merely depleted to the extent of the above-threshold governmental benefit recovery.
Second, uniformity is further dissipated by this scheme’s premium reduction proviso. Section 3109a permits a reduction in full premium rates if the no-fault insured elects a set-off of collateral private benefit amounts. Section 3109(1), on the other hand, compels the insured to pay the full premium rate while concurrently acquiescing to a mandatory governmental benefit set-off. In a real sense, both classes of insureds have paid for their collateral benefits whatever form those benefits assume. Yet, those who have fortuitously engaged private, collateral benefits are permitted to recoup some of their collateral benefit costs through an appropriate premium reduction while those who have been deemed eligible for governmental assistance are denied a recoupment of some of their real out-of-pocket collateral benefit costs through an equally appropriate premium reduction. In effect, private collateral benefit insureds are permitted larger no-fault benefits for their elected full or reduced premium rate payment than are governmental benefit insureds at the mandatory full premium rate payment.
Had the Legislature chosen to offer both similarly situated classes of insureds the § 3109a set-off election with a concommitant reduction in premium rates, we might not have been compelled to consider plaintiffs’ equal protection challenge. That exercise of legislative judgment, however, has not been presented for our consideration. As such, we certainly cannot agree with defendant’s argument that the amendment of the No-Fault Act with the addition of § 3109a operates to breathe constitutional vitality into this otherwise expiring scheme. Rather, we are of the opinion that the juxtaposition of these provisions renders this statutory scheme facially unconstitutional in equal protection terms.
Our holding in Boettner v State Farm Mutual Ins Co, 388 Mich 482; 201 NW2d 795 (1972), following Blakeslee v Farm Bureau Mutual Ins Co, 388 Mich 464; 201 NW2d 786 (1972), while not cited by plaintiffs, provides further support for our concern that plaintiffs have been deprived of a benefit for which they have paid and to which they would otherwise be entitled. Both Blakeslee and Boettner dealt with the stacking of automobile insurance policies prior to the advent of the No-Fault Act. Neither was decided on constitutional grounds. One issue presented in both concerned whether an insured could collect on more than one auto policy for which that insured had paid despite the fact that only one covered auto had been involved in an accident. citing our statement in Blakeslee, 388 Mich 464, 474, we expressed the following in Boettner:
" 'It would be unconscionable to permit an insurance company offering statutorily required coverage to collect premiums for it with one hand and allow it to take the coverage away with the other by using a self-devised "other insurance” limitation.’ ” 388 Mich 482, 487-488.
In a real sense, the § 3109(1) statutory scheme permits an insurer to collect premiums for personal protection coverage with one hand while permitting that insurer to either completely or partially take that coverage away with the other through the guise of a governmental benefit set-off. Just as we found that practice objectionable in these stacking cases, we find them equally objectionable here.
Actually, the benefits subject to subtraction under § 3109(1) may not even be duplicative. This point is illustrated in those instances, for example, where the governmental benefit sought to be subtracted does not arise from an automobile casualty at all, but rather arises from a longevity payment or a war-related disability.
We note in passing that the Legislature could have constitutionally realized its otherwise permissible judgment by treating these similarly situated classes alike, mandating a set-off for both governmental and private insurance recipients. This the Legislature did not do and we therefore feel constrained to declare this classification scheme violative of equal protection.
In view of the Legislature’s apparent reluctance as expressed in § 3109a to permit a set-off of private, collateral benefits in the absence of a direct premium reduction, it might be argued that the Legislature solely mandated a set-off of governmental benefits based on the misconceived notion that governmental benefits are uniformly available to all no-fault insureds. If this erroneous conception guided the Legislature in its enactment of § 3109(1), an equally erroneous conclusion that all insureds are permissibly treated similarly through the operation of § 3109(1) would indeed arise. Our disagreement with this notion is apparent. In fact, all no-fault insureds are not uniformly eligible for governmental assistance. This becomes apparent when one considers that only four narrow classes of individuals are eligible for Federal Social Security survivors’ benefits if their decedent was also statutorily "insured”. 42 USC 402 et seq. Uniformity in treatment, therefore, is not championed by the § 3109(1) statutory scheme; rather, unconstitutionally disparate classification once again clearly emerges from this feigned veil of uniformity.
See Manistee Bank & Trust Co v McGowan, 394 Mich 655; 232 NW2d 636 (1975), wherein this Court considered the equal protection viability of the Michigan guest passenger act. The disputed act statutorily denied tort recovery to negligently injured, non-paying automobile passengers. As one possible purpose for the guest/non-guest classifications drawn by the Legislature, the Court analyzed the allegation that the disputed act was permissibly enacted to limit liability, reduce litigation, and thereby enable insurers to offer mandatory coverage at reduced premium rates. Applying the traditional "reasonable relation” equal protection test to the challenged classification matrix in this particular respect, Justice Levin found the statutory scheme to deny plaintiffs equal protection of the laws and stated for the majority:
"Conceding, arguendo, that insurance rates are lower because there is a guest statute, lower insurance premiums do not, without more, justify an essentially arbitrary classification.
"If persons injured on Thursdays or men between 50 and 60 years of age were denied recovery for ordinary negligence, there would be assurance of less litigation, fewer recoveries, and the possibility of lower insurance rates. Nevertheless, all would agree that such classifications would be struck down as 'arbitrary’ despite the relief afforded 'the purse of the motor owning public’.
"It may be legitimate for the Legislature to intervene in the increasing costs of automobile insurance. But the means selected by the Legislature to do so must be reasonably related to the object sought to be attained. Denying guest passengers recovery for ordinary negligence is no more reasonably related to the objective of lower insurance rates than would be denying recovery to persons injured on Thursdays or men between 50 and 60 years of age.
"Guest passengers as a class are not better able to bear the cost of lower premiums for the motor owning public. As a class, they are not necessarily all wealthy nor do they necessarily all have especial sources of recovery. Those who do not have other sources of recovery are forced to exhaust their own resources and may become public charges.” 394 Mich 655, 677-678.
Justice Levin further opined that it was even uncertain whether governmental efforts to reduce costs and thereby protect the public purse were sufficient justification for legislative selection of a similarly situated class for disparate treatment.
Analogous to the scenario confronted by this Court in Manistee Bank, this case before us involves governmental benefit recipients who pay the same premium as private insureds, suffer the same losses as private insureds, and are governed by the identical no-fault benefit scheme as private insureds. Yet, when it comes time for the no-fault insurer to compensate loss, the insurer is permitted to reduce its out-of-pocket liability with respect to governmental recipients while it must fully compensate the private insured out of the same pocket, while in both instances championing the notion that this disparate treatment is undertaken in an attempt to reduce premium costs for all insureds. Much like the constitutional plight confronted by guests in Manistee Bank, we can perceive no rational relationship between this class segregation and premium reduction; in fact, it appears that the governmental recipient has effectively paid a higher premium for reduced recovery.
Other jurisdictions have similarly held such statutory schemes reducing an insured’s recovery by claims compensable under disability benefit laws by the amount paid out of workers’ compensation funds to be invalid as contrary to public policy. See, e.g., Allied. Mutual Ins Co v Larriva, 19 Ariz App 385; 507 P2d 997 (1973); Travelers Ins Co v National Farmers Union Property & Casualty Co, 252 Ark 624; 480 SW2d 585 (1972). The Court of Appeals aptly quoted the following language from the Travelers Insurance Co decision:
" 'The right claimed by NFU [the insurer] would simply provide it with a windfall in the case of one covered by the workmen’s compensation laws. The purpose of the Uninsured Motorist Act was to protect the insured, not the insurer.’ ” 70 Mich App 487, 497.
Defendant also cites the Florida Supreme Court’s decision in Lasky v State Farm Ins Co, 296 So 2d 9 (Fla, 1974), for the proposition that the present scheme is not violative of equal protection. Indeed, this was the result reached by that Court; we are not bound, however, by the holdings of other state supreme courts although such authority is frequently considered in our deliberations if well-reasoned and persuasive. We do not find Lasky to fall into that latter category of persuasiveness as the Florida Supreme Court’s constitutional analysis of the set-off scheme presented for its review is devoid of policy discussion and lacks the citation of any legal authority. | [
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Coleman, C.J.
The key issue in these cases of first impression is whether a defendant who is unable to recall some or all of the events surrounding the commission of a particular crime may enter a plea of guilty but mentally ill to that crime, and, if so, what procedure is to be utilized at the plea-taking proceeding to establish a factual basis for the plea. In addition to our analysis of these primary issues, we touch upon other tangential contentions advanced by defendants.
We conclude that a forgetful defendant is not precluded under the terms of the statute from entering a plea of guilty but mentally ill. A trial judge presiding over the plea-taking proceeding of a defendant who wishes to plead guilty but men tally ill, but who is unable to attest to the details of the crime because of a lack of memory, may accept such a plea. The factual basis may be elicited from the defendant. If the defendant cannot recall the facts required, a transcript of the preliminary examination or trial testimony, if any, may be considered by the court. Alternatively, a factual basis may be elicited from witnesses. In all other respects, the court must adhere to the constraints of GCR 1963, 785.7 as it relates to pleas of guilty. Because there is no specific court rule designed to afford procedure for a guilty but mentally ill plea, we also adhere to those added safeguards specifically afforded by statute to defendants who tender a plea of guilty but mentally ill.
Accordingly, we reverse the judgments of the Court of Appeals in both cases. We reinstate defendants’ plea-based convictions and sentences.
I
Defendants Terry Lee Booth and James Arthur Long each were charged with two counts of first-degree criminal sexual conduct. On December 17, 1975, a joint preliminary examination was conducted, at which the two twelve-year-old female victims and the two physicians who had examined the victims subsequent to the commission of the offenses were witnesses. Defendants were bound over for trial as charged.
A review of the lower court files reflects that before the instant pleas were offered, substantial efforts were undertaken to inquire into defendants’ competency to stand trial as well as their criminal responsibility at the time the crimes were commit ted. Each defendant had filed a timely notice of insanity defense.
The trial court repeatedly requested — and received — assurances that defendants were, in fact, competent to stand trial. Defendants sought and obtained independent psychiatric evaluations, and were also committed to the Center for Forensic Psychiatry for ascertainment of criminal responsibility. Additionally, supplemental statements (depositions, in the case of defendant Long) specifically directed to the issue of mental illness were prepared by the various examining psychiatrists and were submitted to the trial court.
Plea negotiations took place, and on July 26, 1976, defendant Booth offered a plea of guilty but mentally ill to a single count of first-degree criminal sexual conduct. In exchange, the prosecutor agreed to dismiss the remaining count. Defendant Long entered an identical plea before a different judge, in return for a similar agreement by the prosecutor, on November 3, 1976.
The plea-taking proceedings conducted in these cases were unique, both by virtue of the nature of the pleas offered and the complicating fact of defendants’ undisputed loss of memory with regard to the details of the offenses. The procedure fashioned by the judge presiding over defendant Booth’s plea parallels that followed at defendant Long’s plea-taking. Basically, the trial judges adhered to GCR 1963, 785.7, the court rule implemented to facilitate the proper advice and infor mation of rights in the context of pleas of guilty and nolo contendere.
Because defendant Booth was able only to recount some events preliminary and subsequent to the perpetration of the crime, the trial judge, who advised the parties that he had read the preliminary examination transcript, referred to that transcript for the pertinent facts and concluded that a sufficient factual basis had been established. Defendant Booth acknowledged on the record his belief, derived from the facts available to him, that he was in fact guilty of the crime to which his plea was being offered. Like facts apply to Long.
The trial judge next focused his attention upon the question of defendant Booth’s mental illness at the time of the offense. The prosecutor reported that, in lieu of a hearing on the issue of mental illness, the parties had stipulated to the trial court’s use of reports and letters prepared by the psychiatric examiners to ascertain mental illness (the parties also agreed that the examiners would be produced if necessary to the trial court’s determination). The proffered documents were admitted into evidence without objection. On the basis of the documents presented, the trial judge found that defendant Booth had not been insane at the time of the offense, but had been mentally ill as a result of voluntary drug-alcohol intoxication.
On August 16, 1976, defendant Booth was sentenced to life imprisonment, with a recommendation that he receive alcohol and drug counseling while incarcerated. At defendant Long’s sentenc ing on November 9, 1976, the trial judge imposed a sentence of from 15 to 25 years imprisonment, and further noted that he would oppose any early release.
On appeal, the Court of Appeals panel assigned to decide defendant Booth’s appeal concluded that the lower court had erred in relying on the preliminary examination transcript to establish the factual basis for the plea, and remanded to the trial court to allow the prosecutor to supply a sufficient factual basis. Dissenting, Judge Cavanagh would vacate Booth’s plea-based conviction and remand for trial. A different panel of the Court of Appeals considered defendant Long’s appeal. That panel also decided that it was inappropriate for the trial court to have adduced a factual basis for the plea by resorting to the preliminary exámination transcript. However, instead of remanding for supplementation of the record, the Long panel set aside the plea and remanded either for negotiation of a plea of nolo contendere or for trial.
II
A
The foundational issue presented is whether a defendant suffering from amnesia with regard to the particulars of the charged crime is capable of entering the legislatively created plea of guilty but mentally ill.
We can discern no impediment to the entry of a plea of guilty but mentally ill under circumstances involving a forgetful defendant. Our conclusion is based upon several considerations: (1) the intent of the Legislature in promulgating the guilty but mentally ill statute; (2) the precise language used by the Legislature in establishing the plea of guilty but mentally ill; and (3) in conjunction with the second consideration, the equivalent functions of the more traditional pleas of guilty and nolo contendere and the relationship of these pleas to a plea of guilty but mentally ill.
The verdict of "guilty but mentally ill” was introduced into the jurisprudence of this state by 1975 PA 180 (effective July 25, 1975), an act of the Legislature which also modified the procedures to be used in cases in which an insanity defense is asserted. The Legislature’s intent in establishing a fourth verdict which might be returned by a jury presented with an insanity defense, although not without question or controversy, appears to have been twofold: (1) to ensure that criminally responsible but mentally ill defendants obtain professional treatment in "the humane hope of restoring their mental health” while incarcerated or on probation, and, correlatively, (2) to assure the public that a criminally responsible and mentally ill defendant will not be returned to the streets to unleash further violence without having received necessary psychiatric care after sentencing. See People v McLeod, 407 Mich 632, 663-664; 288 NW2d 909 (1980) (opinion of Ryan, J.); People v Seefeld, 95 Mich App 197; 290 NW2d 123 (1980); People v Philpot, 98 Mich App 257; 296 NW2d 229 (1980).
With particular reference to the first legislative objective, it is readily apparent that these defendants fall within the class of persons whose mental health needs were intended to be accommodated by the guilty but mentally ill statute. Like any other defendant who, although criminally responsible, has been found to have suffered from mental illness at the time of the offense, these defendants stand to benefit from such treatment "as is psychiatrically indicated” during the term of their incarceration. To deny these amnesic defendants the opportunity to plead guilty but mentally ill and, in so doing, to avail themselves of any treatment due them under the statute, undercuts one of the perceived purposes of the Legislature. When promulgating the guilty but mentally ill statute, the Legislature intended to assist mentally ill defendants to regain their mental health. In essence, the guilty but mentally ill statute should apply to those whom it was intended to assist.
We therefore conclude that, despite, and even because of, their amnesia, these defendants are intended recipients of whatever restorative bounty the guilty but mentally ill statute might afford them during the period of their incarceration for the protection of society.
B
Our second consideration more specifically concerns the precise language used by the Legislature in creating the plea of guilty but mentally ill.
MCL 768.36; MSA 28.1059 provides not only for a verdict of guilty but mentally ill to be rendered by judge or jury after trial, but also for a plea known as "guilty but mentally ill”, provided that certain conditions have been met:
"If the defendant asserts a defense of insanity in compliance with section 20a and the defendant waives his right to trial, by jury or by judge, the trial judge, with the approval of the prosecuting attorney, may accept a plea of guilty but mentally ill in lieu of a plea of guilty or a plea of nolo contendere. The judge may not accept a plea of guilty but mentally ill until, with the defendant’s consent, he has examined the report or reports prepared pursuant to section 20a, has held a hearing on the issue of defendant’s mental illness at which either party may present evidence, and is satisfied that the defendant was mentally ill at the time of the offense to which the plea is entered. The reports shall be made a part of the record of the case. MCL 768.36(2); MSA 28.1059(2).”
One of the contentions raised is that the Legislature’s exclusive use of the word "guilty” in describing the new plea precludes forgetful defendants, see Guilty Plea Cases, 395 Mich 96, 134; 235 NW2d 132 (1975), from entering a plea under the guilty but mentally ill statute. We do not read the statute in such a limiting manner.
The guilty but mentally ill statute is broadly addressed to the creation of an altogether different verdict, one which encompasses findings of both criminal responsibility and mental illness. Understandably, the Legislature settled upon the phrase "guilty but mentally ill” to describe this new verdict. That the Legislature also bestowed this appellation upon the plea envisioned by the guilty but mentally ill statute appears to be indicative of a desire for uniformity of phraseology within the confines of the statute. Thus, "guilty but mentally ill” can be viewed as a generic phrase denoting the result which may be obtained under the statute— an adjudication of criminal responsibility as well as mental illness at the time of the crime.
Our interpretation of the guilty but mentally ill statute is reinforced by the fact that a plea of "guilty but mentally ill” is to be accepted "in lieu of’ a plea of guilty or nolo contendere. This language suggests that where questions of mental illness must be determined in addition to the usual question of criminal liability (to which the traditional pleas are solely addressed), the plea established by MCL 768.36(2); MSA 28.1059(2) acts as an addition to the more traditional forms of pleas.
C
Both defendants, the Attorney General, and the Court of Appeals have discussed the plea of guilty but mentally ill in terms of the existing procedure for accepting a guilty plea or a plea of nolo contendere as set forth in GCR 1963, 785.7. Several challenges to the proceedings have been presented. (1) If these were essentially guilty-type pleas, the trial courts were obliged to adduce the factual bases of the crimes via direct interrogation of defendants and thus erred in relying on the preliminary examination transcript; (2) if these were nolo contendere-type pleas, the trial courts erred in (a) failing to state on the record a reason why the nolo contendere pleas were appropriate, and (b) partially interrogating defendants with regard to their roles in the crimes.
However, we perceive the Legislature as having established an offense for which the Supreme Court has provided no procedure by which to address a plea of guilty. Therefore, the efforts to place a square peg in a round hole are necessarily frustrated.
Therefore, it is argued, the plea is of no legal effect until this Court acquiesces and adopts this procedural suggestion for retention.
This Court does possess broad powers in the forum of practice and procedure as provided in the 1963 Constitution. However, this does not mean that where this Court for some reason has failed to exercise its administrative rule-making powers to address a particular procedural problem, the Legislature’s own pronouncement in this area is a nullity. One of our own court rules (GCR 1963, 16) specifies that "rules of practice set forth in any statute, not in conflict with any of these rules, shall be deemed to be in effect until superseded by rules adopted by the Supreme Court”. See, also, Wolodzko v Wayne Circuit Judge, 382 Mich 528, 531; 170 NW2d 9 (1969). Quite simply, consistent legislative enactments serve in lieu of court rule until this Court promulgates its own requirements via court rule.
The statute which speaks to the plea of guilty but mentally ill is not inconsistent with any of our established court rules. The statute, if it is to be viewed as formulating a procedure to be followed in a plea-taking proceeding, should not be looked upon as a nullity because this Court has not yet been prompted to address the plea in the context of our guilty plea rule, GCR 1963, 785.7.
Although we find no inconsistency between the statutory procedure for finding mental illness and our GCR 1963, 785.7, we have not completed our inquiry. We must determine if the mandates of Boykin v Alabama, 395 US 238; 89 S Ct 1709; 23 L Ed 2d 274 (1969), have been followed, so that the record in each case demonstrates that the pleas were freely, understandingly and voluntarily effected.
This Court has purported to assist the bench and bar to assure defendants of constitutional protections in plea-based convictions by promulgating GCR 1963, 785.7.
The trial judge in each of the cases at bar advised the defendant of his constitutional rights and exhaustively interrogated him to the conclusion that each had freely, understandingly and voluntarily waived his right to a trial (pursuant to GCR 1963, 785.7) for a crime established by the stipulated admission of the preliminary examination record and supplemented by his own recollection.
Additionally, the statutory requisites to establish mental illness at the time of the offense were followed on a course stipulated by counsel and carried out by the court.
Ill
The United States Supreme Court in North Carolina v Alford, 400 US 25; 91 S Ct 160; 27 L Ed 2d 162 (1970), found that a guilty plea could be accepted even if accompanied by protestations of innocence. The trial judge had heard witnesses testify as to Alford’s guilt. Although the defendant denied guilt, he asked the court to accept his plea of guilty to second-degree murder because he faced the threat of a death penalty if he went to trial. The Court found that Alford’s desire to avoid the death penalty did not necessarily make the plea involuntary, see Kamisar, LaFave and Israel, Modern Criminal Procedure (5th ed), p 1290 ff.
Defendants Booth and Long had allegedly participated in violent rapes of two children and had heard the testimony of the principal witnesses and the names of other endorsed witnesses. It is understandable that they might wish to avoid trial and plead only to one count of first-degree criminal sexual conduct. The record indicates that each defendant understood what he was doing and voluntarily, and with no coercion, wished to plead guilty but mentally ill.
We would not force an unwilling defendant to go to trial if he wishes to avoid the risks and perhaps the degradation inherent in cases such as these.
The Alford Court said:
"[T]he Constitution is concerned with the practical consequences, not the formal categorization of state law. * * * Thus, while most pleas of guilty consist of both a waiver of trial and an express admission of guilt, the latter element is not a constitutional requisite to the imposition of criminal penalty. An individual accused of crime may voluntarily, knowingly, and understandingly consent to the imposition of a prison sentence even if he is unwilling or unable to admit his participation in the acts constituting the crime.” 400 US 37. (Emphasis added.)
IV
However, as in Alford, we would require from some appropriate source strong evidence of actual guilt.
Therefore, we address the question of the sufficiency of the factual bases for the pleas entered here, established as they were by reference to testimony presented at defendants’ joint preliminary examination.
The standard to be applied by an appellate court in its review of the adequacy of factual bases for a plea is "whether the trier of fact could properly convict on the facts” elicited from defendant at the plea-taking proceeding, People v Haack, 396 Mich 367, 376-377; 240 NW2d 704 (1976), or from alternate reliable sources, as in the case of a plea of nolo contendere. On these records, we find that the triers of fact could properly have convicted defendants of first-degree criminal sexual conduct, and that therefore the factual bases were sufficient.
The crime of first-degree criminal sexual conduct to which defendants entered their pleas is established by showing that the defendant in each instance engaged in sexual penetration of a person under 13 years of age, MCL 750.520b(l)(a); MSA 28.788(2)(l)(a). A reading of the preliminary examination transcript properly relied upon by the lower courts in accepting defendants’ pleas discloses (1) that the victims were both 12 years of age when the crimes were committed, (2) that defendants were the perpetrators, and (3) that each defendant accomplished sexual penetration with the victim named in the count to which he offered his plea.
We cannot agree with defendant Booth that the accuracy of defendants’ pleas — which a factual basis requirement is intended to ensure — was impugned by the prosecutor’s failure to produce evidence negating an intoxication defense, a course suggested by People v Stoner, 23 Mich App 598; 179 NW2d 217 (1970). Stoner is distinguishable on two counts. First, the defendant in Stoner pled guilty to unarmed robbery, a specific intent crime to which voluntary intoxication is a valid defense. However, first-degree criminal sexual conduct involving sexual penetration of a person under the age of 13 has been regarded as a general intent crime. As the law now stands, voluntary "intoxication is not a defense where only general intent needs to be shown”. People v Kelley, 21 Mich App 612, 619; 176 NW2d 435 (1970), cited in People v Crittle, 390 Mich 367, 372; 212 NW2d 196 (1973). We would not require the prosecution to provide evidence at a plea-taking proceeding negating a defense of which defendants could not have availed themselves had they elected to go to trial. Second, the defendant in Stoner waived preliminary examination and the only source drawn upon to establish the factual basis for the plea was the forgetful defendant’s own nebulous account of events. In contrast, the trial courts in these cases had at their disposal an alternate and trustworthy means of ascertaining a sufficient factual basis, a preliminary examination transcript.
V
Defendants’ remaining claims may be disposed of briefly.
Both defendants claim that their pleas were not understanding pleas because the trial judges failed to delineate defenses which might have been available to them had they proceeded to trial. We reject this contention. GCR 1963, 785.7(l)(a) expressly states that "the court is not obliged to explain * * * possible defenses”._
We are not persuaded that the interjection of the issue of mental illness into a. case necessitates an additional explanation to the already lengthy list of rights and advice which must be imparted by the court at a plea-taking proceeding, particularly after defendant’s participation in several preplea examinations with resultant reports and hearings concerning the findings of mental illness as an element of a conviction of guilty but mentally ill.
The claim also is made in an extra-record affidavit by Booth that his plea was involuntary because it was entered into with an exaggerated belief in the benefits to be derived from pleading guilty but mentally ill. We cannot agree. In each case, the substance of the plea-bargaining agreement was that the prosecution would concur in dismissal of one count of first-degree criminal sexual conduct, in exchange for a plea of guilty but mentally ill to another count. Each defendant acknowledged under oath and on the record that this was the only promise made. Obviously, dismissal of one count charging a serious felony in exchange for a plea to another count represents a substantial benefit to a defendant, especially in light of the brutal attacks as related in the preliminary examination by the children and examining physicians. Additionally, the Court does not look with favor upon ex parte, non-record affidavits filed in this Court as purported record supplementation.
Further, we reject defendants’ assertion that because psychiatric treatment has not been forthcoming (as defendants contend in the case), their pleas of guilty but mentally ill were premised upon an illusory bargain and therefore were involuntary. A naked allegation of non-treatment or inadequate treatment after sentencing will not serve to invalidate an otherwise valid plea of guilty but mentally ill, although non-treatment may possibly provide a basis for an action by defendants against those departments which have not fulfilled the statutory mandate of treatment as psychiatrically indicated. It is noted that the mental illness at the time of these offenses was found to be induced by alcohol and drug (PCP).
The remainder of defendant Booth’s contentions have been examined and also are found to be without merit.
VI
In conclusion, we find no impediment to the entry of a plea of guilty but mentally ill. The procedures used in accepting the pleas tendered in these cases were not infirm. Defendants’ contentions that their pleas were, for whatever reason, not understanding or voluntary are without merit.
We therefore reverse the judgments of the Court of Appeals in Booth and Long. We reinstate defendants’ plea-based convictions of guilty but mentally ill of first-degree criminal sexual conduct.
Williams, Levin, Fitzgerald, Ryan, and Blair Moody, Jr., JJ., concurred with Coleman, C.J.
Kavanagh, J.
(for modiñcation and affirmance). Terry Lee Booth and James Arthur Long were each convicted of first-degree criminal sexual conduct on their pleas of guilty but mentally ill. In accepting the pleas, the trial judges, upon the stipulations of the parties, used the transcript of their joint preliminary examination and the reports and letters of the psychiatric experts who had examined the defendants to establish the factual bases for the pleas because neither defendant could remember the details of the oifenses.
On appeal, separate panels of the Court of Appeals concluded that the trial court erred in using the preliminary examination transcript to establish the factual bases for the pleas. In Booth, 86 Mich App 646; 273 NW2d 510 (1978), the Court remanded the case to the trial court to allow the prosecutor to establish a factual record to support the plea. In Long, 86 Mich App 676; 273 NW2d 519 (1978), the Court set aside the plea and remanded the case either for negotiation of a plea of nolo contendere or for trial.
Because I am satisfied that in neither case should the plea of guilty but mentally ill have been accepted, I would amend the orders to provide that the plea in each case be set aside and the matters remanded for the purpose of taking a guilty plea, or for trial.
The Michigan Constitution of 1963, art 6, § 5, provides, inter alia, "The supreme court shall by general rules establish, modify, amend and simplify the practice and procedure in all courts of this state.”
We have pointed out in Perin v Peuler, 373 Mich 531, 541; 130 NW2d 4 (1964): "The function of enacting and amending judicial rules of practice and procedure has been committed exclusively to this Court * * *; a function with which the legislature may not meddle or interfere save as the Court may acquiesce and adopt for retention at judicial will.”
GCR 1963, 785.1 sets forth the criminal procedure applicable to all criminal prosecutions.
GCR 785.6 makes provisions for a plea of not guilty, and GCR 785.7 makes provision for pleas of guilty and nolo contendere. There is no provision in the rule for taking a plea of "guilty but mentally ill”.
MCL 768.36(2); MSA 28.1059(2) purports to authorize a trial judge to "accept a plea of guilty but mentally ill in lieu of a plea of guilty or a plea of nolo contendere”.
However, until this Court acquiesces and adopts for retention this procedural suggestion, it has no legal effect.
These cases are presented to us with the request by the prosecutor that such pleas should be approved as varieties of either a guilty plea or a plea of nolo contendere.
He argues that pleas of guilty but mentally ill are the functional equivalent of pleas of guilty and nolo contendere, and because they serve a good purpose (triggering the treatment possibility referred to in the statute) we should provide for their accommodation.
Insofar as all pleas which waive trial are equivalent for that function and so may properly be described as "functionally equivalent”, the prosecutor is correct, but that fact does not provide a reason for recognizing a plea of guilty but mentally ill.
I am now convinced that our pleading should be limited to pleas of guilty or not guilty. Whatever value the nolo contendere plea may have in the federal procedure, its legitimate utility in Michigan practice has not been demonstrated.
The effort to accommodate concerns for post-conviction consequences has muddied our jurisprudence. Our procedure should be designed to implement and enforce the rights of the parties — to a fair trial or to a free waiver of that right.
So long as judges are embroiled in post-conviction matters such as sentencing and non-judicial activities, the temptation is to clutter up procedural rules with our suggestions for discharge of those duties.
A judge’s training and education is aimed at making him expert in presiding over a trial before a jury or acting as the factfinder in a bench trial.
Court rules properly are concerned with and should be limited to the procedure of determining facts through an adversary proceeding.
A plea of nolo contendere should not be used. Unless a defendant wishes to plead guilty, a plea of not guilty should be entered. If the state can prove its case, it should do so. A defendant who cannot remember the facts and circumstances of an asserted crime will no doubt have a difficult time establishing a defense, but unless a defendant wishes to plead guilty — for that or some other reason — the state should be required to prove the case.
The arguments in favor of pleas of "nolo contendere” or "guilty but mentally ill” are based on a claimed value to the defendant. It is urged that a defendant should not be forced to acknowledge something he cannot remember, or to defend a charge he does not wish to defend because he cannot remember the transaction or does not think much of his defense.
These arguments misperceive the office of pleading, which is simply to fix the matters for proof in an adversary proceeding.
A plea of "guilty” amounts to a statement by a criminal defendant that the state does not have to prove anything; that the defendant is willing to waive the entire adversary proceeding; and that the .defendant wishes to allow the imposition of any lawful penalty provided for the conduct charged.
No defendant is obliged to plead guilty. Since the concept of "guilty” embraces a legal conclusion based on established facts, we permit a defendant to substitute his judgment for that of an independent factfinder whenever we accept a guilty plea. We do so on the theory that the defendant perceives some value to himself in avoiding trial.
Our concern has been, and should continue to be, that one wishing to plead guilty does so knowingly and freely, and that he is not induced to do so by ignorance or chicanery. GCR 785.7 is our cumbersome effort to meet that concern.
If the state wishes to provide treatment for a sick person who has been found guilty of a crime, it indeed may do so. Whether or not it does so, however, should not affect the procedure whereby guilt is established.
Inasmuch as we have not as yet provided any procedure for the pleading of the conclusion of "guilty but mentally ill”, I would set aside these pleas and remand these cases for trial or for the taking of a guilty plea.
We initially denied defendant Booth’s and, in Long, the prosecutor’s applications for leave to appeal, 406 Mich 883 (1979). On reconsideration, we ordered that the applications be held in abeyance pending our decision in People v McLeod, 407 Mich 632; 288 NW2d 909 (1980), 406 Mich 993 (1979). After our decision in McLeod was issued, we granted leave to appeal, 408 Mich 893 (1980).
MCL 768.36(2); MSA 28.1059(2).
MCL 750.520b; MSA 28.788(2).
MCL 768.20a; MSA 28.1043(1).
MCL 768.20a(3); MSA 28.1043(1)(3).
Aside from the contentions to be discussed infra, neither defendant complains that the recitals of rights and information at the plea-taking proceedings were deficient in any way.
86 Mich App 646; 273 NW2d 510 (1978).
86 Mich App 676; 273 NW2d 519 (1978).
Although this is a foundational issue, it has not been approached by the defendants in the same manner in this Court. For example, the Court of Appeals in Long believed that a plea of guilty but mentally ill could not be accepted from a forgetful defendant because of his or her inability to supply a factual basis through direct interrogation. Defendant Long adheres to this position. On the other hand, defendant Booth, in his appeal to this Court, concedes that a nolo contendere-type plea might be accepted under the guilty but mentally ill statute, provided that a forgetful defendant who wishes to enter a plea of this type is afforded certain additional safeguards.
As of this writing, it appears that five other states, Illinois, Indiana, Georgia, New Mexico, and Delaware, authorize a guilty but mentally ill verdict. Legislation to permit this verdict has been urged in other jurisdictions, see, e.g., Gall v Commonwealth, 607 SW2d 97, 113 (Ky, 1980). The United States Congress presently has such a verdict under consideration.
See, generally, Note, The Constitutionality of Michigan’s Guilty But Mentally 111 Verdict, 12 J L Reform 188 (1978); Corrigan & Grano, 1976 Annual Survey of Michigan Law: Criminal Law, 23 Wayne L Rev 473, 474-475 (1977); Schwartz, Moving Backward Confidently, 54 Mich Bar J 847 (1975).
Amnesia appears to be a common symptom of mental illness, see Note, Amnesia: A Case Study in the Limits of Particular Justice, 71 Yale L J 109 (1961).
We discuss some of these claims as if both defendants were similarly situated in their appeals to this Court. Technically, however, only those contentions advanced by defendant Booth are properly before us, since Long is a prosecutor’s appeal, and defendant Long has not applied for leave to cross-appeal.
Each defendant was asked whether, in light of all of the information before him, he believed that he was guilty of the crime to which his plea was being offered. Each replied affirmatively. Defendants’ acquiescence in the evidence against them demonstrates their willingness to plead and to shoulder the consequences of their pleas. Also, it stands as "a precaution * * * against subsequent false claims of innocence”. People v Barrows, 358 Mich 267, 272; 99 NW2d 347 (1959) (not here claimed).
The informations characterize the crimes as "criminal sexual conduct in the first degree by engaging in sexual penetration, accomplished through the use of force or coercion, with a female person under the age of thirteen years * * *. MCL 750.520b.”
Preliminary Examination Transcript, pp 15-16, 46-50, 79, 115-116.
In Stoner, a guilty plea was offered because the Legislature had not yet authorized pleas of nolo contendere. The Court of Appeals, in an opinion written by then-Judge Levin, stated:
"When a defendant claims that because of intoxication he does not recall participating in the commission of the offense, but, nevertheless, desires to plead guilty, the people should be asked to produce evidence negating the intoxication defense. Such evidence might appear in the transcript of a preliminary examination presented to and read by the trial judge before accepting the plea. If from such evidence it appears that the people can substantially refute a claim of intoxication, then a factual basis for the defendant’s plea would appear without regard to his own acknowledged recollection of what occurred. Upon such a showing and express and knowledgeable waiver of the defense by the defendant, the judge could properly accept the plea.” (Footnotes omitted.) Stoner, supra, 608.
The "sexual penetration” element of first-degree criminal sexual conduct, as defined by MCL 750.520a(h); MSA 28.788(1)(h), does not carry with it any specific intent requirement. Compare with the definition of "sexual conduct” for purposes of second-degree criminal sexual conduct, MCL 750.520a(g); MSA 28.788(1)(g).
This contention is similar to the Stoner argument discussed in Part IV. However, the Stoner argument focuses upon whether the plea is accurate, whereas this claim centers upon whether the plea is understanding. | [
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Ryan, J.
This is an appeal from a Court of Appeals affirmance of a summary judgment dismissing the plaintiffs’ case for failure to state an actionable claim under the so-called recreational use statute, MCL 300.201; MSA 13.1485. The only question before us is whether the plaintiffs have alleged facts sufficient to state a claim for gross negligence or willful and wanton misconduct. Our task is thus limited because the recreational use law authorizes recovery in the circumstances of this case only if gross negligence or willful and wanton misconduct is shown.
We agree that no actionable claim for gross negligence is made out in the plaintiffs’ pleadings because there is no allegation therein of the defendant’s subsequent negligence. See Gibbard v Cursan, 225 Mich 311; 196 NW 398 (1923).
We also agree that the plaintiff has alleged facts sufficient, if barely so, to make out a case for willful and wanton misconduct as that concept is defined in Gibbard, supra.
This separate opinion is written, however, because we do not subscribe to much of the analysis in our brother’s opinion, particularly his assessment of the cases of Thone v Nicholson, 84 Mich App 538; 269 NW2d 665 (1978), and Thomas v Consumers Power Co, 394 Mich 459; 231 NW2d 653 (1975).
The interlocutory posture of this litigation suggests that this appeal is an inappropriate opportunity to attempt to reconcile the confused and disparate pronouncements of Michigan’s appellate judiciary concerning the concepts of gross negligence and willful and wanton misconduct. To accomplish that desirable task, it is necessary, we think, to disown much of what has been written in this Court and in the Court of Appeals in earlier cases, and to enunciate a simple and easily understood test defining both gross negligence and willful and wanton misconduct. The more appropriate occasion for that effort will be the time when a case is before us upon a factual record adequate to enable those who will read our pronouncement to better understand it because of the illuminating reflection of the factual and legal context in which it is said. That cannot and ought not to be done on an appeal from the grant of a motion for summary judgment for failure to plead an actionable claim under GCR 1963, 117.2(1).
Until such record is made and presented, we should be guided, indeed bound, as the lawyers before us are, by this Court’s last best effort to define gross negligence and willful and wanton misconduct. That effort was last accomplished best, even if not in the context of the recreational use act, in Gibbard, supra. Gibbard is a well-reasoned case whose three-element formula for determining willful and wanton misconduct, however, is poorly stated. If the three-prong test is read in the context of the instructive analysis which precedes it in Gibbard, it becomes evident that the rule of the case is that willful and wanton misconduct is made out only if the conduct alleged shows an intent to harm or, if not that, such indifference to whether harm will result as to be the equivalent of a willingness that it does. Willful and wanton misconduct is not, as the Gibbard Court observed, a high degree of carelessness. The poorly phrased three-prong test for willful and wanton misconduct in Gibbard is cast entirely in language of ordinary negligence until, in the third element, it is said that it must be shown that an injury "is likely”. It is in that concept — the notion that in the circumstances of a given case the injury is probable, or to be expected, or likely — that is found the requisite indifference to harm tantamount to a willingness that it occur, if not a specific intent that it does, which distinguishes willful and wanton misconduct from ordinary negligence.
Upon careful examination of the allegations of the plaintiffs’ fourth amended complaint, conceding the truth of all the well-pleaded allegations and resolving all inferences properly to be drawn therefrom in plaintiffs’ favor, we are satisfied that, on the whole, the plaintiff has alleged, if barely, facts essentially equivalent to an assertion that thé City of Adrian, in its acts and omissions, was indifferent to the likelihood that catastrophe would come to a member of the public using the lake, an indifference essentially equivalent to a willingness that it occur.
We do not find the language of the three-prong test of Gibbard a satisfactory expression of the standard to be used for identifying willful and wanton misconduct, and do not think it is a faithful summarization of the analysis which it is intended to encapsulate. We would describe the test differently, but only upon a fully developed factual record.
Fitzgerald, C.J., and Kavanagh and Coleman, JJ., concurred with Ryan, J.
The nuisance issue raised by the appellant, and addressed in part IV of our brother’s opinion, is but an aspect of this issue. We concur in his resolution of it.
The three-element formula which Justice Clark adopted to summarize his analysis of the difference between a high degree of negligence and willful and wanton misconduct was taken, with attribution of course, from a legal encyclopedia:
"According to note, 69 LRA 516, and text, 20 RCL, p 145, the elements necessary to characterize the injury in the case at bar as wilfully inflicted are:
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Bronson, J.
Plaintiff, by her administrator, brought suit in the circuit court for the county of Saginaw. The suit against defendant Dropek was brought under the liquor control act. It is alleged that defendant Dropek unlawfully sold intoxicating beverages to plaintiff decedent, a minor, and further that defendant:
“did encourage, permit, allow and entice [plaintiff decedent] * * * to accept a ride in the automobile of defendant, Gerald Satkowiak, when defendant, Thomas Dropek, knew that said Gerald Satkowiak, as a result of his intoxicated condition resulting from the sale of the alcoholic liquor to him by the defendant, Thomas Dropek, was unable to exercise proper caution for the safety of plaintiff’s decedent [sic].”
At the pre-trial conference defendant Dropek noted that the plaintiff’s action was not proper under the liquor control act and moved for summary judgment. Plaintiff’s attorney then moved to add the deceased’s natural mother and father as parties plaintiff. After hearing oral argument, the trial court held that plaintiff’s administrator had no right of action against the defendant Dropek and also denied the motion to add the natural parents as parties plaintiff. Summary judgment was then entered against the plaintiff in favor of defendant Thomas Dropek. Plaintiff appeals from that judgment.
The issue raised by plaintiff on appeal is:
Whether it was error for the trial court to enter summary judgment against plaintiff’s administrator and to deny plaintiff’s motion to add the deceased’s parents as parties plaintiff.
I.
The trial court evidently felt that Vincent A. Scorsone, decedent’s administrator, was the true plaintiff and thus precluded from suing defendant Dropek under the dramshop act.
The trial judge stated that:
“The court is of the opinion that the plaintiff in his capacity as administrator, has no right- of action against the defendant retailer of alcoholic beverages, Dropek, under the liquor control act for the reasons and grounds set forth in the ease of Genesee Merchants Bank & Trust Company v. Bourrie (1965), 375 Mich 383.”
It is our opinion that the trial court misinterpreted and therefore misapplied the holding in Genesee Merchants Bank & Trust Company v. Bourrie (1965), 375 Mich 383.
In Genesee Merchants Bank & Trust Company, the Court stated at p 389 that, “Under the dramshop act the personal representative of the decedent is not á proper party plaintiff.” However, the Court went on to state in Genesee Merchants Bank at p 390:
“The only proper posture for this case would have involved the injured parties (for instance, the widow and the guardian of the children of deceased) suing defendants under the dramshop act. A change to that from the actual plaintiff-chosen posture of administrator of the estate of decedent as plaintiff under the wrongful death act amounts to the introduction of a new cause of action.” (Emphasis added.)
In the pr'esent case, unlike Genesee Merchants Bank, the • decedent, not the administrator, is the plaintiff.
The dramshop act. (CDS 1961, § 436.22 [Stat Arm 1970 Cum Supp § 18.993]) provides that:
“Every wife, husband, child, parent, guardian or other persons who shall be injured-in person or property, means of support or otherwise, by an intbxr icated person by reason of the unlawful selling, giving or furnishing to any ,such persons :any intoxicating liquor, shall have- a right of action in his -or her name against the person who shall by- such selling or giving of any such liquor have caused or contributed to the intoxication of said person or persons or who shall have caused or contributed to any such injury * * * In case of the death of either party, the action or right of action given in this section shall survive to or against his or her executor or administrator, and in every such action by a husband, wife, child or parent, the general reputation of the relation of husband and wife, or parent and child shall be prima facie evidence of such relation, and the amount so recovered by either husband or wife, or parent and child, shall be his or her sole and separate property.” (Emphasis added.)
Clearly, under CLS 1961, § 436.22 plaintiff by her administrator has a right of action against defendant Dropek.
II.
The trial court denied plaintiff’s motion to add new parties, having found that the administrator was not the proper party to bring an action in the present ease. The trial court concluded that new parties could not be added as the two-year statute of limitations on actions brought under the. liquor control act had run. This conclusion would have been correct had plaintiff’s administrator had no right of action against defendant Dropek. It is not true .under the holding made here today.
GrCR 1963, 118 reads in part:
“Amendments. A party may amend his pleading once as a matter of course at any time before or within 15 days after a responsive pleading is served or, if the pleading is one to which no responsive pleading is required and the action has not been placed upon the trial calendar, he may amend it at any time before or within 15 days after it is served. Otherwise, a party may amend his pleading only by leave of court or by written consent of the adverse party. Leave shall be freely given when justice so requires. All amendments shall be filed in writing, dated, and numbered consecutively. Unless otherwise indicated therein, an amended pleading shall supersede the former pleading.” Rule 118.1.
“Relation Back of Amendments. Except for the purpose of demanding a trial by jury under subrule 508.2, the amendment relates back to the date of the original pleading whenever the claim or defense asserted in the amended pleading arose out of the conduct, transaction, or occurrence set forth or attempted to be set forth in the original pleading.” Rule 118.4.
The Supreme Court in LaBar v. Cooper (1965), 376 Mich 401, 405, 406, quoted the following from 1 Honigman & Hawkins, Michigan Court Rules Annotated (2d ed), p 416:
“ ‘Subrule 118.4 is intended to introduce a more liberal and workable test, borrowed from the Federal rules. See committee comment (5), supra. The test is no longer conceptual, but rather functional. The amendment relates back to the date of the original pleading and, therefore, is not barred by limitations, whenever the claim or defense asserted in the amendment arose out of the conduct, transaction, or occurrence set forth or attempted to be set forth in the original pleading. It is thus beside the point that the amendment introduces new facts, a new theory, or even a different cause of action, so long as it springs from the same transactional setting as that pleaded originally. The new test satisfies the basic policy of the statute of limitations, because the transactional base of the claim must still be pleaded before the statute runs, thereby giving defendant notice within the statutory period that he must be prepared to defend against all claims for relief arising out of that transaction.’ ” (Emphasis supplied.)
In Doan v. Chesapeake & Ohio R. Co. (1969), 18 Mich App 271, 276, our Court stated that :
“Although recognizing the truth of defendant’s assertion that the plaintiff, individually, and plaintiff, as administratrix, are two separate legal entities, Jordan v. C. A. Roberts Company (1967), 379 Mich 235, (On Rehearing, 1968), 381 Mich 91, this Court is not persuaded that that is determinative of this case.”
The Court in Doan went on to say, at p 279:
“The test under subrule 118.4 as set forth in La-Bar, supra, makes it clear that whether or not a new cause of action is stated in the amendment is no longer the question, but rather it is whether the amendment arises out of the conduct, transaction, or occurrence alleged in the original pleading sought to be amended. * * * This Court does, however, approve the limitation appearing in 63 Harvard Law Review 1177, 1239, cited in Russell [v. New Amsterdam Casualty Co. (CA 8, 1962), 303 F2d 674]:
“ ‘However, * * * where the plaintiff sues in the wrong capacity some courts have experienced considerable difficulty in avoiding the objection that the original action was void, and have thus disallowed the change of the party plaintiff. Nevertheless, the new plaintiff is today usually allowed to take advantage of the former action if the original plaintiff had, in any-capacity, either before or after the commencement of suit, an interest in the subject matter of the controversy.’ ” (Emphasis supplied.)
Under the trial court’s interpretation of this case, new’ parties could not bo added. Under our holding the contrary result is true. Plaintiff should have been- allowed to add new parties.
Reversed and remanded.
All concurred.
CLS 1961, § 436.22 (Stat Ann 1970 Cum Supp § 18.993), also known as tlie dramshop aet. | [
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Per Curiam.
Defendant was found guilty in a nonjury trial of aiding in the concealment of stolen property knowing it to be stolen, CLS 1961, § 750.535 (Stat Ann 1969 Cum Supp § 28.803).
On appeal defendant argues that after the proofs for both sides were in, the prosecution should not have been allowed to amend the information over objection so that following the language, “Earion White did feloniously and unlawfully receive and conceal stolen property”, was added, “and/or aid in the concealment of stolen property”.
The prosecution relies on CL 1948, § 767.76 (Stat Anu 1954 Rev § 28.1016) which purports to allow a trial court before, during or after a trial to amend the indictment in respect to any defect, imperfection or omission in form or substance or of any variance with the evidence.
The Supreme Court in People v. Sims (1932), 257 Mich 478, said that this language did not authorize the changing of the offense nor the making of a new charge by way of amendment, but permitted only the cure of defects in the statement of the offense which is already sufficiently charged to fairly apprise the accused and court of its nature-. - Being thus procedural, it does not infringe on the accused’s right to be informed of the nature of the charge.
In the present case the amendment was not prejudicial to defendant. Since CL 1948, .§ 767.39 (Stat Ann 1954 Rev § 28.979) makes aiders and abettors in the commission of a crime equally guilty with principals, we find that the amendment called for no different defense than would the original charge. Thus, allowing the amendment did not constitute error. . ’ :
Defendant also alleges that the evidence produced at the preliminary examination was insufficient to show probable cause that the defendant had committed the crime charged and, further, that the evidence produced at the trial was not sufficient to support a conviction that the defendant aided in the concealment of stolen property knowing it to have been stolen.
In People v. Tantenella (1920), 212 Mich 614, the Court held that the evidence of the accused’s guilty knowledge at the time he received the stolen-property, or aided in its concealment, is generally to be collected from all the various circumstances of the case. The Court said:
“Guilty knowledge means not only actual knowledge, but constructive knowledge, through notice of facts and circumstances from which guilty knowledge may fairly be inferred. (Citations omitted.)
“While we have held (Durant v. People [1865], 13 Mich 351) that mere possession cannot be used as evidence to show knowledge that the goods were stolen, we have also held that the fact of recent possession of stolen property, coupled with contradictory statements of the accused as to the possession of such property and aiding in concealing such property, was evidence of guilty knowledge. (Citations omitted.)”
At the preliminary examination the co-owner of a color television set testified that it had been stolen and that two days later she overheard a conversation between her husband and the defendant as follows:
“A. Well, my husband asked him if his T.V. was in there. He said that, he asked him if his T.V. was in there and Earion told him, ‘No,’ and he says, ‘Man, I haven’t seen it, I swear I haven’t seen it and it’s not in my house.’ He said, ‘I don’t know anything about a T.V.’ ”
According to testimony of a police officer, two to three hours after this conversation the police went to defendant’s apartment with a search warrant and found the stolen television set in question.
We hold that this evidence was sufficient to show probable cause that defendant had committed the crime charged.
Other evidence was presented at the trial including defendant’s own testimony that he knew the television set was in his apartment and was suspicious about its ownership.
We hold that the facts and circumstances brought out at trial were such that guilty knowledge that the television was stolen could be fairly inferred.1 People v. Tantenella supra.
Affirmed.
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Bronson, J.
A complaint was filed against Reading Brass Company by sis of its former employees for bonuses allegedly owing them as a consequence of services rendered in 1967. Defendant corporation filed a complaint under GCR 1963, 908 against the attorney for plaintiffs, Kenneth G. Prettie, charging that Prettie could not properly represent the plaintiffs in this case under the Canons of Professional Ethics due to his prior relationships with defendant corporation. Hearing was held in the Hillsdale County circuit court on this complaint. Defendant corporation amended its pleadings so as to include Lawrence L. Hayes, Jr., a partner of Prettie’s, who was also counsel for plaintiffs. Subsequent to the court’s written opinion, an order was entered dismissing the complaint.
In its written opinion the court concluded that even though attorney Prettie was a trustee of defendant company’s employee retirement fund and although Mr. Prettie was a co-trustee with Mrs. White, the president of the corporation, of a testamentary trust, the corpus of which included 225 of the 500 outstanding shares of the corporation, these relationships did not create any conflict that would impair his right to represent the plaintiffs in the principal suit.
The court held that the fact that Mr. Prettie was a director of the bank where defendant corporation’s funds were garnished by plaintiffs for the purpose of this suit did not sufficiently evidence a conflict of interest. The court so held because discovery of information as to the location of these funds was gained by attorney Hayes at a session with corporate representatives wherein the subject matter of the suit on behalf of plaintiffs was discussed.
The court recognized the fact that the attorneys Prettie and Hayes were members of the same law firm at the time the contract between Charles Brat-ton, one of the plaintiffs herein, and defendant corporation was being negotiated. The trial judge found, however, that the representation of Bratton by Mr. Hayes and of the corporation by Mr. Prettie was fully disclosed to all of the parties concerned and consequently it was not a proper basis for any allegation of conflict in the current controversy. The trial court also determined that at the time the suit was filed against the corporation, attorney Prettie was not counsel for the corporation and that in fact his relationship as legal counsel for the company had terminated some time prior, and he was not, as contended by defendant corporation, representing both litigants at the same time. The trial court indicated that notwithstanding the above conclusions of fact, both attorney Prettie and attorney Hayes would normally be precluded from representing plaintiff Bratton in this litigation pursuant to language in Canon 6 and Canon 37 of the Canons of Professional Ethics. But in spite of the foregoing, the trial judge did not so hold because he concluded that the nature of the answer filed by defendant corporation constituted a personal affront to the integrity and representation of the attorneys in question and that an order preventing them from representing Bratton in this suit would result in denying them the opportunity to refute the charges made in that answer and counterclaim. On this basis the trial judge concluded that the attorney should be allowed to represent Bratton in the litigation.
The trial court determined that there was no conflict which would prevent representation of the other five plaintiffs by the same counsel. The contract with Bratton involved his services as general manager of the corporation and the other five plaintiffs are suing the corporation on the basis of contracts made between them and Bratton as general manager of Reading Brass Company. Defendant corporation contends that these contracts made between Bratton and the other five plaintiffs are void because Bratton lacked the requisite authority to execute them on behalf of the corporation. The trial court further concluded that Mr. Prettie’s representation of the corporation at the time that these contracts were entered into was not controlling since he was not involved in their execution and consequently did not possess any confidential information that would create a conflict under Canon 6 or Canon 37. The trial court finally concluded that the validity of these contracts was subject to the validity of the contract between Bratton and defendant corporation and therefore that the same issues of integrity and representation of the attorneys involved were also at issue in these five cases. Defendant appealed the decision of the trial court. This Court granted plaintiff’s motion to dismiss on the ground that the holding of the trial court was not a final judgment from which a claim of appeal could he made as a matter of right. Defendant corporation then filed application for leave to appeal.
The last paragraph of Canon 6 reads as follows:
“The obligation to represent the client with undivided fidelity and not to divulge his secrets or confidences forbids also the subsequent acceptance of retainers or employment from others in matters adversely affecting any interest of the client with respect to which confidence has been reposed.”
Canon 37 states in part:
“It is the duty of a lawyer to preserve his client’s confidences. This duty outlasts the lawyer’s employment, and extends as well to his employees; and neither of them should accept employment which involves or may involve the disclosure or use of these confidences, either for the private advantage of the lawyer or his employees or to the disadvantage of the client, without his knowledge and consent, and even though there are other available sources of such information. A lawyer should not continue employment when he discovers that this obligation prevents the performance of his full duty to his former or to his new client.
“If a lawyer is accused by his client, he is not precluded from disclosing the truth in respect to the accusation.”
I
The term “client” as used in G-CR 1963, 908 includes within its meaning the defendants in this case.
In Wingilia v. Ashman (1928), 241 Mich 534, the Michigan Supreme Court held that the trial court properly disqualified counsel for defendant where it was revealed that counsel formerly represented plaintiff in the drafting of the contract then being litigated. In so holding the Court said at p 537:
“Aside from the legal situation, the trial court did nothing more than Mr. Garvey’s [the attorney] own sense of propriety should have prompted him to do without a motion. He had drawn the contract and consulted with plaintiff concerning the matter, and was, therefore, in a position to be suspicioned of unprofessional conduct if he accepted employment from defendant.”
The language of the above case when coupled with the canons quoted above requires the disqualification of both attorneys in the Bratton case. Attorney Prettie drafted the contract being litigated on behalf of the corporation and is now representing plaintiffs in an action against that former client. This fact in turn disqualifies attorney Hayes since he was a member of the same law firm. Thus far we are in agreement with the trial court. However, the question now becomes:
Does the fact that the professional conduct of these attorneys was brought into issue by the responsive pleadings of defendant corporation change the above result? Canon 37 of the Canons of Professional Ethics allows for disclosure hy an attorney in order to answer an accusation directed at him hy his client. This in no way controls the question of proper representation referred to in Canon 6. The mere fact that such allegations are made in responsive pleadings should not change the result where the attorney would otherwise be disqualified. As to the other five eases, it would appear that the conclusions of the trial court were correct. There is no indication that these attorneys participated in the drafting of the contracts in question, nor is there any indication that Prettie, as counsel for the corporation, possessed confidential information related to questions that might be raised in those five cases.
II
Canon 19 of the Canons of Professional Ethics states:
“When a lawyer is a witness for his client, * * * he should leave the trial of the case to other counsel. Except when essential to the ends of justice, a lawyer should avoid testifying in court in behalf of his client.”
On the basis of the facts here presented, it is doubtful that attorneys Prettie and Hayes would have to testify on behalf of their clients except insofar as the litigation involving Bratton as a plaintiff is concerned. However, because these attorneys were active in the contract negotiations and particularly because of the nature of the responsive pleadings offered by defendant, Canon 19 may indeed have application. While the mere allegation or assertion by a party that a counsel may be called upon to testify as a witness in the litigation cannot automatically invoke Canon 19, in this case there are indications that the testimony of both of these attor neys will be necessary in order to litigate the allegations of fraud made in defendant’s responsive pleadings. These allegations go to the very circumstances surrounding the negotiations which led to the contract now at issue. Under these conditions, it is apparent that the testimony of the attorneys may well be essential to refute the charges. While under other circumstances we might find that application of Canon 19 would promote an obvious abuse or curtailment to a client’s choice of attorney, from these facts we find that Canon 19 requires the attorneys to remove themselves from Bratton’s case.
Ill
The trial court held that attorney Prettie’s status as trustee of 225 of the 500 outstanding shares of the corporation was merely passive. His only apparent duties in that regard were the filing of tax returns each year. None of the evidence indicates he exercised any voting or such related powers over the shares and consequently that there is no indication that his status as counsel for plaintiffs is inconsistent or in conflict with his status as trustee.
Not only must attorneys adhere to the Canons of Professional Ethics, but we feel it is sound advice to scrupulously avoid those situations in which it can be said that there is even an “appearance” of impropriety.
Reversed.
All concurred.
Defendant corporation in its filing of an answer, affirmative defense, and counterclaims with respect to the principal litigation alleged that the above-named attorneys had aeted in concert and fraudulently induced the president of the corporation, Mrs. White, to approve the contract being litigated and' as a director to vote under duress for the formal accordance of that contract by the corporation.
“Hule 908. Claims by Clients Against Attorneys.
“Attorneys and counselors are officers of the courts of this state and as such are subject to the summary jurisdiction of such courts. The circuit court of the county in which an attorney resides or has an office has jurisdiction, on verified written complaint of any client, either in person or by attorney and after reasonable notice and hearing, to make any order for the payment of money or for the performance of any act by the attorney which law and justice may require. All courts of record have a like jurisdiction as to all such complaints regarding matters arising in suits or proceedings in such eourts.”
Although Wingilia was decided before the existence of GCR 1963, 908 or its earlier counterpart, we find that the reasoning of the Court in that ease is applicable here. | [
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Holbrook, J.
This case involves an action for damages for breach of contract brought in Wayne county circuit court by Harbor Land Company, a Michigan corporation and plaintiff herein, against the defendant Township of Crosse lie, a Michigan public corporation.
On January 10,1955 James Rossin and Paul Ringler, directors of plaintiff company and herein referred to as sponsors, entered into a written contract with the township. The contract discloses that the sponsors owned certain undeveloped acreage within the township which they desired to subdivide, develop and improve for residential purposes so as to meet the requirements of the Federal Housing Act and the Michigan State Department of Health pertaining to disposal and treatment of sewage; that the township was without sewers and facilities for sewage treatment and disposal and was, at the time, financially nnahle to erect an adequate sewer system and sewage treatment and disposal plant. The sponsors offered to provide sanitary sewers and treatment facilities for 500 homes which would serve all of sponsors’ land. The defendant township required the proposed sewage facilities of sponsors to be enlarged so as to serve 875 houses before approving the project. The sponsors complied with the township demands.
The sponsors, pursuant to the contract terms, agreed to provide, at their own expense and upon their own premises, a sewage treatment plant to be approved by the State Health Department, the Wayne County Hoad Commission, the Board of Health and defendant township, and to convey the same to the township upon satisfactory completion. The contract provided in part that:
“3. * * * If new subdivisions be developed by owners other than the sponsors herein who could use said plant, then before permission to tie into the plant be given, the new developments shall pay to the sponsors a pro-rata fee for the privilege of such use. The pro-rata fee to be approved by the township.
“4. When the Department of Health of the State of Michigan shall have issued a construction permit for said plant, then the township will direct the issuance of a building permit to the sponsors for the construction of the plant.
“5. Sponsors will at their expense provide and plant appropriate trees and shrubs for landscaping the site and screening the building in an attractive manner. During the construction of the plant the township will have same inspected periodically, and upon satisfactory completion, the sponsors will convey to the township by warranty deed the land upon which the plant will be situated, plus the necessary land for screening purposes, which deed will be accepted by the township. Said warranty deed will have a reverter clause, so that if this plant should be abandoned, then the land will revert to the grantors. * * * ” (Emphasis supplied.)
The.parties entered into a separate operation agreement of same date as the contract.
On January 11, 1955, the sponsors assigned all their right, title and interest in the contract to the plaintiff, and plaintiff did, pursuant to the contract, construct a sewage treatment plant and facilities which, at the insistence of defendant township, were designed to provide a capacity to serve 875 houses instead of the projected 500 houses to be placed on the land of the plaintiff and its predecessors in interest. Upon completion of the plant and facilities, the same were conveyed to the township.
The township board, in accordance with the contract, did, on July 10, 1956, adopt the following resolution: .
“RESOLVED AND ADOPTED, that a tapping-fee of $200.00 be paid to the Harbor Land Company for any new homes built outside of their subdivision; that the township protect the Harbor Land Company by not permitting- anyone to tap into the sewer until they have paid their fee to the Harbor Land Company securing- a letter stating- that they have paid the fee before any permits be issued to tap.” '
On' September 28, 1965, the township rescinded the foregoing resolution and ceased requiring payment of the. agreed tapping fees. On October 18, 1965 ..the township board voted to abandon plaintiff’s .Potawatomie Woods treatment plant when a treatment plant to be constructed by defendant became operational. Accordingly, in that year, defendant township did abandon the treatment plant constructed by plaintiff and proceeded to construct a new township sewer system and treatment plant, into which plaintiff’s sewer system was to be connected.
Mrs. Merele E. Solomon, a supervisor for defendant township since April, 1965, testified to the following facts regarding abandonment of plaintiff’s plant: the township had been informed by the Water Resources Commission that secondary sewage treatment would be required by 1970 so as to bring the water quality in the area surrounding Crosse Ile Township to a prescribed standard by that date; a stipulation to this effect was signed by the township in March, 1966, several months after plaintiff had been informed of the Township’s decision to abandon plaintiff’s plant; consultation was had by township board members with the firm of Hubbull, Roth & Clark, consulting engineers, the board apparently acting upon its recommendations as to what should be done to meet the requirements of the Water Resources Commission; and, the board received from the Wayne County Road Commission official in charge of operation of plaintiff’s treatment plant a breakdown of operation costs, upon defendant’s request, which information was also allegedly considered by the township in determining to abandon plaintiff’s plant. Mrs. Solomon testified that, when abandoned, the sewage treatment plant constructed by plaintiff provided the same primary sewage treatment as did the plant later constructed by defendant township.
The case was tried by the Honorable Cornelia C. Kennedy, without a jury. Upon stipulation of the parties, plaintiff’s motion for temporary injunctive relief was denied and a temporary restraining order dismissed. In its opinion filed August 5, 1968, the trial court found defendant township in breach of contract and awarded damages to plaintiff. Judgment for $37,000 was entered accordingly on Sep tember 5, 1968. Defendant appeals, raising several issues which we restate and consider as follows:
(1) Bid the trial court commit error in finding that defendant township properly entered into a binding contract containing an implied condition that the township would continue operation of plaintiff’s sewage treatment plant, including the collection of tap-in fees, during the plant’s reasonable useful life?
The trial court, in accordance with GrCR 1963, 517.1, as amended 1969, made findings of fact and conclusions of law thereon. In its opinion the trial court stated its findings in part as follows:
a* * * plaintiff hag alleged, and defendant has admitted, that, ‘a sewage treatment plant and facilities providing capacity for approximately 500 homes or 2000 people would have been adequate to serve the needs of the plaintiff, but that the plant was increased in size at the insistence of the defendant township to serve approximately 875 homes and 3500 people and that such increase was a condition precedent imposed by the defendant to their (sic) approval of this sewage disposal plant and this contract.’ The area to be served was to be bounded by Horse Mill Road, East River Road, Stout Avenue and Canal Thoroughfare.
“Pursuant to the written agreement, Exhibit 1,. plaintiff constructed an interceptor sewer most of the_ length of Church Road and a sewage treatment facility at a total cost of approximately $129,000 and conveyed the same to the township. It thus performed all its undertakings under the Agreement, Exhibit 1. Of this total, $20,995.51 was for the Church Road interceptor. The agreement, Exhibit 1, was implemented by a resolution of the Township Board dated July 10, 1956, * * * .
“Thereafter the township required applicants for building permits in the area covered by the agreement to show evidence that they had paid the $200.00 tap fee to Harbor Land Company before such a permit would be issued for all persons, except lot owners in Rossin-Ringler Subdivision No. 1 and Potawatomie "Woods Subdivision which had been developed by plaintiff. During the period prior to September 1965 permits were issued and plaintiff received the $200 fee for each.
“Sometime in 1965 the Township of Crosse Ile undertook to build and put into operation a sewage treatment facility of its own. Initial contracts were let for the area excluding that served by the sewage treatment plant constructed by plaintiff. Subsequently the township determined that it would include the entire island in the area to be serviced by the new facility. It rescinded its resolution of July 10,1956, abandoned the sewage treatment plant construction by plaintiff, and ceased to collect tap-in fees.
“Plaintiff contends that under the agreement the defendant is required to continue to collect tap-in fees for permits issued in the area between Horse Mill Road, East River Road, Stout Avenue, and Canal Thoroughfare, and that its announced refusal to do so constituted a breach of the agreement. Defendant, on the other hand, contends that the agreement did not require the Township of Crosse Ile to collect these fees for any specified or determinate period, and that it was required to collect the same only so long as new homes actually used the sewage treatment plant, and that the plant could be abandoned by the township at any time for any reason that the township deemed sufficient. Defendant points to the provision that the land on which the treatment plant was built reverts under the terms of the agreement to the plaintiff if the plant was abandoned. It should be pointed out that there is no evidence that the treatment plant was not operating properly at the time it was abandoned or that it could not serve the entire area included in the initial agreement. It was approved by the State of Michigan Health Department before it was ae cepted by the township. The township is now required by the Health Department of the State of Michigan to provide secondary treatment of sewage by December 1970. There was no showing that the plant constructed by the plaintiff could not efficiently have been converted or enlarged to include a secondary treatment, nor is there evidence to the contrary.
“The agreement does not state the period of time during which the township will continue to collect tap-in fees or operate the sewage treatment plant. ^ ??
Based upon the foregoing findings of fact the court made the following pertinent conclusions of law:
“* * * Having required plaintiff to construct the sewage treatment plant as it did and having by the agreement * * * and the resolution accompanying it provided a manner in which the plant could be paid for, the township could not unilaterally terminate this arrangement without any reason except that some other sewage treatment system might now be more desirable in the opinion of the township board. Such a change of position, if permitted, could occur on the day following the initial agreement and would amount to no undertaking on the part of the township. Thus, unless there was an implied undertaking by the township to operate the facility and collect tax fees during the reasonable useful life of the facility, the township could have terminated the agreement the day following acceptance of the facility and the agreement would lack mutuality. It is clear from all of the testimony that plaintiff did not intend the sewage facility to be a gift to the township. The court finds that the parties intended that the facility would be operated and the fees would be collected for the reasonable useful life of the facility.
“* * * the court is of the opinion that as of December 1970 the township could properly abandon tlie use of this sewage treatment facility, since at that time its useful life will be terminated because it does not provide secondary treatment. * * *
“It would avail defendant nothing if, as it contends, it did not make a contract to collect tax fees for any specified period or for a reasonable period. For if it contracted to do nothing the contract would, as stated above, be void for lack of mutuality. * * * »
The parties agree that it is realistic to assume that the contract was not intended to be of perpetual duration, as is evidenced by the provision for revert-er of title to the land in the event of abandonment of the plant by the township. However, while defendant township would have this court read the abandonment provision as allowing defendant to abandon the plant at any time, plaintiff contends that that provision was consistent with an implied condition that defendant would operate the plant during its useful life and that that provision merely served to insure that plaintiff, having put up all the money for the contract, would recover the land should defendant abandon the plant at the termination of its reasonable useful life.
In 17A CJS, Contracts, § 385(1), p 457, dealing with the duration of contracts, it is stated:
“* # * if it appears that no termination was within the contemplation of the parties, or that their intention with respect thereto cannot be ascertained, the contract will be terminable within a reasonable time or revocable at will depending upon the circumstances, as discussed infra § 398.”
Section 398, p 480 states:
“* * * It has also been held that a contract will be held terminable within a reasonable time or revocable at will, depending on the circumstances, where no termination date was within the contemplation of the parties, or where their intention in regard thereto could not be ascertained. So, where a contract states no time of duration, it may be inferred that the parlies thereto intended the contract to run for a reasonable time, and no longer.” (Emphasis supplied.)
The footnote corresponding to the above quoted section provides that:
“What constitutes a 'reasonable time’ for which contract will run is usually an implication of fact, and not of law, derivable from language used by parties considered in context of subject matter and attendant circumstances, in aid of apparent intention.”
In 17 Am Jur 2d, Contracts, § 486, p 956 it is stated:
“A contract which provides that it is to continue for a more or less indefinite period may be held to continue for a reasonable time under the circumstances. Indeed, it is said to be the general rule that _ the law implies a reasonable time where the continuation of a contract is without definite duration.”
Several cases dealing with the question of the proper time for performance or payment under a contract have been decided by our Supreme Court and by this Court and have held that where a contract is silent in regard thereto, a reasonable time will be implied from all of the facts and circumstances of the particular case.
As the trial court properly found in the case at hand, there was no showing that plaintiff’s Potawatomie Woods treatment plant was not functioning properly when abandoned, nor that plaintiff’s plant could not have been enlarged or converted to include secondary treatment facilities. Considering these facts, the trial court, upon the basis of the foregoing authority, properly ruled that the contract in question was to run for a reasonable length of time; that a “reasonable time” would, under the circumstances, encompass the reasonable useful life of plaintiff’s plant; and that the plant’s useful life would terminate in the year 1970, by which time the defendant would, under the evidence presented, be required to provide secondary sewage treatment through enlargement or conversion of its own plant or that constructed by plaintiff.
Defendant township asserts that the trial court’s finding of an implied obligation on its part to collect tap-in fees during the reasonable useful life of plaintiff’s plant was erroneous, reasoning that if an agreement not to abandon the plant was intended, it could have been expressed in the written contract. The fact remains, however, that, no express provision as to duration was included within the terms of the contract. In this regard we refer to 17A CJS, Contracts, § 328, pp 282-284, wherein it is stated:
“A contract includes not only what is expressly stated but also what is necessarily to be implied from the language used and external facts, such as the surrounding circumstances; and terms which may clearly be implied from a consideration of the entire contract are as much a part thereof as though plainly written on its face.
“In the absence of an express provision therefor, the law will imply an agreement by the parties to a contract to do and perform those things that according to reason and justice they should do in order to carry out the purpose for which the contract was made. * # * ”
This Court will not set aside the findings of fact of a trial judge in a nonjury case unless they are clearly erroneous or unless the record clearly preponderates against the findings of the trial court. We cannot say that the trial court’s findings were clearly erroneous.
Defendant further argues that the township board in 1955 had no power to contractually obligate a successor board in 1965 to continue the use of plaintiff’s treatment plant during its useful life, reasoning that to so interpret the contract is to deprive the township of its legislative discretion in dealing with sanitation, a “police power” which cannot be bargained away.
The opinion of the trial court, in this regard, stated as follows:
“The Court agrees that the Township could not contract away its legislative discretion or- delegate legislative powers. However, this does not prevent it from exercising them and entering into contracts to do so.”
The power of a municipality’s governing board to enter into contracts binding successor boards is considered in 70 ALB. at p 795, where it is stated:
“It is generally held that a board may contract for water supply, street lighting, gas supply, and the like, and bind subsequent boards, such contracts being made in the exercise of the city’s business or proprietary powers. A contract of this kind, however, must be reasonable in the length of time for which it is to extend.”
149 ALB states at p 339:
“Where a board, in the exercise of its proprietary or business powers, enters into a contract for water supply, street lighting, gas supply, flood prevention, sewerage, and the like, the contract will be held valid if reasonable in its terms.”
Also, see, 10 McQuillin, Municipal Corporations (3d ed, 1966 Bev), § 29.100, pp 486, 487 and § 29.101, pp 491, 492; Dohm v. Township of Acme (1958), 354 Mich 447,450.
The cases cited by defendant are inapposite and therefore not controlling of the ease under consid eration. We rule, upon tbe basis of tbe foregoing authority, that the trial court did not commit error in determining that the contract in question was within defendant’s power to enter, and that it bound defendant to operate plaintiff’s treatment plant and to collect tap-in fees during the reasonable useful life of the facility.
(2) Was the trial court’s award to plaintiff of damages, in the amount of $37,000, excessive?
Plaintiff’s proofs showed that its total out-of-pocket cost of constructing the sewage plant and necessary facilities before turning the same over to the township was approximately $129,000. Plaintiff added to the price of each lot which it developed and sold $200 which represented the proportionate cost of the sewer plant for each lot. Plaintiff assigned part of its land to other developers who subdivided and sold lots for houses which, when connected to the sewer system, paid the $200 tap-in fee. It appears from the record that, up until the time defendant abandoned the plant in 1965, plaintiff received for its plant construction costs, including tap-in fees and extra charges for lots sold by plaintiff, a total of $93,400. As of 1968, the record indicates that 467 houses had been connected to plaintiff’s sewage system. The president of plaintiff company, Mr. Harry Lieberman, testified that the $200 tap-in fees, which defendant agreed to collect on behalf of plaintiff before permitting taps to be made into plaintiff’s sewer system as actually constructed, were intended, as between the parties, to aggregate sufficient funds to pay plaintiff its investment of approximately $129,000, its operation and maintenance costs under the operation agreement, and interest for the time in which plaintiff’s money would be invested in the facility. This testimony was undisputed.
Mr. Lieberman also testified that he had no way of determining what the plant wonld have cost if it had been constructed to provide service for 2,000 people or 500 homes, which, as plaintiff claims, wonld have been adequate to serve the sewage needs of its own subdivisions. He stated that the cost of such a plant had never been estimated inasmuch as plaintiff company had not been able to get township approval for the smaller plant.
The trial court stated in its opinion the following, regarding its determination of damages:
“* * * there is considerable vacant property, some of it platted. The number of taps per year from 1958 to 1965 varied from 25 to 46 and averaged 37-1/4. In 1966 there were 30 tap-ins and in 1967 there were 69 in the area included in the agreement. (The area recited in the written agreement extended to and included lots on East River Road and the Court finds that lots on East River Road are included in the terms of the agreement.) This is an average of 48 for each of these years.
“The president of the plaintiff corporation, an experienced real estate developer, testified that the area involved was a good area for home development. If an average for the area for the past 10 years is used, it would be 39 homes per year. Because the higher average which includes the last 2 years may be due in part to the fact that a township sewer was provided, the court will use the smaller average of 37 homes per year. The court finds that plaintiff has established by a preponderance of the evidence that if the defendant had not breached its agreement, plaintiff wonld in the years 1966 through 1970 have received an average of 37 tap-ins per year or a total of $37,000.”
Defendant argues that the maximum amount of plaintiffs loss, and consequent damages, should be the extra cost incurred in construction of the larger treatment plant which it required plaintiff to build. In the absence of such evidence as to the extra cost of the larger plant, defendant contends, plaintiff’s proofs did not support the finding of $37,000. Defendant does not, however, cite any authority to support this contention.
In Gongola v. Yaksich (1966), 3 Mich App 676, cited by plaintiff, this Court, as to breach of contract damages, stated at pp 680, 681:
“* * * When testimony such as given in this case makes the exact ascertainment of damages impossible the Michigan Supreme Court has said:
‘We do not, * * in the assessment of damages, require a mathematical precision in situations of injury where, from the very nature of the circumstances, precision is unattainable.’ Stimac v. Wissman (1955), 342 Mich 20, 28.
“The object of awarding damages in eases of breach of contract is to award a sum ‘which is the equivalent of performance of the bargain * * * to place the plaintiff in the position he would be in if the contract had been fulfilled.’ McCormick, Damages, § 137, p 561. The trial court in its award has attempted to confer upon the plaintiff the benefits contemplated by both parties when the contract was made, which have been denied the plaintiff as a consequence of defendant’s breach. The method utilized by the trial court in assessing damages was proper and reasonable.”
See, also, Brodsky v. Allen Hayosh Industries, Inc. (1965), 1 Mich App 591; Tann v. Allied Van Lines, Inc. (1966), 5 Mich App 309.
Plaintiff presented for the trial court’s consideration a theory of damages which, if allowed, would have produced an award of $109,862. The court rejected plaintiff’s theory and determined that, upon the record in this cause, an award of $37,000 was proper. The determination of damages was for the trial judge sitting as the trier of fact.
"We conclude that, under the evidence presented in this case, the trial court’s award of damages was reasonable and proper.
Affirmed. Costs to plaintiff.
All concurred.
Ansbacher-Siegle Corp. v. Miller Chemical Co. (1939), 137 Neb 142, 288 NW 538.
A contract is not terminable at will where a reasonable duration is implied. Hammond v. C.I.T. Financial Corp. (CA 2, 1953), 203 F2d 705.
Stange v. Wilson (1868), 17 Mich 342; Ferguson v. Arthur (1901), 128 Mich 297; Pierson v. Davidson (1930), 252 Mich 319; Siegel v. Sharrard (1936), 276 Mich 668; Brady v. Central Excavators, Inc. (1947), 316 Mich 594; Duke v. Miller (1959), 355 Mich 540; Goslin v. Goslin (1963), 369 Mich 372; Thornton Construction Company, Inc., v. Mackinac Aggregates Corporation (1968), 9 Mich App 467; Levine v. Johnson (1968), 10 Mich App 152; Kiff Contractors, Inc., v. Beeman (1968), 10 Mich App 207.
Hoffmaster v. McNett (1966), 2 Mich App 709, 712; Bill v. Brown (1966), 2 Mich App 455, 457; Teachout v. Maiers (1965), 2 Mich App 69, 73; Airport Motel Corporation v. Burke, Burke, Ryam & Roberts (1966), 4 Mich App 385, 387; Tann v. Allied Van Lines, Inc. (1966), 5 Mich App 309, 313; Burke v. Gaukler Storage Company (1968), 13 Mich App 536, 537. See, also, Hudson v. Enichen (1944), 308 Mich 79, 84; Pogletke v. Schwanz (1957), 349 Mich 129, 134; Mellios v. Charney (1957), 350 Mich 199, 203; and G. C. Kay Company v. Standard Steel Treating Company (1958), 352 Mich 234, 238, 239.
Bridgeport Irrig. Dist. v. United States (CA 8, 1930), 40 E2d 827 (writ of certiorari denied in [1930], 282 US 866 [51 S Ct 74, 75 L Ed 766]); Plant Food Co. v. City of Charlotte (1938), 214 NC 518 (199 SE 712); Washington Fruit & Produce Co. v. Yakima (1940), 3 Wash 2d 152 (100 P2d 8) ; North Newton v. Regier (1940), 152 Kan 434 (103 P2d 873) ; Verdigris River Drainage District v. State Highway Commission (1942), 155 Kan 323 (125 P2d 387).
In Plant Food Co. v. City of Charlotte, supra, this footnote, the city made a ten-year contract with plaintiff, whereby the city agreed to deliver sludge from a sewerage disposal plant, plaintiff agreeing to remove the sludge and pay the eity therefor. The court held the contract valid, the court stating at p 520:
“The true test is whether the contract itself deprives a governing body, or its successor, of a discretion which public policy demands should be left unimpaired. It is obvious that a too rigid adherence to the principle would leave the town council nursing a mere theory, in the possession of an important governmental power without practical means for its exercise, and unable to undertake any important public work, since no concern would equip itself and undertake the project when the incoming administration, the product perhaps of political accident, might repudiate the contract at will during its performance.” | [
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Quinn, P. J.
David Newton, a six-year-old child, was a passenger in an automobile driven by his father when that automobile was struck in the rear by a car owned by defendant Barger and driven by defendant Huddle. David suffered a bloody nose as a result of the accident. David was born with a large void in his lip, without flesh going into his nostril. He had had three operations to correct this deficiency prior to the accident here involved.
This action was brought by David’s father as next friend and individually to recover damages for David and for the father growing out of the accident. The damages sought were $100,000 for David and $20,000 for the father. The jury verdicts were no cause of action for David and an award of $200 for the father. Judgments entered on the verdicts; plaintiffs’ motion for new trial was denied, and they appeal.
Two of the grounds urged by plaintiffs as the basis for appellate relief are so interrelated that decision on one ground also disposes of the other. Plaintiffs claim that the verdicts were contrary to law and against the great weight of the evidence, and that the trial court erred in denying the motion for new trial,
There was medical evidence to the effect that David became a month breather instead of a nose breather after the accident and that he would probably need plastic surgery in the future. A report from another doctor who examined David some time after the accident indicated there was no evidence of traumatic damage to David’s nose. "When the latter is considered in conjunction with David’s birth defect and the steps taken to correct it, there is substantial evidence to support the verdict of no cause of action as to David’s claim. Before accepting this verdict, the trial court interrogated the foreman of the jury to determine the accuracy of the verdict. During this interrogation, the foreman indicated that on the evidence presented, the jury did not believe David was injured as a result of the accident.
The test for granting appellate relief because a jury verdict is contrary to law and against the great weight of the evidence is that the verdict is against the overwhelming weight of the evidence. Lake Oakland Heights Park Association v. Township of Waterford (1967), 6 Mich App 29. The record before us fails to meet that test.
The award of $200 on the father’s claim is not so inadequate as to require reversal. That award was within the range of the testimony and it does not shock our conscience. Stevens v. Edward C. Levy Company (1965), 376 Mich 1.
The foregoing findings preclude a finding that the trial court abused its discretion in denying the motions for new trial. The latter finding is necessary before granting appellate relief. Benmark v. Steffen (1968), 9 Mich App 416.
On the strength of defense counsel’s argument to the jury, plaintiffs contend the verdicts were obtained by prejudice and sympathy. Plaintiffs neither objected to the argument nor requested an instruction to disregard the argument. Both steps are necessary to preserve this question for review. Kujawski v. Boyne Mountain Lodge, Inc. (1967), 379 Mich 381.
Finally, plaintiffs’ claim that the jury failed to follow the trial court’s instructions is negated by the jury foreman’s answers to the trial court’s questions to the jury prior to accepting the verdicts.
Affirmed with costs to defendants.
All concurred. | [
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V. J. Brennan, J.
Around 9:45 a.m., February 4, 1968, a Detroit woman, the complainant here, was raped and robbed by a young man meeting defendant Jimmie Dozier’s description. Charged with the two crimes, defendant claimed mistaken identity and alibi as defenses. A jury returned a verdict of guilty of both charges on August 26, 1968, and the court sentenced defendant to two concurrent prison terms of 10 to 15 years.
Defendant’s first two allegations of error involve a telephone conversation allegedly held between the defendant’s mother and a policewoman assigned to the case. Defendant testified on cross-examination that he arrived home from an all-night restaurant around 6 o’clock in the morning of February 4 and stayed in bed until 6 o’clock that evening. Asked by the prosecutor whether she had told a policewoman over the telephone that defendant had arrived home between 1 and 2 a.m., defendant’s mother, a defense witness, answered “No, I didn’t, I don’t think I did,” and finally, “I don’t remember.” The prosecutor then called the policewoman to the stand who testified from her notes that defendant’s mother had indeed told her that defendant had arrived home between 1 and 2 a.m. The policewoman added that defendant’s mother also told her that on February 4 her son stayed in bed until 6 p.m.
Defendant contends that the prosecutor failed to lay a foundation for the impeachment of his mother’s credibility, and therefore the policewoman’s testimony was inadmissible. Queen Caroline’s Case (1820), 2 Brod & Bing 284, 313 (129 Eng Rep 976); 3 Wharton, Criminal Evidence (12th Ed) § 918. We disagree. The prosecutor questioned defendant’s mother as follows:
“Q. {By Mr. Abate, continuing) Did you receive a telephone call anytime within a few days after February 4th, 1968, from a person purporting to be a policewoman?
“A. I can’t recall.
“Q. Can’t recall? Did you ever speak with anybody from the police department?
“A. One Saturday I did.
# *
“Q. Mrs. Dozier, did you make a statement to anyone that you remember, that your son, Jimmie, came home at one or two a.m. Sunday morning, February 4th, 1968?
“A. No, I didn’t.
“Q. Tou did not make that statement to anyone? Are you sure? Are you sure, Mrs. Dozier?
“A. I don’t think I did. I can’t remember.”
McCormick summarizes the elements of laying a foundation:
“To satisfy the requirement the cross-examiner will ask the witness whether he made the alleged statement, giving its substance, and naming the time, the place and the person to whom made. The pur pose of this particularity is, of course, to refresh the memory of the witness as to the supposed statement by reminding him of the accompanying circumstances.
“If the witness denies the making of the statement, or fails to admit it, but says ‘I don’t know’ or ‘I don’t remember’ then the requirement of laying the foundation’ is satisfied and the cross-examiner, at his next stage of giving evidence, may prove the making of the alleged statement.” McCormick, Handbook of the Law of Evidence (1954), § 37, p 68.
The prosecutor’s preliminary questions were more than adequate to refresh the mother’s memory.
The trial court did not instruct the jury that the policewoman’s testimony could be considered only for purposes of impeachment, and not as substantive evidence of the defendant’s guilt. Defendant contends that the failure to give an instruction to this effect is reversible error. The record shows that trial counsel neither requested the instruction nor objected to the court’s failure to give it. Consequently, defendant cannot complain of error. GCR 1963, 516.2; People v. Mallory (1966), 2 Mich App 359; People v. Allar (1969), 19 Mich App 675. We note that it has been held to be reversible error not to give an instruction even though an instruction was not requested and objection was not made. People v. Durkee (1963), 369 Mich 618; People v. Eagger (1966), 4 Mich App 449; People v. Rodgers (1969), 18 Mich App 37; People v. Anderson (1966), 2 Mich App 718. However, where it has, the prior, inconsistent statements have been the only direct evidence of guilt, the other evidence being either nonexistent, Anderson, supra, or only circumstantial, Durkee, Eagger, Rodgers, supra. In the instant case, the complainant’s testimony provided strong and direct evidence of guilt; the prior, inconsistent statements did not. We find no reversible error.
Defendant’s remaining two assignments of error involve a linenp at which the complainant identified him as her assailant.
Defendant contends that the linenp “was so unnecessarily suggestive and conducive to irreparable mistaken identification that he was denied due process of law.” Stovall v. Denno (1967), 388 US 293 (87 S Ct 1967; 18 L Ed 2d 1199). Again we disagree. In the first place, the record does not reveal a disparity in appearance that would have the effect of singling the defendant out from the other members' of the lineup. Although no one member of the lineup was identical in his appearance to the defendant, one was very close, and all were of the same race. In the second place, misidentification seems unlikely, at least on the present record. The complainant gave the police a detailed description of her assailant soon after she was raped, picked out defendant’s photograph before the lineup was held, and then positively identified defendant at the lineup only two days later, on February 6. The attorney who represented defendant at the lineup testified at trial that he thought the lineup was conducted fairly and that the complainant was unequivocal in pointing out the defendant as her assailant.
Finally, defendant contends the court erred by telling the jury three times that it held the lineup to have been “properly conducted,” without once telling them that they were free to disregard the lineup identification if they thought the complainant was mistaken.
We find no error in what the court did tell the jury. The admissibility of testimony concerning the lineup identification was disputed in their presence. The court dismissed them and conducted an evidentiary hearing to determine the validity of the lineup and, ultimately, the admissibility of the testimony concerning it. There was no harm in telling the jury the result of the dispute, that is, that the court found the lineup to have been properly conducted.
Nor do we find error in what the court did not tell them. Trial counsel neither requested a further instruction nor objected to the instruction given. GrCR 1963, 516.2. At the same time, trial counsel did argue that little weight was to be given to the testimony concerning the lineup, calling the lineup a “phony showup.” Defendant was not prejudiced.
Affirmed.
All concurred.
MCLA § 750.520 (Stat Ann 1954 Rev § 28.788) (rape); MOLA § 750.530 (Stat Ann Í954 Rev § 28.798) (unarmed robbery). | [
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Bronson, J.
Plaintiffs instituted this action in the circuit court for the county of Alpena to recover money damages for the alleged taking of aviation easements by the county. Plaintiffs are 18 property owners owning homes immediately adjacent to the southern approach to the north-south runway of the defendant county-owned Phelps Collins Airport. Plaintiffs claim an inverse condemnation of their property. There is uncontroverted testimony to the effect that planes taking off from the north-south runway cause plaster to fall from plaintiffs’ ceilings, cause unbearable noise, cause window panes to rattle, and are generally disruptive of plaintiffs’ use and enjoyment of their property. The trial judge in his written opinion found that “persuasive proofs were adduced in support of plaintiffs’ claims pleaded, relating to the creation of excessive noises, vibrations, smoke, and other disturbances caused by numerous aircraft flying directly over or near plaintiffs’ property at extremely low and dangerous altitudes.”
The trial court found that:
“After reviewing the testimony as it may have related to the county’s liability in the instant suit, and after thorough consideration of the terms of the quit-claim deed received in evidence, the county is not liable.”
From this decision plaintiffs appeal,
The sole issue decided by the trial court and the only question we need consider in this opinion is:
Assuming that plaintiffs have proven an unconstitutional taking of their property and are entitled to recover, is the county of Alpena liable to the plaintiffs for such damages as may be determined by the court?
The trial court found no liability on the part of the county. We cannot agree.
Plaintiffs and defendant each cite as authority for their position Griggs v. County of Allegheny (1962), 369 US 84 (82 S Ct 531; 7 L Ed 2d 585). In Griggs, a property owner brought suit against the county for an alleged appropriation of his property resulting from take-off and landing of aircraft at the county airport. The Supreme Court held that where noise from aircraft landing and taking-off made a home located off the end of the runway unbearable for residential use, there was a “taking” of an air easement over the property, and that the county was liable to the property owner. There the Supreme Court stated at pp 89, 90:
“It is argued that though there was a ‘taking,’ someone other than respondent was the taker — the airlines or the CAA acting as an authorized representative of the United States. We think, however, that respondent, which was the promoter, owner, and lessor of the airport, was in these circumstances the one who took the air easement in the constitutional sense. Respondent decided, subject to the approval of the CAA, where the airport would be built, what runways it would need, their direction and length, and what land and navigation ease ments would be needed. The Federal Government takes nothing; it is the local authority which decides to build an airport vel non. and where it is to be located. "We see no difference between its responsibility for the air easements necessary for operation of the airport and its responsibility for the land on which the runways were built. Nor did the Congress when it designed the legislation for a National Airport Plan. For, as we have already noted, Congress provided in 49 USC § 1109, 49 USCA § 1109, for the payment to the owners of airports, whose plans were approved by the Administrator, of a share of ‘the allowable project costs’ including the ‘costs of acquiring land or interests therein or easements through or other interests in air space.’ § 1112(a) (2). A county that designed and constructed a bridge would not have a usable facility unless it had at least an easement over the land necessary for the approaches to the bridge. Why should one who designs, constructs, and uses an airport be in a more favorable position so far as the Fourteenth Amendment is concerned? That the instant ‘taking’ was ‘for public use’ is not debatable. For respondent agreed with the CAA that- it would operate the airport ‘for the use and benefit of the public,’ that it would operate it ‘on fair and reasonable terms and without unjust discrimination,’ and that it would not allow any carrier to acquire ‘any exclusive right’ to its use.”
The distinguishing factor in the Griggs case, not mentioned in the majority opinion, but apparently underlying the Court’s conclusion, is the agreement between the United States and the county of Allegheny by which the county was paid substantial Federal aid for the construction of its airport. The Pennsylvania court in Griggs cited, among other provisions, the following:
“ ‘Insofar as is within its powers and reasonably possible, the sponsor [county of Allegheny] will prevent the use of any land either within or outside the boundaries of the airport in any manner (including the construction, erection, alteration, or growth of any structure or other object thereon) which would create a hazard to the landing, tahe-of or maneuvering of aircraft at the airport, or otherwise limit the usefulness of the airport. This objective will be accomplished either by the adoption and enforcement of a zoning ordinance and regulations, or by the acquisition of easements or other interest in land or airspace, or by both such methods.’” Griggs v. County of Allegheny (1961), 402 Pa 411 (168 A2d 123).
This agreement specifically placed the duty and obligation upon the county of Allegheny to acquire lands, buildings, easements, -and other interests in land which unless acquired would create a hazard to the landing, take-off, paths of glide, descent paths, and authorized flight of aircraft. The majority opinion of Justice Douglas is based upon the above agreement which places both control and possession of the airport in the county of Allegheny.
The injury claimed and the damage alleged in the present casé arise from a type of use and possession of airport land that is seemingly beyond the power of control granted to the county of Alpena.
An analysis of the quit-claim deed of October 5, 1949, whereby the Federal government deeded the airport in question to the county of Alpena, reveals the following:
In paragraph 1 of page 5 the following language appears:
“(1) That insofar as it is within its powers, the party of the second part [county] shall adequately clear and protect the aerial approaches to the airport by removing, lowering, relocating, marking or lighting or otherwise mitigating existing airport hazards and hy preventing the establishment or creation of future airport hazards.”
Paragraph 2 of page 5 of the deed gives the United States Grovernment the right to non-exclusive use of the landing area of the airport.
“(2) That the United States of America through any of its employees or agents shall at all times have the right to make non-exclusive use of the landing area of the airport at which any of the property transferred by this instrument is located or used, without charge.”
Further, title to the property in the county is not absolute. The transfer is subject to reversion.
“(1) That in the event that any of the aforesaid terms, conditions, reservations or restrictions is not met, observed, or complied with by the party of the second part or any subsequent transferee, whether caused by the legal inability of said party of the second part or subsequent transferee to perform any of the obligations herein set out, or otherwise, the title, right of possession and all other rights transferred by this instrument to the party of the second part, or any portion thereof, shall at the option of the party of the first part revert to the party of the first part sixty (60) days following the date upon which demand to this effect is made.” (Deed, p 8.)
This control and possession on the part of the Federal government is expressed on page 9 of the deed where it is stated that the covenants in the deed are to be construed as conditions which, if breached, would allow the government to exercise its option to cause title, right of possession and all other rights to revert back to it;
Through the above artfully drafted clauses the Federal government has assured itself the use of the airport without local interference. In the 1953 lease between the Federal government and the county of Alpena the following clause appears:
“6. The Lessor shall furnish to the government, as part of the rental consideration, the following:
“c. The government shall have the right to construct a 3,000 foot extension to the south end of the north-south runway and to construct overrun strips to said north-south runway and taxiways and to clear and keep clear all obstructions in the clear zone and the approach zone to conform to Air Force Regulation 86-3.”
In a supplemental agreement dated April 9,1963, the Federal government obtained the right to extend the north-south runway 1,000 feet:
“d. The government shall have the right to extend the north-south runway from 8,000 to 9,000 feet by a 1,000-foot paved extension to the south end of said runway, including additional taxiway, holding pad, blast pad, install additional runway lights, relocation of barriers, improve overruns and do all such other necessary modifications and work in connection with such extension.”
“22. That the government will be responsible for the removal and clearance of any obstructions and hazards within the glide plane surface and/or transitional surfaces of the approach zone lying south of the present southerly boundary of Phelps Collins Airport and which require clearance or removal by reason of the construction of the 1,000-foot extension of the north-south runway as provided in paragraph 2 of this supplement. The topping, lowering, removal and clearance of such hazards and obstructions shall be accomplished in accordance with the present FAA criteria in Technical Standard 0-N18.”
It is the duty of the county of Alpena to clear and protect aerial approaches to the airport adequately insofar as it is within its powers. (1949 Deed.) However, by virtue of the supplemental agreement of April 9,1963 (quoted above in part), it is the Federal government who “will be responsible” for adequately clearing and protecting aerial approaches to the extension of the north-south runway. This amounts to pre-emptive control of the extension since if there is any interference or conflict in the use and maintenance of approaches between the county of Alpena and the Federal government title and right of possession now resting with the county would in accordance with the 1949 deed revert back to the Federal government. Therefore control and possession, which were both vested in the county of Allegheny in the Griggs case, are not vested in the county of Alpena in the present case. The duty and obligation to acquire lands and easements is in the Federal government in the present case, not in the county.
We do not read Griggs in so narrow a manner as does defendant. Rather, we see Griggs as being a landmark decision which enables certain persons to seek redress from their government for alleged invasions of their property rights. Griggs should not be read and applied in such a twisted way as to defeat those persons whom the United States Supreme Court by their decision in Griggs intended to benefit.
It is apparent from an examination of the record and transcript in this case that a definite benefit inures to the county from the existence and operation of Phelps Collins Airport. During the summer months military flights bringing summer trainees account for approximately 80% of the air traffic ai the airport. For the rest of the year about 80% of the air traffic is comprised of private users and an airline. Testimony by Robert Welsh, the airport manager, established the various, relationships that the county maintains with users of the airport. The general indication evidenced in "Welsh’s testimony was that the county recognizes the valúe of the airport to local commerce. Thus, it is understandable that the county would not seek to take any affirmative action which- would force a confrontation with the Federal government and possible loss of the airport.
Whatever responsibility our decision imposes upon the county, it is one of- the county’s own making. Artfully contrived reservations and agreements between the Federal government and the county cannot contract away the county’s responsibilities.
The present owner of the airport is the county of Alpena. As such, it owes a dúty to the surrounding landowners. That duty cannot be evaded by the county with the argument, “We might risk loss of the airport.”
' Plaintiffs are residents of Alpena County. They alone of the population of Alpena County are being forced to bear what may well prove to be the unreasonable hardship that the present operation of the north-south runway as it now exists entails.
The county voluntarily entered into the deed agreement of 1949. As a matter of fact, the county of Alpena receives benefit from ownership of the airport. We cannot accept the argument that by holding defendant county liable in the present action this Court is forcing defendant to lose ownership of the airport. What we do here is to determine the rights of 18 plaintiff residents of Alpena County.
The county of Alpena cannot hide under the umbrella of immunity by holding a deed over its head. It should not be permitted to escape its responsibilities by pointing a finger at Washington. The finger of responsibility is clearly pointed at the connty of Alpena. Accordingly, we find that, if any damages be proven, the connty of Alpena should be held liable for damages awarded.
Reversed and remanded for further hearings consistent with this opinion.
All concurred.
“In eircumstanees more opaque tlian this we have held lessors to their constitutional obligations. See Burton v. Wilmington Parking Authority (1961), 365 US 715, 81 S Ct 856, 6 L Ed 2d 45.” (Footnote by the Supreme Court.)
The amount of traffic hy private users and the airline stays fairly •constant throughout the year. It is only tire amount of total traffic that fluctuates.
At oral argument appellee earnestly advocated “that were an injunction issued against the county to stop flights using the north-south-runway extension, how long would the county be able to keep the airport before thg government took it back under reverter?” | [
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ON REMAND
Before: Neff, P.J., and Michael J. Kelly and Reilly, JJ.
Neff, P.J.
This case is before us for a second time after our Supreme Court, in lieu of granting leave to appeal, vacated our prior judgment and remanded to us for reconsideration in light of the decision in Rowe v Montgomery Ward & Co, Inc, 437 Mich 627; 473 NW2d 268 (1991). 439 Mich 891 (1991). In our original opinion we reversed an order granting summary disposition in favor of defendant SPX Corporation (hereafter defendant) and remanded to the trial court for trial. Schippers v SPX Corp, 186 Mich App 595; 465 NW2d 34 (1990). We now reevaluate whether, under the standards expressed in Rowe, there is a genuine issue of material fact regarding the existence of an employment contract between plaintiff and defendant providing for termination only for just cause.
i
We start from the premise that there is a presumption of employment at will that plaintiff has the burden to overcome by convincing the court that it should supply an omitted term or that the circumstances are such that the jury is entitled to do so. Rowe, supra, pp 638-639._
In Rowe, the Supreme Court took pains to explain what it was not holding:
We do not decide that the words and conduct of parties cannot, as a matter of law, create an issue submissible to a jury regarding the existence of a contract implied in fact. Moreover, we do not suggest that a contract of employment is too indefinite to be enforced where the employee’s consideration is the work performed in response to a unilateral offer. [Id., p 638.]
As noted, this case was decided in the trial court on defendant’s motion for summary disposition. When ruling on a motion for summary disposition made pursuant to MCR 2.116(C)(10), courts are liberal in finding that a genuine issue exists, drawing all inferences in favor of the nonmovant and granting the motion only when the court is satisfied that it is impossible for the claim to be supported at trial because of some deficiency that cannot be overcome. Rizzo v Kretschmer, 389 Mich 363, 371; 207 NW2d 316 (1973); Langeland v Bronson Methodist Hosp, 178 Mich App 612, 615-616; 444 NW2d 146 (1989).
When we examine this case within this framework, we are led to the same conclusion we reached initially, to wit, material issues of fact exist on the basis of defendant’s employee handbook and testimony concerning oral representations made by spx personnel to plaintiff.
ii
According to plaintiff’s deposition testimony, he was hired by the defendant’s Sealed Power Division in 1973 as an over-the-road truck driver. At the time he transferred to the Hy-Lift Division, there were six over-the-road truck drivers at Sealed Power and he was second in seniority. At Hy-Lift, there was only one truck and one driver, plaintiff.
When plaintiff was approached by his superiors to transfer from Sealed Power to Hy-Lift, he was concerned about job security because Hy-Lift had only one truck and he would be the only driver in that division. Plaintiff was worried because if the one truck at Hy-Lift were to be eliminated for any reason, he would be out of work. He therefore sought assurances of continued availability of work and of his own job security. According to his testimony, plaintiff received assurances from three of defendant’s employees, including plaintiff’s immediate supervisor, that his job was secure, as long as they had a truck and until plaintiff was ready for retirement.
m
Careful review of the opinion in Rowe leads us to the conclusion that this case is more nearly consonant with Toussaint v Blue Cross & Blue Shield of Michigan, 408 Mich 579; 292 NW2d 880 (1980), the seminal Michigan case in the law of employment contracts. As in Toussaint, plaintiff in this case expressed concerns about job security and engaged in discussions about his concerns before accepting the transfer to Hy-Lift. His concerns were met with assurances that raise a question of fact concerning whether he had a reasonable belief that he could be fired only for cause.
This conclusion is further bolstered by the existence of the employee handbook that, as we noted in our original opinion, at the very least, raised the possibility of an illusory promise of an employment contract providing for termination only for just cause meant to benefit the employer by infer ring job security while retaining the benefit of denying such security at the whim of the employer. Rowe, supra, p 655; Schippers, supra, pp 598-599; Diggs v Pepsi-Cola Metropolitan Bottling Co, Inc, 861 F2d 914 (CA 6, 1988).
While the handbook issued by defendant in this case does not contain the same type of language specifically providing for termination only for just cause as the one at issue in Toussaint, it does offer objective support for the oral representations allegedly made to plaintiff with regard to his concerns involving job security. Like in Toussaint, plaintiff engaged in preemployment discussions concerning job security and he specifically inquired about that issue. On the other hand, the handbook in this case did not, as did the handbook in Rowe, clearly and unambiguously notify plaintiff of any policy of termination at will.
Another way in which this case more closely resembles Toussaint than Rowe is that the position into which plaintiff transferred was unique. He was the only driver of the only truck in the division. These factors, according to the opinion in Rowe, are important considerations in determining whether a question of material fact exists sufficient to send the case to a jury. Rowe, supra, p 643.
The concurring opinion of Justice Boyle, which agrees with the bulk of the reasoning in the plurality opinion of Justice Riley, also contains some language that we believe supports the conclusions we reach here. There was reference to a "durational term” to plaintiff’s employment with the mention that plaintiff would be employed until retirement. Rowe, supra, p 664. This further bolsters the argument that a fact question exists concerning whether there was a commitment that could reasonably be understood to be a promise of employment in which termination would be only for just cause, because plaintiff testified that defendant’s employees told him his job was safe until he was ready to retire. As Justice Boyle noted in footnote 5 to the concurring opinion on p 664:
Where the parties’ intention is not apparent and the facts and circumstances advanced by the plaintiff are sufficient to show it is more likely than not that a reasonable promisee would believe that the employer was making a commitment that amounted to a promise of job security, the court will conclude, as a threshold matter, that the presumption has been overcome. Where facts and circumstances are contradicted and reasonable minds can differ, the jury will determine the facts and circumstances that actually obtained, whether there was a commitment amounting to a promise, and whether the promise was breached. Where the facts and circumstances produced would not warrant a reasonable juror in finding a promise of job security, the question cannot be put to the jury, Leslie v Mendelson, 302 Mich 95, 104; 4 NW2d 481 (1942).
IV
We specifically find that there are facts and circumstances that are contradicted and upon which reasonable minds can differ. As a result, it is for the jury to determine the facts and circumstances that actually occurred, whether there was a commitment amounting to a promise, and whether the promise was breached. Accordingly, we reverse and remand for further proceedings consistent with this opinion. We do not retain jurisdiction.
Reversed and remanded.
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Memorandum Opinion.
Defendant Albert Francis Johnson was convicted by a jury of the offense of unlawful sale of a hallucinogenic drug, contrary to MCLA 335.106; MSA 18.1106. He was sentenced to a prison term of 1-1/2 to 4 years.
On appeal defendant claims that the people did not prove that phencyclidine (P.C.P.) was a dangerous drug and devotes the major portion of his brief to the issue of dangerous drugs.
The trial court was correct. The defendant was charged with selling a hallucinogenic drug, not a dangerous drug.
An examination of the record and briefs discloses no prejudicial error.
Affirmed. | [
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Per Curiam.
The defendant was convicted of unlawful possession of a narcotic drug, contrary to MCLA 335.153; MSA 18.1123.
The defendant was arrested for violation of parole. Prior to incarceration all persons are searched and an inventory is made of their belongings. During such a procedure in this case, marijuana was discovered on the defendant.
Defendant moved to suppress the evidence and the motion was denied.. He claims the trial court erred in denying the motion.
The Fourth Amendment prohibits unreasonable searches. A search of a prisoner to inventory his possessions prior to incarceration is not an unreasonable search. Charles v United States, 278 F2d 386 (CA 9, 1960); State v Stevens, 26 Wis 2d 451; 132 NW2d 502 (1965). See concurring opinion of Judge Levin in People v Henry Robinson, 37 Mich App 115,119 (1971).
Affirmed.
US Const, Am IV. | [
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Per Curiam.
Plaintiff appeals from an order of the circuit court granting summary disposition in favor of defendants pursuant to MCR 2.116(C)(8) and (10). We affirm.
This dispute is premised on plaintiff’s dissatisfaction with financial services rendered her now deceased father, Joseph Walker, by defendant Shear-son Lehman Hutton, Inc., and its agent, defendant William J. Konchal. Plaintiff alleged various counts, including claims of negligent estate plan ning, that the decedent was sold securities unsuitable for his investment purposes, that defendants engaged in excessive trading in the decedent’s account, and violation of the Racketeer Influenced and Corrupt Organizations Act, 18 USC 1961 et seq.
Plaintiff first argues that the trial court erred in refusing to enforce her discovery request for a policy and procedures manual utilized by Shearson for its employees. Generally, any document that is relevant and not privileged is freely discoverable upon request. Eyde v Eyde, 172 Mich App 49, 55; 431 NW2d 459 (1988). The circuit court’s decision to grant or deny a discovery request is reviewed for an abuse of discretion. Id. at 54.
In the case at bar, defendants do not allege that the document sought to be discovered is protected by privilege, and, therefore, we must determine whether the document was relevant to the litigation. Plaintiff, however, offers no explanation of the perceived relevancy of Shearson’s policy and procedures manual beyond the bold assertion that the document is indispensable to preparation of her case in light of the fact that the major witness to the events, Walker, is now deceased. Plaintiff claims that the document would shed light on the customary scope of defendant’s investment advice and trade practices and whether it is customary for an investment advisor to consider the capital gains tax consequences of investment recommendations.
We fail to see, however, how the manual would be relevant to any of these purposes. As for Walker being deceased, the policy and procedures manual would not bear out, or be relevant to, the actual facts of the transactions between Walker and defendants. As for the customary scope of defendant’s investment advice and trade practice, the relevant inquiry is not what Shearson directs its employees to do, but what this employee did in handling Walker’s account and whether those activities constituted either a violation of the various statutes relied upon by plaintiff or negligence in the handling of Walker’s account. As noted above, the manual will shed no light on what Konchal actually did, or did not do, in the handling of this account.
As for plaintiff’s claim that discovery would aid in determining whether it is customary for an investment advisor to consider the capital gains tax consequences of his recommendations, this again is not relevant to the litigation. It matters not whether it is customary for Shearson’s agents, because of the requirements of its policy and procedures manual, to advise investors regarding the capital gains tax consequences of investment advice. What is relevant is whether a stockbroker has an obligation to advise an investor regarding the tax consequences of recommended investment options and, if such a duty does exist, whether Konchal complied with that duty in handling Walker’s account. Because plaintiff makes no showing of how the manual would shed light on either the question of a stockbroker’s duty to his customer or what Konchal actually did in the handling of Walker’s account, the contents of the manual are not relevant to this litigation and plaintiff is merely engaging in a fishing expedition.
While Michigan does encourage wide discovery, Eyde, supra, the trial court must also protect the interests of the opposing party so as not to be subjected to excessive, abusive, or irrelevant discovery requests. In the case at bar, if the manual does have some relevance to this litigation, plaintiff has not demonstrated to our satisfaction what that relevance is, and, therefore, we cannot con- elude that the trial court abused its discretion in refusing to compel discovery of the document.
Plaintiff also argues on appeal that the trial court erred in granting defendants’ motion for summary disposition. We disagree. First, we conclude that the trial court correctly determined that there was no genuine issue of material fact concerning count i of the complaint, plaintiff’s claim of negligent estate planning. The trial court determined, after reviewing the deposition testimony and affidavit of Konchal, that there was no evidence to support the claim that Konchal ever gave estate planning advice to Walker and that plaintiff failed to produce any affidavits or other documentary evidence in support of her claim. A genuine issue of material fact does not exist in the absence of contradictory evidence brought forth by the nonmoving party. The nonmoving party may not merely rely on the allegations or denials contained in the pleadings. McCart v J Walter Thompson USA, Inc, 437 Mich 109, 115; 469 NW2d 284 (1991).
Turning to count ii of the complaint, that defendant Konchal had recommended an unsuitable investment for Walker in light of his investment objectives, we again conclude that summary disposition was appropriate. First, plaintiff argues that the cause of action for selling unsuitable securities may be found in the provisions of MCL 451.604(a) (1)(M); MSA 19.776(204)(a)(l)(M), which authorizes the revocation of the registration of a broker for recommending to a customer the purchase, sale, or exchange of a security without reasonable grounds to believe that the recommendation is suitable for the customer on the basis of the customer’s circumstances as known by the broker. However, § 204(h) specifically states that a violation of § 204 does not subject a registrant to civil liability to a customer, except to the extent that the violation is contrary to some other provision of the Uniform Securities Act, MCL 451.501 et seq.) MSA 19.776(101) et seq. Thus by the explicit terms of the statute, plaintiff’s reliance on § 204 to establish a cause of action for selling unsuitable securities is frivolous.
Plaintiff also argues that the claim of selling unsuitable securities also can be based on violations of the rules promulgated by the New York Stock Exchange (nyse) and the National Association of Securities Dealers (nasd). We disagree. With regard to this issue, we are persuaded by the reasoning of Judge (now Justice) Boyle in Kirkland v E F Hutton & Co, Inc, 564 F Supp 427, 443 (ED Mich, 1983), who held that there is no private cause of action by a customer against a broker for violations of the nasd and nyse rules.
Further, it appears that plaintiff also relies upon the Securities and Exchange Act of 1934 in support of her claim that the defendants had recommended unsuitable investments. However, we need not determine whether a cause of action for selling unsuitable securities is created under the Securi ties and Exchange Act of 1934, or the rules promulgated thereunder, because Congress has vested the federal courts with exclusive jurisdiction to resolve claims arising under the 1934 act. 15 USC 78aa; Emrich v Touche Ross & Co, 846 F2d 1190, 1197 (CA 9, 1988).
Finally, with respect to plaintiff’s unsuitability claim, to the extent that plaintiff argues that she is stating a negligence claim and is merely relying on the above statutes and rules to establish the standard of conduct required of a stockbroker, we would agree that those restrictions on stockbrokers would be probative of the issue, see Kirkland, supra at 443, but nevertheless agree with defendants that there exists no genuine issue of material fact concerning any such claim of negligence with respect to defendant Konchal selling unsuitable securities to the decedent. Specifically, plaintiff has produced no evidence to support a claim that Konchal recommended a sale or purchase that was unsuitable for the investment aims of the decedent. In fact, plaintiff, in her deposition, testified that she had no knowledge whether defendant Konchal had recommended to Walker that he engage in the securities transactions that did occur. Furthermore, Konchal’s affidavit does not disclose that he recommended any particular course of action to Walker, but that he merely had executed the "unequivocal directive” of Walker to engage in the transactions. Accordingly, even as suming that a stockbroker’s recommendation that a client engage in a securities transaction that is unsuitable for the investment goals of the client gives rise to a common-law negligence action, plaintiff has produced no facts supporting the conclusion that Konchal had affirmatively recommended that Walker engage in the complained-of transactions. Further, at least with respect to the subsequent reinvestment, there has been no claim that the transaction was unsuitable. Therefore, the trial court correctly granted summary disposition of this count.
Turning to the claim of excessive trading, or "churning,” we again agree with defendants that summary disposition was appropriate. To establish churning, it is necessary to show that the stockbroker has control of the account and that there has been excessive trading in it. Booth v Peavey Co Commodity Services, 430 F2d 132, 133 (CA 8, 1970). In the case at bar, plaintiff has produced no facts to support a conclusion that Konchal controlled Walker’s account. In fact, as discussed above, the only facts of record indicate that Walker approached Konchal with a specific investment plan in mind, to sell the stockholdings Walker had accumulated over the years and to reinvest the proceeds in other investment vehicles. Furthermore, while it is true that Walker, over the period of several months, did change his investment portfolio, the total number of trades involved were relatively few. Accordingly, we conclude that there is no genuine issue of material fact.
Finally, plaintiff argues that the trial court erred in granting summary disposition in favor of defendants of plaintiffs claim under the Racketeer Influenced and Corrupt Organizations Act, 18 USC 1961 et seq. We disagree. The record is utterly devoid of any evidence that would support a conclusion that defendants engaged in securities fraud or otherwise committed acts that could give rise to a Rico claim. Plaintiffs Rico claim is so lacking in merit that it requires neither reversal nor discussion.
Affirmed. Defendants may tax costs.
Plaintiffs claim in her brief that defendant Konchal admitted in his affidavit that he had engaged in estate planning misrepresents Konchal’s statement in that affidavit. Paragraph 7 of the affidavit states that the "only arguable 'estate planning’ advice” that Konchal gave Walker was to confirm Walker’s preexisting understanding concerning the effect of holding property with another person as joint tenants with rights of survivorship and what happens to the title to the property upon the death of one of the joint tenants. This is not an admission of estate planning by Konchal as plaintiff states. Merely informing a person of the effects and ramifications of the manner in which property is titled does not constitute estate planning. A professional engages in estate planning where he advises his client to title property in a certain manner in order to achieve a desired result. Konchal’s affidavit makes no mention of advising Walker how to title the property to achieve a particular result, or that a particular result should be achieved, but merely confirmed Walker’s understanding of the meaning of holding property as joint tenants with rights of survivorship.
Konchal’s affidavit is not clear regarding whether Konchal gave advice concerning the mutual funds in which Walker should invest the proceeds from the sales of the Gerber and American Brands stocks. Konchal’s affidavit was clear only that Walker directed him to sell the Gerber and American Brands stocks and that he wished to make mutual fund investments. This, however, does not change the result of our analysis. First, plaintiff has still failed to show that Konchal affirmatively recommended a particular purchase to Walker and that that recommendation was unsuitable for Walker’s investment goals, and, in any event, a reading of plaintiff’s brief on appeal indicates that plaintiff merely claims that the sale of the Gerber and American Brands stock was unsuitable for Walker, not that the subsequent reinvestment of the proceeds of that sale was unsuitable. | [
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Corrigan, J.
Defendant appeals by leave granted from an award of workers’ disability compensation benefits to plaintiff and his wife. We affirm in part, reverse in part, and remand.
Plaintiff, an electronics and appliance repair technician, was employed by defendant from 1972 until September 30, 1985. For the last several of those years, his work essentially involved appliance repair for defendant’s residential customers. His job often required lifting or moving heavy objects, sometimes with assistance and sometimes alone.
On April 25, 1985, plaintiff injured his back while moving a sixty-pound television back onto a stand in a customer’s home. He later sought medical attention from a company physician and from an orthopedic surgeon, Dr. Trager. He was hospitalized briefly. On August 30, 1985, Dr. Trager authorized plaintiff to return to work, provided that he not lift anything heavier than twenty-five pounds.
Plaintiffs supervisor would not allow him to return to work under that condition. Plaintiff then obtained a "no restrictions” release from Dr. Trager and reported to work again on September 30, 1985. When he appeared, however, he was informed that he was being laid off. He has not been employed by defendant since then. He received unemployment compensation benefits for a period of twenty-six weeks in 1985-86. In 1985, plaintiff earned $531.60 a week, or an annual salary of $27,643.20; his wife earned between $16,000 and $20,000 for the same period.
Plaintiff sought other employment, first in Michigan and later in Florida. He and his wife moved to Florida, where plaintiff thought he had secured a position with another retail chain, but the job fell through. Plaintiff has since earned a limited income selling real estate and mobile homes in Florida.
Defendant voluntarily paid plaintiff workers’ compensation benefits for the period of April 25 to September 30, 1985, but refused further payment, claiming that plaintiff was no longer disabled. Plaintiff filed a claim with the Bureau of Workers’ Disability Compensation in 1986. In June 1987, before the hearing on the matter, plaintiff was examined again by Dr. Trager and also by defendant’s medical expert, Dr. DeBruin. Both medical witnesses, as well as plaintiff himself, testified at the hearing on plaintiff’s compensation claim.
The magistrate found that plaintiff had suffered a continuing work-related disability and ordered that defendant pay him $316.54 a week. That figure was based in part on the magistrate’s finding that plaintiff’s wife, "who was working, but making less than her husband,” was plaintiffs dependent at the time he was injured.
Defendant appealed the magistrate’s decision to the Workers’ Compensation Appellate Commission, which affirmed in a split decision. The majority determined that plaintiff’s wife had been his dependent at the time of injury:
To effectuate the purpose of the statute, we hold that of [sic] purposes of determining the dependency of a spouse living with a worker at the time of a disabling injury, the income of the injured worker and that of the spouse (if any) shall be treated as joint income, so that whenever an injured worker makes an amount at least equal to that of the spouse, the injured worker is providing half or more of the spouse’s support, if there is no other source of household income to be factored in.
Since the plaintiff here earned in excess of $27,000 and the spouse made $20,000 at the most liberal interpretation of the testimony, she would be a dependent for worker’s compensation purposes. Even assuming that plaintiff’s spouse earned $20,000 per year, her average weekly wage of $384.62 would be less than one-half of the household’s average weekly wage of $916.22, i.e., the amount to which their standard of living was geared.
The dissenting commissioner agreed with the disability finding but concluded that the benefit award had been computed incorrectly, because plaintiff’s wife should not have been found to be his dependent.
[Plaintiff’s wife earned] $307.69 to $384.62 on a weekly basis. Even at the lesser figure of his wife’s estimated wages, plaintiff clearly did not provide one-half or more of her support at [the] time of injury. Presuming both spouses to have enjoyed the same standard of living, half of their combined weekly wages of $839.29 went for plaintiff’s support and half for his wife’s. Each received, therefore, $419,645 [sic] on a weekly basis. Even the lowest estimated amount earned by plaintiff’s spouse, $307.69, is much more than one-half of $419,645 [sic]. Since plaintiff’s spouse received less than one-half of her support from plaintiff at [the] time of injury, she cannot be considered his dependent.
Defendant appeals. We affirm the opinion of the appellate commission with respect to the finding of disability but reverse and remand with regard to the dependency issue.
i
Under the provisions of MCL 418.301(1); MSA 17.237(301X1), "[a]n employee, who receives a personal injury arising out of and in the course of employment . . . shall be paid compensation.” At the time of plaintiff’s injury, the statute defined "disability” as "a limitation of an employee’s wage earning capacity in the employee’s general field of employment resulting from a personal injury or work related disease.” MCL 418.301(4); MSA 17.237(301)(4).
The role of this Court in reviewing decisions of the wcac was recently clarified in Holden v Ford Motor Co, 439 Mich 257, 261-263; 484 NW2d 227 (1992). The Court first cited 1985 PA 103, which created the wcac and made other changes in the workers’ compensation statutory scheme:
Under Act 103, beginning October 1, 1986, . . . findings of fact by a workers’ compensation magistrate were to be considered conclusive, on administrative appellate review by the wcac, if supported by "competent, material, and substantial evidence on the whole record.” MCL 418.861a(3); MSA 17.237(861a)(3).
Act 103 did not change the standard for judicial review of final decisions in workers’ compensation proceedings. . . . Act 103 provides that the findings of fact made by the wcac, not the findings of the magistrate, are to be conclusive, on judicial appellate review, in the absence of fraud.
. . . [J]udicial review by the Court of Appeals or this Court of a wcac decision is to be of the findings of fact made by the wcac and not the findings of fact made by the magistrate. And the findings of fact made by the wcac are conclusive if there is any competent evidence to support them.
Applying Holden, then, we examine the findings of fact of the wcac in this case. After reviewing the record in detail, we do not hesitate to conclude that the wcac’s finding of disability is supported by "competent evidence.” Defendant’s own expert, Dr. DeBruin, recommended that plaintiff be restricted from lifting objects exceeding thirty pounds. While he did not agree with Dr. Trager’s diagnosis of a herniated disk and attributed plaintiffs problem to degenerative disk disease, he agreed that part of the "stresses” that contributed to that degeneration included plaintiffs years of lifting while employed by defendant.
Furthermore, plaintiff himself provided extensive evidence of permanent impairment from his 1985 injury. In a pre-Holden case, the Supreme Court held that "testimony of plaintiff and his wife, without more, and even though arguably disputed by certain medical witnesses, is sufficient to support the [Workers’ Compensation Appeal Board’s] finding of disability.” Sanford v Ryerson & Haynes, Inc, 396 Mich 630, 637; 242 NW2d 393 (1976).
The wcac’s finding that plaintiffs layoff was related to his disability is similarly acceptable. The magistrate concluded that defendant was "not convinced that plaintiff had recovered, a conclusion more than amply supported by the record.” We also find sufficient evidence in the record to justify this conclusion. For example, two days before plaintiff was laid off, his position was filled by a newly hired worker, suggesting plaintiff was laid off because of his injury, not for economic reasons.
We therefore affirm the wcac’s finding that plaintiff suffered a work-related disability, making defendant liable for compensation to him.
ii
The workers’ compensation system also provides for the compensation of dependents of an injured worker. MCL 418.353(1); MSA 17.237(353)(1) provides in part:
(a) The following shall be conclusively presumed to be dependent for support upon an injured employee:
(i) The wife of an injured employee living with such employee as such wife at the time of the injury.
(b) . . . Except as to those conclusively presumed to be dependents, no person shall be deemed a dependent who receives less than Vi of his support from an injured employee.
Subsection (a)(i), supra, was found unconstitutional in Pike v Wyoming, 431 Mich 589, 594-595; 433 NW2d 768 (1988). The Pike Court followed Day v W A Foote Memorial Hosp, 412 Mich 698, 701; 316 NW2d 712 (1982), which had held that surviving spouses "are required to prove their dependency in fact” to receive compensation under MCL 418.331; MSA 17.257(331), the statute providing for survivor’s benefits to dependents of workers who die in the course of their employment. See also Costa v Chrysler Corp, 152 Mich App 530, 535; 394 NW2d 6 (1986).
Absent the conclusive presumption, the statute requires that a dependent wife must receive more than one-half of her support from an injured employee. As the Supreme Court said in an early case, "Where the facts are undisputed, dependency becomes a legal conclusion.” Garbutt v Stoll, 287 Mich 396, 405; 283 NW 624 (1939). See also Compton v Ford Motor Co, 337 Mich 654, 658-659; 60 NW2d 191 (1953) (adult daughter living with father was not a dependent).
This Court has the power to review questions of law involved with any final order of the wcac if timely application is made under the court rules. MCL 418.861a(14); MSA 17.237(861a)(14). See Barr v Stroh Brewery, 189 Mich App 549, 551-552; 473 NW2d 716 (1991) (legal conclusion of wcac not insulated from appellate review); Tagliavia v Barton Malow Co, 185 Mich App 556, 560; 463 NW2d 116 (1990) (review limited to questions of law). MCL 418.861a(14); MSA 17.237(861a)(14) is substantially identical to MCL 418.861; MSA 17.237(861), which referred to the Workers’ Compensation Appeal Board, the predecessor of the wcac. See Aaron v Michigan Boiler & Engineering, 185 Mich App 687, 703; 462 NW2d 821 (1990). A decision of the wcab could be reversed if the board operated within the wrong legal framework or if its decision was based on erroneous legal reasoning. McDonald v Meijer, Inc, 188 Mich App 210, 214; 469 NW2d 27 (1991). See also, e.g., Flint v General Motors Corp, 184 Mich App 340, 343; 457 NW2d 157 (1990) (decision of the wcab reversed where it erred in applying effective date of statutory amendment); Juneac v ITT Hancock Industries, 181 Mich App 636, 639; 450 NW2d 22 (1989) (wcab erred in awarding supplemental ben efits to the plaintiff); Spencer v Clark Twp, 142 Mich App 63, 66; 368 NW2d 897 (1985) (wcab erred in not applying statute retroactively); Morris v Metals Engineering Mfg Co, 122 Mich App 404, 407; 332 NW2d 495 (1983) (wcab erred in computing the plaintiff’s average weekly wage). The same rule applies in our review of decisions of the wcac, to the extent that the Holden, supra, rule regarding factual findings is not relevant.
We turn, then, to an examination of the dependency standard set out in MCL 418.353; MSA 17.237(353). The rule that "no person shall be deemed a dependent who receives less than Vz of his support from an injured employee” parallels the test for dependency adopted by Congress as part of the income tax provisions of the Internal Revenue Code. "[T]he term 'dependent’ means any of the following individuals over half of whose support, for the calendar year in which the taxable year of the taxpayer begins, was received from the taxpayer.” 26 USC 152(a) (emphasis supplied).
In the absence of Michigan case law regarding the determination of dependency, cases interpreting the federal statute are instructive. The federal rule is quite clear; a taxpayer must provide more than one-half of the alleged dependent’s support to claim that person as a dependent — not simply more "support” than the alleged dependent provides for himself. The court must consider "the entire amount of support which the individual received from all sources, including support which the individual himself supplied.” Turecamo v Comm’r of Internal Revenue, 554 F2d 564, 569 (CA 2, 1977), citing Treas Reg § 1.152-1(a)(2)(i). The taxpayer must prove both the total amount expended for an alleged dependent and that the amount provided by the taxpayer is more than one-half of that amount. Rountree v Comm’r of Internal Revenue, 456 F2d 1110, 1111 (CA 6, 1972) (child support); Hogg v United States, 428 F2d 274, 283 (CA 6, 1970) (same); Klofta v United States, 333 F Supp 781, 782 (ND Ohio, 1970) (same).
Snyder v United States, 321 F Supp 661 (D Colo, 1970), aff'd 445 F2d 319 (CA 10, 1971), is virtually on point. The plaintiff there provided his mother with $1,020 in support and wished to claim her as a dependent. His mother, however, had $1,290 in other income (social security, rental, and interest). The court agreed with the irs that the plaintiff was not entitled to a dependency exemption for his mother. "It is clear . . . that the plaintiff did not in fact provide his mother with over one-half of her support.” Id. at 663. See also Ammons v Dunbar & Sullivan Const Co, 54 Mich App 107, 109-110; 220 NW2d 323 (1974), where the Court reversed a wcab decision and held that a mother who received social security payments was only partially dependent on her son, even though she chose not to expend her own income for her support.
The wcac erred in the method it applied to determine whether plaintiff’s wife was his dependent for purposes of computing his disability benefits. The question turns on whether plaintiff provided more than one-half of his wife’s support. We assume that plaintiff and his wife pooled their income and that each spouse used half of that total for "support.” We also assume, absent contrary evidence, that neither spouse had any unearned income in 1985, or earned income other than that described at the 1987 hearing.
Plaintiff earned $531.60 a week in 1985, for an annual salary of $27,643.20. His wife earned "$16,-000 to $20,000” that year. If we adopt the highest figure offered, then, the couple’s joint income was $47,643.20, or $916.22 a week. Half of $916.20 equals $458.10; half of $458.10 (i.e., half of plaintiff’s wife’s support) is $229.05. Mrs. Corbett’s $20,000 salary is equivalent to a weekly income of $384.62, which is well in excess of $229.05. It cannot be said, then, that plaintiff provided more than one-half of his wife’s support. Accordingly, she was not a dependent for purposes of MCL 418.353; MSA 17.237(353).
We remand this matter to the wcac for recomputation of the benefits due the plaintiff from his date of injury, based on a rate determined without the inclusion of his wife as a dependent. Defendant is, of course, entitled to set off benefits already paid, plaintiff’s other earned income, and his unemployment compensation benefits. In all other respects, however, the decision of the wcac is affirmed.
Affirmed in part, reversed in part, and remanded. No costs, neither party having prevailed in full.
The Day decision was mandated by the United States Supreme Court’s determination in Wengler v Druggists Mutual Ins Co, 446 US 142; 100 S Ct 1540; 64 L Ed 2d 107 (1980), which had invalidated a similar statute from Missouri, finding that it violated the Equal Protection Clause of the United States Constitution by discriminating in favor of surviving wives without according similar benefits to surviving husbands.
A spouse is not considered a dependent under the tax code. See 26 USC 152(a)(9).
Defendant listed plaintiffs pay rate as $13.27 an hour in the original proceeding. For a forty-hour week, plaintiff would have earned $530.80, but the magistrate found his average weekly wage to be $531.60. We have adopted the latter figure, which has not been challenged on appeal.
Plaintiffs own half of the joint income is not considered a contribution to his wife’s support. See Garbutt v Stoll, supra at 405 ("So much of the earnings of deceased as was needed and necessarily used for his individual care and support is not to be treated as a contribution by him to the support of his dependents.”) | [
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Per Curiam.
Defendant was charged with murder in the second degree in violation of MCLA 750-.317; MSA 28.549, and was convicted by a jury of manslaughter, MCLA 750.321; MSA 28.553. From that conviction, defendant appeals by right.
Defendant first contends that he was prejudiced when during a “view” of the scene of the homicide, the jury, while outside of the courtroom, was permitted to see the defendant while handcuffed.
The record does not indicate that the jury actually saw the defendant handcuffed, but only reveals allegations by defense counsel that the jury did see defendant handcuffed and that they were prevented by the officers in charge from observing the defendant again. However, even assuming that defendant was seen wearing handcuffs by the jury, the issue was not properly preserved for appeal.
Defense counsel never requested that the jury be polled to determine what in fact they saw. Also, defense counsel never asked for a cautionary instruction to inform the jury that the use of handcuffs outside the courtroom is normal, nor did defendant move for a mistrial. These failures on the part of defense counsel are necessarily fatal to this issue on appeal. See People v Shaw, 7 Mich App 187 (1967). We will not, therefore, discuss the issue since our review of the entire record reveals that there has not been a miscarriage of justice. MCLA 769.26; MSA 28.1096.
Defendant next contends that he was prejudiced when during the “view”, one juror discussed the evidence with another juror. Even assuming the truth of the contention, the trial court was under no duty to interrogate the jurors. The duty was upon the defendant to request an interrogation. Defendant did not, however, request such an interrogation but only requested that the jury be informed that their discussions had come to the attention of the trial judge and that they be instructed to keep an open mind until the trial was concluded. The trial court substantially complied with the latter part of defendant’s request. Defense counsel must have been satisfied since he did not thereafter move for a mistrial. Failure of the trial judge to give the former part of the instruction must be deemed to fall within his discretion.
“The judge presiding throughout the trial and observing the occurrences in the courtroom and elsewhere was in a better position to determine the probability of any conduct on the part of jurors or others prejudicial to the rights of the defendant than is this Court.” People v Nick, 360 Mich 219, 224 (1960).
Defendant shows no prejudice.
Affirmed. | [
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Connor, J.
The petitioner, Robert L. Beadle, claimed that his retirement from the Michigan State Police was caused by a psychiatric disability that was duty-incurred. The State Police Retirement Board denied petitioner’s application for duty-incurred disability retirement benefits under the State Police Retirement Act of 1986, MCL 38.1601 et seq.; MSA 5.4002(1) et seq. The circuit court affirmed the board’s decision. Petitioner appeals as of right. We affirm.
Petitioner was a member of the State Police for more than twenty-three years when he became disabled and retired. Since early childhood, he had suffered from psychiatric problems. These problems had manifested themselves in paraphiliac behavior, but had not been disabling. In October 1987, the accumulation of personal stress, job stress, public discovery of his behavior, and stress caused by an investigation into allegations of his possible criminal behavior resulted in a suicide attempt and petitioner’s becoming completely disabled.
Petitioner applied for disability retirement benefits under the State Police Retirement Act. He was granted benefits for a nonduty-incurred disability, but denied benefits for a duty-incurred disability. The board found that although his work environment had aggravated his preexisting condition, petitioner’s disability was not duty-incurred within the meaning of the act.
Petitioner claims that because job stress and professional disappointments helped aggravate his preexisting illness to the point of disability, his disability is duty-incurred. We disagree.
The act provides for differential disability retirement benefits depending on whether the disability is duty-incurred or nonduty-incurred. Compare MCL 38.1626; MSA 5.4002(26) with MCL 38.1628; MSA 5.4002(28). It provides for similarly differential death benefits depending on whether the death is duty-related or nonduty-related. Compare MCL 38.1625; MSA 5.4002(25) with MCL 38.1627; MSA 5.4002(27). Although the act does not define "duty-incurred,” it does define "duty-related.” See MCL 38.1625; MSA 5.4002(25). Reading the act as a whole, Montano v General Motors Corp, 187 Mich App 230, 235; 466 NW2d 707 (1991), it is clear duty-related and duty-incurred refer to the same relationship.
Consequently, a disability is duty-incurred if it results from injuries received or an illness or disease contracted by reason of occupation as a member of the State Police. MCL 38.1625; MSA 5.4002(25).
Petitioner also argues that the term "injury” under the act should be interpreted in accordance with the term "personal injury” in the Workers’ Disability Compensation Act, MCL 418.101 et seq.; MSA 17.237(101) et seq., which would encompass the aggravation of preexisting conditions. We do not agree. See Arnold v State Employees’ Retirement Bd, 193 Mich App 137; 483 NW2d 622 (1992). Workers’ disability compensation benefits are payable for personal injuries, MCL 418.301(1); MSA 17.237(301X1), and personal injury is defined to include occupational diseases and can include mental disabilities that are aggravated or accelerated by employment in a significant manner, MCL 418.401(2)(b); MSA 17.237(401)(2)(b). Here there is no need for such a definition, because the State Police Retirement Act provides benefits for disabilities due to illness or disease as well as injury. Therefore, we will not construe the act beyond its plain meaning. Dudewicz v Norris Schmid, Inc, 192 Mich App 247, 255; 480 NW2d 612 (1991).
Accordingly, normal job stress and professional disappointments are not "injuries” that petitioner received as a result of his employment; his disability is properly classified as one resulting from illness or disease. Consequently, the illness or disease would have to have been contracted because of his job in order for petitioner to be entitled to benefits for a duty-incurred disability.
Given the ambiguity in the act concerning when an illness is contracted, we defer to the board’s interpretation that a disease or illness is contracted at least by the time it first manifests itself, even in a nondisabling form. ADVO-Systems, Inc v Dep’t of Treasury, 186 Mich App 419, 426; 465 NW2d 349 (1990). This interpretation is not a substantial and material error of law that otherwise would support the disturbing of the board’s decision. MCL 24.306(l)(f); MSA 3.560(206)(l)(f); Buttleman v State Employees’ Retirement System, 178 Mich App 688, 689-690; 444 NW2d 538 (1989).
Because petitioner had already contracted his illness by the time he began working for the State Police, his disability cannot be duty-incurred even though his job helped aggravate it to the point of disability.
Affirmed.
MCL 38.1625(1); MSA 5.4002(25X1) refers to the payment of a retirement allowance on behalf of a member of the retirement system "who while in the discharge of his or her duty is killed or receives injuries or contracts a disease or illness, by reason of his or her occupation, which results in his or her death.” MCL 38.1625(3); MSA 5.4002(25)(3) also refers to the payment of funeral expenses for a member of the retirement system who "is killed or dies from injuries, disease, or illness, contracted by reason of his or her occupation as a member of the department of state police . . . .” | [
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Michael J. Kelly, P.J.
Following a bench trial in this matter, the trial court entered verdicts of no cause of action on plaintiffs complaint and on defendant’s counterclaim. Plaintiff appeals as of right the finding that it had no cause of action against defendant, and defendant appeals as of right the trial court’s denial of actual costs based on plaintiffs rejection of the mediation award.
We decline to address the merits of the issues raised on appeal in this matter. In spite of repeated requests by this Court, the parties have failed to provide us with a transcript of critical proceedings in the trial court. We have not been provided with a transcript for six days of what appears to be a seven-day bench trial. In view of the parties’ noncompliance with MCR 7.204, 7.210, 7.212, and failure or refusal to provide this Court with a full transcript of the proceedings below, we consider the issues raised by both parties abandoned on appeal. Baker v Wayne Co Bd of Road Comm’rs, 185 Mich App 82, 89; 460 NW2d 566 (1990); People v Johnson, 173 Mich App 706, 707; 434 NW2d 218 (1988).
We note that the parties could have cured their failure to submit a full transcript of the proceedings below by submitting to this Court an agreed-upon statement of facts in accordance with MCR 7.210(B)(1)(e).
Both appeals are dismissed with prejudice and without costs. | [
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Per Curiam.
Plaintiff brought this wrongful discharge suit against his former employers, Automobile Club of Michigan and the Auto Club Insurance Association (which hereinafter will be treated as a single defendant). Following trial, the jury returned a verdict in favor of plaintiff on claims of breach of contract, age discrimination, and mental distress, for a total award of $300,500. The trial court granted defendant’s motion for remittitur and reduced the award by $80,000. Defendant appeals as of right from the jury verdict. Plaintiff cross appeals as of right from the order of remittitur.
Plaintiff worked for defendant for thirty-one years, from 1952 until 1983, as a commissioned sales representative (csr) before he was terminated for failing to meet defendant’s sales quota. He then worked for defendant for approximately IV2 months as a member advisor before taking an early retirement. Plaintiff was fifty-seven years old when he retired.
In 1951, Park Zickel, the general manager of defendant at that time, approached plaintiff and offered him a job as a csr. Zickel told plaintiff that in the thirty-six years that Zickel had worked for defendant, he had been paid a seven-percent commission on all new sales of auto insurance and a seven-percent commission on all renewals. Zickel never said anything about reserving the right to change the method of compensation, and plaintiff never expected the method to be changed. Zickel also said that the only people that were ever fired were those who withheld company funds.
When plaintiff was hired by defendant, the sales manual characterized the csr position as a "well-paid career position.” It also stated that "though the major portion of [a csr’s] income comes from the creditable handling of existing accounts, he is expected to prospect and solicit new business and establish and maintain an acceptable ratio of new business to the existing business he is assigned.” There was no express statement that a csr was terminable at will.
Plaintiff started working for defendant in 1952. He immediately began to sell automobile insurance and memberships to the Auto Club, and his "book of business” began to grow. A book of business is the list of customers to whom a csr sold an insurance policy. Plaintiff received a seven-percent commission on the original sale of an automobile insurance policy and seven percent each time it was renewed. As plaintiff’s book of business grew, so did his income.
In 1978, defendant instituted a new system of pay for the csrs. Instead of paying on a commission basis, defendant paid csrs a fixed sum of money for each sale, or "unit compensation.” Plaintiffs income began to decline.
In 1980, defendant established a new category of workers, called member advisors, who performed many of the same functions as the csrs. Like csrs, member advisors sold automobile insurance, other insurance, and memberships. Member advisors serviced their customers in the same manner as did csrs. Member advisors were different from csrs in that they worked regular hours, were paid a salary, were not required to recruit new customers, and were not subject to a production quota.
In September 1981, defendant implemented a new minimum production system that required selling specified numbers of new memberships and life insurance policies each month. Failure to meet the new quota resulted in an oral warning, a written warning, probation, and then termination. Plaintiff did not meet the quota in the final months of 1981.
Plaintiff then expressed his interest in the new position of general agent developed by defendant. The general agent position would have permitted plaintiff to establish his own office and to service his own book of business without being subject to the quota system. However, plaintiff eventually turned down the general agent position because of start-up costs, defendant’s requirement that he waive any legal action against defendant, his uncertainty of what the job responsibilities were, and his lack of trust of defendant.
After plaintiff turned down the general agent position, he received a letter terminating his employment as a csr, effective January 15, 1983. The letter also offered him a job as a member advisor n at a salary of $26,000, which was approximately $6,000 less than his 1982 salary as a csr.
Despite his reservations about the job, plaintiff accepted the member advisor position, pending notice of the details of defendant’s early retirement program. Plaintiff received information of the retirement plan in January 1983, and he chose to retire.
In his complaint, plaintiff alleged breach of contract, age discrimination, unjust enrichment, promissory estoppel, and conversion. The jury awarded plaintiff $300,000 damages for loss of income due to age discrimination and breach of contract, and $500 for mental distress.
i
The dispositive issue on appeal is whether the trial court erred in denying defendant’s motion for judgment notwithstanding the verdict with respect to plaintiff’s claim of age discrimination. Defendant argues that plaintiff failed to establish as a matter of law the disparate treatment theory of age discrimination. Defendant maintains that the production standards were applied equally to all csrs. Defendant claims that it is inappropriate to prove disparate treatment by comparing the csrs to the member advisors, because of the differences in the responsibilities of the positions. Plaintiff, on the other hand, states that a reasonable jury could conclude that he was discharged because of his age. We agree with plaintiff.
We examine the testimony and all legitimate inferences that may be drawn in a light most favorable to the plaintiff when reviewing a trial court’s failure to grant a defendant’s motion for judgment notwithstanding the verdict. Matras v Amoco Oil Co, 424 Mich 675, 681; 385 NW2d 586 (1986); Michigan Microtech, Inc v Federated Publications, Inc, 187 Mich App 178, 186; 466 NW2d 717 (1991). If reasonable minds could differ concerning whether the plaintiff has met his burden of proof, a judgment notwithstanding the verdict is inappropriate. Byrne v Schneider’s Iron & Metal, Inc, 190 Mich App 176, 179; 475 NW2d 854 (1991). We will not disturb a trial court’s decision on a motion for judgment notwithstanding the verdict absent a clear abuse of discretion. Michigan Microtech, supra, pp 186-187.
A prima facie case of age discrimination under the Civil Rights Act, MCL 37.2101 et seq.; MSA 3.548(101) et seq., can be made by showing either intentional discrimination or disparate treatment. Schipani v Ford Motor Co, 102 Mich App 606, 617; 302 NW2d 307 (1981). Because plaintiff attempted at trial to prove disparate treatment, he was required to show that he was a member of a protected class and that he was treated differently than persons of a different class for the same or similar conduct. Reisman v Wayne State University Regents, 188 Mich App 526, 538; 470 NW2d 678 (1991). A prima facie case of age discrimination can also be made by showing that plaintiff (1) was a member of the protected class, (2) was discharged, (3) was qualified for the position, and (4) was replaced by a younger person. Ewers v Stroh Brewery Co, 178 Mich App 371, 380; 443 NW2d 504 (1989). Because defendant failed to claim that it was making cutbacks because of economic necessity, plaintiff did not have a greater burden of proof. Compare Matras, supra, p 684.
Viewing the evidence in a light most favorable to plaintiff, we find that he established a prima facie case of age discrimination under the Reisman standard. Plaintiff was a member of a protected class, because he was fifty-seven years old when he was discharged. The parties differ regarding whether there was sufficient evidence that plaintiff was treated differently than persons of a different class who were engaged in the same or similar conduct. Defendant argues that plaintiff was treated no differently than other csrs. Although this might be true, we believe that the member advisors were the comparable group of employees for age discrimination purposes.
First, the average age of the member advisors was more than twelve years less than the average age of the csrs. Second, the csrs were treated differently than the member advisors for the same or similar conduct. Although both groups sold insurance and memberships and serviced customers, and the member advisors typically performed the duties of the csrs when the csrs left the company, including handling the books of business of the former csrs, the member advisors, unlike the csrs, worked regular hours, were paid a salary, and were not required to recruit new customers. Nevertheless, from the similarity of job responsibilities, it may be legitimately inferred that the member advisors and the csrs were comparable groups for determining whether the csrs were treated differently for the same or similar conduct.
Evidence was presented at trial that showed that the csrs were treated differently than the member advisors. Even though the member advisors and the csrs both sold insurance, the csrs were subject to a quota and were demoted to member advisor n positions if they failed to meet it. We believe that reasonable minds could differ concerning whether the plaintiff met his burden of proof.
Alternatively, plaintiff met his burden of proof under the Ewers standard of a prima facie case of age discrimination. Plaintiff was a member of a protected class. Plaintiff was discharged (see Issue iv). A reasonable juror could conclude that plaintiff was qualified for the position, having built a considerable book of business. Plaintiff was then replaced by a younger person working as a member advisor. Age might not have been the main reason for plaintiff’s discharge, but a reasonable jury could find that age was one of the reasons that made a difference in defendant’s determining whether to discharge plaintiff. Accordingly, the trial court did not abuse its discretion in denying defendant’s motion for judgment notwithstanding the verdict.
ii
Because we find that sufficient evidence was presented at trial to justify sending the age discrimination claim to the jury, we need not address the contract issues raised by defendant. The jury awarded plaintiff damages for loss of income on the basis of age discrimination and breach of contract. Even if we were to find merit in defendant’s arguments concerning the breach of contract claim, the age discrimination claim would still support the jury’s award of damages for loss of income.
iii
We next consider whether the trial court im properly admitted the testimony of four former employees concerning the circumstances of how each individual was hired by defendant. Defendant moved to exclude the testimony of these four individuals, contending that any testimony about oral statements made to them at their own times of hire was irrelevant because it did not shed light on plaintiffs hiring experience. The trial court summarily denied defendant’s motion. Defendant argues on appeal that this testimony was prejudicial, confusing, and misleading regarding the issue whether a contract existed between plaintiff and defendant. We disagree.
The decision whether to admit evidence is within the sound discretion of the trial court and will not be disturbed absent an abuse of discretion. Reisman, supra, p 543; Brunson v E & L Transport Co, 177 Mich App 95, 104; 441 NW2d 48 (1989). Generally, all relevant evidence is admissible, and irrelevant evidence is inadmissible. MRE 402. Even if relevant, evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice. MRE 403; Dunn v Nundkumar, 186 Mich App 51, 55; 463 NW2d 435 (1990).
In this case, the testimony of the other employees concerning the promises made to them when they were hired, if substantially similar to what plaintiff testified he was promised, would have the tendency to corroborate plaintiffs testimony. See Schippers v SPX Corp, 186 Mich App 595, 597; 465 NW2d 34 (1990). Any danger of prejudice in admitting this evidence, because what was promised to these witnesses was not necessarily promised to plaintiff, did not substantially outweigh its probative value. Defense counsel had the opportunity to highlight the differences between plaintiffs hiring experience and those of the other employees by pointing out that they were hired at different times by different people. Thus, the trial court did not abuse its discretion in admitting the testimony of the four former employees.
IV
Defendant further contends that the trial court erred in denying its motion for judgment notwithstanding the verdict with respect to plaintiffs claim of constructive discharge. Defendant argues that plaintiff submitted insufficient evidence to establish that defendant made plaintiffs working conditions so intolerable that he was forced to leave the job. Plaintiff responds that the issue was a proper question for the jury. Plaintiff states that the fact that defendant offered and he accepted a lesser job does not preclude the jury from finding constructive discharge. We utilize the standard of review set forth in Issue i.
In Jenkins v Southeastern Michigan Chapter, American Red Cross, 141 Mich App 785, 796; 369 NW2d 223 (1985), this Court ruled that constructive discharge may be found where working conditions would have been so difficult or unpleasant that a reasonable person in the employee’s shoes would have felt compelled to resign. A finding of constructive discharge depends on the facts of each case. Id.
In Jenkins, the plaintiff was told to either accept a new position or resign. The new position not only paid the same salary as plaintiffs former job, but also included a car and an expense account. Nevertheless, this Court held that a reasonable factfinder in that case could find constructive discharge because the new job was not the substantial equivalent of the position from which the plaintiff was discharged. The new position was a demotion and the job responsibilities were severely reduced.
In the present case, plaintiff was terminated from his position as a csr and then offered a job as a member advisor. Viewing the evidence again most favorably toward plaintiff, we note that accepting the member advisor position required plaintiff to relinquish his book of business and receive $6,000 less than what he earned the previous year. The member advisor position carried less status than the csr position. Under these circumstances, a reasonable jury could find that plaintiff was constructively discharged. Moreover, the fact that plaintiff initially accepted the member advisor position for IV2 months does not preclude him from claiming constructive discharge, especially because he accepted the position on a temporary basis so as to take advantage of the early retirement program. After receiving details of the program, he decided to retire. Consequently, the trial court did not abuse its discretion in denying defendant’s motion for judgment notwithstanding the verdict against plaintiff’s claim of constructive discharge.
v
Turning to the issue before us on cross appeal, we next consider whether the trial court abused its discretion in granting defendant’s motion for remittitur. The trial court reduced the jury verdict by $80,000 and ruled that the jury’s verdict did not reflect plaintiff’s failure to mitigate his dam ages. The trial court determined that plaintiff could have earned wages over the eight-year period before he turned sixty-five years old, and thereby reduced the jury verdict $10,000 for each year.
MCR 2.611(E)(1) authorizes a trial court to reduce a jury verdict when the amount awarded is greater than the highest amount of damages that the evidence at trial would support. A trial court’s decision on a motion for remittitur is reviewed for an abuse of discretion. Palenkas v Beaumont Hosp, 432 Mich 527, 531; 443 NW2d 354 (1989); Byrne, supra, p 183.
The jury awarded plaintiff $300,000 in lost wages. Unlike the trial court, we find that this amount is not greater than the highest amount of damages that the evidence at trial supported. Plaintiff’s expert testified that plaintiff suffered damages in the amount of $696,056. Defendant’s expert calculated that plaintiff could have earned $353,188 if he had worked until he reached sixty-five years of age.
Although it is undisputed that plaintiff did not seek employment after leaving defendant’s employ, the question whether defendant carried its burden of proving plaintiff was unreasonable in not seeking other employment was within the province of the jury. Hughes v Park Place Motor Inn, Inc, 180 Mich App 213, 220; 446 NW2d 885 (1989).
Defendant argues that plaintiff should have accepted either the member advisor ii position or the general agent position to mitigate his damages. However, the member advisor position could reasonably be considered a demotion (see Issue iv). Moreover, plaintiff testified that he declined the general agent position because of start-up costs, defendant’s requirement that he waive any legal action against defendant, his uncertainty of what the job responsibilities were, and his lack of trust of defendant at that time. In light of this testimony, we find that a jury could find that plaintiff was reasonable in rejecting defendant’s offer of these two positions. Id., p 221. Thus, the trial court abused its discretion in granting defendant’s motion for remittitur.
Affirmed in part and reversed in part.
We decline to find that plaintiffs failure to meet the discriminatory quota suddenly made him unqualified for the job.
Defendant purports that plaintiffs claim of age discrimination is contradicted by his temporary acceptance of a member advisor position pending defendant’s announcement of its early retirement program. Because defendant failed to cite supporting authority for this argument, we decline to review it. Dafter Twp v Reid, 159 Mich App 149, 162; 406 NW2d 255 (1987).
Our conclusion is not- illogical in light of our decision in Issue i. In Issue 1, we compared the job responsibilities of the member advisors with those of the csrs to determine that the two groups were comparable for age discrimination purposes. In Issue iv, we weigh the different responsibilities of the positions to determine whether a reasonable person would feel compelled to resign. | [
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Connor, J.
Plaintiff appeals as of right from the trial court’s postjudgment order of January 29, 1990, denying his request for costs and attorney fees. On November 27, 1989, the court entered a final judgment based upon the parties’ acceptance of a mediation award of $17,000 for plaintiffs claim for personal protection insurance benefits under the no-fault insurance act, MCL 500.3101 et seq.; MSA 24.13101 et seq. We affirm.
On appeal, plaintiff challenges the trial court’s decision that he was not entitled to recover costs and attorney fees available pursuant to MCL 500.3148; MSA 24.13148 and MCL 600.2591; MSA 27A.2591.
In the mediators’ evaluation of this case, plaintiff was awarded $17,000, but "no costs or interest.” The parties have not made their respective mediation summaries part of the lower court record, therefore we do not know what issues were raised in mediation. According to plaintiffs complaint and amended complaint, he was seeking not only no-fault benefits he claimed were due from defendant, but also attorney fees under MCL 500.3148; MSA 24.13148 for defendant’s alleged unreasonable refusal to pay and delay in paying insurance benefits.
The trial court denied plaintiff’s request for attorney fees on the ground that defendant disputed the benefits plaintiff claimed were due, and, therefore, there was a valid defense in this case. Plaintiff moved for reconsideration of that decision, and the trial court ruled in part as follows:
Plaintiff’s argument ignores the fact that the issue of no-fault attorney fees was resolved along with all the other matters at issue in this case when the mediators evaluated it and the parties then accepted their evaluation.
On appeal, plaintiff argues that the trial court erred in denying the request for costs and attorney fees as a matter of law as well as on the merits.
MCR 2.403(M) addresses the effect an acceptance of a mediation evaluation has on the status of a case. At the time of mediation in this case, MCR 2.403(M)(1) provided as follows:
If all the parties accept the panel’s evaluation, judgment will be entered in that amount, which includes all fees, costs, and interest to the date of judgment.
The court rule for mediation does not otherwise address the awarding of costs, fees, or sanctions for cases resolved through the acceptance of the mediators’ evaluation.
In general, courts will not award attorney fees unless expressly authorized by court rule or statute. McKelvie v Mt Clemens, 193 Mich App 81, 84; 483 NW2d 442 (1992). Both MCL 500.3148; MSA 24.13148 and MCL 600.2591; MSA 27A.2591 permit a prevailing party to recover attorney fees in appropriate cases. The question we must resolve is whether these provisions apply to cases that are resolved through mediation without the necessity of a trial.
In interpreting court rules, we apply the rules of statutory construction. Taylor v Anesthesia Associates of Muskegon, PC, 179 Mich App 384, 386; 445 NW2d 525 (1989). Hence, a court rule should be construed in accordance with the ordinary and approved usage of the language, in light of the purpose to be accomplished by its operation. Knoke v Michlin Chemical Corp, 188 Mich App 456, 459; 470 NW2d 420 (1991). In general, the purpose of MCR 2.403 is to expedite and simplify the final settlement of cases to avoid a trial. Smith v Elenges, 156 Mich App 260, 263; 401 NW2d 342 (1986). An accepted mediation evaluation serves as a final adjudication of the claims mediated, and is therefore binding on the parties similar to a consent judgment or settlement agreement. Espinoza v Thomas, 189 Mich App 110, 117; 472 NW2d 16 (1991).
In this instance, we believe MCR 2.403(M)(1) clearly and unambiguously provides that it is for the mediation panel to decide if costs, fees, or interest should be included in any evaluation. If a mediation panel declines to award costs, fees, or interest, the mutual acceptance of the mediators’ evaluation waives the subsequent raising of the issue of costs or fees in the trial court. Fees and costs are no longer available but are considered disposed of in the mediation panel’s decision. "The mediation award is deemed to include all costs, fees, and interest to the date of judgment, so the amount of the judgment and the amount of the award will be identical.” 2 Martin, Dean & Webster, Michigan Court Rules Practice, p 445. Other panels of this Court have reached the same conclusion with regard to awards of prejudgment interest when a mediation award is accepted by both sides. Mercer v Winnick, 185 Mich App 567, 569-570; 462 NW2d 760 (1990); Hatt v Cheff, 177 Mich App 679, 681; 442 NW2d 732 (1989).
The two provisions plaintiff relies upon in this case to seek attorney fees provide for the recovery of either "fees,” MCL 500.3148; MSA 24.13148, or "costs and fees,” MCL 600.2591; MSA 27A.2591. In accordance with our determination that any entitlement to attorney fees or costs is presumed to have been decided by the mediation panel, we find as a matter of law that plaintiff was not entitled to request attorney fees or costs under either MCL 500.3148; MSA 24.13148 or MCL 600.2591; MSA 27A.2591 after he accepted the mediation evaluation for his claims against defendant.
We also reject plaintiffs argument that MCR 2.403(M)(1) is limited to costs or fees and consequently would not bar an award made pursuant to either MCL 500.3148; MSA 24.13148 or MCL 600.2591; MSA 27A.2591 because those statutes provide for "sanctions.” Compare Antonow v Marshall, 171 Mich App 716, 718-719; 430 NW2d 768 (1988) (order of dismissal that provided the case was dismissed without "costs, interest or attorney fees,” did not bar motion brought pursuant to MCR 2.114(E) because that rule grants "sanctions” for violation of the court rules regarding pleadings). We believe that MCR 2.403 is intended to settle cases without further litigation, and that purpose would not be served by distinguishing awards of attorney fees from sanctions that include attorney fees.
Although the trial court addressed the merits of the request for fees under MCL 500.3148; MSA 24.13148 and MCL 600.2591; MSA 27A.2591 in ruling that defendant did not present a frivolous defense or did not unreasonably deny plaintiff benefits, we need not address the correctness of that ruling because plaintiff was not entitled to recover costs under MCL 500.3148; MSA 24.13148 or MCL 600.2591; MSA 27A.2591 as a matter of law.
Affirmed.
Effective March 31, 1990, MCR 2.403(M)(1) now provides:
If all the parties accept the panel’s evaluation, judgment will be entered in that amount. The judgment shall be deemed to dispose of all claims in the action and includes all fees, costs, and interest to the date of judgment.
Under MCR 2.403(K)(5),' in medical malpractice cases or tort actions, a mediation panel may indicate if a party’s defense or action is frivolous. This provision of the court rule is not applicable to this case because tort or malpractice claims are not at issue.
The application of MCL 500.3148; MSA 24.13148 and MCL 600.2591; MSA 27A.2591 are not contingent upon a case actually being tried.
We note that the mediation evaluation indicates that plaintiff was not awarded costs or interest. This leads us to conclude that the mediation award may have taken into account an award of attorney fees, otherwise we think the panel would have probably stated it also was denying an award for fees. | [
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Per Curiam.
In May of 1956 the defendant was sentenced to a term of 20 years to life after being convicted by a jury of sale of narcotics. MCLA § 335.152 (Stat Ann 1971 Rev § 18.1122). In March of 1970 the defendant moved to vacate sentence because he had not been represented by counsel at the sentencing. The trial court granted the motion and on June 11, 1970, the defendant was sentenced to a term of 20 years to 40 years. The trial court credited the time that the defendant had served in confinement against his sentence, but refused to give him credit for time spent on parole. On June 17, 1970, the defendant made a delayed motion for a new trial which was denied and he has appealed on leave granted.
The defendant’s first contention is that a reversal is required because he was not provided with counsel at the preliminary examination and the arraignment on the information. The record shows that the defendant was not represented by counsel at either the preliminary examination or the arraignment, and there is no indication that he waived, his right to counsel.
However, we do not believe that a reversal is required. At the arraignment the defendant pled not guilty and thus the absence 'of counsel did not prevent him from presenting a defense. After the arraignment, counsel was appointed and the defendant had a jury trial where he was capably represented. No motion to remind for a preliminary examination was made. In addition the defendant has not pointed to any way in which he was prejudiced and our review of the record has revealed none. On this record we believe it can be said that any error was harmless beyond a reasonable doubt. Chapman v. California (1967), 386 US 18 (87 S Ct 824, 17 L Ed 2d 705); Coleman v. Alabama (1970), 399 US 1 (90 S Ct 1999, 26 L Ed 2d 387).
The defendant contends that it was error to allow a police officer to testify regarding statements that the officer had overheard by making use of an electronic device which was attached to the person of an informer. The United States Supreme Court has recently held that such testimony is admissible. United States v. White (1971), 401 US 745 (91 S Ct 1122, 28 L Ed 2d 453). Therefore, the admission of the testimony was not error.
The defendant contends that the court erred in refusing to credit the time he had spent on parole against his sentence. We find this contention to be meritorious. When a void sentence is set aside and a new sentence is imposed, any time served upon the void sentence must be credited against the new sentence. MCLA § 769.11a (Stat Ann 1971 Cum Supp § 28.1083 [1]) provides:
“Whenever any person has been heretofore or hereafter convicted of any crime within this state and has served any time upon a void sentence, the trial court, in imposing sentence upon conviction or acceptance of a plea of guilty based upon facts arising out of the earlier void conviction, shall in imposing the sentence specifically grant or allow the defendant credit against and by reduction of the statutory maximum by the time already served by such defendant on the sentence imposed for the prior erroneous conviction.”
Under Michigan law a paroled prisoner is considered to be still serving his sentence. MCLA § 791.238 (Stat Ann 1971 Cum Supp § 28.2308) provides in part:
“A prisoner violating the provisions of his parole and for whose return a warrant has been issued by the assistant director of the bureau of pardons and paroles shall, after the issuance of such warrant, be treated as an escaped prisoner owing service to the state, and shall be liable, when arrested, to serve out the unexpired portion of his maximum imprisonment, and the time from the date of the declared violation to the date of his availability for return to any penal institution under the control of the commission shall not he counted as any part or portion of the time to he served. (Emphasis added.)
•7T W
“A parole granted a prisoner shall be construed simply as a permit to such prisoner to go without the enclosure of the prison, and not as a release, and while so at large he shall he deemed to he still serving out the sentence imposed upon him by the court, and shall be entitled to good time the same as if he were confined in prison.”
The foregoing statutes make it clear that the defendant is entitled to credit for the time spent on parole. See also Moore v. Parole Board (1967), 379 Mich 624. However, on the record before us we cannot ascertain how much credit the defendant should be given and a remand is required on this issue. The defendant was paroled on several occasions and was subsequently reincarcerated because of parole violations. Under the statute any time elapsed between the date of the declared violation and the date the defendant became available for return to prison is considered “dead time” and is not to be credited against his sentence. Because the record does not show how much “dead time” existed, the cause must be remanded for determination of this issue.
Remanded for further proceedings consistent with this opinion.
For purposes of decision we are assuming that the right to counsel at these proceedings will he held retroactive. The Supreme Court of the United States has granted certiorari in Adams v. Illinois (1971), 401 US 953 (91 S a 981, 28 L Ed 2d 236) to determine the retroactivity of Coleman v. Alabama (1970), 399 US 1 (90 S Ct 1999, 26 L Ed 2d 387) which held that a defendant has a right to counsel at a preliminary examination. | [
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Reilly, J.
Following a jury trial, defendant was convicted of two counts of second-degree murder, MCL 750.317; MSA 28.549, and one count of possession of a firearm during the commission of a felony, MCL 750.227b; MSA 28.424(2), arising out of the shooting deaths of his ex-wife and her boyfriend. Defendant was sentenced to two terms of forty to sixty years of imprisonment, to be served concurrently, for the murder convictions and a consecutive term of two years of imprison ment for the felony-firearm conviction. Defendant now appeals as of right. We affirm.
i
Defendant first argues that his convictions must be reversed because the prosecutor impermissibly elicited testimony of and commented on defendant’s silence when sheriff’s deputies went to his home at 3:30 or 4:00 a.m., shortly after the murders were reported, to take in defendant for questioning.
During the case in chief, the prosecutor asked Bruce Trebian, one of the sheriff’s deputies who was present at defendant’s house, whether defendant asked why the officers were at his home:
Q. Did Mr. Schollaert make any statements to them at that time?
A. As to . . .
Q. Just make any statements as they walked in.
A. It kind of surprised me. The only thing he really mentioned is he more or less acted like he knew them, "Come on in.” He invited them in. I thought it kind of strange because its four o’clock in the morning, during that period of time. You know, somebody is beating on your door, and there’s two people there with . . .
Q. Did he ever say, "What are you guys doing here?” or anything like that?
A. I never heard him respond to anything like that until after they’d taken him from the residence and were standing by the edge of the road just before a car pulled up.
The prosecutor asked Lewis Corwin, a detective with the sheriff’s department who was also present:
Q. And at anytime did he, while you, were inside the residence, ask you why you were there?
A. He didn’t ask me that question.
Q. Did you ever hear Bruce make that statement at all?
A. No.
Joe Patino, another sheriffs deputy, testified that he asked defendant if he would be willing to go to the station for questioning and that defendant agreed to go. Deputy Patino testified that defendant did not ask what was going on until he was in the police car. However, during his direct examination, defendant stated that he asked Deputy Patino "What’s the problem?” when the deputy arrived at his home.
During closing argument, the prosecutor commented on defendant’s failure to question why the deputies were at his house:
He [Deputy Trebian] also testified that he thought it was rather unusual, he went into the house after Detective Patino and Detective Corwin and some of the others arrived, that during the five minutes or so that defendant was in the house, he never asked why the officers were there at all. You remember he said he thought that a little unusual.
During rebuttal, the prosecution stated:
The testimony from the police, when they go in, they said they were there for five minutes and he never asked why we were there. The defendant said that wasn’t the way it was. But again, what reason would the place [sic] have to lie about it.
Defendant argues that the prosecutor impermissibly used his silence as substantive evidence of his guilt by inferring that an innocent person would have asked why he was being taken in for questioning at 3:30 in the morning.
Although defendant failed to object to the above-noted questions of the prosecutor or to the prosecutor’s comments during closing argument, appellate review is nevertheless appropriate where a significant constitutional question is involved. People v Alexander, 188 Mich App 96, 101; 469 NW2d 10 (1991).
Defendant asserts that the above-noted questions and comments of the prosecutor violated the rule announced in People v Bobo, 390 Mich 355, 359; 212 NW2d 190 (1973). In Bobo, the Michigan Supreme Court stated:
We will not condone conduct which directly or indirectly restricts the exercise of the constitutional right to remain silent in the face of accusation. "Nonutterances” are not statements. The fact that a witness did not make a statement may be shown only to contradict his assertion that he did. Id. at 359.
Recently, our Supreme Court has released a series of decisions clarifying the rule announced in Bobo. People v Sutton (After Remand), 436 Mich 575; 464 NW2d 276 (1990); People v McReavy, 436 Mich 197; 462 NW2d 1 (1990); People v Cetlinski, 435 Mich 742; 460 NW2d 534 (1990). In each of these cases, the Court construed Bobo as being coextensive with federal precedent, Sutton, supra at 579; McReavy, supra at 201; Cetlinski, supra at 759, and construed the Michigan Constitution consistently with developments in Fifth and Fourteenth Amendment jurisprudence.
In Cetlinski, the Court held that the use for impeachment purposes of a defendant’s prior statement, including omissions, given during contact with police before arrest or accusation, does not violate the defendant’s rights under the federal or state constitutions. Cetlinski, supra at 746-747. In Sutton, the Court held that a defendant’s exculpatory testimony may be impeached with prearrest or postarrest, pre-Miranda silence, but that a defendant’s silence after arrest and following the giving of the Miranda warnings may not be used to impeach an exculpatory story. However, where the defendant not only offers an exculpatory story, but affirmatively testifies that he had made a post-Miranda statement to the police consistent with his trial testimony, the prosecution is permitted to rebut his claim with evidence of the defendant’s postwarning silence. Sutton, supra at 599. According to the Court, a defendant does not have a constitutional right to immunity from contradiction.
In McReavy, the Court addressed the issue whether Bobo precluded the admission as substantive evidence of testimony concerning a defendant’s behavior and demeanor during a custodial interrogation after a valid waiver of his Fifth Amendment right against compelled self-incrimination. The Court noted that where a defendant’s silence is attributable to an invocation of his Fifth Amendment right or a reliance on the Miranda warnings, the use of his silence is error. McReavy, supra at 201. However, the Court found that because the defendant had waived his Fifth Amendment right, there was no basis to conclude that the defendant’s unresponsiveness to some questions was attributable to the invocation of that right or reliance on the Miranda warnings. Accordingly, the Court concluded that there was no violation of the defendant’s right not to incriminate himself. Id. at 203.
The present case involves an issue not directly addressed by our Supreme Court in Sutton, Cetlinski, or McReavy. The question presented here is whether the admission as substantive evidence of testimony concerning a defendant’s silence before custodial interrogation and before the Miranda warnings have been given is a violation of the defendant’s constitutional rights. On the basis of our reading of these cases and certain federal precedent decided since Bobo, we conclude that it is not.
The Fifth Amendment and Const 1963, art 1, § 17 provide that no person shall be compelled to be a witness against himself in a criminal trial. The Fifth Amendment privilege has been extended beyond criminal trial proceedings "to protect persons in all settings in which their freedom of action is curtailed in any significant way from being compelled to incriminate themselves.” Miranda v Arizona, 384 US 436, 467; 86 S Ct 1602; 16 L Ed 2d 694 (1966).
As Justice Stevens, concurring in Jenkins v Anderson, 447 US 231, 243-244; 100 S Ct 2124; 65 L Ed 2d 86 (1980), noted:
The fact that a citizen has a constitutional right to remain silent when he is questioned has no bearing on the probative significance of his silence before he has any contact with the police. We need not hold that every citizen has a duty to report every infraction of law that he witnesses in order to justify the drawing of a reasonable inference from silence in a situation in which the ordinary citizen would normally speak out. When a citizen is under no official compulsion whatever, either to speak or remain silent, I see no reason why his voluntary decision to do one or the other should raise any issue under the Fifth Amendment. For in determining whether the privilege is applicable, the question is whether petitioner was in a position to have his testimony compelled and then asserted his privilege, not simply whether he was silent. A different view ignores the clear words of the Fifth Amendment.
See also Justice Boyle’s concurring opinion in People v Collier, 426 Mich 23, 39-40; 393 NW2d 346 (1986).
In the present case, when the sheriffs deputies entered defendant’s home, defendant was not in a custodial interrogation situation where he was compelled to speak or to assert his right to remain silent. Although defendant was the focus of the police investigation at that point, the relevant inquiry is whether he was subjected to police interrogation while in custody or deprived of his freedom of action in a significant way. Beckwith v United States, 425 US 341; 96 S Ct 1612; 48 L Ed 2d 1 (1976); People v Hill, 429 Mich 382; 415 NW2d 193 (1987).
Assuming that the presence of the police officers in defendant’s home significantly deprived him of his freedom of action so that he could be found to be in police custody, there is nothing in the record to indicate that he was subjected to interrogation or questioning while in his home or that his silence was in reliance on the Miranda warnings. See United States v Rivera, 944 F2d 1563, 1568 (CA 11, 1991), where the court found that no constitutional difficulties arose out of the presentation as substantive evidence of testimony concerning the defendant’s silence before or after his arrest, but before the defendant was given Miranda warnings. Compare Wainwright v Greenfield, 474 US 284, 295; 106 S Ct 634; 88 L Ed 2d 623 (1986), where the Supreme Court held that the use of a defendant’s postarrest, post -Miranda silence as substantive evidence of his sanity was a violation of the Due Process Clause of the Fourteenth Amendment.
This case is also analogous to the situation in McReavy, supra. In McReavy, the Court found that because the defendant had previously waived his rights, there was no basis to conclude that his nonresponsiveness was attributable to the invocation of his Fifth Amendment privilege or a reliance on the Miranda warnings. Therefore, the Court concluded that admission of evidence regarding the defendant’s demeanor during questioning was not a violation of his Fifth Amendment right not to incriminate himself. The Court noted in McReavy, supra at 221, n 28:
The dissent erroneously characterizes the testimony of the detectives in this case as comments on periods of silence which are constitutionally protected, even though silences so protected are those in which a defendant has exercised the right to remain silent.
In the present case, defendant’s silence or non-responsive conduct did not occur during a custodial interrogation situation, nor was it in reliance on the Miranda warnings. Therefore, we believe that defendant’s silence, like the "silence” of the defendant in McReavy, was not a constitutionally protected silence. On the basis of our reading of the Michigan Constitution, together with developments in Fifth and Fourteenth Amendment jurisprudence, we conclude that defendant’s constitutional rights were not violated when evidence of his silence was admitted as substantive evidence.
Having concluded that defendant’s silence was not a constitutionally protected silence, we must now determine whether the testimony regarding his failure to question why the sheriffs deputies were at his home was admissible under the Michigan Rules of Evidence. Defendant’s failure to question the presence of the deputies was relevant as evidence of his consciousness of guilt. See, e.g., McReavy, supra at 203. Furthermore, we note that the testimony regarding defendant’s failure to question why the sheriff’s deputies were at his home was not contrary to People v Bigge, 288 Mich 417; 285 NW 5 (1939). The rule in Bigge precludes the admission of evidence of a defendant’s failure to say anything in the face of an accusation as an adoptive or tacit admission of the truthfulness of the accusation under MRE 801(d)(2) (B) unless the defendant has "manifested his adoption or belief in its truth.” See McReavy, supra at 213. In the present case, defendant’s failure to question the presence of the deputies at his home at 3:30 a.m. was not allowed into evidence as a tacit admission of any accusation. Rather, defendant’s demeanor was admitted as substantive evidence that was relevant to a determination of defendant’s guilty knowledge. We find no error.
ii
Defendant’s next argument is that the trial court erred in denying his motion to suppress the search warrant because the warrant was not supported by probable cause. We disagree.
This Court will reverse a trial court’s ruling on a motion to suppress only if the ruling was clearly erroneous. A ruling is clearly erroneous if this Court is left with a definite and firm conviction that a mistake has been made. People v Martinez, 187 Mich App 160, 171; 466 NW2d 380 (1991). On the basis of our review of the record, we conclude that the trial court did not clearly err in determining that the search warrant was properly issued.
Evidence of probable cause sufficient to support the issuance of a search warrant exists where, on the basis of all the facts and circumstances, a reasonable person would believe that the evidence of a crime or the contraband sought is in the place requested to be searched. People v Lucas, 188 Mich App 554, 567; 470 NW2d 460 (1991).
The affidavit presented to the magistrate in support of the search warrant detailed the facts that led police to believe that defendant was a suspect in the murders and that evidence of the murders would be found in defendant’s car and residence. The affidavit stated that defendant had been at the sheriffs office earlier on the evening of the murders regarding a problem with his two daughters. At that time, Deputy Burt, who handled defendant’s complaint, noticed that defendant was driving a brown Dodge Ramcharger with a white top. Later, another deputy, while approaching the murder scene, saw a vehicle matching this description. The deputy attempted to follow the vehicle, but lost it. Deputy Burt, responding to the report that there had been a shooting at the house of defendant’s ex-wife, went to the murder scene and then to defendant’s home once he received information that defendant might be involved. When Deputy Burt arrived at defendant’s home he saw defendant’s vehicle parked in the driveway. Upon investigation, he found that the hood, tires, and brake drums of the vehicle were warm. Deputy Burt saw a gun case through the window of the Ramcharger. The affidavit further stated that the victims had apparently been shot with a shotgun and that 16-gauge shotgun shells were found at the murder scene.
On the basis of the foregoing, we believe that the search warrant was properly issued.
hi
Next, defendant argues that the trial court should have granted his motion for a directed verdict because insufficient evidence was presented concerning the elements of premeditation and deliberation to justify submitting the charge of first-degree murder to the jury. We disagree.
When ruling on a motion for a directed verdict, the trial court must consider the evidence presented in the light most favorable to the prosecution to determine whether a rational trier of fact could have found that the essential elements of the crime were proven beyond a reasonable doubt. People v Hampton, 407 Mich 354, 368; 285 NW2d 284 (1979); People v Heard, 178 Mich App 692, 702; 444 NW2d 542 (1989).
Before a defendant may be convicted of first-degree murder, the prosecution must prove that the defendant intentionally killed the victim and that the act of killing was premeditated and deliberate. People v Saunders, 189 Mich App 494, 496; 473 NW2d 755 (1991). Premeditation and deliberation require sufficient time to allow the defendant to take a second look. People v Gonzalez, 178 Mich App 526, 531; 444 NW2d 228 (1989). The elements of premeditation and deliberation may be inferred from the circumstances surrounding the killing. Saunders, supra at 496. Premeditation may be established through evidence of the following factors: (1) the prior relationship of the parties; (2) the defendant’s actions before the killing; (3) the circumstances of the killing itself; and (4) the defendant’s conduct after the homicide. People v Johnson, 93 Mich App 667, 675; 287 NW2d 311 (1979); Gonzalez, supra at 533.
On the basis of our review of the record, we conclude that sufficient evidence was presented concerning the elements of premeditation and deliberation. Testimony presented at trial established that one of the victims, Beverly Schollaert, defendant’s ex-wife, was afraid of defendant, and one of defendant’s daughters testified about an incident that occurred about a year before the killings where defendant had been physically abusive to Beverly. Defendant’s son testified that two or three days before the murders he heard his father say, in reference to Beverly, "I’m going to kill her; the bitch is dead.” Furthermore, there was testimony that defendant was scheduled to appear in court on the morning after the killings to answer a show cause motion filed by Beverly. The son also testified that shortly before the murders he saw defendant smash out the windows of the car of the other victim, Neil Young, who was romantically involved with Beverly. We believe that this testimony together with the circumstances surrounding the killings, i.e., Beverly Schollaert was shot twice and Neil Young was shot four times with a shotgun, was sufficient to establish the elements of premeditation and deliberation. Accordingly we find no error in the submission of the first-degree murder charge to the jury.
IV
Lastly, defendant argues that his sentence of forty to sixty years violates People v Moore, 432 Mich 311; 439 NW2d 684 (1989). We disagree. At the time defendant was sentenced to a term of forty to sixty years for the murder convictions and a consecutive term of two years for the felony-firearm conviction he was forty-three years old. Thus, defendant will be eighty-five upon serving his minimum sentence. Considering regular disciplinary credits, People v Rushlow, 437 Mich 149, 155; 468 NW2d 487 (1991), defendant will be in his late seventies at the expiration of his minimum sentence. Even if the disciplinary credits aren’t considered, defendant’s sentence does not violate Moore, because a sentencing court reasonably may expect a defendant to live into his eighties. People v Redman, 188 Mich App 516, 518; 470 NW2d 676 (1991).
Further, we find that the sentence is proportionate to the seriousness of the circumstances relating to defendant and the crimes committed. People v Milbourn, 435 Mich 630; 461 NW2d 1 (1990).
Affirmed.
In support of its holding, the Court in Cetlinski noted the United States Supreme Court case of Jenkins v Anderson, 447 US 231; 100 S Ct 2124; 65 L Ed 2d 86 (1980) (the use of prearrest silence for impeachment purposes did not violate the Fifth Amendment or the Due Process Clause of the Fourteenth Amendment).
Miranda v Arizona, 384 US 436; 86 S Ct 1602; 16 L Ed 2d 694 (1966).
See also Doyle v Ohio, 426 US 610; 96 S Ct 2240; 49 L Ed 2d 91 (1976), and Fletcher v Weir, 455 US 603; 102 S Ct 1309; 71 L Ed 2d 490 (1982).
We recognize that a reading of People v Sain, 407 Mich 412; 285 NW2d 772 (1979), and People v Finley, 177 Mich App 215; 441 NW2d 774 (1989), might indicate a contrary result. However, both of these cases relied on the rule announced in Bobo that we believe has been greatly restricted by the latest decisions of our Supreme Court and developments in federal law.
There was a conflict among panels of this Court regarding the applicable standard for reviewing the issuance of a search warrant. See People v Kort, 162 Mich App 680, 690; 413 NW2d 83 (1987), and People v Goins, 164 Mich App 559, 560; 417 NW2d 499 (1987). This conflict was apparently resolved in People v Landt, 188 Mich App 234; 469 NW2d 37 (1991), where the Court held that a reviewing court must look at the affidavits and determine whether the information contained in the documents provides a sufficiently substantial basis of probable cause to conclude that the evidence that is sought will be found in a specific place. However, Landt was reversed by an order of the Michigan Supreme Court in People v Landt, 439 Mich 866 (1991).
After the issuance of the Landt case and before its reversal, another panel of this Court, noting the conflict, found that the magistrate did not abuse his discretion in that case because a substantial basis existed for the determination that probable cause existed. See Lucas, supra at 567-568.
We do not believe it is necessary to determine whether the standard employed in Landt is still viable or whether the standard employed in Lucas is to be followed under Administrative Order No. 1990-6, because we find that the warrant was properly issued under either standard. | [
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Per Curiam.
Plaintiff was awarded workmen’s compensation benefits by order of a referee. Defendants appealed to the appeal board which affirmed the award. Defendants then sought review of the award in circuit court by “Petition for Review.” Plaintiff moved for summary judgment on the grounds that the circuit court had no jurisdiction to review final orders of the Workmen’s Compensation Appeal Board and for judgment upon the referee’s award pursuant to § 863 of the Workmen’s Compensation Act of 1969, MCLA 418.863; MSA 17.237 (863).
By order entered June 28, 1971, the circuit court granted plaintiff’s motion for summary judgment and dismissed defendants’ action for lack of jurisdiction. By order entered July 2, 1971, the circuit court entered judgment upon the award.
Defendants appeal as of right to this Court. Plaintiff has filed a motion to affirm. GrCR 1963, 817.5(3).
The June 28, 1971 order for summary judgment is affirmed. This Court has exclusive original jurisdiction to review final orders of the Workmen’s Compensation Appeal Board. MCLA 418.861; MSA 17.237 (861). The review afforded by that statute fully satisfies the requirement of “direct review by the courts” as guaranteed by Const 1963, art 6, § 28. Evans v United States Rubber Co, 379 Mich 457 (1967).
The July 2, 1971 order granting judgment on the award was entered pursuant to and in conformity with MCLA 418.863; MSA 17.237 (863).
Motion to affirm is granted. | [
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Van Valkenburg, J.
Appellant Regents of the University of Michigan seek review of the March 16, 1971 decision and order of appellee Michigan Employment Relations Commission, whereby a representation election was ordered to be conducted among the interns, residents, and post-doctoral fellows working for the appellant at the University of Michigan Medical Center for the purpose of determining whether said individuals wished to be represented for collective bargaining purposes by the University of Michigan Interns-Residents Association.
The genesis of this story goes back to the fall of 1966, when a group of interns and resident doctors connected with the University Hospital, desiring to bargain with the Regents of the University of Michigan concerning wages, rates of pay, and conditions of employment, decided to band together and form the University of Michigan Interns-Residents Association. The Regents, however, refused to recognize this newly formed organization as a bargaining agent. The association thereafter filed an election petition with the commission in April 1970.
An extensive hearing was held in June and July of 1970 before a trial examiner. Briefs were filed, and oral arguments were presented to the full commission on March 2, 1971, whereupon the commission issued its order of March 16, 1971, setting the election for April 21, 22, and 23, 1971. Prior to the election the Regents sought to stay the election. This Court denied the motion to stay the election, “but without prejudice to the plaintiff’s right to decline to bargain with the bargaining agent until a decision by this Court on the application for leave and until further order of the Court”.
The election was held and resulted in 296 votes in favor of representation, 115 against, and 4 chai lenged ballots.. Tbe association soon after the election requested of the Regents that negotiations be instituted, but this was refused on the theory that the matter was still pending before this Court. Leave to appeal was granted and an order was issued staying all proceedings among the parties until such time as a final decision could be made.
The factual setting having been laid, we must now look at the issues raised.
May the Public Employment Relations Act be applied to The Regents of The University of Michigan in the present matter without contravening their authority under Const 1963, art 8, § 5?
The question of whether the constitutional grant of authority to supervise, direct, and control university affairs insulates the governing bodies of state universities from regulation as a public employer has now been laid to rest. The Michigan Supreme Court in Board of Control of Eastern Michigan University v Labor Mediation Board, 384 Mich 561, 565-566 (1971), while recognizing that:
“The powers and prerogatives of Michigan Universities have been jealously guarded not only by the boards of those universities but by this Court in a series of opinions running as far back as 1856”,
nonetheless held that:
“Here we find no plenary grant of powers which, by any stretch of the imagination, would take plaintiff’s operations outside of the area of public employment. ‘Public employment’ is clearly intended to apply to employment or service in all governmental activity, whether carried on by the state or by townships, cities, counties, commissions, boards or other governmental instrumentalities. It is the entire public sector of employment as distinguished from private employment. The public policy of this state as to labor relations in public employment is for legislative determination.”
We therefore hold that, while the Regents continue to enjoy the entire control and management of its affairs and property, they are a public employer and thus are subject to regulation as a public employer.
Hence, we are confronted with the crucial issue.
Are interns, residents and post-doctoral fellows serving at the university and affiliated hospitals of The University of Michigan Medical Center public employees within the meaning of 1965 PA 379¶
Two members of the commission, who comprised the majority, decided that, although the persons who sought to be included in the bargaining unit were students of the University of. Michigan Medical School, they nonetheless also had an employment relationship with the university and were entitled to unite for collective bargaining purposes. The majority determined the appropriate unit to be:
“All interns, residents and fellows employed by the Regents of The University of Michigan possessing the equivalent of a minimum of an M. D. or D.D.S. degree, and post-doctoral fellows in the clinical and basic sciences, EXCLUDING- pharmacy interns, dietetic interns, nurse anesthetist trainees, chaplaincy interns, and all other employees.”
The third member of the commission dissented, holding that:
“I would find on the basis of the record as a whole that interns and residents are not employees in the traditional or legal sense but are in fact post-graduate students. Their activities represent a continuation of their medical study and are, therefore, pri marily educational rather than employment in nature. I would find, contrary to my colleagues, that the interns and residents are not public employees for whom this Commission should direct an election.”
Appellees maintain that the findings of fact made by the majority of the Employment Relations Commission are final, and that the reviewing court may not substitute its judgment for that of the administrative agency if such findings by the agency are supported by competent, material, and substantial evidence. Generally speaking, we have no quarrel with this argument; however, we note with approval the language of 8 Callaghan’s Michigan Pleading & Practice (2d ed), § 60.88, pp 259-260, that:
“Legal conclusions drawn by an agency, and questions of law involved in its decisions or determinations, are reviewable. Thus it has been decided, that findings upon undisputed facts are reviewable, the determination in such case being a legal conclusion, and that legal conclusions based upon findings of fact are subject to review.”
The question herein raised, as to whether the interns, residents, and post-graduate fellows are to be considered employees within the meaning of the statute, is a question of law, and thus is properly the subject of review by this Court.
In 1947 the Legislature enacted 1947 PA 336, commonly referred to as the Hutchinson Act , for the purpose of preventing strikes among public employees and creating a procedure by which to mediate grievances. In 1965 the Legislature, exercising its authority granted in Const 1963, art 4, § 48, enacted 1965 PA 379; MCLA 423.201 et seq; MSA 17.-455(1) et seq, which substantially amended the 1947 act and included eight new sections.
The pertinent part of the title to the act as amended reads:
“An act to prohibit strikes by certain public employees ; * * * to declare and protect the rights and privileges of public employees; # (Emphasis supplied.)
The statute does not, however, define what is meant by the words “public employees”. Some help is found in Hillsdale Community Schools v Labor Mediation Board, 24 Mich App 36, 41 (1970), where it was held that:
“The words ‘public employee’ are to identify the employees other them private and does not define public employee so as to exclude supervisory personnel.”
The word “employee” is quite flexible in meaning and subject to different interpretations in accordance with the intent of the statute in which it is used. Illustrative of this point, we quote the language found in 30 CJS, Employee, p 672:
“ ‘Employee’ has neither technically nor in general use a restricted meaning by which any particular employment or service is indicated, and that it may have different meanings in different connections admits of no doubt. The word ‘employee’ has no fixed meaning which must control in every instance, and it is not a word of art, but takes color from its surroundings and frequently is carefully defined by the statute where it appears.”
Since the term “employee” is nebulous in nature and undefined in the statute, what then was the intent of the Legislature with regard to interns, residents, and post-graduate fellows acting as such at hospitals associated with state universities? It is first necessary to look at the nature of these persons’ positions. Webster’s Third New International Dictionary defines the word “intern” as:
“an advanced student or recent graduate in a professional field * * * one trained in a profession allied to medicine who undergoes a period of practical clinical experience prior to practicing his profession.”
The same dictionary defines “resident” as:
“a physician serving a residency”,
with “residency” being defined as:
“a period of advanced medical training and education that normally follows graduation from medical school and completion of internship and that consists of supervised practice of a specialty in a hospital and its out-patient department and instruction from specialists on the hospital staff.”
“Fellow” is defined as:
“a young physician who has completed training as an intern and resident and has been granted a_stipend and position allowing him to do further study and research in a specialty.”
The relationship between these persons and the Regents thus assumes a unique blend of the aspects of both employer-employee and teacher-student. Neither can we overlook the fact that a state university is a unique public employer, because its powers, duties and responsibility are derived from the Constitution rather than from enactments of legislation. See Regents of University of Michigan v Labor Mediation Board, 18 Mich App 485, 490 (1969).
The Regents have exclusive control of all matters dealing with the education of the student. To this end, the Legislature cannot enact any law which will regulate or direct the manner in which the educational processes are to be conducted. The wisdom of this independence was well stated in Branum v Board of Regents of University of Michigan, 5 Mich App 134,138 (1966):
“This Court recognizes that such independence must be maintained in educational matters in order to provide the highest quality education for the students of Michigan, and in order to maintain the outstanding national reputation of the University.”
The educational and employment aspects of the relationship of the interns, residents, and post-graduate fellows with the Regents are inextricably mixed. To hold that these persons are employees within the meaning of the statute would impinge, to some degree, upon the constitutional authority of the Regents to control and manage the educational affairs of the University. Absent some clear expression by the Legislature that they intended to excise their constitutional authority to regulate labor relations among public employees in such a manner as to so impinge upon the Regents’ constitutional authority, this Court will assume that the Legislature did not intend such a result. If the Legislature had intended that graduate students were to be included as public employees within the meaning of the statute, they would have clearly indicated such an intent.
Courts cannot be oblivious to the consequences of their decisions. If the interns, residents, and post graduate fellows associated with the University Medical Center were to be classified as herein requested, the assistants in all other departments, working part-time at their trade or profession for a small stipend, would, in order to avoid discrimination, conclude that they were entitled to the same treatment. Such a result could well wreak havoc upon the very ability of the Regents to control and manage the educational affairs of the University. It is further noted that the Legislature, itself, considers interns and other assistants as students rather than employees for the purpose of determining the amount of annual appropriation made to the University.
This case is apparently one of first impression, not only in Michigan, but in the entire United States. While the attorneys for both sides filed long and exhaustive briefs, which clearly indicate the importance of this litigation, none of the cases therein cited offer any real help in the determination of this issue. It would be of little value to review all the citations, since, in the final analysis, all can be distinguished. We would also note that in New York interns and residents may organize for purposes of collective bargaining; however, such bargaining units are specifically provided for by statute. The Legislature of that state has spoken on the question ; the Legislature of Michigan has not.
Therefore, for the reasons stated herein, it is the conclusion of this Court that the interns, residents, and post-graduate fellows associated with the University of Michigan Medical Center are not public employees within the meaning of 1965 PA 379; MCLA 423.201 et seq; MSA 17.455(1) et seq.
The decision of the Michigan Employment Relations Commission is hereby reversed and set aside, but without costs, a public question being involved.
Holbrook, J., concurred.
Named after Representative Edward Hutchinson who sponsored the legislation. He is now a United States Congressman from the 4th district.
“The legislature may enact laws providing for the resolution of disputes concerning public employees, except those in the state classified civil service.”
30 McKinney’s Consolidated Laws, Labor Law, § 705, Subd 2. | [
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Per Curiam.
Defendant was convicted by a jury of delivery of heroin and sentenced to 10 to 20 years imprisonment. The Court of Appeals affirmed. Because of an unfairly prejudicial line of inquiry pursued by the prosecutor during his cross-examination of defendant, we reverse the Court of Appeals, vacate the conviction and sentence, and remand the case for a new trial._
I
Defendant testified in his own behalf. He specifically denied ever using or selling heroin. While cross-examining him, the prosecutor inquired at great length and in detail about defendant’s knowledge of heroin, its use, and the use of paraphernalia connected with the use of heroin. Whenever the defense counsel objected to this line of questioning, his objections were overruled. A sample of the challenged cross-examination follows:
"Q. [Assistant Prosecuting Attorney]: Did you ever see Michael Pierrie [the government informant] use heroin?
"A. [Defendant]: Yes, I did.
"Q. What did he use heroin — did he swallow it or what did he do?
"A. He was injecting it in his arm.
"Q. What did he use to inject it into his arm?
"A. A needle.
"Q. Did he do anything before he stuck the needle in his arm?
"A. He had a rope or something around his arm.
”Q. Could you demonstrate, using this rubber band? Can you demonstrate what Michael Pierrie did to his arm with that rope? You could take off your jacket if it would be easier.
"Did Michael Pierrie have on a long-sleeved shirt that time he used heroin?
"A. No, it was in the summer.
"Q. Could you roll your sleeve for us, please?
"A. It was just tied around — he was sitting at the table and he tied it around his arm.
”Q. Then what did he do?
"A. I don’t know what he did. He had the needle and the rope around his arm.
"Q. Where did he put the needle?
"(Witness indicating.)
”Q. Putting a needle in there would leave a mark, wouldn’t it?
"A I’m pretty sure it would,
”Q. Do you know what needle tracks are?
. "A. Yes, I have seen them.
"Q. What are needle tracks?
"A. Some marks you get from using a needle.
”Q. Where did you see these needle tracks?
"A. It was on a — like, you’d be out; people have on short sleeve shirts, you could see them. That’s the way you notice. Somebody else use heroin and that.
”Q. Now, let’s see; heroin is a — like we have had marked here; this is a powdery sort of thing. This is a little dried out, but it’s generally powder, isn’t it?
"A. Yes.
"Q. Is heroin always brown or is it sometimes white?
"[Defense Counsel]: Your Honor, I will object to that unless Mr. Klumpp establishes that Mr. McKinney is an expert on that.
"The Court: I will overrule it. Proceed.
"A. Give me the question again.
”Q. [Assistant Prosecuting Attorney]: This heroin is brown, is it not?
"A. Yes.
”Q. Brown heroin comes from Mexico, generally, in this area?
"A. I wouldn’t know.
”Q. Is heroin ever white?
"A. I wouldn’t know that, either.
"Q. What is done with the heroin that is powderized before you can inject it into your arm?
"A. I guess water is put in it.
”Q. Do they just add water to it and then stir it up and put it in a syringe and inject it into their arm?
"A. I wouldn’t know how it was done.
”Q. Have you ever heard the phrase in relation to a heroin measuring device, a Mac spoon?
"A. Yes, I have heard that.
”Q. And isn’t it true that a Mac spoon is one of these little MacDonald spoons that you use to measure a quantity of heroin that you can inject into your arm at one time, just a little small amount?
"A Yes, I’ve seen spoons.
”Q. It would take several of those little MacDonald spoons to fill up a quarter teaspoon such as you saw on the dresser, wouldn’t it?
"A. I wouldn’t know.
"Q. A MacDonald spoon is pretty small, isn’t it?
"A. Yes.
"Q. Have you ever heard of the phrase, 'a $10 paper’, or 'a $20 paper’ in relation to a quantity of heroin on the street?
"A. Yes.
”Q. And isn’t it true that a $10 or a $20 paper would be something that would be a usable quantity of heroin that you could inject at one time without killing yourself?
"A. I don’t know. I never used it so I wouldn’t know.
”Q. Have you ever heard of anyone overdosing on heroin and dying or becoming quite ill from it?
"A. Yes.
”Q. And that would be because they put too much heroin in their system at once and their body couldn’t take it?
"A. Yes.
"Q. Have you ever seen anyone overdose?
"A. No. Well, yes.
"Q. When did you see someone overdose on heroin?
'A. I was in the doctor’s office and three guys brought a guy in that overdosed.
”Q. And isn’t it true that this 10 or $20 paper would be something that you would pay 10 or $20 for?
"A. I wouldn’t know.
”Q. Have you ever heard of anyone paying $210 for three street grams of heroin and using it at one time?
"A. No, I never heard of that.
”Q. Isn’t it true that that quantity of heroin would probably result in an overdose?
"A I’m pretty sure if they say it’s as much as they say it is.
”Q. Isn’t it true that when people buy heroin to inject into themselves it is not 100 percent heroin?
’’[Defense Counsel]: Your Honor, I will object to this line of questioning.
’’The Court: I will overrule it. Proceed.
"A. I wouldn’t know.”
II
The defense counsel objected at trial that the foregoing line of inquiry was "immaterial”. As stated, his objections were overruled and the questions permitted, and answers given allowed to stand.
Whether analyzed as a matter of materiality or relevancy, evidence proffered at trial must bear a particularly sufficient correspondence or connection to a case before it can be properly admitted. This threshold requirement represents the application of two distinct rules: first, the matter sought to be established by the evidence must be "in issue”; and, second, the proffered evidence must have probative value with respect to that matter. These rules, at the price of sacrificing clarity of analysis, are often formulated as one. For instance, in People v Becker, 300 Mich 562, 565; 2 NW2d 503 (1942), it was said that the general rule is that evidence "is admissible if helpful in throwing light upon any material point in issue”.
The threshold requirement of admissibility has more recently found expression in the more precise phraseology of MRE 401 under the term "relevant evidence”:
" ^Relevant evidence’ means evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence.”
In the case before us, the defendant claims on appeal that the evidence sought to be elicited by the prosecutor’s cross-examination of defendant was "immaterial” or not "relevant evidence” within the meaning of MRE 401. We disagree.
It is plain that the prosecutor intended to illustrate and emphasize defendant’s intimate familiarity with both heroin and the details of heroin use. Evidence of that familiarity would have a tendency, however slight, to contradict defendant’s statement on direct examination that he had never used or sold heroin. Thus, the evidence was relevant, although minimally so. An effect of the contradiction would be impugnment of defendant’s credibility. Since it is axiomatic that the credibility of a witness is always a "fact that is of consequence to the determination of the action”, the evidence to which the disputed cross-examination was directed was therefore material.
We see this, therefore, not as a question of the relevancy or materiality of the evidence. Instead, the real issue involves the application of MRE 403: Was the probative value of the evidence in question substantially outweighed by its untoward effects? MRE 403 provides:
"Although relevant, evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury, or by considerations of undue delay, waste of time, or needless presentation of cumulative evidence.”
Even though the evidence that the prosecutor attempted to establish on cross-examination of defendant was relevant, we are convinced that the prejudice engendered by the prosecutor’s questions was of a nature and degree that warranted preclusion of the questions and answers under MRE 403. It is clear to us that the cross-examination created a risk that the jury would rely upon defendant’s purported familiarity with the incidents of heroin use in reaching a decision as to whether defendant delivered heroin to the person, at the time, and at the place charged in the information. This risk not only substantially outweighed but overwhelmed the probative value of the cross-examination and was, therefore, unacceptable. Furthermore, the risk was aggravated by the fact that defendant was required to perform a pantomime to demon strate how heroin is hypodermically injected into the arm. The likelihood that a guilty verdict would be founded upon an improper basis was simply too great to justify receiving the evidence for its minimal relevancy.
Accordingly, pursuant to GCR 1963, 853.2(4), in lieu of granting leave to appeal, we reverse the judgment of the Court of Appeals, vacate defendant’s conviction and sentence, and remand the case to the Saginaw County Circuit Court for a new trial.
Coleman, C.J., and Kavanagh, Williams, Levin, Fitzgerald, Ryan, and Blair Moody, Jr., JJ., concurred.
MCL 335.341(1)(a); MSA 18.1070(41)(1)(a) (current version is MCL 333.7401[2][a]; MSA 14.15[7401][2][a]).
People v Oliphant, 399 Mich 472, 489; 250 NW2d 443 (1976), quoting McCormick, Evidence (2d ed), § 185, p 434.
Focus upon what is "in issue”, "in dispute”, or "provable” in a given case has generally been associated with the concept of materiality. As a noted authority observed, "We begin, then, with the notion of materiality, the inclusion of certain questions or propositions within the range of allowable proof in the lawsuit”. McCormick, Evidence (2d ed), § 185, pp 434-435. Accordingly, a matter that is "in issue” is material. In contemporary legal parlance, a material matter is described as "any fact that is of consequence to the determination of the action”. MRE 401; FRE 401.
This demand is one of simple, logical relevancy, measured by logic, common experience, and common sense, .apart from legal technicalities. See McCormick, Evidence (2d ed), § 185, pp 436-437, fn 19. It concerns "the tendency of evidence to establish a proposition which it is offered to prove”. Id., p 435.
Accord, People v Wilkins, 408 Mich 69, 72-73; 288 NW2d 583 (1980); see People v Nichols, 341 Mich 311, 331; 67 NW2d 230 (1954) (pre-MRE), quoting Stroh v Hinchman, 37 Mich 490, 497 (1877): "All evidence should have some legitimate tendency to establish or disprove the fact in controversy, and whatever has no such tendency should be rejected.”
The Michigan Rules of Evidence were in effect during defendant’s trial.
Accord, People v DerMartzex, 390 Mich 410, 415 and fn 3; 213 NW2d 97, 100 and fn 3 (1973) (pre-MRE). | [
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The question certified by the United States District Court, Eastern District of Michigan, Southern Division, is considered. Pursuant to GCR 1963, 797.2, the briefs and appendix in xerographic form are accepted, and the Court accepts the request to answer the certified question. | [
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Per Curiam.
This case arises out of a plan by the Detroit Economic Development Corporation to acquire, by condemnation if necessary, a large tract of land to be conveyed to General Motors Corporation as a site for construction of an assembly plant. The plaintiffs, a neighborhood association and several individual residents of the affected area, brought suit in Wayne Circuit Court to challenge the project on a number of grounds, not all of which have been argued to this Court. Defendants’ motions for summary judgment were denied pending trial on a single question of fact: whether, under 1980 PA 87; MCL 213.51 et seq.; MSA 8.265(1) et seq., the city abused its discretion in determining that condemnation of plaintiffs’ property was necessary to complete the project.
The trial lasted 10 days and resulted in a judgment for defendants and an order on December 9, 1980, dismissing plaintiffs’ complaint. The plaintiffs filed a claim of appeal with the Court of Appeals on December 12, 1980, and an application for bypass with this Court on December 15, 1980.
We granted a motion for immediate considera tion and an application for leave to appeal prior to decision by the Court of Appeals to consider the following questions:
Does the use of eminent domain in this case constitute a taking of private property for private use and, therefore, contravene Const 1963, art 10, §2?
Did the court below err in ruling that cultural, social and historical institutions were not protected by the Michigan Environmental Protection Act?
We conclude that these questions must be answered in the negative and affirm the trial court’s decision.
I
This case raises a question of paramount importance to the future welfare of this state and its residents: Can a municipality use the power of eminent domain granted to it by the Economic Development Corporations Act, MCL 125.1601 et seq.; MSA 5.3520(1) et seq., to condemn property for transfer to a private corporation to build a plant to promote industry and commerce, thereby adding jobs and taxes to the economic base of the municipality and state?
Const 1963, art 10, § 2, states in pertinent part that "[p]rivate property shall not be taken for public use without just compensation therefor being first made or secured in a manner prescribed by law”. Art 10, § 2 has been interpreted as requiring that the power of eminent domain not be invoked except to further a public use or purpose. Plaintiffs-appellants urge us to distinguish between the terms "use” and "purpose”, asserting they are not synonymous and have been distinguished in the law of eminent domain. We are persuaded the terms have been used interchangeably in Michigan statutes and decisions in an effort to describe the protean concept of public benefit. The term "public use” has not received a narrow or inelastic definition by this Court in prior cases. Indeed, this Court has stated that " '[a] public use changes with changing conditions of society’ ” and that " '[t]he right of the public to receive and enjoy the benefit of the use determines whether the use is public or private’ ”.
The Economic Development Corporations Act is a part of the comprehensive legislation dealing with planning, housing and zoning whereby the State of Michigan is attempting to provide for the general health, safety, and welfare through alleviating unemployment, providing economic assistance to industry, assisting the rehabilitation of blighted areas, and fostering urban redevelopment.
Section 2 of the act provides:
"There exists in this state the continuing need for programs to alleviate and prevent conditions of unemployment, and that it is.accordingly necessary to assist and retain local industries and commercial enterprises to strengthen and revitalize the economy of this state and its municipalities; that accordingly it is necessary to provide means and methods for the encouragement and assistance of industrial and commercial enterprises in locating, purchasing, constructing, reconstructing, modernizing, improving, maintaining, repairing, furnishing, equipping, and expanding in this state and in its municipalities; and that it is also necessary to encourage the location and expansion of commercial enterprises to more conveniently provide needed services and facilities of the commercial enterprises to municipalities and the residents thereof. Therefore, the powers' granted in this act constitute the performance of essential public purposes and functions for this state and its municipalities.” MCL 125.1602; MSA 5.3520(2). (Emphasis added.)
To further the objectives of this act, the Legislature has authorized municipalities to acquire property by condemnation in order to provide industrial and commercial sites and the means of transfer from the municipality to private users. MCL 125.1622; MSA 5.3520(22).
Plaintiffs-appellants do not challenge the declaration of the Legislature that programs to alleviate and prevent conditions of unemployment and to preserve and develop industry and commerce are essential public purposes. Nor do they challenge the proposition that legislation to accomplish this purpose falls within the constitutional grant of general legislative power to the Legislature in Const 1963, art 4, § 51, which reads as follows:
"The public health and general welfare of the people of the state are hereby declared to be matters of primary public concern. The legislature shall pass suitable laws for the protection and promotion of the public health.”
What plaintiffs-appellants do challenge is the constitutionality of using the power of eminent domain to condemn one person’s property to convey it to another private person in order to bolster the economy. They argue that whatever incidental benefit may accrue to the public, assembling land to General Motors’ specifications for conveyance to General Motors for its uncontrolled use in profit making is really a taking for private use and not a public use because General Motors is the primary beneficiary of the condemnation.
The defendants-appellees contend, on the other hand, that the controlling public purpose in taking this land is to create an industrial site which will be used to alleviate and prevent conditions of unemployment and fiscal distress. The fact that it will be conveyed to and ultimately used by a private manufacturer does not defeat this predominant public purpose.
. There is no dispute about the law. All agree that condemnation for a public use or purpose is permitted. All agree that condemnation for a private use or purpose is forbidden. Similarly, condemnation for a private use cannot be authorized whatever its incidental public benefit and condemnation for a public purpose cannot be forbidden whatever the incidental private gain. The heart of this dispute is whether the proposed condemnation is for the primary benefit of the public or the private user.
The Legislature has determined that governmental action of the type contemplated here meets a public need and serves an essential public purpose. The Court’s role after such a determination is made is limited.
" 'The determination of what constitutes a public purpose is primarily a legislative function, subject to review by the courts when abused, and the determination of the legislative body of that matter should not be reversed except in instances where such determination is palpable and manifestly arbitrary and incorrect.’ ” Gregory Marina, Inc v Detroit, 378 Mich 364, 396; 144 NW2d 503 (1966).
The United States Supreme Court has held that when a legislature speaks, the public interest has been declared in terms "well-nigh conclusive”. Berman v Parker, 348 US 26, 32; 75 S Ct 98; 99 L Ed 27 (1954).
The Legislature has delegated the authority to determine whether a particular project constitutes a public purpose to the governing body of the municipality involved. The plaintiffs concede that this project is the type contemplated by the Legislature and that the procedures set forth in the Economic Development Corporations Act have been followed. This further limits our review.
In the court below, the plaintiffs-appellants challenged the necessity for the taking of the land for the proposed project. In this regard the city presented substantial evidence of the severe economic conditions facing the residents of the city and state, the need for new industrial development to revitalize local industries, the economic boost the proposed project would provide, and the lack of other adequate available sites to implement the project.
As Justice Cooley stated over a hundred years ago "the most important consideration in the case of eminent domain is the necessity of accomplishing some public good which is otherwise impracticable, and * * * the law does not so much regard the means as the need”. People ex rel Detroit & Howell R Co v Salem Twp Board, 20 Mich 452, 480-481 (1870).
When there is such public need, "[t]he abstract right [of an individual] to make use of his own property in his own way is compelled to yield to the general comfort and protection of community, and to a proper regard to relative rights in others”. Id. Eminent domain is an inherent power of the sovereign of the same nature as, albeit more severe than, the power to regulate the use of land through zoning or the prohibition of public nuisances.
In the instant case the benefit to be received by the municipality invoking the power of eminent domain is a clear and significant one and is sufficient to satisfy this Court that such a project was an intended and a legitimate object of the Legislature when it allowed municipalities to exercise condemnation powers even though a private party will also, ultimately, receive a benefit as an incident thereto.
The power of eminent domain is to be used in this instance primarily to accomplish the essential public purposes of alleviating unemployment and revitalizing the economic base of the community. The benefit to a private interest is merely incidental.
Our determination that this project falls within the public purpose, as stated by the Legislature, does not mean that every condemnation proposed by an economic development corporation will meet with similar acceptance simply because it may provide some jobs or add to the industrial or commercial base. If the public benefit was not so clear and significant, we would hesitate to sanction approval of such a project. The power of eminent domain is restricted to furthering public uses and purposes and is not to be exercised without substantial proof that the public is primarily to be benefited. Where, as here, the condemnation power is exercised in a way that benefits specific and identifiable private interests, a court inspects with heightened scrutiny the claim that the public interest is the predominant interest being advanced. Such public benefit cannot be speculative or marginal but must be clear and significant if it is to be within the legitimate purpose as stated by the Legislature. We hold this project is warranted on the basis that its significance for the people of Detroit and the state has been demonstrated.
II
Plaintiffs’ complaint also alleged that the proposed project violates the Michigan Environmental Protection Act (MEPA), MCL 691.1201 et seq.; MSA 14.528(201) et seq., because it "will have a major adverse impact on the adjoining social and cultural environment which is referred to as Pole-town”. The trial court dismissed this claim, stating that " 'social and cultural environments’ are matters not within the purview of the MEPA and outside its legislative intent”. We agree.
MCL 691.1202(1); MSA 14.528(202)(1) permits maintenance of an action for declaratory and equitable relief against the state, its political subdivisions, or private entities, "for the protection of the air, water and other natural resources and the public trust therein from pollution, impairment or destruction”. (Emphasis supplied.) The reference to "air, water and other natural resources” is also made in other sections of the act and in its title. Given its plain meaning, the term "natural resources” does not encompass a "social and cultural environment”. Moreover, under the principle of ejusdem generis, where a statute contains a general term supplementing a more specific enumeration, the general term will not be construed to refer to objects not of like kind with those enumer ated. 2A Sutherland, Statutory Construction (4th ed), §§ 47.18-47.19, pp 109-114.
The decision of the trial court is affirmed.
The clerk is directed to issue the Court’s judgment order forthwith, in accordance with GCR 1963, 866.3(c).
No costs, a public question being involved.
Coleman, C.J., and Kavanagh, Williams, Levin, and Blair Moody, Jr., JJ., concurred.
Shizas v Detroit, 333 Mich 44, 50; 52 NW2d 589 (1952).
City of Center Line v Michigan Bell Telephone Co, 387 Mich 260; 196 NW2d 144 (1972); Gregory Marina, Inc v Detroit, 378 Mich 364; 144 NW2d 503 (1966); and In re Slum Clearance, 331 Mich 714; 50 NW2d 340 (1951).
Hays v Kalamazoo, 316 Mich 443, 453-454; 25 NW2d 787; 169 ALR 1218 (1947), quoting from 37 Am Jur, Municipal Corporations, § 120, pp 734-735.
MCL 125.1610(2); MSA 5.3520(10)(2).
MCL 125.1603(e); MSA 5.3520(3)(e).
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Fitzgerald, J.
In both of these cases, the employer locked out its employees upon the expiration of their collective bargaining agreement after negotiations to arrive at a new agreement had been unsuccessful. We granted leave to appeal to decide whether the employees are entitled to unemployment compensation where they were locked out in spite of their willingness to continue working during contract negotiations. In both cases, the Michigan Employment Security Commission (MESC) Referee, the MESC Appeal Board and the circuit court found for the employer and the Court of Appeals reversed, finding for the employees.
I
These cases require us to examine the labor dispute disqualification provision of the Employment Security Act (ESA), MCL 421.29(8); MSA 17.531(8), as it applies to the lockout situation. The statute provides in pertinent part:
"An individual shall be disqualified for benefits for any week with respect to which his total or partial unemployment is due to a labor dispute in active progress, or to shutdown or start-up operations caused by that labor dispute, in the establishment in which he is or was last employed, or to a labor dispute, other than a lockout, in active progress, or to shutdown or start-up operations caused by that labor dispute, in any other establishment within the United States which is functionally integrated with the establishment and is operated by the same employing unit.”
A finding of disqualification under the above provision is not the end of the inquiry. The statute further provides that an individual shall not be disqualified unless he is "directly involved” in the dispute. Section 29(8)(a) sets forth four criteria by which the requisite involvement is determined. It is only after both of these findings have been made that a claimant may be disqualified from receiving unemployment benefits under this provision. Thus, in order for appellees in the present cases to be disqualified, it must be shown that their unemployment was due to a labor dispute in which they were directly involved.
II
Appellees and amicus AFL-CIO argue that the type of lockout involved here is not intended to be included within the terms of the statutory labor dispute disqualification. They rely on the general purpose of the statute expressed in MCL 421.2; MSA 17.502, to provide benefits to workers who are involuntarily unemployed. Because appellees were willing to continue working during contract negotiations, appellees claim that they were involuntarily unemployed. Appellees and amicus AFL-CIO, as well as the Smith panel in the Court of Appeals, rely heavily on National Gypsum Co v Administrator, Louisiana Dep’t of Employment Security, 313 So 2d 230 (La, 1975). Finally, appellee Smith argues that the commission, the trial court and appellants have misread § 29(8) by "contending that a disqualification results from their reading of the phrases, 'or to a labor dispute, other than a lockout, in active progress, or to shutdown or start-up operations caused by that dispute * * *’ as if the [italicized] 'or’ was 'and’ ”.
At the outset, we reject plaintiff Smith’s construction of the statute. Such a construction would render the labor dispute clauses redundant. This violates the basic rule of statutory construction that, if at all possible, no word should be treated as mere surplusage or rendered nugatory. Scott v Budd Co, 380 Mich 29, 37; 155 NW2d 161 (1968); Stowers v Wolodzko, 386 Mich 119, 133; 191 NW2d 355 (1971).
A plain reading of the first sentence of § 29(8) indicates that it is composed of two clauses in which the Legislature sets forth two discrete types of disqualification. The first disqualification applies to labor disputes in the establishment in which a claimant is or was last employed. The second disqualification applies when the labor dispute (other than a lockout) occurs in a functionally integrated establishment operated by the same employing unit. In the instant cases we are concerned only with the first disqualification clause.
It is significant that the Legislature chose to qualify the labor dispute disqualification in the second clause by excepting lockouts while it left intact the labor dispute disqualification in the first clause without similar qualification. First, it indicates that the Legislature understood that a lockout is one form of a labor dispute since it would have been unnecessary to include the lockout exception in the second clause had it been otherwise. Second, it leads us to conclude that the Legislature intended to exempt lockouts from the labor dispute disqualification for claimants who are unemployed due to a labor dispute at a functionally integrated establishment, while it did not intend to so exempt claimants who are unemployed due to a labor dispute at an establishment in which they are or were last employed. If the Legislature had intended to exclude lockouts in the first clause, it could have explicitly done so as it did in the second clause.
Further support for our conclusion is provided by § 29(7)(a) of the act which states that an individual shall not be disqualified for benefits for refusing to accept work, "[i]f the position offered is vacant due directly to a strike, lockout, or other labor dispute(Emphasis added.) Numerous other jurisdictions have considered similar provisions in their unemployment statutes to be a legislative recognition that the lockout constitutes one form of labor dispute.
"Nearly all of the 51 statutes employ the term 'labor dispute’ or its equivalent, but only a few attempt any definition or limitation of those words. However, one clue as to meaning has been inserted in every statute in order to satisfy the minimum requirements of the Federal Social Security Act. The state statutes provide without exception that benefits shall not be denied to an otherwise eligible employee if he refuses to accept new work when the position offered is vacant due to a 'strike, lockout, or other labor dispute,’ such a job not constituting 'suitable work.’ This phrase indicates not only that 'strikes’ and 'lockouts’ are species within the genus 'labor dispute’ but also that a statutory 'labor dispute’ may exist in the absence of the strike or lockout manifestations.” (Footnotes omitted.)
We agree that the inclusion of such language in our own statute is probative of the Legislature’s intention to include lockouts within the labor dispute disqualification.
In response to the argument that we should adhere to the general purpose of the statute, i.e., to provide benefits to individuals involuntarily unemployed, in construing § 29(8) to exclude lockouts because individuals who are locked out are involuntarily unemployed, we refer to Noblit v The Marmon Group, 386 Mich 652, 654-655; 194 NW2d 324 (1972):
"The Employment Security Act is intended to provide relief from the hardship caused by involuntary unemployment. That is the broad legislative purpose. It deserves liberal application by the courts.
"But equally deserving of judicial cognizance and respect are the specifics of the Employment Security Act.
"It would have been simple enough for the Legislature to provide unemployment benefits for all persons involuntarily unemployed.
"The legislative process is more complex than merely a forum in which broad goals are agreed upon. The Employment Security Act is a detailed legislative enactment, embodying the ultimate agreement of the Representatives and Senators upon a scheme of unemployment compensation, and reflecting their compromise of various policy considerations affecting the circumstances under which other policy considerations warranted the conclusion that no benefits should be paid at all.
"The Legislature has declared that benefits shall not be paid when
" '* * * unemployment is due to a labor dispute which was or is in progress in any department or unit or group of workers in the same establishment.’ MCL 421.29(8)(a)(iv); MSA 17.531(8)(a)(iv).
"There is no question that the unemployment of the truck drivers was involuntary. Likewise, there is no question that the involuntary unemployment of the truck drivers was a category of involuntary unemployment which the Legislature has specifically excluded from eligibility for unemployment compensation benefits.”
The courts of other states which have been presented with this argument in the lockout context have disposed of it similarly:
"Under a well-established canon of statutory construction, the foregoing section makes an exception to the generally declared purpose of the act to provide compensation in all cases of involuntary unemployment. In re Steelman, 219 NC 306; 13 SE2d 544 (1941). For the rule is that: 'Where a statute expresses first a general intent, and afterwards an inconsistent particular intent, the latter will be taken as an exception from the former and both will stand.’ 1 Lewis’ Sutherland Statutory Construction (2d ed), § 268, p 513; Rodgers v United States, 185 US 83; 22 S Ct 582; 46 L Ed 816 (1902); Crane v Reeder, 22 Mich 322 (1871).” In the Matter of North River Logging Co, 15 Wash 2d 204, 207-208; 130 P2d 64 (1942). See, also, Lawrence Baking Co v Unemployment Compensation Comm, 308 Mich 198; 13 NW2d 260 (1944).
"This labor dispute clause is a departure from the general idea of relief from involuntary unemployment. The question of voluntariness in such a case is not the test.” Buchholz v Cummins, 6 Ill 2d 382, 386-387; 128 NE2d 900, 903 (1955).
Finally, we find that National Gypsum Co v Administrator, Louisiana Dep’t of Employment Security, supra, is distinguishable. In that case, the Louisiana court concluded that the labor dispute disqualification in their statute only applied to unemployment resulting from labor disputes in which the employee himself actively engages by refusing to work. First, Louisiana’s statutory labor disqualification provision differs from Michigan’s in that it does not contain the phrase "labor dispute, other than a lockout”. Second, as the court itself recognized, National Gypsum is a minority holding. The great weight of authority in other jurisdictions is that a lockout is one form in which a labor dispute may be manifested. We are impressed not only with the fact that the majority holds this view, but also by the reasoning upon which the majority is based.
Moreover, we decline to follow National Gypsum because it would require us to ignore the clear language of the statute and to decide issues of policy reserved to the Legislature. See Buzza v Unemployment Compensation Comm, 330 Mich 223, 236; 47 NW2d 11 (1951); Lawrence Baking Co v Unemployment Compensation Comm, supra, pp 212, 215; Lansing v Lansing Twp, 356 Mich 641, 648; 97 NW2d 804 (1959).
We hold that a lockout is one form of a "labor dispute” as that term is used in §29(8). Furthermore, we find that § 29(8) exempts lockouts from the labor dispute disqualification only when the labor dispute occurs in functionally integrated establishments operated by the same employing unit.
Ill
Having determined that § 29(8) recognizes a lockout as a type of labor dispute which comes within the disqualification provision applicable here, we must next decide whether the unemployment involved in the cases before us was due to a labor dispute and, if it was, whether appellees were directly involved in the labor dispute. Our function as a reviewing court is limited to a determination of whether the findings of the MESC are supported by competent, material and substantial evidence on the whole record. MCL 421.38; MSA 17.540. This Court cannot substitute its own judgment for that of the administrative agency if there is substantial evidence which supports the agency. Michigan Employment Relations Comm v Detroit Symphony Orchestra, Inc, 393 Mich 116; 223 NW2d 283 (1974); Regents of the University of Michigan v Employment Relations Comm, 389 Mich 96; 204 NW2d 218 (1973).
A
Before we examine the evidence, it is helpful to review certain legal concepts which are relevant here.
The term "labor dispute” has been defined in Michigan as follows:
" 'The term "labor dispute” includes any controversy between employers and employees or their representatives concerning or affecting hours, wages, or working conditions. In the state labor mediation act ([1948 CL 423.2, subd (b); MSA 17.454(2), subd (b)]) it is defined as follows:
"' "The terms 'dispute’ and 'labor dispute’ shall include but are not restricted to any controversy between employers and employees or their representatives * * * concerning terms, tenure or conditions of employment, or concerning the association or representation of persons in negotiating, fixing, maintaining or changing terms or conditions of employment.’ ” Lillard v Employment Security Comm, 364 Mich 401, 420; 110 NW2d 910 (1961).
"It means no more than a controversy between em ployer and employees regarding hours, wages, conditions of employment or recognition of a bargaining representative.” General Motors Corp v Employment Security Comm, 378 Mich 110, 117; 142 NW2d 686 (1966).
"Controversy” denotes "a difference [of opinion] 'marked by the expression of opposing views.’ ” Salenius v Employment Security Comm, 33 Mich App 228, 238; 189 NW2d 764 (1971). (Emphasis added.)
A lockout, one of the forms by which a labor dispute is manifested, has been defined as follows:
"A lockout is an employer’s withholding of work from his employees in order to gain a concession from them. It is the employer’s counterpart of a strike.” 4 Restatement Torts, § 787, Comment a, p 128.
In addition to establishing the existence of a labor dispute, it must be shown that the claimant’s unemployment was causally connected to the labor dispute. Michigan Tool Co v Employment Security Comm, 346 Mich 673; 78 NW2d 571 (1956); Scott v Budd Co, supra. In Baker v General Motors Corp, 409 Mich 639, 660; 297 NW2d 387 (1980), we explained the requirement of causal connection:
"An individual is disqualified for benefits under the basic provision if a disqualifying labor dispute is shown to be a substantial contributing cause of his or her unemployment. The dispute need not be the sole cause of the unemployment.”
Lastly, it is appellants who bear the burden of proving appellees’ disqualification. Michigan Tool Co v Employment Security Comm, supra.
B
In both, cases, appellees contend that the cause of their unemployment was actually a layoff due to economic reasons rather than a lockout as the appellants claim. The practical distinction, of course, is that appellants would be liable for unemployment benefits for a layoff whereas they would not be liable in a lockout situation. We shall consider the facts of each case separately.
In Smith, the parties had a collective bargaining agreement which expired at 12:01 a.m. on June 23, 1975. Representatives of both parties met on several occasions in May and June of that year in order to negotiate the terms of a new agreement. However, negotiations broke down on the evening of June 22, 1975, and the company informed the union that the employees would be locked out the next day in spite of the fact that the employees were willing to continue working without a new contract. A new contract was ratified on July 27, 1975, and the employees returned to work the next day.
The above facts are not disputed. What follows is the disputed portion of the testimony before the MESC referee upon which the parties draw differing conclusions as to the cause of the unemployment.
Appellees contend that on the evening of June 22, 1975, the union felt that it was close to an agreement but that it wanted to go over some details of the new contract. However, the company asked the union for its strike notice, and when informed there would be no strike, the company told them that it would lock out the employees. The union representative, Mr. Jones, testified that the company informed him that it did not need the employees. He was told that the company had engineers in the plant making changes, that some of the machines were torn down and that the plant was being cleaned up. Mr. Jones admitted that he had no personal knowledge of what was going on inside the plant. Mr. Jones also testified that in the previous year, the company had closed down in the first week of July.
Mr. Biondi, the company’s representative, testified that early in the day on June 22, he felt that they were close to coming to an agreement. However, after a four-hour recess, the union came back in an adamant mood and asserted that none of the proposals were acceptable. Mr. Biondi testified that he advised the company to lock out the employees because he felt the negotiations were at a standstill. He felt that it was better to take a short-term loss resulting from a lockout rather than a three-year loss resulting from an unfavorable contract. Biondi further testified that had a new agreement been ratified on June 22, no lockout would have occurred.
During the period of the lockout, the company continued limited production with its supervisory staff. Mr. Biondi testified that the company could not meet the demands of its customers during this period and that other vendors were supplying their customers’ demands. General Motors was allowed to remove some tooling they owned from the plant because the company was their sole supplier. Mr. Biondi denied that any revamping of the plant took place during the lockout and stated that only regular maintenance occurred. He testified that there was nothing planned as to a shut down during July. Further, Mr. Biondi testified that when the employees returned to work, there was a backlog of work and the company had to hire new employees to catch up.
The referee made the following findings of fact, in pertinent part:
"It is found from the record in this matter that the lockout by the employer was used as a weapon against the union and the employees for the purpose of attempting to secure a more favorable contract to the employer. We are not persuaded by any of the statements in the record that the employer used the period of time to re-do its plant, to cover up for what would otherwise be a shutdown or layoff because of depressed economic conditions. The lockout was nothing short of a bargaining tactic.”
The referee’s finding was upheld by the Michigan Employment Security Appeal Board and the circuit courts. The Court of Appeals did not address the referee’s findings of fact, but instead chose to rely on National Gypsum Co v Administrator, Louisiana Dep’t of Employment Security, supra, discussed in the previous section of this opinion.
The above review of the evidence in Smith indicates that the referee was called upon to determine an issue of credibility. Appellees produced evidence of a disguised layoff while appellant produced evidence of a lockout. This is exactly the type of situation where this Court must defer to the factfinder.
"Such review must be undertaken with considerable sensitivity in order that the courts accord due deference to administrative expertise and not invade the province of exclusive administrative fact-finding by displacing an agency’s choice between two reasonably differing views.” Michigan Employment Relations Comm v Detroit Symphony Orchestra, supra, p 124.
In short, we find that the substantial contributing cause of the lockout, which of course was the immediate cause of unemployment, was a labor dispute. There was evidence that negotiations had broken down on the eve of the expiration of the collective bargaining agreement, that the employer locked out its employees to obtain a new contract more favorable to it and that the company had sufficient work to do during the lockout period and was in fact losing business to its competitors. There was also evidence to support appellees’ contention of a disguised layoff, but where substantial evidence exists to support both sides and the agency must make a judgment assigning credibility to one side, we may not substitute our judgment for that of the agency.
In Doerr, the parties had been operating under a collective bargaining agreement which was to expire on June 1, 1971. On April 1, 1971, the company gave notice of its intent to terminate the agreement as of May 31, 1971. The representatives of both parties held 23 meetings in the two months prior to the expiration of the old contract trying to negotiate a new agreement. Early in the negotiations, the union offered to continue working under the old contract, but the company informed the union that it could not and would not continue under the terms of the old contract.
On May 26, 1971, the company made its final offer, which included a 9-cent per hour wage increase and certain non-economic proposals. The company indicated in a letter sent to the union that if the offer was not accepted, it would shut down the plant.
"Universal Engineering Division, having reached an impasse with the U.A.W. Local 1131 in its attempt to bargain, and having called in the FMCS for further assistance in negotiations, and after further attempts, still finds itself at an impasse in this labor dispute, having legitimate and substantial business reasons, including continuing substantial economic losses, low employment, low volume of incoming sales, customer resistance to placing orders with the division due to the uncertainty of operations due to labor negotiations, and the unwillingness of the union to grant the necessary efficiency and flexibility requests of Universal Engineering, will close the Frankenmuth plant as of midnight, May 31, 1971, because of this labor dispute.
"These matters were all discussed in considerable detail in this year’s negotiation meetings.
. "The economic and non-economic terms and conditions for a new contract, a copy of which is attached, is the final offer which would permit a settlement of this dispute.
"In consideration of the withdrawal of any and all union demands at Universal Engineering regarding a Houdaille Council, including the demand for a Houdaille Council step in the grievance procedure, Universal Engineering will continue to operate the Frankenmuth plant through June 4 to facilitate the current negotiations and to permit the union to hold necessary meetings to vote on the company final proposal. Operations of the plant after June 4 is [sic] subject to settlement of the current labor dispute.”
On May 28 and 30, the union responded with counter-proposals, including a 35-cent per hour increase, a "30-and-out” pension plan and rejection of the company’s non-economic proposals. The union also stated that it did not intend to strike.
"This proposal is made on the basis of the company withdrawing all the demands listed in the first paragraph of the company’s proposal made May 26, 1971. Also, settlement of all other non-economic issues as presented by the union. Plus, we are willing to bargain past May 31 until an agreement is reached. We have no intention of striking the plant with the understanding any agreement will be retroactive to June 1, 1971. We want to make it clear we have no intention of striking the plant at this time.”
On May 31, 1971, the company locked out its employees. Approximately two weeks later, the company contacted the union and negotiations resumed. On August 23, 1971, the employees returned to work in response to a letter from the company’s president inviting them to do so under the terms of the old agreement. In its letter inviting the employees back to work, the company explained that the lockout was being terminated "[i]n accordance with our understanding of the Executive Order of the President of the United States and related documents and public statements covering the ninety (90) day wage-price freeze effective August 15, 1971”. A new contract was signed and ratified on January 13, 1972, which was effective retroactive to December 27, 1971.
Appellees contend that the company, as well as the machine tool industry in general, was in a serious economic slump prior to and at the time of the contract negotiations. The proofs submitted to the MESC Appeal Board by appellees included economic data presented by the company to the union in conjunction with the contract negotiations. The evidence demonstrated that the company’s profit level from 1967 to 1970 had declined 432% and that the company estimated it was losing $1.38 for every employee hour worked in 1971 through the date of the shutdown. Direct and indirect labor hours at Universal declined 47.7% from 1967 through 1970. Appellees also introduced before the appeal board a July 1, 1971, letter from the company to the MESC in which the company stated that it had laid off a clerical employee because of "the decline in incoming orders”.
Appellees point to the fact that they resumed work August 23, 1971, under the terms of the expired labor contract under which they had agreed to continue working prior to the closing of the plant. In addition, appellees rely on the company’s May 26, 1971, letter to the union in which it states economic reasons for the plant closing.
Appellant points out that more than 20 negotiating sessions preceded the lockout. From the onset of these negotiation sessions, the company advised the union that unless a new contract was agreed upon before the old contract expired, the company would not continue operations. John Engels, Universal’s Industrial Relations Manager, testified at the MESC Referee hearing as follows:
"We had to know what our [inaudible] and operational procedures would be under a new successor agreement and we couldn’t continue to operate under the framework of the old agreement without knowing what we were going to be involved in, in a new agreement. We had no way of knowing what the final outcome would be and we knew that we were experiencing very, very many difficulties in regards to the operation under the present agreement and we had to know what our changes would be.”
Appellant claims this testimony is buttressed by the company’s May 26, 1971, letter to the union which indicates that a work stoppage would not be necessary if the union came to terms.
Appellant points out that it was the company which reinstituted negotiations. The recall of employees on August 23, 1971, under the terms of the old contract, was in keeping with the intent and purpose of the August 15, 1971 Executive Order of the President of the United States. Executive Order No. 11615, 3 CFR, 1971-1975 Compilation, p 602.
During the bargaining, Universal argued for the inclusion of two new clauses dealing with the concept of "a fair day’s work for a fair day’s wages” and an "efficient operations” provision. It was in conjunction with these new clauses that Universal presented to the union the dismal financial data which appellees now rely on. This information was used to persuade the union that it was necessary to increase productivity and job flexibility to match the productivity levels of foreign workers. Appellant contends that it was simply using "the age-old negotiating technique of 'pleading poverty’ ”.
Appellant further contends that there was no direct evidence that it lacked work for its production workers in June 1971 or that it ever threatened economic layoffs of production personnel. Appellant explains that the layoff of the clerical worker does not support appellees’ position because there is frequently a long delay between the time an order is received and the time in which production of the ordered item has been completed. Finally, appellant points out that it did not close any plant other than the one at which the labor dispute existed.
The referee concluded that the appellees were unemployed due to a labor dispute and, thus, he upheld the commission’s disqualification. However, in reaching his conclusion, the referee stated that a labor dispute exists whenever negotiations are ongoing, citing Lillard v Employment Security Comm, supra. This was error. The definition of the term "labor dispute” as set forth in Part 3A requires that there be a controversy. See Salenius v Employment Security Comm, 33 Mich App 228; 189 NW2d 764 (1971). Although the referee made additional findings of fact to support his finding of the existence of a labor dispute, we cannot be sure that this did not affect his decision.
This error was compounded by the appeal board when it reviewed the decision of the referee. Much of appellees’ evidence was presented for the first time before the appeal board. This included the letter of the company to the MESC regarding the laid-off clerical worker which the appeal board found irrelevant, and the company’s May 26, 1971, letter to the union, along with the company’s economic data, which the appeal board said did not provide "any material new information significantly relating to the question of whether or not the unemployment of the claimants in these matters was due to a labor dispute”.
We disagree that the new evidence did not provide any material new information significantly relating to the labor dispute question. Although we make no finding regarding the weight or credibility to be accorded to this evidence, we find that it was relevant and material to appellees’ theory that appellant’s economic condition was the substantial contributing cause of their unemployment.
An employer may not use the failure to reach an agreement as a pretext for charging a labor dispute when it would otherwise have curtailed operations because of economic conditions. But where economic conditions would not have other wise caused the curtailment of operations, but only have played a part in the decision to utilize the lockout tactic, i.e., when the labor dispute is the substantial contributing cause, the employees may properly be disqualified. This determination is necessarily a question of fact.
We think that the appeal board treatment (or lack of treatment) of the evidence indicates that it did not realize that it must not only decide whether a labor dispute existed, but whether the labor dispute was the substantial contributing cause of the appellees’ unemployment. If the board did recognize and decide this question, it has failed to make any finding of fact in this regard. Obviously, we cannot review findings of fact if none exist. As we have emphasized numerous times in cases involving workmen’s compensation, "conclusory findings are inadequate because we need to know the path [the board] has taken through the conflicting evidence, the testimony it has adopted, the standards followed and the reasoning used to reach its conclusion”. Kostamo v Marquette Iron Mining Co, 405 Mich 105; 274 NW2d 411 (1979).
We remand to the board of review for further proceedings consistent with this opinion. We retain jurisdiction.
C
Having determined that appellees in Smith were unemployed due to a labor dispute, we must next decide if appellees were directly interested in the labor dispute. Section 29(8)(a) of the ESA sets forth four criteria by which direct involvement is determined. We find that subpart (ii) is the applicable criterion in these cases:
"For the purposes of this subsection an individual shall not be deemed to be directly involved in a labor dispute unless it is established that:
"(ii) He is participating in or financing or directly interested in the labor dispute which causes his total or partial unemployment. * * *”
Section 29(8)(b) further defines the term "directly interested” as follows, in pertinent part:
" 'Directly interested’ as used in this subsection shall be construed and applied so as not to disqualify individuals unemployed as a result of a labor dispute the resolution of which may not reasonably be expected to affect their wages, hours, or other conditions of employment, and to disqualify individuals whose wages, hours, or conditions of employment may reasonably be expected to be affected by the resolution of the labor dispute. A 'reasonable expectation’ of an effect on an individual’s wages, hours, or other conditions of employment shall be deemed to exist, in the absence of substantial preponderating evidence to the contrary:
* * *
"(ii) If it is established that 1 of the issues in or purposes of the labor dispute is to obtain a change in the terms and conditions of employment for members of the individual’s grade or class of workers in the establishment in which the individual is or was last employed; * *
We think that it is clear that one of the purposes of the labor dispute involved here was to obtain a change in the terms and conditions of appellees’ employment. We reject, as being contrary to the clear wording of the statute, the argument that each provision of § 29(8)(a) requires a voluntary stoppage of work on the part of the employee. Therefore we find that appellees were directly interested in the labor dispute.
IV
The appellees in Smith contend that if § 29(8) is construed to allow benefits for employees who are unemployed due to a lockout at a functionally integrated establishment, while denying benefits to an employee who is unemployed due to a lockout in the establishment in which he is or was last employed, the disqualification is arbitrary and denies them equal protection of the law. Appellees in Doerr had this issue decided adversely to them in the circuit court and the Court of Appeals and have not raised the issue in this Court.
Appellees’ primary contention is that in analyzing the reasonableness of a statutory classification, a court must look to the purpose of the statute. Appellees claim that they were involuntarily unemployed and, thus, they fall within the purpose of the legislation as set forth in MCL 421.2; MSA 17.502, i.e., to provide benefits to workers involuntarily unemployed. Other workers who are involuntarily unemployed as a result of being laid off or as a result of a lockout in a functionally inte grated establishment are entitled to receive unemployment benefits.
In Ohio Bureau of Employment Services v Hodory, 431 US 471; 97 S Ct 1898; 52 L Ed 513 (1977), the Court addressed an equal protection challenge to Ohio’s unemployment labor disqualification provision. The Ohio statute disqualified plaintiff, who was furloughed as the result of a strike at another plant owned by plaintiff’s employer. The basis of plaintiff’s complaint was that the state may not deny benefits to those who are unemployed through no fault of their own.
The Court upheld the constitutionality of the statute stating, in relevant part:
"The statute does not involve any discernible fundamental interest or affect with particularity any protected class. Appellee concedes that the test of constitutionality, therefore, is whether the statute has a rational relation to a legitimate state interest. Brief for Appellee 29. See New Orleans v Dukes, 427 US 297 [96 S Ct 2513; 49 L Ed 2d 511] (1976). Our statement last Term in Massachusetts Bd of Retirement v Murgia, 427 US 307 [96 S Ct 2562; 49 L Ed 2d 520] (1976), explains the analysis:
" 'We turn then to examine this state classification under the rational-based standard. This inquiry employs a relatively relaxed standard reflecting the Court’s awareness that the drawing of lines that create distinctions is peculiarly a legislative task and an unavoidable one. Perfection in making the necessary classifications is neither possible nor necessary. Dandridge v Williams, [397 US 471,] 485 [90 S Ct 1153; 25 L Ed 2d 491 (1970)]. Such action by a legislature is presumed to be valid.’ Id., at 314.
" 'If the classification has some "reasonable basis,” it does not offend the Constitution simply because the classification "is not made with mathematical nicety or because in practice it results in some inequality.” Lindsley v Natural Carbonic Gas Co, 220 US 61, 78 [31 S Ct 337; 55 L Ed 369 (1911)].’ Dandridge v Williams, 397 US at 485. The rationality of this treatment is, of course, independent of any 'innocence’ of the workers collecting compensation.”
The Court found that Ohio’s form of state neutrality which is accomplished through denial of benefits for striking employees is not irrational. Further, the Court held that protection of the fiscal integrity of the fund is a legitimate concern of the state.
In Michigan, the standard of review in scrutinizing legislation which is primarily social and economic against a claimed violation of equal protection is also the rational basis test. Appellees must show that the classification is arbitrary and wholly unrelated in a rational way to the objective of the statute. In re Kasuba Estate, 401 Mich 560, 568-569; 258 NW2d 731 (1977); McAvoy v H B Sherman Co, 401 Mich 419, 453-454; 258 NW2d 414 (1977).
We find that there exists a rational basis for the Legislature’s treatment of lockouts in relation to unemployment benefits. The Legislature could have chosen to distinguish between claimants who are laid off and claimants who are unemployed due to a strike or lockout in order to preserve the state’s neutrality in labor disputes. The policy of the ESA is not only to provide relief from involuntary unemployment, but also includes the subsidiary policy of maintaining the state’s neutrality in labor disputes. Lawrence Baking Co v Unemployment Compensation Comm, supra; Linski v Employment Security Comm, 358 Mich 239; 99 NW2d 582 (1959); Noblit v The Marmon Group, supra. The Legislature may have determined that the payment of benefits to locked-out employees would weaken the effectiveness of the lockout as a bargaining tactic and may have chosen to leave intact the lockout as the employer’s counterpart to the strike.
The Legislature also could have rationally distinguished between an employee locked out at his own place of work and an employee who is unemployed due to a lockout at a functionally integrated establishment. It is apparent from the 1963 amendments to § 29(8), which included the addition of the functionally integrated clause, that the Legislature was concerned with eliminating the weapon which employees previously had in being able to strike a key plant, thereby forcing an employer to pay benefits to laid-off employees at functionally integrated plants. It is not unreasonable to conclude that the Legislature intended to eliminate the corresponding weapon of employers in utilizing a lockout to avoid paying unemployment benefits to employees laid off at functionally integrated plants. This goal furthers both aforementioned policies of the ESA.
Whether or not we agree with the wisdom of the lines the Legislature has drawn, we cannot say that they lack a rational basis. Thus, we conclude that the Legislature’s treatment of lockouts in § 29(8) does not violate equal protection.
V
In conclusion, we hold that a lockout may be a manifestation of a "labor dispute in active progress” as that term is utilized in the ESA. If a claimant cannot work because of a lockout "in the establishment in which he is or was last employed”, and if the substantial contributing cause of the lockout is a labor dispute, then the claimant falls within the purview of the disqualification of § 29(8). We further hold that if a lockout occurs "in any other establishment within the United States which is functionally integrated with the [claimant’s] establishment and is operated by the same employing unit”, and if the lockout is the substantial contributing cause of the claimant’s unemployment, then the claimant falls without the disqualification of §29(8) and is eligible for benefits. We conclude that this classification does not violate the Equal Protection Clause.
In Smith, we find that there was substantial, competent and material evidence to support the agency’s finding that appellees were unemployed due to a labor dispute in which they were directly involved. Therefore, they were disqualified from receiving unemployment benefits. The decision of the Court of Appeals is reversed and the judgments of the trial courts are reinstated.
In Doerr, we remand to the board of review for further proceedings consistent with this opinion. We retain jurisdiction.
Finally, we grant the motions to strike the unauthenticated and extra-record material contained in the briefs of amicus Borden and amicus Michigan Manufacturers Association. People v Robinson, 390 Mich 629; 213 NW2d 106 (1973); Anderson v Jersey Creamery Co, 278 Mich 396; 270 NW 725 (1936).
No costs, a public question being involved.
Coleman, C.J., and Kavanagh, Williams, and Ryan, JJ., concurred with Fitzgerald, J.
Blair Moody, Jr., J.
(for affirmance). The issue presented in these cases is whether employees are entitled to unemployment compensation when they are locked out by their employer in spite of their willingness to continue working without a contract during negotiations, and in spite of their assurances that they would undertake no strike or picketing activity or otherwise interfere with the employer’s business during that time. My colleagues conclude that such employees are not entitled to receive benefits as long as the lockout is a true manifestation of a labor dispute rather than merely a. disguised layoff. Because a reading of the Michigan Employment Security Act (MESA), MCL 421.1 et seq.; MSA 17.501 et seq., taking into account not only the literal meaning of its words, but also the broad remedial social policy it was meant to implement as part of a total labor relations scheme, compels a finding of compensation for the employees, I would affirm the decisions of the Court of Appeals.
I
Resolution of the instant controversy requires judicial interpretation of the labor dispute disqualification provision of the MESA, MCL 421.29(8); MSA 17.531(8), a provision which itself has been the subject of much dispute and commentary. This section provided, in pertinent part:
"An individual shall be disqualified for benefits for any week with respect to which his total or partial unemployment is due to a labor dispute in active progress, or to shutdown or start-up operations caused by that labor dispute, in the establishment in which he is or was last employed, or to a labor dispute, other than a lockout, in active progress, or to shutdown or start-up operations caused by that labor dispute, in any other establishment within the United States which is functionally integrated with the establishment and is operated by the same employing unit. * * * An individual shall not be disqualified under this subsection if he is not directly involved in the dispute.”
To disqualify an employee from receiving unemployment compensation under this provision, three elements must be satisfied. First, a labor dispute in active progress must exist. Secondly, such labor dispute must be a "substantial contributing cause” of claimants’ unemployment, Baker v General Motors Corp, 409 Mich 639, 660; 297 NW2d 387 (1980), a determination which is largely a question of fact. Finally, claimant must be directly involved in the disqualifying labor dispute which causes his unemployment.
It is concluded that the words "labor dispute in active progress” by definition do not contemplate a situation such as that in the instant cases, where bargaining is fluid, no economic action is undertaken, and the employees are willing to continue working while negotiating. The Legislature could not have intended, consistent with the policy of the MESA, to allow the employer to unilaterally declare a labor dispute in such circumstances, automatically denying employees the unemployment benefits they may need to survive._
II
It is a well-known canon of statutory interpretation that the words of a statute should not be construed in isolation; that they gain their meaning from context and overall statutory purpose. And, especially when a statement of purpose has been enacted into the statute itself, a court must read its provisions not solely in terms of their literal meaning, but rather as colored by and in the light of that stated policy.
When the Michigan Legislature first enacted the MESA in 1936, it included the following declaration of policy for use as a guide to interpretation:
“The legislature acting in the exercise of the police power of the state declares that the public policy of the state is as follows: Economic insecurity due to unemployment is a serious menace to the health, morals, and welfare of the people of this state. Involuntary unemployment is a subject of general interest and concern which requires action by the legislature to prevent its spread and to lighten its burden which so often falls with crushing force upon the unemployed worker and his family, to the detriment of the welfare of the people of this state. Social security requires protection against this hazard of our economic life. Employers should be encouraged to provide stable employment. The systematic accumulation of funds during periods of employment to provide benefits for periods of unemployment by the setting aside of unemployment reserves to be used for the benefit of persons unemployed through no fault of their own, thus maintaining purchasing power and limiting the serious social consequences of relief assistance, is for the public good, and the general welfare of the people of this state.”
Thus, as this Court stated in an early case:
"In view of this declaration of public policy, it is evident that the purpose of the unemployment compensation act is to provide protection against the evils incident to involuntary unemployment, and thus, to foster social and economic security for the people of our State. The act is intended to provide benefits for those who are unemployed through no fault of their own, who are willing, anxious, and ready to obtain employment so that they may support themselves and their families. It is intended to benefit persons who are genuinely attached to the labor market, and who are unemployed because of conditions therein over which they have no control.” Dwyer v Unemployment Compensation Comm, 321 Mich 178, 188; 32 NW2d 434 (1948).
Commentators and Michigan courts have also recognized that the effect of the MESA goes beyond the payment of compensation to an individual or group of claimants; benefits are designed to run to claimants’ families, and, in an even broader sense, to the benefit of the public generally. Lillard v Employment Security Comm, 364 Mich 401; 10 NW2d 910 (1961). The unemployment compensation acts are designed to keep money circulating in times of economic insecurity and thereby provide a buffer against a downward economic spiral.
Since 1936, this legislatively declared public policy has provided a context for judicial construction of the provisions of the unemployment compensation statute, including the labor dispute disqualification. See, e.g., I M Dach Underwear Co v Employment Security Comm, 347 Mich 465; 80 NW2d 193 (1956); Dwyer v Unemployment Compensation Comm, supra; Copper Range Co v Unemployment Compensation Comm, 320 Mich 460; 31 NW2d 692 (1948). Consistent with the stated purpose of providing relief from the hardship of involuntary unemployment, our courts have stressed the remedial, social welfare nature of the MESA, requiring that the statute be liberally construed to achieve its purpose and allow benefits, and that disqualifications from benefits be narrowly interpreted. Copper Range Co v Unemployment Compensation Comm, supra; Godsol v Unemployment Compensation Comm, 302 Mich 652; 5 NW2d 519; 142 ALR 910 (1942); Salenius v Employment Security Comm, 33 Mich App 228; 189 NW2d 764 (1971); Fifth Dist Republican Committee v Employment Security Comm, 19 Mich App 449; 172 NW2d 825; 43 ALR3d 1343 (1969). Additionally, the employer bears the burden of proving the employees’ disqualification. Michigan Tool Co v Employment Security Comm, 346 Mich 673; 78 NW2d 571 (1956).
To be sure, both the statute and case law clearly indicate that involuntariness of unemployment is not now and probably never was the sole or ultimate factor in determining the award of MESA benefits. Thus, benefits are payable to claimants who leave work voluntarily with good cause or who voluntarily refuse suitable work for good cause. MCL 421.29(1), subds (a) and (e); MSA 17.531(1), subds (a) and (e).
On the other hand, this Court has upheld the denial of benefits in the opposite situation despite the fact that the workers’ unemployment appears objectively involuntary. For example, in Noblit v The Marmon Group, 386 Mich 652; 194 NW2d 324 (1972), we held that truck drivers who were willing but unable to work because of a strike by foundry workers at the truckers’ place of business were not entitled to unemployment compensation.
Nevertheless, until the Legislature specifically strikes it from the statute, the goal of helping those unemployed through no fault of their own remains the primary purpose of the MESA. Even the "involuntary” unemployment cases where benefits have been denied reflect that policy.
All of those prior situations in which the labor dispute disqualification has applied have contained some element of voluntary economic action by a group of employees, if not claimants themselves, by others closely associated with them. In each case, such employee actions as a strike, Noblit, supra; Scott v Budd Co, 380 Mich 29; 155 NW2d 161 (1968), or threat to strike, Bedwell v Employment Security Comm, 367 Mich 415; 116 NW2d 920 (1962), sometimes accompanied by picketing, Nobes v Unemployment Compensation Comm, 313 Mich 472; 21 NW2d 820 (1946), or a slowdown, Chrysler Corp v Smith, 297 Mich 438; 298 NW 87; 135 ALR 900 (1941), either directly caused or were a manifestation of the labor dispute which caused the unemployment.
The current language of the labor disqualification provision itself was enacted in response to this type of "involuntary” unemployment. Legislative disapproval of this Court’s refusal to disqualify Ford Motor Company employees "involuntarily” laid off in Michigan because of a strike at the Ford plant in Canton, Ohio, led to wholesale changes in § 29(8).
The situation in the instant cases presents a marked contrast to that of such prior cases. Rather than using weapons of economic warfare, the employees specifically refrained from resorting to such tactics. It is clear that the employees reflected an attitude of cooperation, not active economic confrontation. In essence, the voluntary acts of employees involved in Smith and Doerr, namely the simple rejections of the employers’ contract offers, are qualitatively far different from the aggressive economic warfare activities at issue in prior cases.
Thus, the extension of the disqualification holdings of cases such as Noblit to deny benefits in the instant situations requires a departure from the MESA’s policy of providing relief from the hardship of involuntary unemployment substantially greater than ever considered before. Especially in view of the history of construing this remedial statute liberally to achieve its stated purpose, this Court should not endorse such a departure.
Ill
Denial of unemployment compensation to the locked-out claimants in the instant cases also would conflict with Michigan’s labor relations policy of encouraging the peaceful resolution of labor disputes. This goal is codified in the labor mediation act, MCL 423.1; MSA 17.454(1):
"It is hereby declared as the public policy of this state that the best interests of the people of the state are served by the prevention or prompt settlement of labor disputes; that strikes and lockouts and other forms of industrial strife, regardless of where the merits of the controversy lie, are forces productive ultimately of economic waste; that the interests and rights of the consumers and the people of the state, while not direct parties thereto, should always be considered, respected and protected; and that the voluntary mediation of such disputes under the guidance and supervision of a governmental agency will tend to promote permanent industrial peace and the health, welfare, comfort and safety of the people of the state.”
The application of the MESA often affects the labor relations strategies of the parties involved. In Noblit, this Court acknowledged, in effect, how the purposes of the two statutes intersect. Describing the policy of the MESA, we stated:
"That policy is not only to relieve from involuntary unemployment, but to do so in a manner calculated to avoid any encouragement of work stoppages arising out of labor disputes. ” 386 Mich 655.
However, the view urged by the employers leads to the exact opposite of this desired effect. Disqualifying locked-out employees will encourage employers to use that tactic, which most often results in production shutdowns, work stoppages and a polarization of positions, rather than to continue peaceful negotiations in an effort to reach a solution.
IV
My colleagues construe the unemployment compensation statute by looking to the literal meaning of the words involved. It is suggested that a labor dispute "means no more than a controversy between employer and employees regarding hours, wages, conditions of employment or recognition of a bargaining representative”. General Motors Corp v Employment Security Comm, 378 Mich 110, 117; 142 NW2d 686 (1966). A lockout is one form or manifestation of such a dispute where an employer withholds work from his employees to gain concession from them. 4 Restatement of Torts, § 787, Comment a, p 128.
Yet the fact that these words appear in the context of a disqualification provision which is to be narrowly construed must be kept in mind. This is especially true because we are confronted with a provision about which it has been said: "[m]uchamended section 29 is not a stellar example of legislative draftsmanship.” Graham v Fred Sanders Co, 11 Mich App 361, 373; 161 NW2d 601 (1968).
Even though it fits within the literal definition, "[a] lockout is not entitled to automatic designation as a labor dispute” under § 29(8), because "[i]f it were, by designating a layoff as a lockout an employer could avoid the unemployment consequences of a layoff and frustrate the purpose of the Employment Security Act”. Salenius v Employment Security Comm, 33 Mich App 228, 238-239; 189 NW2d 764 (1971). By the same token, and for the same reasons, the phrase "a labor dispute in active progress” should not be given a broad construction, which also may technically conform to the literal meaning of the words, but is inconsistent with the purposes of the act.
As a further aid to interpretation, my colleagues invoke the maxim expressio unius est exclusio alterius. The argument runs as follows: The Legislature specifically exempted lockouts from the labor dispute disqualification for claimants who are unemployed due to a labor dispute at a functionally integrated establishment, and it failed to similarly limit the labor dispute disqualification for claimants unemployed due to a labor dispute at their own establishment. Therefore, if the Legislature had intended to exclude lockouts in the latter situation, it would have specifically done so, as it did in the case of disputes at functionally integrated establishments.
There are several problems with this interpretation. First, because this section does not represent a "stellar example of legislative draftsmanship”, Graham v Fred Sanders Co, supra, it is difficult to discern legislative intent from the words alone. Second, maxims such as expressio unius should serve as a guide to interpretation, not a strict rule of construction to dictate a result. In addition, when a remedial statute such as the MESA is involved, the use of such maxims to interpret legislative silence may be especially inappropriate. Where an exclusion is involved in a remedial statute, the Legislature must make its intent clear. Courts should not disqualify claimants not expressly excluded by the Legislature. Fifth Dist Republican Committee v MESC, 19 Mich App 449; 172 NW2d 825; 43 ALR3d 1343 (1969).
In fact, it is equally tenable that if the Legislature had contemplated the suggested interpretation of the instant cases, it would have added the phrase "including a lockout” after "labor dispute” when referring to such disputes in the claimant’s own establishment to parallel the phrase "other than a lockout” used with reference to disputes in a functionally integrated establishment.
Finally, as Judge Maher cogently noted in his concurrence in the Court of Appeals decision to grant claimants benefits in Doerr:
"[T]he express exception for lockouts in other establishments [does not compel] the conclusion that the Legislature intended that any lockout in the establishment in which the claimant is employed would disqualify him for benefits, without regard to the genesis of the lockout. I am of the opinion that the Legislature simply intended that no claimant would be disqualified because of a lockout at a plant other than that at which he is employed whatever the circumstances of that lockout. As to lockouts in the establishment in which the claimant is employed, I agree that in a labor dispute where, for example, the employees are no longer willing to bargain, or where ultimatums are delivered or concessions demanded as a condition of continuing work, or a strike or a slowdown is threatened, and a lockout results, employees are disqualified from receiving unemployment compensation benefits under MCL 421.29(8); MSA 17.531(8). * * * Where an employer locks out employees who are willing to work and to continue peaceful negotiations, however, * * * the employees are not disqualified from benefits.” 90 Mich App 455, 476; 282 NW2d 352 (1979).
V
My colleagues’ opinion acknowledges the inconsistency between their construction of the labor dispute disqualification and the purpose of the act in this context where the locked-out claimants were willing to work during negotiations. The conflict is justified as an example of a rule of statutory construction which states:
"Where a statute expresses first a general intent, and afterwards an inconsistent particular intent, the latter will be taken as an exception from the former and both will stand.”_l Lewis’ Sutherland Statutory Construction (2d ed), § 268, p 515.
However, resolution of the instant cases does not require such inconsistency; a better approach is to harmonize, if possible, the construction of the term "labor dispute in active progress” with the declared purpose of the Michigan Employment Security Act as a whole.
The Indiana and Montana courts have adopted such an approach, which respects the integrity of both the labor dispute provision and the statutory policy. The result is an "impasse” test which narrows the definition of a "labor dispute in active progress”; where the facts show "good faith negotiations between representatives of management and labor”, and "the bargaining is in a fluid state and no impasse has occurred”, a disqualifying labor dispute does not exist. Bootz Manufacturing Co v Review Board of Employment Security Divi sion, 143 Ind App 17, 23; 237 NE2d 597 (1968). Good faith negotiations, in and of themselves, do not constitute a labor dispute. Id. See also Salenius v Employment Security Comm, 33 Mich App 228; 189 NW2d 764 (1971). Thus, as long as negotiations remain fluid, the employer cannot unilaterally declare a labor dispute to deny the employees unemployment compensation.
An impasse is "the absence of 'an atmosphere in which a reasonable foreseeable settlement of the disputed issues might be resolved’ ”. Gold Bond Building Products Division National Gypsum Co, Shoals Plant v Review Board of the Indiana Employment Security Division, 169 Ind App 478, 490; 349 NE2d 258 (1976). Further, consistent with interpretations of the National Labor Relations Act, if the parties are deadlocked on "key” issues, without which a final agreement is impossible, a settlement is not reasonably foreseeable. Gold Bond Building Products, supra, 490-491.
The impasse test has proven to be a workable and fair rule. It brings the labor dispute disqualification into harmony not only with the Employment Security Act’s declared purpose, but also with the national and state policy of encouraging good-faith collective bargaining as opposed to a resort to economic warfare. And, it does not encourage the employer to use denial of unemployment compensation benefits to enforce its bargaining demands. Yet, the "impasse” test has not been one-sided; since its adoption, the courts have denied benefits as well as granted them. For the foregoing reasons, this Court should adopt the same standard for a disqualifying labor dispute. Application of the impasse test to the instant cases would require a remand to the board of review in Smith as well as Doerr for a determination of whether an impasse existed.
The same fairness and policy considerations that led the Indiana and Montana courts to adopt the impasse test dictate that, even if this Court declines to do the same, we not construe the labor dispute disqualification so broadly as to include the situation in the instant cases. In National Gypsum Co v Administrator, Louisiana Dep’t of Employment Security, 313 So 2d 230, 233 (La, 1975), the state Supreme Court held that the disqualification should apply only to unemployment caused by labor disputes "in which the employee himself actively engages by refusing to work”.
Paying benefits to the instant claimants would be far more consistent with the purpose of providing relief from unemployment in a manner which avoids encouraging work stoppages than is denying compensation. In both cases, the employees expressed their willingness to work under the terms of the old contract while a new one was being negotiated. Even after they were locked out, the employees in Smith did not picket or do anything to interfere with the company’s operation of its plants. In Doerr, the employees ultimately did return to work under the old contract terms, and worked at full efficiency during the continuing negotiations. Refusal to pay unemployment compensation under these circumstances will discourage such attempts at labor peace.
All of the foregoing considerations are magnified in a state such as Michigan, where unemployment in times of economic stress far outpaces that of the rest of the nation, and where the implementation of the MESA policy is so necessary for the survival of not only individual claimants, but also their employers and the economy as a whole.
VI
Appellant employers argue that awarding benefits to claimants would represent an intrusion into questions of policy reserved to the Legislature. We reject that contention. On the contrary, it is the job of this Court to construe the statutory language, harmonize it if necessary with the statutory purpose, and apply it to the facts of the case. With respect to the MESA, this Court has repeatedly stated:
"It is not the proper function of this Court to amend the statute to broaden or extend the disqualifications fixed by plain language by the Legislature.” Sullivan v Employment Security Comm, 358 Mich 338, 341; 100 NW2d 713 (1960). See also Thomas v Employment Security Comm, 356 Mich 665, 669; 97 NW2d 784 (1959).
Consonant with this statement, it is deemed appropriate in the instant cases to narrow or limit the scope of the disqualification to make it consistent with the act’s declared purposes. Similar action has been taken in the past. In Holdridge v Tecumseh Products Co, 80 Mich App 310; 263 NW2d 600 (1977); lv den 403 Mich 851 (1978), the Court of Appeals incorporated a "fear of violence” exception into the labor dispute disqualification and granted compensation to employees who refused to cross a picket line during a strike at their plant.
In further support of this interpretation of the labor dispute disqualification, it should be noted that the Legislature has failed to respond to the Court of Appeals decisions awarding benefits in both Smith and Doerr. In the instant situation, several factors combine to give increased significance to this legislative inaction.
First, in the past, the Legislature has not hesi tated to respond when it has disagreed with a court’s interpretation of the MESA. The complex labor disqualification language under consideration today was itself enacted in response to, and in disapproval of, the decision of this Court in Park v Employment Security Comm, 355 Mich 103; 94 NW2d 407 (1959). Park provides an analogy to the instant cases. In Park, as here, the appellate courts construed the labor dispute disqualification provision narrowly to grant benefits to claimants. After Park, the Legislature changed the statute to modify the decision; after Smith and Doerr, both published Court of Appeals decisions, the Legislature has been silent. Certainly, if the Legislature disapproved of those decisions, it would have changed the law, as it did following Park.
Second, if it disagreed with the grant of benefits in Smith and Doerr, the Legislature had the opportunity and legislative vehicle to express that disagreement. In 1980, major amendments to the MESA were enacted. Substantive changes were made affecting portions of § 29, which lists all the bases for disqualification. 1980 PA 358. Yet, in spite of two appellate court decisions construing its language, the Legislature made only minor stylistic changes in § 29(8), the disqualification for labor disputes. Under these circumstances, it cannot be summarily concluded that awarding unemployment compensation to the instant claimants conflicts with legislative intent; if any inconsistency existed, it is not likely that the Legislature would have remained silent.
VII
We also reject the contention that awarding benefits to locked-out employees will violate the state’s policy of maintaining neutrality in labor disputes. Such neutrality requires that the unemployment compensation fund not be used to support either side of a labor dispute through the denial or award of benefits. See Lawrence Baking Co v Unemployment Compensation Comm, 308 Mich 198; 13 NW2d 260; 154 ALR 660 (1944). As appellants see it, employees would be unfairly buttressed if benefits were awarded in any lockout situation. But this argument fails to ring fully true in these circumstances. Neutrality requires that the act be interpreted with a balanced approach.
"Just as unemployment compensation benefits may not be used to support employees during a strike, so too denial of benefits may not be used to strengthen the position of an employer who has locked out employees who are willing to work.” Doerr v Universal Engineering Division, Houdaille Industries, Inc, 90 Mich App 455, 474; 282 NW2d 352 (1979) (Maher, J., concurring).
When employees are willing to continue their tasks, without engaging in such economic action as a strike, slowdown, unwarranted absenteeism or picketing, the MESA was not intended to help enforce a lockout in this manner.
VIII
Accordingly, in keeping with the purpose of the MESA to relieve the^ hardship of involuntary unemployment and consistent also with Michigan’s labor relations policy of encouraging the peaceful resolution of labor disputes, employees who are locked out in spite of their willingness to work during contract negotiations and who do not strike, threaten to strike, picket or engage in any other concerted economic warfare activity should be entitled to compensation for their unemployment. Therefore, I would affirm the decisions of the Court of Appeals in both Smith and Doerr.
Levin, J., took no part in the decision of this case.
Baker v General Motors Corp, 409 Mich 639; 297 NW2d 387 (1980); Scott v Budd Co, 380 Mich 29; 155 NW2d 161 (1968).
We do not distinguish, as does appellee Doerr, between offensive and defensive lockouts because the Legislature has not chosen to do so. See Memco v Maryland Employment Security Administration, 280 Md 536, 546; 375 A2d 1086, 1092-1093 (1977).
See Lewis, Unemployment Compensation Law in Labor Disputes: Michigan Compared with Seven Selected States 1936-1964 (Kalamazoo: The W. E. Upjohn Institute for Employment Research, 1964); 6 Unemployment Ins Rep (CCH) 25, 255.
Ibid.
See, e.g., Adams v Industrial Comm, 490 SW2d 77 (Mo, 1973); In the Matter of Usery, 31 NC App 703; 230 SE2d 585 (1976); Buchholz v Cummins, 6 Ill 2d 382; 128 NE2d 900 (1955); Schoenwiesner v Board of Review, 44 NJ Super 377; 130 A2d 648 (1957); In the Matter of North River Logging Co, 15 Wash 2d 204; 130 P2d 64 (1942); Henzel v Cameron, 228 Or 452; 365 P2d 498 (1961); Nelson v Texas Employment Comm, 290 SW2d 708 (Tex Civ App, 1956).
Shadur, Unemployment Benefits and the "Labor Dispute” Disqualiñcation, 17 U Chi L Rev 294, 300 (1950).
See, also, Adams v Industrial Comm, supra; In the Matter of Usery, supra; In the Matter of North River Logging Co, supra; Nelson v Texas Employment Comm, supra.
Barnes v Employment Security Board of Review, 210 Kan 664; 504 P2d 591 (1972); Adams v Industrial Comm, supra; In the Matter of Usery, supra; Olusczak v Florida Industrial Comm, 230 So 2d 31 (Fla App, 1970); Buchholz v Cummins, supra; Sweeny v Board of Review, 43 NJ 535; 206 A2d 345 (1965); Schoenwiesner v Board of Review, supra; In re North River Logging Co, supra; Henzel v Cameron, supra; Nelson v Texas Employment Comm, supra; A J Sweet of La Crosse, Inc v Industrial Comm, 16 Wis 2d 98; 114 NW2d 141, 853 (1962); Baltimore Typographical Union No 12 v Hearst Corp, 246 Md 308; 228 A2d 410 (1967) (Maryland enacted a statutory exception for lockouts prior to decision in that case. It is interesting to note that the Court held in that case that application of the exception was prospective only). See, also, Anno: Unemployment compensation: Application of labor dispute disqualification for benefits to locked out employee, 62 ALR3d 437; 76 Am Jur 2d, Unemployment Compensation, § 81, p 990; Haggart, Unemployment Compensation During Labor Disputes, 37 Neb L J 668 (1958).
A "labor dispute” is generally defined in similar fashion in other states. See Anno: Unemployment Benefits — Labor Disputes, 63 ALR3d 88, 107.
The new evidence was accepted and made a part of the record pursuant to the appeal board’s granting of appellees’ motion to introduce the exhibits. See MCL 421.35(1); MSA 17.537(1); MCL 421.36(3); MSA 17.538(3).
The circuit court noted in this regard:
"No doubt economic conditions influenced the decision of the employer to lock out its employees to coerce agreement if its final offer was not accepted; and it may have welcomed the opportunity to do so. Likewise, economic conditions undoubtedly influenced the union’s decision to offer to work under the old contract and not strike. Probably economic conditions always influence such decisions. It is most unlikely that an employer would lock out employees who are willing to work under a profitable contract in good times for the industry. And an employer need not lock out employees who are unwilling to work. That would be futile.”
We concur with the trial judge that probably economic conditions will always be a factor in a lockout or strike decision. As far as the appellant "welcom[ing] the opportunity to do so” in this case, we leave that decision to the board of review on remand.
The board of review is the present successor to the appeal board. See 1977 PA 52; MCL 421.35(3); MSA 17.537(3).
Ohio Rev Code Ann § 4141.29(D)(1)(a).
1963 PA 226. See the authorities cited in fn 3, supra.
See, e.g., 6 Unemployment Ins Rep (CCH) 25,255.
Minor stylistic changes were made in 1980. See 1980 PA 358.
The statute sets forth four criteria for determining direct involvement. MCL 421.29(8)(a), subds (i)-(iv); MSA 17.531(8)(a), subds (i)-(iv). See also MCL 421.29(8)(b); MSA 17.531(8)(b).
Hart & Sacks, The Legal Process: Basic Problems in the Making and Application of Law (Cambridge Tentative Edition, 1958), p 1411.
id., p 1413.
1936 (Ex Sess) PA 1, § 2.
MCL 421.2; MSA 17.502.
The statement of policy was taken from "Draft Bills” prepared by the Committee on Economic Security of the Social Security Board. See Shadur, Unemployment Beneñts and the "Labor Dispute” Disqualification, 17 U Chi L Rev 294 (1950).
Williams, The Labor Dispute Disqualification — A Primer & Some Problems, 8 Vand L Rev 338 (1955).
"Thus unemployment compensation is not paid primarily to reward the employee nor to punish the employer, but rather to protect the stability of the state and of the family, by relieving the family distress and the menace to the public welfare occasioned through unemployment of individual workers.” National Gypsum Co v Administrator, Louisiana Dep’t of Employment Security, 313 So 2d 230, 232 (La, 1975). See also Burns, Unemployment Compensation and Socio-Economic Objectives, 55 Yale LJ 1 (1945).
"A liberal interpretation requires that we view with caution any construction of the act which would narrow its coverage and deprive persons entitled thereto of the benefits of the act.” Fifth Dist Republican Committee v MESC, 19 Mich App 449, 452-453; 172 NW2d 825; 43 ALR3d 1343 (1969).
In recent amendments to the MESA, the Legislature virtually eliminated compensation in the case of such voluntary "quits” occurring after March 1, 1981, and before April 1, 1983. 1980 PA 358, § 69.
The disqualification was based on MCL 421.29(8)(a), subd (iv); MSA 17.531(8)(a), subd (iv).
Park v Employment Security Comm, 355 Mich 103; 94 NW2d 407 (1959).
See 6 Unemployment Insurance Rep (CCH) 25,255-25,256. The bill which incorporated the changes, 1963 PA 226, was called the "Ford-Canton” bill.
Since 1963, when these major changes were enacted, the Legislature has amended the labor disqualification section several times. See 1974 PA 104; 1975 PA 110; 1980 PA 358. The changes were primarily technical, and for the purposes of the instant cases, are of no substantive effect.
This section, along with others concerned with trade practices and labor disputes, has been omitted from the Restatement of Torts, 2d, "in the view that these subjects have become substantial specialties, in their own right, governed extensively by legislation and largely divorced from their initial grounding in the principles of torts”. 4 Restatement of Torts (2d), Introduction, p vii. The lockout definition, however, remains valid.
Hart & Sacks, p 1412.
See also Gold Bond Building Products Division National Gypsum Co, Shoals Plant v Review Board of the Indiana Employment Security Division, 169 Ind App 478; 349 NE2d 258 (1976); City Pattern v Review Board of Indiana Employment Security Division, 147 Ind App 636; 263 NE2d 218 (1970); International Steel Co v Review Board of Indiana Employment Security Division, 146 Ind App 137; 252 NE2d 848 (1969); Montana Ready Mixed Concrete Ass’n v Board of Labor Appeals, 175 Mont 143; 572 P2d 915 (1977).
As noted in my colleagues’ opinion, at page 265, the referee in Doerr erred in concluding that a labor dispute exists as soon as negotiations begin. We agree that this error requires a remand.
29 USC 151 et seq. See, e.g., American Federation of Television & Radio Artists, AFL-CIO v National Labor Relations Board, 129 US App DC 399; 395 F2d 622 (1968).
See Labor Management Relations Act, 29 USC 141(b); MCL 423.1; MSA 17.454(1).
See Albett v Review Board of Indiana Employment Security Division, 150 Ind App 202; 275 NE2d 827 (1971).
Some Michigan courts have, in fact, used the impasse test. See Keeler v C M Hall Lamp Co, Docket No 73-247-518-AE (Wayne Circuit Court, July 25, 1978). In Baker v General Motors Corp, the Genesee Circuit Court held that since the parties had not bargained to impasse, no labor dispute existed. It specifically noted that a "labor dispute in active progress” should not be so broadly construed as to include good faith bargaining prior to impasse. In reversing the circuit court result, neither the Court of Appeals nor the Supreme Court directly addressed this argument. Baker v General Motors Corp, 74 Mich App 237; 254 NW2d 45 (1977), rev’d 409 Mich 639; 297 NW2d 387 (1980).
In Smith, the parties disagree about whether they bargained to impasse, the employer claiming the parties did so, the union denying it.
Of the ten areas in the United States hardest hit by unemployment, seven are located in Michigan, according to figures released by the United States Department of Labor on December 15, 1980. The unemployment rates in these seven areas ranged from 12.2 to 16.4 percent. Detroit Free Press, December 16, 1980, p 3A, col 8.
For this reason, the fact that a great majority of other states have construed their unemployment compensation acts to disqualify employees in the same position as the instant claimants, Anno: Unemployment compensation: Application of labor dispute disqualification for benefits to locked out employee, 62 ALR3d 437, is not dispositive.
"The meaning of words can almost always be narrowed if the context seems to call for narrowing.” Hart & Sacks, p 1412.
Doerr v Universal Engineering Division, Houdaille Industries, Inc, 90 Mich App 455; 282 NW2d 352 (1979); Smith v Employment Security Comm, 89 Mich App 212; 280 NW2d 489 (1979).
In Park, functionally integrated plants located in more than one state were construed not to be a single establishment for disqualification purposes. In response, the Legislature added language to disqualify claimants whose unemployment was due to a labor dispute at an establishment functionally integrated with their own.
The Court of Appeals has properly disposed of the employers’ argument that payment of unemployment compensation to locked-out employees interferes with their right to engage in lockouts as recognized by the National Labor Relations Act (NLRA). See American Ship Building Co v National Labor Relations Board, 380 US 300; 85 S Ct 955; 13 L Ed 2d 855 (1965). In Holland Motor Express, Inc v Michigan Employment Security Comm, 42 Mich App 19; 201 NW2d 308 (1972), the Court held that since lockouts are permitted but not protected under the NLRA, the MESA provision exempting from disqualification unemployment caused by lockouts at functionally integrated establishments was not inconsistent with the letter or spirit of the Federal law. See also Unemployment Compensation Board of Review v Sun Oil Co of Pennsylvania, 476 Pa 589; 383 A2d 519 (1978). | [
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Blair Moody, Jr., J.
We granted leave in this case to consider two questions:
1) Whether the Workers’ Compensation Appeal Board or the Court of Appeals correctly applied the standards set forth in Hutsko v Chrysler Corp, 381 Mich 99; 158 NW2d 874 (1968), and in Mitchell v Metal Assemblies, Inc, 379 Mich 368; 151 NW2d 818 (1967), in this matter, and
2) Whether this Court should adopt a different standard and, if so, whether the plaintiff would qualify under such a standard.
We conclude that (1) the Workers’ Compensation Appeal Board correctly applied the Mitchell and the properly interpreted Hutsko standards and reverse the Court of Appeals; and (2) there is no present need for a different standard.
Facts
In 1946, plaintiff, Frederick J. Pipe, was employed by defendant, Leese Tool & Die Company, as an apprentice diemaker. Shortly thereafter, plaintiff earned a journeyman diemaker’s card.
During plaintiffs employment with defendant, defendant manufactured large dies for the automotive industry. Plaintiffs duties as a diemaker included primary layout, machine work distribution, and detail assembly and finishing. During the course of his work, plaintiff was required to handle a number of hand and machine tools, including hammers, screwdrivers, micrometers, height gauges and radial drill presses.
On March 10, 1970, plaintiffs right hand was caught in a large press. As a result of this event, plaintiff suffered an almost complete circumferential laceration of his right hand together with multiple fractures of the bones in the hand and a number of other lacerations. Plaintiff was hospitalized for an extended period. During his hospitalization, it ultimately became necessary to amputate his first and second fingers. Later, plaintiffs thumb became severely ankylosed. Finally, surgery was required to place a pedicle graft over the dorsal ulnar aspect of the hand and also over the carpal-metacarpal joint of the thumb.
On May 27, 1970, plaintiff returned to work. According to plaintiff, although he continued in the classification of diemaker, he no longer could perform all of his prior duties. For the most part he performed bench work. Plaintiff indicated that he had lost 95 percent of the function of his right hand and activities that required the use of his right hand could no longer be performed by that hand but were transferred to the left hand.
Subsequent to his return to work, plaintiff was paid workers’ compensation benefits by Liberty Mutual, defendant’s insurance carrier. Benefits were paid for 71 weeks, the statutory period applicable to specific loss of the first and second fingers under MCL 418.361(1); MSA 17.237(361)(1).
Plaintiif continued to work for defendant until October 1, 1972, when defendant ceased to do business. After a period of layoff, plaintiff obtained work at Michigan Machine. Plaintiff indicated that the work he performed at Michigan Machine was considerably lighter than the work he performed for defendant and that very little of his work involved diemaking.
On April 4, 1974, plaintiff filed a petition for hearing with the Bureau of Worker’s Compensation, claiming specific-loss benefits for loss of industrial use of his right hand. At a hearing held on December 24, 1974, plaintiff testified as follows as to the use he made of his right hand on his present job:
”Q. Would you please explain for us the principal functions of your right hand in your present job?
"A. Hooking and pushing. I can hook. I can push; and if it’s a very small object, I can prop it in between the digits.
* * *
"A. The digits on my hand are almost nonfunctional. I have very little control of them, and they are set and fused in most of the joints. What little function is left, I prop things in between for — with my left hand, and then I can use them. It’s basically — I—I suppose if it was a mechanical hand, you would do the same thing.
”Q. Tell me this, Mr. Pipe: disregarding for the moment the use of your left hand, what, if any, portions of your work can you perform independently with the right hand without any assistance from the left hand?
"A. I wouldn’t get anywhere. I — I would — I would say 95 percent of my function is with my left hand.”
Also introduced at the hearing was the testimony of Dr. Albert Van’t Hof, an industrial surgeon who specialized in hand surgery, who had examined the plaintiff on two occasions at the request of Liberty Mutual. The doctor testified to the following findings:
”Q. Doctor, could you give us a brief physical description of this man’s hand as it exists today?
"A. This man has three remaining digits; the thumb, on the first examination, had a small amount of motion at the metacarpal-phalangeal joint which was 15 degrees instead of the usual 40 to 50, and the interphalangeal joint 35 degrees instead of the usual 60 to 80 degrees. The last examination he’d lost all motion in the metacarpal-phalangeal joint of the thumb, therefore this was zero instead of 35 degrees — 15 degrees as first reported on the first examination. The motion in the other fingers was essentially the same. This, on the present examination, therefore, he has no motion. We’ll discuss the ring finger first. He has no motion at the metacarpal-phalangeal joint, this being fixed at 145 degrees. Normal motion here is 90 degrees. At the proximal-interphalangeal joint of the same digit, he has 25 degrees, normal is 90 degrees. And at the distalinterphalangeal joint, showed approximately 20 degrees, normal being 50 tó 60 degrees. The ring finger, he showed 80 — approximately 80 percent motion, active, at the metacarpal-phalangeal joint; all of these measurements I gave, I’m sorry, are active. At the proximal joint of the small finger, it’s 30 degrees instead of the usual 90 degrees, and at the distal-interphalangeal joint, 20 degrees instead of the usual 50 to 60 degrees. He could flex the pulp of the ring finger to within 7 centimeters of the distal palmar crease, and of the small finger to within 5 centimeters of the distal palmar crease, and he had some motion in the. m.p. joint of the thumb, so that he could — he would have a distance of about 1-1/2 to 2 centimeters between the thumb, which is severely ankylosed, and having a very slight motion at the m.p. joint, and the joint of his — the palm of the hand. Sensation, though, normal in the remaining thumb, ring and small fingers. Adduction,. of course, was greatly impaired or absent, opposition likewise, was absent.
"Q. Doctor, you have reached a computation of a percentage of anatomical loss of this man’s hand, have you not?
”A. Yes.
”Q. And that is 86 percent?
’A. This is what I estimated it to be.”
The doctor testified further regarding the functional usefulness of plaintiffs right hand, saying that plaintiff retained no power grasp, had some precision grasp, had no pinch and had some remaining push and hook.
On May 12, 1975, the administrative law judge found that plaintiff was entitled to benefits for the specific loss of his right hand. On appeal, the WCAB affirmed, applying the legal standard announced in Hutsko.
The Court of Appeals reversed. The Court held that the WCAB had failed to properly apply the Hutsko standard because "plaintiff retained some functions of the hand that would not have been present had the hand actually been amputated”. 90 Mich App 741, 746; 282 NW2d 462 (1979).
Discussion
I
In order to place the present controversy in proper perspective, it is necessary to trace the history of a series of appellate decisions of this jurisdiction, all involving claims for specific-loss benefits for the loss of industrial use of a hand. As will become clear, there appears to be a remarkable consistency in the decisions.
The first of the decisions is Lovalo v Michigan Stamping Co, 202 Mich 85; 167 NW 904 (1918). In Lovalo, plaintiff filed a claim for specific-loss benefits for the loss of a hand as the result of a press accident which amputated four fingers and part of the palm. The thumb remained intact, however.
This Court, in commenting on plaintiffs injury, made a forceful statement regarding the anatomical function of the hand:
"In common terms the human hand consists of the palm, fingers and thumb, being in combination peculiarly adapted physiologically to the function of prehension, or grasping, which is their primary service, locomotion and support being of scant importance as contradistinguished from the lower order of animals. In that sense and for such uses plaintiff has lost his right hand.” Lovalo, 89.
The Lovalo Court affirmed the award of benefits made by the Industrial Accident Board, one of the predecessors of the WCAB. The Court rejected amputation in toto as the only standard for the determination of benefits. Quoting favorably the decision of the Industrial Accident Board, this Court set the following as the standard:
" 'As stated above, he may not technically have lost the entire hand within the meaning of section 10, of part 2, of the workmen’s compensation act, but the board found from the testimony and a careful inspection and examination of the hand, that he has lost substantially the entire usefulness of the hand. The board cannot see that the thumb he has left is of much, if any, practical use to him as far as following any employment is concerned, and believes that for all practical purposes he has lost the entire hand.’” Lovalo, 88.
In West v Postum Co, Inc, 260 Mich 545; 245 NW 561 (1932), plaintiff filed for benefits after suffering the amputation of four fingers on his right hand. Plaintiff also suffered ankylosis of the right thumb and claimed that for all practical purposes his right hand was useless. In sustaining an award of benefits, this Court succinctly stated:
"A question is whether there has been loss of the hand under the act. The commission relies on Lovalo v Michigan Stamping Co, 202 Mich 85. In that case there was greater loss of the member in respect of the palm, but here there is a total loss of use. The holding in that case sustains decision here.” West, 546-547.
Lovalo and West were faithfully followed in later decisions of this Court. See, e.g., Rench v Kalamazoo Stove & Furnace Co, 286 Mich 314; 282 NW 162 (1938); Rupp v Hutter Construction Co, 288 Mich 105; 284 NW 662 (1939).
After following the twofold standard of Lovalo, and later West, for almost 30 years, this Court abruptly switched its focus in Hlady v Wolverine Bolt Co, 325 Mich 23; 37 NW2d 576 (1949). In Hlady, plaintiff claimed benefits as the result of the amputation of four fingers in an accident. In reversing an award by the Workmen’s Compensation Commission, this Court, based upon a limited record, applied a rather mechanical standard to the determination of specific-loss benefits. The Court cited Lovalo but distinguished that case. The Court stated:
"As a matter of law the commission’s award to plaintiff for the loss of a hand was erroneous, because there was no testimony that plaintiff’s injury was other than the loss of 4 fingers of her right hand which resulted in no more than the normal impairment of industrial use which must always follow such amputations, or at least naturally and commonly results.” Hlady, 26.
While focusing exclusively on anatomical loss, the Hlady Court ignored this Court’s prior holdings that loss of industrial use need not be shown by anatomical loss alone but could also be shown by substantial loss of use in industry based upon a loss of the "primary service” of the hand. Lovalo, supra, 89.
In the series of decisions following Lovalo, Hlady represented an aberration. Further, Hlady was not rigidly followed. In Lentz v Mumy Well Service, 340 Mich 1; 64 NW2d 673 (1954), this Court upheld an award of specific-loss benefits in a case which was only superficially distinguishable from the facts of the Hlady case. The Lentz plaintiff had suffered the amputation of four fingers but had also suffered some minor impairment of the thumb and some swelling of the hand when used. Lentz represented an unspoken return to the prior standard, focusing on both anatomical loss and loss of use.
Hlady was specifically and emphatically overruled by this Court in Mitchell v Metal Assemblies, Inc, 379 Mich 368; 151 NW2d 818 (1967). The Mitchell plaintiff had had all four fingers amputated in an industrial accident. As quoted by this Court in Mitchell, the WCAB affirmed an award of benefits made by the referee, saying:
" 'In the instant case all four fingers which were opposed to the thumb have been amputated. Since the capacity to grasp comes from the fact that the phalanges are opposable, it follows then that the capacity to grasp is destroyed. It is true that plaintiff can hold some objects by using the thumb in conjunction with the palm or surface of the hand. However, this is more in the nature of a holding action similar to that which might be accomplished by sticking an object between the phalanges of the paw of the performing dog. Plaintiff herein is left with little, if any, more than a pushing instrument. His capacity to use the forelimb to any degree depends upon the other parts of the forelimb. While the forelimb is not completely useless, it is of less use than a forelimb fitted with a modern prosthetic hand. Plaintiff is relegated to the ranks of the odd lot who must substitute other bodily functions for that destroyed in order to continue to be gainfully employed. We hold that he has suffered industrial loss of use of his hand. The order of the referee shall stand affirmed.’ ” Mitchell, 370-371.
The Court of Appeals reversed, specifically relying on Hlady.
In a unanimous opinion, this Court reversed the Mitchell decision of the Court of Appeals and in the process overruled Hlady. Noting the series of specific-loss benefit cases beginning with Lovalo, the Court commented:
" 'Michigan was once on the right track’, the 'right track’ being regular application by this Court of its original rule that no amputation in toto is required to entitle the appeal board * * * to find as a fact that the amputee had lost the industrial use of a substantially amputated member.” Mitchell, 376.
Focusing its attention on the Hlady case itself, the Mitchell Court opined:
"The trouble with Hlady is that it stands by itself in the midst of earlier and subsequent decisions which adhere to the more flexible, and manifestly more desirable, rule that a claim of industrial loss of use of a hand or other member is not (excepting where specifically applicable statutory language says otherwise) to be judicially determined contrary to supported factual findings of the appeal board. Proof of outright loss of a hand is one thing. Proof of loss of the industrial use of that hand is something else. Proof of either entitles the appeal board to award compensation for loss of industrial use of the hand. ” Mitchell, 378.
In rejecting the Hlady rationale, the Mitchell Court described what is meant by loss of the industrial use of a hand. It quoted with approval the commission’s application of the Lovalo test in Hlady:
" 'Applying the test described in the above case [Lovalo] it is self-evident that the plaintiff has lost the primary service of her right hand. The plaintiff has no useful grasping function in her right hand and it is obvious from a look at the photographs that no one would undertake to employ her at anything but a one-handed job. We, therefore, find that the plaintiff has lost the industrial use of her right hand as the result of her amputations * * *. The fact that the amputations do not involve any portion of the hand beyond the 4 fingers does not warrant an opposite conclusion.’ ” Mitchell, 379.
Thus, the Court dispatched Hlady as a mere aberration and reinstated the long-held test announced in Lovalo for determining eligibility for specific-loss benefits.
A scant 11 months after reaching its decision in Mitchell, this Court announced its decision in Hutsko v Chrysler Corp, 381 Mich 99; 158 NW2d 874 (1968). The factual setting of the Hutsko case was as follows: plaintiff was a skilled tradesman who caught his hand in a fan he was repairing. As a result of the accident, plaintiff’s little finger was amputated; there was restricted use of the ring and middle fingers; and the index finger was deformed. Plaintiff possessed a normal thumb and palm. Subsequent to filing a claim for specific-loss benefits for the loss of his hand, plaintiff retired. All the medical testimony introduced agreed that plaintiff had lost the industrial use of his hand in his skilled trade but retained some general industrial use.
This Court granted leave to appeal on the following very narrow question:
"Where a claimant has lost the industrial use of his hand in his particular skill but retains a measure of general unskilled industrial use thereof, has he sustained the loss of the hand within the meaning of the specific loss schedule of the workmen’s compensation law?” Hutsko, 101.
In determining that the standard for specific-loss benefits was the ability to perform general unskilled industrial work rather than the ability to perform a particular skilled trade, the Court an swered more than it was asked to answer. In dictum, the Court stated:
"However, in order to qualify for the specific loss payment where there has not been the actual physical loss of the member as by amputation, there must be that total incapacitating loss of use which renders the organ or member industrially useless for any type of work, skilled or unskilled. To hold otherwise we think would be a logical contradiction. Plaintiffs injury has not amounted to the actual physical loss tantamount to destruction or amputation contemplated by the specific loss schedule. The test is not the degree of loss measured by the requirements of the skill of the injured workman. The test is the degree of loss as compared with the actual physical loss by destruction or amputation. We hardly need add that where the specific loss schedule makes an exception as in the case of an eye, the percentage of loss legislatively specified obtains.” Hutsko, 102-103.
The holding of Hutsko may be reconciled with the holdings in Lovalo, West, Rench, Lentz and Mitchell. All medical testimony agreed that Hutsko retained some general industrial use of his hand. Given these facts, it was concluded, in effect, that the plaintiff had not lost the "primary service” of his hand. Thus, he had not suffered a substantial loss of utility in industry as defined in Mitchell.
However, language employed in the Court’s opinion created confusion for the WCAB and the Court of Appeals in cases that would follow Hutsko. It became apparent that specific-loss benefits for the loss of a hand were being denied because there was no showing of complete amputation or its equivalent.
Illustrative of the logic employed is the statement of the Court of Appeals in the present con troversy before this Court. The Court of Appeals stated:
"In view of these findings the WCAB could not have applied the Hutsko standard, ¿s it is properly interpreted, because it is clear that plaintiif retained some functions of the hand that would not have been present had the hand actually been amputated.” Pipe v Leese Tool & Die Co, 90 Mich App 741, 746; 282 NW2d 642 (1979).
The assumption was made that Hutsko had sub silentio overruled Mitchell and all the predecessors of Mitchell. Lewis v Detroit, 58 Mich App 570; 228 NW2d 467 (1975). However, to the extent that Hutsko has been read to require that to recover specific-loss benefits one must show a physical loss tantamount to amputation, whether the basis for recovery is anatomical loss or loss of industrial use of the hand, such interpretation is incorrect.
With this in mind, it must be noted that at least one Court of Appeals panel and the WCAB in other decisions cogently refused to apply the Hutsko decision as it has been misinterpreted in its most literal meaning. Chaffin v Grand Rapids Metalcraft, 38 Mich App 200; 196 NW2d 20 (1972), lv den 387 Mich 776 (1972). Furthermore, in concurring in the present case, WCAB member Marshall stated:
"It is certain that loss of industrial use can never be found as a matter of law under Hutsko, supra, where there remains some movable flesh and bone. However, in cases such as this we are concerned with loss of industrial use for reasonable and practical industrial purposes and not exclusively with anatomical loss, although it is obvious that the extent of anatomical loss will always be one of the primary factual considerations, * * * [Pjreoccupied enchantment with the legal stringencies of Hutsko, supra, are misplaced. The emphasis of decisional inquiry here is more properly with the reasonable and practical issues of fact as to loss of industrial use mandated by Mitchell, supra. Plaintiff is entitled to specific loss compensation for the factual loss of industrial use of his right hand.” 1977 WCABO 3376, 3387.
II
The fact that Hutsko may have been subject to misinterpretation does not require that we establish a new test for determining qualification for specific-loss benefits for the loss of a hand. The standard which evolved from Lovalo and West and was recently re-invoked and clearly enunciated in Mitchell provides both a realistic and practical test for determining eligibility for specific-loss benefits. This standard is: For purposes of determining an award of speciñc-loss beneñts for the loss of a hand, there must be a showing of either anatomical loss or loss of the industrial use of the hand as determined by the loss of the primary service of the hand in industry. We are satisfied that this test is comparable to the test that is most universally applied in the other jurisdictions of this country. See, e.g., Travelers Ins Co v Seabolt, 361 SW2d 204 (Tex, 1962); Mustapha v Patton-Mac-Guyer Co, 100 RI 493; 217 A2d 240 (1966); Boxleitner v St Maries Plywood Co, 91 Idaho 852; 433 P2d 122 (1967); Federal Copper & Aluminum Co v Wright, 504 SW2d 957 (Tenn, 1974); Gindy Manufacturing Co v Workmen’s Compensation Appeal Board, 32 Pa Commonwealth Ct 128; 378 A2d 492 (1977).
In this case, the Workers’ Compensation Appeal Board found that plaintiff suffered a loss of the industrial use of the hand. It is clear "that, in this particular type of closely disputed loss of industrial use’ case, the issue almost automatically becomes one of fact”. Mitchell, supra, 375.
Applying this standard to the facts of the present case, there is no question that plaintiff, Frederick J. Pipe, meets the test. By the direct testimony of Doctor Van’t Hof, plaintiff has suffered an 86 percent anatomical loss to his right hand. The WCAB found that the hand has no significant power grasp, some precision grasp, no significant pinch function and some hook and push function. Additionally, by plaintiff’s own testimony, plaintiff is able to make little or no use of his right hand in the industrial setting in which he works. In effect, although retaining some function, he has lost the primary service of his hand. For all practical purposes "he has lost substantially the entire usefulness of the hand”. Lovalo, supra, 88. As plaintiff has substantially lost the use of his hand in industry, he is qualified for specific-loss benefits.
The Court of Appeals is reversed. Costs to plaintiff.
Kavanagh, Williams, Levin, and Fitzgerald, JJ., concurred with Blair Moody, Jr., J.
MCL 418.361(1); MSA 17.237(361)(1), reads in pertinent part:
"(1) While the incapacity for work resulting from the injury is partial, the employer shall pay, or cause to be paid to the injured employee a weekly compensation equal to 2/3 of the difference between his average weekly wages before the injury and the average weekly wages which he is able to earn thereafter, but not more than $64.00 if such injured employee has no dependents; $69.00 if 1 dependent; $75.00 if 2 dependents; $81.00' if 3 dependents; $87.00 if 4 dependents; and $93.00 if 5 or more dependents; except as provided in section 355. Compensation shall be paid for the duration of the disability. In cases included by the following schedule, the disability in each such case shall be deemed to continue for the period specified, and the compensation so paid for such injury shall be 2/3 of the average weekly wages for the loss of the following:
"(a) Thumb, 65 weeks.
"(b) First finger, 38 weeks.
"(c) Second finger, 33 weeks.
"(d) Third finger, 22 weeks.
"(e) Fourth finger, 16 weeks.
"The loss of the first phalange of the thumb, or of any finger, shall be considered to be equal to the loss of 1/2 of such thumb or finger, and compensation shall be 1/2 of the amounts above specified.
"The loss of more than 1 phalange shall be considered as the loss of the entire finger or thumb. In no case shall the amount received for more than 1 finger exceed the amount provided in this schedule for the loss of a hand.
"(h) Hand, 215 weeks.”
Regarding the specific functions of power grasp, precision grasp, pinch, and push and hook, Doctor Van’t Hof testified as follows:
"A Grasp is prehension, and can be considered two areas. One can have power grasp, or precision grasp.
"Q. Would you define those two types of grasps?
"A. The power grasp is, I think, should be considered as a grasp between the flexed fingers and the palm, where one can hold objects and make a definite grasp on objects between flexed fingers and the palms.
"Q. Did you evaluate Mr. Pipe’s hand for power grasp?
"A. I did.
”Q. And what did you conclude?
"A. I did not feel there was any significant remaining power grasp.
"Q. Would you define precision grasp for us?
"A. I think precision grasp is defined as — which held thin objects, as a rule, which can be done, say, between the opposing thumb and the side of the finger. In this case it was the ring finger, where he had some precision grasp, and enough so apparently that he said he at times could do some writing. And I think another remaining precision grasp, essentially, in this patient, is between the thumb and the palm, if he has objects which are light, and perhaps from no less than 1-1/2 or 2 centimeters in diameter, because of the slight increase — the slight motion that he has in the — in the distal joint of his thumb, he might be able to retain that type of objects, and I would consider this as a precision grasp.
"Q. Now, doctor, what is pinch?
"A Pinch, of course, would be — I think is defined as an opposition of the thumb, the palmar side of the thumb to the various digits, and can be classified as tip pinch, pulp pinch, and lateral pinch.
"Q. What, if any, pinch function has Mr. Pipe retained?
"A. I don’t think he had any, unless we get into the area of wanting to possibly consider, which I would prefer to call prehension grasp, between the thumb and the remaining ring finger, because it doesn’t involve the pulp or the tip of the finger, but in essence, this is what we would — what he would do to retain thin objects between these two digits.
"Q. And what is hook and push mechanism?
"A Well, a hook and push would simply imply, I think it’s useful only to complement the function, of the uninjured other hand, where one would aid in pushing objects, and in the same way, be able to place the palm of his hand to pull, aiding in pulling towards you. I think there is some remaining push and hook.” | [
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Fitzgerald, J.
We are asked to construe GCR 1963, 105.8. In the Krueger case, we must decide whether the rule will permit substituted service of process upon a defendant’s liability insurer. In the Rodgers case, we must determine if this rule au thorizes service of process by publication to obtain personal jurisdiction over a defendant.
I
In Krueger v Williams, plaintiff and defendant were involved in an automobile accident. At the time, both parties were insured by the Detroit Automobile Inter-Insurance Exchange (hereafter DAIIE). Plaintiff attempted to negotiate a settlement with DAIIE. When resolution became impossible, approximately six months before the statute of limitations was to run, plaintiff filed suit against Alice Williams, who at the time of the accident was apparently a resident of Grand Rapids.
After the complaint was filed, plaintiff tried to locate the defendant. An investigator was hired but all attempts to find Alice Williams were unsuccessful.
Four months after the complaint was filed, a copy of the summons and complaint were sent by registered mail, return receipt requested, to the defendant’s last known address in Arkansas. These were returned unopened with the notation "Moved —left no address.” Copies were also served upon the Secretary of State, Non-Resident Section, and defendant’s liability insurance carrier. The summons, complaint, affidavit and proof of service were mailed to the DAIIE office in Grand Rapids. The attorney for the insurance company entered a special appearance, challenging the circuit court’s jurisdiction since no personal service was made on Alice Williams.
Plaintiff then filed a motion pursuant to GCR 1963, 105.8, to allow substituted service upon defendant by service of process on the liability carrier. Following hearings on the motion, this form of substituted service was denied. The circuit court also granted defendant’s application for a writ of mandamus dismissing the cause of action. The Court of Appeals agreed that the method of substituted service was inadequate. We granted leave to appeal, directing the parties to address the issue of whether the trial court erred by refusing to allow plaintiff substituted service of process upon the defendant’s liability insurer.
In Rodgers, plaintiffs were passengers on a city bus when a police car chasing a vehicle went through a stop sign and collided with the bus. The plaintiffs sustained injuries and filed a complaint naming various officials as defendants and alleging that the driver and/or owner of the car was unknown. After the plaintiffs learned that the owners of the automobile were Fanny Mae and Willie Davis, and that the driver was either Louis Scott or Paul Hines, a motion was made and granted to amend the complaint and add these four persons as defendants. Shortly thereafter, plaintiffs filed a motion for substituted service by mail and publication stating that following diligent attempts by their office staff and outside investigative agencies, they had been unable to locate the added defendants. This motion was granted. The added defendants failed to appear and a default judgment was entered against Fanny Mae Davis, Willie Davis, Louis Scott and Paul Hines._
Plaintiffs then filed an affidavit for garnishment against the Detroit Automobile Inter-Insurance Exchange which had a policy of insurance in effect on the named insured Willie Davis and on Louis Scott. DAIIE moved to vacate the default and dismiss the garnishment on the grounds that personal jurisdiction was never obtained over the principal added defendants and that the order for substituted service was improperly granted because it was not calculated to give actual notice of the proceedings. This motion was denied.
The trial of garnishee liability resulted in judgment for the plaintiffs. The court found that the insurance company had adequate notice of the case well before the default judgment was taken and had failed to sustain the burden of proving that it was prejudiced. The Court of Appeals affirmed in an unpublished per curiam opinion. Rehearing in the Court of Appeals was denied. We granted leave to appeal, directing the parties to include among the issues to be briefed whether the trial court erred in finding that GCR 1963, 105.8, authorizes service of process by publication to obtain personal jurisdiction as a means reasonably calculated to give actual notice of the proceedings and an opportunity to be heard and whether the trial court, when considering the prerequisites for substituted service when personal jurisdiction is required, erred by not requiring an appropriate affidavit in support to show diligent inquiry.
II
GCR 1963, 105.8 reads:
"Discretion of the Court. The court in which an action has been commenced may, in its discretion, allow service of process to be made upon a defendant in any other manner which is reasonably calculated to give him actual notice of the proceedings and an opportunity to be heard, if an order permitting such service is entered before service of process is made upon showing to the court that service of process cannot reasonably be made in the manner provided for under other rules.”
Service of process is defined as:
"[T]he giving of such actual or constructive notice of a suit or other legal proceeding to defendant as makes him a party thereto, and compels him to appear or suffer judgment by default; and 'service’ in this connection means the execution of process or the particular act of the officer by which the copy of the citation was communicated.” 72 CJS, Process, § 25, pp 1022-1023.
Service may be made personally on a defendant or, if this is not possible, constructive service is permitted. Our court rules provide various methods to achieve substituted service. The Legislature has recognized that these rules must be drawn so as to be applicable to a wide variety of facts. The inherent limit is the requirement that the means chosen be reasonably expected to give notice of the pendency of the action. GCR 1963, 105.8, recognizes this by allowing service in any manner as long as it can be shown to the court that other, more traditional, modes are unavailable.
The committee notes to rule 105.8 read:
"This provision is included to give the court discretion to allow service of process to be made in a manner which satisfies the language of Milliken v Meyer, 311 US 457; 61 S Ct 339; 85 L Ed 278; 132 ALR 1357 [1940], rehearing denied 312 US 712; 61 S Ct 548; 85 L Ed 1143 [1941], i.e., a method 'reasonably calculated to give him actual notice of the proceedings and an opportunity to be heard.’
"The state of the law seldom remains static for very long, and particularly in the field of service of process, change has been occurring rapidly. * * * It is thus believed desirable to confer discretion upon the courts to permit utilization of new methods of service of process which may be developed, and to permit courts themselves to propose and effectuate other methods of service of process, so long as the methods meet the requirements of the due process clause of the 14th Amendment to the United States Constitution, and the equivalent clause in the Michigan constitution.” 1 Honigman & Hawkins, Michigan Court Rules Annotated (2d ed), pp 111-112.
Traditionally, service of process was integrally linked with jurisdiction and the power of a court to render a binding decision. See Pennoyer v Neff, 95 US 714; 24 L Ed 565 (1877). This "power concept” has been substantially altered by the United States Supreme Court decision in Shaffer v Heitner, 433 US 186; 97 S Ct 2569; 53 L Ed 2d 683 (1977). Jurisdiction and notice may now be viewed as two separate aspects of one due-process guarantee. Shaffer addressed itself to the jurisdiction question, reaffirming the basic requirements set out in International Shoe Co v Washington, 326 US 310; 66 S Ct 154; 90 L Ed 95 (1945). To assert jurisdiction sufficient minimum contacts must ex ist between the forum, the defendant and the subject matter of the litigation so as not to offend traditional notions of fair play and justice.
The notice component, equally fundamental to any due process analysis, but with its own distinct requirements, is guided by the reasoning set forth in Mullane v Central Hanover Bank & Trust Co, 339 US 306; 70 S Ct 652; 94 L Ed 865 (1950). See also Lacy, Personal Jurisdiction and Service of Summons After Shaffer v Heitner, 57 Oregon L Rev 505, 506-511 (1978).
"Many controversies have raged about the cryptic and abstract words of the Due Process Clause but there can be no doubt that at a minimum they require that deprivation of life, liberty or property by adjudication be preceded by notice and opportunity for hearing appropriate to the nature of the case.” Mullane, supra, p 313.
The requirement of notice so as to afford an opportunity to be heard is clearly the heart of GCR 105.8. The rule adopts a liberal approach to service of process which recognizes the mobility of contemporary society and the state’s interest in providing recompense for injured plaintiffs. The court is given the discretion to implement any method for service of process beyond those set out in other rules when it is shown that in the context of a given situation other methods are not reasonable. This omnibus rule is meant to allow flexibility, and as long as the means chosen meet Mullane’s standards, service will be allowed. See Conrad v Ward, 33 Mich App 687, 690; 190 NW2d 361 (1971); Felix v Felix, 47 Mich App 744; 209 NW2d 871 (1973).
It is important to note that Mullane acknowl edged the possibility that the means chosen would never reach the defendant.
"[I]t has been recognized that, in the case of persons missing or unknown, employment of an indirect and even a probably futile means of notification is all that the situation permits and creates no constitutional bar to a final decree foreclosing their rights.” Mullane, supra, p 317.
This language reflects an awareness that there may be situations in which an injured plaintiff will not be denied a cause of action even though a defendant cannot be found. Similarly, the broad scope of GCR 1963, 105.8, offers an injured plaintiff the possibility of fashioning a method of service which will serve to permit an action to proceed. The rule recognizes that substituted service in an extraordinary case is not an automatic right. After consideration of all the relevant circumstances of the individual case, it is the court that must make an independent evaluation regarding available alternative methods of service consistent with the guarantees of due process. As long as the means are "reasonably calculated” to reach the defendant, the requirement of actual notice is satisfied and service will be sustained. We are reminded of the frequently quoted words of Justice Holmes, "Now and then an extraordinary case may turn up, but constitutional law like other mortal contrivances has to take some chances, and in the great majority of instances, no doubt justice will be done.” Blinn v Nelson, 222 US 1, 7; 32 S Ct 1; 56 L Ed 65 (1911).
Ill
The arguments in the Krueger case involve two issues: 1) will service of process upon a defendant’s liability insurer comport with the guarantees of due process of law and enable our courts to exercise jurisdiction, and 2) did the lower courts err by not allowing plaintiff to use some method of substituted service of process to serve an absent defendant.
We conclude that jurisdiction was proper in Michigan courts and that litigation here does not offend the due process rights of defendants. Defendant Williams argues:
"The landmark case of Pennoyer v Neff [supra] declared that, to have a determination of personal liability of the defendant, he must be brought within the jurisdiction of the court by service of process within the state, or by his voluntary appearance. * * * In other words, while the court might have jurisdiction over the subject matter, it would not have jurisdiction over the defendant unless he was personally served with process within the state.”
We rely again on the United States Supreme Court’s recent decision of Shaffer v Heitner, in which the Court said, 'Pennoyer itself recognized that its rigid categories * * * could not accommodate some necessary litigation.” Shaffer, supra, p 201. Cases involving automobile accidents comprised one such category.
"The advent of automobiles, with the concomitant increase in the incidence of individuals causing injury in States where they were not subject to in personam actions under Pennoyer, required further moderation of the territorial limits on jurisdictional power. This modification, like the accommodation to the realities of interstate corporate activities, was accomplished by use of a legal fiction that left the conceptual structure established in Pennoyer theoretically unaltered.” Shaffer, supra, p 202.
Thus, under Pennoyer, service could be made on an in-state resident as the basis of in personam jurisdiction and, by using the legal fiction that the out-of-state motorist appointed a state official to act as his agent and accept process, in personam jurisdiction was also possible for the non-resident driver.
International Shoe Co v Washington, supra, acknowledged this use of legal fictions and announced that the ancient concept of in personam jurisdiction based on the court’s power over the defendant was no longer the proper focus of inquiry. Rather, courts were to evaluate the contacts that existed between the defendant and the forum and if sufficient contacts were shown to exist, jurisdiction could be maintained. The standard to be used was one of reasonableness under all of the circumstances; no mechanical formulas could determine whether or not due process was satisfied. The Shaffer Court said, "Thus, the relationship among the defendant, the forum, and the litigation, rather than the mutually exclusive sovereignty of the States on which the rules of Pennoyer rest, became the central concern of the inquiry into personal jurisdiction.” Shaffer, supra, p 204.
Our courts have utilized this minimum contact approach. See Parish v Mertes, 84 Mich App 336; 269 NW2d 591 (1978); Cole v Doe, 77 Mich App 138; 258 NW2d 165 (1977). The language of our court rules reflects these concepts. GCR 1963, 105.9, Personal Jurisdiction, speaks of the contacts, ties and relations between the defendant and the state as the tests to determine whether our courts may assert personal jurisdiction. In Schneider v Linkfield, 40 Mich App 131; 198 NW2d 834 (1972), aff'd 389 Mich 608; 209 NW2d 225 (1973), the Court of Appeals, addressing the jurisdiction issue and not the validity of service, said, "We see nothing unfair about allowing a plaintiff to sue in Michigan a defendant who was a resident of the jurisdiction at the time the cause of action arose.” In Schneider, an automobile accident occurred in Michigan. The defendants were Michigan residents at the time of the accident but had subsequently moved out of state.
Recent United States Supreme Court decisions have questioned the validity of the Pennoyer type of reasoning in favor of the dual aspect analysis we have explored in Part II. We conclude that Alice Williams did have sufficient contacts with Michigan to make our courts a proper forum for litigation.
In addressing the issue of substituted service of process, we conclude that the lower courts did err by not allowing, consistent with the provisions of OCR 1963, 105.8, some form of substituted service of process.
Some additional facts are pertinent. On the date of the accident, both parties were insured by DAIIE. Alice Williams was an assigned risk. Thus, though DAIIE did not sell the policy to Mrs. Williams, and while the actual notice of the accident was forwarded by the "Producer of Record” (the producing agent who sold the policy to Alice Williams), DAIIE did have an obligation to the defendant. The parties do state that at one point, albeit early in the history of this case, the defendant did write a letter to the insurance company. Also, plaintiff did attempt to negotiate this claim with a representative of DAIIE. Suit was filed only after these negotiations failed.
Plaintiff attempted service of process by compliance with the non-resident motorist statute, MCL 257.403; MSA 9.2103. Because the letter was returned unopened, this type of service was unavailable. See Tomkiw v Sauceda, 374 Mich 381; 132 NW2d 125 (1965).
Plaintiff made diligent efforts to locate the defendant. An investigator was hired and various locations checked. Affidavits of two investigators as well as plaintiff’s attorney were filed reflecting these efforts. Plaintiff has demonstrated that there were no other means available to her to effect service of process except by appealing to the court, in its discretion, to allow her to serve the defendant’s liability insurer.
While the ability to effect service of process in this manner is a new concept for Michigan, we are not without precedent. A unanimous opinion of the highest court of New Jersey has held that consistent with the requirements of due process, service of process on a motorist, insured at the time of the accident but missing at the time of suit, may be made by service on the defendant’s liability insurance carrier and notice to the defendant’s last known address. Feuchtbaum v Constantini, 59 NJ 167; 280 A2d 161 (1971).
In Dobkin v Chapman, 21 NY2d 490; 289 NYS2d 161; 236 NE2d 451 (1968), the New York Court ruled that following an automobile accident when the whereabouts of the defendant is unknown, alternative methods of service of process may be used, including service by ordinary mail or service by mail and service on the insurance carrier. After noting that due process cannot be measured by any rigid formula, the New York Court evaluated four factors before reaching its conclusion. Weighing "the plaintiff’s need, the public interest, the reasonableness of the plaintiff’s efforts under all the circumstances to inform the defendant, and the availability of other safeguards for the defendant’s interest”, the Court concluded that the interests of the plaintiffs are paramount.
After considering the same factors, the New Jersey Court wrote:
"Upon a consideration of all of the interests involved, the balance must be struck in plaintiffs favor. Substituted service should be ordered. We agree that service upon the carrier would be appropriate. By its contract the carrier has the right and the duty to defend any action against the insured. The carrier thus has a representative role, which, though it does not include an express agency to accept service of process, is nonetheless relevant when process cannot otherwise be served upon the insured. Realistically there is more of a chance that defendant will learn of the suit by such service than through available alternatives, for the carrier is likely to have an interest in finding him.” Feuchtbaum, supra, p 178.
We agree with these analyses. Plaintiff has made diligent attempts to serve defendant. Plaintiffs need to utilize constructive service in this case is obvious. Our mobile society affords elusive defendants the potential to escape liability by avoiding service of process. The insurance company, while undertaking negotiations to settle this controversy, was aware of the possibility that a suit would be filed. We would allow constructive service under these circumstances.
In Rodgers, the second case before us, appellant DAIIE contests both the type of service which was allowed and the manner in which the substituted service was granted. It argues that to premise personal jurisdiction on service of process by publication alone is violative of the constitutional guarantee of a due-process right to notice. Appellant also contends that where personal jurisdiction is necessary, GCR 1963, 105.8, requires an appropriate affidavit of facts showing the diligent inquiry made by plaintiffs to locate defendants.
The method of imparting notice sufficient to pass constitutional muster was discussed by the United States Supreme Court in Mullane:
"An elementary and fundamental requirement of due process in any proceeding which is to be accorded finality is notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.
"The means employed must be such as one desirous of actually informing the absentee might reasonably adopt to accomplish it. The reasonableness and hence the constitutional validity of any chosen method may be defended on the ground that it is in itself reasonably certain to inform those affected, or, where conditions do not reasonably permit such notice, that the form chosen is not substantially less likely to bring home notice than other of the feasible and customary substitutes.” (Emphasis added.) (Citations omitted.) Mullane, supra, 314-315.
It is evident that due process does not require that actual notice be given in every case. Due process requirements are satisfied if the 'method of imparting notice is reasonably calculated under all the circumstances to afford notice. When circumstances make it doubtful that actual notice will be effected, the method used may not be substantially less likely to afford notice than other customary substitutes.
Service of process by publication is generally regarded as the method least likely to impart actual notice. However, publication notice is permissible under the Due Process Clause in certain limited situations. As we have quoted, the Mullane Court recognized that if, for example, the specific whereabouts of a person is unknown, service of process by publication may be the most practicable and adequate method of service available.
Notice must be reasonably calculated to inform interested parties that an action against them is pending, but there is no rigid formula to determine when personal service is required or when constructive service may be utilized. The kind of notice required will, of necessity, vary with the circumstances of each case. See Walker v City of Hutchinson, 352 US 112; 77 S Ct 200; 1 L Ed 2d 178 (1956).
In a number of cases subsequent to Mullane, the Supreme Court was confronted with the issue of whether service of process by publication constituted fair notice to a defendant consistent with due process. It is significant that in every instance where alternate means of giving notice were available which were better calculated to give actual notice, the Court held service of process by publication constitutionally deficient. _
The Hutchinson Court rejected service of process by publication as an adequate method of imparting notice in that case, stating that "if feasible, notice must be reasonably calculated to inform parties of proceedings which may directly and adversely affect their legally protected interests”. (Emphasis added.) Id., 115. Thus, although the United States Supreme Court has not set forth a rigid test as to what showing is required before publication notice is deemed sufficient, the Court has not hesitated to disapprove the use of publication notice where alternative means better calculated to impart actual notice are reasonably available and where resort to these alternative means is not overly burdensome.
Similarly, our Court has held unconstitutional statutory schemes which authorize service by publication as the only required means of imparting notice especially where the identity and whereabouts of parties are readily ascertainable. See Dow v Michigan, 396 Mich 192; 240 NW2d 450 (1976); Ridenour v Bay County, 366 Mich 225; 114 NW2d 172 (1962).
GCR 1963, 105.8 was designed to give trial judges freedom to fashion methods of giving notice consistent with due process, where a sufficient showing has been made to justify relieving a party from compliance with methods of service specifically prescribed by court rule or statute. A party seeking such relief must show to the court’s satisfaction that the proposed method of service "is reasonably calculated to give him [defendant] actual notice of the proceedings” and that "service of process cannot reasonably be made in the manner provided for under other rules”. GCR 1963, 105.8.
A truly diligent search for an absentee defendant is absolutely necessary to supply a fair foundation for and legitimacy to the ordering of substituted service. "[W]hen notice is a person’s due, process which is a mere gesture is not due process.” Mullane, supra, 315.
The verified motion for substituted service presented on behalf of plaintiffs in Rodgers is insufficient. It fails to show with particularity either that service of process could not reasonably have been made according to prescribed methods or that no better alternative means of giving notice were available than publication.
The only evidence in the record of plaintiffs’ efforts to personally serve defendants appears in a conclusory statement contained in plaintiffs’ motion for substituted service supported by a general affidavit by one of their attorneys that the motion’s allegations are "true to the best of his knowledge, except those matters therein stated to be on information and belief, and as to those matters he believes the same to be true”. In short, there is no direct sworn testimony. _
The motion first asserts that personal service on defendants "is not possible”. It then states the last known address of one defendant and that the whereabouts of the other defendants are "unknown”. The motion further alleges that despite "diligent attempts” by office staff and investigative agencies, plaintiffs have been unable to locate defendants. In short, the pleadings contain insufficient factual assertions as to what diligent attempts were undertaken to find and serve defendants under other rules. Further, the pleadings offer no explanation as to why other means better calculated to impart actual notice than publication were not reasonably available.
While it may very well be that the unnamed members of the office staff and the anonymous outside investigative agencies did everything necessary to constitute an effective good-faith effort under GCR 1963, 105.8, from the record before us we just do not know. As stated in Thompson v Shiawassee Circuit Judge, 54 Mich 236, 237; 19 NW 967 (1884):
"The affidavit should state the facts of inquiry and investigation, so that the court can see that the conclusion that the party cannot be found for the reason stated is a reasonable one upon such facts.”
The plaintiffs bear this burden so that the trial judge and appellate bench may make an informed and reasonable determination.
The nature and extent of efforts to locate and notify parties under normal methods of service, sufficient to justify the ordering of substituted service under Rule 105.8, will vary according to the circumstances presented in each case. However, the efforts required should be evaluated at least in part according to the type of substituted service proposed by the party seeking relief.
In this case, the plaintiffs requested substituted service by publication and mailing to one defendant’s last known address. Under this rule, the use of publication as a notice-giving device should be limited to discrete circumstances where a strong specific factual showing is made that notice cannot reasonably be effectuated in the manner provided under other rules and that means which are better calculated to give notice than publication are not reasonably available or feasible.
Therefore, we remand the Rodgers case to the trial court so that plaintiffs may be permitted to show that they did indeed satisfy the requirements of GCR 1963, 105.8. If plaintiffs can demonstrate to the trial judge’s satisfaction that, prior to the time substituted service was originally ordered, they had exercised due diligence to locate defendants but were unable to serve them under other rules and that means better calculated to give actual notice than publication were not feasible, the judgments of the trial court and the Court of Appeals shall be affirmed. If plaintiffs are unable to make such a showing, we would reverse and require the trial court to enter an appropriate order of dismissal.
Krueger is reversed and remanded for further proceedings in accordance with this opinion.
Williams, Levin, and Blair Moody, Jr., JJ., concurred with Fitzgerald, J.
Fanny Mae Davis’ last known address was in Clarksville, Tennessee. Louis Scott was on parole at the time to the Michigan State Department of Corrections; however, he hadn’t reported to his parole officer for a substantial period of time, and his parole officer did not know his current whereabouts. Plaintiffs had no knowledge of the whereabouts of defendants Hines and Willie Davis.
Letters were sent by registered mail to Fanny Mae Davis’ last known address. A notice was published in the Detroit Legal News once a week for five weeks naming all defendants involved in this cause of action.
The Court of Appeals agreed that DAIIE had adequate notice of the pending action sufficiently before the default judgment was entered. In regard to the substituted service by mail and publication, the court noted that the evidence indicated that the added defendants had purposefully concealed their whereabouts. In such a situation it would be unfair to allow the garnishee to escape liability when the judgments are within the policy limits and the garnishee is the truly interested party. Thus, service under GCR 1963, 105.8, was appropriate. The court held, however, that service on Fanny Mae Davis was not proper since there was no evidence that a return receipt of the registered mail was made a part of the record as required by statute. MCL 257.403; MSA 9.2103. Thus, judgment against Fanny Mae Davis was vacated. The default judgment against Willie Davis, Louis Scott and Paul Hines was affirmed, as was the judgment of garnishment against DAIIE.
See, e.g., City of New York v New York, N H & H R Co, 344 US 293, 296; 73 S Ct 299; 97 L Ed 333 (1953), which involved a railroad reorganization proceeding where publication notice to a creditor of the time for filing claims was held insufficient. In Walker v City of Hutchinson, 352 US 112; 77 S Ct 200; 1 L Ed 2d 178 (1956), publication notice to a landowner of condemnation proceedings was deemed constitutionally deficient where the landowner’s name was known to the city and the city failed to present any "compelling or even persuasive reasons why * * * direct notice * * * [could not] be given”. Id., 116.
Similarly, in Schroeder v City of New York, 371 US 208; 83 S Ct 279; 9 L Ed 2d 255 (1962), publication notice to a landowner whose property rights were affected by diversion of a river was held insufficient. The Court noted that the landowner’s name and address were ascertainable from deed records and tax rolls and concluded:
"The general rule that emerges from the Mullane case is that notice by publication is not enough with respect to a person whose name and address are known or very easily ascertainable and whose legally protected interests are directly affected by the proceedings in question.” Schroeder, 212-213.
In other cases concerning the adequacy of notice, the Court has stressed that notice will not be considered reasonable if better means of actually informing a party are available. Thus, in Covey v Town of Somers, 351 US 141; 76 S Ct 724; 100 L Ed 1021 (1956), the Court held that mailed notice in a foreclosure proceeding was insufficient where the city knew that the party receiving the notice was incompetent and therefore incapable of understanding the meaning of the notice. Also, in Robinson v Hanrahan, 409 US 38; 93 S Ct 30; 34 L Ed 2d 47 (1972), notice was held insufficient where notice was mailed to defendant’s home address and the state knew that defendant was no longer at that address but was incarcerated.
Such testimony as there is is contained in the following three paragraphs:
"1. Plaintiffs petition this honorable court to serve the defendants, Fanny Mae Davis, Willie Davis, Louis Scott and Paul Hines by substituted service to their last known addresses as may be reasonably determined by plaintiffs for the reason that plaintiffs have sought to serve defendants, Fanny Mae Davis, Louis Scott, Willie Davis and Paul Hines personally, but same is not possible.
"2. That plaintiffs verily believe that Fanny Mae Davis’ last known address has been 705 Dixon Street, Clarksville, Tennessee; and, defendant, Louis Scott is presently on parole to the Michigan State Department of Corrections, but has not reported to his parole officer for a long period of time, and his present whereabouts are unknown to his parole officer, and, defendants Paul Hines and Willie Davis’ whereabouts are totally unknown to plaintiffs.
"3. That plaintiffs have made diligent attempts through members of their office staff and outside investigative agencies to locate the defendants, but has [sic] been unable to do so.” | [
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Levin, J.
(for affirmance in Smith and reversal in Sabraw). The question presented concerns the liability of a fire insurer to employees of its insured for injuries sustained as a result of fire hazards not detected and brought to the insured’s attention as a result of the insurer’s inspections of the insured’s premises.
Defendants insured the premises where plaintiffs or their decedents were employed against losses from fire. The insurers regularly inspected the premises for fire hazards.
Plaintiffs or their decedents sustained accidental injuries in the course of their employment on the insured premises as a result of electrical arcing (Smith) or explosion (Sabraw). Plaintiffs allege that the injuries were caused by fire hazards that would have been detected and, inferentially, corrected, had the insurers conducted their inspections with reasonable care. Because their exclusive remedy against their employers is a workers’ compensation claim, they cannot bring an action for their employers’ failure to maintain a safe place to work by detecting and correcting those hazards.
In each of these cases, the jury returned a verdict against the insurer and the trial judge granted judgment notwithstanding the verdict. The Court of Appeals affirmed in Smith and reinstated the verdict in Sabraw. Because we conclude that the judgments notwithstanding the verdict were properly granted, we affirm in Smith and reverse in Sabraw.
The law does not impose a duty on insurers to inspect the premises of their insureds, although such an obligation may be undertaken.
Plaintiffs rely on concepts concerning an actor’s liability to third persons for negligent performance of an undertaking, as they are expressed in the Restatement. Section 324A of the Restatement Torts, 2d, provides that, in certain circumstances, one who undertakes to render services to another which he should recognize as necessary for the protection of a third person is subject to liability if his "failure to exercise reasonable care to perform his undertaking” results in physical harm to the third person.
We conclude, as did the dissenting judge in Sabraw, that the threshold requirement of an undertaking to render services to another is lacking in these cases. An insurer’s inspection of an insured’s premises for fire hazards does not in itself demonstrate an undertaking to render fire inspection and prevention services to the insured. Absent evidence that the insurer agreed or intended to provide services for the benefit of the insured, there is no basis for a conclusion that such inspections are conducted other than to serve the insurer’s interests in underwriting, rating and loss prevention and hence there is no undertaking. An insurer who does not undertake to inspect for the insured’s benefit owes no duty to the insured or the insured’s employees to inspect with reasonable care; such an insurer is, however, subject to liability if it engages in affirmative conduct creating or enlarging a fire hazard.
I
A
On February 7, 1971, Noble Smith was operating an overhead crane in the course of his employment at Great Lakes Steel Corporation’s Ecorse, Michigan, complex, when he heard a crackling noise. Smith turned around and saw sparks flying behind him. He immediately climbed over the controls, hung out of the window of the crane cab, and dropped to the concrete floor below, seriously injuring himself.
Investigation revealed that a shunt cable, part of the assembly linking the crane to its power supply, had separated and made contact with the crane cab, creating an electric arc which burned a hole two inches in diameter through the wall of the cab before contact was interrupted and the arc was extinguished. Arcing may occur in an ungrounded electrical system when more than one ground develops in the system. The ungrounded system that supplied power to Smith’s crane served 30 to 40 acres of the Great Lakes plant, and grounds were continually appearing in the system.
Smith and his wife commenced an action against Allendale Mutual Insurance Company (Allendale), which insured the Great Lakes plant against property damage from fire, and Factory Mutual Engineering Association (Factory Mutual), which by agreement with Allendale inspected the plant for fire hazards and notified Allendale and Great Lakes of problems that it observed.
Smith’s theory was that Allendale and its agent Factory Mutual had voluntarily undertaken, by inspecting the Great Lakes plant, to perform Great Lakes’ duty to provide its employees with a safe place to work insofar as guarding against fire hazards was concerned. He contended that Allen-dale and Factory Mutual had breached that duty by failing to discover and warn of the risk of fire attendant upon a single ungrounded electrical system extending through large areas of the plant. Smith claimed that he was injured as a result of their negligent failure to identify the hazard posed by the sprawling ungrounded system and to recommend that the system be properly limited so that accidental grounds could be located promptly and the risk of fire resulting from arcing minimized.
The jury awarded plaintiffs damages totaling $860,000. The judge granted defendants’ motion for judgment notwithstanding the verdict. _
The Court of Appeals affirmed, stating that the insurer’s inspections were "limited in both scope and purpose” and that "employees were not included within the orbit of risk created by the duty assumed”.
B
On September 15, 1969, the Farm Bureau Services feed mill at Zilwaukee, Michigan, exploded, killing three Farm Bureau employees and injuring three others.
Michigan Millers Mutual Insurance Company had insured the Zilwaukee mill for fire damage. John Vaughan, a field inspector for Michigan Millers, inspected the mill at least four times a year from the commencement of construction in 1963 until the explosion.
When he visited the mill on February 19, 1969, Vaughan was appalled by the conditions he encountered. Dust produced by milling was suspended in the air in a concentration that, in his judgment, created a high risk of explosion. Vaughan informed the mill manager and a Farm Bureau vice president who happened to be on the premises of his concern but obtained little response. Dust conditions in the plant remained unsatisfactory until the explosion.
Vaughan and plaintiffs’ expert witness on fires and explosions agreed that the most probable explanation for the explosion centered on the "Bobcat”, a four-wheeled industrial vehicle used for a number of purposes including unloading boxcars of grain and meal that arrived at the mill. Shortly before the explosion, an employee unloading a boxcar of corncob meal noticed that the Bobcat’s muffler was glowing red hot and heating bits of the corncob material until they became glowing embers that floated into the mass of meal and created small "black spots”. Although the employee then halted loading operations, it was likely that ignited bits of the corncob meal had already drifted into the boxcar and been loaded with the rest of the meal into a hopper from which the meal was conveyed to storage bins. In the bins some of these embers continued to burn, ignited adjacent dust, and began a chain reaction that culminated in the explosion.
Although Vaughan inspected the mill thoroughly at least four times a year for the purpose of detecting fire hazards and made safety recommendations based upon his findings, he never warned that use of the "Bobcat” in the dusty feed mill would create a danger of explosion. Vaughan testified that he was aware that Farm Bureau kept a Bobcat in the vicinity but he had never seen it used inside the mill during his many visits. He never inquired whether the Bobcat was used to unload boxcars or how the boxcars were unloaded. Plaintiffs offered testimony that boxcars were unloaded once or twice a week, usually with the Bobcat, and that the Bobcat was sometimes used inside the mill for other purposes; Vaughan thus may not have seen the Bobcat inside the mill and then, again, he may have.
The plaintiffs commenced wrongful death and personal injury actions against Michigan Millers, alleging that it had negligently performed its voluntary undertaking to inspect the feed mill premises. They claimed, in addition to a voluntary undertaking by Michigan Millers to perform Farm Bureau’s duty to provide a safe workplace for its employees, that Michigan Millers had increased the risk of harm by its negligence and that Farm Bureau had relied on the insurer’s inspections.
Following a lengthy trial of six consolidated cases, the jury found in favor of all plaintiffs and returned verdicts totaling $3,660,000. The judge granted judgments notwithstanding the verdicts.
A divided panel of the Court of Appeals reversed, finding sufficient evidence of an undertaking, want of reasonable care in discharging the undertaking, and reliance, to justify the jury’s verdict.
We granted leave to appeal in Smith and in the six consolidated feed mill cases (Sabraw), ordered them heard together and requested the parties to brief the question "whether the evidence supported the jury’s finding that defendant had gratuitously undertaken a duty to protect employees of the insured from fire hazards, within the meaning of 2 Restatement Torts, 2d, § 324A, and had breached that duty causing injury to plaintiffs”.
II
A
Plaintiffs contend that defendants’ negligence in inspecting the employers’ premises for fire hazards caused the losses they suffered.
The plaintiffs do not claim that a statute or the common law imposes a duty on fire insurers to inspect for and warn of fire hazards for the benefit of the owners of insured premises, their employees, customers or other invitees. Nor do they claim that these insurance contracts provided for inspections. They contend, rather, that the defendants, by inspecting the premises, incurred a duty to the owners and to plaintiffs as their employees to exercise reasonable care in inspecting under common-law tort principles expressed in § 324A of the Restatement Torts, 2d: _
"§ 324A. Liability to Third Person for Negligent Performance of Undertaking
"One who undertakes, gratuitously or for consideration, to render services to another which he should recognize as necessary for the protection of a third person or his things, is subject to liability to the third person for physical harm resulting from his failure to exercise reasonable care to protect [sic; perform] his undertaking, if
"(a) his failure to exercise reasonable care increases the risk of such harm, or
"(b) he has undertaken to perform a duty owed by the other to the third person, or
"(c) the harm is suffered because of reliance of the other or the third person upon the undertaking.”
The plaintiffs assert that a substantial number of cases, old and new, have applied the common-law rule that even a gratuitous volunteer must act with reasonable care, embodied in § 324A, to hold an insurer liable for injury to a third party resulting from its negligent inspection of insured property. Indeed, a number of Michigan cases have cited § 324A in approving actions against employers’ workers’ compensation insurance carriers by injured employees who claimed that their injuries were caused by negligent inspections of the workplace. Plaintiffs argue that the fire inspections conducted in these cases are comparable "undertakings” which fall within the § 324A rule of liability.
Before examining this contention, we note that the application of a common-law rule to a particular set of facts does not turn upon whether those facts can be characterized in the language of the Restatement section corresponding to the common-law rule. Unlike a statute, which expresses a legislative directive for the treatment of future cases, the Restatement seeks primarily to distill the teachings of decided cases and is descriptive. While its drafters may sometimes strive to choose "the better rule” or to predict or shape the development of the law, its influence depends upon its persuasiveness. Even where a particular Restatement section has received specific judicial endorsement, cases where that section is invoked must be decided by reference to the policies and precedents underlying the rule restated. Textual analysis of the Restatement is useful only to the extent that it illuminates these fundamental considerations.
For the reasons stated in Part II-C, infra, we conclude that the insurers in these cases are not liable to plaintiffs under the common-law rule restated in § 324A because on these records the relationships did not give rise to an undertaking creating a duty to inspect with due care. This result is consistent with the Restatement when § 324A is read in light of the cases that gave rise to it. It also reflects our judgment, guided by the legislative response to a prior case, of the wiser public policy.
B
It is generally agreed that the duty question— "whether, upon the facts in evidence, such a relation exists between the parties that the community will impose a legal obligation upon one for the benefit of the other” — is to be decided by the court.
Plaintiffs contend, however, that where the scope and nature of the relationship between the plaintiff, defendant and others determines whether a duty is owed, the question is for the jury.
It is commonplace to say that a particular defendant owes a duty to a particular plaintiff, but such a statement, although not incorrect, merges two distinct analytical steps. It is for the court to determine, as a matter of law, what characteristics must be present for a relationship to give rise to a duty the breach of which may result in tort liability. It is for the jury to determine whether the facts in evidence establish the elements of that relationship. Thus, the jury decides the question of duty only in the sense that it determines whether the proofs establish the elements of a relationship which the court has already concluded give rise to a duty as a matter of law.
It is also for the court to determine what evidence is minimally necessary to establish the elements of a relationship on which tort liability may be premised. In the instant cases we are satisfied that the evidence, taken most favorably to plaintiffs, failed to create a jury question on whether the scope and nature of the relationships gave rise to an undertaking which would create a duty on the part of the insurers. Absent evidence supporting a conclusion that the insurers agreed or intended to provide inspection services for the employers’ benefit, the threshold element of duty— which in a case based upon § 324A flows from an undertaking to render services to another — is lacking.
C
Section 324A provides that an actor who "undertakes, gratuitously or for consideration, to render services to another” (emphasis supplied) may in certain circumstances be liable to foreseeable third persons for negligence. Plaintiffs maintain that by inspecting the Farm Bureau feed mill and the Great Lakes Steel plant for fife hazards, the insurers in these cases embarked upon gratuitous undertakings within the ambit of § 324A.
In our view, plaintiffs misconceive the sweep of the section’s principles. The illustrations given in the official comments to § 324A and the cases cited by way of example in the Reporter’s Notes involve either a contractual undertaking by a defendant to render particular services, an undertaking by an agent or employee to render services to his em ployer as part of the agency or employment, or an undertaking whose unambiguous object is to benefit another and which would not have been performed primarily for the actor’s purposes.
One can agree with the general proposition that any person, including an insurer, who assumes to act must act with reasonable care without concluding that the insurers in these cases are subject to liability under the rule of § 324A. It is not enough that the insurer acted. It must have undertaken to render services to another. Its acts do not constitute such an undertaking unless it agreed or intended to benefit the insured or its employees by the inspections.
Ordinarily the question whether an actor has undertaken to render services to another is not in dispute. In the instant case, the central question, as we see it, is whether such an undertaking to serve another can be established from conduct which is consistent with an intention primarily to serve the purposes of the actor.
The law does not impose a duty upon an insurer who inspects in the absence of conduct evidencing an agreement or intent to benefit others by the inspection; only in such a case has the insurer acknowledged the propriety of judging the competence of its inspection by a standard which measures its potential effect on others. This concept of acknowledged obligation to another is comprehended by § 324A’s threshold description of "[o]ne who undertakes * * * to render services to another”; the rule stated in § 324A by its terms does not apply to an actor following a self-serving course of conduct.
While an undertaking which may give rise to liability under the rule of § 324A may be gratuitous as well as contractual, the evidence must show that the actor assumed an obligation or intended to render services for the benefit of another. Evidence demonstrating merely that a benefit was conferred upon another is not sufficient to establish an undertaking which betokens duty. Persons pursuing their own interests often benefit others in the process. Accordingly, where a plaintiff seeks to prove an undertaking by conduct which benefits another and that conduct is consistent with a primary purpose on the part of the actor to benefit himself, the plaintiff must offer additional evidence to create a jury question whether there was an undertaking to render services and hence a duty to one who might foresee-ably be injured by the actor’s failure to perform the undertaking with reasonable care.
An inspection for fire hazards does not in itself represent that the insurer has done more than seek to reduce claims or determine whether it is willing to underwrite or remain on the risk. Identification of fire hazards and the making of recommendations to the insured do not in themselves suggest an objective other than to reduce the insurer’s losses on the policy or to justify a decision by the insurer to raise or lower rates or to decline or remain on the risk; such conduct does not imply an undertaking to warn the insured of reasonably identifiable fire hazards.
This is not to say that a fire insurer may not undertake to render fire inspection services to its insured and thereby incur a duty, breach of which will subject it to liability. If the insurer promises to provide complete fire inspection services to alert the insured to fire hazards on the premises, its failure to exercise reasonable care in performing that undertaking will subject it to liability under the rule of § 324A.
Absent such a specific undertaking, there must be evidence other than the fact of inspection and consequent loss prevention to indicate that the insurer undertook to render fire inspection services for the insured’s benefit before a negligent inspection claim can be submitted to the jury. For example, if the insurer’s advertising or communications with its policyholders represent that its inspection services will relieve the insured of the burden of monitoring its own facilities, it has undertaken to render inspection services for the benefit of the insured and is subject to liability if it fails to exercise reasonable care in performing that undertaking. It would be for a jury to decide whether the insurer failed to inspect with reasonable care and whether that failure caused the plaintiffs injury.
In sum, a fire insurer who inspects its insured’s premises for fire hazards does not, merely by making the inspections, however thorough and frequent they may be, undertake to render services to the insured.
III
The records in these cases do not support a conclusion that the defendants undertook to render fire inspection services to the employers of the injured and deceased workers.
A
Smith emphasizes that Factory Mutual, a leading provider of fire inspection services, employed skilled engineers who were supposed to inspect every area of a plant. The Great Lakes plant was inspected twice yearly. Each inspection lasted approximately one week. The inspector was accompanied on his rounds by the plant fire chief. At the conclusion of each inspection the inspector conducted an "exit interview” to review his findings with the fire chief, and management or engineering personnel if available.
Following each inspection, the inspector prepared both an "underwriting survey” for Allen-dale’s use and a "loss prevention report” which was forwarded to Factory Mutual’s home office and from there distributed to Allendale, which in turn sent a copy to Great Lakes. There was evidence that, "on the average”, Great Lakes followed the inspector’s recommendations.
Factory Mutual also investigated fires after they occurred, prepared loss reports that were distributed to Great Lakes, and made recommendations on how to prevent the fire from recurring. One item on the loss report forms asked whether the conditions which caused the loss could have been detected at the last inspection and, if so, whether Factory Mutual had made appropriate recommendations.
Smith introduced copies of Factory Mutual publications discussing protection against short cir cuits, inspection of electrical cables, and electrical maintenance. Factory Mutual inspectors were instructed to sit down with the insured’s maintenance and engineering staif and discuss whether the National Electrical Code was being applied.
Smith argues that this evidence demonstrates an "extensive, systematic undertaking” by Allendale and Factory Mutual to provide Great Lakes with the benefit of Factory Mutual’s superior experience and to assist Great Lakes in minimizing loss from fire.
While the inspections performed by Factory Mutual at Allendale’s request benefited Great Lakes, it does not follow that Allendale and Factory Mutual undertook to render those services to benefit Great Lakes. All the evidence relied upon by Smith to establish an undertaking to render services to Great Lakes is equally consistent with the view that Allendale systematically attempted to reduce its losses under the fire insurance policy issued to Great Lakes. The insurer’s inspections undoubtedly benefited and assisted Great Lakes because in seeking to contain its own losses, Allen-dale necessarily reduced Great Lakes’ losses as well. The identification of fire hazards, if acted upon by Great Lakes, would tend to reduce the risk of both property damage and employee injury in the plant. There is, however, no indication that Allendale or Factory Mutual agreed or intended to inspect the Great Lakes plant for other than Allendale’s loss prevention and underwriting purposes.
The contract between Great Lakes and Allen-dale had no provisions pertaining to inspections. While a Factory Mutual employee testified that Great Lakes wanted the benefit of Factory Mutual’s fire inspection services, there was no evidence that Allendale agreed or intended to provide the benefit of inspections more comprehensive than it chose to make for its own benefit or, indeed, that Great Lakes expected it to do so. Nor was there evidence that Allendale or Factory Mutual represented that the inspections were provided as a benefit to Great Lakes or were designed to relieve Great Lakes of responsibility for detecting fire hazards and instituting remedial measures, or even that Great Lakes thought that to be the purpose of the inspections. Perforce, there was no communication by Great Lakes that it was depending upon Allendale or Factory Mutual to conduct comprehensive inspections.
B
The plaintiffs in Sabraw and its companion cases would find an undertaking by Michigan Millers on similar evidence. They emphasize that Vaughan, Michigan Millers’ inspector, visited the feed mill frequently from the time construction began. He advised Farm Bureau on certain aspects of the electrical installation and recommended other fire prevention measures even before the mill opened. Vaughan inspected the mill thoroughly on many occasions. He furnished the mill management with "No Smoking” signs and posters containing safety suggestions to be posted in the plant. On at least one occasion, Vaughan directly warned Farm Bureau employees whom he observed smoking, and on another occasion he gave a presentation on fire protection and prevention to a small group of employees from the Farm Bureau complex.
Farm Bureau had a corporate safety committee, headed by an accountant in its main office, which apparently did little more than arrange occasional meetings at which it "tried to get all locations’ safety managers at that plant to meet with us and we would have the various insurance companies go over the various problems”. No member of the safety committee had an engineering background and the committee relied "to a degree” for safety information on the insurance carriers.
Plaintiffs maintain that the record convincingly establishes that Michigan Millers either completely assumed Farm Bureau’s function of providing its employees with a safe place to work or at least "actively joined hands in a partnership with Farm Bureau in this respect”. They acknowledge:
"[I]nsurance companies do not inspect plants and machinery in order to save the lives of workmen, nor do fire insurance carriers carry out their inspections to save the property of their insureds. In each instance the inspections are carried out, first and foremost, in order to reduce losses and thus to retain for the insurance carriers the valuable premium dollars which they collect.”
Nevertheless, they equate Michigan Millers’ inspections with an undertaking to render services to another giving rise to liability under the rationale of § 324A.
As in Smith, the evidence in these cases establishes no undertaking by the insurer to provide the insured with the benefits of comprehensive fire inspections, although incidental benefits flowed from the insurer’s effort to protect itself from losses under the policy. Although Vaughan acknowledged that detection of safety hazards could benefit persons as well as property, there is no evidence that the inspections were undertaken for any purpose other than underwriting, risk analy sis and loss prevention, and hence there is no basis for concluding that Michigan Millers undertook to render inspection services to Farm Bureau and thereby incurred a duty to Farm Bureau’s employees to exercise due care in inspecting.
Again, as in Smith, the contract did not provide for inspections. There was no evidence that Michigan Millers agreed or intended to provide Farm Bureau with the benefit of inspections more comprehensive than it chose to make for its own benefit, or that Farm Bureau expected it to do so or communicated such an expectation. Michigan Millers did not represent to Farm Bureau that the inspections would detect reasonably discoverable fire hazards or would relieve Farm Bureau of its own duty to exercise vigilance in eliminating fire hazards in the workplace.
Even if the circumstances of this case would otherwise support an inference that Michigan Millers had undertaken such an obligation, that inference is precluded by a clause which appeared on the forms on which Vaughan’s post-inspection fire prevention suggestions were forwarded to Farm Bureau. The forms stated at the bottom of the page, in relatively small type:
"The recommendations listed are made with the belief that, if followed, they will lessen the possibility of loss to your property. We can accept no responsibility for their completeness or effectiveness, but we consider them important and hope you will comply with them.” (Emphasis supplied.) _
The insurer was entirely justified in so limiting its liability under the circumstance that the law does not impose on a fire insurer a duty to inspect for and warn its insured of fire hazards.
IV
Our colleague’s scholarly review of the cases suggests that the analysis in this opinion is inconsistent with prior authority holding insurers liable in negligence for injury resulting from inspections comparable to the inspections in the instant cases. Insurers’ liability for negligent inspection has not, however, been universally accepted, nor is there extensive precedent supporting liability under § 324A in the fire insurance context. It is instructive to examine the prototypical cases on the subject to observe the evolution of precedent.
A
In Van Winkle v American Steam Boiler [Insurance] Co, the plaintiffs building was damaged when a steam boiler burst in an adjacent building owned by the insured. The insurer had covered the insured’s boiler under a policy which permitted, but did not require, the insurer’s inspectors to inspect the boiler. The policy also provided that "should such inspector, upon said examination, discover any defect affecting the safety of said boiler or boilers or machinery, he shall notify the assured” (emphasis supplied), and that the policy should be void "if the load on the safety valve shall be exceeded as approved by the inspector * * * according to the inspector’s certificate, issued to the assured after each inspection”. The insurer had made repeated inspections of the boiler and had issued the mentioned certificates for the guidance of the insured’s engineer.
In Van Winkle, the court emphasized that the case concerned the management of a highly dangerous instrumentality, an activity for which courts showed special concern in developing common-law tort liability. Moreover, the insurer’s inspections were confined to a single, highly dangerous machine and the insurer had undertaken to inform the insured of any defects discovered. The court concluded as a matter of law that the insurer had undertaken to discharge the insured’s obligation to inspect the boiler. In the instant cases, the inspections did not focus on a specific instrumentality, there is no agreement to inform the insured of any defects discovered during the course of an inspection, and no basis in the insurance policy for concluding that the insurer undertook to provide inspections coextensive with the owner’s duty to inspect.
Hartford Steam Boiler Inspection & Ins Co v Pabst Brewing Co also involved a boiler explosion. Hartford had insured boilers used in Pabst’s Milwaukee brewery under an insurance policy similar to the policy issued in the Van Winkle case; this policy even specified the maximum load on the safety valve. Hartford continually inspected the boilers and made reports to the insured. When three boilers exploded, devastating the boiler building, the insured sought to recover damages in tort as well as in contract on a theory of negligent inspection. Although a verdict in favor of the insured was reversed for instructional error, the Seventh Circuit recognized that a tort cause of action could be maintained on the facts of the case, but its language left no doubt that the mere performance of such inspections was not sufficient to show "the undertaking of duty”:
"Inspection of the boilers necessarily requires care and skill in its performance for safety in their use, and, when thus undertaken by the insurance company to serve as a beneñt to the assured, the duty arises, with or without contract obligation to inspect, to exercise reasonable care and skill in each inspection so made, although no such rule of duty obtains in favor of the assured where the inspections are attributable alone to the policy provision for the sole beneñt of the insurer, which would leave no ground for a finding of fact that they were understood between the parties to be made and accepted as inspection service for direct beneñt to the brewing company. ” (Emphasis supplied.)
What evidence illuminated the purpose of the inspections or the parties’ understanding thereof?
"Advertisements of the insurance company accompanied its above-mentioned reports to the assured, calling attention to the benefits which were given with the insurance, through its competent experts engaged in the inspections, as a means 'for immunity from an explosion,’ a service 'superior even to providing indemnity for a loss,’ and stating that about one-half of the premium received was expended for such inspections, making their insurance desirable 'to provide for regular and thorough inspection’ and maintain 'safe operating condition.’ ”
Thus, the facts of the Pabst case, which actually illustrates the principles of § 323 of the Restatement rather than § 324A, emphasized, in addition to insurer participation in the management of a dangerous instrumentality and narrowly focused inspections of it, insurer representations that the inspections were conducted as a benefit to the insured.
With the exception of a few subsequent cases permitting suits against insurers who had undertaken to perform elevator inspections and furnish certificates required by law, thereby rendering to the building owner a service necessary to operation of the elevator, the concept of insurer liability to third parties for injuries said to result from negligent insurance inspections remained dormant until 1960.
Smith v American Employers’ Ins Co transplanted this concept into the fertile field of workers’ compensation, where an employer has no responsibility in tort for unsafe conditions, and it was sought to hold its workers’ compensation carrier liable on a theory of negligent inspection.
Smith lost both her legs when a compressed air tank near which she worked exploded. She sued American Employers’, which had provided her employer with workers’ compensation insurance and had conducted monthly inspections of the plant, including the tank which had exploded. Although treating the issue as primarily a question of statutory construction — whether the insurer shared the employer’s immunity from tort liability or was subject to liability under the third-party recovery section of the workers’ compensation act — the court invoked common-law principles in sustaining Smith’s claim against the insurer:
"[O]ne who undertakes to act, even gratuitously, may be liable to persons injured by his failure to use due care. * * * This liability extends to all who may fairly be said to come within the orbit of risk created by the actor’s negligence. * * * We need not labor the point that the plaintiff employee, working in proximity to the tank which exploded, falls squarely within the class entitled to protection.” _
Roughly half the courts which have since had occasion to construe workers’ compensation statutes have followed Smith in permitting injured employees to maintain common-law actions for negligent inspection against their employers’ compensation carriers. The other half, however, have held such suits prohibited under the applicable workers’ compensation acts.
It is noteworthy that in those jurisdictions, including Michigan, where the injured employee was found to have a common-law tort remedy against the compensation carrier, the state legislatures usually responded with amendatory legislation extending the employer’s exclusive remedy protection to the insurer.
Although disclaiming the need for plaintiff to prove reliance on the inspections, the leading case to follow Smith, Nelson v Union Wire Rope Corp, emphasized that the insurer’s safety inspections had encompassed the hoist whose collapse resulted in injury and that the record "fully negates any concept that defendant’s gratuitous inspections were solely for its own internal purposes”. There was voluminous evidence that the insurer in that case had undertaken to render services to its insureds.
B
It is understandable that the concept of insurer liability for negligent inspection, which originated with inspection of a specific and uniquely dangerous instrumentality pursuant to an express undertaking, might be rekindled in the workers’ compensation context. Clearly, an imperfection in a particular machine or piece of equipment can impose a highly specific risk to those who work with or near it. The proximity of the employee to the machine or equipment and the foreseeability that he or she will be injured if a defect or dangerous condition manifests itself suggest at first blush that one who inspects a particular machine or piece of equipment and fails to detect and warn of a danger which could reasonably have been discovered should be liable for negligence if the danger thereafter results in injury to the employee. The case for recovery is less compelling intuitively where the hazards for which a fife insurer inspects may occur virtually anywhere within a large plant and may endanger any person who happens to be on the premises, and where the primary focus of the inspections is not hazards which can only cause personal injury but, rather, those which may cause property damage without necessarily injuring persons.
Only a smattering of authority to date supports applying the common-law principles developed in the boiler insurer and workers’ compensation carrier cases and which find expression in § 324A to insurers whose inspections fail to reveal fire hazards. Two of the three cases noted by counsel appear to be reconcilable with the analysis adopted here; all three cases reached the appellate courts before trial and thus the facts relied on to show an undertaking to render services to another were not fully developed.
In Johnson v Aetna Casualty & Surety Co, plaintiffs decedent was a firefighter who died while attempting to extinguish a fire in an A & P supermarket. A motion to dismiss brought by Aetna, the store’s public liability insurer, was denied. The court relied exclusively on the text of § 324A and the plaintiff’s allegations that defendant "breached its contractual duty * * * to inspect the premises and report to the A & P any and all hazards to life or property”. Such an allegation pleads an undertaking to render inspection services which gives rise to a duty to inspect with due care.
Sims v American Casualty Co reversed a summary dismissal of an action against insurance companies which provided coverage other than workers’ compensation to the employer of Sims, who died of burns suffered when a volatile alcohol-based product with which he worked ignited. Although the court stated that "defendants’ duty may arise from contract or from undertaking actual inspections without contract”, it appears that the complaint alleged that "the inspections were made not only to rate the risk but to help [Sims’ employer] reduce its accidents and losses and to protect the lives, health and safety of its employees”.
Hill v United States Fidelity & Guaranty Co upheld the potential liability under § 324A of a hotel’s public liability insurer for negligent inspection. The opinion does not reveal any claim that the inspections were undertaken for the benefit of the insured but notes that insurer inspections serve "the interests of the class of hotel guests * * * and the interests of the hotel” as well as the insurer’s "interests in underwriting, establishing rates, and minimizing losses * * *”. We are not persuaded by the Hill case, which responded to concerns about the social utility of subjecting in surers to tort liability for injuries resulting from negligent inspection by simply noting that plaintiffs had alleged reliance on the insurer’s inspections.
We find no case in which a verdict against a fire insurer reached the appellate courts or which has considered in such a developed factual context the concerns here addressed.
V
A
The development of common-law principles is shaped by considerations of public policy. Amici curiae insurers contend that an adverse decision will either discourage insurance inspections or cause insurers to institute such thorough inspection programs that the cost of insurance will be greatly increased, perhaps beyond the reach of many businesses. Amicus curiae Michigan Trial Lawyers Association contends that these scenarios are fanciful and that insurers should be shielded from the usual application of common-law negligence principles only by the Legislature.
The common-law principles relied on by the plaintiffs do not subject an insurer to liability for negligent inspection unless it undertakes to inspect for the insured’s benefit. In assessing the proper development of these principles, we find compelling that, after the Court of Appeals permitted maintenance of actions against workers’ compensation insurers for employee injuries proximately resulting from negligent safety inspections, the Legislature amended the workers’ compensation act to preclude third-party actions against the carrier based upon its furnishing of, or failure to furnish, safety inspections. This amendment expresses a policy judgment that the societal benefits obtained from not burdening the insurer’s decision to inspect its risks with the disincentive of tort liability outweigh whatever advantage might be realized from insistence that such inspections be conducted with due care. Although this amendment was by its terms confined to workers’ compensation carriers, we are guided by the policy judgment implicit in the legislative decision.
Insurers’ inspections can detect hazards before they manifest themselves in harm and thus reduce the social costs of property damage and injury. Even a negligent inspector may detect far more hazards than he misses.
Imposition of liability upon insurers who conduct inspections, without regard to whether they have agreed to provide inspections as a service to their insureds, might either drastically reduce inspections or raise premiums dramatically to meet the cost of more extensive inspection programs and judgments. If fire insurers were to become responsible to those on the premises should a jury decide that the injury was attributable to negligence in inspecting for fire hazards, the premium heretofore based on the risk of property damage must necessarily be substantially enlarged to reflect such public liability exposure.
Imposing such liability would not improve the safety of the premises unless the insured acts on insurers’ recommendations. Unless all insurers require the insured to implement insurers’ recommendations, many insureds will decline to do so, preferring to find a carrier willing to insure the risk even at a greater cost._
Imposing such responsibilities on fire insurers has doubtful social utility in comparison to the aggregate cost of the disruption of established underwriting relationships, the additional premiums charged insureds by other sources for insuring the same risk theretofore insured but now declined, the litigation generated against fire insurers, the general increase in all premiums to cover the additional exposure of fire insurers attributable to the newly imposed public liability and marginal repairs ordered by an overly cautious inspector.
As the records in these cases indicate, many employers will comply to a degree with insurers’ recommendations. We have no basis for concluding that the additional degree of compliance obtainable by imposing enlarged responsibilities on fire insurers would justify the costs.
In assessing the wisdom of enlarging the tort liability of fire insurers, we have taken into account that an owner of premises owes a common-law duty of safe maintenance to persons on the premises unless, as in the case of an owner-employer in respect to his employees, a statute has relieved him of that responsibility, and that owners of premises of sufficient value so that fire insurers conduct inspections generally maintain public liability insurance within limits ordinarily adequate to compensate persons injured on the premises by unsafe conditions.
B
Although it is implicit in plaintiffs’ claim that their employers were also negligent, the employers are not named as defendants because the exclusive remedy of an employee against his employer is his claim for workers’ compensation.
In Funk v General Motors Corp, this Court said:
"An unstated premise of the legislative reference to the law of torts is that the development of that body of law will neither be stimulated nor impeded because the result would create or deny a workman a source of recovery alternative to workmen’s compensation.
"The question whether there is, under the law of torts, an alternative source of recovery to workmen’s compensation is to be decided without regard to whether other workmen 'similarly situated’ have such a source or whether a decision adverse to liability may deny any alternative source of recovery to a particular workman.”
In Funk we concluded that the imposition of liability on a general contractor who was not plaintiff’s employer for failure to implement safety measures in common work areas to guard against readily observable and avoidable serious risks of personal injury was "an appropriate development of the law of torts” and that the basis of the owner’s liability, exercise of retained control, "has long been established”.
In the instant cases we conclude that it would not be an appropriate development of the law of torts to impose liability on a fire insurer on the facts presented.
If liability were to be imposed, the additional exposure of the fire insurer would be essentially for the benefit of third persons (employees, customers and other invitees), not the insured for whose benefit the insurer nominally is said to have undertaken this added responsibility. The insured ordinarily will be impeded in maintaining an ac tion for negligent inspection because its own omissions may be a cause of whatever loss it suffers. More fundamentally, the insurer and insured have agreed upon the amount that the insurer is required to pay in the event the undetected fire hazard causes property loss. Unless the insured is an individual who is himself injured in the fire, his property loss should be reimbursed by the insurer pursuant to the policy and any inadequacy in such compensation would generally be the result of rejection of coverages (e.gbusiness interruption) or of deductibles or co-insurance to which the insured had agreed.
The office of this new application of "well-established principles of tort law” thus would be essentially to provide an alternative to workers’ compensation for injured employees and an alternative means of recovery to customers and invitees where the insured failed to maintain adequate limits of public liability insurance. But the cost of providing such additional protection to workers would inevitably be passed on to employers in the form of increased fire insurance premiums, a result inconsistent with their limited liability for injuries suffered by their employees.
VI
We conclude that, unless the insurer agrees or intends to provide the insured with fire inspection services and advice guarding against reasonably discoverable fire hazards, a negligent failure to detect and warn of such hazards in the course of an inspection is not actionable.
We affirm the Court of Appeals in Smith and reverse in Sabraw.
Coleman, C.J., and Kavanagh, Fitzgerald, and Ryan, JJ., concurred with Levin, J.
Blair Moody, Jr., J.
(for reversal in Smith and affirmance in Sabraw). We granted leave to appeal and consolidated these matters to consider whether, within the meaning of 2 Restatement of Torts, 2d, § 324A, there was evidence to support the jury findings that defendants had gratuitously undertaken a duty to protect the employees of the insured from fire hazards and had breached that duty, causing injury to plaintiffs. Additionally, we are asked to consider whether a fire insurer may include within the scope of its fire hazard inspections only "property” and not "persons”.
Based upon principles developed at common law and upon § 324A, we determine that there was indeed evidence to support the juries’ findings that defendants had gratuitously undertaken a duty to protect the employees of the insured from fire hazards and had breached that duty, causing injury to plaintiffs. Further, we recognize that a fire insurer may attempt to expressly limit its liability by contract. However, when there is no such express limitation and the insurer has gratuitously undertaken to perform fire inspections and has performed the inspections in a negligent fashion, the insurer cannot claim that the scope of its inspections was limited to property only because the orbit of risk from fire encompasses not only all foreseeable property but also all foreseeable persons as well.
Accordingly, we would reverse the Court of Appeals in Smith and remand to the trial court for reinstatement of the verdict. We would affirm the Court of Appeals in Sabraw.
Facts
Smith
On February 7, 1971, plaintiff Noble Smith was operating an overhead crane in Building B of the Great Lakes Steel facility in Ecorse, Michigan. In the process of making a lift, plaintiff heard a crackling noise and saw sparks flying. Fearing an extensive electrical fire, plaintiff climbed from his crane cab and dropped 35 to 40 feet onto the concrete floor below, sustaining serious injuries.
An investigation of the circumstances surrounding the accident revealed the following facts: Electrical power was supplied to the Great Lakes Steel complex by means of an ungrounded electrical system, which ran the entire length of the 30- to 40-acre facility. Somewhere within this vast electrical network a ground had occurred with a subsequent short circuit. Sometime later, at the time plaintiff was operating his crane, a second ground occurred in the system. Specifically, the shunt cable, which is part of the assembly linking the crane to its power supply, separated and made contact with the crane cab. This contact resulted in the formation of the second electrical ground. This ground in combination with the first undetected and unrepaired ground caused an electrical arc with resultant sparking and fire at the crane cab site.
Plaintiff and his wife filed suit against Allendale Mutual Insurance Company (Allendale), which carried a policy of insurance for fire damage to property at Great Lakes Steel. Also joined in the action was Factory Mutual Engineering Association (Factory Mutual) which had contracted with Allendale to perform fire hazard inspections at the Great Lakes complex. _
At trial, plaintiffs presented, within the following factual setting, their theory regarding defendants’ duty and the breach of that duty which resulted in plaintiff’s injuries: Plaintiffs began by acknowledging that ungrounded electrical systems are commonly used in industrial settings. However, to be in conformity with the guidelines of the National Electrical Code, an ungrounded electrical system must be properly limited so that the location and cause of an accidental ground can be quickly detected and repaired before a second ground can occur. The electrical system at the Great Lakes facility was not properly limited, so that when the first ground occurred it was not detected and corrected, resulting in the arcing when the second ground occurred in the crane shunt cable.
Further, plaintiffs presented expert testimony to the effect that the non-limited electrical system posed a major fire hazard for the whole Great Lakes facility. Since all the electrical circuitry in the whole facility was interconnected, further grounds could occur in the system with further sparking and fire throughout the complex.
In contrast, the inspector for Factory Mutual testified that although numerous inspections had been conducted at the Great Lakes complex the electrical system had never been inspected. The inspector did acknowledge that failures in electrical systems frequently cause fires in industrial settings and that at least one out of every five fires in industry results from electrical failures.
From all this, plaintiffs theorized that Allendale and its agent Factory Mutual had gratuitously undertaken a duty to protect the employees of the insured from fire hazards. By its failure to inspect the electrical system and to detect the major fire hazard posed by the improperly limited electrical system, defendant had failed to use reasonable care in carrying out its undertaking. This failure breached the duty to plaintiff and resulted in his injury.
The jury returned a verdict in favor of plaintiffs. The trial judge granted defendants’ motion for judgment notwithstanding the verdict. The Court of Appeals affirmed. 79 Mich App 351; 261 NW2d 561 (1977).
Sabraw
On September 15, 1969, an explosion occurred at the Farm Bureau Services feed mill in Milwaukee, Michigan. Three Farm Bureau employees were killed and three were seriously injured.
It was generally agreed that the most probable cause of the accident was overheating of the unshielded and unprotected exhaust pipe of the "Bobcat”, a gasoline-engine industrial vehicle which was used for loading and unloading boxcars at the mill and for other purposes. On the day of the explosion, a Farm Bureau employee was using the Bobcat to unload a boxcar filled with corn cob meal. The corn cob meal was transferred by the employee to the Bobcat, from the Bobcat to a hopper, and from the hopper by means of an auger and elevators up into bins for final storage.
After having unloaded between 1/3 and 1/2 of the boxcar, the employee noticed that the muffler of the Bobcat was glowing red hot and that "red ash” was floating in the air and dropping on the floor of the boxcar, forming small "black spots” in the corn cob meal. Becoming concerned, the employee shut off the engine of the Bobcat and summoned Mr. Euler, the assistant mill manager. Euler immediately had the Bobcat removed from inside the mill to have it hosed down with water and cooled off. He instructed two employees to take shovels and remove the black spots from the smoldering corn cob meal and have it taken outside and dropped on the ground.
As the employees were removing the black spots, a disastrous explosion and fire occurred within the mill, blowing out the concrete and steel walls. Again, it was generally agreed that the explosion resulted from the black-spotted smoldering corn cob meal being transported up into the mill where it combined with the large amounts of dust in the bins to create an explosion.
The plaintiffs brought wrongful death and personal injury actions against Michigan Millers Mutual Insurance Company (Michigan Millers), which had contracted with Farm Bureau as Farm Bureau’s fire insurance carrier.
Plaintiffs presented the following factual setting for its legal theory that Michigan Millers owed a duty toward the employees of Farm Bureau and breached that duty by its negligence in inspecting the Farm Bureau facilities: Construction plans were made for the Zilwaukee grain elevator by Farm Bureau Services in August 1963. Farm Bureau invited John Vaughan, an inspector for Michigan Millers, to view the site prior to construction and participate in the construction by making recommendations for water and fire protection. Vaughan became an active participant in the project, making recommendations regarding installation of electrical equipment and insisting that Farm Bureau comply with certain safety standards dealing with fire and explosion protection.
After completion of the plant, Vaughan continued to make voluntary inspections of the facilities. There was no provision in the insurance contract which called for or required these inspections. Vaughan’s inspections continued regularly, at least four times a year, right up to the time of the explosion.
Defendant argued that Vaughan’s inspections were not "safety inspections” but were made strictly for insurance rate-making purposes. Vaughan himself, however, testified that his inspections had more than a mere rate-making function. He testified that his inspections accomplished two things: prevention of fire and explosion and safeguarding of employees by preventing fire and explosion. On other occasions, Vaughan characterized the purpose of his inspections "to minimize danger of loss or injury” and his recommendations were to promote "fire safety and employee health”.
From their testimony, Farm Bureau management and employees relied on Vaughan’s inspections and viewed them as promoting employee safety. Further, Vaughan provided "No Smoking” signs for the plant and directly warned employees regarding smoking and other safety concerns.
As Vaughan continued his inspections, he be came more and more distressed by the hazardous conditions which existed at the mill. On February 19, 1969, seven months before the explosion, he conducted an inspection. Concerned by the conditions at the mill, Vaughan immediately tried to contact "anyone in authority” to report the apparently hazardous conditions. He was able to contact Farm Bureau’s Executive Vice President and advised him of the imminent danger posed by conditions at the facility. Apparently, because of the forcefulness of his presentation, the Executive Vice President became irate and threatened to cancel his insurance coverage. This led directly to Vaughan’s being reprimanded by his own superiors. In addition, Michigan Millers sent a letter of apology to Farm Bureau.
For all his efforts, Vaughan admitted that at no time did he ever inspect the Bobcat, although he knew of its existence, nor did he advise anyone of the danger of operating the Bobcat within the mill. Vaughan did state that he knew that it was dangerous to operate a gasoline-engine vehicle inside a grain elevator.
It is within this framework that plaintiffs posited their legal theory. Plaintiffs claimed that Michigan Millers had negligently performed a voluntary undertaking, i.e., to inspect the feed mill and thereby provide a safe workplace for Farm Bureau’s employees. In addition, plaintiffs claimed that Farm Bureau management and employees had relied on the voluntary undertaking and that because of the negligent fashion in which the undertaking was performed, Michigan Millers had actually increased the risk to the Farm Bureau employees.
The jury found in favor of all plaintiffs. The trial judge granted defendant’s motion for judgment notwithstanding the verdict. The Court of Appeals reversed. 87 Mich App 568; 274 NW2d 838 (1978).
Discussion
Two interrelated issues are presented in the instant case: (1) whether the evidence supported the juries’ findings that defendants had gratuitously undertaken a duty to protect the insured’s employees from fire hazards, within the meaning of 2 Restatement of Torts, 2d, § 324A, and had breached that duty causing injury to plaintiffs; and (2) whether a fire insurer may include within the scope of its fire hazard inspections only "property” and not "persons”.
The central focus of the issues in this case is § 324A of the Restatement of Torts. Section 324A provides:
"Liability to Third Person for Negligent Performance of Undertaking
"One who undertakes, gratuitously or for consideration, to render services to another which he should recognize as necessary for the protection of a third person or his things, is subject to liability to the third person for physical harm resulting from his failure to exercise reasonable care to protect [sic; perform?] his undertaking if
"(a) his failure to exercise reasonable care increases the risk of such harm, or
"(b) he has undertaken to perform a duty owed by the other to the third person, or
"(c) the harm is suffered because of reliance of the other or the third person upon the undertaking.”
However, before examining the application of § 324A to an insurer’s actions in performing fire inspections, it is first necessary to examine how the courts of a number of jurisdictions of the United States have treated at common law claims against insurers for the negligent performance of fire and other types of safety inspections. As the discussion which follows will show, the courts developed certain principles which later courts were to adopt in the context of actions predicated upon § 324A of the Restatement. While neither the earlier common-law decisions nor the later decisions based upon § 324A are binding upon this Court, they do present certain basic universal principles which are applicable in all negligent-inspection cases and which are illuminative of the issues presented in the instant case.
I
The first case in the United States to discuss the liability of an insurer for negligent inspection was Van Winkle v American Steam Boiler Co, 52 NJL 240; 19 A 472 (1890). In Van Winkle, defendant insurer had written a policy of insurance for a steam boiler which was located on the property of the Ivanhoe Paper Company. Plaintiff Van Winkle owned a building near the Ivanhoe Paper Company. As part of the insurance contract between defendant American Steam Boiler and Ivanhoe there was a stipulation that American Steam Boiler had the "right” to inspect the steam boiler on Ivanhoe’s premises, if it chose to do so. There was no obligation to inspect. Defendant did make regular inspections but failed to discover a dangerous condition in the boiler. The boiler ultimately exploded, damaging both the property of the in sured and the neighboring property owned by plaintiff.
Plaintiff brought suit against the insurer for damages to the property as a result of the explosion. Plaintiff argued that it was entitled to recovery based upon the contract between defendant insurer and the insured:
"The declaration avers, and the fact, of course, is admitted by the demurrer, that the defendant, in the exercise of its volition, made repeated inspections of the boiler in question, and furnished the required certificates for the guidance of the engineer of the assured. No one can doubt that, by such a course of action, a duty in favor of the assured was imposed on the defendant, by the operation of the contract itself, to act with ordinary skill and care, both with respect to its inspection and its certificate. It is deemed that there is no room for doubt that for the proximate damage occasioned by the absence of such care and skill the defendant became answerable to the assured per contraction; it had stipulated for such care and skill by the terms of its contract, read in the light of legal rules.” Van Winkle, 242-243.
While the court recognized a cause of action on the part of the insured, the court could find no such corresponding cause of action for plaintiff based upon the contract between the insurer and insured.
The court’s analysis did not end here. While no contractual action might obtain, the court found that principles of tort law and of public policy were applicable to this situation. The court stated:
"Very plainly the defendant stood within the spirit of the rule that laid upon the proprietor of the boiler the duty of exercising care and skill in its use. That rule is but the creature of social justice. That a man cannot do an act for his own benefit or pleasure, the natural consequence of which will be detrimental to the equal rights of another, is an equitable principle of importance to the common welfare; and the rule that one man cannot with impunity assist another in doing such wrongful act, appears to be a necessary corollary to the proposition, unless such proposition is to be regarded as purely formal and arbitrary. In the present instance, this boiler burst and injured the adjacent property of the plaintiff solely, as the facts now appear, by reason of the omission of a proper test and inspection; the defendant, by its inspector, was in the actual performance of that function, and it was its agent that was morally and primarily at fault; it would seem, therefore, quite unreasonable to say that the defendant, whose servant the inspector was, is not liable; but that the Ivanhoe Paper Mill Company, whose servant the inspector was not, is liable.” Van Winkle, 246.
While the court’s initial statements were couched in agency language, the court went further to find a duty on the part of a party that voluntarily undertakes an activity, which if performed negligently could result in damage to the property and person as follows:
"[I]n all cases in which any person undertakes the performance of an act which, if not done with care and skill, will be highly dangerous to the persons or lives of one or more persons, known or unknown, the law, ipso facto, imposes as a public duty the obligation to exercise such care and skill. The law hedges round the lives and persons of men with much more care than it employs when guarding their property, so that, in this particular, it makes, in a way, every one his brother’s keeper, and, therefore, it may well be doubted, whether in any supposable case redress should be withheld from an innocent person who has sustained immediate damage by the neglect of another in doing an act which, if carelessly done, threatens, in a high degree, one or more persons with death or great bodily harm.” Van Winkle, 247.
Several principles are readily apparent from the Van Winkle holding: (1) That an inspection clause in an insurance contract creates a contractual right of action for the insured if there is a negligent inspection of the insured object. Implicit in this is the fundamental notion that inspections inure to the benefit of both the insurer and the insured. (2) A non-party to the contract has a cause of action against the insurer which is negligent in performing its inspections not upon principles of contract law but rather tort law, i.e., a party who voluntarily assumes an undertaking owes a duty to all foreseeable plaintiffs to perform its undertaking with reasonable care.
The holding and reasoning of the Van Winkle case set a trend for the cases that followed. In Hartford Steam Boiler Inspection & Ins Co v Pabst Brewing Co, 201 F 617 (CA 7, 1912), an insurer was charged with the negligent inspection of the insured’s steam boiler which had exploded and caused severe damage.
As in Van Winkle, the Seventh Circuit Court of Appeals applied tort principles rather than contract principles to the relationship between the insurer and the insured. The Pabst court recognized that the duty to use due care arises separate from the insurance contract, without regard to any contract obligation to inspect. Under the facts of the case, the duty arose from a number of factors, including: a long insurance relationship between plaintiff employer and defendant insurer, which had always been attended by periodic inspections by the insurer with reports issued to the employer describing conditions found; the insurance company’s representative had inspected the boiler which exploded prior to that boiler’s installation and continuously thereafter; and finally, advertise ments which had accompanied the insurance company’s safety reports specifically emphasized the value of the inspection services.
Further, the Pabst case added a new element to the analysis of negligent inspection cases. The court required that for a cause of action to exist the claiming party must have relied on the inspections. It should be noted that this element of reliance became codified in Restatement of Torts, 2d, § 324A(c). Later courts, however, were to hold that in a negligent inspection action reliance need not be shown or reliance could be an alternative basis for determining liability under § 324A.
Perhaps the leading modern case in the area of negligent inspection is Nelson v Union Wire Rope Corp, 31 Ill 2d 69; 199 NE2d 769 (1964). In Nelson, 18 plaintiffs brought suit for personal injuries and wrongful deaths against American Mutual Liability Insurance Company, the workers’ compensation and public liability carrier for the general contractor on the construction project where plaintiffs worked. The substance of plaintiffs’ complaint against American Mutual was that the insurer had gratuitously undertaken to make safety inspections of the practices and equipment of the insured general contractor and had carelessly and negligently performed these inspections, with the proximate result that workers were injured and killed. In response to plaintiffs’ complaint, defendant insurer replied that what inspections it had performed were not gratuitously performed for the benefit of the employees of the insured, but rather were done exclusively for purposes of risk assessment.
In rejecting defendant’s risk-assessment argument, the court found that plaintiff had properly stated a cause of action under the Restatement of Torts. The Nelson court held:
"Taken in its entirety, all of this evidence leads solely to the conclusion that defendant did gratuitously undertake to make safety inspections and to render safety engineering services on the courthouse project, and that such inspections were planned, periodic and directed to the safety of the employees on the project.” Nelson, 83.
The evidence referred to included: regular and periodic inspections by the defendant, with reports and recommendations to the insured, and representations by the insurer that the insured would receive extra safety benefits from the services of defendant’s safety experts.
In reaching its conclusion, the court also emphasized that defendant’s lack of "control” over the activities or equipment of the insured or its employees did not relieve it of liability. See also Andrews v Ins Co of North America, 60 Mich App 190; 230 NW2d 371 (1975).
Confronted with an argument based upon the Pabst case that reliance either by the insured or its employees was a necessary part of any negligent inspection case, the Nelson court determined that in an action predicated upon the Restatement of Torts, reliance was not an essential element. The court reasoned:
"We think it clear under the law that defendant’s liability for the negligent performance of its undertaking, as distinguished from a failure to perform, is not limited to such persons as might have relied upon it to act but extends instead to such persons as defendant could reasonably have foreseen would be endangered as the result of negligent performance. It is axiomatic that every person owes to all others a duty to exercise ordinary care to guard against injury which naturally ñows as a reasonably probable and foreseeable consequence of his act, and that such duty does not depend upon contract, privity of interest or the proximity of relationship, but extends to remote and unknown persons. ” (Emphasis added.) Nelson, supra, 86.
Inherent in the Nelson court’s analysis of the reliance question is also the rejection of an argument by defendant that there was no showing that defendant’s alleged negligent actions were the proximate cause of plaintiffs’ injuries. The court found that the actions of the insurer in not inspecting the faulty equipment constituted misfeasance. Had the equipment been properly inspected and an appropriate warning given, it is highly unlikely that injury would have resulted. Since plaintiffs were found to be foreseeable persons, i.e., in the orbit of risk created by the negligent actions of defendant, plaintiffs had properly pleaded a cause of action under the Restatement.
The cases following Nelson were essentially variations on the same theme. Yet because each case presented a unique factual pattern, it became evident that courts and juries were evaluating the totality of the circumstances and stressing different factors in different cases in determining whether insurance companies would be held liable for negligent inspections.
In American Mutual Liability Ins Co v St Paul Fire & Marine Ins Co, 48 Wis 2d 305; 179 NW2d 864 (1970), the Wisconsin Supreme Court sustained a negligent inspection action by a workers’ compensation insurance carrier against a liability insurance carrier which had insured a boiler. The court included in its discussion an evaluation of whether it was essential to a cause of action for negligent inspection that the insurer in securing the policy had emphasized the increased likelihood of safety promotion by the insurer’s inspections. The court found that the statements made in advertisements by the insurer were not probative, saying:
"While some cases have placed stress upon the fact that the advertising of the insurance company in securing the policy emphasized the increased safety factor that would result from its inspections, we conclude that such 'puffing’ expressed at the time the policy is taken out is not probative of the question of misfeasance. Although advertising of this nature would constitute a clear holding out of the intention to perform inspections, it is enough under * * * the Restatement rule that there be an actual undertaking to perform the inspection whether or not inspections were a promised inducement for the contract.” American Mutual, 315.
Further, the court concluded that it was unnecessary to consider the question of contractual liability since a cause of action was made out in tort, under § 324A:
"Under this view it is immaterial in a negligence action whether or not the defendant contractually obligated itself to inspect the boilers. It is enough that it undertook to inspect the boilers and that it did so negligently.” American Mutual, 313.
In United States Fidelity & Guaranty Co v Jones, 356 So 2d 596 (Ala, 1977), the court noted that decisions emphasizing the fact that an employer had its own safety personnel and held safety meetings in determining that the insurer could not have undertaken to assist the employer in its duty to provide a safe workplace erroneously ignored the possibility that both parties, the insurer and the employer, might be jointly liable.
Other courts began to acknowledge that inspections should not be viewed in terms of benefits for the insurer alone. Any improvement of safety lowered the insurer’s possibility of loss and thus was of benefit to the insured or any other reasonably foreseeable plaintiff. Sims v American Casualty Co, 131 Ga App 461; 206 SE2d 121 (1974), aff'd per curiam sub nom Providence Washington Ins Co v Sims, 232 Ga 787; 209 SE2d 61 (1974).
Beury v Hicks, 227 Pa Super 476; 323 A2d 788 (1974), differs from the prior cases in that it was not an action against an insurance company. In Beury, a wrongful death action was brought against certain property owners and a power company. Plaintiffs decedent was killed when a tree limb fell upon his automobile. Plaintiffs action against the property owners and the power company, which inspected and maintained services on trees adjoining the highway in proximity to the company’s power lines, was based upon negligent inspection.
The Pennsylvania Superior Court dismissed the action as against the property owners but found for plaintiff as against the power company. Resting its decision on § 324A and finding that the question of whether the power company’s actions constituted a gratuitous undertaking on behalf of foreseeable third parties was submissible to the jury, the Beury court forcefully concluded:
"Liability under § 324A does not require, as appellant argues, the express undertaking of a duty owed by the landowners to third parties. Rather, the Section applies to any undertaking to render services to another which the gratuitous actor should recognize as necessary for the protection of third parties. Thus, the fact that appellant performed tree care services for the protection of its transmission lines does not preclude liability. Whether the services should have also been recognized as necessary for the protection of third parties was an issue properly submitted to the jury and resolved in the appellee’s favor.” Beury, supra, 480.
Finally, the Michigan courts have not been totally silent in the area of causes of action for negligent inspection. As has been alluded to, the Michigan Court of Appeals in Ray v Transamerica Ins Co, 10 Mich App 55; 158 NW2d 786 (1968), lv den 381 Mich 766 (1968), found that the immunity enjoyed by an employer from suits by its employees did not extend to the workers’ compensation carrier of the employer. A direct action by the employee against the carrier for allegedly negligent inspection could be made.
When the Ray case reached the Court of Appeals again in Ray v Transamerica Ins Co, 46 Mich App 647, 653; 208 NW2d 610 (1973), the Court made a poignant statement regarding the public policy question involved in allowing actions against insurance companies for negligent inspection:
"Much is made of the economic argument that if insurers are subjected to unlimited liability for faulty inspection, they will cease all inspection to the detriment of workers, employers, and the public. We find this argument unpersuasive * * *. A recent case in the Sixth Circuit Court of Appeals said:
" 'Just as insurance carriers are voluntarily induced into insuring workmen’s compensation risks by the premiums they charge, so also do these carriers voluntarily engage in safety inspections to enhance their economic returns from their insurance coverage. Promises to make safety inspections are not taken because there is a workmen’s compensation law, but are made to reduce industrial accidents and enhance carrier profits.’ Bryant v Old Republic Ins Co, 431 F2d 1385, 1388 (CA 6, 1970).”
II
Restatement § 324A recognizes that the common-law tort principles of negligent inspection in three-party situations require a plaintiff, in order to maintain such a cause of action, to show existence of the following four elements of the tort:
(1) the existence of a duty to use due care running from the party sought to be held liable to the plaintiff seeking recovery. The pertinent language of § 324A describes this duty as follows: "One who undertakes, gratuitously or for consideration, to render services to another which he should recognize as necessary for the protection of a third person or his things, is subject to liability to the third person”. Set in the context of the instant cases, the relevant inquiry is whether there is evidence in the record that the insurers undertook to render to the employers of the present plaintiffs or their decedents fire safety inspections which the insurers should have recognized as necessary for the protection of the insureds’ employees;
(2) that the party sought to be held liable breached its duty through negligent conduct. The Restatement expresses this element by requiring the party who has undertaken to render the services to have "fail[ed] to exercise reasonable care to protect [sic; perform] his undertaking”. Under the facts of the cases, then, the question becomes whether the insurers did or did not exercise reasonable care in carrying out their fire safety inspections.
(3) that the negligence of the party sought to be held liable proximately caused the plaintiffs injuries or death. The Restatement encompasses this element by requiring that the physical harm to the third person "result” from such party’s failure to exercise reasonable care. In the instant cases, the question for this Court, then, is whether, after establishing that the insurers failed to exercise reasonable care in performing their undertaking of rendering fire safety inspections, plaintiffs can show that such failure of reasonable care was the proximate or legal cause of the injuries or deaths for which recovery is sought.
(4) that injury has in fact occurred to the employees, i.e., the Restatement’s requirement of "physical harm”. In short, the plaintiff employees or their decedents must suffer physical injury as a result of the concurrence of the first three elements. This fourth element is not disputed in the instant cases.
In addition to these four elements of the cause of action, Restatement § 324A lists three circumstances, stated in subparagraphs (a)-(c), any one of which must also be present to impose liability under that section. The question common to both Smith and Sabraw involves the circumstance embodied in subparagraph (b), i.e., the party sought to be held liable has undertaken to perform a duty owed by another to a third person. Under the facts of the instant cases, the requirement of this sub-paragraph subsumes the threshold element of duty set out in the prefatory paragraph of § 324A and explicates it. In other words, to show that, as stated in (b), the insurers herein undertook to perform the duty owed in the first instance by the employers to provide a safe workplace for their employees, e.g., one free from fire hazards, is also necessarily to show that the insurers undertook to render services to the employers which the insurers should recognize as necessary for the protection of a third person as required in the first clause of § 324A.
Our job in the present cases, as noted in Part III, infra, is to ascertain whether the verdicts for the plaintiffs were supported by the evidence. More specifically, there must exist evidence to support each of the four necessary elements of the tort set forth above.
As our colleagues note, often the most difficult problem in this regard is finding evidential support for the duty element. However, even the majority recognizes that liability for negligence to foreseeable third persons may be imposed without an express undertaking between two parties to render services. The conduct of the parties may also evidence an undertaking by the insurer to render services to another with its inspection, thus giving rise to a duty on its part to exercise reasonable care in performing the inspection.
In the overwhelming majority of cases, there is no express agreement between the parties in this regard. Therefore, the courts, in passing upon the propriety of a jury’s verdict imposing liability as well as in determining whether to submit the case to the jury, of necessity are forced to look to the actions of the parties for guidance with respect to not only the duty element, but also the other elements of § 324A and the common-law tort as well. A careful review of the long line of negligent inspection cases discussed in Part I, supra, reveals that the courts have looked to a number of different evidentiary factors to determine whether a plaintiff has adequately proved the critical legal elements of duty, breach, proximate cause and injury. It is important in this respect to recognize that each case has a unique factual pattern and therefore the totality of evidence presented rather than any particular fact is crucial in evaluating the existence of these four elements of the tort. Further, different courts stress different factors in establishing the tort. Nevertheless, certain eviden tiary factors have been of noticeable importance to the courts in deciding issues similar to those raised in the instant cases.
Without intending to make an exhaustive list of such evidentiary factors or to immutably limit the scope of inquiry under each factor, we offer the following as illustrative of the proper focus of attention:
(1) The amount of inspecting done. One of the most essential elements in proving the existence of a duty is to show that there was an undertaking to render services to another. Consequently it is important that a series of inspections must have been conducted. No court has allowed a finding of liability when an insurer who had such a right failed to inspect. Mann v Highland Ins Co, 461 F2d 541 (CA 5, 1972). Some type of inspection is required to convert the right to a duty.
In addition, if the action is predicated upon § 324A(b), i.e., the insurer has undertaken to perform a duty owed by the insured to a third person, there must be a showing of some kind of communication between the insurer and insured regarding the inspection and the findings made. It is unlikely that a cause of action would obtain under (b) if there was absolutely no release of information regarding the inspections by the insurer to the insured. See, e.g., Viducich v Greater New York Mutual Ins Co, 80 NJ Super 15; 192 A2d 596 (1963).
(2) The purpose of the inspection. This factor also encompasses consideration of the duty element, especially as reflected in the introductory, threshold language of § 324A, i.e., "[o]ne who undertakes, gratuitously or for consideration, to render services to another which he should recognize as necessary for the protection of a third person”. Our colleagues conclude that an insurer, in performing safety inspections, cannot be charged with an undertaking unless it specifically agreed or intended to benefit the insured or the insured’s employees. They further state that § 324A liability cannot be applied to an actor who follows a "self-serving course of conduct”.
Along the same lines, defendant insurers routinely raise this defense, contending that their activities are totally or even primarily self-serving, e.g., for risk-assessment purposes, and that they were never, intended to benefit the assured. However, many courts have rejected this argument for a number of reasons. The emphasis upon defendants’ intent and assumed obligation in imposing a duty is inconsistent with the conceptual underpinnings of tort law, which, for reasons of policy, often imposes a duty without regard to a defendant’s intent.
Further, the courts recognize that the fact that the primary purpose of the insurer’s acts is for its own benefit does not preclude a finding that the acts also constitute an undertaking within the meaning of § 324A with the consequent duty, running to third parties, to use due care in the performance of those acts. Certainly inspections may serve a dual purpose. The same acts which benefit the insurer and reduce its possibility of loss also benefit the insured and the insured’s employees by providing a safer workplace. Sims v American Casualty Co, 131 Ga App 461; 206 SE2d 121 (1974), aff'd per curiam sub nom Providence Washington Ins Co v Sims, 232 Ga 787; 209 SE2d 61 (1974). To allow an insurer to escape liability merely because its actions have a self-serving component is to totally disregard the benefit or tragedy that can result from the insurer’s activities. See Beury v Hicks, 227 Pa Super 476; 323 A2d 788 (1974). By such a standard, long-standing principled advances in tort law and concepts of social justice would be undermined.
Certainly the courts do consider the purpose of the inspection in evaluating the nature of defendant’s undertaking and duty. If the inspection is found to be solely for internal insurance purposes, a duty is less likely to be found. However, the purpose is measured not by the insurer’s stated intent, but by the insurer’s conduct, its relationship to the other parties involved, and also by the conduct of those parties. Some circumstances, such as advertising by the insurance company which emphasizes that increased safety will result from the purchase of insurance, are regarded as a clear indication that the purpose of the inspection is to benefit the insured. Nelson, supra. However, courts will find an undertaking even in the absence of this type of representation. American Mutual Liability Ins Co v St Paul Fire & Marine Ins Co, 48 Wis 2d 305; 179 NW2d 864 (1970).
Most often, though, the conduct of the insurer is equivocal, i.e., consistent with inspections for the purpose of internal use only as well as for the insured’s benefit. In that case, as discussed in Part III, infra, determination of whether or not the inspections were conducted in any sense for the benefit of the insured, and whether such conduct constitutes an undertaking within the meaning of § 324A so that a duty is properly imposed on the insurer must be left to the jury.
(3) The class of persons to which the injured person belongs. The person injured must be a member of the class which the inspection was intended to protect. Generally, when inspection services are performed for an employer, and the insured’s employee is the injured party, this aspect of duty causes little difficulty because in most cases the insurer should have recognized these services "as necessary for the protection of a third person or his things”.
(4) The scope of inspection. In order to satisfy the requirement of proximate causation and hold the insurer liable for its failure to inspect or detect an injury-causing defect, such a defect must be within the scope of the undertaking the insurer contracted for. For example, a fire insurer will not be held liable for the failure to inspect or detect that a machine did not have proper safety guards unless the lack of such guards in some way posed a fire hazard. To predicate liability, the scope of the inspection should be reasonably related to the precipitating cause of the injury. In other words, under traditional considerations of proximate causation, liability is limited not by what is injured, but by how the injury occurred.
In addition, it should be emphasized that the inquiry regarding the scope of the inspection includes not just whether the insurer inspected the exact cause of the injury; it includes also a consideration of whether, given the insurer’s undertaking, it should have inspected the exact cause of the injury.
(5) Control over inspections and repairs. A problematic component of the issue of causation in negligent inspection cases involves the extent to which the negligence of the insurer in conducting inspections caused the plaintiff’s harm. If the insurer has control over the inspection and any repairs that necessarily result from the inspection, the insurer will be liable if the insurer either fails to properly inspect or fails to properly make the repairs. Such a situation assumes that the insurer has totally assumed the duty of the insured in this regard. However, the insurance company need not have complete control in ordering repairs to be charged with a duty to the employees and to be found to have proximately caused injury or death. Nelson, supra; Andrews v Ins Co of North America, 60 Mich App 190; 230 NW2d 371 (1975). As is usually the case, the insurer does not have full control but merely participates in the activity by making recommendations for repairs. In these cases, if in the normal course of things the insured generally follows the recommendations of the insurer, a question for the jury arises as to whether the insurer has in fact assumed the duty of the insured and by its activities or omissions may be said to have legally caused plaintiffs injuries.
(6) Reliance. While some of the earlier cases required a showing of reliance on the part of the insured or its employees, the modern view based on § 324A is that the rule is stated in the disjunctive and that there need be no showing of reliance as to the theory of recovery under subparagraph (a) or subparagraph (b) of the Restatement. Olkowski v Aetna Casualty & Surety Co, 53 Mich App 497; 220 NW2d 97 (1974), aff'd 393 Mich 758; 223 NW2d 296 (1974).
Ill
The instant cases must be analyzed not only in terms of the substantive principles emerging from prior cases, but also taking into account the procedural posture in which they come to this Court.
In both Smith and Sabraw the jury returned a verdict in favor of plaintiffs. Nevertheless, in both cases the trial judge granted defendants’ motion for judgment notwithstanding the verdict.
There are two interlocking aspects of appellate review of a jury’s verdict. First, and particularly important with respect to the instant cases, a reviewing court must determine whether the particular issue is an appropriate one for the jury’s consideration at all, based upon the proper division of functions between the court and the jury.
The threshold question in these cases, as in many other negligence cases, is whether defendants owed any duty of care to plaintiffs. We agree that, as a general proposition, the question of duty is for the court to decide. See Moning v Alfono, 400 Mich 425; 254 NW2d 759 (1977). However, often the imposition of a duty in the first instance depends on factual circumstances establishing the conduct or relationship of the parties involved. The existence or nonexistence of such facts, as well as the resolution of disputed inferences therefrom, are clearly questions for the jury’s determination. Farwell v Keaton, 396 Mich 281; 240 NW2d 217 (1976); Elbert v Saginaw, 363 Mich 463; 109 NW2d 879 (1961).
The Court’s discussion of the issue of duty in Farwell provides a framework that is useful in analyzing the question in the instant cases. In Farwell, decedent was severely beaten in a parking lot outside a restaurant while his companion, defendant Siegrist, escaped injury. Decedent was given an ice pack to apply to his head. Subsequently, Siegrist drove decedent around, stopping at four different drive-in restaurants. During that time, decedent fell asleep in the back seat of the car. After approximately two hours, Siegrist ended up at decedent’s grandparents’ house, parked the car in the driveway, unsuccessfully attempted to wake decedent and left. Decedent was found alive in the car the next morning, but died three days later.
After discussing the functions of the court and jury with respect to the question of duty, this Court concluded:
"In a case such as the one at bar, the jury must determine, after considering all the evidence, whether the defendant attempted to aid the victim. If he did, a duty arose which required defendant to act as a reasonable person.” Farwell, 287-288.
The situation in negligent inspection cases is directly analogous to that in Farwell. In both circumstances, defendant’s conduct is examined for the presence of certain factors which, if found, give rise as a matter of law to a duty to act with reasonable care.
In Farwell, an initial element that had to be found before a duty could be imposed was an attempt to aid the victim; similarly, in negligent inspection cases under § 324A, an initial element that must be found before a duty arises is an undertaking to render services to another. And, just as in Farwell, where the existence of this basic element is a factual determination for the jury, under §324A, the question whether defendant actually undertook to render services to another is a factual one that the jury must answer after considering all the evidence and drawing reasonable inferences therefrom.
However, my colleagues decide that, under the facts of the instant cases, as a matter of law defendant fire insurers did not undertake to render inspection services for the employers. They summarily conclude that where the evidence of defendants’ undertaking is equivocal, i.e., consistent with a purpose to benefit another as well as himself, "the plaintiff must offer additional evidence to create a question for the jury whether there was an undertaking to render services and hence a duty”.
Yet, as noted above, the basic question of the existence of an undertaking is a factual one. It is one thing when there is no evidence at all of defendant’s undertaking, e.g., where defendant does not perform any inspections at all. In that situation, of course, the court may decide the issue as a matter of law. It is a completely different matter when evidence of the undertaking exists, but is equivocal, as when the character or purpose of the inspections is unclear. Then the issues of fact, and reasonable inferences including the resolution of any ambiguities, all must be submitted to and determined by the jury.
Removal of the undertaking question from the jury’s consideration in the instant cases not only contravenes theoretical concepts of the division of function between judge and jury but also conflicts with the way Michigan courts have consistently approached these functions in negligent inspection cases. For example, in Ray v Transamerica Ins Co, the Court stated:
"Normally the issue of duty owed a particular person is a question for the trial court. * * * However, where, as here, the existence of a relationship between the parties determines the duty owed, and that relationship is not clear, the issue of duty may be properly given to the jury.” 46 Mich App 647, 654.
Specifically, whether the insurance company undertook to provide safety inspection services on the insured’s premises, the frequency of the inspections and their character are all "factual issues for jury resolution”. Megge v Lumbermens Mutual Casualty Co, 45 Mich App 119, 122; 206 NW2d 245 (1973). Finally, "[t]he jury is given wide latitude in evaluating the undertaking of the insurance company”. Andrews, supra, 199.
For the foregoing reasons, the question whether defendant insurers undertook to render services to another in the instant cases should not be decided as a matter of law by this Court. Rather, it was properly submitted to the jury. In both Smith and Sabraw the jury found that defendants’ conduct did constitute an undertaking giving rise to a duty to use reasonable care.
The second aspect of appellate review of a jury’s verdict is that a court will refuse to disturb such a finding of fact or the verdict as a whole unless reasonable minds could not differ regarding the finding or verdict. Megge, supra. Further, all evidence presented, findings of fact and legitimate inferences drawn therefrom are to be construed in favor of the non-moving party, the plaintiffs in the instant cases. McKinney v Anderson, 373 Mich 414; 129 NW2d 851 (1964). Analysis of the facts as presented in Part IV, infra, clearly indicates that the jury’s verdicts in both Smith and Sabraw easily pass this test.
IV
Using this substantive and procedural background as a framework for analysis, we turn our focus to the application of § 324A(b) to the present cases and the issues raised in these cases to ascertain whether a sustainable action for negligent inspection has been raised by the facts of the cases.
Smith
We begin by noting that plaintiffs’ cause of action was based solely on § 324A(b) of the Restatement of Torts, i.e., "he has undertaken to perform a duty owed by the other to the third person”. Since the question of reliance was not raised nor need be raised if plaintiffs have successfully pleaded a cause of action under § 324A(b), Olkowski, supra, we do not address the question of reliance.
In considering all the relevant evidence, we feel the jury was justified in finding that Allendale, through its agent Factory Mutual, undertook to perform the duty of Great Lakes Steel to provide a safe workplace for its employees. The evidence presented also justified submission of the duty question to the jury. There was uncontroverted testimony that Factory Mutual had conducted inspections of the Great Lakes Steel facility for over 40 years. Further, Factory Mutual held itself out to be one of the most pre-eminent companies in the world in terms of fire inspection and protection. While it did not make any repairs at the Great Lakes facility, after conducting an inspection it would hold an "exit interview” with the fire chief, plant manager and chief engineer and make its recommendations and ask for action. Although defendant Factory Mutual argued that such inspections as a whole were purely for risk-assessment purposes, there was evidence on the record as a whole which rebutted that contention. Defendant Factory Mutual was clearly aware that Great Lakes relied on the inspections made by defendant. In addition, evidence reflected that the recommendations made not only provided a benefit to the insured, but also provided a benefit to the employees of the insured as well. A proper inspec tion of property for fire hazards will most likely have the concomitant benefit of providing a safer work environment for employees. Based on all this evidence, we conclude that plaintiffs properly established the duty element of the tort.
There was also sufficient evidence to uphold the jury’s verdict that the insurer failed to exercise reasonable care in its inspections and that such failure proximately caused plaintiffs injuries. While defendant Factory Mutual argued that the "scope” of its inspections did not extend to the ungrounded electrical system, evidence was adduced to support the question for the jury that the inspection "should have” extended to the electrical system. Factory Mutual’s engineer-inspectors were specifically trained to find fire hazards. Additionally, they were trained to inspect for violations of the National Electrical Code. Plaintiffs’ expert testified that the non-limited electrical system posed a major fire hazard for the whole Great Lakes facility and such non-limited system was in direct violation of the National Electrical Code. Further, even witnesses for Factory Mutual acknowledged that one in five industrial fires results because of some fire in the electrical system. Yet, these same witnesses acknowledged that the vast electrical system was never at any time inspected.
Combined with this evidence of defendant’s negligence in inspecting is the fact that even though Great Lakes Steel had its own "safety” department, it consistently complied with and made changes based upon the recommendations made by Factory Mutual. Thus there was no reason to believe that if Factory Mutual had exercised reasonable care by inspecting the underground electrical system and discovering its hazardous, non-limited nature, Great Lakes Steel would not have complied with any suggested safety recommendations. Great Lakes Steel recognized Factory Mutual to be an expert in terms of fire protection and for this reason complied when Factory Mutual dictated that some action be taken. Under the standards established for consideration of proximate causation, a proper question submissible to the jury was raised as to whether an inspection conducted with reasonable care would have protected the plaintiff.
Defendants did not challenge the existence of the element of injury to plaintiff.
Sabraw
We note at the outset that plaintiffs pleaded their cause of action under subparagraphs (a), (b), and (c) of § 324A of the Restatement. Because of our conclusions regarding subparagraph (b), we need not decide whether plaintiffs have successfully pleaded a cause of action under subparagraphs (a) and (c).
As in Smith, we find that the evidence, taken as a whole, supports the jury’s determination that the duty requirement of § 324A was satisfied. Defendant Michigan Millers’ involvement in the activities of its insured began prior to the existence of an insurance contract on the premises. Michi gan Millers’ inspector, Mr. Vaughan, was intimately involved in the very construction of the Zilwaukee mill. Vaughan made recommendations regarding the installation of electrical equipment and insisted that the insured comply with certain safety standards dealing with fire and explosion protection. After the buildings were completed, Vaughan continued to make inspections of the facilities. While he did not make actual repairs to the facilities, Vaughan would make recommendations for changes that he felt essential for the protection of the property and for the safety of the employees as well. Sometimes his recommendations were made verbally to plant management or employees and in other cases his recommendations were included in his written reports, copies of which were always supplied to the insured. Further, Vaughan would supply safety literature and directly counsel employees regarding safety concerns. Finally, the insured most often complied with the recommendations of Michigan Millers.
Again as in the Smith case, defendant attempted to avoid the imposition of a duty by arguing that the purpose of its inspections was merely for risk assessment. Such argument, however, was controverted by the statements and actions of defendant’s agent Vaughan. A question for the jury was presented. Vaughan testified that his inspections were not merely for rate-making purposes. He stated that his inspections accomplished a dual purpose: to prevent fire and explosion and to safeguard employees by preventing fire and explosion. As has been noted, on several occasions Vaughan characterized the purpose of his inspections as being to minimize danger of loss or injury and his recommendations were made to promote fire safety and employees’ health. Furthermore, as above noted, Vaughan reported to Farm Bureau and even counseled Farm Bureau employees regarding fire safety. Given the totality of this evidence, the jury could have found an undertaking under §324A in spite of a clause on Vaughan’s post-inspection fire prevention forms which attempted to limit Michigan Millers’ liability for negligent inspection.
As to whether the defendant was negligent in failing to warn Farm Bureau of the fire danger that the operation of the gasoline-powered Bobcat within the mill presented, defendant argued that the scope of its inspection did not even extend to the Bobcat vehicle. Vaughan himself testified that although he knew a Bobcat was used on the premises he never saw the Bobcat being operated in the mill itself. He did acknowledge, however, that there was a considerable risk to having a gasoline-engine vehicle being operated within a mill. Employees, on the other hand, testified that the Bobcat was regularly used in the mill and that if Vaughan was not directly aware of such use, from all the circumstances he should have been aware of such use. The courts below correctly determined that the question whether defendant knew or should have known of the use of the dangerous instrument known as the Bobcat was one for the jury to decide.
The question of cause in fact and proximate cause is a close one in this case. While there was testimony that Farm Bureau most often complied with the recommendations made by Michigan Millers, there was also testimony that on at least one occasion involving a very important matter, Farm Bureau failed to comply with the recommendations of Michigan Millers. Vaughan testified that from the very beginning of the construction of the project he had recommended that some kind of dust-control system be installed. No dust-control system was installed. The lack of dust control, defendants contend, could have contributed to the explosion caused by the Bobcat. Although there is support for defendants’ argument, on balance there is sufficient evidence from which a jury could conclude that there was a substantial likelihood that Farm Bureau would have ceased the use of the Bobcat within the mill had the risk of such use ever been reported to Farm Bureau. More significantly, evidence exists from which the jury also could have concluded that defendant’s negligence in failing to discover and warn of the dangers of using the Bobcat was a sufficient factor in causing plaintiffs’ harm.
Once more, as in Smith, there is no question of plaintiffs’ injuries.
From the above, there can be no question that there was evidence to support the jury’s findings in both Smith and Sabraw that defendants, under the common law and 2 Restatement of Torts, 2d, § 324A, had gratuitously undertaken a duty to protect the employees of the insured from fire hazards and had breached that duty proximately causing injury and death to plaintiffs. We so hold.
V
Having resolved the first issue in favor of plaintiffs, we determine that the second issue is basically a non-issue. Some courts have held that a party can limit its exposure to tort liability by express contractual limitations. See, e.g., Jeffries v United States, 477 F2d 52 (CA 9, 1973); Roberson v United States, 382 F2d 714 (CA 9, 1967). We need not address whether an attempt by a fire insurer to expressly limit its liability by contract is bind ing. In the absence of such express limitations by contract, as in the present cases, an insurer which has gratuitously undertaken to perform fire inspections and has performed them in a negligent fashion cannot claim that the scope of its inspections was limited to property only because the orbit of risk from fire hazards encompasses not only all foreseeable property but also all foreseeable persons.
VI
We agree that decisions such as those in the instant cases should not be made in the absence of public-policy considerations. Defendant insurers paint a gloomy picture of the consequences of imposing liability in such circumstances. An adverse decision, they argue, will either completely discourage insurers from performing inspections or require them to be so careful that the cost of insurance will become prohibitively high.
With respect to the first contention, that insurers will stop performing safety inspections, it is speculative at best. As noted earlier, insurance companies in a competitive market are motivated to conduct inspections for their economic self-interest, i.e., to assess risks and reduce liability, thereby enhancing profits. There is substantial impetus to continue inspections for these purposes even in the face of potential tort liability. Further, a number of courts have concluded that no inspection at all is preferable to a negligent one. See, e.g., Fabricius v Montgomery Elevator Co, 254 Iowa 1319; 121 NW2d 361 (1963). Besides, if insurers’ representations as to the limited nature of their inspections are to be taken at face value, their contribution to the overall safety of the workplace is certainly open to question.
Insurers’ alternative prediction, that with the imposition of liability for negligent inspections the cost of insurance will increase dramatically, must be evaluated in the context of the fact that human lives are at stake. We are unwilling to adopt the position that requiring measures to save lives and avoid tragic injuries is not worth some potential increase in cost. Moreover, even a threatened overall rise in insurance costs is dubious. Over a period of time, as inspections become more careful, fewer accidents will occur, insurance companies’ liabilities will decrease, and the cost of insurance will go down. Finally, the policy of tort law favors redressing people for their injuries rather than allowing tortfeasors to avoid the consequences of their wrongs.
Defendants also point to the Legislature’s action in protecting workers’ compensation carriers from tort liability for their performance or failure to perform safety inspections as representing implicit approval of the insurers’ public-policy views. They argue that this Court should, therefore, find these same considerations of policy persuasive with respect to the property insurers in the instant case.
The succinct response to this contention is that the Legislature itself did not extend tort immunity to property insurers. Had the Legislature found that public policy dictated that property insurers receive protection from tort suits, it simply could have granted immunity to them as it did to workers’ compensation carriers. Staffney v Fireman’s Fund Ins Co, 91 Mich App 745; 284 NW2d 277 (1979). We decline to do what the Legislature would not do.
Conclusion
We conclude, therefore, that there was evidence to support the juries’ findings that defendants had gratuitously undertaken a duty to protect the employees of the insured from fire hazards, within the meaning of 2 Restatement of Torts, 2d, § 324A, and had breached that duty, causing injury to plaintiffs. Accordingly, we would reverse the Court of Appeals in Smith and remand to the trial court for reinstatement of the jury’s verdict. We would affirm the Court of Appeals in Sabraw.
Costs to plaintiffs.
Williams, J., concurred with Blair Moody, Jr., J.
In Sabraw and two related cases the plaintiffs are the administrators of the estates of fatally injured employees. In Smith and in Hansen, another case arising from the same occurrence as Sabraw, the wives of injured employees also sought damages for their losses.
Smith v Allendale Mutual Ins Co, 79 Mich App 351; 261 NW2d 561 (1977).
Sabraw v Michigan Millers Mutual Ins Co, 87 Mich App 568; 274 NW2d 838 (1978).
Although the published text of § 324A uses the word "protect” instead of "perform”, this is apparently a typographical error. See Hill v United States Fidelity & Guaranty Co, 428 F2d 112, 115, fn 2 (CA 5, 1970).
Smith thus relied exclusively on clause (b) of the Restatement Torts, 2d, § 324A.
Smith contended that the danger of arcing and resulting fire accompanied the ungrounded system wherever it reached and that the system served areas of the plant where inflammable substances were present. In the immediate area where Smith worked, cranes transferred coils of steel from one railroad car to another. Factory Mutual’s district manager testified that this was a “very low risk” area. Smith maintained, however, that the ungrounded system could as easily have produced arcing in a high risk area, and his expert on electrical systems testified that whenever current flows out of or returns to the system through grounds, arcing may occur if there is a poor connection at the point of the ground.
Although the judge’s oral opinion is obscured by an apparent error in transcription, he seems to have concluded that Allendale and Factory Mutual had not voluntarily undertaken to perform Great Lakes’ duty to provide a safe workplace for its employees "and therefore as a matter of law had no duty to the plaintiff”.
Smith v Allendale Mutual Ins Co, supra, pp 356, 357.
Vaughan testified that fibrous dust in suspension was considered highly explosive in concentrations of from 10 to 15 percent.
There had been continual "housekeeping” problems at the mill since shortly after it opened, and Vaughan had discussed these with the mill manager on many occasions. On February 19, the manager told Vaughan that lack of manpower "and an austerity budget insofar as plant improvement expenditures” — especially a long-contemplated dust control system — hampered housekeeping operations. The vice president was annoyed that Vaughan approached him and told Vaughan to proceed through normal channels.
We proceed on the assumption that, if the insurer had a duty to detect and warn against fire hazards, it was a jury question whether Vaughan was negligent in failing to warn against inside use of the Bobcat.
The complaints also named Fireman’s Fund Insurance Company, the workers’ compensation carrier for the mill, as a defendant, but plaintiffs introduced no evidence against Fireman’s Fund and a directed verdict in its favor was entered at the close of plaintiffs’ proofs.
Plaintiffs thus relied on clauses (a)-(c) of Restatement Torts, 2d, § 324A.
The judge found that "the sole proximate cause of the accident * ** * was the negligence of Farm Bureau” and that "there was no evidence of an undertaking by Michigan Millers to provide a safe place to work for the employees of Farm Bureau * * Further, assuming an undertaking within the meaning of § 324A, the judge found no evidence that Michigan Millers increased the risk of harm to plaintiffs, undertook Farm Bureau’s obligation to provide a safe place to work for plaintiffs, or induced reliance upon its efforts by employer or employee. He added that plaintiffs "had failed to present an issue of fact for the jury on the question of liability” and that the verdict on this issue "was clearly against the weight of the evidence, and the applicable law”.
Sabraw v Michigan Millers Mutual Ins Co, supra, pp 575-576.
406 Mich 968, 969 (1979).
2 Restatement Torts, 2d, § 323, declares the actor’s liability for negligent performance of an undertaking to render services to the person to whom the services were rendered. Section 324A is a parallel provision concerning liability to third persons.
See fn 4, supra.
Ray v Transamerica Ins Co, 46 Mich App 647; 208 NW2d 610 (1973) ; Watson v Employers Ins Co of Wausau, 50 Mich App 597; 213 NW2d 765 (1973); Olkowski v Aetna Casualty & Surety Co, 53 Mich App 497; 220 NW2d 97 (1974), aff'd 393 Mich 758; 223 NW2d 296 (1974) .
Prosser, Torts (4th ed), § 37, p 206.
See Elbert v Saginaw, 363 Mich 463, 476; 109 NW2d 879 (1961).
Smith asserts that "[w]hen the scope of the undertaking and the nature of the ensuing relationship determine the duty owed, the issue of duty properly becomes a question for the jury”. We are referred to Bonin v Gralewicz, 378 Mich 521; 146 NW2d 647 (1966), and Ray v Transamerica Ins Co, 46 Mich App 647; 208 NW2d 610 (1973).
In Bonin v Gralewicz, this Court reversed a directed verdict entered in favor of a defendant who backed his car out of his garage and struck his two-year-old granddaughter, whom he had left inside his house about two minutes before. Reading the circuit judge’s opinion as holding that defendant owed no duty of due care to the child because her presence in the zone of danger was unforeseeable, the Court held that the jury should have been allowed to decide the fact issue of foreseeability of harm.
Since the grandfather unquestionably owed a duty to his granddaughter — as he did to all other persons who might be struck by his automobile — to drive carefully, Bonin, although it reached the right result, made the common mistake of combining the questions of duty and standard of care. See Moning v Alfono, 400 Mich 425, 437-438; 254 NW2d 759 (1977). The jury question was not whether it was "foreseeable” that a person behind, as well as one in front of, the automobile might be injured by the grandfather’s negligent driving (the duty question), but whether, assuming, as a matter of law, a duty to exercise due care for the benefit of such a person, the grandfather failed to exercise due care in not foreseeing that the child might have left the house and approached the rear of the automobile (the specific standard of care question).
Ray, p 654, acknowledged the general rule that "the issue of duty owed a particular person is a question for the trial court” but stated —citing Bonin, Prosser, Torts (3d ed), § 52, pp 329-330, and Harper & James, Law of Torts, § 18.8, pp 1058-1061 — that where, the "relationship [between the parties] is not clear, the issue of duty may be properly given to the jury”.
See 2 Restatement Torts, 2d, Appendix (1965), § 324A, pp 52-54.
Although in analyzing what constitutes an "undertaking” under § 324A, we use terms with contract law overtones, such as "agreed” or "intended to benefit another”, it should be emphasized that we are determining when an "undertaking” will give rise to tort liability, not contractual liability. We deal with the question of when a party’s conduct furnishes a proper basis for the law to impose tort liability, not with the question of when a party’s conduct can properly be considered as creating a contract implied in fact.
In an action to recover damages for breach of a contract a court is concerned primarily with determining the expectations of the parties and whether those expectations were reasonable. ,In imposing tort liability, however, a court is only concerned with whether it is appropriate public policy to impose liability for particular conduct; it does not usually consider whether the parties involved believed liability to exist. Thus, the question of what conduct is sufficient to subject a party to tort liability for a negligent undertaking is not solely a matter of what a reasonable person with whom the party deals would understand, but rather one of law in deciding whether liability should be imposed. This is especially so where the one bringing the tort action is not the one who allegedly might reasonably infer the undertaking from the party’s conduct.
Although considerations appropriate in a contractual context may also be relevant in the tort context, differences in the relevant public policies, extent of liability, the nature of the relationships and the expectations of the persons involved, suggest that the question of what conduct amounts to an undertaking for the negligent performance of which the law will impose tort liability should not be confined by principles of contract law.
See Creameries of America v Industrial Comm, 98 Utah 571, 580; 102 P2d 300, 304 (1940):
"In ordinary usage the term 'services’ has a rather broad and general meaning. It includes generally any act performed for the beneSt of another under some arrangement or agreement whereby such act was to have been performed. The general definition of 'service’ as given in Webster’s New International Dictionary is 'performance of labor for the benefit of another’; 'Act or instance of helping, or benefiting’.” (Emphasis supplied.)
See, also, Moya v Warren, 88 NM 565, 567; 544 P2d 280, 282 (1975).
An insurer who performs inspections primarily for its own benefit may be subject to liability under ordinary tort principles if its affirmative conduct results in harm to others, as where its inspector makes a suggestion whose implementation creates a new or enlarges a pre-existing risk of harm.
Cf., Grimes v Employers Mutual Liability Ins Co, 73 FRD 607, 611 (D Alas, 1977), and Nelson v Union Wire Rope Corp, 31 Ill 2d 69, 79-83; 199 NE2d 769 (1964).
Other courts have invoked the same rationale in denying liability in cases where the inspection was performed by the liability insurance carrier of a general contractor, Gerace v Liberty Mutual Ins Co, 264 F Supp 95, 97 (D DC, 1966), a workers’ compensation carrier, Kennard v Liberty Mutual Ins Co, 277 So 2d 170, 174 (La App, 1973) (contract expressly disclaimed undertaking for benefit of insured or others), and an insurer of the plaintiffs employer against the cost of equipment repair, Hartford Steam Boiler Inspection & Ins Co v Cooper, 341 So 2d 665, 667 (Miss, 1977).
See, also, American Mutual Liability Ins Co v St Paul Fire & Marine Ins Co, 48 Wis 2d 305, 319-321; 179 NW2d 864, 871-872 (1970) (Hallows, C.J., dissenting).
In Smith the Court of Appeals stated: "Any duty assumed by the defendants did not extend to the plaintiffs because employees were not included within the orbit of risk created by the duty assumed.” Our order granting leave to appeal in Sabraw requested the parties to brief the question "whether a fire insurer may include within the scope of its fire hazard inspections only 'property’ and not 'persons’ ”.
Since our disposition rests upon the determination that defendants entered upon no undertaking giving rise to a duty to plaintiffs, it is unnecessary for us to decide that question and we intimate no opinion thereon.
Vaughan’s inspections served in part to evaluate the risk. He took the conditions he found into account in formulating rating suggestions that were subject to examination and approval by the home office.
For a slightly different policy provision to the same effect, see Brooks v New Jersey Manufacturers Ins Co, 170 NJ Super 20, 25; 405 A2d 466, 468 (1979); " '[N]either the right to make inspections nor the making thereof * * * shall constitute an undertaking on behalf of or for the benefit of the insured or others, to determine or warrant that such work places, operations, machinery or equipment are safe.’ ”
That is not to say that an insurer who expressly undertakes to provide comprehensive inspection services for the benefit of the policyholder can avoid the responsibility so assumed by a subsequent disclaimer where the inspection is actually made and report thereon delivered.
Even if plaintiffs had presented evidence of an undertaking by the defendants to render inspection services to the plaintiffs’ employers, it is doubtful whether they brought themselves within § 324A. Liability does not arise thereunder merely from the negligent performance of an undertaking; at least one of the three additional circumstances listed in subparagraphs (a)-(c) must also be shown.
Subparagraph (a) applies when the actor’s "failure to exercise reasonable care increases the risk of [physical] harm”. In the instant cases, any want of reasonable care in performing the insurance inspections did not increase the risk of harm. At most, the insurers’ failure to make corrective recommendations left the risks presented by the electrical system and the Bobcat as they initially were.
Subparagraph (c) applies when "the harm is suffered because of reliance of the other or the third person upon the undertaking”. Comment e to § 324A reiterates that the reliance must be a cause in fact of the injury: "Where the reliance of the other, or of the third person, has induced him to forgo other remedies or precautions against such a risk, the harm results from the negligence as fully as if the actor had created the risk.” 2 Restatement Torts, 2d, p 144.
In Smith, although there was evidence that the inspector’s recommendations were routinely communicated to Great Lakes and that Great Lakes sometimes acted upon them, there was no evidence that Great Lakes had forgone its own inspections or other precautions in reliance on Factory Mutual’s inspections — particularly with respect to the plant electrical system, which Factory Mutual did not inspect. Moreover, the modifications in the electrical system that Smith asserts Factory Mutual’s inspectors should have recommended would have been extensive — so extensive that it is not likely that Great Lakes management would have implemented them even if it did rely on Factory Mutual to detect hazards in the system.
In Sabraw, the accountant who headed Farm Bureau’s safety committee testified that the committee relied "to a degree” on its insurers for safety information. The safety committee, however, had little or no decision-making power. The insurer’s recommendations were communicated directly to Farm Bureau management and there is no evidence that the management relied on the inspections to relieve the company of the burden of inspecting for fire hazards. Indeed, the Farm Bureau vice president who oversaw the feed mill testified that it was Farm Bureau’s responsibility to provide safety in the mill and that, while Farm Bureau "appreciated the recommendations and the assistance provided by the insurance companies, * * * the ultimate responsibility for the operation of the plant in a safe manner is that of Farm Bureau Services”. He further testified that the insurer’s inspections "augmented those inspections that we were making”.
Subparagraph (b) applies where the actor who has undertaken to render services to another "has undertaken to perform a duty owed by the other to the [injured] third person”. Plaintiffs argue that the insurers undertook to perform the duty owed them by their employers to provide and maintain a reasonably safe workplace.
Assuming arguendo that the insurers had undertaken to render services to plaintiffs’ employers, it is by no means clear that liability can be founded upon subparagraph (b) where the duty alleged to have been assumed, the duty to provide a safe workplace, could not have been enforced in tort against the person whose duty it is claimed was assumed. With one possible exception, discussed infra, the illustrations given in comment d and the cases whose holdings are purportedly restated in subparagraph (b) involve the assumption of a duty enforceable in tort against the original holder of that duty. Here, the employer’s common-law duty to provide its employees with a safe place to work has been rendered unenforceable in tort by a workers’ compensation statute, which limits the employer’s liability to its employees to statutory benefits regardless of the care or indifference shown for employee safety.
The exception referred to is Mire v Lafourche Parish School Board, 62 So 2d 541 (La App, 1952), where an injured student brought an action against a school bus driver, the school board that employed him, and the negligent driver of a car which passed the stopped school bus and struck the plaintiff as she crossed the road. The court held that the school board was not liable because, under Louisiana law, "a school district, being merely an agency of the state, is not liable for torts committed by its trustees or employees in the absence of statute imposing such liability”. The court, however, concluded that the driver could be held liable both because he "did not perform the duties ordinarily found to be incumbent on public carriers” and because his written contract required him to get out of the bus and superintend the safety of children being unloaded on a main highway.
Whether Mire is properly cited as exemplifying subparagraph (b) is questionable. It appears that the court regarded the bus driver as a common carrier, not that the court found that the driver had undertaken to perform a duty owed by the school board as a common carrier. If the case is viewed as one in which the bus driver undertook by his contract to perform a duty owed to his passengers by the school board, the independent basis for such a duty on the part of the school board does not appear from the opinion.
In three other cases cited in the Reporter’s Notes, the duty undertaken and not performed was apparently an employer’s duty to provide a safe workplace. These cases, however, may be distinguished from the instant cases on other grounds. Two are pre-workers’ com pensation tort actions against supervisory employees, while in the third case the defendants were a coal company which had elected not to operate under workers’ compensation and two of its foremen. In yet another case cited by the Reporter, State for use of Lay v Clymer, 27 Tenn App 518; 182 SW2d 425 (1943), plaintiffs alleged that a district mine inspector and a chief mine inspector employed by the state had failed to carry out their duties to inspect the coal mine where plaintiffs were injured in an explosion. It appears from the opinion, however, that the action rested solely on a claim that the mine inspectors had breached their statutorily prescribed duties, not that they had undertaken to perform the employer’s common-law duty to keep the mine reasonably safe. Again, it is questionable whether Clymer is properly cited as an instance where the defendant assumed a duty owed by another to the plaintiff.
Subparagraph (b) therefore does not restate law applicable to the circumstances of this case. Whether the principle embodied therein should be extended to impose tort liability on an actor who has assumed a duty that could not have been enforced in tort against the one who originally owed it is open to question. Declaring that breach of a duty not ordinarily enforceable in tort may subject a party who has undertaken to perform that duty on behalf of another to tort liability appears to attach undue significance to an ephemeral distinction between duty and remedy. Yet one may posit cases where it is not altogether clear that an immunity from tort liability enjoyed by the original holder of a duty should be transferred to one who undertakes to perform that duty. We intimate no opinion on this difficult question of public policy.
Van Winkle v American Steam Boiler [Insurance] Co, 52 NJL 240; 19 A 472 (1890).
Id., pp 241-242.
"There is a public duty, to exercise great care and skill incumbent on those having charge of instruments which, if mismanaged, are highly dangerous to the lives and persons of men who happen to be in their neighborhood; and for the non-performance of such duty a person specially injured thereby is entitled to sue.” Id., p 240 (syllabus by the court; emphasis supplied).
"What this defendant did was this: It co-operated with the owner of this dangerous instrument in its management, in a particular indispensable to its safe use, and it thereby, in that degree, constituted itself the agent, or the substitute, of such owner. It performed a series of acts that could not be performed by the owner without the responsibility just mentioned; and as such responsibility belonged not to the ownership of the machine, but to the function of operating it, it does not seem that any one could perform such function without incurring the responsibility. Very plainly the defendant stood within the spirit of the rule that laid upon the proprietor of the boiler the duty of exercising care and skill in its use.” Id., pp 245-246 (emphasis supplied).
Hartford Steam Boiler Inspection & Ins Co v Pabst Brewing Co, 201 F 617 (CA 7, 1912).
Id., p 629.
Id.
See fn 17, supra.
Sheridan v Aetna Casualty & Surety Co, 3 Wash 2d 423; 100 P2d 1024 (1940); Bollin v Elevator Construction & Repair Co, 361 Pa 7; 63 A2d 19 (1949).
Smith v American Employers’ Ins Co, 102 NH 530; 163 A2d 564 (1960).
Id.. 533-534.
Mays v Liberty Mutual Ins Co, 323 F2d 174 (CA 3, 1963) (Pennsylvania law); Fabricius v Montgomery Elevator Co, 254 Iowa 1319; 121 NW2d 361 (1963); Nelson v Union Wire Rope Corp, 31 Ill 2d 69; 199 NE2d 769 (1964) (Florida law); Ray v Transamerica Ins Co, 10 Mich App 55; 158 NW2d 786 (1968); Bryant v Old Republic Ins Co, 431 F2d 1385 (CA 6, 1970) (Kentucky law); Beasley v MacDonald Engineering Co, 287 Ala 189; 249 So 2d 844 (1971).
For a listing of these cases, see 2A Larson, Workmen’s Compensation Law, § 72.90, fn 29, and Comment, Insurer’s Liability for Negligent Performance of Voluntary Safety Inspections, 3 Cumberland-Samford L Rev 118, 124-128 (1972).
See NH Rev Stat Ann §281:2(II); Iowa Code 88A.14 (since repealed); Pa Stat Ann, title 77, § 501; Fla Stat Ann § 440.11(2); and Ala Code § 25-5-11. Regarding the legislative response in Michigan, see fn 58 infra, and accompanying text.
Nelson v Union Wire Rope Corp, fn 44 supra.
Id., pp 79, 83.
"[Defendant constantly represented that those who insured with it would receive countless extra safety and monetary benefits through the services of defendant’s 'safety experts’ or 'safety engineers.’ An advertising symbol referred to as 'Mr. Friendly’ was adopted, and by a series of advertisements placed in both national and trade publications, such representations as the following were made: (1) 'In case after case, month after month, American Mutual’s safety engineering service has helped contractors all over the country reduce accidents and costs;’ (2) that insureds 'have worked hand in hand with American Mutual Safety Engineers to build safety into every job;’ (3) after explaining that one insured had saved money, the method was stated to be: 'Close cooperation between Hittig Management and American Mutual Safety Engineers in designing and operating an effective safety program;’ (4) 'Thanks to thorough investigation and hazard analysis * * * and immediate investigations when accidents have occurred, this nationally known firm has been able to maintain a good accident record and to lower operating costs.’ These are but samplings of many representations that could be stated, but, in general, the tenor of each of the 29 advertisements admitted in evidence was that the safety engineers took an active part in the safety programs of the insureds and saved lives, limbs and money. A former executive of defendant, testifying directly to the function of the safety engineers, stated that it was to help the insureds to reduce accidents and to determine what were or were not unsafe practices. From all of the evidence it appears that defendant’s safety engineers, and the various financial and safety benefits claimed to inure to insureds as a result of their safety engineering services, were its chief stock in trade. Just as certainly, it appears beyond a shadow of a doubt that the services gratuitously given by the engineers were not solely for defendant’s own purposes.” Id., pp 79-80.
Johnson v Aetna Casualty & Surety Co, 348 F Supp 627 (MD Fla, 1972), reversing 339 F Supp 1178 (MD Fla, 1972).
Id., 339 F Supp, p 1179.
Sims v American Casualty Co, 131 Ga App 461; 206 SE2d 121 (1974), aff’d per curiam sub nom Providence Washington Ins Co v Sims, 232 Ga 787; 209 SE2d 61 (1974).
131 Ga App, p 473.
Id., p 467.
Hill v U S Fidelity & Guaranty Co, supra.
Id., p 120.
Ray v Transamerica Ins Co, 10 Mich App 55; 158 NW2d 786 (1968).
1972 PA 285, amending MCL 418.131; MSA 17.237(131) and MCL 418.827; MSA 17.237(827).
Funk v General Motors Corp, 392 Mich 91, 112; 220 NW2d 641 (1974).
The pertinent provisions of the engineering service agreement between Allendale and Factory Mutual, providing for the performance of comprehensive fire services by Factory Mutual on behalf of Allendale are as follows:
"2.1(c). Fire and Other Inspection and Engineering Services. The term 'fire and other inspection and engineering services’ shall mean any and all engineering and inspection services relating to property insurance and reinsurance performed by the Association involving insureds or prospective insureds, including, but not limited to (1) complete loss prevention engineering in order to preserve property and to prevent losses thereto; (2) the inspection, evaluation and testing of insured or prospective insured property; (3) the appraisal of insured property; (4) the establishment of standards for, and the evaluation and testing of protective devices, whether or not related to policies of insurance and reinsurance.
"3. Performance of Services by the Corporation. The Factory Mutual Engineering Corporation (The 'Corporation’) shall perform or cause to be performed for * * * the Association any and all services being performed as of the date hereof and hereafter by the Corporation as may relate to property or boiler and machinery insurance, including but not limited to (1) research on causes and prevention of loss to property; (2) establishment of standards for loss prevention and protective devices; (3) compilation and analysis of accounting and statistical data; and (4) rendition of appropriate written reports regarding such services.”
For a general discussion of the Van Winkle decision and the decisions which followed Van Winkle, see Comment, An Insurer’s Liability to Third Parties for Negligent Inspection, 66 Kentucky LJ 910 (1978); Comment, Insurer’s Liability for Negligent Performance of Voluntary Safety Inspections, 3 Cumberland-Samford L Rev 118 (1972).
See, e.g., Nelson v Union Wire Rope Corp, 31 Ill 2d 69; 199 NE2d 769 (1964); Olkowski v Aetna Casualty & Surety Co, 53 Mich App 497; 220 NW2d 97 (1974), aff'd 393 Mich 758; 223 NW2d 296 (1974).
The majority of courts in actions brought against workers’ compensation carriers for negligent inspection have reached a result similar to that of the Nelson court. See Mays v Liberty Mutual Ins Co, 323 F2d 174 (CA 3, 1963); Corson v Liberty Mutual Ins Co, 110 NH 210; 265 A2d 315 (1970); Fabricius v Montgomery Elevator Co, 254 Iowa 1319; 121 NW2d 361 (1963); Smith v American Employers’ Ins Co, 102 NH 530; 163 A2d 564 (1960). See also Sims v American Casualty Co, 131 Ga App 461; 206 SE2d 121 (1974), aff’d per curiam sub nom Providence Washington Ins Co v Sims, 232 Ga 787; 209 SE2d 61 (1974); Ray v Transamerica Ins Co, 10 Mich App 55; 158 NW2d 786 (1968), lv den 381 Mich 766 (1968).
A case reaching a contrary result is Viducich v Greater New York Mutual Ins Co, 80 NJ Super 15; 192 A2d 596 (1963). Viducich is distinguishable, however, on its facts. In that case, defendant insurer had conducted only one inspection of the machinery which caused injury to plaintiff. In all the other cited cases the insurer had conducted a series of inspections of its insured’s property.
Other courts have reached a result similar to Viducich based not on the facts of the case but upon interpretation of the language of the workers’ compensation statute. See 2A Larson, Workmen’s Compensation Law, § 72.90.
In some states, including Michigan, the Legislature has in effect overruled court decisions and abrogated the common-law tort remedy against the workers’ compensation carrier by amendments extending the immunity of the employer to these insurers. See 1972 PA 285, amending MCL 418.131; MSA 17.237(131) and MCL 418.827; MSA 17.237(827). See also, Ala Code § 25-5-11; Fla Stat Ann § 440.11(2); NH Rev Stat Ann § 281:2(II); Pa Stat Ann, title 77, § 501. The ratio decidendi of the court decisions, however, remains relevant with respect to the actions of other types of insurance companies. See Sims v American Casualty Co, 131 Ga App 461; 206 SE2d 121 (1974), aff'd per curiam sub nom Providence Washington Ins Co v Sims, 232 Ga 787; 209 SE2d 61 (1974). The legislative actions affected only the question whether a specific type of defendant could be held liable at all; it did not undercut the analysis and development of the common-law principles embodied in § 324A.
As noted, the Legislature subsequently extended the tort immunity enjoyed by employers to workers’ compensation carriers.
It has been specifically held that, in the absence of legislative action, such immunity does not extend to property insurers. Staffney v Fireman’s Fund Ins Co, 91 Mich App 745; 284 NW2d 277 (1979).
See p 748, ante.
Opinion of Justice Levin, p 717.
Opinion of Justice Levin, p 718.
The analysis of duty and the division of function between judge and jury under § 324A as presented in these cases is not affected by the subsequent legislative grant of tort immunity to workers’ compensation insurers.
Additional support for the jury’s verdict for plaintiffs is provided by application of Restatement § 324A(c) to the facts of this case. Plaintiffs have made out a strong case that both the management and employees relied on the inspections made by Vaughan for their safety. Mr. Euler, the assistant manager of the mill, stated that he thought that the inspections were provided to promote a safe working environment for Farm Bureau employees and he relied on them to accomplish this purpose. There was evidence that the inspections upon which plaintiff relied, because of the negligent manner in which they were conducted, led directly to the harm plaintiffs suffered. Further, while there was evidence that Farm Bureau did have a safety committee of sorts, the operation was a mere token operation. Evidence was presented from which the jury could conclude that Farm Bureau depended for the most part upon the actions of Vaughan and Michigan Millers in inspecting its premises. | [
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Leave to appeal considered and, pursuant to GCR 1963, 853.2(4), in lieu of leave to appeal, we modify the discipline imposed by the Attorney Discipline Board by reducing it to a reprimand because the finding that respondent-appellant failed to ensure that the views of the sentencing judge were made known to the Parole Board is not record supported, the other findings do not justify a conclusion that respondent-appellant violated DR 6-101(A)(3) and DR 7-101(A)(1), and the conduct of respondent-appellant does not warrant a suspension. | [
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Per Curiam
(to reverse and remand). There are two issues in this case. The first is whether the trial court, relying solely on the preliminary examination transcript, correctly quashed the information against the defendant on the theory that the testimony of the sole witness before the examining magistrate was "inherently incredible”: the defendant argues that no one would wait until the last minute, as the police were reaching his or her car, to secrete narcotics after having been followed by these same officers for some distance. The examining magistrate chose to believe the officer rather than defendant’s argument. The second issue is whether the Court of Appeals, though doubtful of the validity of the trial court’s quashing of the information, correctly affirmed the trial court on the basis of defendant’s Fourth Amendment illegal seizure argument, although the trial court never looked beyond the record of the preliminary examination and the suppression argument had not been the articulated basis of the trial court’s decision to quash.
As to the trial court’s quashing of the information, we find such action to have been erroneously taken. The examining magistrate did not abuse his discretion in finding probable cause to bind defendant over on the charged offense. Regarding the Court of Appeals affirmance of the trial court due to its own determination of the unconstitutionality of the seizure of the evidence, we hold such determination to have been misdirected since the pretrial hearing on defendant’s motion was not only devoid of any relevant discussion or consideration relating to the existence of probable cause to seize the evidence, but more particularly was made on the basis of the preliminary hearing transcript and not on a full evidentiary hearing. We specifically disapprove of the practice of relying exclusively on preliminary examination transcripts in the conduct of suppression hearings. Accordingly, in lieu of granting leave to appeal, and pursuant to GCR 1963, 853.2(4), we reverse the judgment of the trial court and vacate the judgment of the Court of Appeals and remand the matter to the trial court for the holding of a de novo evidentiary hearing to resolve the issue of whether the arresting officers had probable cause to seize the evidence.
I. Facts
The sole factual exposition of the events sur rounding defendant’s arrest and the seizure of the evidence was that of Officer James Henry, one of two officers arresting the defendant and the only person to testify at defendant’s preliminary examination. According to Officer Henry, he and his partner observed the car in which defendant was riding as a passenger speeding. They pursued the car in a marked scout car for several blocks, pacing its speed, but staying about three quarters of a block behind, before they signaled it to pull over after coming up to it at a stop sign. The car in which defendant was riding then proceeded almost another full block before it could find a spot in which to pull over. Officer Henry then testified that as he approached the car on the driver’s side and his partner approached on the passenger’s side, he observed defendant drop to the floor of the car a brown paper bag protruding from which he could see a large plastic bag containing green coin envelopes. The defendant then, according to Officer Henry, attempted to "kick” the bag under the seat with his left hand. Based on the officer’s prior experience with coin envelopes as a means of packaging narcotics, the defendant and the driver were thereupon ordered out of the vehicle and the bag was seized from the car. Upon opening the brown bag at the scene the officers found it to contain three large plastic bags with a total of 230 green coin envelopes dispersed among the three bags. After opening one of the green coin envelopes and finding it to contain an off-white powder which they suspected to be heroin, the officers arrested the defendant. It was stipulated at the preliminary examination that 60 of these coin envelopes, representing a sampling from all three plastic bags, were found to contain heroin. The defendant was charged with possession of heroin with intent to deliver. MCL 333.7401; MSA 14.15(7401).
At defendant’s preliminary examination defense counsel argued that the defendant should not be bound over since the testimony of Officer Henry was "inherently incredible”. According to defense counsel it was beyond belief that two men possessing a bag containing a quantity of heroin would wait until the officers were right next to their car before one of them would attempt to secrete it, despite the fact that they had been paced for several blocks by a marked scout car containing two uniformed officers, that they had proceeded for almost one full block after being signaled by the police to pull over, and that they had to wait for the officers to get out of their car which had been parked five feet behind their own and approach them on foot. The examining magistrate, however, chose to believe the testimony of Officer Henry and bound defendant over for trial on the charged offense.
Following the preliminary examination the defendant filed a pretrial motion which he entitled "Motion to Suppress the Evidence and Quash the Information”. However, at the outset of its hearing on this pretrial motion, the trial court characterized it simply as one to "quash information”, and concerned itself throughout the hearing almost exclusively with the credibility of Officer Henry, the officer who testified at the preliminary examination. There was no consideration at this hearing as to the suppression of the heroin as a matter of constitutional law, no one addressing the issue whether, even assuming the facts as related by the officer were true, there was or was not probable cause to seize the bag containing the heroin under the "plain view” exception to the warrant require ment. Instead, the trial court found that the examining magistrate had abused his discretion in not finding Officer Henry’s testimony "inherently incredible” and quashed the information for that reason.
The Court of Appeals affirmed the trial court’s decision in a memorandum opinion on the different rationale that the police lacked probable cause to seize the brown bag. Support for this rationale was provided exclusively by citation to People v Young, 89 Mich App 753; 282 NW2d 211 (1979), lv den 407 Mich 877 (1979).
II. Trial Court Review of the Examining Magistrate
As already indicated, following the preliminary examination the defendant filed a pretrial motion to suppress the evidence and quash the information. On the sole basis of its disbelief of Officer Henry’s testimony at the preliminary examination, the trial court did quash, saying:
"A fair reading of the testimony that went into that case makes it inherently incredible that that is the method by which this observation of the bag could have been done.”
In other words, the trial judge substituted his judgment for that of the examining magistrate.
In reviewing the decision of a magistrate to bind over an accused person, the trial court may not properly substitute its judgment for that of the magistrate, but may reverse a magistrate’s decision only if it appears on the record that there has been an abuse of discretion. Genesee Prosecutor v Genesee Circuit Judge, 391 Mich 115, 121; 215 NW2d 145 (1974); People v Dellabonda, 265 Mich 486, 491; 251 NW 594 (1933). In Dellabonda, this Court stated:
"Primarily the question of probable cause is for the consideration of and determination by the examining magistrate. This Court may not agree with the findings of such magistrate but it has no right to substitute its judgment for his except in case of a clear abuse of discretion.”
Part and parcel of the magistrate’s function of determining whether an offense has been committed and whether probable cause exists for charging the defendant therewith is the duty of passing judgment on the credibility of witnesses. People v Paille #2, 383 Mich 621, 627; 178 NW2d 465 (1970); People v Karcher, 322 Mich 158, 164; 33 NW2d 744 (1948). This was emphasized in Paille #2, where this Court said:
"[T]he magistrate had not only the right but, also, the duty to pass judgment not only on the weight and competency of the evidence, but also the credibility of the witnesses.
"We have often commented upon the fact that the judge who hears the testimony has the distinct advantage over the appellate judge, who must form judgment solely from the printed words.”
Our task in assessing the trial court’s decision to quash the information is to determine whether or not there has been an abuse of discretion on the part of the examining magistrate because, as observed above, a reviewing trial court may only substitute its judgment for that of the examining magistrate where there has been such an abuse. Our standard for review, furthermore, in testing for an abuse of discretion is a narrow one. The classic description of this standard, first articu lated in Spalding v Spalding, 355 Mich 382, 384-385; 94 NW2d 810 (1959) (a modification of a divorce decree case) and later given a somewhat stricter interpretation in the criminal context by this Court in People v Charles O Williams, 386 Mich 565, 573; 194 NW2d 337 (1972), reads as follows:
"Where, as here, the exercise of discretion turns upon a factual determination made by the trier of the facts, an abuse of discretion involves far more than a difference in judicial opinion between the trial and appellate courts. The term discretion itself involves the idea of choice, of an exercise of the will, of a determination made between competing considerations. In order to have an 'abuse’ in reaching such determination, the result must be so palpably and grossly violative of fact and logic that it evidences not the exercise of will but perversity of will, not the exercise of judgment but defiance thereof, not the exercise of reason but rather of passion or bias.”
See also People v Wilson, 397 Mich 76, 80-81; 243 NW2d 257 (1976); People v Merritt, 396 Mich 67, 80; 238 NW2d 31 (1976).
In passing, a careful reading of the transcript of the pretrial motion to suppress the evidence and quash the information reveals that the trial judge may indeed have misapprehended the preliminary examination testimony. The trial court speaks twice of the defendant "being chased several blocks” (emphasis supplied), whereas the witness’s testimony at the preliminary examination was that the police "paced” the car and were three-quarters of a block behind it. The police, in fact, did not use blinkers or siren until they reached the pursued car at a stop street, after which the pursued vehicle went about a block farther before it could pull over. In other words, until the police were almost upon the defendant and his companion and shortly before the ultimate stop, it is entirely possible that neither person knew they were being pursued. Under this set of facts, the time in which the defendant had an opportunity to decide what to do with the brown paper bag containing the green coin envelopes is appreciably shorter than if he had been involved in a car chase for several blocks, as it seemed the trial court envisioned.
In any event, we cannot say a magistrate who had the opportunity to hear Officer Henry’s testimony and observe his demeanor abused his discretion, as a matter of law, in giving credence to the officer’s testimony and in ordering the defendant bound over for trial.
III. Appellate Court Review
The Court of Appeals, while having "serious doubts” regarding the trial court’s finding, on the basis of a simple review of the preliminary examination transcript, that Officer Henry’s testimony was "inherently incredible”, affirmed the trial court’s decision on the theory that the trial court should have suppressed the heroin from evidence on the authority of People v Young supra.
However, we are here not primarily concerned with the precedential value of Young. What really concerns us in this matter is that the Court of Appeals would presume under the circumstances of this case to affirm the trial court on the basis that the evidence should have been suppressed. Not only was the probable cause issue not explicitly passed upon by the trial court, but the circumstances of this case, of course, are that whatever action the trial court did or did not take, it did so on the basis of the preliminary examination record alone.
Even had the trial court chosen to give express consideration to the constitutionality of the seizure, it could not properly have decided whether or not the evidence should have been suppressed without a full evidentiary hearing — listening to witnesses and judging other evidence — to determine whether or not the seizing officer had probable cause to seize the evidence. Since the trial court did not have such a full evidentiary hearing it would have no way of knowing whether the facts in the case authorized or did not authorize the officer to seize the evidence. For the Court of Appeals to presume to rule on the merits in such an absence of proper procedure requires this Court to point out to that Court and all trial courts that a motion to suppress evidence requires the holding of a full evidentiary hearing and any attempt to rule on such a motion on the basis of a preliminary examination transcript alone is inadequate and erroneous.
Since a trial court has not yet had an opportunity to examine the totality of circumstances surrounding the contested seizure with an eye toward determining the existence or absence of probable cause, we remand for an evidentiary hearing on defendant’s motion to suppress to help insure the constitutionally correct resolution of this issue.
The hearing upon remand is to be a de novo inquiry into the constitutional validity of the contested seizure. The trial court in this case, and all other trial courts in the conduct of all future suppression hearings, shall not place exclusive reliance on the preliminary examination transcript in the determination of the legality of a contested search or seizure.
The defendant presents here what is essentially a bifurcated argument respecting the constitutionality of the seizure. First, defendant still maintains that the allegations of the arresting officers are "inherently incredible”. While at heart this is a factual matter involving credibility concerns, it is a matter whose resolution is of constitutional dimensions. To disbelieve the testifying officer’s account of the chain of events leading up to the seizure of the heroin is, in substance if not in form, to determine that the evidence in question was seized in some manner other than through "plain view”. Since no other constitutionally justifying circumstances, as, for example, consent, are advanced for the warrantless seizure of the evidence, one can only infer, if one disbelieves the testifying officer, that the evidence was seized impermissibly. In light of this we believe the trial court should have the opportunity to view firsthand the demeanor of the officer as he relates his version of the circumstances surrounding the contested seizure and to pass anew on his credibility. Other witnesses, too, may either corroborate or diminish Officer Henry’s testimony. The trial court cannot properly assess credibility from the cold record prepared at the preliminary examination. A suppression hearing, unlike a hearing to quash an information due to an alleged magisterial abuse of discretion, is not to be limited to the record of the preliminary examination. In short, at a suppression hearing the trial court may choose to believe or not believe the "plain view” account of the officer, or may choose to believe another proffered version of the relevant events in determining whether to suppress the seized evidence. This action does not reflect upon the effect of the magistrate’s decision in the binding over, where another rule of review obtains.
Second, defendant also argues that there was no probable cause supporting the warrantless seizure of the evidence even if Officer Henry’s story is to be believed. Here it is not the facts per se that are in dispute, but the legal conclusion to be drawn from these facts, i.e., did the factual situation, as recounted by Officer Henry, give the police probable cause to seize the evidence. Nonetheless, a further exposition of certain constitutionally significant factual matters in this case can be of immeasurable aid to the trial court in making its constitutional determination. The factual record prepared at the preliminary examination may, for numerous reasons, be found critically wanting when analyzed for purposes of a motion to suppress. For example, the preliminary examination may have focused on facts surrounding actions not especially helpful to a constitutional determination or it may prove to be too skeletal to benefit a suppression hearing due to inadequate time for preparation of counsel or to counsel’s fear of disclosing his or her case at the preliminary examination. Cf. People v Olajos, 397 Mich 629, 634-635; 246 NW2d 828 (1976). See, also, California v Green, 399 US 149, 189; 90 S Ct 1930; 26 L Ed 2d 489 (1970) (Brennan, J., dissenting). By requiring a de novo evidentiary hearing on remand, the trial court will have an opportunity to fully weigh the nature of the furtive gesture, as well as such "other factors” as the workaday knowledge and experience of the arresting officers, and any other relevant facts the prosecution may choose to advance. See People v Howell, 394 Mich 445, 447; 231 NW2d 650 (1975).
Accordingly, in lieu of granting leave to appeal, and pursuant to GCR 1963, 853.2(4), we vacate the Court of Appeals affirmance of the trial court and remand this matter to the trial court for an evidentiary hearing on the issue of probable cause for purposes of the motion to suppress. In so doing, we do not intend to intimate any view as to the substantive merits of defendant’s motion to suppress the evidence.
Coleman, C.J., and Kavanagh, Williams, Fitzgerald, Ryan, and Blair Moody, Jr., JJ., concurred_
It is also noteworthy that the only case which defendant cites in support of his contention that the testimony of Officer Henry was "inherently incredible”, Henry Jackson v United States, 122 US App DC 324, 326-327; 353 F2d 862, 864-865 (1965), is clearly not in point. Jackson involved appellate review of a bench trial, not trial court review of an examining magistrate. Jackson, additionally, was correctly decided under a "clearly erroneous” standard, applicable in that case to the trial court, and not under an "abuse of discretion” standard applicable in this case to the examining magistrate.
Of course, if a witness who testified at the preliminary examination is unavailable to testify at the suppression hearing, the trial court could, of necessity, properly rely on his or her preliminary examination testimony to aid in the determination of constitutionality. Cf. MRE 804.
We recognize that it has often been the practice of our trial courts to rely exclusively on preliminary examination transcripts in ruling on motions to suppress. This, of course, meant that appellate courts were also limited to the preliminary examination transcripts in passing on search and seizure issues since testimony later taken on the trial, amplifying the circumstances of the search or seizure, cannot be considered. People v Miller, 245 Mich 115, 117; 222 NW 151 (1928). See, e.g., People v Zeigler, 358 Mich 355, 359; 100 NW2d 456 (1960); People v Kaigler, 368 Mich 281, 297-299; 118 NW2d 406 (1962); People v Miller, 26 Mich App 665, 667; 182 NW2d 772 (1970). Today we specifically prohibit this practice in order to promote a more thorough exposition of the events surrounding a contested search or seizure. This, we hope, will aid the trial courts as well as the appellate courts in drawing the difficult line between the constitutionally permissible search or seizure and the constitutionally impermissible one.
The issue of whether opposing counsel may stipulate to the trial court’s sole reliance on a preliminary examination transcript in passing on a motion to suppress evidence is not before us, and we therefore do not consider it. | [
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North, J.
This is an appeal from the September 10, 1947, order and decree of the circuit court allowing the final account of the commissioner of insurance, David A. Forbes, as statutory receiver (CL 1948, § 503.1 et seq. [Stat Ann § 24.40 et seq.]) of the Lapeer Farmers’ Mutual Fire Insurance Association, and the discharge of the receiver and the deputy receiver.
Over 14 years ago (September 17, 1935) the Lapeer Farmers’ Mutual Fire Insurance Association was placed in receivership. A statutory receiver (the commissioner of insurance) was appointed and also a deputy receiver in the person of William Simpson, who served as such from September 30, 1935, to January 22, 1940. In September, 1937, Simpson levied and filed an assessment incident to which 800 to 900 suits for collection were instituted. Because of Simpson’s failure to follow instructions given by the court, the above levied assessments were held void, the pending suits dismissed, and all judgments not previously satisfied were discharged of record. Simpson’s final account was filed January 23, 1940, and it was approved February 1, 1940. Notice of this hearing was not given to association members or creditors, certain of whom sought to intervene but their application to intervene was denied in the circuit court and that holding was affirmed in this Court. See Attorney General, ex rel. Commissioner of Insurance, v. Lapeer Farmers Mutual Fire Ins. Assn. (Appeal of Rice), 300 Mich 320. The circuit judge’s order approving Simpson’s final account and his discharge contained the following:
“It is further ordered that the bond of said William Gr. Simpson be cancelled and discharged as to any future liability thereon and without prejudice to any claims or obligations under said bond incurred during the time it was in force and effect.”
Following Simpson’s discharge and on January 23, 1940, a successor insurance commissioner, John Gr. Emery, was appointed receiver, and Charles R. Bowles was appointed deputy receiver. On June 27, 1944, Bowles filed his final account which in September, 1944, was allowed and his bond released, but subject to the same limitation quoted above incident-to Simpson’s discharge. Certain members of the association demanded copies of the final account which Bowles had submitted for approval. This was denied on the ground that the attorney representing such persons had been served with a copy of the petition, but a copy of the proposed final account of Bowles did not accompany the copy of the petition served on the attorney.
So far as disclosed by the record, Bowles, as deputy receiver, took no action to have reconsideration of Simpson’s final account, nor does it appear that any action was prosecuted to finality either by Simpson or Bowles when serving as deputy receivers to obtain complete relief from alleged maladministration of the association’s business on the part of William E. Ivory prior to the inception in 1935 of the receivership, during the period that Ivory was secretary-treasurer of the association.
Prior to the allowance of Bowles’ final account, and on March 4, 1943, David A. Forbes, as commissioner of insurance, became the statutory receiver, and later Richard W. Atwell was appointed deputy receiver. As first above noted, appellants herein challenge the order and decree of the circuit court of September 10, 1947, allowing the final account of Forbes as receiver. The issues presented by appellants will be considered later herein.
The extent of litigation attending this receivership is indicated by the fact that the topical journal entries alone occupy more than 40 pages of the printed record in the instant case. After several prior appeals a phase of this litigation was before this Court in 1947. See Attorney General, ex rel. Commissioner of Insurance, v. Lapeer Farmers’ Mutual Fire Insurance Association (Appeal of Warner), 318 Mich 60. Our opinion in that case contains recital of many additional details of the prolonged litigation, to which recital, without repetition, we refer. In that case we affirmed with some modification the. circuit court’s decree. By that, decree as affirmed, Mr. Forbes, the commissioner of insurance as receiver, was authorized to sell and transfer the assets of the Lapeer Farmers’ Mutual Fire Insurance Association to trustees for the.benefit of its creditors, and the decree, provided that upon filing and approval of his final account the receiver should be discharged. At the.hearing on such final account appellants herein, having filed an- answer and objections, were heard. On application for rehearing, objections of appellants claimed to have been “unanswered and undenied” were duly answered. On September 10, 1947, after hearing, the circuit court entered an order allowing the final account of Forbes as the statutory receiver. The application for rehearing was thereafter denied on February 9, 1948. Appellants perfected this appeal.
Appellants complain that the account rendered by Forbes appears to include only cash receipts and disbursements. He admitted that there were other assets of the receivership which consisted of uncollected assessments (some reduced to judgments) and title to certain real estate claimed to be the property of the association. As to such real estate and possibly other tangible assets of the association not being included in the receiver’s account, it seems apparent that this deficiency is due to the fact that at no time during the receivership has there been made and filed in the proceedings an inventory or appraisal of all of the assets of the association. Obviously it would have been quite impossible in March, 1943, when Forbes became receiver, for him to have made an inventory of the association’s assets at the beginning of the receivership in 1935. Such was not ordered by the court. In his final account Forbes did list his receipts from the preceding-receiver and numerous other sources. He also itemized his disbursements. And his final account disclosed that: “All equipment has been sold as per the last examination of May 31, 1944, and proceeds deposited in the depository.” This record satisfies us that there were no assets that came into the possession of receiver Forbes other than those disclosed to the court at the hearing of this receiver’s final account.
Further claimed deficiencies in Forbes’ final account complained of by appellants are as follows: (1) Uncollected receiver’s assessments are not included. But if not collected such items were not assets in the possession of the receiver, and he was not obligated to account therefor. A list of outstanding judgments was included in exhibit A which the circuit judge accepted and evidently considered a part of Forbes’ final account, and appellants’ attorney was given a list of such judgments. (2) The Forbes’ final account does not cover the period from his appointment, March 4, 1943, to June 1, 1944. But the record discloses that the period above noted was included in the final account of deputy receiver Bowles. (3) That the Forbes’ final account was not “supported by vouchers.” But since the account without vouchers was satisfactory to the circuit judge, appellants, who disclose no irregularities in Forbes’ final account, cannot be heard to complain. (4) Even more captious is appellants’ present complaint that back in 1935 when Simpson was appointed deputy receiver his account did not cover the 13 days prior to his appointment, September 30, 1935; this 13-day period being subsequent to the appointment of the first principal receiver, Insurance Commissioner Ketcham, on September 17, 1935. But appellants make no claim or showing of loss to the receivership, during these 13 days, 14 years ago.
The major portion of appellants’ brief is devoted to their claim that the final account of Forbes as receiver should include “the several transactions covering the entire receivership” and that appellants have on the final accounting of receiver Forbes a right to a hearing on the entire receivership, including the final accounts of Simpson and Bowles. In substance appellants assert that had the above scope of investigation been opened to them they could have established their claim that by misappropriations, malfeasance or nonfeasance during the time Simpson and Bowles were serving as receivers the assets of the receivership were depleted in the amount of many thousands of dollars. In considering the above contentions of appellants it must be borne in mind that in proceedings of this character the court having supervision and control of the receivership, acting within the scope of its authority, must be controlled by the facts and circumstances of the particular case in making decision therein. As hereinbefore noted, this prolonged receivership has been fraught with unusual and disastrous circumstances, resulting largely from litigation. This condition was noted quite emphatically in Attorney General, ex rel. Commissioner of Insurance, v. Lapeer Farmers’ Mutual Fire Insurance Association (Appeal of Warner), 318 Mich 60. The petition of Commissioner of Insurance David Forbes for approval of his final account and his discharge as statutory receiver was filed promptly after our decision in the last above cited case, and in accord with the amended decree therein. The record made at the hearing of that petition sustains the circuit judge’s finding that “there were no discrepancies in the accounting” of Forbes as receiver. We do not understand that such finding is challenged by appellants, except as to some variance in figures which were explained in the testimony at the conclusion of which appellants’ counsel said: “That explains it very well.” Instead, appellants contend that receiver Forbes should be required to examine the conduct and accounts of Simpson and Bowles as receivers, obviously for the purpose of detecting some maladministration and possibly by further litigation accomplishing some benefit for the receivership.
In support of the contention, just above noted, appellants in their answer and objections to the allowance of Forbes’ final account make reference to and attach to their answer a list of items upon which they rely in their assertion of “shortages or unaccounted * * * gums of (former) officers and directors,” and which items appellants assert should be embodied in Forbes’ final account. Eeference to this list discloses that for the most part, if not wholly, the items consist of asserted claims against William E. Ivory, who was secretary-treasurer of this mutual insurance association before it went into receivership in 1935, or against the first deputy receiver, William Simpson, who was discharged in 1940, and the right of action on practically all of these items accrued between 1931 and 1936. It appears from appellants’ petition for a rehearing in the circuit court that the claims of this character are now barred by the statute of limitations. Nothing beneficial to the interested parties could have been accomplished by requiring investigation and report by receiver Forbes of claims of the character noted. The extent and the futility of relief to which appellants assert a right is indicated by the following from their prayer for relief:
“That this court enter its order granting respondents or their duly authorized agent or agents an unrestrained opportunity to see and examine the books and records of said Lapeer Farmers Mutual Fire Insurance Association, covering the years 1926 to and including the year 1935, the books, records, call reports, reports of examination and correspondence in the files and records of the Michigan Department of Insurance of and pertaining to said insurance association covering the same period.”
In our judgment, under the circumstances disclosed by this record, the circuit judge at the conclusion of the proofs properly held:
“The two previous accountings, the Simpson account and the Bowles, as I said before, those matters Lave been adjudicated in this court, and an order entered, and they were allowed by Judge Carr. This accounting could only be from the time Mr. Forbes became the receiver in 1943, up to the present time."
Appellants’ contention that on the hearing of the final account of receiver Forbes they should have had a report and opportunity to contest any account of a previous receiver or his failure to properly account, since appellants were not permitted to be heard incident to allowance of the accounts of the prior receivers, is not tenable under the circumstances of this case. Appellants were not deprived of an opportunity to enforce any of the claims which they assert should have been embodied in this final account of receiver Forbes. See Attorney General, ex rel. Commissioner of Insurance, v. Lapeer Farmers’ Mutual Fire Insurance Association (Appeal of Warner), 318 Mich 60, 69. Instead, by the amended decree entered in the cited case, it was provided:
“If the nonassenting creditors and dissatisfied members regard seriously the alleged causes of action against former receivers and deputy receivers, excepting only the incumbents, David A. Forbes and Richard W. Atwell, they are free to pursue their remedy within the prescribed period of time (90-days) at their own expense.’’
Notwithstanding they were granted the opportunity to do so, no proceedings were instituted by any of appellants. The foregoing is sufficient answer to appellants’ complaint that in the instant proceedings they were not served with a copy of the final account of receiver Bowles who had been discharged in 1944. And in this connection it may be noted that prior to hearing on Forbes’ final account appellants or their counsel had a photo static copy of the Bowles’ account. The reason for the claim that in this 1947 proceedings appellants were entitled to a copy of Bowles’ account is stated in their brief as follows:
“Without a copy of the Bowles account, appellants were not in a position to make and intelligently prepare objections or to contest the allowance of that account, and were thereby deprived of their right to be heard and to inquire into the acts of maladministration and the waste of large sums of money of the receivership, to the irreparable loss of the trust estate, its creditors and members, consisting' of the failure by Deputy Bowles to obtain the return of salary, fees and expenses of upwards of $50,000 paid Simpson and Leibrand as indicated by this Court in Attorney General, ex rel. Commissioner of Insurance, v. Lapeer, Farmers’ Mutual Fire Ins. Assn. (Appeal of Rice), 300 Mich 320 at 322.”
Under the circumstances of this prolonged receivership, the circuit judge properly limited the hearing on receiver Forbes’ final account to the period during which he acted'as statutory receiver. In this connection it should be noted that the final accounts of the former receivers were contained in the files of this ease, and the court orders discharging these former receivers and their bonds were conditional, as hereinbefore noted.
We find no merit in appellants’ contention that the final report or accounting of Forbes as receiver was not sufficient to comply with legal requisites. The receiver’s accounting to the court included a cash account beginning with the amount received from the preceding deputy receiver and included thereafter the items of all other cash receipts during the term Forbes was receiver, and an itemized statement of the receiver’s cash disbursements during the same period, and a final statement of cash on hand and in bank. At this hearing there was received as a part of the accounting testimony of the receiver which we quote in part:
“Q. Now, commissioner, in addition to this cash that will be turned over to the trustee, there are certain judgments uncollected, is that right?
“A. That is correct.
“Q. And you and your deputy receiver, I understand, have a complete list of those judgments ?
“A. We have.
“Q. Of the amounts due?
“A. We have. * * * We also have as assets of the receivership, of course, certain uncollected assessments. * * *
“Q. Is there, are there suits or some judgments obtained against any members on certain pieces of real estate in Lapeer county?
“A. Oh, yes; there were 2 or 3 cases.
“Q. So you have those parcels, 3 or 4 cases or parcels ?
“A. Yes.
“Q. And those are a part of the assets?
“A. That is right. * * *
“Q. Have you filed in your accounting a statement or a list of claims against this estate ? * * *
“A. Yes, we have, listed as part of the transferable assets to the trustee. Mr. Yaughn has a copy of' that list. * * * The only reason I did not attach the list is because it is a schedule. These are judgments and claims against members that have'been in receivership for years. They constitute part of' the assets as a schedule which has been filed as an exhibit today, * * * but with the history of this case I did not want to complicate its receipts and disbursements. * * * Prior receiverships tried to collect the judgments, I believe that they are practically worthless, as the costs of collection are greater than the judgments themselves.”
At this point the attorney for the receiver made' the following statement to the court:
“All these questions Mr. Yaughn is asking were-taken care of by the final accounting of Mr. Bowles. This is a copy, which is a voluminous list of all judg ments and claims against the trust. This is a matter of record. The account shows the receipts from these judgments as collected since the final accounting by-Mr. Bowles.”
Our review of this record discloses no claim of culpable negligence or misconduct, misfeasance or nonfeasance, on the part of receiver Forbes, or his deputy receiver, Richard W. Atwell. In our judgment the final account of receiver Forbes as approved by the circuit judge was, under the exceptional circumstances of this case, such as complied with all legal requirements; and further that the proceedings had in the instánt case have been such that appellants have not been deprived of property rights without due process of law in violation of their constitutional rights.
The decree entered in the circuit court is affirmed. Plaintiff may tax costs against appellants.
Sharpe, C. J., and Bushnell, Reid, and Butzel, JJ., concurred.
Boyles, Dethmers, and Carr, JJ., did not sit.
For further facts and comments concerning litigation incident to this receivership see Attorney General, ex rel. Commissioner of Insurance, v. Lapeer Farmers Mutual Fire Ins. Assn. (Appeal of Rice), 300 Mich 320. | [
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Sharpe, J.
This case came to us as a result of a collision between a taxicab owned by defendant company and an ambulance owned by plaintiffs. The collision occurred in the intersection of Division and Fulton streets in the city of Grand Rapids, on January 27, 1951, at or about the hour of 3 p.m. The ambulance was proceeding in a northerly direction on Division street. Its driver was taking a patient to the hospital, and as it approached Fulton street its siren was sounding in an oscillating manner. The taxicab was proceeding in an easterly direction on 'Fulton street, had stopped before entering the intersection. The intersection is controlled by traffic lights-. "When the traffic light changed to green for Fulton street traffic, the taxicab entered the intersection with the green light in its favor. The collision between the 2 vehicles occurred in the northeast corner of the intersection.
The damage to the ambulance was $675.01, of which plaintiff insurance company paid $575.01, and has taken an assignment in such amount from plaintiffs, and as such is a party plaintiff.
The cause came on for trial, and at the conclusion of plaintiff’s proofs the defendant made a motion for “judgment of no cause of action” for the reason that plaintiffs were guilty of contributory negligence because its driver entered the intersection against the red light. The motion was denied. At the.close of all proofs the trial court granted plaintiffs, Anton Eggeheen, Jr., and Jean Eggeheen, a judgment in the amount of $100 and plaintiff insurance company a judgment in the amount of $575.01.
The trial court, at the close of all proofs, gave an opinion, a part of which reads as follows:
“So, without attempting to go into a detailed review of what each witness testified to, I will say the testimony in this case shows clearly and competently and preponderantly that the driver of this ambulance was exercising a high degree of care, and I would say commensurate with the responsibility that he has in operating this ambulance; and it seems to me the driver of this taxi must have heard it. I think he must have heard this siren. As the ambulance was approaching with its siren sounding 30 or 40 feet south of this intersection, when the man in the taxi saw it or heard it first he certainly could have stopped before he got into the middle of South Division street. Certainly he could have stopped and given the ambulance right-of-way. * * * I would say that the driver of this taxi was careless, which is commonly called negligent, in the way in which he started up his taxi to be sure to get to that fellow he was going to take for a ride.”
Defendants appeal and urge that plaintiff’s driver was guilty of contributory negligence in entering the intersection against the red light. Plaintiffs rely on the following statutory provisions:
“(a) Upon the immediate approach of an authorized emergency vehicle equipped with at least 1 lighted lamp exhibiting red light visible under normal atmospheric condition from a distance of 500 feet to the front of such vehicle and when the driver is giving audible signal by siren, exhaust whistle, or beH; •
“1. The driver of every other vehicle shall yield the right-of-way and shall immediately drive to a position parallel to and as close as possible to, the right-hand edge or curb of the roadway clear of any intersection <and shall stop and remain in such position until the authorized -emergency vehicle has passed, except when otherwise directed by a police officer. * * *
“(b) This section shall not operate to relieve the driver of an authorized emergency vehicle from the duty to drive with due regard for the safety of all persons using the highway.” PA 1949, No 300, § 653 (CL 1948, § 257.653 [Stat Ann 1949 Cum Supp § 9.2353]).
, “The speed limitation set forth in this chapter shall not apply to vehicles when operated with due regard for safety under the direction of the police in the chase or apprehension of violators of the law or of persons charged with or suspected of any such viola tion, nor to fire department or fire patrol vehicles when traveling in response to a fire alarm, nor to public or private ambulances when traveling in emergencies. This exemption shall not however protect the driver of any such vehicle from the consequences of a reckless disregard of the safety of others.” PA 1949, No 300, § 632 (CL 1948, § 257.632 [Stat Ann 1952 Rev § 9.2332]).
In City of Kalamazoo v. Priest, 331 Mich 43, we had occasion to consider a similar statute. We there .held that the driver of an emergency vehicle is not relieved of the duty to drive with due regard for the safety of others. The trial court found as a fact that the driver of the ambulance was exercising a high degree of care commensurate with his responsibility in operating an ambulance. In Vannett v. Michigan Public Service Co., 289 Mich 212, we said:
“We have repeatedly said in cases tried without a jury that the trial judge is the trier of the facts and may give such weight to the testimony as in his opinion it is entitled to. In such cases we do not reverse unless the evidence clearly preponderates in the opposite direction.”
See, also, Lather, for use and benefit of Employers Mutual Casualty Company, Inc., v. Michigan Public Service Co., 332 Mich 683.
In determining whether the evidence clearly preponderates against the finding of fact of the trial court, we find it necessary to examine the testimony from which such findings were made.
It is undisputed that the driver of the ambulance was engaged in an emergency run; that in addition to the siren, the ambulance was equipped with a red dome light visible for 4 blocks over intervening traffic; that Division street is approximately 54 feet wide and has 4 lanes of traffic, 2 for northbound traffic and 2 for southbound traffic; that some snow had fallen and the streets were sloppy and wet; that Fulton street has a width of 45 feet from curb to curb, and that the collision occurred in the northeast part of the intersection. There is testimony from which the court could find that, as the ambulance entered the intersection, all traffic on all 4 sides of the intersection stopped for the ambulance, with the exception of the taxicab. Ned Shaw, the driver of the ambulance, testified:
“I entered Division avenue on Franklin street and drove on Division to Fulton where the accident happened. The siren was going all of the time, oscillating to bring it to a high pitch, coast down a little and bring it up again so traffic can hear it. It never stopped completely during that run.
“I was driving 25 to 30 miles an hour during the trip from Franklin to Fulton. Traffic for a distance of 3 blocks from Fulton street was heavy enough to necessitate maneuvering in and out from the right to the left and then as we got toward the intersection of Fulton street it was heavy there. The oncoming traffic had pulled over into the lanes, and the traffic traveling in my direction was heavy enough that I maneuvered back and forth on my right side of the street. The weather was clear. The pavement was wet and slippery, probably covered with thin ice or thin film.
“As I was pulling up to the intersection the signal was changing from the green to amber and at that I slowed up my speed and traffic itself was stopped, for traffic coming from the west, going west, that had stopped, and also traffic on the east; northbound traffic was at a stand-still, and I proceeded into the intersection. I was on the crosswalk when the light changed to red for Division. I was still looking around. I looked to my right and left. I saw vehicles stopped on both sides. There were lines of traffic on both sides that were stopped. As I entered the intersection I was going about 10 miles an hour, 10 to 15. I at that time after making obser vation formed a judgment that it was safe to go on through. As I came into the intersection when it was clear why just out of no where, the taxicab; I tried to pull to the right after I saw him; I tried to pull right with him but it was too late then. The taxi appeared from my left. He came from the west going east. I don’t know whether he was north or south of traffic that was stopped there. I do know there were other cars waiting as he came through, because I never saw him until I saw him sliding into the intersection itself. Then the 2 vehicles collided. He hit me on the left front fender. I was still headed north at that time. He was headed east. When the impact occurred the ambulance was midway, little past the midsection of the intersection. After the impact it went towards the’ curb, that would be on the northeast corner. I was still facing-north when I came to a stop. I was right over at the east curb. * * *
“I was at the south curb line on Fulton street when my eyes got around north of the 2 cars that were waiting there. I would say I was about 10 feet from the curb line when my vision was clear for the whole intersection. I was about 10 feet or so south of the curb line when my eyes passed those 2 cars. At that time I looked west and I looked east. I also looked north, in other words my head was just in that motion. I looked to the east first. Then I looked to the west. I saw traffic was stopped, that the westbound traffic was stopped ¿nd waiting; that the eastbound traffic was stopped and waiting. Then I proceeded north into the intersection. # * *
“There are buildings along the west side of Division avenue, south of Fulton street and on the south side of Fulton street west of Division avenue. These buildings are built right up to the. sidewalk and are continuous. They interfere with the view of traffic going north on Division and traffic going east on Fulton.”
Richard Twelvetrees, a witness for plaintiff, testified as follows:
“I was a witness to the accident on January 27th at Division and Pulton streets. I was in my automobile first in line headed west on Pulton street at Division. I heard the siren of the ambulance several seconds before the ambulance came into view. The ambulance came into sight a few feet from the corner. The streets were kind of sloppy. It was wet. It was not raining or snowing that I recall. I had stopped for the red light originally. The light then changed to green for Pulton street traffic. When the light changed from red to green for Pulton street traffic the ambulance was just a little ways from the corner, not quite to the corner, and I estimated its speed at 10 to 15 miles an hour. As the light changed from red to green for Pulton street traffic I remained standing there to let the ambulance pass.”
Mrs. Viola White, a witness for plaintiff, testified:
“I was in the front seat of- the ambulance by the side of the driver. My son’s wife was a patient in the rear of the ambulance. * * *
“The ambulance driver appeared to slow down when approaching the intersection and take things in view generally. The vehicle slowed down. The taxicab was on Pulton street, facing east, and the Greyhound bus on the east side of Pulton, going west, both waiting for the traffic light to change. The light turned red as we entered the intersection. I observed the taxicab start up, he had the green light and he started into the intersection. When the taxicab drove into the intersection we were well into the intersection; the front part was beyond the center.”
We have carefully examined the evidence produced on the part of the defendant, and conclude that there is evidence from which the trial court could find that plaintiff’s driver was driving with due regard to the safety of others. It follows that he was not guilty of contributory negligence as a matter of law. The trial court found that the driver of the taxicab was careless and negligent. There is evidence to sustain this finding of fact. The ambulance was equipped with and was operating its siren and red light; all cars were stopped. Under such conditions the driver of the taxicab should have heeded the warning given by the ambulance. The trial court was correct in refusing to grant defendant’s motion for a directed verdict, as there was evidence from which the court could have found that the negligence of the driver of the taxicab was the proximate cause of the accident.
When this motion was renewed at the close of all proofs, the court had the benefit of the testimony of Lewis Rounds, the driver of the taxicab, who testified that the radio in his cab was on, that all windows were up except the window on the left of the driver’s seat, which had an opening of about an inch for ventilation; that when he first saw the ambulance it was 30 to 40 feet south of the intersection; that he was in low gear, traveling at a speed of 7 or 8 miles per hour and .could stop his cab within a distance of approximately 15 feet. In our opinion the evidence produced by plaintiffs is such that the trial court could find that the negligence of the driver of the taxicab was the proximate cause of the collision. Other questions have been raised by defendants, but none of them are determinative of any material issues.
The judgment of the trial court is affirmed, with costs to plaintiffs.
Dethmers, Btjtzel, Carr, Btjshnell, Boyles, and Reid, JJ., concurred.
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Butzel, J.
On April 2,1949, plaintiff Ethel Buchthal was seated nest to her husband on the front seat of an automobile driven by him on a bright clear day. It was proceeding east along a road in Cass county, popularly known as Peavine road or Swank road. They reached an intersection of the double track right-of-way of defendant New York Central Railroad Company, known as Swank’s crossing, located between Niles and Dowagiac, Michigan, and about 2 miles west of Dowagiac. Peavine road is a narrow gravel or dirt highway, not a trunk line and was used for the convenience of the residents of the rural district. The right-of-way of the railroad was partly obscured by numerous trees to the right of the road but the approach to the railroad crossing was indicated by 2 warning signs placed along the road. Plaintiff and her husband had lived in that vicinity at one time and were familiar with the crossing. She does not claim that she did not know of its existence.
Plaintiff’s husband stopped the car at a point some 12 or 15 feet from the closest rail to look and listen for a possible train. At this point the car had passed out of the wooded area and beyond the fenced-in boundary of the right-of-way. The visibility was very good, notwithstanding the fact that the snn was shining from the southwest. Plaintiff testified that she could see beyond the semaphore signal posts which were 2,546 feet distant from the intersection The testimony showed that the railroad track west of the crossing proceeded in a straight line for several miles and there was a very slight upgrade starting 3,700 feet from the crossing. Also, there was a slight upgrade of approximately 5% on Swank road at the crossing. Several witnesses testified as to ordinary conditions of visibility at the crossing but all conceded that the semaphore signal was ordinarily visible from a point some 10 or 15 feet beyond the right-of-way, notwithstanding alleged bushes and shrubbery which are not shown in exhibits verified by plaintiff.
When the driver stopped the car both he and plaintiff lowered their respective windows on each side and made observations by looking up the track and listening for warning bells or whistles. After seeing and hearing nothing, according to her testimony, they raised the windows and proceeded across the tracks without further observations and drove in first gear at approximately 2 miles per hour, possibly at 3 miles per hour, the distance between, the outside rails of the double tracks being 21-1/2 feet. The car was almost entirely across the further south side rail when its right rear corner was struck by the Wolverine, a regularly scheduled fast passenger train run by defendant. Plaintiff testified that she heard nothing until she felt the impact of the train as it struck the car. Plaintiff’s husband was killed. The sole question is plaintiff’s right to recover for damages to herself.
The engineer testified that he was proceeding at a speed of 80 miles an hour as he approached the crossing. That is the speed permitted by the company rules for the particular crossing, which was the last crossing west of Dowagiac. Plaintiff, however, contends that the speed was greater. The engineer testified that he blew the whistle the prescribed number of times as he reached the whistle post, which is located 1,327 feet before the-crossing. • The fireman and the road foreman corroborated this testimony. They also testified that the bell was sounding continuously as they approached the crossing and that the headlight was burning. - The engineer- and fireman testified that they were observing the tracks for possible obstructions and although visibility was excellent, the sun being behind them, they did not see the car until after the impact. Plaintiff emphasizes that the engineer and the fireman were engaged in conversation but the record indicates that the conversation took place after the impact and not before.
Plaintiff, testified that she was 55 years of age at the time of the accident, had had extensive driving experience, had good vision and good hearing; that .she was in the habit of making observations for danger and warning her husband when necessary. Prom her own testimony, she was alert, watching and listening for oncoming trains at the time. The case presents a peculiar • situation. Plaintiff must have known from her experience that very fast passenger trains use the right-of-way and on a bright clear' day the car was driven at from 2 to 3 miles per hour over the railroad right-of-way when the oncoming train could have been seen by her at least 2,546 feet from the intersection.
Attorneys for plaintiff urge that the question of whether the train was going at such an excessive rate of speed so as to constitute negligence should have gone to the jury. They conceded that the testimony of the engineer is binding insofar as it is not contradicted. His testimony was positive that he was proceeding at 80.miles an hour as shown by the speedometer. Plaintiff testified she did not see the approaching train, and that when she last looked up the track she could see as far as the semaphore, 2,546 feet distant, and saw no train. She states that the automobile. had come to a full stop when she last looked, it was then put into first speed and it proceeded at 2-miles, possibly 3 miles, an hour across the tracks until hit. She -now tries to prove that by ■mathematical calculation at 80 miles an hour, the train could go only 2,115 feet in 18 seconds (the time elapsing between her last observation and seeing no train at or past the semaphore and the time of the collision), that, therefore, the train must have speed-ed at 90 or 100 miles an hour to also cross the 431 feet of additional distance.
The rules of the railroad, not a statute, limited- the speed of the train to 80 miles an hour at that particular crossing. As a rule it would not be negligence for a train to speed at a rapid rate through- open rural country. Plaintiff partly relies on Hudson v. Grand Trunk Western R. Co., 227 Mich 1 (23 NCCA 682); Morgan v. Detroit, Jackson & Chicago Railroad, 234 Mich 497. Neither of these cases is in point as the accidents complained of took place at village crossings. In Mulvaney v. New York Central R. Co., 233 Mich 350, we held that it was proper to take the issue -from the jury and that as a matter of law no negligence existed when a person 20 feet from the track could see up the track for some 1/4 to 1/2 mile and where the train was running through sparsely -settled country, the crossing being 2 and 9 miles respectively from the nearest towns. The highway in the Mulvaney Case, like that here, was not part of a trunk line system. The train in that case was running at 55 miles per hour. We held that the general rule is that when running through open country the speed of trains is not limited. We cited Robinson v. Flint & P. M. R. Co., 79 Mich 323 (19 Am St Rep 174), an early case, where we held that a speed of 60 miles an hour was not evidence of negligence. In Shufelt v. Flint, P. M. R. Co. (1893), 96 Mich 327, at 329, we said:
“Trains are not limited in the rate of speed they may run in the country, and across the public highways, where travel is limited.”
See, also, Robins v. Pitcairn, 124 F2d 734. It is generally known that in the years which have elapsed since the Shufelt and Robins decisions, the speed of trains has greatly increased. It must be borne in mind that the Wolverine was proceeding through a .rural section in broad daylight. Inasmuch as there is no law that prohibits a train from going at high speed in sparsely settled open country, we hold that there was no negligence shown because of speed.
Plaintiff contends that under the admitted conditions of good visibility the train crew, particularly the fireman and the engineer, charged with the duty of observing persons lawfully crossing the tracks and of maintaining a reasonable lookout, should have stopped the train when the car became visible. There was no duty upon the train crew to slow down the train or stop, even if they had seen the car. In Piskorowski v. Detroit, G. H. & M. R. Co., 121 Mich 498 (80 Am St Rep 518), we held that a hand-car crew was not negligent as to a pedestrian unless they realized that the traveler would not stop and the crew have a right to assume that he will stop. We have held that at a country crossing there is no reason to slacken speed unless danger is apparent. See Tuckfir v. Chicago & Grand Trunk R. Co., 122 Mich 149; Knickerbocker v. Detroit, G. H. & M. R. Co., 167 Mich 596; Rushford-Surine v. Grand Trunk R. Co., 239 Mich 19; Tomes v. Detroit, T. & I. R. Co., 240 Mich 133. It is obvious that, under plaintiff’s own testimony, had the train crew realized that the motorist intended to continue across the tracks it would have been too late to prevent the accident. Whether they made an actual observation becomes immaterial.
Under CL 1948, § 466.13 (Stat Ann § 22.272), the railroad must give at least 2 whistle signals at least 40 rods before a crossing is reached, together with a continuous ringing of the bell from that point to the •crossing. Plaintiff’s own testimony is as follows:
“My best estimate is we were possibly about 12 or 15 feet from the rail closest to us at that time. As near as I can judge we proceeded on the track at about 2 miles an hour. After we once started up it was clear in’my mind no train was coming. We went across, that’s all. No use looking any further.
“I lowered the window in the first place to listen and look so I could hear, that was the purpose in lowering the window. You can’t hear through it; I don’t suppose after I raised the window I was able to hear so well. No doubt when I took my last look I could see well over 40 rods, and I didn’t see a train within 40 rods.” (Italics ours.)
The road foreman, fireman, and the engineer testified that the bell and the whistle were sounded in accordance with the statute but plaintiff testified that she did not hear anything until the impact. No other witness testified. Plaintiff contends that her testimony raised an issue for the jury as to whether the bell and whistle had been properly sounded. Plaim tiff, however, admitted with the window closed she could not hear, or, at least as well, the signals after the car got under way and while it traversed not only the 12 or 15 feet but also most of the 21-1/2 feet over the 2 sets of tracks. If her observation as to distance was correct, she looked before the train had reached the whistling post, at which time there was no duty to sound the whistle. Thereafter she had closed the car window and was not in a position to hear the signals, or at least hear them as well.' The testimony that a witness did not hear signals cannot be considered unless it is shown affirmatively that the witness was in a position to hear signals if given and that she was paying attention when it is claimed the signals were being given. See, to that effect, Shufelt v. Flint & P. M. R. Co., 96 Mich 327; Lambert v. Minneapolis, St. P. & S. S. M. R. Co., 209 Mich 107; Mulvaney v. New York Central R. Co., supra. In Burt v. Detroit, G. H. & M. R. Co., 262 Mich 204, it was held that in an action brought by a boy who was struck by a train while crossing the tracks, his purely negative testimony that he heard no bell ring as against positive testimony that it was ringing, raised no issue of fact. Similarly here, plaintiff’s testimony constitutes negative testimony only and the positive testimony of employees of defendant ■will be accepted as determinative.
Plaintiff' claims error because a motion for new trial for newly-discovered evidence was denied. In an affidavit accompanying the motion, one Junior Coyle testified that while on a farm about a half mile •away from the crossing, he heard the noise of the impact but no sound of a whistle preceding it; that he was listening for a whistle and would have heard 'it if it had been blown. Plaintiff filed an affidavit •that she had not been aware of such.testimony until after the trial. We do not believe that the court •abused its discretion in denying motion for a new trial. There was no showing that plaintiff could not, 'with reasonable diligence, have discovered such evidence and produced it at the trial. Without such showing, it was not error to deny a new trial. See Grossman v. Langer, 269 Mich 506; Davidson v. City of Detroit, 307 Mich 420.
We find that no negligence on the part of the defendant was shown. In the case of ¡¡richer v. Green, 313 Mich 218 (163 ALR 697), we held that ordinarily the contributory negligence of the traveler is not imputed to the passenger. In the instant case it was claimed that plaintiff was contributorily negligent inasmuch as she was also, according to her own testimony, accustomed to watch and warn her husband while he was driving and she did assume such duty to look out for any approaching train. Under the facts of this case, plaintiff was unquestionably guilty of contributory negligence. However, we need not enlarge on this point as there was no negligence on the part of the defendant.
Judgment for defendant affirmed, with costs.
Dethmers, Care, Bushnell, Sharpe, Boyles, and Reid, JJ., concurred.
The late Chief Justice North did not sit. | [
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Butzel, J.
Plaintiff, the Watts Construction Company, an Ohio corporation, entered into a contract with Joint Clutch and Gear Service, Inc., a Michigan corporation, to construct a building on land owned by the latter in Detroit, Michigan. The contract was executed in Ohio. After a long delay, for which the plaintiff claims it was not to blame, and when the building was far from completion, the contract was terminated. Plaintiff filed a mechanic’s lien against the property, claiming $21,758.79 was still due it on the contract. The present suit was brought to foreclose the lien. Other parties were joined as defendants, it being alleg’ed that they had an interest in the property. We shall refer, herein, to Joint Clutch and Gear Service, Inc., as the defendant.
Defendant in its answer raised many defenses to plaintiff’s claim but only one is presented in the instant appeal. Plaintiff, a foreign corporation, admittedly has never obtained a certificate of authority to carry on or transact intrastate business in this State. See CL 1948, §§ 450.93 to 450.96 (Stat Ann §§ 21.94 to 21.97).
The question presented is whether such failure precludes plaintiff from invoking the jurisdiction of or maintaining any action in the courts of this State. CL 1948, § 612.19 (Stat Ann § 27.671), provides:
“Sec. 19. But when, by the laws of this State, any act is forbidden to be done by any corporation, or by any association of individuals, without express authority by law, and such act shall have been done by a foreign corporation, it shall not be authorized to maintain any action founded upon such act, or upon any liability or obligation, express or implied, arising out of, or made or entered into in consideration of such act.”
Plaintiff claims that its contract with defendant constituted an interstate transaction, and even if it were determined otherwise, it was a single, isolated transaction and so not within the scope of the laws hereinabove quoted, and therefore, it was not required to comply therewith. It further contended in its pleadings and in the colloquy at the hearing of the case, that it neither maintained an office nor had any materials or equipment in Michigan; that it never before did any work in Michigan; that the construction was done by subcontractors, whose contracts, like the main contract with defendant, were all executed in Ohio; and that its sole activity in carrying out the contract was the supervision of the work from its principal office in Toledo, Ohio, by its vice-president who made numerous trips to Detroit to supervise the construction of the building. Plaintiff relies heavily on the opinion in Richmond Screw Anchor Co. v. E. W. Minter Co., 156 Term 19 (300 SW 574), which tends to uphold plaintiff’s contentions. Defendant, however, contends that it is at variance with the holdings in the vast majority of the States where a similar question has arisen. Plaintiff also supports its claim by the authority of Bay City v. Frasier (CCA), 77 F2d 570, in which it was held that the plaintiff, a foreign corporation, was engaged in interstate commerce when it contracted to do the engineering for and the supervision of the construction of a water-works system for the city of Bay City. The court pointed out that it did not contract to construct the plant, furnish any materials, or to do any of the actual erection. The contract provided for a resident engineer in Bay City, who would keep in close touch with the Ohio, office of the engineering company. Plaintiff also cites National Adjusting Association v. Dallavo, 253 Mich 239, Smilansky v. Mandel Bros., 254 Mich 575, and other cases in Michigan and foreign jurisdictions.
On the other hand defendant relies on Power Specialty Co. v. Michigan Power Co., 190 Mich 699, Decorators Supply Co. v. Chaussee, 211 Mich 302, Haughton Elevator & Machine Co. v. Detroit Candy Co., 156 Mich 25, Phillips Co. v. Everett (CCA), 262 F 341, A. E. Andrews Co. v. Colonial Theatre Co., 283 F 471, Browning v. City of Waycross, 233 US 16 (34 S Ct 578, 58 L ed 828), and other cases, in Michigan and the Federal courts, as well as statements of the law found in 23 Am Jur, p 378 and 95 ALR 367. Each party attempts to distinguish the. cases cited by the other party by claiming the facts in the instant case vary from those in the cases respectively relied on. It is true that they show variance, as the holding in each case depends primarily on the particular facts of that case. To what extent the cited cases vary from the instant case or how far we are bound by them need not now be considered.
A motion to dismiss made by the plaintiff shortly after the issue was joined, on the ground that plaintiff, a foreign corporation, had not complied with the laws of this State, was denied by the trial judge. The motion to dismiss was renewed at the beginning of the hearing. The trial judge stated that this was the important question, for if defendant prevailed and this Court upheld the decision, it would not’ necessitate a protracted hearing on all the other claims of the respective parties. No testimony was taken. After examining the pleadings and the pretrial statement, and hearing the oral arguments of the counsel, the judge granted the motion to dismiss. Plaintiff has appealed.
We have always frowned upon the dismissal of like cases on a motion to dismiss without the taking of testimony when there are questions of fact involved. Lewis J. Selznick Enterprises v. Harry I. Garson Productions, 202 Mich 106. In order for the trial court as well as this Court to properly consider the case, both parties should have full opportunity to present such testimony as they deem proper.
For this reason we remand the case to the trial court for a full hearing on the questions involved. The costs in this Court and the trial court shall abide the final outcome of the case.
Sharpe, C. J., and Bushnell, Boyles, Reid, North, Dethmers, and Carr, JJ., concurred. | [
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Per Curiam.
Plaintiff sued defendant General Motors Corporation and others for wrongful death of her decedent. All defendants, General Motors excepted, were dismissed with prejudice. Trial against General Motors ended with rendition of an instructed negative verdict and entry of a negative judgment. Division 2 affirmed (28 Mich App 7). Other than as amplified in the ensuing opinion, counsel for General Motors have supplied a generally satisfactory statement of facts:
"Michael McDonough, a journeyman iron worker employed by Paragon Bridge & Steel Company, was killed on October 3, 1963 in a construction accident at the Chevrolet assembly plant in Flint. His employer had contracted to erect the structural steel framework for an additional floor which was to be built above the then-existing plant. Sometime before the day of the accident, Paragon had installed several steel trusses which were to become part of the structure. At the time of the accident, Mr. McDonough was standing on one of these trusses. The Paragon crew of which he was a member had just completed the erection and rigging of a stiff-legged derrick, owned by Paragon, which was to be used to lift steel beams onto the roof of the plant. It was then late in the afternoon and it appeared that the derrick would not be used until the following morning. Following the customary practice in the industry, the crew proceeded to tie the boom of the derrick to a permanent truss in order to secure it for the night. While Mr. McDonough was bending under the boom attempting to secure it to the truss the boom fell, due either to careless operation of the derrick or faulty installation of the boom cable. It struck him and caüsed serious injuries which resulted in his death.”
Division 2 did not meet squarely plaintiff’s ap peal to the exception which, by our decisions, has been engrafted into the general rule of nonliability of an owner-contractee, when the work contracted for by him is "inherently dangerous”. For an up to date statement of the exception, see Vannoy v City of Warren, 15 Mich App 158, 163-164 (1968):
"In Michigan the inherently or intrinsically dangerous activity doctrine is founded upon a theory which is closely akin to, but not exactly the same as, strict liability. The principle is applied 'where a duty is imposed upon the employer in doing work necessarily involving danger to others, unless great care is used, to make such provision against negligence as may be commensurate with the obvious danger. It is this duty which cannot be delegated to another so as to avoid liability for its neglect.’ Inglis v Millersburg Driving Association (1912), 169 Mich 311, 321, 322.”
The Inglis decision seems to mark the first occasion when this Court applied the exception to facts tending to show that the work contracted for was inherently dangerous or perilous. In that case the Court approved expressly an extended passage taken from Covington, etc, Bridge Co v Steinbrock & Patrick, 61 Ohio St 215; 55 NE 618; 76 Am St Rep 375 (1899), and then went on to conclude (Inglis at 321-322):
"The principle involved cannot be better stated than it is in the sentence last quoted, supra. It is not applied to those cases where the injuries occur which are collateral to the employment, like the dropping of material by the servant of a contractor upon a person passing by, but where a duty is imposed upon the employer in doing work necessarily involving danger to others, unless great care is used, to make such provision against negligence as may be commensurate with the obvious danger. It is this duty which cannot be delegated to another so as to avoid liability for its neglect.”
Subsequent cases following Inglis and applying its rule are Huntley v Motor Wheel Corp, 31 Mich App 385, 393 (1971); Vannoy v City of Warren, 15 Mich App 158, 163-164 (1968); Utley v Taylor & Gaskin, Inc, 305 Mich 561, 572 (1943); Grinnell v Carbide Chemicals Corp, 282 Mich 509, 527 (1937); Watkins v Gabriel Steel Co, 260 Mich 692, 695 (1932), and Wight v H G. Christman Co, 244 Mich 208, 215 (1928). Probably the best statement of the mentioned exception to the general rule, succinct and specific as always when written by Mr. Justice Cooley, was quoted in Inglis (from 2 Cooley on Torts, 3d ed, p 1091):
"If I employ a contractor to do a job of work for me which, in the progress of its execution, obviously exposes others to unusual perils, I ought, I think, to be responsible, * * * for I cause acts to be done which naturally expose others to injury.” (Inglis at p 319.)
The foregoing Michigan rule is echoed now by 2 Restatement of Torts 2d, particularly sections 416 and 427 (pp 395 and 415 respectively):
"416. One who employs an independent contractor to do work which the employer should recognize as likely to create during its progress a peculiar risk of physical harm to others unless special precautions are taken, is subject to liability for physical harm caused to them by the failure of the contractor to exercise reasonable care to take such precautions, even though the employer has provided for such precautions in the contract or otherwise.
"427. One who employs an independent contractor to do work involving a special danger to others which the employer knows or has reason to know to be inherent in or normal to the work, or which he contemplates or has reason to contemplate when making the contract, is subject to liability for physical harm caused to such others by the contractor’s failure to take reasonable precautions against such danger.”
The first question is whether plaintiff made out, as against defendant General Motors’ motion below, a case which tended to show that this contract of construction involved "danger to others unless great care is used” and that defendant General Motors failed to see that such "great care” attended execution of the contract. We think she did, and that the issue of actionable negligence as charged in the first count of her complaint was for the jury.
True, plaintiff bore a burden of legal persuasion that was, by the very nature of the stated rule and its exception, much heavier than obtains in the typical case where ordinary negligence is charged. There must be proof or inference from proof, not only of contracted work that is inherently dangerous, but also proof or inference from proof that "great care” was not used. We hold that such proof was supplied here.
Generally, and as already known by comparing the ever steepening rates of workmen’s compensation insurance, judicial notice may be taken that the assigned task of overhead riggers and assemblers of heavy steel beams and shapes is usually fraught with out-of-ordinary danger to such employees as well as others. Taking such notice, it is prima facie apparent (but no more than that) that the job called for by this contract had to be performed with "great care” lest employees — not only of Paragon but of Chevrolet workmen below — be or become endangered by such performance.
Promptly taken photographs of the scene of this fatal accident were received in evidence. They provide striking proof of the inherently dangerous character of this contracted steel construction job. The crew was not framing a new building. It was framing a new floor and new roof over an existing floor and roof of a great manufacturing plant, with work proceeding below as before. The risk on favorable view was that much greater, for it extended to more workmen than those employed by the independent contractor. Had the boom of Paragon’s derrick, which the crew had just lengthened from 50 feet to 60 feet, not fallen partly across the closest of the trussed girders which the crew had fastened into place, it is not unlikely that the boom or some heavy part thereof would have crashed through or partly through the original roof of the plant, beneath which Chevrolet workmen presumably were at work or, considering the time of day, were coming and going between shifts. When the wrong sized cable, which through a succession of sheaves connected the drum of the derrick with the end of the boom, snapped and dropped the boom, the outer end of the latter caught on and was held by the girder; a fact we regard as fortunate for all nearby, plaintiffs decedent excepted.
We do not say that the mentioned exception applies here as a matter of law or, for that matter, that it applies as a matter of law to other like cases. We say only that the evidence adduced warranted submission of the question of liability as charged, under the rule of Inglis and subsequent cases.
General Motors however claims immunity from liability under two provisions of the construction contract. They are:
"11. Contractor’s Responsibility: The Contractor shall be responsible for his work and every part thereof and for all materials, tools, appliances and property of every description used in connection therewith. The Contractor shall assume all risks of damage or injury to property or persons used or employed on or in connection with the work, and of all damage or injury to any persons or property wherever located, resulting from any action or operation under the Contract or in connection with the work, and shall protect, defend and save harmless the Owner from and against all claims on account of any such damage or injury.”
"30. Protection of Premises and Persons: The Contractor shall take all necessary precautions, provide barricades, guards, signs, notices, and such protection as may be required by laws and regulations for the protection of the Owner’s and other Contractors’ property, as well as adjacent property, on both new and existing work. By such provisions, the Contractor shall also protect all persons who may be on the premises or in adjacent areas affected by the Contractors’ operations.”
The exception we have considered precludes matter-of-law employment of these allegedly ex-emptive contractual provisions. As said regularly in the cited authorities, the owner "cannot escape this duty by turning the whole performance over to a contractor”; nor can he delegate that duty "so as to avoid liability for its neglect”. The decedent was not a party to the contract and neither he nor his personal representative became bound thereby. Hence, the most that may be said for such provisions is that they may or may not, as between the contracting parties, have provided some right of indemnity or contribution should General Motors be held to respond in damages.
A separate question is raised and briefed. Since the case is to go back for retrial, we should and do consider it. Plaintiff states:
"Does an employer of a contractor doing major building construction who retains the right to control the safety performance, methods and program, enjoy immunity from suit for the negligent exercise of that control?”
General Motors counterstates:
"Does a property owner, who contracts to have construction work performed on his property and who does not retain control over the methods and procedures of a subcontractor, owe a duty of due care to protect an employee of the subcontractor from injury caused by the careless installation, use or the improper condition of the subcontractor’s own equipment?”
The questions thus stated and counterstated are of course argumentative. We think the issue may be couched best by inquiring whether, by what is contractually designated as the "Architect-Engineer’s Supervision”, General Motors provided for such measure of control over the conduct of the work, by its architect-engineer, as might or did create the same jury question as the Court found in Lake Superior Iron Co v Erickson, 39 Mich 492 (1878); a decision we shall presently review.
Exhibit 53a sets forth General Motors’ "Structural Steel” specifications. These specifications were drafted for General Motors by its architectural firm, Albert Kahn Associated Architects and Engineers, Inc. The architect-engineer was General Motors’ overall administrator of the construction job as contracted. His legal position was, the contract documents considered, poised delicately— and ambiguously — between that of a general superintendent of major construction, and that of a mere consultant having no right to interfere or duty other than of advice. Consider his "status” (Exhibit 53a):
"Architect-Engineer Status: The Contractor agrees the Architect-Engineer and his representative shall have access to the work at all times and that the Architect-Engineer shall have the right to act in any and all of the various capacities assigned to him under the Contract.
"The administration, inspection, assistance and other actions by the Architect-Engineer or the Architect-Engineer’s Superintendent, as hereinbefore provided, shall not be construed as undertaking supervisory control of the construction work or of means and methods employed by' the Contractor, and shall not relieve the Owner or the Contractor from any of their responsibilities or obligations under the Contract; nor shall the Owner or the Contractor request or require the Architect-Engineer or the Architect-Engineer’s Superintendent to undertake such supervisory control or to administrate, supervise, inspect, assist or to act in any manner so as to relieve the Owner or the Contractor from such responsibilities or obligations.”
Between the two extremes thus forensically submitted lies the correct answer, review here being that of grant of motion for direction of a negative verdict. General Motors did not as a matter of law, retain "control”. Nor can it be said, as a matter of law, that General Motors retained such "control”. We have here a mixed question of fact and law, determinable as usual in these cases by due interpretation and application of factual testimony, expert testimony and — particularly here — contract documents which on account of the very length thereof are likely to be susceptible of variant conclusions.
Having pored over 470 pages of contract documents forming a part of the original record, and having done so in conjunction with a mass of testimony adduced by plaintiff having to do with what in the record is known as General Motors’ "Safety Program”, one certain conclusion comes to the surface. It is that General Motors, drafter of all these contract documents, did upon view favorable to plaintiff reserve a measure of firm control over the job to be done for it by Paragon, and that it then (again on favorable view) attempted to water the legal stock of that conclusion by the quoted "Architect-Engineer Status” provision.
An owner contracting to have construction work done on his property cannot reserve to himself "[t]he administration, inspection, assistance and other actions” which do or may authorize some measure of influence or dominion over the way the work is to be done, and yet maintain as a matter of law that such reservation "shall not be construed” as undertaking supervisory control of the work "or the means and methods employed by the Contractor”. When a statutory action (MCLA 413.15; MSA 17.189) is brought by one not a party to such an Owner-Contractor "Agreement”, and it is shown either in fact or law that the relationship of employer and employee did not exist between the owner and the plaintiff or personal representative bringing suit, the applied construction of that agreement is for the court to determine according to its processes; not the drafter of the contract.
For a decision that is closely analogous, both in law and fact, review Lake Superior Iron Co v Erickson, supra. There as here "[t]here was no employment relation” between the owner and the plaintiffs decedent. Justice Campbell proceeded (pp 497-498):
"It is proper first to consider the respective positions of the parties. Day and McEncroe [officers of the mining company] stood in the place of the mining company in making these contracts. There was no employment relation between them and Erickson, who was laboring under the contractors. So far as this changed the relative liabilities of the parties it must operate in this case. But while there are cases in which there is no duty or legal privity between principals and the servants of those who contract with them, this lack of privity is not universal and absolute. If, for example, a railway company were to contract with a firm of car-builders to build cars according to given plans in places under the entire control of the builders, there could be no possible corporate responsibility for injuries received by workmen in their callings. But on the other hand it might be quite possible for men to be employed in piecework in the shops of such companies where they retained more or less control, when for the failure of a corporate duty the workmen or strangers injured by that failure might have a cause of action for the wrong directly against the corporation, although it had not employed them.” (Citing Michigan cases.)
TO CONCLUDE:
1. Since the issue may arise on retrial, note is made of plaintiffs alternative contention that the record supports her allegation that General Motors, contracting thus with Paragon, knew or should have known that it had engaged "an incompetent contractor”. We find in the record no evidence or permissible inference from evidence tend ing to justify submission to the jury of that alternative theory of recovery.
2. To avoid possible interpretation that this opinion affects that type of case mentioned in Inglis, "where the injuries occur which are collateral to the employment, like the dropping of material by the servant of a contractor upon a person passing by”, the profession is advised that the question of application of the exception to such a case, is expressly reserved.
Reversed and remánded for new trial. Costs of all three courts to plaintiff.
Black and Swainson, JJ., concurred.
SUPPLEMENT, by Justice Black (October 31, 1972):
This appeal was duly assigned to me in accordance with the practice of the Court. It was argued March 9, 1972. April 3 I submitted to the Justices a proposed opinion headed "Per Curiam” which, to the paragraph commencing "[a] separate question is raised and briefed” (ante 442), remains intact.
That opinion as proposed was amended by the writer August 9, so as to include treatment of the second question above. My August 9 memo to the Justices advised and concluded:
"The reason for treatment of the second question was my discovery of the uncited case of Lake Superior Iron Co v Erickson, 39 Mich 492 [1878]. I called Justice Brennan’s attention to this case prior to the time he prepared and turned in his opinion, and he has dealt with it according to his views. In addition to this information the Chief Justice says he expects to propose for consideration at our next conference some additional material he deems pertinent both to the Me Donough Case and the yet unsubmitted Funk v General Motors Case.
"The foregoing, I believe, will get the case back on schedule so that it may move along.”
Now that the day of around-the-table judgment has arrived, it appears that the submitted Per Curiam opinion will make no precedent; hence this explanation to the profession.
The panel stated what to it was the dispositive issue (28 Mich App 9):
" * * * whether a property owner, who contracts to have construction work performed on his property and who does not retain control over the methods and procedures of a subcontractor, has an affirmative legal duty to protect an employee of the subcontractor from injury caused by the negligent use by the subcontractor or improper condition of the subcontractor’s equipment.”
"Great care”, in cases as at bar, means some sort of a safety precaution program, initiated and maintained by the contracting owner. Whether that was done became upon the record a question for the jury.
The cable used was five-eighths of an inch in diameter; whereas the derrick was designed for cable diametered three-eights to one-half of an inch. Importantly, the sheaves of the derrick were not enlarged to fit the cable in use and there was proof that the length of cable used was too short, the extension of the length of the boom considered.
Exhibits 53, 53a, 53b, 53c, 53d, 53n and 53o. | [
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Black, J.
(for affirmance). I agree with the reasoning of both opinions below (37 Mich App 115, 119) and therefore vote to affirm. In particular I adopt as level-headed common sense the first two paragraphs of the concurring opinion Presiding Judge Levin prepared. They read:
"When a person is arrested and jailed it is a customary procedure to require him to remove and deposit his personal belongings with the jailer.
"Information obtained by a police officer through the exercise of his senses as he observes articles being removed by a prisoner from his pockets and transferred to a receptacle for safekeeping is not information obtained as a result of a search.”
T. E. Brennan, Swainson and Williams, JJ., concurred with Black, J. | [
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Dethmers, J.
On March 11, 1943, the parties, then husband and wife hut separated, executed an agreement in which it was agreed that plaintiff should have a cottage and lot owned by them and convey to defendant all her rights in their other real estate, and that defendant would pay plaintiff $75 per month until their children completed their schooling, but for not to exceed 6 years, and thereafter $50 per month for the balance of her life, and also the children’s medical and clothing expenses until they completed their education. It was further agreed that plaintiff should continue to have her apartment in premises on which the parties held a lease expiring in 1948 and that thereafter defendant would furnish her with a suitable home for her use and occupancy for the rest of her life or, in lieu thereof, pay her $3,500. The agreement recited that in consideration thereof plaintiff released defendant from all liability for her support and discharged and released her dower rights in any lands which defendant might then or thereafter own and that, if either should seek a divorce, the terms of the agreement should be incorporated into the decree.
In October, 1943, plaintiff filed suit for divorce and subsequently a decree of divorce was entered. Under the heading “alimony” the decree required defendant to pay to the friend of the court $75 monthly for the support and maintenance of plaintiff and 2 children until the latter completed their education, but for not to exceed 6 years, and thereafter $50 monthly. Under the heading “property settlement” the decree provided that “the property settlement heretofore entered into between the parties on the 11th day of March, 1943, is hereby ratified and confirmed and is made a part of this decree by reference thereto, and that the provisions therein made for the plaintiff by said defendant shall be in lieu of her dower.” Shortly after the divorce plaintiff remarried and left the apartment and the city in which it is located.
Defendant filed a petition for modification of the decree as to alimony on the ground of change of circumstances and for construction of its property settlement provisions. The court entered a “modified decree” vacating the alimony provisions of the original decree and relieving defendant from making further monthly payments for plaintiff’s support and maintenance, but in no wise altering or constru ing the provisions contained in the original decree under the heading of “property settlement.” Plaintiff appeals.
It is plaintiff’s contention that the provision, for monthly payments which the original decree required defendant to make was not for alimony, bnt constituted a property settlement not subject to subsequent modification except for fraud. Winter v. Winter, 270 Mich 707; McFarlane v. McFarlane, 298 Mich 595. If it was a property settlement it should, have been placed under that heading and not under the heading “alimony” in the decree. Michigan Court Rule No 51, § 5 (1933, as amended in 1938);. Ratcliffe v. Ratcliffe, 308 Mich 488; Frohnapel v. Frohnapel, 309 Mich 215; Polmanteer v. Polmanteer, 311 Mich 282. In the latter 2 cases we appear to have held the heading “property settlement” to be rather persuasive of the character of the provisions, prefaced thereby. Whether or not the heading is to be deemed conclusive of the question, it is manifest that the heading “alimony” prefacing the provisions for monthly payments by defendant in the-instant case is no misnomer. A fairly equal division of property had been made between the parties. The fact that the monthly payments of $75 were to decrease to $50 when the children had completed their education indicates an intent to provide plaintiff with support commensurate with her needs rather than an attempt to compensate her for property interests' then and there relinquished to defendant. The decree does not recite that such payments shall be in lieu of dower, but rather that they are for support and maintenance of plaintiff and children. The advantage to. plaintiff of decreeing such payments as alimony rather than as property settlement was the availability of contempt proceedings for the enforcement thereof. The recital in the decree, under the heading-“property settlement,” that the provisions in the agreement, which are incorporated into the decree under that heading, “shall be in lieu of her dower” clearly refers to the other provisions made for plaintiff in the agreement and not to the provision in the decree for monthly payments for support and maintenance of plaintiff and children prefaced by the heading “alimony.” We hold the provision for the monthly payments to have been for alimony, subject to modification by the court.
Plaintiff also urges that the court in-its “modified decree” should have construed the provision of the original decree that defendant would furnish plaintiff with a suitable home for her use or in lieu thereof pay her $3,500 to mean that plaintiff has the option of electing whether to take the use of such home or the money. We do not so read the provision. The plain meaning of the language is that the option rests with defendant. The fact that plaintiff has removed to another community, however, does not relieve defendant of the duty to furnish a home for plaintiff’s use inasmuch as the decree does not specify where such home is to be located. We do not believe it to have been the meaning of the decree to restrict plaintiff to residence in the city where she was residing at the time of decree. We think that a fair reading of the provision requires defendant to furnish plaintiff with a suitable home for her use in the community where she chooses to reside or, failing therein, to pay plaintiff $3,500.
Affirmed, without costs.
Sharpe, C. J., and Bushnell, Boyles, Reid, North, and Butzel, JJ., concurred.
Carr, J., did not sit. | [
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Dethmers, J.
Defendant appeals from a conviction of negligent homicide, assigning as error the admission into evidence of testimony concerning the results of a test voluntarily taken by him on a so-called “Harger Drunkometer” and deductions drawn therefrom as to his being under the influence of intoxicating liquor at the time of the accident.
It is plaintiff’s position, supported by proofs, that it is generally accepted by medical authorities (1) that a chemical analysis of a specimen of blood, urine or other body fluid will accurately disclose the percentage of alcohol contained in the blood and (2) that when the blood alcohol concentrate of a subject is 0.15 per cent, or more, by weight, he is under the influence of intoxicating liquor to the extent of im pairment of his ability to drive an automobile. On the basis of that general acceptance by the medical profession it has been held that evidence of the taking of such specimen at or near the time in question, of its chemical analysis, and of the alcoholic content of the blood as determined by such analysis, together with expert opinion testimony as to what the presence of such alcoholic content in the blood indicates with respect to the subject’s intoxication or sobriety, are admissible. See 20 Am Jur (1948 Supp), Evidence, § 876; 127 ALR 1513; 159 ALR 209; State v. Duguid, 50 Ariz 276 (72 P2d 435); State v. Morkrid, — Iowa — (286 NW 412); Kuroske v. Aetna Life Insurance Co., 234 Wis 394 (291 NW 384, 127 ALR 1505).
Is there general scientific recognition that the breath test applied by the Harger Drunkometer will afford an accurate index of the alcoholic content of the blood? Two policemen, both trained in chemistry, one of whom studied the Drunkometer for a month under the inventor and then instructed the other with respect thereto, and a doctor who had worked as a student assistant to the inventor, Harger, gave complex explanations of the underlying theory and modus operandi of the device and testified for plaintiff that, in their opinion, the Drunkometer produces accurate results as to the alcoholic content of the blood. To the same effect is an article by Harger and associates entitled “A Rapid Chemical Test for Intoxication Employing Breath” appearing in the journal of the American Medical Association, vol 110, p 779. Contra is the testimony of 5 doctors sworn for the defense, one of whom testified that “what is going on in this test is that you have got a continuous series of errors, some for and some against, so that the thing works like a slot machine,” and another of whom testified that most of the medical profession do not regard the instru ment reliable. Their views find direct support in a report appearing in 26 Journal of Laboratory and Clinical Medicine, p 1527, by Dr. Haggard, professor of physiology and director of the Alcohol Institute at Yale University, and others, and, indirectly, in other medical and scientific reports and articles. Under such state of the record there would seem to be applicable here what the supreme court of Wisconsin said concerning the so-called lie detector in State v. Bohner, 210 Wis 651, 658 (246 NW 314, 86 ALR 611), as follows:
“The present necessity for elaborate exposition of its theory and demonstration of its practical working, in order to convince the jury of its probative tendencies, together with the possibility of attacks upon the soundness of its underlying theory and its practical usefulness, may easily result in a trial of the lie detector rather than the issues in the cause.”
There is no testimony in the record that there is general acceptance by the medical profession or general scientific recognition of the results of a Harger Drunkometer test as accurately establishing the alcoholic content of a subject’s blood and thus the extent of his intoxication.
“The record is devoid of evidence tending to show a general scientific recognition that the pathometer possesses efficacy. Evidence relating to handwriting, finger printing and ballistics is recognized by experts as possessing such value that reasonable certainty can follow from tests. Until such a fact, if it be a fact, is demonstrated by qualified experts in respect to the ‘lie detector,’ we cannot hold as matter of law that error was committed in refusing to allow defendant to experiment with it.” People v. Forte, 279 NY 204 (18 NE2d 31, 119 ALR 1198).
“Just when a scientific principle or discovery crosses the line between the experimental and de monstrable stages is difficult to define. Somewhere in this twilight zone the evidential force of the principle must be recognized, and while courts will go a long way in admitting expert testimony deduced from a well-recognized scientific principle or discovery, the thing from which the deduction is made must be sufficiently established to have gained general acceptance in the particular field in which it belongs.
“We think the systolic blood pressure deception test has not yet gained such standing and scientific recognition among the physiological and psychological authorities as would justify the courts in admitting expert testimony deduced from the discovery, development, and experiments thus far made.” Frye v. United States, 54 App DC 46 (293 F 1013, 34 ALR 145).
While plaintiff contends that a different rule should apply to! the admissibility of evidence concerning a lie detector test than to that of a Drunkometer test because the former relates to a mental and the latter to a physical fact, both involve tests by scientific devices, the accuracy of which can scarcely be determined by a jury on the basis of complicated, scientific testimony concerning the theory and operation of the devices in the face of a difference of scientific opinion as to their accuracy. We think there should be applied here what this Court said concerning the lie detector in People v. Becker, 300 Mich 562 (139 ALR 1171). In that case, after quoting from 20 Am Jur, p 633, the following:
“The instances in which such criteria have been subjected to judicial scrutiny are relatively infrequent. Those which have passed upon the question have held that the systolic blood pressure deception test for determining the truthfulness of testimony has not yet gained such standing and scientific recognition as to justify the admission of expert testimony deducted from tests made under such theory.”
this Court went on to say:
“We see no reason why, under the circumstances of this case, the result should have been admitted. There was no testimony offered which would indicate that there is at this time a general scientific recognition of such tests.”
The admission into evidence of testimony concerning the Drunkometer and the results of the test thereby imposed on defendant was error.
Defendant also assigns as error the admission of testimony and exhibits relating to a piece of gray cloth allegedly found, after the accident, on the front of defendant’s automobile and of testimony that the deceased was, at the time of the accident, wearing a dark gray suit, without production in court of the piece of cloth, the suit, or an explanation of the failure to so produce. Plaintiff contends that defendant is not in position to complain because he failed to make proper objection at the trial. There can be no doubt that such admission, under the circumstances, over objection, would be error. The same may be said for testimony concerning skid-marks on the pavement at the scene of the accident if not properly tied up to defendant’s automobile. The error complained of in the court’s charge to the jury will not likely occur on retrial and therefore merits no further discussion.
Sentence is vacated, the conviction reversed and set aside and the cause remanded for a new trial.
Sharpe, C. J., and Bushnell, Boyles, Reid, North, Butzel, and Carr, JJ., concurred. | [
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Dethmers, J.
Plaintiff claims error in the trial court’s admission of testimony concerning plaintiff’s cruelty and other matters on the ground that defendant’s answer amounted to a mere denial of the allegations in plaintiff’s bill for divorce, alleging no affirmative defense, and that defendant filed no cross bill. “It must be assumed, without convincing evidence to the contrary, that the court disregarded all evidence improperly admitted. The reception of any such testimony, under the circumstances, is not error which so affects the merits of the case as to be grounds for reversal.” Westgate v. Westgate, 291 Mich 18. It does not appear that the trial court relied on such testimony in arriving at its decision, nor do we; hence, the point merits no further consideration.
Plaintiff also contends that the court could not award custody of the minor child, alimony or divi sion of property to defendant because her answer contained no prayer therefor. While the decree did require plaintiff to pay a sum for the support and maintenance of the minor child in custody of defendant, it expressly provided that plaintiff should pay defendant no alimony. The fact that plaintiff’s bill prayed for custody and award of the property of the parties to him and that defendant prayed for no such relief but merely for dismissal of plaintiff’s bill of complaint, did not serve to limit the court to those alternatives. Plaintiff’s bill prayed for a decree of divorce. In granting a decree of divorce the authority vests in and the duty reposes upon the court to determine questions concerning the custody of children and the respective rights of the parties in their property, regardless of the contents of the prayers for relief in those respects in either the bill or answer. CL 1948, § 552.101 (Stat Ann § 25.-131); Losie v. Losie, 323 Mich 300; CL 1948, § 552.16 (Stat Ann § 25.96); CL 1948, § 722.541 (Stat Ann § 25.311).
Divorce was granted plaintiff on the grounds of cruelty in that the defendant was infatuated and associated with another man extensively and openly. Adultery was not shown or claimed. Plaintiff urges that under such circumstances it was error to award custody of the parties’ two and one-half-year-old son to the defendant wife. Plaintiff cites cases in which the wife’s misconduct was such that custody of small children was held properly awarded to the husband. Defendant, on the other hand, cites cases in which, despite the wife’s misconduct toward her husband entitling him to divorce, custody was nevertheless awarded to the wife. The trial court properly took the position that the question was not one of the rights of the parties and whether either had forfeited such rights, but, rather, what would best serve the well-being of the child. Winn v. Winn, 243 Mich 587; Brookhouse v. Brookhouse, 286 Mich 151; Sawyer v. Sawyer, 312 Mich 524.
An examination of the record convinces us that the trial court did not err in finding that the defendant was a good mother, attached to the child, gave him good care, was a fit person to have his custody, and that the best interests of the small child would be subserved by awarding his custody to the defendant mother as contemplated by the statute (CL 1948, § 722.541 [Stat Ann § 25.311]).
Decree affirmed, with costs to defendant.
Sharpe, C. J., and Bushnell, Boyles, Reid, North, Butzel, and Carr, JJ., concurred. | [
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Butzel, J.
Bevised Statutes of 1846, ch 16, §70, provided that the supervisor, 2 justices of the peace and the township clerk of each organized Michigan township should constitute its township board, 3 of its 4 members constituting a quorum. PA 1935, No 19, and PA 1937, No 81, amended section 70 of chapter 16 of the Revised Statutes of 1846, so as to provide that in townships of under 5,000 population there was to be a 5-member board, consisting of the supervisor, the 2 justices of the peace whose terms of office “will soonest expire,” the ■township treasurer and the township clerlt, 3 of whom should constitute a quorum; and.that in town.ships having a population of 5,000 or over according to the last Federal census there was to be a 7-man board, consisting of the supervisor, the township treasurer, the township clerk and 4 justices of the peace, any 4 of whom should constitute, a. quorum. The provisions for a 7-man board were conditioned, however, upon the. electors of the township adopting the provisions of section 70, supra, by a majority vote at any annual town meeting. Section 70j.supra, as amended, is set forth in CL 1948, §41.70 (Stat 'Ann 1951 Gum 'Supp §5.62). There were further .amendments to clarify the population provisions .’of the act but.they are not material here. PA 1945, No 23; PA 1949, No 9. For brevity, we refer to the amended act as section 70, supra. For over 100 years justices of the peace have been member's of the township board. Statutes relating to the powers and' duties of township boards' in regard to procuring standards of weights .and measures, prohibiting sales of liquor to certain persons, granting licenses to tavern keepers, licensing public exhibitions, et cetera, are listed in the index of the Revised Statutes of 1846. The township board since 1846 has been expressly given certain. legislative and administrative powers.
Prior to 1947 Dearborn township, plaintiff herein, had been organized with a 5-man board but at an annual meeting of the electors held on' April 7, 1947, the township was brought under the provisions of the amendment applicable to townships having 5,000 population or oyer, the Federal census of 1940 having, indicated a population far in excess of 5,000. The township operated under a 7-man board until the annual meeting of the electors on April 2, 1951, at which time the electors purported to rescind their action taken in 1947 and to reestablish a 5-man board. The reason given at the time was that the 7-man board gave the majority control to the 4 justices of the peace. Defendant township clerk, thereafter recognized only the votes of the 2 jirstices of the peace “whose term would soonest expire.” Plaintiff, claiming that the resolution restoring the 5-man board was ineffective for various reasons, brought a bill for declaratory judgment, asking that defendant be required to record all 4 votes of the justices. On motion for entry of a judgment on pleadings the trial court held for defendant, on the ground that the Constitution forbade the legislature from giving legislative power to judicial officers, namély, justices of the peace, and thus neither 2 nor 4 justices of the peace could be members of a township board. Other questions were raised but we believe' the over-ali question is the constitutionality of section-70,: supra, in constituting justices of -the peace members of the township board, a legislative body.
More specifically stated, defendant contends that section 70, supra, providing that justices'of the peace be members of either a 5-man or a 7-man board, violates article 4, §§l-and 2, of the Michigan Constitution, which divides the State government into 3 departments: The legislative, the executive and the judicial, and forbids any person belonging to one department from exercising powers properly belonging to any other except in cases expressly provided for in the Constitution. The judicial power, by article 7 of the Constitution, is vested in justices of the peace as well as in the higher courts. If defendant is correct in his contention that section 70, supra, Is unconstitutional insofar as it makes justices of the peace members of township boards, we need not discuss other questions raised.
In coming to our conclusions, we are mindful of the restrictions upon the power of this Court to declare a challenged statute in conflict with our Constitution. It is too well settled to require citation that a statute must be treated with the deference due to a deliberate action of a co-ordinate branch of our State government. If the legislature enacted a statute which does not violate the provisions of the Constitution, this Court may not inquire into the wisdom of the legislation or substitute its judgment for that of the legislature. The conflict between the statute and constitutional provisions must be clear and inevitable before we strike down a statute as unconstitutional.
Plaintiff, in attempting to uphold the constitutionality of section 70, supra, relies on section 1 under the schedule appended to the Constitution of 1908, which provides as follows:
“The common law and the statute laws now in force, not repugnant to this Constitution, shall remain in force until they expire by their own limitations, or are altered or repealed.” (Italics ours.)
He also cites a similar provision appended to the Constitution of 1850, and contends that by reason of such provisions the constitutionality of section 70, supra, in effect at the time of the constitutional revisions, was affirmed. An examination of the quoted language of section 1, however, shows that a statute which was indeed “repugnant” to the provisions of the Constitution would not be embraced in this section. "We find that the reenactment of such statute has no determinative effect here other than as further proof of the long period in which it has been in effect without challenge. Section 5 of the schedule appended to the Constitution refers to “officers” and not to “offices” and is not relevant here.
Our reluctance to overturn an action of the legislature increases when we are confronted by an enactment of such ancient vintage. For over 100 years justices of the peace have sat upon township boards within the State of Michigan without any question being raised as to their eligibility. If we were confronted with a matter of construction of a statute containing some claimed ambiguity or with a mere technical objection, long acquiescence in a certain interpretation of such statute might be binding on us. But neither contemporaneous construction nor long acquiescence can prevail over the plain language of the Constitution when the constitutional question is presented to us for the first time. Repetition of error does not correct it nor can acquiescence for a very long time legalize a clear usurpation of power. The fact that justices of the peace have acted as de facto members of township boards over the years does not make them members de jure.
Additional constitutional provisions which may be pertinent in considering the instant problem are as follows:.
Article 8 of the Michigan Constitution of 1908, entitled “Townships, Local Legislation,” states:
“Sec. 17. The legislature may by general law confer upon organized townships such powers of a local, legislative and administrative character, not inconsistent with the provisions of this Constitution, as it may deem proper.”
The Constitution makes no provision for any other agency to be vested with the powers mentioned in section 17, supra, but they are vested by various statutes in the township board.
It is apparent that section 70, supra, attempts to vest justices of the peace, officers possessing judicial power by virtue of article 7, § 1, with legislative and administrative power given to the township governing bodies thereof under article 8, § 17. On its face, therefore, section 70, supra, to the extent that it constitutes justices of the peace members of the township board is a violation of article 4, § 2, which provides that no person belonging to one department shall exercise the powers properly belonging to another.
In many decisions- this Court has upheld and jealously guarded the right to keep distinctly separate one department from another. The doctrine of strict separation was early set forth by Mr. Justice Cooley in People, ex rel. Sutherland, v. Governor, 29 Mich 320 (18 Am Rep 89). In holding that the apportionment of powers to one of the 3 co-ordinate branches' is- a prohibition of its exercise by either of the other departments, he said: '
' “Our government is one whose powers have been carefully apportioned between 3 distinct departments, ' which' emanate alike from the people, have their powers alike limited and defined by the Constitution, are of equal dignity, and within their respective spheres of action equally independent. One, makes the laws, another applies the laws in contested cases, while the third must see that the laws are executed. This division is accepted as a necessity in all free governments, and the very apportionment of power to one department is understood to be a prohibition of its exercise by either of the others. The executive is forbidden to exercise judicial power by the same implication which forbids the courts to take upon themselves his duties.”
In other decisions we have reaffirmed that doctrine and applied it to a variety of situations. We have struck down attempts by the legislature to give nonjudicial power to courts (Houseman v. Kent Circuit Judge, 58 Midi 364; Nichols v. Judge of Superior■ Court of Grand Rapids, 130 Mich 187; Anway v. Grand Rapids Railway Co., 211 Mich 592 [12 ALE 26]). We forbade any attempt by the legislature to restrict judicial powers or qualifications (People v. McMurchy, 249 Mich 147; Attorney General, ex rel. Cook, v. O’Neill, 280 Mich 649). In C. F. Smith Co. v. Fitzgerald, 270 Mich 659, we reaffirmed the doctrine that the courts cannot legislate under the guise of the examination of the validity of a law. In Wood v. State Administrative-Board, 255 Mich 220; and Civil Service Commission v. Auditor General, 302 Mich 673, we emphasized that the legislative and the executive could not encroach upon each other’s powers. For other statements of the general rule see Cooke v. Holland Furnace Co., 200 Mich 192 (LRA1918E, 552), and Focal 321, State, County & Municipal Workers of America v. City of Dearborn, 311 Mich 674.
That the rule favoring strict separation of powers prevails throughout the United States need merely be mentioned in passing. From the time of the Federalist papers, the United States supreme court and other United States' jurisdictions -have reaffirmed that keeping :the' 3 great branches of government separate and distinct from- each other is essential to the maintenance of a republican form of government. This principle has become axiomatic.
Plaintiff, admitting that the doctrine of strict separation of powers will be applied in Michigan, contends that the instant case is not a :proper one for the application of such a doctrine, for several reasons: First, that the township hoard is not a legislative body and is not given legislative powers by the statute in question; Second, that the justicé of the peace is not only a judicial officer hut is permitted under a proper interpretation of the Michigan Constitution to exercise extrajudicial functions; and, Third, that the modified or limited doctrine of separation of powers should instead be applied here in the consideration of a problem of local government.
Plaintiff contends that the statute in question merely creates the township board but gives it no powers and it cannot therefore be said to be a legislative body to which powers were illegally delegated, and that its constitutionality must be determined solely from the particular statutory provisions sought to be held unconstitutional. Plaintiff’s argument, although ingenious, does not reach the root of the problem. Under his reasoning every statute enacted conferring power on township boards would have to be individually declared unconstitutional on the ground that the board itself was an illegally constituted body; whereas in reality unconstitutionality finds its roots in the very composition of the board. It is true that only by additional or supplemental statutes are the powers vested in the township board, which the Constitution (article 8, § 17) authorizes the legislature to vest in the township. The very existence of the township board, however, implies that it 'will be given powers by other statutes. We cannot presume that the legislature would do a useless thing. We find that the legislature contemplated the establishment of a body possessing certain power's of a township authorized under article 8, § 17, when it set forth the composition of the township board and that it is proper for us to consider the constitutionality of section 70 in that light.
Plaintiff further contends that the township board is not a basic legislative body and as such does not constitute a legislative body whose power would be illegally delegated to a constitutional judicial officer, as it lias no real basic legislative power to delegate but is more a special, semiministerial body.
It is true that the township board was held, in People, ex rel. Le Roy, v. Hurlbut, 24 Mich 44 (9 Am Rep 103), and Hanslovsky v. Township of Leland, 281 Mich 652, to be a board of special and limited jurisdiction. It has no power or authority by constitutional mandate; it derives its sole authority from the legislature, which is authorized to delegate certain powers to the township by the Constitution. People, ex reí. Le Roy, v. Hurlbut, supra, however, did not hold that a township board is not a legislative body but that the legislature may delegate any or none of its legislative power to a township board; that only as to such powers as are delegated can the township board exercise legislative power. The township board, possessing certain powers originally given to the legislature by the Constitution and properly delegated to the township board, is a legislative body to that extent.
In considering PA 1933 (Ex Sess), No 8, relating to the liquor control commission, and particularly the provision therein to the effect that applications for the sale of intoxicants should be-approved by the local legislative body, we held that the township board was the local legislative body of the township. Scott v. Arcadia Township Board, 268 Mich 170. Also, see McCarthy v. Thomas Township Board, 324 Mich 293. Further evidence as to the fact that the township board possesses legislative powers appears when we examine the statutes prescribing its powers and duties. Among others, CL 1948, § 41.201 (Stat Ann § 5.191), provides that a township board may employ a traffic officer and fix his compensation. CL 1948, §41.444 (Stat Ann §5.274), provides '’that the township board shall pass on the budget of the township park commission. CL 1948, § 125.281. (Stat Ann 1949 Rev § 5.2963 [11]), provides that the township board shall vote on the adoption of a zoning ordinance to be submitted to the electors and provide a penalty for violation. It may also (CL 1948, §125.351 [Stat Ann 1949 Rev § 5.2973 .(1)]) provide by ordinance for the uniform construction of buildings and fix the penalty for violation. ' The township board possesses no judicial duties; all of its duties are legislative or administrative in character.
We agree with defendant that the township board can in no sense be held to have any connection with the judicial department of the. government and that it is vested with legislative, as well as certain administrative, powers which justices of the peace as judicial officers by the constitutional provisions herein-before referred to, may not exercise.
Article 7 of the Michigan Constitution provides in section 1 that the judicial powers of the State shall vest in the Supreme Court, circuit, courts, probate courts, justices of the peace, and such other courts as the legislature may establish. Section 15 provides for the election in each organized township of 4 justices of the peace to serve for 4 years. Section 16 defines their jurisdiction, and section 18 provides that justices of the Supreme Court, circuit judges and justices of the peace shall be conservators of the peace within their respective jurisdictions. In interpreting these provisions, we have held that the justice of the peace is vested with part of the judicial power of the State (Holland v. Adams, 269 Mich 371; In re Sanderson, 289 Mich 165) and in exercising his judicial powers in criminal cases he represents the State rather than the township (People, ex rel. Royce, v. Goodwin, 22 Mich 496; Faulks v. People, 39 Mich 200 (33 Am Rep 374); People v. De Meaux, 194 Mich. 18). "We have also held that, the judicial power conferred upon justices of the peace was in no manner reduced or modified by virtue of their constitutional appointment as conservators of the peace (In re Sanderson, supra; In re Slattery, 310 Mich 458). Unquestionably justices of the peace belong to the judicial department of the government.
Plaintiff contends, however, that in addition to their judicial duties, justices of the peace in Michigan may exercise other functions, among which are the duties vested in them by reason of their membership on township hoards. He relies on section 16 which, after providing for the civil jurisdiction of justices, states:
“They shall also have such criminal jurisdiction and perform such duties as shall he prescribed by law.”
What was meant by “such duties?”
Defendant contends that the wording of section 16 extends only to additional judicial duties. .That such duties exist is indicated by O’Connell v. Menominee Bay Shore Lumber Co., 113 Mich 124, in which it was held permissible to give justices additional jurisdiction in certáin trespass and conversion cases under the authority of section 16; and by Village of Paw Paw v. Flook, 214 Mich 486, in which it was held permissible to give justices the responsibility of summoning a jury in condemnation proceedings. There being other judicial duties not enumerated in section 16, it appears that the rule of ejusdem generis applies inasmuch as judicial duties are specifically mentioned and such inclusion by specific mention thereof excludes other types of duties not mentioned. See Michigan Wolverine Student Co-Operative, Inc., v. Wm. Goodyear & Co., 314 Mich 590. This is not a case where the specific words which precede a general term embrace all objects of their class and the rule of ejusdem generis is held not to apply in order that the general term may be given a meaning differing from specific words, as was true in Utica State Savings Bank v. Village of Oak Park, 279 Mich 568.
Notwithstanding the written provisions of the Constitution and statutes, plaintiff contends that the history of the office of justice of the peace in Michigan and the other States of the United States shows that they have traditionally had other than merely judicial powers. He cites the laws of the Northwest Territory which gave the justices of the peace numerous nonjudicial powers, among which were the participation in township organization, and People, ex rel. Le Roy, v. Hurlbut, supra, in which it was stated:
“The Constitution has been adopted in view of a system of local government, well understood and tolerably uniform in character, existing from the very earliest settlement of the country, never for a moment suspended or displaced, and the continued existence of which it is assumed.”
However, the plain provisions of the Constitution are paramount, notwithstanding a custom which violates such provisions.
We are asked to look into the history of the Northwest Territory and other governments preceding or coexisting with our own. We do not believe such consideration can be controlling in the face of our own Constitution which limits the justices of the peace to judicial duties. That justices of the peace are also made conservators of the peace by article 7, § 18 of the Constitution, does not constitute the granting of nonjudicial authority to justices, but-merely imposes upon them a function possessed by all judicial officers of the State of Michigan and is limited to the constitutional power thus, expressly-given.
In Robertson v. Baxter, 57 Mich 127, we held:
“It has always been understood that in providing*, as it does, for the organization and incorporation of townships, the" Constitution dealt with them as recognized and ancient municipal bodies, the substantial character of which was intended to be perpetuated.”
It is worthy of note, however, that the holding of the Robertson Case was concerned with an attempt of a township to extend its authority over drains without its jurisdiction and this Court held that the township jurisdiction had been limited traditionally to within its territorial limits. -This Court did not concern itself with the question of separation of powers upon which there had been a clear constitutional mandate.
Plaintiff relies heavily on State, ex rel. Patterson, v. Bates, 96 Minn 110 (101 NW 709, 113 Am St Rep 612). Minnesota has adopted the theory that when duties of an ambiguous character are imposed upon a judicial officer any doubt will be'resolved in favor of the validity of the statute creating such duties. However, the rule in Michigan is stated in Civil Service Commission v. Auditor General, 302 Mich 673, as follows:
“If there is any ambiguity the doubt should be resolved in favor of the traditional separation of governmental powers.”
An examination of the history of Michigan Constitutional Debates is a clear indication that in Michigan the justices of the peace were intended to have judicial powers only. The 1835 Constitution did not clearly define the powers of justices, but in 1850 a proposal that the justices be made a part of the township government was rejected by the Constitutional Convention. The proposed section had provided :
“There shall be elected annually on the first Monday of April, in each organized township, one supervisor, one township clerk, who shall be ex officio school inspector, one commissioner of highways, one township treasurer, one school inspector, not exceeding 4 constables and 1 overseer of highways for each highway district, in whom together with the justices of the peace shall be vested the township government to be defined and limited by the legislature.”
The final provision, which was substantially carried over into the 1908 Constitution (article 8, § 18), omitted all references to the justices. That, in the face of such rejection, section 70, supra, was allowed to remain on the statute books in its present form, we can only attribute to inadvertence and possibly to the fact that up to the present time it did not become a subject of serious controversy. The question is squarely presented to us in the instant case.
We have held that the township board exercised, legislative as well as ministerial and. local functions. However, if we had held that the township board •exercises only ministerial or administrative functions, we would conclude that it would not be permissible for a justice of the peace to serve thereon, as under Michigan law a justice of the peace is solely a judicial officer, with the same status as other constitutional judicial officers. Local 170, Transport Workers Union of America, v. Genesee Circuit Judge, 322 Mich 332.
The theory of the “modified” or “limited” doctrine of the separation of the powers of government was stated in Story’s Constitutional Law (4th ed), p 380 et seq., and quoted in Local 321, State, County & ■Municipal Workers of America v. City of Dearborn, supra, as follows (at p 677) :
“When we speak of a separation of the 3 great departments of government, and maintain that that separation is indispensable to public liberty, we are to understand this maxim in a limited sense. It is not meant to affirm that they must be kept wholly and entirely separate and distinct.”
Plaintiff cites authority holding that the “modified” or “limited” view will find particular application to the local level of government, but we note that plaintiff has cited no Michigan cases to such effect. Indeed, as we have noted, this Court has rigidly stated the doctrine of absolute separation of powers on numerous occasions.
It is claimed that Local 321, State, County & Municipal Workers of America v. City of Dearborn, supra, is an exception but an examination of the facts of that case distinguishes it. The Court first reaffirmed the very important principle that the departments of the government must be kept separate but added, however, that when it is expressly provided in the Michigan Constitution or in the charter of the political unit in question that the 2 departments act together in a certain matter under certain conditions, then.this is not a violation of that principle. A well-known example is that of the veto power of the executive. In the Dearborn Case, the city council gave to municipal workers a cost-of-living increase in pay without the consent or action of the city civil service board, with whom b.y charter (Dearborn’s charter having been promulgated under the provisions of the home rule act) it was required to act. We properly held that the city council could not act alone.
Even assuming that a local government may be given authority to set up a governmental structure which in some respect may not strictly conform to the doctrine of separation, and that indeed this is done' in the case of many local governments, the instant case is not such a one. The organization of the township and that of the office of justice of the peace are directly under the purview of the legislature and the Constitution, of the State and are subject to the provisions of the latter. The individual townships are given no power over the structure of their own governments; we are, instead, dealing with the exercise of legislative power delegated to them and which is subject to the provisions of the State Constitution.
It was held in the case of Myers v. United States, 272 US 52 (47 S Ct 21; 71 L ed 160) that while it is not possible wholly to avoid conflicts between the several departments of government, the Constitution should be expounded to blend the departments of government no more than it affirmatively requires. To a similar effect, see 11 Am Jur, § 182, p 880. We have not been shown any affirmative requirement that the justices of the peace so act on township boards; indeed the very existence of this controversy is an indication to the contrary. It is possible for the township justices to perform all of their judicial duties without any encroachment upon any department of the township government. As a minority on the township board, the justices would be exercising part of the legislative power on the board and thus are sitting unconstitutionally, but as a majority they might usurp all of the legislative power of the board.
We hold, therefore, that we do not have presented to us a case for the application of the “modified” or “limited” doctrine of separation of powers and that, in accordance with the main current of Michigan authority, the instant statute, insofar as it provides that justices of the peace be made members of township boards, is unconstitutional.
The trial judge held that section 70, supra, is unconstitutional for the reasons we have heretofore given and he entered a decree to that effect. The decree is affirmed. The trial judg’e further found that there was no merit in other claims made by defendant. In view of our holding in favor of defendant on the main issue in- the case, it is unnecessary to discuss claims made on cross appeal from the decree of the court disallowing additional claims made by defendant.
The decree may be entered herein affirming the trial judge in holding that section 70, supra, insofar as it provides for justices of the peace sitting as members of township boards, is in violation of and repugnant, to the provisions of the Michigan Constitution and that the only legal members of the township board of Dearborn township are the supervisor, the township clerk, the township treasurer. No costs, a public question being presented.
Dethmers, Carr, Bhshnell, Sharpe, Boyles, and Reid, J J., concurred.
The late Chief Justice North did not sit.
See Const 1850, sehed § 1.—Reporter.
See US Const, art 4, § 4.—Reporter.
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Butzel, J.
Plaintiffs, electors and voters in School District No 1 of Royal Oak township in the county of Oakland and State of Michigan, filed a petition in the Oakland circuit court for a writ of mandamus to order defendants, trustees and Loretta Baker, acting clerk of such school district, to call and take all other necessary steps for a recall election as asked for in similar petitions for the recall of defendants Lonnie 0. Cash, Chester Carter and Sidney Thomas, as trustees.
Although we are only considering the petition for the recall of defendant Lonnie C. Cash, counsel have stipulated that our determination herein shall also be binding upon defendants Chester Carter and Sidney Thomas. According to the recall petitions, School District No 1, supra, embraces the entire voting precinct No 4 and a portion of voting precinct No 6 of Royal Oak township, that the vote for all candidates for governor for the State of Michigan in the last preceding election did not exceed 899 votes and the total number of voting electors who signed the recall petitions was in excess of 600. Following the filing of the petitions, demand was made upon Loretta Baker as acting clerk of the school district and upon other defendants, comprising all its board of trustees, that petitions for the recall of Cash be given full effect, that a recall election be called as asked for in the recall petitions, and that they do all the necessary things to proceed with a recall election in accordance with the law, CL 1948, § 201.101 et. seq. (Stat Ann §6.771 et seq.). Defendants first claimed that there was an insufficient number of signatures to the petitions but they evidently have abandoned such claim. In reply to the petitions for mandamus they do not deny any of the reasons given for such recall but challenge the sufficiency of the petitions, claiming that they do not comply with the recall statutes, supra, in that they do not state clearly; “the reason or reasons for said demand” for recall. The trial judge held the petitions sufficient and issued a writ of mandamus. Defendant filed an appeal to this Court in the nature of certiorari.
The petition against defendant Cash sets forth the following reasons why. he should be recalled from the office of trustee of said school board:
“1. That the said Lonnie C. Cash has violated the clear provisions of the laws of the State of Michigan pertaining to the administration of education in said school district; ' ■ ’ ‘
“2. That he has received money in the form of wages from said school board and district, in violation of law;
“3. That he has received expense moneys improperly from said board and district, in violation of law;
“4. That he has been using property of the school district for his own use, pleasure and business, to the neglect of its proper use, particularly the station wagon;
“5. That he has failed as a board member to ask for and obtain proper competitive bids on contracts with the said board as required by law;
“6. That he has intimidated employees to obtain forced resignations and has not issued proper legal contracts of hire to teachers employed by said board;
“7. That his actions have caused turmoil, loss of public confidence and irreparably injuring confidence in public education;
“8. That he has taken action with others on said board to interfere with free discussion of school problems by employees under threat of dismissal;
" 9. That he has participated in concert with otherson said board to violate the school laws of the State of Michigan as hereinbefore set forth.
“10. That he has assumed duties with other members of the board which should be performed by the superintendent of the district and which he has prevented the superintendent from performing.”
We have repeatedly called attention to the fact that a recall petition differs from a proceeding for removal, and exacts neither the technical proof nor procedure of a petition for removal. -
We have considered what constitutes a sufficiently clear statement of reasons to comply with the statute in 3 previous cases, namely, Newberg v. Donnelly, 235 Mich 531; People, ex rel. Elliott, v. O’Hara, 246 Mich 312; Amberg v. Welsh, 325 Mich 285. In Newberg v. Donnelly, supra, cited by defendants, allegations that a member of the school board refused to hire a certain teacher and. stated that he would run the school district to suit himself while intimidating the other members of the school board were held to be insufficient. We said:
“This statement must be such as will furnish information to the electors on which they may form a judgment when called upon to vote.' The reason or reasons assigned must be based on some act or failure to act which, in the absence of a sufficient justification, would warrant the recall.”
In People, ex rel. Elliott, v. O’Hara, supra, we held that allegation that a school board officer had held back $60 from salary due an employee for his own use to be sufficient. We stated that an allegation ■was sufficient when it was “a specific allegation of •facts, and charges misconduct in office. It is not insufficient because it does not allege the time, person, and occasion involved. It must be presumed to refer to the ensuing term of office. It clearly states the charge so the officer may identify tálmncident and prepare his justification, and it informs the electors of the specific character and instance of official misconduct relied on for recall.”
We further held that:
“In view of the «general application of the statute to even the smallest municipalities, where such petitions would often be drafted by laymen, it would impose too great a burden on recall proceedings to require meticulous and technical detailed statement of the charges.”
This becomes particularly true in the instant case where evidently over 600 voters out of 899 entitled to vote filed the recall petitions. CL 1948, § 201.101.
In Amberg v. Welsh, supra, we held that even if some of the reasons for recall were unimportant or insufficient, there were sufficient valid reasons, properly stated, in the petition that may he classified as charges of misfeasance, malfeasance, or nonfeasance to raise a question as to whether the acts of the officer complained of warrant a recall and entitled the electors to vote thereon.
It will serve no purpose to compare all these cases in more detail. No 2 recall petitions will allege the same facts or circumstances. We do find, however, that at least reasons 2 and 4 of the petition before us meet the tests set forth in those cases. They present a more definite statement of reasons than, appeared in the case of Newberg v. Donnelly, supra. If they are true and defendant can show no justification, then they are charges of misfeasance or malfeasance in office, since they involve the illegal use of school district properties and money. The misappropriation of such assets would warrant a recall. As is obvious upon examination of the entire petition, the receiving of a salary and the use of the district station wagon were carried on as a continuous course of conduct and it would have been impossible for the petitioners to refer to a particular time and occasion. As in the case of People, ex rel. Elliott, v. O’Hara, supra, it must be presumed that this course of conduct took place in a current term of office. Defendant Cash has sufficient notice so as to be able to prepare the justification of his conduct in office. CL 1948, § 201.103. Similarly the electors will know of the specific character of the misconduct relied upon as a basis for recall.
We find that reasons 2 or 4 satisfy the statute in that each, or either one, constitutes a clear statement of a reason for recall. In so holding, we find it unnecessary to consider the other portions of the recall petition.
The order of the trial court ordering the issuance of a writ of mandamus is affirmed, and the case remanded to the trial court for further proceedings, if such order is not complied with forthwith. No costs, a public question being involved.
Dethmers, Carr, Bushnell, Sharpe, Boyles, and Reid, JJ., concurred.
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Reid, J.
Plaintiff filed her bill of complaint for the construction of a will and the determination of the interests of parties in real estate devised by the will. Testimony was taken on the hearing. From a decree dismissing the bill, plaintiff appeals.
The parties to this case are daughters of Rose Evers Bates, who died October 2, 1943. At the time of her death, she was living on a farm in Lansing township, Ingham county, which had been purchased by her and her husband Norris Evers about 30 years before she died. The farm originally consisted of 120 acres, the southwest corner of the farm being located at the intersection of Aurelius road and Cavanaugh road. Plaintiff Pearle Widman and her husband Harry Widman purchased a part of the 120 acres in 1925. About that same time, plaintiff’s husband drew up a tentative plat of a portion of the farm, approximately 20 acres in extent, and several blueprint copies of the plat were made but the plat was never recorded. Although there were subsequent conveyances of portions of the original 120 acres, apparently none of those conveyances in their descriptions contained any reference to the unrecorded plat. Also, a strip of land 12 rods wide from the center of the road upon the Cavanaugh road, extending from the eastern boundary of the property that Widmans had bought to the extreme eastern boundary of the farm, was sold to the Consumers Power Company. This strip was about 13 acres in extent.
Mr. Evers died in 1934 and several years afterward his widow Rose Evers married Wirth Bates. On January 28, 1942, Rose Evers Bates made her will. After taking’ into consideration- deeds made of portions of the 120 acres and the devises made in the will preceding the devises hereinafter recited, there appear to have been left about 87 acres of the unplatted portion of the original farm. The portions of the will in dispute in this case appear in the following form:
“Also to my daughter Charlotte Franklin, I give, devise and bequeath the north | of the remainder of my farm consisting of approximately 99 acres, not heretofore subdivided, and which is located in the township of Lansing, county of Ingham, State of Michigan, and which is described as:
“The south ½ of the northwest J, and the southwest ¼ of the northeast ¼ of section 35, town four (4) north, range two (2) west.
“Third: . To my daughter, Pearl Widman of the •city of Lansing, Michigan, I will, devise and bequeath, the south i of the remaining and unplatted portion of my farm consisting of approximately 99 acres as described in the above paragraph.”
There is nothing in the rest of the will as to the number of acres in any plat nor as to the number of acres that testatrix still had title to that had been unsold. One query in the part of plaintiff is,
“Does the testatrix mean that the north % of the rest of her farm is 99 acres in extent, and that she is giving all of 99 acres to her daughter, Charlotte Franklin, or does she imply by the wording that she is giving Charlotte Franklin the north i of the remainder of her farm, which entire remainder con sists of 99 acres, and therefore, that she is devising* to this daughter approximately 49J acres ? ”
Plaintiff claims that the testatrix had evidently entirely forgotten the conveyance to Consumers Power Company of a strip of land because the will refers to 99 acres as the unplatted remainder of her farm, whereas a surveyor, Mr. Hendryx, employed by the defendant, testified that the only way in which testatrix’ remaining unplatted acreage could approximate 99 acres would be to include the lands conveyed to the Consumers Power Company.
Plaintiff further infers an intent on the part of the testatrix so to divide the remainder of the farm between the two daughters that plaintiff Widman would be afforded an entrance from her half to the public highway. There is no direct proof of any such intent; neither can it be inferred from the will.
Plaintiff further indicates by her argument that if all of the farm of testatrix remaining unsold or undisposed of by devises in the will preceding the ones in dispute should be added together and equally divided between the two daughters, then in that case plaintiff would have access to the road.
We infer from the statements of the parties that there is a portion of the farm somewhat irregular in outline and about 3½ acres in extent remaining in the original proposed plat and not devised by specific description in the will, which 3½ acres would go under the residuary clause to defendant Charlotte Franklin. Plaintiff desires to have the will so construed that the 3½ acres shall be included with the unplatted portion of the farm and the north half and south half divisions to the parties respectively made accordingly. Plaintiff further propounds the following query in her brief:
“Does Mrs. Bates mean the south ½ of all the remaining, as well as of the unplatted portion, of the farm, or does she mean ½ of the unplatted portion which remains’ ? If the former meaning is what she •had in mind, then this devise on the face of it is according to the contention of plaintiff, since the testatrix means to give Pearle Widman one-half of the remainder of her farm, including one-half of the unplatted portion.”
We are not in accord with plaintiff’s construction of the will. The will plainly gives defendant Charlotte Franklin the north half of what remains of the unplatted portion of the farm and gives to the plaintiff the south half of what remains of the unplatted portion of the farm.
Moreover, such meaning is plain. The will is not ambiguous in the respect claimed by plaintiff. It is clear that plaintiff’s half as set forth in the will has nothing to do with the platted portion of the farm.
The decree dismissing the bill is affirmed. Costs to defendant.
Sharpe, C. J., and Bushnell, Boyles, North, Dethmers, Butzel, and Carr, JJ., concurred. | [
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Butzel, J.
Plaintiffs are owners of land respectively in Bangor and Kawkawlin townships, Bay county, Michigan, and not far distant from the piggery and garbage disposal plant of J. Claude Greene, d/b/a Garbage Disposal Company, defendant and sole appellant. On September 4, 1947, plaintiffs filed a bill for the abatement of the nuisance caused by defendant in the operation of a piggery and asking that he be enjoined from continuing it. The bill was dismissed as to defendant city of Bay City. Testimony showed that appellant fed some 300 to 350 hogs on the premises, to which he hauled the garbage that had been collected from some 4,000 residences in Bay City. It was further shown that the stench from appellant’s premises permeated the atmosphere for a very long distance and at times reached homes miles away; that the condition thus created was revolting and nauseating to many residents in the 2 townships. It was also shown that the refuse waters from the garbage and the piggery flowed into Indian Town drain, a duly-established county drain, and that plaintiffs were owners of land assessed for the maintenance of said drain; that said drain flowed through the lands of plaintiffs, or at least some of them; that as a result of appellant’s operations the drain became filled with waste and decaying matter; that for long periods of time in the summer the drain was filled with stagnant water which was contaminated with refuse from appellant’s piggery and caused the air for a long distance to be filled with noxious and nauseating stenches.
Defendant as appellant raises only one question: Did the court err in holding that defendant’s present and future method of 'operation of his business materially interfere with, plaintiffs’ enjoyment of their property, and thereby create a private nuisance? Plaintiffs as appellees state the question as follows: Did the appellant develop a method of treating garbage fed to his pigs on a commercial scale and in a manner so that it will not constitute a nuisance ? The bill of complaint was filed September 4, 1947. The case was not heard until May 25 and 26,1948. In the period that intervened, and possibly shortly before then, appellant did make earnest efforts to correct the conditions so as to abate the nuisance. Whether they were sufficient to abate the nuisance is the only controversial question in the case. There was a partial abatement of the nuisance but it was not and from the testimony cannot be sufficiently eliminated. A very large number of hogs gathered together can create' a nuisance. Garbage several days old becomes a nuisance. The combination is bad and intensifies the nuisance. Testimony showed that before the garbage was fed to the hogs, it was at least from 3 to 5 days old. Appellant built some concrete slabs on which the 'garbage was spread. He also used lime, a crane and a bulldozer to bury such refuse as was not eaten together with excreta from the hogs. Defendant also testified that he proposed only keeping 200 hogs on the premises in 1948. Testimony was offered to show that during the 5 months prior to the hearing in 1948, conditions were not as bad as in previous years. These were winter and spring months. It was shown, however, that the supply of garbage and the odor from its decomposition and also from the hogs became more intense in the summer months because of the hot weather, and the larger amount of garbage gathered from the waste of vegetables and fruits used by householders. One of the plaintiffs testified that the odor in 1948 from appellant’s farm and the drain was the same as during the previous year although- at the time of the hearing it was not as bad as the previous summer; that there was a heavy smell coming from it every day in 1948. Another one of the residents who lived nearby, but who was not a plaintiff, testified that in 1948 he had smelled the odors on 2 occasions, also that the drain still had a stagnant smell and the ditch which he had seen the morning of the hearing had scum on the surface. A health officer for Bay county testified that the conditions had been much improved hut that within the week prior to the hearing he noticed the odors while he was on the road from behind the farm. He further stated that any time there is wet garbage and hogs feeding on it and leaving their excreta there is plenty of odor. Another witness testified that odors were very bad on various days in 1948. Defendant also testified in his own behalf and produced a number of witnesses, almost all of whom corroborated his tes-, timony to the effect that new methods were being-used by him so that the nuisance had been abated. With the exception of defendant and of a former owner of the premises, the witnesses for defendant were either employees, their relatives or someone who had some business relations with defendant.
The trial judge visited the premises himself at or about the time of the hearing and at a time wherl the weather was comparatively mild and there was no garbage deposited on the concrete slabs. He found the drain was considerably contaminated by reason of the putrefied matter which, according to the health officer, was caused by the accumulation of garbage and offal from the piggery maintained by the appellant. The judge further stated that the grounds and the entire farm seemed to he completely filled with a sour, unpleasant odor and that under conditions of extreme heat a most unpleasant situation, annoying and objectionable to an extent sufficient to prove a nuisance, would result from the continuance of defendant’s business. In Mitchell v. Hines, 305 Mich 296, 302, we stated:
“Tests do not show any satisfactory means of carrying on a large-scale garbage-feeding piggery. * * * No method of feeding garbage to pigs on a commercial scale, as is here the case, in a manner that will not constitute a nuisance has been disclosed by the proof.”
Also, see Trowbridge v. City of Lansing, 237 Mich 402 (50 ALR 1014); Albaugh v. Abbott, 253 Mich 588.
Appellant asks that if the decree of the lower court be upheld, that he be given a period of one year to remove the business, or to close it, but on condition that he maintain the 1948 method of disposition of the refuse. Appellant has already had 8 months since October 4, 1948, when the decree was rendered, while the appeal was being perfected and brought on for hearing. Plaintiffs should not be •subjected to the nuisance during the ensuing summer months. Appellees suggest that if any further time for discontinuing the business is allowed, that it should not be beyond July, 1949. On account of the exigencies in the situation, we adopt this suggestion.
The decree of the trial court in favor of plaintiffs is affirmed, but appellant will be allowed until the end of July, 1949, to move or close the business, provided that in the meantime he uses every proper method to minimize the nuisance, and that, in case of his failure to do so, plaintiffs may apply to the trial court for an order for the immediate cessation of the business. Plaintiffs will recover costs.
Sharpe, C. J., and Bushnell, Boyles, Reid, North, Dethmers, and Carr, JJ., concurred. | [
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Carr, J.
This suit was instituted by plaintiff in circuit court for the purpose of obtaining an absolute divorce from the defendant. The parties were married on or about the '9th of February, 1943, and according to plaintiff’s allegations in her bill of complaint they lived together as husband and wife until 2|- months prior to tbe filing of said bill on July 26, 1950. There were 2 children of tbe marriage, tbe older being 8 years of age at tbe time of tbe trial of tbe case in circuit court on April 6, 1951, and tbe younger 4 years of age at that time.
Plaintiff charged that defendant bad been guilty of extreme and repeated cruelty toward her in that be bad failed to furnish a proper home for her and tbe children, that be found fault with her concerning money matters, that be drank intoxicants to excess, that be falsely accused her of improper associations with other men, and that be bad stated that be did not care for her and wanted a divorce. Defendant by answer denied that be bad been guilty of extreme and repeated cruelty toward tbe plaintiff. He further asserted in bis pleading that be wished to become reconciled, and that he still bad affection for plaintiff notwithstanding conduct on her part subversive of tbe marital relation. He further alleged that plaintiff bad failed to properly care for tbe children of tbe parties.
Following a bearing tbe trial court came to tbe conclusion that plaintiff bad failed to establish her right to tbe relief sought and entered a decree dismissing tbe bill of complaint. Plaintiff has appealed, asserting that tbe bolding of tbe trial judge was erroneous and not in accord with tbe evidence in tbe case. This Court is asked to enter a decree in plaintiff’s favor on tbe basis of tbe record before us.
At tbe time of tbe trial plaintiff was 25 years of age, and defendant 49. At tbe time of tbe marriage she was 17. According to her testimony tbe parties lived together for approximately 8 months before they were married. Defendant was born in Mexico, but it does not appear that the parties had trouble because of racial differences. He became a naturalized citizen of this country prior to the bringing of the divorce action. It does appear, however, that plaintiff’s dissatisfaction with defendant arose in part from the fact that he was approximately 24 years older than she. The following testimony given by her on her cross-examination is significant:
“Q. Is the real reason you want a divorce because your husband is 25 years older than you?
“A. Not altogether.
“Q. Your major reason?
“A. Not altogether.
“Q. That is a reason?
“A. That is 1 of the reasons.”
Plaintiff further' stated that another reason for her seeking a divorce was her dissatisfaction with the home surroundings. At the time of the separation of the parties they were living in the home of plaintiff’s grandmother, where they had been for approximately 18 months. The grandmother was a witness for defendant on the trial, testifying to the arrangement under which the parties to the case shared her home and stating further that she had never heard any quarrels or arguments between plaintiff and defendant until shortly before plaintiff left. The witness testified also to statements by plaintiff indicating her dissatisfaction because of defendant’s age, and to the conduct of the parties in seeking recreation nights and Sundays.
The record fairly indicates that defendant worked whenever he could find employment. It was his claim that prior to 1949, when he was unemployed for several months, he customarily turned over his paychecks to the plaintiff and that she used the money for the expenses of the household and for her-own purposes. It was his claim further that at one time, after having been steadily employed for several years, he had approximately $1,800 in bonds, which he gave to plaintiff to 'keep. It was his desire to save a sufficient amount of money to enable the parties to purchase, a home. He testified further that plaintiff, without his knowledge, cashed the greater portion of the bonds and used the money for such purposes as she desired.
The evidence in the case indicates clearly that the parties were not provident in their financial matters, that each indulged in the use of intoxicating liquors, and that they habitually attended places of amusement. Plaintiff complains of defendant’s failure to establish a permanent home, although for about a 4-year period during the time that they lived together they occupied a. house that they had rented. At other times they lived with relatives of the plaintiff, but it does not appear that such situation contributed materially to plaintiff’s dissatisfaction. The conclusion is fully justified that the failure to establish a permanent home was not entirely defendant’s fault. Neither may it be said that he was solely responsible for the quarrels in which the parties indulged from time to time. Plaintiff admitted in her testimony that, after the separation of the parties, she had associated to some extent with a man other than the defendant. Other testimony indicates that plaintiff visited a certain man who was at the time an inmate of the Oakland county jail. It appears that defendant’s jealousy and the accusations of which she complained in her bill of complaint were not entirely without foundation.
On the trial of the case the claims of the parties were contradictory in many material respects. The determination of issues of fact involved in the controversy depended largely on the credibility of the witnesses, particularly the parties to the case. The trial judge, after listening to the proofs and noting the demeanor of the witnesses in court, came to the conclusion that the plaintiff had not met the burden resting on her, and that in consequence she was not entitled to relief. Our examination of the record does not convince, us that we would have reached a different conclusion had we been in the position of the trial judge. In consequence, his determination should not be set aside. Chubb v. Chubb, 297 Mich 501; Wells v. Wells, 330 Mich 448. Plaintiff’s testimony, corroborated in some respects by her witnesses, might perhaps be deemed sufficient to establish a prima facie case in her favor, but on the entire record it must be said that she has failed to sustain by the requisite degree of proof the grounds for divorce alleged in her bill of complaint, or any of such grounds. Bolthuis v. Bolthuis, 233 Mich 584.
The decree of the trial court is affirmed, but without costs.
Dethmers, Butzel, Bushnell, Sharpe, Boyles, and Reid, JJ., concurred.
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Reid, J.
Plaintiff’s original and amended bill of complaint was filed for the purpose of enjoining officials of the city of Detroit from purchasing and from using certain automatic voting machines in public elections to be held in the city of Detroit. Plaintiff states in his bill of complaint that he is a resident taxpayer and voter in the city of Detroit. Defendants answered and moved to dismiss the bill. Without hearing on the merits, the'court granted the motion to dismiss the bill, on the ground that the bill did not state a cause of action.
On or about May 22, 1951, the city of Detroit through defendant Hazen L. Punk, commissioner of purchases and supplies, received bids for furnishing 300 to 500 voting machines, pursuant to a request for bids authorized by the common council of the city of Detroit. The Engineering Society of Detroit was appointed by the common council of the city of Detroit to make a study of the voting machines upon which bids had been submitted; the said society reported among other things to the common council that the automatic voting machines manufactured by the Automatic Voting Machine Corporation of Jamestown, New York, intervening defendant, were so constructed that the officer’s latch is depressed to unlock the voter’s lever; this arrangement permits the officer’s latch to be leaned against by a careless officer and thus held in such a position that multiple voting is possible; and further that under certain circumstances it is possible to examine the counters of the machine during the course of an election and to return the machine to a voting condition without this improper action having been exposed by malfunctioning of the machine, which reported facts plaintiff relies on as grounds for the injunction prayed for by him.
Plaintiff further claims that prior experience with the automatic voting machine in question revealed that it was deficient in that it was inadequate to provide for the ballot used in some elections in the city of Detroit, particularly in the primary election held in 1950, and in the nomination for members in the State legislature where 21 candidates are nominated.
Plaintiff further claims that the construction and operation of the machine so confused voters that candidates appearing upon the top row received votes actually intended for candidates in the second row, because of nonrotation of names.
Plaintiff further claims that the horizontal arrangement of offices on the voting machine violates the requirements of CL 1948, §§ 177.20 and 191.6 (Stat Ann §§6.365 and 6.570).
Plaintiff further claims that notwithstanding the defects reported by the Engineering Society, and other defects otherwise found out by experience, the common council recommended the purchase of the said automatic voting machines and intended to authorize the purchase of 500 of the machines for approximately $600,000 as an initial installation; and that the total cost including other future installations would be.$4,500,000.
No dishonesty or fraud is claimed regarding the actions or contemplated actions of the defendants. The authority and power of the officials to purchase and .use voting machines is not subject to doubt. By the statute of this State, CL 1948, §§ 191.2 and 191.6 (Stat Ann §§ 6.566 and 6.570), the city is granted the power to purchase and use voting machines, and standards and requirements are set forth.
The statute prescribes (CL 1948, § 191.6 [Stat Ann § 6.570]) that the names shall be “in the same order” on the machines that the names are required to be upon printed ballots.
It is to be noted that the statute, CL 1948, § 177.15 (Stat Ann 1951 Cum Supp § 6.359), as to paper ballots, prescribes, “The names of all candidates of each political party shall be placed in a separate column on said ballot,” whereas the statute, CL 1948, § 191.6 (Stat Ann § 6.570), apparently contemplating that machines may be used, prescribes, “The name of each candidate for nomination to any office by a political party shall be placed upon the party row of such party.” We italicize and emphasize the 2 words “column” and “row,” to indicate that we differentiate between column and row, whereas plaintiff seems to argue that the 2 words mean the same thing, as to being vertical or horizontal.
Respecting the defect that all the names of candidates at some primary elections cannot be placed on the voting machines, it is to be noted that the statute, CL 1948, § 191.6 (Stat Ann § 6.570), further provides:
“Where voting machines are purchased or are used the election commissioners of the county, city or village or township shall not be required to print and furnish paper ballots for election districts using voting machines, except for any question or matter that cannot be provided for by the voting machines ” (Italics supplied.)
No question is'raised in this case but that the election commissioners could provide paper ballots when confronted with a primary or general election, in which it shall be found that the voting machine cannot accommodate all the names of candidates.
In connection with plaintiff’s contention respecting nonrotation of names and that the top candidate received votes actually intended for second row candidates, it is to be noted that the statute, CL 1948, §165.3 (Stat Ann § 6.248), provides for rotating names of candidates by precincts, i.e., the machine in one precinct has the order of names of candidates changed from the order in another precinct.
In Groesbeck v. Board of State Canvassers, 251 Mich 286, we say (per syllabus 17):
“Neglect of election officials to alternate names of candidates on ballots, as required by election law (part 3, «hap 4, §12), does not invalidate ballots.”
Also (per syllabus 18):
“Use of voting machines at primary election, as authorized by election law (part 3, chap 11, § 3), and failure to alternate names of candidates thereon, did not invalidate the vote cast thereon.”
Where there are several candidates, the name in the top row, or first on the list, has presumably some advantage to such candidate. We consider the statutory provision proper which provides for rotation of names on the machines by precincts, and that said statutory provision disposes of plaintiff’s objection as to nonrotation of names.
Plaintiff further claims that the use of the machine tended to confusion of the voters, and that it is inconvenient for use by aged or infirm voters because of the size and shape of the lever, which 2 questions, we consider, are legislative and discretionary, and not so set forth in the bill of complaint as to indicate grounds .for judicial interference, and do not merit detailed discussion.
The allegations of the bill of complaint are insufficient to show that the actions or contemplated actions of the defendants are ultra vires, contrary to the Constitution, the statute or the city’s charter, or fraudulent, malicious or corrupt, and so it is unnecessary to rule on plaintiff’s request that he be declared a proper party to bring this suit.
In view of the foregoing, we find the purchase and use of the machines in question not violative of the statutes or charter and there is no sufficient allegation in the bill to show that the machines are not in compliance with statutory requirements.
“In accordance with the general rules governing judicial control over the acts of public officers, the judgment of municipal officers in the execution of powers conferred on them by law or charter is not subject to control and correction by the_ courts in the absence of fraud or a clear abuse of discretion.” 37 Am Jur, p 886. '
' “Where a municipality has the power to engage in an activity for a public purpose, the courts will not interfere' with the discretionary acts of its municipal officials. * * * [Citing cases.] In Veldman v. City of Grand Rapids, 275 Mich 100, 113, we said:
“ ‘In order to warrant the interposition of a court óf equity in municipal affairs, there must be a malicious intent, capricious action or corrupt conduct, something which shows the action of the body whose acts are complained of did not arise from an exercise of judgment and discretion vested by law in them.’” Wolgamood v. Village of Constantine, 302 Mich 384, 395.
We affirm the decree appealed from dismissing the bill of complaint. No costs, a public question being involved.
Dethmers, Butzel, Carr, Bushnell, Sharpe, and Boyles, JJ., concurred.
North, C. J., did not sit. | [
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Bushnell, J.
The parties hereto were married on November 2, 1939, when both were 19 years old, and attending school. Within a month following their marriage the parties separated, later resumed their marital relations for about 5 or 6 weeks and, except for periods totaling about two weeks thereafter, have not lived together since. The parties have an infant daughter.
Plaintiff Thomas F. Batcliffe filed a bill of complaint on November 18,1941, seeking a divorce from defendant Eloise J. Batcliffe on the ground of exr treme cruelty. The defendant filed an answer and cross bill in which she sought a divorce from bed and board under the provisions of 3 Comp. Laws 1929, § 12729 (Stat. Ann. § 25.87), on the ground of nonsupport.
The trial of the case was completed on September 1,1942, and on November 4,1942, prior to determination of the matter, defendant sought leave of court to amend her bill of complaint to conform to the provisions of 3 Comp. Laws 1929, § 12794 (Stat. Ann. § 25.211), or in the alternative for permission to withdraw her cross bill. Her petition was denied in a memorandum opinion filed January 12, 1943. A decree was entered dismissing plaintiff’s bill of complaint and granting defendant an absolute divorce on her cross bill. The custody of the minor child was awarded to the mother.
Defendant has appealed and contends that the court erred in denying her petition to amend her cross bill so as to bring her action under section 12794, instead of section 12729, or in the alternative to withdraw her cross bill. She argues that under the circumstances the court should not have imposed a decree of absolute divorce upon her.
Had defendant in the first instance filed her cross bill under section 12794 the court could not have decreed an absolute divorce but, having proceeded under section 12729, either an absolute divorce or divorce from bed and board was permissible.. Conkey v. Conkey, 237 Mich. 326, and 3 Comp. Laws 1929, § 12730 (Stat. Ann. § 25.88).
Chief Justice Campbell, speaking for the court in Burlage v. Burlage, 65 Mich. 624, said:
“The statute has authorized the courts, where a case is made out for a permanent separation, to decree an absolute divorce, if it appears proper to do so. This is not done to meet the desire of the parties, but on grounds of public policy, to prevent the mischiefs arising from turning out into the world, in enforced celibacy, persons who are neither married nor unmarried. If they have scruples about remarriage, there is nothing to prevent their continuing single as long as they choose.” •
Courts are not concerned with the personal desire of parties to divorce actions, and whether or not a divorce should be from bed and board or absolute, under section 12729, must be determined in the light of the public policy of the State and the best interests of the parties. DeVries v. DeVries, 255 Mich. 396. The character of the decree entered in such matters “rests in the sound discretion of the court.” Sullivan v. Sullivan, 112 Mich. 674.
The trial judge determined that, under the provisions of section 12730, it was “discreet and proper” to grant an absolute divorce for the best interests of the parties. No one will be benefited by a recital of the testimony on which this determination was based. It has been considered de novo and, because of the peculiar circumstances disclosed by this record, we have no inclination to disagree with the conclusion reached by the trial judge, who had the advantage of hearing and observing the parties and their witnesses. We are in accord with his statement that:
“There is no prospect of reconciliation. To grant the amendment would add tragedy to tragedy, condemn the parties to enforced celibacy, turn them out neither married nor unmarried, prevent either from again marrying, and wreck and ruin their lives.”
The court’s refusal to permit defendant to amend her cross bill can only be set aside upon a showing that the trial judge abused his discretion. The motion to amend having been made over two months after the trial was completed, we cannot hold this denial to be an abuse of discretion. The trial court’s refusal to permit the defendant to withdraw her cross bill without the consent of plaintiff was also proper and in accord with Court Rule No. 38, §1 (1933), and Goodspeed v. Goodspeed, 300 Mich. 371.
Defendant also argues that the provisions of the decree with respect to alimony and dower are in contravention of Court Rule No. 51, § 5 (1933).
The provisions of the decree with respect to alimony and dower read as follows:
“It is further ordered, adjudged and decreed, that the plaintiff, Thomas F. Ratcliffe, pay to the defendant, Eloise J. Ratcliffe, the sum of $3,500 and same to be in lieu of alimony, allowance for the support of child, dower, and all other rights or claims aris ing out of the marital relation and in full for expenses of suit. Said sum of $3,500 shall be payable $500 on the. 15th day of February, 1943, and $500 payable February 15th of each succeeding year until paid in full, with interest at 3 per cent, per annum, payable annually from February 15, 1943, with the privilege of paying the full amount at any time.
“It is further ordered, adjudged and decreed that the provision herein made for payment in gross to the said defendant shall be in lieu of her dower in the property of said plaintiff and in full satisfaction of all claims that she may have in.any property which the said plaintiff owns or may hereafter own, or in which he has or may hereafter have any interest and that he shall hereafter hold his remaining real estate free, clear and discharged of and from any such dower right or claim.”
This does not conform to the requirements of Court Rule No. 51, § 5 (1933). This rule requires that:
“In every decree for divorce wherein provision is made for a property settlement, such provision shall be embodied in a separate and distinct paragraph prefaced by the heading: ‘Property Settlement.’ And in every decree for divorce wherein a provision is made for alimony or for support of children or both, such provision shall be embodied in a separate and distinct paragraph prefaced by the heading: ‘Alimony.’
“A circuit judge shall not sign nor shall a clerk of a circuit court file a decree of divorce which does not comply in form with the requirements of this section.”
The purpose of this rule is apparent. The remedy for nonpayment of alimony is by contempt proceedings or lien and execution. A trial judge may revise, modify or alter decrees of divorce with respect to alimony, 3 Comp. Laws 1929, § 12748 (Stat. Ann. §25.106), but such decrees may not be modified or altered with respect to property settlements, except on tbe ground of fraud or for like reasons. See Winter v. Winter, 270 Mich. 707, and McFarlane v. McFarlane, 298 Mich. 595.
Tbis court rule was adopted for tbe purpose of obviating confusion, sucb as is bound to follow from tbe provisions of tbe decree in tbe instant case.
The decree entered below is vacated and tbe cause is remanded for tbe sole purpose of entering a new decree in conformity with tbe provisions of Court Rule No. 51, § 5 (1933). Costs to appellant.
North, C. J., and Starr, Wiest, Butzel, Sharpe, Boyles, and Reid, JJ., concurred. | [
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Btítzel, J.
Plaintiff, National Bank of Detroit, on behalf of itself and also of all national banking-associations in Michigan, filed a petition under the declaratory judgment act (PA 1929, No 36 [CL 1948, § 691.501 et seq. (Stat Ann § 27.501 et seq.)}) for a declaration of rights, as to their liability for payment of Michigan sales tax, alleging that the provisions of the Michigan sales tax act (PA 1933, No 167, as amended [CL 1948, § 205.51 et seq. (Stat Ann 1950 Rev § 7.521 et seq.)}) conflict with section 5219 of the Revised Statutes of the United States (12 USCA, § 548) as to retail purchases made by plaintiff from Michigan vendors, and to retail sales made by plaintiff to Michigan vendees. Defendant, Michigan department of revenue, is charged with the .administration of the sales tax system. Prior to July 1,1949, it was recognized that sales of personal property at retail both to and by national banking associations were exempt from the imposition of the sales tax. However, since the sales tax act was amended by PA 1949, No 272, it has been interpreted to mean that both types of sales are subject to the tax. It is alleged, and not denied, that without paying such sales taxes, plaintiff would be unable to purchase in Michigan personal property necessary for its business; and that it is also required to collect such tax from its vendees whether in the conduct of running a restaurant for its employees or reselling personal property it acquires by foreclosure of liens or otherwise in the conduct of its business.
Plaintiff contends that it is a Federal instrumentality and that the imposition of such sales tax is in conflict with its Federal statutory and constitutional immunity. That question is not presented on this appeal so we shall not discuss it.
Defendant in a motion alleged, and the trial court found, that as plaintiff is not the taxpayer under the sales tax act, and is not the real party in interest, it is not entitled to institute an action to the extent of determining whether or not taxes could be levied on sales to it. Accordingly, an order was entered dismissing that portion of plaintiff’s petition concerned with the imposition of the sales tax on sales to plaintiff by Michigan vendors. . Plaintiff- appeals from that order.
Provisions of the sales tax act material to the present issue are (as amended by PA 1949, No 272):
“Sec. 1. That when used in this act:
“(a) The term ‘person’ includes any individual firm, copartnership, joint venture, association, social club, fraternal organization, municipal or ■ private corporation whether organized for profit or not, company, estate, trust, receiver, trustee, syndicate, the United States, State of Michigan, county, or any other group or combination acting as a unit, and the plural as well as the singular number, unless the intention to give a more limited meaning is disclosed by the context. * * *
“(1) The word ‘taxpayer’ means any person subject to any tax hereunder. * * *
“Sec. 2. There is hereby levied upon and there shall be collected from all persons engaged in the business of making sales at retail, as hereinbefore defined, an annual tax for the privilege of engaging-in such business equal to 3 per cent, of the gross proceeds thereof, plus the penalty and interest when applicable as hereinafter provided, less deductions allowed in sections 4 and 4a. * * * The taxes levied hereunder shall be a personal obligation of the taxpayer. * * *
“Sec; 4. In computing- the amount of tax levied under the provisions of this act for any month, * * *
“No person subject to a tax under this act need include in the amount of his gross proceeds used for the computation of the tax any proceeds of his business derived from sales to the United States, its unincorporated agencies and instrumentalities, any incorporated agency or instrumentality of the United States wholly owned by the United States or by a corporation wholly owned by the United States, the American Red Cross and its chapters and branches, and the State of Michigan or its departments and institutions or any of its political subdivisions.
“Sec. 4a. No person subject to tax under this act need include in the amount of his gross proceeds used for the computation of the tax any sales of tangible personal property [enumerating numerous exemptions not material here]. * * *
“Sec. 23. No person engaged in the business of selling tangible personal property at retail shall advertise or hold out to the public in any manner, directly, or indirectly, that the tax herein imposed is not considered as an element in the price to the consumer. Nothing contained in this act shall be deemed to prohibit any taxpayer from reimbursing himself by adding to Ms sale price any tax levied hereunder: Provided, however, That no person other than the State may enrich himself or gain any benefit from the collection or payment of such tax.”
Other sections of the act, not material here, concerning the administration and collection of the tax, consistently refer in the context to the “taxpayer” as the retailer. It is alleged and not denied, however, that the economic burden of the tax is always passed on to the consumer, and that such was the intent of the legislature when formulating the sales tax act, as evidenced by section 23 thereof, supra (CL 1948, § 205.73, as amended by PA 1949, No 272 [Stat Ann 1950 Rev § 7.544]).
It is significant that the Michigan department of revenue has stated its understanding of the true incidence of the tax in regulation 22 of its rules and regulations, as follows:
“A taxpayer must include the sales tax as part of the selling price of tangible personal property sold by him. He is not required to state the tax- as a separate item to the consumer, but he may not advertise or hold out to the public in any manner directly or indirectly that the tax is not considered as an element in the price to the consumer.”
Although exemptions from the operation of the sales tax are now stated in sections 4 and 4a (CL 1948, §§ 205.54, 205.54a, as amended by PA 1949, No 272 [Stat Ann 1950 Rev §§7.524, 7.525]), concerning permissible deductions from gross proceeds, prior to 1949 there was a provision in section 4, subd (b), which read in part:
“As a consumer, the United States * # * shall not be liable for the payment of the tax.”
It is obvious from a reading of regulation 22 that the change in the wording of section 4 was made merely for the purpose of clarity in the operation of the act and did not change its substantive effect.
The parties discuss at some length whether or not an actual case and controversy exists here; who is the real party in interest in the action, retailer or consumer; whether the retailer should not have been the party plaintiff; and whether or not plaintiff is entitled to seek a declaration of rights under the declaratory judgment act. The main question presented in this'appeal is whether a justiciable question is presented, when the court is asked to consider the economic realities of the situation, and treat the plaintiff as the real “taxpayer” under the Michigan sales tax act, for the purposes of an action in which it claims immunity as a Federal instrumentality.
We assume that the direct legal incidence of the Michigan sales tax act falls upon the retailer. Indeed, no other conclusion can he reached after examining carefully the method in which the sales tax operates. It is expressly termed a tax on gross proceeds and is paid to defendant in bulk, not per transaction, by the retailer who is entitled to .a discount on the amount collected and paid to defendant. The retailer is personally obligated for the payment of the tax due. However, he is authorized to collect an amount equal to the tax levied by adding it to the purchase price of his goods, and he is forbidden to hold out to the consumer that such is not being done. It is, therefore, clear that it was the intention of the legislature that the general sales tax is a tax whose economic burden falls chiefly on the consumer. That the collection of such tax from the consumer is in some degree an economic burden upon the retailer cannot be denied and it is in this sense, economically speaking, that the general sales tax is a tax on the privilege of doing a retail business in the State. It may seem paradoxical to say that the re- taller only is an interested party when there is properly and legally added to the sales price to the consumer the 3% sales tax on almost every purchase and this amount is remitted to the State "by the retailer after the deduction of a discount. ' ■
"We made this economic distinction in C. F. Smith Co. v. Fitzgerald, 270 Mich 659. Therein we said, in answer to a challenge to the validity of - the chain store tax (pp 676, 677, 685, 686):
“The tax is not void because it constitutes double taxation. The tax in question is a license- tax, — a tax upon the privilege of operating chain stores or mercantile establishments. It is contended it constitutes double taxation because there is already .imposed under the' law of Michigan a sales- tax .'based upon the amount of business done. PA 1933, No 167. The tax imposed by PA 1933, No 265 is upon, the privilege to operate chain stores. The sales tax is a tax imposed upon consumption, a tax upon comrpodities sold, a tax which is usually and ordinarily paid not by the person who operates the business, but by the customer who purchases and pays for merchandise. .PA 1933, No 167, § 23. (Italics added.) * # *
“The chain store tax is a franchise tax or* fee imposed for the privilege of establishing, opening, maintaining or operating 2 or more stores. * * * The general sales tax is a privilege tax imposed upon the privilege of making retail sales, measured by the gross proceeds of such sales, less deductions allowed by statute.”
Defendant relies on City of Wyandotte v. State Board of Tax Administration, 278 Mich 47, in which .we considered the question as to whether sales to nonexempt individuals from municipally-operated xitilities should be exempt from taxation. After finding that a municipality was not subject to the sales tax, we held that such sales were also exempt, saying (P 53):
“The tax is not imposed upon the consumer, hut upon those 'engaged in the business of making sales at retail as hereinbefore defined,’ et cetera (Section 2).”
The case refers to C. F. Smith Co. v. Fitzgerald, supra, and does not overrule it.
Subsequent Michigan cases reaffirmed the “legal incidence” doctrine, that the sales tax is a privilege tax exacted for the privilege of engaging in the business of selling tangible personal property and measured by the gross proceeds of such sales. However, none are determinative here. In Montgomery Ward & Co. v. Fry, 277 Mich 260, mail order sales in which the goods were sent from a mail order house in another State were held to be in the course of interstate commerce and beyond the taxing power of the State. In Standard Oil Co. v. State of Michigan, 283 Mich 85, it was held that the sales tax was not payable on Federal gasoline tax and that certain deductions would not be allowable on trade and quantity discounts. City of Bay City v. State Board of Tax Administration, 292 Mich 241, held that it was in the power of the State to impose the sales ta*x upon the operation of municipally-owned utilities when they are in the exercise of a proprietary function. In Gardner-White Co. v. State Board of Tax Administration, 296 Mich 225, we held that upon conditional sales the retailer should compute the tax on the full sale price and upon recapture of property for nonpayment of instalments there is no refund or right to credit. Howard Pore, Inc., v. State Commissioner of Revenue, 322 Mich 49 (4 ALR2d 1041), dealt with the problem of how to measure “gross proceeds” when trade-in property was involved. It must be noted that none of these cases deal with a claimed Federal immunity, nor did consumers ask for an adjudication of their rights.
Before passing on to Federal decisions on this issue, however, it is well to note the existence of the Michigan use tax, PA 1937, No 94 (CL 1948, § 205.91 et seq. [Stat Ann 1950 Rev §7.555(1) et seg.]). This has been held to be a tax for the privilege of using, storing and consuming tangible property brought from out of the State after it has come to rest. Goebel Brewing Co. v. State Board of Tax Administration, 306 Mich 222; Western Electric Co. v. Department of Revenue, 312 Mich 582. Its intent is to reach those purchases by Michigan consumers not reached by the sales tax act. The 2 acts peculiarly intercorrelate and in some respects the latter is complementary to the former. Kress v. Department of Revenue, 322 Mich 590. The presence of a use tax in our tax system lends further support to the proposition that retailers are used only as a conduit or means of collection from consumers of a sales tax; for when that method is not effective, other and more direct collection from the consumer is accomplished by the use tax if the purchase is made out of the State. This would be obviously unnecessary if the ■purpose of a sales tax were merely to exact the tax from Michigan retailers and the consumer was not a party in interest.
Counsel have cited numerous authorities from United State's jurisdictions possessing similar sales tax acts. The most that can be said after a study of the authorities is that the courts are divided, and that even the decisions of an individual State may vary from the time to time.
We turn to the decisions specifically involving the ■immunity of Federal instrumentalities from such a tax to determine what theories have been applied, ,and most particularly to the decisions of the United State's supreme court.
In an earlier case, Williams v. Riley, 280 US 78 (50 S Ct 63, 74 L ed 175), it was held that the" pur chaser of motor vehicle fuel cannot question the constitutionality of a tax imposed on distributors, whereby the cost to him was enhanced. The distributor was legally liable for the tax, but the entire burden of the tax was passed on to the consumer. Six justices felt that no direct injury was threatened and that .the purchaser had no standing. Three justices, however, dissented. In Carpenter v. Shaw, 280 US 363 (50 S Ct 121, 74 L ed 478), decided soon thereafter, however, it was held that the characterization given to a State tax by State courts or legislatures is. not binding where a Federal right is com cerned and .did not relieve the court from considering the real nature of the tax and its effect upon a Federal right.' The court went on to hold a tax on oil royalties., actually a tax on real estate of the kind forbidden in certain Federal leases. A similar situation developed in Stahmann v. Vidal, 305 US 61 (59 S Ct 41, 83 L ed 41), where the court looked into the-, purpose of the Bankhead cotton act and found that it was to place a burden on the producer thereof by taxation in an attempt to restrict producr tion even .though the ginner was given the legal responsibilty for collection and payment of the tax, and that the producer could maintain an action to challenge the act.
Colorado National Bank, of Denver v. Bedford, 310 US 41 (60 S Ct 800, 84 L ed 1067), involved a Colorado “service tax” which assessed a percentage tax against users of safety deposit services. The banks were required to collect such taxes in a manner similar to that existing under the Michigan sales tax act today. It was held that the collection of the tax did not impose an unconstitutional burden on a, Federal instrumentality. The court said, on p 52:
“The person liable for the tax, primarily, cannot always be said to be the real taxpayer: The 'taxpayer is the person ultimately-liable for the tax itself. The funds which were received by .the State came from the assets of the user, not from those of the Federal instrumentality, the bank. The Colorado supreme court holds the user is the taxpayer. The determination of the State court as to the incidence of the tax has great weight with us, and, when it follows logically the language of the act, as here, is controlling.”
Alabama v. King & Boozer, 314 US 1 (62 S Ct 43, 86 L ed 3, 140 ALR 615), held there was no immunity from paying added costs attributable to taxes on those who furnish supplies to the government and who have been granted no tax immunity even though the government by reason of the contract eventually bore the economic burden thereof, because cost-plus construction contracts had not been granted, immunity by act of Congress. No question was raised as to who was the “real party in interest.” That such a ruling was not intended to apply to Federal land banks was made clear by a holding in Federal Land Bank of St. Paul v. Bismarck Lumber Co., 314 US 95 (62 S Ct 1, 86 L ed 65). Involved was the -North Dakota sales tax act which ? is similar to the Michigan, sales tax act with the additional provision that “Retailers shall add * * * to the sales price * * * and when added * * * shall be a debt from consumer or user to retailer until paid, and shall be recoverable at law in the same manner as other debts.” The North Dakota court construed the sales tax as imposed upon the purchaser. The United States supreme court accepted the construction of the North Dakota court and exempted the. Federal land bank from taxes paid on materials bought in aid of its lending functions. ;
United States v. County of Allegheny, 322 US 174 (64 S Ct 908, 88 L ed 1209)) and Federal Land Bank of New Orleans v. Crosland, 261 US 374 (43 S Ct 385, 67 L ed 703, 29 ALR 1), decisions in which it was held that the validity of the tax was not dependent upon the ultimate resting place of the economic burden of the tax, may be distinguished as both involved direct property taxes on instrumentalities of the Federal government.
The most recent decision as to the rights of the consumer claiming a Federal immunity was Richfield Oil Corp. v. State Board of Equalization, 329 US 69 (67 S Ct 156, 91 L ed 80). It is particularly significant because in previous cases involving privilege taxes measured by gross proceeds, the State court’s interpretation of the effect of the tax was accepted. Here, however, the United States supreme court indicated that such was not the determining factor. The Richfield Oil Corporation argued that the tax was a tax on exports when placed on oil to be delivered out of the State. The California supreme court held that no question of exports was involved as the tax was levied on the retailer, who was authorized to collect the tax from the consumers, and that the tax was not laid on the consumer and not a tax on the sale or because of the sale. The question of whether the tax deprived the taxpayer of a Federal right, however, said the court, “turns not on the characterization which tlie State has given the tax, but upon its operation and effect.”
Carson v. Roane-Anders on Co., 342 US 232 (72 S Ct 257, 96 L ed 257), decided this year, held that all activities of the Atomic Energy Commission were exempt from the payment of Tennessee sales tax, by reason of a provision of the atomic energy act granting such immunity. Although there appeared to be some doubt in the State court as to whether the taxes were to be considered as levied on the retailers who sold to the AEO or the persons who bought for the use of the AEG, this question was not mentioned by the court, who evidently assumed the determination to be immaterial when a Federal right was involved as decided in the Richfield Case, supra.
In sections 4 and 4a of the amended sales tax law, supra, certain persons, institutions, and articles are exempted from the sales tax and the proceeds from such sales need not be included in the returns to the State. The query arises, assuming sales to national banks are exempt from sales tax by Federal law, is not such immunity as effective as if it were expressly included in sections 4 and 4a supra? We see no reason why the effect of the immunity, whether granted by Michigan statute or by the Federal law, should not be the same.
It is of interest to note that the internal revenue code permits the deduction of the amounts paid for sales tax by the consumer to his vendor, the same as if such amount constituted a tax imposed upon and paid by the consumer. 26 TJSCA, § 23(c) (3). It thus recognizes the legal incidence of the tax and the economic burden on the consumer, who pays the tax.
The conclusion we draw from the above review of the facts and authorities is as follows: It is a justiciable question whether or not national banks can assert Federal immunity from State sales and excise taxes, regardless of whether or not the legal incidence of the tax falls upon a national bank. The consumer bank may plead that it has been deprived of a Federal right especially when the burden of the tax falls upon it in an economic sense, and will not be deprived of a hearing as to the claimed Federal immunity.
The plaintiff calls attention to the fact that as vendee at retail it is called upon to tax, and that as vendor and retailer of other articles, it again is asked to pay the tax, though in the latter case it may collect it from the vendees. This indicates how closely the 2 problems are involved in the instant suit and how proper it is to include them both in plaintiff’s petition.
We find, therefore, that a purchaser of tangible personal property at retail within this-State, claiming a Federal immunity from the provisions of the Michigan sales tax act, may invoke the jurisdiction of this Court to determine the question of the taxability of the proceeds of a retailer derived from its sales, which tax in turn is passed on under the law to the purchaser or consumer. An actual controversy does exist between the parties: Plaintiff claiming immunity from the economic burden of the tax, and defendant contending that no immunity exists.
The Michigan declaratory judgment act states at section 1:
“The court may, in cases of actual controversy, make binding declarations of rights whether any consequential relief is or could be claimed, or not, including the determination at the instance of anyone interested in the controversy, of the construction of any statute, * * * and a declaration of the rights of the parties interested.”
Section 7 provides:
“This act is declared to be remedial, and is to be liberally construed and liberally administered with a view of making the courts more serviceable to the people.”
It should need no further citation of authority to indicate, in view of what has been said above, that, an actual controversy within the scope of the declaratory judgment act exists.
Defendant contends, and the lower court decided, that the instant suit was improper as the results of it would not be binding on the retailer-taxpayer who is not joined in this suit. The retailer, however, has no interest in this action beyond that of a mere collection agent or intermediary and will abide by the final determination of the question. We have carefully considered defendant’s other contentions herein, and have found them to be without merit.
The order dismissing that portion of plaintiff’s petition concerned with the imposition of the sales tax on sales to plaintiff by Michigan vendors.is reversed, without costs, a public question being involved. The case is remanded for further proceedings.
Dethmers, Carr, Bushnell, Sharpe, Boyles, and Reid, J J., concurred..
North, C. J., did not participate in this decision.
See CL 1948, § 205.54, prior to amendment.
48 Stat 598.—Reporter.
ND Laws 1937, eh 249, § 6.—Reporter.
60 Stat 755 (42 USCA, § 1801 et sea-).—Reporter. | [
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North, C. J.
Plaintiff is a resident and an elector in the county of Ontonagon, and at present he is a representative in the State legislature from his district composed of the counties of Ontonagon, Baraga, and Keweenaw. He has filed a petition in this Court wherein he asks that defendant Herman H. Dignan as secretary of State be restrained from issuing election notices under Act No. 228, Pub. Acts 194:3 (Comp. Laws Supp. 1943, §§ 3, 4, Stat. Ann. 1943 Cum. Supp. §§ 2.23, 2.24), by which the legislative districts of the State were reapportioned; and also that mandamus be granted to compel the secretary of State to issue election notices in accord with Act No. 152, Pub. Acts 1925 (1 Comp. Laws 1929, §§ 3, 4, Stat. Ann. §§ 2.21, 2.22), under which reapportionment of legislative districts was controlled prior to the 1943 act. The grounds upon which plaintiff asserts that the 1943 act is unconstitutional and void are as follows:
“(a) That the reapportionment is inequitable and unfair, and not a just exercise of legislative discretion ;
“(b) That many counties having a moiety of the legislative ratio are attached to other counties having less population than a moiety of said ratio.”
Defendant has filed an answer to the order to show cause which was issued upon the filing of the petition. Therein defendant denies that the 1943 act is either an inequitable or unfair exercise of legislative discretion and denies that it contravenes the pertinent provisions of the Constitution (1908), art. 5, §§ 3 and 4; and further defendant avers that in each instance where a county having a population less than a moiety is joined in a representative district to another county having a moiety, such reapportionment is valid because in each instance the county having less than a moiety is completely sur rounded by counties having more than a moiety, and that under such circumstances the law of legislative necessity requires combining a county containing. less than a moiety of the representative ratio with a county having a moiety, if the people in the less populous county are to be represented at all.
The pertinent constitutional provisions are found in the Constitution (1908), art. 5, §§3 and 4. Tbe latter of these two sections provides in substance that each tenth year after Í913 the legislature shall by law apportion anew the representatives among the counties and districts of the State according to the number of inhabitants, using as a basis for such apportionment the last preceding United States census of this State. The portion of article 5, § 3, in the light of which the instant case must be decided reads as follows:
‘ ‘ The house of representatives shall consist of not less than sixty-four nor more than one hundred members. Representatives shall be chosen for two years and by single districts, which shall contain as nearly as may be an equal number of inhabitants and shall consist of convenient and contiguous territory. * * * Each county, with such territory as may be attached thereto, shall be entitled to a separate representative when it has attained a population equal to a moiety of the ratio of representation. ’ ’
It is of first importance that consideration should be given to the former holdings of this Court in Houghton Board of Supervisors v. Blacker, Secretary of State, 92 Mich. 638 (16 L. R. A. 432), and Stevens v. Secretary of State, 181 Mich. 199, because both the plaintiff and the intervening plaintiffs, Hillsdale county and city of Hillsdale, largely rely upon statements made by the Court in these cases.
The Blacker Case has given rise to some difference of opinion between counsel for the respective parties as to the construction that should be placed upon or the meaning of the words “convenient and contiguous” as used in the constitutional provision which provides that representative districts “shall contain as nearly as may be an equal number of inhabitants and shall consist of convenient and contiguous territory.” At the time of decision in the Blacker Case Isle Royal, an island located several miles off the northern shore of the mainland of this State, was designated as a county, the county of Isle Royal. Notwithstanding the large stretch of intervening navigable water between this island county and the mainland, it was held in the Blacker Case that within the meaning of the quoted constitutional provision the county of Isle Royal was “contiguous”-to other counties on the mainland. It is in reliance upon such holding plaintiff insists that various counties in the northern peninsula of Michigan, each of which contains less than a moiety of population and which are not contiguous to each other by land, could be and should be grouped together in creating a representative district in which no one of the counties would contain a population equal to a moiety. Plaintiff’s present representative ' district is composed of three counties which are contiguous only through navigable water, not by land. For the purpose of decision in the present case it may be conceded that the expression “convenient and contiguous,” especially in cases of reasonable necessity, may be construed as in the Blacker Case. But it does not follow that in passing a reapportionment act the legislature is bound to adopt such rather strained rule of construction, especially if districts can be created of counties having land con tact. In the 1943 reapportionment act there is actual land contact between counties of the northern peninsula grouped in the respective representative districts composed of more than one county. Hereinafter consideration will be given to the contention that such redistricting violates constitutional restrictions. We note in passing that this Court in its decision in the Blacker Case as to what constitutes “convenient and contiguous territory,” at least to some extent, resorted to the rule of “legislative necessity;” and that the primary question in the Blacker Case was whether in reapportioning representative districts the legislature had the power to divide Houghton county so that part of that county would be in one representative district and part in another. It was held that such a division of a county was violative of the Constitution. That question is not at all involved in the instant case.
More serious difficulty is presented by the following statement of Justice Moore in the Stevens Case wherein a reapportionment act was held invalid. Justice Moore said:
“We think it clear that the county is the unit of representation; that, if not alone entitled to a representative, it must be joined to an entire county or counties to send one representative; and conversely that, if the county alone is entitled to a representative, it cannot be combined with other counties to form a district. Such combination of a county having a moiety of the representative ratio with other counties containing less than a moiety is contrary to the theory of the county as a unit of representation, and is unjust to both counties combined.”
At the outset it should be noted that only three other Justices concurred in the quoted portion of Justice Moore’s opinion. Justice Brooke took no part in the Stevens Case. The other three mem bers of the Court, apparently unwilling to subscribe to the above-quoted portion of Justice Moore’s opinion, reached the same result as Justice Moore but placed decision solely on the authority of Williams v. Secretary of State, 145 Mich. 447, wherein a reapportionment of senatorial districts was held invalid because of disparity in the population of the districts which quite conclusively revealed gross inequalities in representation.
And it should be further noted, and we deem this of great importance, that immediately following the above-quoted words Justice Moore added:
“The only exception is where a county having less than a moiety is entirely surrounded by counties, each of which has more than a moiety, in which ease the law of legislative necessity makes it necessary, if the people of the lesser county are to be represented at all, to combine it with a county having a moiety.”
Obviously the words “legislative necessity” mean nothing more or less than the exercise of fair and reasonable discretion on the part of the legislature in passing reapportionment statutes which comply as far as practically possible with constitutional requirements. The exercise of such a right is contemplated by the constitutional provision itself wherein it is noted that the respective representative districts shall “contain as nearly as may be an equal number of inhabitants and shall consist of convenient and contiguous territory.” Clearly the framers of the Constitution understood that in determining whether the respective districts contain an equal number of inhabitants “as nearly as may be” under all the circumstances attending the reapportionment placed in the legislature a certain measure of discretion. Likewise what might constitute “convenient” territory is a matter incident to which tbe legislature was left to exercise some discretion. And further it should be recalled' that at the time the 1908 Constitution was drafted and adopted, this Court in the Blacker Case had already indicated that the legislature had a wide degree of discretion in determining (at least under the law of legislative necessity) what constituted so-called “contiguous” territory. Even a casual consideration of the constitutional provisions relative to reapportionment of legislative districts immediately discloses the necessity of allowing a reasonable measure of discretion on the part of the legislature in not adhering literally to each of the separate constitutional provisions restricting the manner of reapportionment. Otherwise the legislature would find itself in a strait jacket and reapportionment of representation suited to changing conditions would be wholly impossible. In part this comes about from the constitutional limitation of 100 as a maximum number of State representatives which must be apportioned among 83 counties, in which the population is unevenly distributed with large portions of population congested in comparatively small municipal areas, and with counties having more than a ratio of population being interlocated between counties having less than a moiety of population. Because of these difficulties we are not in accord with that portion of Justice Moore’s statement above quoted which reads “and conversely that, if the county alone is entitled to a representative (by reason of having a moiety of population), it cannot be combined with other counties to form a district.” The Constitution does not so expressly provide but instead it reads: “Each county, with such territory as may he attached thereto, shall be entitled to a separate representative when it has attained a population equal to a moiety of the ratio of representa tion..” Surely some meaning’ must be given to the above italicized words. Justice Moore obviously foresaw the impracticability, if not the impossibility, of literal compliance in reapportionment acts with the above-quoted limitation which he embodied in his opinion, because immediately thereafter he makes it plain that under “the law of legislative necessity” there may be departure from his restricted interpretation of the constitutional provision. The statement of Justice Moore may well be accepted as a rule of construction to be applied when it is reasonably possible to do so; but it cannot be accepted as literally binding upon the legislature under all circumstances attending the enactment of reapportionment statutes.
Incident to plaintiff’s contention that the 1943 reapportionment “is inequitable and unfair, and not a just exercise of legislative discretion,” his presentation is almost wholly confined to the reapportionment of representative districts in the northern peninsula. He suggests a different allocation of counties; and by adopting the theory of the Blacker Case as to counties being contiguous through navigable waters of the Great Lakes, plaintiff suggests a reapportionment of northern peninsula counties which would avoid representative districts being composed of a county having’ more than a moiety of population with a county or counties -having less than a moiety. As noted above, we decline to follow as an inflexible rule the statement of Justice Moore, as did three of the Justices who sat with him in the Stevens Case, to the effect that “if the county alone is entitled to a representative, it cannot be combined with other counties to form a district:” This leaves only for consideration, so far as plaintiff is concerned, the question of whether or not in the 1943 reapportionment of legislative districts in the north ern peninsula the legislature exercised a fair and honest discretion in creating districts which contain “as nearly as may be an equal number of inhabitants.”
We have already noted that under the 1943 reapportionment each northern - peninsula representative district consisting of a plurality of counties is constituted of counties which are in fact contiguous by reason of adjacent territory. In noting this, we do not mean to say that if reasonable necessity exists therefor resort might not be had to the theory of counties being contiguous through navigable waters as held in the Blacker Case. And on the other hand we do not hold, as plaintiff contends, that notwithstanding there is a reasonable “legislative necessity” therefor arising from the constitutional provision as to “convenient and contiguous territory,” a legislative district may not be constituted by joining a county having more than a moiety of population with a county or counties having less than a moiety; and the joining of such counties is permissible even though it might be avoided by resort to the rule of the Blacker Case as to what constitutes “contiguous territory.”
With parenthetical figures indicating the population of the representative districts and counties, the 1943 reapportionment of the northern peninsula is disclosed by the following:
Alger district (36,552) is composed of Mackinac (9,438), Luce (7,423), Schoolcraft (9,524), and Alger (10,167) counties.
Gogebic district (43,156) is composed of Gogebic (31,797) and Ontonagon (11,359) counties.
Houghton district (51,635) is composed of Houghton (47,631) and Keweenaw (4,004) counties.
Iron district (29,599) is composed of Iron (20,243) and Baraga (9,356) counties.
Menominee district (53,614) is composed of Menominee (24,883) and Dickinson (28,731) counties.
Each of the following northern peninsula counties composes a legislative district having one representative: Chippewa (27,807), Delta (34,037), and Marquette (47,144).
Bearing in mind that under the 1940 Federal census, which is the basis of the 1943 reapportionment, the total population of Michigan was 5,256,106, and that on the basis of 100 representatives provided in the 1943 act the ratio of population is 52,561 and that a moiety of a ratio is 26,280, it readily appears that each of the northern peninsula representative districts has been given a rather large proportion of representation as compared with other counties of the State. This is especially true as to such counties as St. Clair which has only one representative for a population of 76,222 and as to Wayne county with 2,015,623 population to which was allotted 27 representatives, being an average of 74,653 for each Wayne county representative.
It may also be noted that the 1943 reapportionment results in a fairly equal, at least “as nearly as may be,” population in each of the eight northern peninsula representative districts. Exact equality in population between representative districts or even a close approximation thereto has never been accomplished nor is it possible to accomplish it under the Constitution and physical conditions existing in this State. In Houghton Board of Supervisors v. Blacker, Secretary of State, supra, p. 647, it is said:
“It is, of course, well known that an equal and exact division of the members among the different counties cannot be made, and all that the Constitution contemplates is that the division shall be as equal as may be. * * * The words 'as nearly as may be’ are capable of sufficient expansion to meet all difficulties that lie in the way. * * _* It is also claimed that the Constitution, in relation to apportionment of representatives, cannot always be carried out in detail without violating some of its provisions. This is no doubt true. *' * * It has resulted always in the necessary denial to some county or counties of their full representation under the moiety system. This Court could not be called upon to enforce a constitutional provision incapable of enforcement. In' case of making as equitable a division as possible under the Constitution,- — and that is all that can be required, — it must be in the discretion of the legislature to deprive some of the counties of their representation * * * upon the moiety plan. ’ ’
The figures given just above disclose that only one of the 8 northern peninsula districts has a population in excess of the 52,561 ratio. The average of representation under the 1943 reapportionment in the northern peninsula taken as a whole is 40,443 as against the State at large having a ratio of 52,561. In view of the foregoing plaintiff’s contention cannot be sustained to the effect that the 1943 reapportionment is inequitable or unfair or an unjust exercise of legislative discretion, or that it is constitutionally defective because in some instances a county having a moiety of the legislative ratio is attached to another county having less than a moiety of the ratio of population in the formation of a representative district.
Hillsdale county and the city of Hillsdale as intervening plaintiffs have filed a brief in which they also assail the constitutionality of Act No. 228, Pub. Acts 1943. Prior to the 1943 reapportionment Hills-dale county constituted a district with one representative. The 1940 Federal census gives Hillsdale county a population of 29,092. The 1943 reapportionment act joined Branch county, having a popu lation of 25,845, with, the adjacent county of Hills-dale in one legislative district. In so doing Branch county was combined with the least populous adjoining county. It is asserted in the Hillsdale brief that since Hillsdale county’s population exceeds a moiety of a ratio it is entitled to be constituted a representative district without having .other territory attached to it, and that denial thereof in the 1943 reapportionment act is violative of the constitutional provision that: “Each county, with such territory as may be attached thereto, shall be entitled to a separate representative when it has attained a population equal to a moiety of the ratio of representation.” We have hereinbefore held adversely to this contention. Further, the record discloses that Branch county on the south borders on the State of Indiana, and on the west, north and east it is contiguous to counties each of which has more than a moiety of the ratio of population. Therefore even under the holding in the Stevens Case (181 Mich. 199), Branch county, which has a population less than a moiety of the ratio, may properly, as a matter of “legislative necessity,” be joined with another contiguous county, having more than a moiety, to form a representative district.
It is also urged in the Hillsdale brief that the 1943 reapportionment act is unconstitutional because of the disparity of representation provided.for Wayne county, which as noted above, is given only one representative to each 74,653 of its population, whereas other districts are given a larger ratio of representation and some of them a much larger ratio. This, it is asserted in the Hillsdale brief, violates the constitutional mandate that apportionment of representatives shall be equal “as nearly as may be.” Wayne county’s number of representatives was increased by the 1943 reapportionment act from 21 to 27; and instead of complaining, Wayne county, as well as certain other counties, has filed an amicus curiae brief in support of the validity of the 1943 reapportionment act. As pertinent to intervening plaintiffs’ contention relative to the disproportionate representation in Wayne county, and expressing a directly opposite view, the principal plaintiff’s brief contains the following, which we approve:
“In cases of counties entitled to more than one representative, some discretion is necessarily given to the legislature as to how the additional representatives shall be apportioned, limited, of course, to equality of population ‘as nearly as may be.’ This may very properly come within the term ‘legislative necessity.’ ”
In view of all the difficulties attendant upon reapportionment of representative districts, intervening plaintiffs may not successfully attack the constitutionality of the 1943 reapportionment act on the ground just above noted, especially since intervening plaintiffs are not adversely affected thereby.
There is no merit to the contention in the Hills-dale brief that to prevent Hillsdale county being deprived of a representative from that county, the 1943 reapportionment act should have contained a provision that the representative from that district (now composed of Hillsdale and Branch counties) should always be a resident of Hillsdale county. Such a provision would at all times deprive the 25,845 population of Branch county of a resident representative; and the propriety of such a provision, to say nothing of its constitutionality, may well be questioned.
We are not in accord with intervening plaintiffs’ further contention that since the Constitution (1908, art. 5, §4) provides for “rearrangement” of senatorial districts, as well as reapportionment of repre sentative districts once in each 10 years, the 1943 reapportionment act as to representative districts shonld be held invalid as an “abuse of legislative discretion,” because the 1943 legislature did not also rearrange senatorial districts.
No reason has been advanced which would justify holding Act No. 228, Pub. Acts 1943, invalid. It is presumed to be constitutional, rather than unconstitutional. The petition filed herein is dismissed and the relief sought by plaintiff and intervening plaintiffs is denied. A public question being involved, no costs are awarded.
Starr, Wiest, Butzel, Bushnell, Sharpe, Boyles, and Reid, JJ., concurred. | [
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Boyles, J.
Plaintiff sued to recover damages for personal injuries and for damages to his automobile struck by one of defendant’s freight trains. On trial by jury, at the close of the proofs the court directed a verdict for defendant, and plaintiff appeals from the judgment entered thereon.
The accident happened before daybreak on the morning of January 25, 1941, at the crossing of defendant’s tracks with Caniff avenue, Hamtramck. Plaintiff was driving his automobile on Caniff avenue and transporting five other men to work at a motor company plant. At the crossing in question there are five railroad tracks. Plaintiff was driving east on Caniff, the traffic was heavy both ways, and plaintiff was following two other automobiles. As plaintiff approached the tracks he stopped, a freight train was passing over the crossing on a northbound track, in a northerly direction. After the northbound freight had passed, the automobiles ahead of plaintiff began to move forward and plaintiff followed. The automobile immediately ahead of plain tiff after crossing two of the railroad tracks stopped, compelling plaintiff to stop, with his rear wheels about on the easterly rail of the second railroad track, on which a southbound freight train was approaching. Two of the other men with plaintiff were in the front seat and three of his passengers were in the rear seat. The engineer of the southbound freight started blowing his whistle for the crossing when about a quarter of a mile from the crossing, his bell was ringing, his headlights on. Mr. Grosso, the passenger who was sitting on the right of the three men in the rear seat of the automobile (this was on the side farthest from the direction of the approaching freight), testified:
“The automobile stood on the tracks about 12 or 13 seconds when I first heard the whistle of the train. We all sat in this automobile for 12 or 13 seconds, and at the end of that time I heard the whistle of a train and it was then that I started to get out of the car. When I heard the whistle of the train I said, ‘Let’s get out,’ and I started out. I used my elbow, pushed down, and opened the car door. I got out of the car and ran east. I did not go all the way across the tracks, just a little bit right under that watch tower, right in line with it. I went east about 40 or 45 feet from where the car stood. I did not see either Mr. Fitzgerald or Mr. Barker or Mr. Hicks or Wilson while I stood there. I don’t know where they went. I did not see the train hit the automobile. I was running, with my back turned towards the . car.”
Mr. Wilson, who was sitting in the middle of the rear seat, testified:
“The northbound train went on, and traffic started. We followed it on across. Traffic stopped again and I raised up and a car sitting in front of us stopped, and about that time the train whistle commenced blowing and I looked around and Joe (Mr. Grosso) was getting out of the car. I followed bim right on ont. * * * When I heard the whistle I looked over my shoulder and saw the headlights. I do not know how far the headlight was away then, I couldn’t say, just flashed in my face and I knew we were on the tracks and I began to get out. I did get out, and was on the west side on the ground when the collision occurred. As to how far I was away from the car, well, across one of the tracks it was setting on and one switch track there behind the car.”
Mr. Hicks, who was sitting at the left in the rear seat, testified:
“Just a second or so before the whistle blew, I saw the train coming. Mr. Carlson had to stop because the other car stopped ahead of him. His motor was running. The automobile that I was in had Come to a stop about 20 seconds when I saw the headlight of the train coming. After I saw the headlight I would say about 10 seconds elapsed before the train hit the Carlson automobile. I would say I run about 15 feet, approximately that. I had stopped running and had just begun to turn around, when the collision took place. ’ ’
Mr. Barker, the passenger who was sitting on the right side in the front seat, testified:
“According to my observation the auto stood stopped about 20 seconds on the track. The whistle first attracted my attention to the train. After the whistle I looked north and saw the light, and heard the whistle at the same time! I saw the light bearing down on us. I then got out of the auto and went east, same way Mr. Grosso went.”
Mr. Fitzgerald, who was sitting in the middle of the front seat, testified:
“The car remained on the tracks about 18 or 20 seconds, before I made any movement in the car. That’s from the time the car came to a stop on the railroad tracks, before I made any movement. The next that I know, I didn’t hear the whistle because I had no hearing aid with me, but the first thing I noticed was Mr. Barker glancing over his shoulder past me, and then started to reach for the door. When he did that I knew that something must be wrong, so I glanced over my shoulder. All that I could see was that big headlight bearing down on us, so I wasn’t very long following him out of the car. He had opened the door at that time. I didn’t even have to open the door. I followed him out as quick as I could. I went straight east. I stopped probably 10 feet in front of the car. * * * I am somewhat deaf. I am wearing an Acousticon, they call it. I was, to a certain extent suffering from deafness on January 25, 1941, when this accident happened. I did not have that acoustic instrument on at that time. I imagine that was the reason I did not hear the whistle.”
Plaintiff, who was sitting in the driver’s seat, testified that he had followed the automobile in front of him at about 10 or 12 feet, that it stopped, and he (plaintiff) stopped behind it with his rear wheels about on the east rail of a southbound track. His window was open, his motor was not stalled, it was in low gear, he was “kind of excited,” he did not attempt to move his automobile. He heard the whistle of the approaching freight, then he saw the light, and as to his own action testified as follows:
“I started to open the door, then I had the door open and started to get out. I just remember that I had my foot out, just started out, had my foot starting to get out, that’s all I remember. I was hit. I had the door open and I was just starting to get out, and had my foot, just moving my foot to get down, and that’s all I remember.”
The other five men had time to get out of the automobile and reach a place of safety before the automobile was struck by the freight train. One of them was 40 feet distant when the crash occurred. Even the two men sitting in the middle of the seats had time to follow others out of the car and reach a place .of safety. Plaintiff was a strong, able-bodied man, 41 years old, his hearing and eyesight good, he had always led an active life. He had ample warning of the approach of the freight, and as full opportunity to avoid injury as the others in the automobile. The record is barren of any adequate reason why he failed to do so.
The record leaves considerable doubt as to whether the defendant’s employees were guilty of negligence in the operation of the freight train. The trial court directed the jury to return a verdict of no cause for action on the ground that the testimony did not prove the defendant guilty of negligence. The court also held that the plaintiff was guilty of contributory negligence. The fact that the circuit judge gave a wrong reason for directing a verdict' does not control if the right result was reached. We need not recount the facts relied on by plaintiff to establish defendant’s negligence. Assuming for the purpose of this opinion that defendant’s negligence was,established as an issue of fact for the jury, we hold that plaintiff was guilty of contributory negligence as a matter of law. Plaintiff had ample time and opportunity to avoid injury to his person. The instant case is controlled by Goldman v. Railway Co., 287 Mich. 289, where the facts were almost identical with the case at bar and the accident occurred at this same crossing. See, also, Krouse v. Railway Co., 215 Mich. 139, where plaintiff sought damages under somewhat similar circumstances and the court said:
“If plaintiff’s decedent could have escaped injury by the exercise of ordinary care and she failed to do so then her own negligence was the proximate cause of the accident and there can be no recovery. If plaintiff’s decedent’s want of ordinary care was in whole or in part a proximate cause of her injury thére can be no recovery. Williams v. Edmunds, 75 Mich. 92. There was ample opportunity after the automobile stalled upon the track for the deceased, in the exercise of reasonable prudence, to step to a place of safety. She was possessed of all of her faculties and no reason is shown for her delay in responding to the request of her husband to leave the automobile.”
There is no occasion to apply the doctrine of subsequent negligence in the instant case. The record is clear that the engineer of the freight train did everything possible to avoid the accident when he discovered, or by the exercise of reasonable care should have discovered, the rear wheels of plaintiff’s automobile on his east rail. There was traffic both ways on Caniff avenue. Westbound traffic interfered with the engineer’s vision of plaintiff’s automobile and when the engineer first saw that plaintiff’s car was not in motion his engine was 250 ' to 300 feet distant from the crossing, he applied his emergency brakes, and did all that could be done to stop. The momentum of the heavy freight train carried the engine about 400 feet across Caniff avenue.
“Plaintiff planted her case on the negligence of defendant without any negligence on her part, and the doctrine of subsequent negligence was not an issue. See Kerns v. Lewis, 246 Mich. 423.” Kraft v. Railway Co., 262 Mich. 494.
See, also, Mallory v. Pitcairn, 307 Mich. 40; Davidson v. City of Detroit, 307 Mich. 420.
Plaintiff argues that he was entitled to go to the jury on the question of damages to his automobile ($246.50), relying on Goldman v. Railway Co., supra. In the Goldman Case, there were separate actions, by Belle Goldman, the driver of the automobile, for personal injuries, and by her husband for damages to the car owned by him. "While Mrs. Goldman was denied recovery for personal injuries because of her contributory negligence, judgment for $400 for the husband for damages to his car was allowed on the ground that she had attempted to remove the stalled automobile from the railroad track with no proof that she was guilty of contributory negligence in failing to do so. The court said (p. 297) :
“Nor is there any testimony of lack of effort to remove the automobile from its place of danger. In this particular Mrs. Goldman did all she possibly could. While it was within her power to have removed her person to a place of safety, she was wholly powerless to remove the automobile. If by the exercise of care she had saved herself from injury, nonetheless under the circumstances of this case it is evident that the automobile would have been damaged. It follows that Mrs. Goldman was not guilty of any contributory negligence in not getting the automobile off defendant’s track before it was struck. ’ ’
Such is not the case now before us. Plaintiff’s automobile was not stalled, the motor was running, he made no attempt to remove it, there is no proof that plaintiff could not have backed his car up, out of the place of danger. His contributory negligence is a complete bar to any recovery.
Judgment affirmed, with costs to appellee.
North, C. J., and Starr, Wiest, Butzel, Bush-hell, Sharpe, and Reid, JJ., concurred. | [
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Reid, J.
The separate petitions of the 2 petition-
ers have been consolidated for the purpose of consideration on this appeal. Each petitioner petitioned the circuit court for a peremptory writ of mandamus requiring defendant board to meet and approve of Ms petition filed with the defendant board for the purpose of placing him on service retirement annuity or “pension roll” of the defendant city. ’
Each petitioner claims and .defendants admit that he had- served over 20 years .of creditable service as fireman in the employ of defendant city.
The only question in this case is whether the defendant board is vested with discretion and on what grounds to grant or to deny the applications of plaintiffs who are eligible for retirement so that each petitioner “shall receive [or not receive] a service retirement annuity.”
At the first meeting of defendant board at which plaintiffs’ petitions were considered, it seems that not all members were present, but at a later meeting held October 9, 1951, all members were present, but the petitions were not approved by the required majority.
The sections of the amended charter of the city of Dearborn which are of importance in determining the .issue in this case are as follows:
“Sec. 21.16. .Each trustee shall be entitled to one vote in the meetings of the board. Five members of the board shall constitute a quorum. At least 5 concurring votes shall be necessary for a decision by the trustees at any meeting of the board. The members of the board shall serve without additional compensation.
“Sec. 21.17. The mayor of the city shall be ex-officio, chairman of the board, and the mayor protein shall be ex-officio vice-chairman. The board shall adopt its own rules of procedure and shall keep a record of its proceedings. The board shall hold meetings regularly, at least 1 in each month, and shall designate the time and place thereof. All meetings of the board shall be public. * * *
“Sec. 21.27. (a) Any member in service may file with the board his written application for retirement setting forth on what date not less than 30 days ■nor more than 90 days subsequent to the execution and filing thereof he desires to be retired; provided that the said member at the time so specified for his retirement shall have 20 or more years of creditable service as a policeman or fireman in the employ of the city.
“(b) Any member-who has attained age 60 shall be retired forthwith, or on the first day of the calendar month next succeeding that in which the member shall have attained age 60. On recommendation of the department head, the board may continue such a member in service for periods not to extend beyond the attainment of age 65. This paragraph shall not apply to any member until 5.years from the effective date of this charter amendment.
“Sec. 21.28. Upon, retirement from service according to the provisions of section 21.27 of this chapter, a member shall receive a service retirement annuity equal to 1/50 of his average final compensation multiplied by his total years of creditable service; provided, however, the service retirement annuity of a member or beneficiary shall not exceed 1/2 his average final compensation, or 7/10 of the annual rate of pay received by a patrolman first class, or a fireman first class, whichever amount is the lesser.”
Defendants’ answer to plaintiff O’Connell’s petition for mandamus among other things alleges:
“Defendants allege that petitioner O’Connell was on the date of filing said application for retirement 44 years of age, was in excellent health and was in the prime of life; that he had received upwards of 20 years of training in the Dearborn fire department at city expense, and because of these facts the discretion of the defendant retirement board existed whereby the city should not lose the benefit of- the investment which it had made in plaintiff O’Con nell; that no clear legal right was alleged to be existing in the plaintiff to the relief prayed for and no clear legal duty was alleged to be existing and none in fact existed in the defendants to grant plaintiff’s application for retirement; that chapter 21 of the charter of the city does not in any place impose upon defendants the duty of granting retirement to an applicant, but on the contrary, the language is clearly discretionary with the defendant retirement board as to whether the application for retirement will be allowed, particularly when the applicant is strong and able bodied and has ability to continue as an employee of the city.”
The trial court in his opinion, among other things, stated:
“Reading the provisions of section 21.27 (a) with a view to a fair meaning of the context of the section itself, as well as in relation to the provisions of the other sections hereinbefore set forth, it seems to the court a fair conclusion that eligibility for retirement of an able bodied policeman or fireman is complete when he has completed 20 or more years of creditable service, and that when he has done so, he has' fulfilled all requirements necessary to such eligibility, and is entitled to be retired, unless some special circumstance or event takes his case out of the purview of the section of the charter relative to such retirement. That the board has discretionary power, within limits, is evident from the language of certain provisions of the retirement act itself, more particularly section 21.16. The reason given by defendants for refusal to act favorably in the instant case, namely, the city’s investment by reason of its training of a fireman or policeman for a period of 20 years or more, does not seem to the court to rest upon any reasonable basis either in law or equity. When placed against the background of the present case, such claimed reasoning is too shallow to merit credence. Retirement allowance of a pension is controlled by the provisions of the retirement act itself and not by theories, worthy or otherwise, foreign to a fair construction of the prescribed terms of the act itself. * * *
“To hold that petitioners are not entitled to favorable action by the board for the novel reasons set forth by defendant in his pleadings and in his presentation of the case is, in the opinion of the court, to do violence to the fair intent of the language set forth in section 21.27 (a), and is, in effect, arbitrary and captious to a point bordering on fraud. The petitioners have fulfilled every requirement set out by the charter. No emergency or unusual .circumstance has been shown to exist. If, in addition to the 20 or more years of creditable service, a policeman or fireman must also meet some other requirement not mentioned in the retirement act, then, in reason, appropriate language to that effect should be added to the aforementioned policemen’s and- firemen’s retirement act. In the absence of such language, the board cannot assume that such exists nor can the court supply the deficiency.”
“The scope of judicial review is limited and the courts will not review or disturb the decision of the [pension] board except for want of jurisdiction, fraud, bad faith, abuse of discretion, or arbitrariness.” 62 CJS, p 1212, citing cases in California, Colorado, Connecticut, Missouri, New York and Ohio.
In McCarthy v. Couzens, 214 Mich 501, mandamus was sought by the plaintiff in that case, to compel the pension committee of the fire department of the city of Detroit to grant a pension. "We say at pages 506, 507:
“In passing upon the issue of fact before the commission at its hearing of April 20, 1916, its action is not shown to have been fraudulent, arbitrary or capricious. In the absence of such showing the action of the commission must be deemed final and we have no right to interfere by mandamus, no right to substitute our judgment or discretion for that of the commission.”
In Nyman v. Detroit Police Pension Committee, 302 Mich 520, in reversing an order of a circuit court granting a mandamus ordering the defendant committee to grant a pension, we say at page 521:
“The committee after a full hearing had determined that the officer did not die from the effect of injuries received in the performance of his duties, and that, therefore, plaintiff was not entitled to a pension.”
We further say at page 525:
“We-shall not discuss the testimony except to state that it fully sustains the committee in its third and final denial of plaintiff’s petition for a pension. * * * The determination of the committee, being neither arbitrary, capricious nor fraudulent, was final.”
Eligibility to receive a pension was the issue in dispute in the McCarthy and Nyman Cases.
By fair implication, if we had found the determination of the committee in the Nyman Case or in the McCarthy Case, to be arbitrary, capricious or fraudulent, we would not have treated the determination as final. It may therefore be said that our decisions in the. Nyman Case and McCarthy Case are fairly in line with the rule as laid down in 62 CJS, p 1212, above cited.
Plaintiffs cite 3 McQuillin, Municipal Corporations (3d ed), § 12.143 (in part), as follows: •
“Pension laws; being remedial in nature, should be liberally construed in favor of the persons intended to be benefited thereby. If a provision is ambiguous and uncertain, the courts will consider the obvious purposes and objects sought to be attained and will construe the language used, insofar as it reasonably permits, to the end of giving it vitality and efficiency in the accomplishment of such purposes and objects.”
“A judiciously administered pension fund is doubtless a potent agency in securing and retaining, the services of the most faithful and efficient class of men connected with those arms of the municipal service in which every property owner and resident of the city is most vitally' interested.” 40 Am Jur, p 972.
The State has recognized the propriety and desirability of fire and police department pensions by the enactment (with later amendments) of CL 1948, § 38.551 et seq. (Stat Ann 1949 Rev § 5.3375 [1] et seq.). Neither the plaintiffs nor the defendants state any claim that the State statute limits the amendment to the charter of defendant city of Dear-born nor affords a rule for decision of the matter herein litigated.
In Hubbard v. Board of Trustees of Dearborn Retirement System, 319 Mich 395, we say (per syllabus 1):
“The powers of a board, created by a city ordinance, to exercise discretion must be found in the ordinance itself and are subject to its limitations thereon.”
Plaintiffs are not of the age of 60 years and each had the option under section 21.27 of the charter above cited, each having more than 20 years of creditable service as firemen, to apply for retirement under the charter provisions.
The reasons given by the defendant board are not sufficient reasons for refusal of the service retirement annuity.
The charter provisions seem to imply that all employees eligible under those provisions to receive service retirement annuities, shall be treated alike. To hold otherwise would render the retirement funds subject to personal' and political favoritism, which it cannot be considered the voters intended by adopting the charter provisions in question. Such favoritism in the administration of public funds could not be tolerated by the court. The action of defendant board in the instant case must be deemed arbitrary or capricious or the result of insufficient reasons not disclosed in the record. There was no issue of fact as to the eligibility of plaintiffs to receive a “pension.”
The trial court ordered the issuance of a writ of mandamus, in each of the 2 consolidated cases, which orders were appealed from by defendants, and are affirmed by us. No costs, a question of public importance being involved.
Dethmers, Butzel, Carr, Bushnell, Sharpe, and Boyles, JJ., concurred.
North, C. J., did not participate in this decision. | [
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Sharpe, J.
This is an appeal by the employer and the insurer from an award of compensation to plaintiff, John Nightlinger.
The essential facts are as follows: Plaintiff worked as a grocery packer, for defendant, Giant Super. Market, Inc., from June, 1949, until June 17, 1950. He only worked on Thursdays and Fridays from 4:30 p. m. to 9 p. m., and all day on Saturday. He was 18 years of age, and a student in school.
In his job as a grocery packer he stood at a stand, the top of which was 22 inches above the floor, and part of the time he stood with his feet turned out and the inside of his knees pressing against the top of the stand. At times his knees bumped the top of the stand. Plaintiff noticed some redness on the knee when he first worked for defendant. Plaintiff did not have any medical attention for the knee until J une 26,1950, when he consulted Dr. Donald C. Durman. He informed Dr. Durman at that time that the pain and swelling in the vicinity of the right knee had been present for about a month. On June 26, 1950, Dr. Durman found “a swollen area on the right leg, on the inner aspect of the leg, just below the knee, which was red, very tender to pressure, hard, firm.” The swollen area extended from the upper end of the tibia down a distance of 2 or 3 inches on the inner side of the leg. Dr. Durman made a diagnosis of osteogenic sarcoma of the tibia. The leg was amputated at the lower third of the thigh on July 24, 1950. -After the operation it was diagnosed as a “Periesteal osteofibroehondro sarcoma,” which appears in young people more often than in older people.
On November 28, 1950, plaintiff filed an application for hearing and adjustment of claim with the Workmen’s compensation commission. The deputy commissioner granted plaintiff an award of $18.66 per week for total disability for the specific loss of a leg for a 200-week period, together with an amount for medical expenses. Upon appeal the commission affirmed the award, based upon the following taken from an opinion filed in the cause:
“We recognize that -the causes for the various.types of cancer are not definitely known. We also recognize that medical men differ in their opinion, as Dr. Durman indicated, as to whether trauma can be a factor in development of cancer. However, we do not feel inclined to categorically conclude that trauma is not a factor in the development of cancer simply because the causes of cancer are not definitely established or because medical men are in disagreement on the relation of trauma to cancer. We think each case must be decided on its facts. In the instant ease plaintiff had never had any trouble with his right leg prior to his employment by defendant company. In the course of his employment he repeatedly bumped his right leg on the counter and a redness appeared at the site of the repeated bumping. The red area was caused by the repeated bumping of the leg against the counter. He felt ¿ pain in his right leg after working for 3 or 4 months. Later a swelling appeared on the leg in the area where it was bumped against the counter. Finally the malignant tumor developed at that spot. To exclude the repeated humping as a causative factor for the tumor, we would have to disregard those undisputed facts and conclude that the repeated trauma and the formation of the tumor in the very area which was subjected to the trauma were purely coincidental. We do not believe such a conclusion is justified because the symptons first appeared following trauma to the leg and progressed with the repeated trauma. In our opinion it is more reasonable to conclude that the repeated trauma was a factor in the development of the sarcoma and we so find.”
Defendants appeal and urge that plaintiff failed to show competent evidence that he received a personal injury arising out of. and in the course of his employment.
Plaintiff testified:
“Q. John, you worked for the Giant Super Market and when did you first begin your employment with them ? Just approximately ?
“A. Approximately June, 1949.
“Q. What were your duties ? What did you do in working for the Giant Super Market?
“■A. was a packer.
“Q. Would you please explain just what you mean by a packer ?
“A. A packer you got to — you have a checker unload the groceries from the over-stand and the packers stack them up and put them in boxes. * * *
“Q. And would you just explain just what that picture is of your -stand, where they come up, where the cash register is?
“A. They have a high place there where they set the canned goods and food, and groceries, on the stand and down below they have a place where they set groceries on the side, a little lower. * * *
“Q. The Commissioner: What did you say about the inside of your leg ?
“A. I said the inside of your leg hits the counter.
# # -y?
“Q. Describe to us, as you are operating what we will call the checkout counter, would you just describe what your process is in packing these groceries ?
“A. Well, in order to get up close to it and reach, your left leg was down on the floor and sort of bringing your right leg up where it cuts on the corner-shaped counter, sort of a sharp corner there.
“Q. Are you talking about the top of the stand?
“A. The top of the lower part of the stand.
“Q. Can you tell us how high this part where you are working is ?
“A. Approximately about 22 inches.
“Q. John, what is your height?
“A. My height is about 5 feet, 9 1/2.
“Q. And when did you first notice any sign or trace of your injury complained of?
'“A. When I complained.
“Q. When did you first notice any sign of it?
“A. Well, it was sort of reddish skin for quite a while back.
“Q. What do you mean by that?
A. When I first started working there it was red■<dish.
“Q. Then what was the next indication you had of injury?
“A. Well, it started swelling.
“Q. And when would you say that was ?
“A. Well, approximately 2 months before the operation.”
Dr. Donald C. Durman, a witness produced by plaintiff, testified:
“Q. When did you first see him?
“A. June 26,1950.
“Q. And did you examine him at that time ?
■“A. Yes.
“Q. Will yoti tell us what you found?
“A. I found a swollen area on the right leg, on the inner aspect of the leg, just below the knee, which was red, slightly red, very tender to pressure, hard, firm.
“Q. Which knee was that?
“A. The right knee. * * *
“Q. Now, what did you do after you located this ?
“A. Made an X-ray examination of the leg. * * # “Q. And will you tell us what you found in these X-rays ?
“A. On the anterior posterior view the femur and tibia and fibula are normal. The knee joint itself, the knee joint space is normal. On the tibia, on the medial condyle there is an area of decreased density ■of the bone, and just below it there is an area of rather marked increase in density of the hone and1 at that point on the surface of the bone, due to the level of the epithelial plate or line, there is an area of destruction of the cortex of the bone. The lateral view shows' normal appearance of the femur, patella and fibula, hut also shows this area of diminished density of the upper portion of the tibia and shows-below it an irregular area of marked increased density of hone.
“Q. What does this area and existence of bone indicate to you ?
“A. Indicates increased density of calcium in the hone from some cause or other. * * *
“Q. What was your diagnosis ?
“A. Osteogenic sarcoma of the tibia.
“Q. Will you tell us laymen just what that means so we' can understand it?
“A. It is a malignant tumor of the hone.
“Q. Where did you find that malignant tumor on the bone, was it on the outer surface or inner or both ?
“A. Both and inside the hone. It had gone through the cortex and the tumor tissues outside of the hone in the soft tissues had radiated from the outside in. You couldn’t tell at the time where it had originated.
“Q. Where did you amputate the leg?
“A. Lower 1/3 of the thigh.
“Q. Is there some reason why you went that high?
“A. The first is that this tumor was very close to the joint, so that in order to be sure of getting above it we would have to get above the knee. * * *
“Q. Now, Doctor, based upon the history given you, and the condition that you found there, the malignant condition you found there, and your examination and your diagnosis of that condition, can you tell us whether there might be or could be a causal relationship between the malignant condition found and the injury complained of by the boy?
“A. I don’t know.
“Q. Would you say there could be or might be a causal relationship there?
“Mr. Dodge: After the Doctor has answered as he did it is speculation.
“Mr. Sheldon: I can speculate on it, I think.
“The Commissioner: He may answer.
“A. It is the opinion of a good many pathologists that repeated trauma or injury to a certain area over a long period of time may have something to do with the development.of this type of tumor, but, on the other hand, I think there are probably an equal number of very competent pathologists that say it has no causal relationship whatever.
“Q. Well, are you telling us that there could be a causal relationship?
“A. I really don’t know.
“Q. Well, I am not asking you whether there would be; I am asking you whether there could be?
“A. Well, I suppose it is possible to conceive of repeated bumping producing enough stimulation of the tissues or change in the tissues so that some abnormal growth might take place. That is about as near as I can answer that question.
“The Commissioner: * * * Is there anybody actually knows what brings on these cancers, or sarcomas ?
“A. I don’t believe so.
“By the Commissioner: Your position is, in this, that this change could occur by a series of traumas but as to whether it did you, yourself, have no knowledge and are not able to tell us?
“A. That is right. # * *
“Q. What does the pathological report show as to the depth of it?
“A. He says, ‘Sections show an inflamed or infected considerable portion proximal end of the bone extending for a distance of 2 or 3 centimeters under the cortex.’ ”
Plaintiff bases his claim for compensation on testimony showing repeated trauma followed by a tumor in the area where the trauma occurred, and the testimony of Dr. Durman, who testified:
“Well, I suppose it is possible to conceive of repeated bumping producing enough stimulation of the tissues or change in the tissues so that some abnormal growth might take place. That is about as near as I can answer that question.”
The burden of proving a right to compensation is on the party asserting that right, see Veek v. Wesley Freight Co., 306 Mich 485. In awarding compensation the commission may not indulge in the assumption of a mere possibility in the nature of a guess as to whether plaintiff is entitled to compensation, see Ginsberg v. Burroughs Adding Machine Co., 204 Mich 130, but the commission may draw reasonable inferences from established facts; see Standard Drug Store v. A. E. Wood & Co., 227 Mich 333.
In Featherly v. Central Paper Co., 281 Mich 562, plaintiff fell and injured himself in September, 1933. He continued to work until August, 1935, when it was found that he had osteo sarcoma, which caused total disability. We approved the following taken from an opinion of the department:
“The department has carefully reviewed the medical testimony offered to show a causal relationship between the accident and the disability and the most that may be said is that there is a possibility that the accident might have had some connection with the disability. All the doctors admit that the cause of osteo sarcoma is unknown; that osteo sarcoma may occur without trauma; that osteo sarcoma is the cause of plaintiff’s disability. ‘Legal liability may not be predicated on mere guess or probability. Draper v. Regents of University of Michigan, 195 Mich 449.’ Rubin v. Fisher Body Corp., 205 Mich 605.”
It is also the rule that the findings of fact and legitimate inferences drawn from established facts as found by the department are binding upon the Supreme, Court. See Shaw v. General Motors Corp., 320 Mich 338. In the case at bar plaintiff testified that when he first started working for Giant .Super Market, the subsequent traumatic area was “reddish,” and that while at work he had a series of traumas at or near the swollen place on his leg. Whether there' is proof of a causal connection between the trauma and the subsequent cancerous condition depends upon the testimony of Dr. Durman, who testified that he did not know whether there could be a causal relationship between the malignant condition found and the injury complained of.
\ He'also testified that it is the opinion of many pathologists that repeated trauma to a certain area over a long period of time may have something to do with this type of tumor. It also appears that the following questions and answers were given:
“By the Commissioner:
“Q. Your position is, in this, that this change could occur by a series of traumas but as to whether it did you, yourself, have no knowledge and are not able to tell us ?
“A. That is right.”
The only reasonable interpretation of the doctor’s testimony is that he does not know whether there is a causal relationship between .the malignant condition and the injury suffered. His testimony of what some pathologists believe is not testimony upon which an award can be anchored. In granting an award the commission had to find that there was a causal connection between the injury and the resulting condition of plaintiff’s leg. The record does not support such a finding of fact. The failure of plaintiff to furnish evidence from which the inference can be legitimately drawn that the injury resulted in the later amputation precludes the granting of an' award. The case is remanded for entry of an order denying compensation. Defendant may recover costs.
North, C. J., and Dethmers, Butzel, Carr, Bushnell, Boyles, and Reid, JJ., concurred.
See CL 1948, § 413.12 (Stat Ann 1951 Cum Supp § 17.186).— Reporter. | [
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Starr, J.
Plaintiff appeals from a, judgment for defendants entered by the trial court sitting without a jury.
On August 26, 1938, one Albert Varcoe, a carpenter employed by plaintiff school district, was working on á scaffold attached to a building located on plaintiff’s school grounds in Ionia. The scaffold fell and Varcoe sustained serious injuries. Plaintiff’s insurance' carrier, the Employers’ Liability Assurance Corporation, Ltd., paid Varcoe workmen’s compensation benefits of $3,679.
In pursuance of the provisions of 2 Comp. Laws 1929, §8454 (Stat. Ann. §17.189), plaintiff began the present suit, for the use and benefit of its insurance' carrier, to recover the above-mentioned workmen’s compensation benefits paid to Varcoe. In its declaration plaintiff alleged, in substance, that the scaffold was caused to fall and its employee Varcoe was injured by reason of the negligent operation of a motor truck owned by defendant Ionia Boy Scouts and driven by defendant Lester Dadd, who was also an employee of plaintiff school district. Defendants answered, denying the charge of negligence.
The trial court held that plaintiff had failed to establish negligence in the operation of the truck, and entered judgment for defendants. Plaintiff appeals. In reviewing the judgment, we have examined the record tp ascertain whether or not the trial court’s findings, upon which it was based, were against the preponderance of the evidence. In Vannett v. Michigan Public Service Co., 289 Mich. 212, 218, we said:
“We have repeatedly said in cases tried without a jury that the trial judge is the trier of the facts and may give such weight to the testimony as in his opinion it is entitled to. In such cases we do not reverse unless the evidence clearly preponderates in the opposite direction.”
See, also, Hazen v. Rockefeller, 303 Mich. 536; Flat Hots Co., Inc., v. Peschke Packing Co., 301 Mich. 331; Hanson v. Economical Cunningham Drug Stores, Inc., 299 Mich. 434.
Therefore, we shall discuss briefly the material facts shown by the record. It appears that there was a close working relation between plaintiff school district and defendant Ionia Boy Scouts. Plaintiff was the sponsoring organization of the Scouts and .held title to the lands, camp sites, and other properties which they used. The undisputed testimony shows that defendant Roy Carpenter, field commissioner of the Boy Scouts, had no interest in the motor truck involved in the accident. The truck was registered in the name of the Scouts, who permitted plaintiff to use it part time without rental or compensation. The party using the truck paid the expense for oil and gasoline, and the cost of mainte nance was borne equally by plaintiff and tbe Scouts. At the time of the accident, the truck was being used by plaintiff to move school seats or desks from one building to another. The scaffold upon which plaintiff’s employee Yarcoe was working was 3 feet wide and about 8 feet high, and was attached to the west side of the building, at or near the northwest corner thereof. The uprights of the scaffold rested upon but were not embedded in or attached to the ground. The scaffold platform was laid upon crosspieces spiked to the uprights and to the building. A gravel roadway about 10 feet wide extended along the west side of the scaffold, and immediately west of the roadway was an open, cement-lined gutter about a foot deep. The roadway on the school grounds extended in a westerly direction and, turning around the northwest corner of said building, continued in a southerly direction between the scaffold and the cement gutter, as above described. The truck, which was about 8 feet wide and. 12 feet long, loaded with desks or seats, was proceeding around the northwest corner of the building and between the scaffold and the gutter, in creeper gear, at a speed of five miles or less an hour. The scaffold had been up for several days, and defendant Dadd had driven the truck by it on previous occasions. At the time of the accident the front part of the truck had passed the corner of the building and scaffold and, as the rear part was passing, the scaffold fell. Yarcoe, who was sitting on the platform doing carpenter work, fell with the scaffold and sustained injuries for which the workmen’s compensation benefits in question were paid to him. He testified in part:
“Q. While you were sitting there (on the scaffold) what happened?
“A. Well, I know that tbe end post went ont from under me in an awful hurry and I went to tbe ground.
“Q. Whereabouts was tbis end post located?
“A. On tbe northwest corner of tbe building. • * *
1 ‘ The first thing that I recall of tbis accident was when tbe end post went out from underneath me. That is tbe first knowledge I bad of it. I didn’t actually see tbe truck come up tbe driveway that day. I knew there was a truck coming in, but I didn’t look to see what one it was until I was on tbe ground. I did not actually see it strike any part of the structure or scaffold. * *
“He (Dadd) stopped tbe truck, stopped immediately after it bit, because I laid right back of tbe truck. * * *
“Q. Did you bear any scraping or anything?
“A. There was tbe cracking noise, of course, when it pulled itself off and broke tbe brace.”
Defendant Dadd, who was driving tbe truck, testified in part:
“I was custodian at tbe high school. * * * I started driving tbe truck in 1936. Tbe superintendent of tbe schools ■ * * * gave me orders whenever I was to go to tbe other building or transport anything around for tbe school. * * * On August 26, 1938, I bad orders that morning to go to tbe Jefferson school and bring seats back to the junior high. * * *
“Before I came into tbe driveway there was about a three-foot raise; you have to stop tbe truck with a load on, shift it into creeper, then you have to come up straight and make a big swing over to tbe left around (the northwest corner of) tbis building, that is, tbe building on which tbe scaffold was on.
• “Q. You didn’t make a big enough swing on tbis particular occasion?
“A. Well, I figured I was right in the track where I had been all the time.
“Q. When you came along did you see Mr. Varcoe on the scaffold?
“A. I don’t think so. I don’t realize I did see him; no.
“Q. Then what happened? Did you see your truck hit the scaffold?
“A. I didn’t see the truck hit the scaffold.
“Q. Did you see the scaffold fall as the truck drew alongside?
“A. No, not until somebody hollered. * * *
“Q. You had gone in before on this truck and gone in there and shifted into low gear and got it around there all right?
“A. Around it all right.
“Q. In other words, if anything hit this, hit the scaffold, what was it in your judgment?
“A. I think that we had quite a load on and possibly the back of the rack was spread out farther.
“Q. You didn’t stop and tell your man to' get out and look and see how the sides of the truck were?
“A. Never entered my mind.
“Q. You just kept going right through there even though you had a larger load then usual?
“A. I don’t believe I had any larger load. You can’t get only so many seats on. * * *
“I didn’t hear any scraping or anything. I never heard a thing. I just heard somebody yell, ‘Whoa,’ and I stopped right there. * * * As I came through there, I was not talking to the man in the car with me. I don’t remember saying a thing. I was watching the road to get around. * * * I always take it careful and have it in creeper. I knew the scaffold was there and that is why I was taking it so slow as I did. * *
“I felt no. impact at all. * The front part of the truck did not come in contact with anything as I was driving past the scaffold. * * * I would say that I stopped the truck within three feet after I heard someone shout. * * *
‘ ‘ The driveway right at the particular point where the accident occurred is between the portable building, and the gutter, so-called. * * * The cement in the gutter was * * * fresh cement. * * * You- couldn’t drive over on it.”
Another employee of the plaintiff, who was riding in the truck with defendant Dadd, testified regarding the accident in part as follows:
“I was a passenger or helper in the car of Lester Dadd at the time of this accident. * * *
“Q. Just what happened'-as you arrived at the Lincoln school?
“A. Well, we drove up in the school yard. We came beyond what they call a portable building. They were working on that and there was a scaffold out there and there was a man working up there and as we came by I was on the opposite side of where the scaffold was and, why, the first I knew was the falling of the scaffold. * * *
“Q. Whether or not the front of the car struck anything at all?
“A. I would say, no. It would be the back part of the truck that hit the scaffold.
“Q. Whether or not you saw any part of the truck strike the scaffold?
“A. No, I didn’t. * * *
“Q. Did you hear studding fall and hit the truck?
“A Yes. * * *
“The Court: * * * I want to know whether you felt any impact before the scaffold came down, any impact of the truck hitting the scaffold?
“A. Well, I wouldn’t say that I did. I know just as the truck hit the scaffold, of course, it all went down.
“The Court: You didn’t feel the impact yourself?
“A. * * * No.”
In his opinion determining that plaintiff had failed to establish negligence on the part of defendant Dadd, the trial court said in part:
“At the close of the plaintiff’s case there was no direct testimony that the truck hit the scaffold support. * * * There is no testimony showing that Dadd saw or could have seen Varcoe on the scaffold as he approached the building. * * *
“In order for the plaintiff to recover it must show by a preponderance of the evidence that Lester Dadd (defendant) was guilty of negligence in operating the truck at the time and place in question. * * * In determining as to whether or not there is negligence the question narrows itself down to an inquiry as to whether or not the facts show that Lester Dadd did not act as an ordinarily prudent man would have acted under the circumstances here involved. * * * It is quite true that had Dadd exercised extraordinary care he might have gotten out of the truck and looked to see whether or not the back end was clearing the scaffold support or might have had the man who was riding with him do so. However, he is bound to exercise only ordinary care and not extraordinary care. It is my opinion that the ordinarily prudent man would have exercised no more care than did Lester Dadd on the occasion in question. The fact that he had negotiated the passageway shortly before the accident would give him every reason to believe that he might again negotiate such passageway by driving slowly and paying strict attention to where he was steering the truck. A mere miscalculation does not necessarily amount to negligence.”
The burden was on plaintiff to establish by competent evidence that defendant Dadd was negligent in his operation of the motor truck. Nylund v. Gemo, 295 Mich. 75. Negligence on his part will not be presumed. Schultz v. Sollitt Construction Co., 296 Mich. 125. The mere fact that an accident happened, resulting in injuries to plaintiff’s employee, does not establish defendant’s negligence. Poundstone v. Niles Creamery, 293 Mich. 455; Burghardt v. Detroit United Railway, 206 Mich. 545 (5 A. L. R. 1333). Although it might be inferred from the testimony that the truck struck the scaffold, causing it to fall, that fact alone would not establish negligence on the part of defendant driver, as the doctrine of res ipsa loquitur is not followed in this State. Weissert v. City of Escanaba, 298 Mich. 443 (10 N. C. C. A. [N. S.] 393).
It was the duty of defendant Dadd in his operation of the motor truck to exercise that degree of care and caution which an ordinarily careful and prudent person would have exercised under the same or similar circumstances. Hazen v. Rockefeller, supra. The testimony clearly presented a question of fact as to whether or not he exercised such care and caution. That question was for determination by the trial court as the trier of the facts.
The record shows that defendant Dadd used the only roadway available for ingress to that part of the school grounds; that the truck was about 8 feet wide and the roadway between the scaffold structure and the open'cement gutter was about 10 feet wide; that he had driven by the scaffold on other occasions without accident; that he was driving in the lowest gear at a speed of five miles or less an hour; that he was looking straight ahead and watching the road; and that his attention was not distracted. It shows that the front part of the truck passed the scaffold and that, while the rear part was passing, the scaffold fell; that no one saw it fall; and that lie stopped the truck within a few feet after it fell. The trial court saw and heard the witnesses and was in a better position to judge their credibility and the weight to be given their testimony.
We are satisfied that the findings of the trial court, upon which the judgment for defendants was based, were not against the preponderance of the evidence. In view of our conclusion, other questions presented by plaintiff do not require consideration.
The judgment for defendants is affirmed, with costs.
North, C. J., and Butzel, Bushnell, Sharpe, Boyles, and Reid, JJ., concurred with Starr, J. | [
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Bushnell, J.
Proponent, National Savings and Trust Company, of Washington, D. C., presented an instrument in proper form to the probate court for the county of Cheboygan, as the last will and testament of Robert Livingston Smith, deceased. Contestant Florence D. Smith, his widow, filed objections to the allowance of the proposed will and upon her petition under the provisions of Act No. 288, chap. 1, § 36, Pub. Acts 1939, as amended by Acts Nos. 26 and 176, Pub. Acts 1941 (Comp. Laws Supp. 1943, §16289-1 [36], Stat. Ann. 1943 Rev. § 27.3178 [36]), the will contest was certified to the • circuit court for the county of Cheboygan, where it was heard by the trial judge sitting without a jury. Contestant filed objections in the circuit court, to which was added by stipulation of counsel the claim that the decedent intended a 'certain instrument, dated May 28, 1936, hereinafter referred 'to as the Nassau will, to be his last will and testament, and did not intend the instrument, dated October 23, 1939, hereinafter called the Nebraska City will, to be his last will and testament. The circuit court admitted the Nebraska City will to probate and contestant has appealed from such judgment.
Although the objections filed by the contestant included mental incapacity and undue influence, these were abandoned and the ease was tried on the sole issue of whether the decedent at the time he executed the Nebraska City instrument intended it to operate as a testamentary disposition of his property.
Appellant’s several claims on appeal may be summarized in the contention that the evidence produced at the trial did not preponderate in favor of proponent.
The decedent, Robert L. Smith, was the adopted son of Sarah L. Smith and Fred B. Smith, of Nebraska City, Nebraska. Fred B. Smith established a trust for Robert’s benefit, of which proponent National Savings & Trust Company was one of the trustees. Under this trust, Robert had the power of disposition of the residue by will, excepting an interest therein which remained in the name of his adopted son, Richard B. Smith. '
Decedent and contestant, Florence D. Smith, were married in 1933, and had no children. Their legal residence was at Indian River, Cheboygan county, Michigan. They also maintained a home at Nassau, in the Bahamas, where, the Nassau will was executed in 1936. The record shows that Robert L. Smith discussed the drafting of a new will with his foster-mother’s attorney, John M. Dierks, a former county judge in Nebraska, some time in September of 1939 at his mother’s home in Nebraska City. Judge Dierks represented the National Savings & Trust Company in the administration of the Fred B. Smith trust. The instructions he received from Robert L. Smith were transmitted to the trust company, and Judge Dierks later received from it a draft of a proposed will. Robert L. Smith was afflicted with Hodgkin’s disease and had, in the meantime, left Nebraska City to go to Ann Arbor, Michigan, for medical treatment. The trust company’s draft was mailed by Judge Dierks to him at Ann Arbor on October 19, 1939, and remained in bis possession until its execution in Nebraska City on October 23d.
On October 21st, Ann Kuslak, a registered nurse of Ann Arbor, Michigan, was called to attend Robert L. Smith, and she left Ann Arbor with him that day by train for Nebraska City. They arrived at the home of his mother on Sunday, October 22d. The following morning Judge Dierks called on Robert. Nurse Kuslak was not in the room during the visit of Judge Dierks, but shortly thereafter, while they were alone, Robert asked her to write a letter to his wife, which he signed and the nurse witnessed. She was told by Robert that, in case of his death, “to be sure and give it.to his wife, Mrs. Florence DeVore Smith.” Miss Kuslak was relieved of her duties that day and left for her home in Ann Arbor that evening. This letter, received in evidence over the objection of proponent, reads as follows:
“Nebraska City, Neb.
October 23, 1939.
“To be given t,o my wife Florence DeVore Smith, in case of my death.
“Dear Florence:
“Mother had me sign a ‘will’ this morning, but I had nothing to do with the way it was made, for it was not my intention or wish to make another ‘will’ now. You know I am too sick to go into all that, but in case of my death Florence, I want the ‘will’ I made in Nassau two or three years ago carried out, for that was my last will and is still my wish.
Robert L. Smith
“Dictated per Mr. Smith to A. Kuslak, R. N.”
The Nebraska City will, executed the same day as the letter, was witnessed by Judge Dierks and two other parties. This will does not mention the Nassau. will and differs materially from it in its terms. It contains a bequest to a friend, Ben Janes, which was interlined by Judge Dierks at the request of Robert, and initialed by him before the will was executed.
Robert died at the home of his foster-mother in Nebraska City on October 31, 1939, eight days after the execution of the will. After Robert’s death his widow located Nurse Kuslak through one of the doctors at the Ann Arbor hospital and called upon her with her attorney. Nurse Kuslak testified that at the time she did not know whether these parties were who they represented themselves to be, nor could she be positive that Robert was dead. She did not then deliver the letter to Florence or say anything about it. After their departure, Nurse Kuslak verified the factual situation by conversation with an Ann Arbor doctor. She then telephoned Mrs. Florence Smith at Indian River, Michigan, and told her she had something that would be very helpful to her. Subsequently the letter was delivered to the contestant.
To constitute a valid will the instrument must have been executed with testamentary intent, and a presumption of such intent usually arises upon a showing of execution of such a writing in form and substance as required by statute. See the. probate code, Act No. 288, chap. 2, § 5, Pub. Acts 1939, as amended (Comp. Laws Supp. 1940, §16289-2 [5], Stat. Ann. 1943 Rev. § 27.3178 [75]), and In re Cosgrove’s Estate, 290 Mich. 258 (125 A. L. R. 410).
The controlling question in the instant appeal is whether extrinsic evidence is admissible for the purpose of showing lack of testamentary intent.
The letter in question was received in evidence over proponent’s objection.
The English rule enunciated in Lister v. Smith, 3 Sw. & Tr. 282, 10 Jur. N. S. (Eng.) 107, 33 L. J. P. 29, 9 L. T. N. S. 578, 12 W. R. 319, 164 Eng. Rep. 1282, is stated in Re Kennedy’s Estate, 159 Mich. 548 (28 L. R. A. [N. S.] 417, 134 Am. St. Rep. 743, 18 Ann. Cas. 892), as follows:
“ ‘The momentous consequences of permitting parol evidence thus to outweigh the sanction of a solemn act are obvious. It has a tendency to place all wills at the mercy of a parol story that the testator did not mean what he said. On the other hand, if the fact is plainly and conclusively made out, that the paper which appears to be the record of a testamentary act, was in reality the offspring of a jest, or the result of a contrivance to effect some collateral object, and never seriously intended as a disposition of property, it is not reasonable that the court should turn it into an effective instrument. And such no doubt is the law. There must be the animus testandi,’ citing Nichols v. Nichols, 2 Phill. Ecc. 180 (161 Eng. Rep. 1113); Trevelyan v. Trevelyan, 1 Phill. Ecc. 149 (161 Eng. Rep. 944); Swinburne, pt. 1, s. 3; Sheppard’s Touchstone, p. 404; Pym v. Campbell, 6 El. & Bl. 370 (119 Eng. Rep. 903).
“ ‘But here I must remark that the court ought not, I think, to permit the fact to be taken as established, unless the evidence is very cogent and conclusive. It is a misfortune attending the determination of fact by a jury, that their verdict recognizes and expresses no degree of clearness in proof. They are sworn to find one way or the other, and they do so sometimes on proof amounting almost to demonstration, at others on a mere balance of testimony; sometimes upon written admissions and independent facts proved by disinterested parties, sometimes on conflicting oaths or a nice preponderance of credibility. And it is difficult to impress them with the enormous weight which attaches to the document itself as evidence of the animus with which it was made. This weight it becomes the court to appreciate, aud to guard with jealousy the sanction of a solemn act.
“In the present case, however, the court finds the evidence so cogent, that it is prepared to act on the finding of the jury that the codicil was executed as a sham and a pretense, never seriously intended as a paper of testamentary operation. But I am far from saying that the court will in all cases repudiate a testamentary paper simply because a jury can be induced to find that it was not intended to operate as such. The character and nature of the evidence must be considered, as well as the result at which a jury have arrived, and the court must be. satisfied that it is sufficiently cogent to its end.’ ”
In the Kennedy Case this court rejected the English rule by saying:
“ ‘The momentous consequences of permitting parol evidence thus to outweigh the sanction of a solemn act,’ referred to by the court in the case of Lister v. Smith, supra, are still more momentous under the laws of this State, since, under the rule of evidence prevailing with us, no more cogent evidence is required to establish the fact of lack of testamentary intention in the making of ah instrument than to establish any other fact which may be submitted to a jury for its determination, and the court has no greater authority to control the verdict or influence it in such a case than in any other. Recognizing fully the high character of the authorities sustaining the contestants’ position, we are inclined, as this is an open question in this State, in view of the serious consequences of the contrary view, to hold, as was held by the supreme court of Alabama in the case of Barnewall v. Murrell, 108 Ala. 366 (18 South. 831), that:
“ ‘It was, doubtless, one of the purposes of the statute, in requiring that testamentary dispositions of personal property should be executed with the same formalities required in devises of land, to remove them from the doubt and uncertainty in this respect which attended them while the rule of the common law prevailed. There is no other mode of giving a valid expression to the animus testandi than that which the statute prescribes. Whatever forms the expression may assume, whatever solemnity may accompany it, the statute declares it ineffectual, unless the formalities it prescribes are observed. When these formalities are observed, if the writing be testamentary, if it imports a posthumous destination of property, the statute in itself and of itself attaches, and conclusively attaches, the animus testandi. The requisition of extrinsic or additional evidence of its existence is to add to the requirements of the statute; and to receive such evidence to repel the existence of the intent would be to receive evidence against the statute.’ ”
Contestant argues that the rule stated in the Kennedy Case has been overruled by implication in Re Henry’s Estate, 263 Mich. 410, and in Re Cosgrove’s Estate, supra, and therefore the letter signed by Robert should be considered in determining the issue of testamentary intent.
In the Henry Case the instrument presented for probate as a codicil was a letter written by the decedent to her lawyer, and the court there admitted extrinsic evidence for the purpose of determining testamentary intent.
In the Cosgrove Case the question was whether the paper presented for probate, an original penciled memorandum, was merely a memorandum from which the will was to be made or was the very instrument by which the deceased intended to dispose of his property after his death. In that case the court also held that extrinsic evidence was admissible to determine intent.
In the instant case, as in the Kennedy Case, testamentary intent is clearly deducible from the writing presented for probate which is on its face, in final form and substance, a will in compliance with the statutory requisites; while in the Henry Case and the Cosgrove Case, the instruments in question were not wills on their face in final form and substance, but were of doubtful character, and extrinsic evidence was, therefore, admissible to determine the decedent’s intention.
The Cosgrove Case contains the following quotation from Merrill v. Boal, 47 R. I. 274, 283 (132 Atl. 721, 45 A. L. R. 830):
‘ ‘ Oral evidence as to the circumstances surrounding the execution of the instrument is admissible for the purpose of showing either an absence or presence of testamentary intent.”
In the Merrill Case a will and a trust instrument were prepared at the same time. The trust instrument was executed with formality required by law for executing a will, and the question was whether this instrument, though not a will on its face, was executed animus testandi. Under these circumstances, which are unlike those in either the Kennedy or instant cáse, extrinsic evidence was properly admissible.
In support of the foregoing quoted statement of the law, the Rhode Island court cited Clarke v. Ransom, 50 Cal. 595; Milam v. Stanley, 33 Ky. Law, 783 (111 S. W. 296, 17 L. R. A. [N. S.] 1126); Outlaw v. Hurdle, 46 N. C. (1 Jones L.) 150; Whitney v. Hanington, 36 Col. 407 (85 Pac. 84); and Gage v. Gage, 12 N. H. 371. An examination of these authorities indicates that in none of them was this rule applied, except in instances where the instrument was of doubtful character and not on its face a will in final form and substance, in compliance with statutory requirements.
Neither the Henry Case nor the Cosgrove Case overruled the Kennedy Case.
Even if the letter in question were admissible, there would still remain serious doubt whether the evidence against the will “is very cogent and conclusive. ’ ’ The law throws around the formal acts of a testator the safeguard that such acts are not to be lightly overturned after his death. At the same time, the law provides simple and effective methods for revoking a testamentary instrument. See the probate code, Act No. 288, chap. 2, § 9, Pub. Acts 1939, as amended (Comp. Laws Supp. 1940, § 16289-2 [9], Stat. Ann. 1943 Eev. § 27.3178 [79]).
We are considerably impressed by the fact that the decedent had the draft of the Nebraska City will in his possession for some time, and that when he executed the instrument he insisted upon insertion of the bequest to Janes, his friend and family chauffeur, which was interlined in his presence and initialed by him. However, decision is not planted upon any of these matters, but upon the legal proposition stated in the Kennedy Case, that:
“ ‘When a sane testator, not subject to coercion or restraint, intentionally executes, with the formalities required by the statute, a writing which in form and substance is testamentary, the writing of itself imports, and conclusively imports, the animus testandi, i. e., the mind to dispose, the firm and advised determination to make a testament, closing all inquiry as to the existence and manifestation of the intent.’ ” Barnewall v. Murrell, 108 Ala. 366 (18 South. 831).
The judgment admitting the Nebraska City will to probate is affirmed, with costs to appellee.
Starr, Wiest, and Sharpe, JJ., concurred with Bushnell, J. | [
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Reid, J.
The record in this case is extremely scant. None of the testimony is set ont. Defendant relies for reversal on the claimed error of the trial judge in denying motion of defendant’s attorney for a separate trial from codefendant Wendell Lochbiler. Defendant appeals from his conviction for conspiracy to obstruct justice. The State’s claim is that between January 2,1935, and August 1,1940, defendant committed such offense and further, that defendant was a deputy inspector of police of the city of Detroit in command of a designated district in which he had full charge of the enforcement of all laws and that it was his duty as inspector to enforce laws against gambling. Defendant, was put on trial in April, 1942, with 66 other defendants. The trial proceeded until April 22, 1942, on which day Dr. Jaekel appeared and testified that his patient, the defendant, was taken ill and that it was indefinite when defendant could be in court; that defendant had bleeding ulcers of the stomach and that it would be at least a week or more before the bleeding could be controlled and stopped and that the routine way of treating this malady is, “to keep them in bed for' a month. That is routine for all bleeding ulcers,” whereupon Mr. Newman, attorney for defendant, said to the presiding judge, “Well, in order to clarify the record on the showing made this morning, and the testimony of the doctor, and in order not to tie up this jury, as Mr. 0 ’Hara suggested, I move that the court grant the defendant Burczyk a separate trial, and dismiss him from this proceeding at this time. The court: The motion will be granted.” Whereupon the trial of the other defendants proceeded without the appellant. After the trial of the other defendants had been concluded there remained this defendant, the appellant, and another former police officer, Wendell Lochbiler, who defendant says was a fugitive from justice, who had joined the United States navy, and after having been dishonorably discharged was brought back for trial near the conclusion of the trial of the 66 other defendants. Defendant claims that a fair trial was not given him because of the prejudice existing against the codefendant who had been a fugitive from justice.
There is nothing in this scant record to indicate how generally it was known that Lochbiler had been a fugitive or that this or any other matter concerning his past history was brought to the attention of the jury. Before the trial of defendants Burczyk and Lochbiler, which was set for July 1, 1942, defendant Burczyk objected to his trial proceeding jointly with defendant Lochbiler but made no showing in support of this claim that such joint trial would operate unfairly as to appellant. The trial judge thereupon made the following order:
“It appearing to this court that defendants, Frank J. Burczyk and Wendell Lochbiler, were both charged in the information filed in this cause together with other defendants and that they were both arraigned upon the information before this court, and
“It further appearing that at the time of the trial of the other defendants before this court and this judge the said Wendell Lochbiler did not appear together with the other defendants for trial but remained absent from such trial during the entire progress thereof without the consent of this court,
“It further appearing that the defendant, Frank J. Burczyk, filed a motion for separate trial which was heard and denied prior to the commencement of the trial and that he then sat as a defendant for several weeks, until, to wit, April 22, 1942, when he was taken ill and removed to the hospital, and testimony was offered on his behalf that it would be at least a week and possibly a month before he could be present at the further proceedings in the trial, and
“It further appearing that thereupon his counsel moved for a separate trial which was granted in order to enable the trial to proceed as to the other 66 defendants and not unduly delay the trial inasmuch as the jury was in the custody of officers and locked ■ up, and that this is the only reason that he was granted such separate trial, which was in fact only a mistrial as to him, and
“It further appearing to this court that a joint trial will expedite the proceedings and result in no injury to either defendant,
“It is thérefore ordered that the defendants, Frank J. Burczyk and Wendell Lochbiler shall be tried jointly in this cause at this time.”
The determination of the question whether the trial should he joint or separate was conceded to be a discretionary matter by Mr. Newman and is such whether conceded or not. 3 Comp. Laws 1929, §17298 (Stat. Ann. §28.1028). There is no showing that the discretion was abused or that the joint trial resulted unfairly to the defendant.
Appellant’s conviction and sentence are affirmed.
North, C. J., and Starr, Wxest, Butzel, Bushnell, Sharpe, and Boyles, JJ., concurred. | [
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Coleman, C.J.
Section 3109(1) of the Michigan no-fault insurance act requires a subtraction of benefits provided under the laws of state or federal government from the amount of personal protection insurance benefits payable under any no-fault insurance policy. A second provision of the no-fault act, § 3109a, permits a coordination of no-fault personal protection benefits with "other health and accident coverage on the insured”. The principal question presented in this case is whether Medicare payments, made on behalf of a qualifying participant to cover expenses incurred as a consequence of an accident for which no-fault benefits are also payable, must be set off in accordance with § 3109(1) as benefits provided under the laws of the federal government, or whether such payments may be set off under § 3109a as "other health and accident coverage on the insured”. The Court of Appeals ruled in a 2-to-l decision that § 3109(1) requires a set-off of Medicare payments against no-fault benefits otherwise due. We reverse the decision of the Court of Appeals. The phrase "other health and accident coverage” contained in § 3109a contemplates benefits provided to qualified participants under the Medicare pro gram; thus, Medicare benefits may be coordinated with no-fault personal protection insurance benefits at the option of the insured. In view of our holding on the principal question, we do not reach the constitutional issue framed in our order granting leave to appeal.
I
Plaintiff sustained multiple injuries in a pedestrian/automobile accident which occurred on June 2, 1976, and as a result, required extensive hospitalization and outpatient treatment. At the time of the accident, plaintiff was over the age of 65 and was eligible to receive Medicare benefits pursuant to certain sections of the Social Security Act which provide payment for eligible medical expenses on behalf of qualified individuals. Plaintiff additionally qualified for personal protection insurance benefits under the no-fault insurance policy issued him by defendant. The policy in question contained a provision mandating a subtraction of benefits payable by a state or federal government from no-fault benefits otherwise due. Defendant does not submit that plaintiff paid a reduced no-fault premium in recognition of his eligibility for Medicare benefits.
Medicare disbursed a total of $13,539.57 to various providers in payment of hospital and medical expenses incurred by plaintiff as a result of his accident. Defendant paid no-fault benefits with respect to qualified items of hospital and medical care not covered by Medicare, but refused to compensate plaintiff for those expenses which were picked up by Medicare, claiming that Medicare benefits were required to be subtracted from no-fault benefits under § 3109(1) of the no-fault act.
On April 15, 1977, plaintiff brought an action in circuit court to recover from defendant no-fault benefits for Medicare-reimbursed hospital and medical expenses, and attorney’s fees. The circuit court denied the claim for attorney’s fees, but awarded summary judgment in plaintiff’s favor on the set-off issue, relying on O’Donnell v State Farm Mutual Automobile Ins Co, 70 Mich App 487; 245 NW2d 801 (1976). Defendant appealed to the Court of Appeals, which reversed on the set-off issue in a 2-to-l decision. Plaintiff appealed and we granted leave to appeal on the following issues: "(1) whether MCL 500.3109 and 500.3109a; MSA 24.13109 and 24.13109(1) can be construed to allow a no-fault insurer to set off for Medicare benefits; and (2) whether MCL 500.3109; MSA 24.13109 is constitutional if it is construed to allow a no-fault insurer to set off for Medicare benefits”.
II
Before addressing the specific arguments advanced by the parties on appeal, we consider the pertinent statutory provisions, the intent of the Legislature underlying their enactment, and interpretations given them by the courts of this state. Section 3109(1) states:
"Benefits provided or required to be provided under the laws of any state or the federal government shall be subtracted from the personal protection insurance benefits otherwise payable for the injury.”
This section has been the subject of extensive litigation; almost invariably, the governmental benefits at issue have been social security survivors’ loss benefits and workers’ compensation benefits.
In the leading case concerning § 3109(1), O'Donnell v State Farm Mutual Automobile Ins Co, 404 Mich 524; 273 NW2d 829 (1979), this Court sustained the constitutional validity of the mandatory set-off, confirming that social security survivors’ benefits are required to be subtracted from § 3108 no-fault survivors’ benefits. We observed that government benefits provided as a result of the same accident for which no-fault benefits are also payable, and which serve the same purpose as no-fault benefits, are within the scope of § 3109(1); however, we emphatically stated that our decision in O'Donnell "does not purport to encompass other possible government benefits”. O’Donnell, supra, 538.
In Mathis v Interstate Motor Freight System, 408 Mich 164; 289 NW2d 708 (1980), we extended our holding in O’Donnell to workers’ compensation benefits, which we found to be constitutionally subject to the mandatory set-off of § 3109(1).
The Court considered the application of § 3109(1) to somewhat atypical benefits, Medicaid benefits, in Workman v Detroit Automobile Inter-Insurance Exchange, 404 Mich 477; 274 NW2d 373 (1979). However, since we ascertained that Workman was statutorily disqualified from receiving Medicaid benefits because of her eligibility for no-fault benefits, we declined to decide the issue, or otherwise to express an "opinion with respect to the propriety of a set-off of redundant, accident-related, ex gratia governmental transfer coverage”, Workman, supra, 486.
The legislative history of § 3109(1) was adequately detailed in O’Donnell, supra, 544-545:
"The history of § 3109(1) indicates that the Legislature’s intent was to require a set-off of those government benefits that duplicated the no-fault benefits payable because of the accident and thereby reduce or contain the cost of basic insurance.
"In a letter to the Governor from the Commissioner of Insurance analyzing a series of proposed no-fault bills introduced in 1971, none of which contained a set-off provision, the Commissioner criticized the bills because they tended to 'increase the duplication and overlap between auto insurance and other insurance programs, sick leave programs and social security’. Subsequent bills did contain set-off provisions. The final version of § 3109(1) was similar to an amendment suggested by the Commissioner. According to the Commissioner, the purpose of the amendment was 'to provide a more complete and effective coordination of benefits between Michigan auto insurance and the benefits provided by the laws of all the states and the federal government’. As noted by Justice Williams in his opinion in this case, the Commissioner’s comments 'make clear that the purpose of the § 3109(1) statutory scheme was framed in terms of maintaining or reducing premium costs for all insureds through the elimination of duplicative benefits recovery’.”
The second provision of the no-fault act relevant to our discussion herein is § 3109a:
"An insurer providing personal protection insurance benefits shall offer, at appropriately reduced premium rates, deductibles and exclusions reasonably related to other health and accident coverage on the insured. The deductibles and exclusions required to be offered by this section shall be subject to prior approval by the commissioner and shall apply only to benefits payable to the person named in the policy, the spouse of the insured and any relative of either domiciled in the same household.”
In contrast with § 3109(1), § 3109a has been seldom mentioned, much less construed. Nyquist v Aetna Ins Co, 84 Mich App 589; 269 NW2d 687 (1978), aff'd 404 Mich 817; 280 NW2d 792 (1979), merits our attention. In Nyquist, nine named plaintiffs brought an action against Aetna to recover no-fault benefits withheld by Aetna because plaintiffs’ hospitalization expenses had been paid for by Blue Cross-Blue Shield, and because plaintiffs had paid reduced no-fault premiums in electing a coordination of benefits. Plaintiffs principally asserted that Blue Cross-Blue Shield was not "insurance” and therefore did not come within the purview of § 3109a. The Court of Appeals responded:
"[Plaintiffs’ argument is untenable for three reasons.
"First, the legislative history of this provision demonstrates that coordination of Blue Cross-Blue Shield benefits with personal injury insurance protection was a primary concern * * *.
"We also note that § 3109a uses the word 'coverage’ rather than 'insurance’; the use of the broader term militates against plaintiffs’ restrictive reading of the section at issue.
"Secondly, documents that were part of the record below show that the Commissioner and Deputy Commissioner of Insurance have taken the position that medical and hospitalization plans such as Blue Cross- Blue Shield fall within § 3109a. We give particular weight to the interpretations of those charged with the implementation and enforcement of a statute. See Boyer-Campbell Co v Fry, 271 Mich 282; 260 NW 165 (1935).
"Finally, the plain purpose of § 3109a was to reduce premiums by eliminating duplicate coverage. It is undisputed that personal injury insurance benefits overlap with medical and hospitalization benefits. Thus, plaintiffs’ restrictive reading of § 3109a would subvert the clear purpose of the legislation.” Nyquist, supra, 591-592.
The Court of Appeals, in a second case discussing the permissive set-off provision, Orr v Detroit Automobile Inter-Insurance Exchange, 90 Mich App 687; 282 NW2d 177 (1979), held that sick leave accumulated by an employee was not health and accident coverage as set forth in § 3109a.
Although our primary focus in O’Donnell was upon the constitutionality of § 3109(l)’s mandatory set-off, we also concluded that § 3109a is constitutional, commenting:
"Section 3109(1) did not attempt to address the problem of overlapping no-fault and private health or accident insurance benefits. Soon after the No-Fault Act was passed by the Legislature, however, an attempt was made to fine-tune the set-off provisions so that this kind of duplication could be reduced while still permitting persons with needs exceeding the benefits provided by no-fault insurance to obtain the extra coverage they required. The Legislature enacted § 3109a * * *.
"Although the Legislature did not choose to make this set-off mandatory, as it had done with § 3109(l)’s government benefit set-off, this distinction is justified by the perceived necessity of making it possible for persons with greater needs to obtain the coverage they require and pay reduced rates on the no-fault insurance through deductibles and exclusions approved by the Commissioner. That some persons can still slip through the colander of § 3109a and receive additional benefits does not mean the statute is unconstitutional. Mathematical precision is neither possible nor required.
"Section 3109a promotes the valid legislative objective of reducing duplicative benefits; the means chosen is rationally related to that end; and the distinctions drawn are supported by a rational basis. This statute is also constitutional.” O’Donnell, supra, 550-551.
Crucial to our analysis in this case are two documents which tend to clarify the intent of the Legislature in enacting § 3109a. The first is a letter addressed to the Governor from the Commissioner of Insurance which explains the purpose of 1974 House Bill 5724 and summarizes the arguments in favor of the bill:
"The bill requires automobile insurers to offer to their insureds personal protection insurance benefits with exclusions and deductibles which relate to other health and accident coverage on the insured. Offer of such deductibles and exclusions will virtually eliminate the current overlap of coverage which occurs when an insured has both the no-fault personal protection benefits and other health and accident coverage which, like the personal protection benefits, covers medical expenses connected with auto accidents and other accidents.
"The bill will eliminate or drastically reduce the incidence of overlapping coverage for medical expenses related to automobile accidents and hence reduce the cost of such insurance to the insured.
"The bill will require that persons covered by the Medicare program be given personal injury protection benefits at reduced rates. Currently, some automobile insurers do not provide reduced personal protection rates to persons covered under the Medicare program. The only reduction available to all retired persons is due to their lower income not their Medicare benefits, if any.
"The bill would make it possible to eliminate the current situation in which persons insured under accident and health policies which include medical expense and loss of wages benefits may collect benefits from such coverage and from their no-fault personal protection benefits. This double recovery is contrary to public policy in that it is wasteful and can result in an insured receiving more income when recuperating than when working.
"The bill gives each consumer the chance to select or reject deductibles based on his existing non-automotive health and accident coverage. Currently, insurers writing approximately 90% of Michigan’s no-fault coverage do not allow the consumer to make such a choice.”
The second item is an analysis of HB 5724 prepared by the House Insurance Committee, which largely echoes the arguments and purposes set forth in the Insurance Commissioner’s letter to the Governor:
’’The Apparent Problem to Which the Bill Addresses Itself:
"Since the advent of compulsory no-fault automobile insurance last October, auto insurance premiums have not been reduced as some persons had anticipated. Many believe the average driver is overbuying in regards [sic] to accident and medical insurance since no-fault coverage overlaps with portions of the medical coverage offered by the private accident and health insurers and the group plans of Blue Cross and Blue Shield. Some persons claim Michigan residents should not be required to pay for this duplicate coverage and that automobile insurers should offer deductions and exclusions at reduced premiums to those who pay for similar coverage under other health and accident plans. Further, many contend this elimination of duplicate coverage by the no-fault insurers would result in a substantial savings [sic] to Michigan drivers.
"Argument For:
"The bill would save millions of dollars for Michigan drivers and would offer them an opportunity to eliminate their duplicate, overlapping insurance coverage since automobile insurers would be required to offer deductibles of exclusions which wrap-around a policyholder’s health and accident coverage. No-fault insurers would offer these deductions at reduced premiums, and State insurance officials estimate the 5 to 6 million Michigan drivers could save $100 million annually.
"Argument For:
"Passage of the bill would create more flexibility in health and accident coverage by offering consumers an insurance option which the vast majority of underwriters operating in Michigan do not offer. Further, if the Blue Cross/Blue Shield plans gain approval for their proposed modifications, the consumer seeking health and accident coverage will have yet another option from which to choose. The bill does not make it mandatory for an insurance buyer to select these deductibles and exclusions so many could still opt for overlapping coverage.
"Argument For:
"The skyrocketing hospital and medical costs could be contained to a greater extent with health and accident as the primary coverage since these policies, like the Blue Cross/Blue Shield plans, have established limits on their reimbursement of doctor and hospital expenses. A physician who knows his or her patient has unlimited medical coverage has no incentive to keep the doctor bill at a minimum.”
In summary, § 3109(1) requires a subtraction of government benefits from no-fault benefits otherwise payable. The provision exists to eliminate duplicative recovery and to contain insurance costs. Reduction of insurance costs is implemented under § 3109(1) by spreading the savings among all no-fault consumers. This Court has thus far found that social security survivors’ benefits and workers’ compensation benefits are subject to the mandatory set-off provision.
Section 3109a permits a set-off of "other health and accident coverage” at the insured’s option. This provision, like § 3109(1), serves to eliminate duplicative recovery and to contain or reduce insurance costs; additionally, it allows individuals to tailor their insurance coverage to their own special needs. Cost reduction is implemented under § 3109a on an individual basis rather than in blanket fashion. Blue Cross-Blue Shield has been deemed one form of "other health and accident coverage” qualifying for permissive coordination of benefits under § 3109a.
Ill
Medicare has been variously defined as " 'social welfare legislation passed by the Congress to aid the general health and welfare of those over 65 years of age’ ”, Imvris v Michigan Millers Mutual Ins Co, 39 Mich App 406, 410; 198 NW2d 36 (1972), and as "a federally funded and adminis tered program created by Title XVIII of the Social Security Act providing hospital and outpatient insurance benefits to elderly persons”, American Medical Ass’n v Weinberger, 395 F Supp 515, 518 (ND Ill, 1975). The 1965 enactment of Medicare into the Social Security Act "established the federal government as the largest health insurer in the United States”. American Medical Ass’n, supra, 518.
Medicare is a two-part program, each part distinct with regard to benefits, coverage, financing and administration. Part A of Medicare, known as the "hospital coverage” is incorporated into the existing social security structure, and is designed to assist in the payment of services for inpatient hospital care, skilled nursing care and certain home health care. To be eligible for Part A benefits, an individual must be aged 65 or older, and must meet conditions for cash social security benefits. Most persons aged 65 or older automatically qualify for Part A benefits. Part A coverage is wholly financed through universal and mandatory contributions from employers, employees, and self-employed people, and thus entails no monthly premium on behalf of a qualifying participant. Persons who meet the age requirements and who are enrolled in Part B, but who have not worked long enough to satisfy the other conditions for participation in Part A, may purchase Part A coverage by paying a monthly premium which is said to represent the cost of Medicare hospital protection. Amounts paid as employee and self-employment taxes under the Internal Revenue Code do not qualify as amounts paid for insurance, and are not deductible as medical expenses.
Participation in Part B of the Medicare program, termed the "medical coverage” or the "physician coverage” is voluntary, and is open to any individual aged 65 or older, except nonresident aliens. In contrast with Part A coverage, some individuals must apply for Part B coverage to be eligible for it. Moreover, delay in applying for Part B coverage results in a 10% increase in the amount of monthly premium for each year of delay. Once enrolled in Part B, an individual may cease participation either by filing a written no tice, or by failing to pay the premium. Former Part B participants are permitted to re-enroll only once, and at a higher premium. Part B of Medicare pays 80% of reasonable charges in excess of a moderate deductible for physicians’ services, outpatient hospital services, home health visits, outpatient physical therapy and speech pathology services, ambulance services, some chiropractic services, and other physician-prescribed health and medical services. Financing of Part B is accomplished through an exaction of monthly premiums of a uniform amount from enrollees and, at a minimum, matching contributions from the federal general appropriations fund. Premiums, paid either by direct payment or by automatic deduction from the participant’s social security benefit check, can be increased only if there has been a general increase in social security cash benefits during the previous year. Because any premium increase cannot exceed the percentage increase in cash benefits, the share assumed by the federal government is necessarily enlarged. Part B premiums qualify as amounts paid for insurance covering medical care under the Internal Revenue Code, and are deductible as medical expenses. Correlatively, Part B benefits received are in the nature of medical insurance proceeds, and are excluded from gross income under federal income tax provisions.
IV
We first address defendant’s contention that the phrase "other health and accident coverage” contained in § 3109a refers to "coverage other than that provided or required to be provided under the laws of any state or the federal government”, i.e., coverage other than the governmental benefits of § 3109(1) which, defendant posits, include Medicare benefits. For several reasons, we believe that such a construction is incompatible with and unwarranted by a common-sense reading of the text of § 3109a. Section 3109a makes no internal reference, express or implied, to § 3109(1); thus an interpretation dependent upon language set forth in § 3109(1) is pointless. Furthermore, the fact that "other health and accident coverage” immediately follows a reference to "personal protection insurance benefits” compels a conclusion that "other health and accident coverage” clearly means coverage other than personal protection insurance benefits payable under any no-fault policy.
V
Defendant asserts that Medicare benefits are unquestionably within the purview of § 3109(1) because they are provided pursuant to federal law, are administered by agencies of the federal govern ment, and are funded by federal tax schemes. Accordingly, Medicare payments do not qualify for § 3109a’s permissive set-off because they are not private benefits, as characterized by this Court in O’Donnell. Defendant believes that the plain meaning of § 3109(1), coupled with the intent of the Legislature in enacting the mandatory set-off provision, necessitate a conclusion that Medicare benefits are government benefits for purposes of § 3109(1).
Defendant’s analysis is certainly plausible, but it is not eminently persuasive.
Our holding is not predicated upon the governmental/private benefits dichotomy as urged by defendant. However enticing such a simple resolution might be, we are convinced that it is not the correct one insofar as Medicare benefits are concerned. It is indisputable that § 3109(1) contemplates benefits derived from a collateral governmental source; it is not equally indisputable that § 3109a applies only to "other health and accident coverage” obtained from a collateral private source. On its face, § 3109a is not so limited. While we acknowledge that the distinction between private and governmental benefits repeatedly surfaced throughout our discussion in O’Donnell, and that we there characterized § 3109a as relating to private benefits, suffice it to say that our concerns in O’Donnell were radically different from those confronting us here, and that we precisely confined O’Donnell to its facts.
The legislative history of § 3109a suggests that the Legislature, in leaving the phrase "other health and accident coverage” unmodified by the word private, intended to give unrestrained application of § 3109a to health and accident coverage from whatever source. The analysis of HB 5724 prepared by the House Insurance Committee indicates that the bill would eliminate duplicate cover-' age by making private accident and health insurance, as well as the group plans of Blue Cross and Blue Shield, primary sources of reimbursement for accident-related medical and hospital expenses. Thus, both private and non-private plans were within the scope of the bill. Further, in his letter to the Governor regarding HB 5724, the Insurance Commissioner expressed his view that Medicare recipients must be offered no-fault personal injury protection benefits at reduced rates under the bill. We presume that the Legislature reflected upon the Insurance Commissioner’s position in enacting § 3109a, and we give some weight to the interpretation given a statute by the official charged with its enforcement. Magreta v Ambassador Steel Co, 380 Mich 513, 519; 158 NW2d 473 (1968).
That participants in the Medicare program qualify for permissive coordination of benefits under § 3109a, rather than for mandatory coordination of benefits under § 3109(1), is forcefully demonstrated by the Legislature’s deliberate use of distinct words to describe the items subject to set-off in the two provisions. Section 3109(1), enacted as a portion of the original no-fault act, is clearly addressed to government beneñts. In a general sense, benefits are those things which promote an indi vidual’s welfare, advantage or profit. See Salisbury v United States, 377 F2d 700, 706 (CA 2, 1967); State ex rel Hardesty v Aracoma-Chief Logan No 4523, Veterans of Foreign Wars of the United States, Inc, 147 W Va 645, 650; 129 SE2d 921, 924-925 (1963). In contrast to § 3109(1) is the later-enacted § 3109a, which more specifically speaks to other health and accident coverage. "Coverage”, a word of precise meaning in the insurance industry, refers to protection afforded by an insurance policy, or the sum of the risks assumed by a policy of insurance. See D'Angelo v Cornell Paperboard Products Co, 59 Wis 2d 46, 51; 207 NW2d 846, 849 (1973); Freimuth v Glens Falls Ins Co, 50 Wash 2d 621, 625; 314 P2d 468, 471 (1957). In discussing whether an employee’s sick leave program constituted "other health and accident coverage” under § 3109a, the Court of Appeals in Orr, supra, 690, commented:
"The noninadvertent use of the word 'coverage’ in this section of the no-fault act, when the rest of the no-fault act refers to benefits, clearly indicates that the Legislature intended § 3109a, deductibles and exclusions, to be limited to health and accident insurance coverage upon the insured.”
We join in the belief of the Court of Appeals that the Legislature’s choice of the word "coverage” to delineate the perimeters of § 3109a was "noninadvertent”. We are also of the view that the Legislature’s enactment of § 3109a, which is narrowly limited to "coverage” and which is not expressly confined to private forms of such "coverage”, evinces an intent to provide unique treatment to health and accident insurance, as opposed to other perhaps equally duplicative "benefits”.
Medicare is "other health and accident coverage” qualifying for § 3109a’s permissive set-off. We perceive no just reason to differentiate Medicare from other, more traditional, forms of health and accident coverage which irrefutably are within the scope of § 3109a. Just like any so-called private insurer, Medicare compensates providers of medical and hospital services on behalf of participants who require health care. It is inconsequential that in other contexts Medicare has been deemed not to be insurance in the usual sense of the term: the same has been said of Blue Cross and Blue Shield plans which, according to Nyquist, fall within § 3109a. Blue Cross & Blue Shield of Michigan v Insurance Comm’r, 403 Mich 399; 270 NW2d 845 (1978).
By construing § 3109a to embrace Medicare ben efits, we do no violence to the legislative intent underlying the provision; indeed, our interpretation comports with and fosters the purposes of § 3109a. Like § 3109(1), § 3109a exists to eliminate duplicative recovery and to contain or reduce insurance costs. These worthy goals are promoted by including Medicare within § 3109a, since, as Medicare participants opt to coordinate their Medicare benefits with their no-fault benefits, they obtain a direct reduction of no-fault premiums and forego dual recovery. However, § 3109a also recognizes that certain persons possess unique requirements which necessitate additional health and accident coverage; hence the optional facet of § 3109a’s coordination of benefits. Medicare’s exclusive application to the elderly population, which frequently has an expanded need for health care, provides a convincing reason for including it within § 3109a.
VI
Medicare constitutes "other health and accident coverage” within the meaning of § 3109a of the no-fault act. Thus, payments made to health care providers pursuant to the Medicare program for expenses arising out of the same accident for which no-fault benefits are also payable may be subtracted from payable no-fault benefits at the option of the insured. Since plaintiff in the instant case did not elect to coordinate his Medicare benefits with his no-fault benefits, payments made on his behalf by the Medicare program may not be subtracted from the no-fault benefits due under the no-fault policy issued to him by defendant. We do not reach the constitutional issue presented on appeal, nor do we express an opinion with regard to the inclusion of other possible forms of health and accident coverage within the purview of § 3109a.
The decision of the Court of Appeals is reversed.
Williams, Fitzgerald, and Blair Moody, Jr., JJ., concurred with Coleman, C.J.
MCL 500.3109 subd (1); MSA 24.13109 subd (1).
1972 PA 294, MCL 500.3101 et seq.; MSA 24.13101 et seq.
MCL 500.3109a; MSA 24.13109(1).
87 Mich App 555; 274 NW2d 69 (1978).
42 USC 401 et seq.
42 USC 1395-1395rr.
The policy issued plaintiff by defendant was not made a part of the record on appeal. At the request of the clerk’s office, plaintiffs counsel submitted a certified true copy of the policy to the Court, along with a copy of plaintiffs premium notice for a subsequent period (the latter item is said to indicate applicable coverages also in effect for the period in which the accident occurred). These documents designate plaintiffs coverage as "P”, meaning that allowable expenses were payable on a primary, rather than on a coordinated, basis with respect to benefits provided under another policy or plan.
The record does not disclose what portion of these expenses was paid pursuant to Part A of the Medicare program, or what portion was paid pursuant to Part B of Medicare. At oral argument on January 9, 1980, counsel for plaintiff implied that plaintiff was a Part B Medicare participant.
MCL 500.3148(1); MSA 24.13148(1) provides for reasonable attorney’s fees in a no-fault action "for advising and representing a claimant in an action for personal or property protection insurance benefits which are overdue”.
At the time judgment was entered in the circuit court, O’Donnell was pending decision by this Court. See 404 Mich 524; 273 NW2d 829 (1979).
Plaintiff cross-appealed the circuit court’s denial of attorney’s fees to the Court of Appeals, which affirmed on that point. 87 Mich App 555, 558; 274 NW2d 69 (1978). Attorney’s fees are no longer in dispute.
87 Mich App 555; 274 NW2d 69 (1978).
406 Mich 1009 (1979).
MCL 500.3109(1); MSA 24.13109(1).
See, e.g; Wysocki v Detroit Automobile Inter-Insurance Exchange, 77 Mich App 565; 258 NW2d 561 (1977), rev’d 406 Mich 860; 275 NW2d 551 (1979); Pollock v Frankenmuth Mutual Ins Co, 79 Mich App 218; 261 NW2d 554 (1977); Smart v Citizens Mutual Ins Co, 83 Mich App 30; 268 NW2d 273 (1978); Hawkins v Auto-Owners Ins Co, 83 Mich App 225; 268 NW2d 534 (1978), aff’d 408 Mich 164; 289 NW2d 708 (1980); Greene v State Farm Mutual Automobile Ins Co, 83 Mich App 505; 268 NW2d 703 (1978); Mielke v Michigan Millers Mutual Ins Co, 82 Mich App 721; 267 NW2d 165 (1978), rev’d 406 Mich 858; 275 NW2d 553 (1979); Ottenwess v Hawkeye-Security Ins Co, 84 Mich App 292; 269 NW2d 570 (1978), rev’d 408 Mich 164; 289 NW2d 708 (1980); Hubert v Citizens Ins Co of America, 88 Mich App 710; 279 NW2d 48 (1979); Lindsey v Hartford Accident & Indemnity Co, 90 Mich App 668; 282 NW2d 440 (1979); Brumfield v Detroit Automobile Inter-Insurance Exchange, 89 Mich App 1; 279 NW2d 293 (1979); Wolford v Travelers Ins Co, 92 Mich App 600; 285 NW2d 383 (1979); Neumann v Transit Casualty Co, 96 Mich App 472; 292 NW2d 555 (1980); O’Donnell v State Farm Mutual Automobile Ins Co, 70 Mich App 487; 245 NW2d 801 (1976), rev’d 404 Mich 524; 273 NW2d 829 (1979); Workman v Detroit Automobile Inter-Insurance Exchange, 404 Mich 477; 274 NW2d 373 (1979); Mathis v Interstate Motor Freight System, 408 Mich 164; 289 NW2d 708 (1980).
Exceptions include Workman v Detroit Automobile Inter-Insur ance Exchange, 404 Mich 477; 274 NW2d 373 (1979) (Medicaid benefits), and Neumann v Transit Casualty Co, 96 Mich App 472; 292 NW2d 555 (1980) (supplementary medical insurance benefits, i.e., Part B of Medicare).
MCL 500.3108; MSA 24.13108.
Hawkins v Auto-Owners Ins Co, Ottenwess v Hawkeye-Security Ins Co and In re Certiñed Questions (Joseph v Transport Indemnity Co) were decided with Mathis.
See, also: Gretzinger, O’Donnell v State Farm Mutual Insurance Co: A Judicial Attempt to Amend Michigan’s No-Fault Act, 1977 DCL Rev 187, 191-195.
MCL 500.3109a; MSA 24.13109(1).
See Porter v Michigan Mutual Liability Co (On Remand), 97 Mich App 281; 293 NW2d 799 (1980), for additional mention of § 3109a.
Letter dated February 26, 1974 from Daniel J. Demlow, Commissioner of Insurance, to Governor William G. Milliken.
Subsequently enacted into 1974 PA 72, the present MCL 500.3109a; MSA 24.13109(1).
Letter from Insurance Commissioner Demlow to Governor Milliken, supra, 1-2.
Analysis of 1974 House Bill 5724 prepared by the Analysis Section of the House of Representatives Insurance Committee, containing material complete to February 27, 1974.
House Insurance Committee Analysis, supra, 1.
But see Witherspoon v St Paul Fire & Marine Ins Co, 86 Wash 2d 641, 646; 548 P2d 302, 306 (1976): "Neither Part A nor Part B Medicare constitute a 'welfare plan.’ ”
Added July 30, 1965, 79 Stat 291, 42 USC 1395 et seq.
Witherspoon, supra, 644, citing H. Somers & A. Somers, Medicare and the Hospitals — Issues and Prospects (Washington, DC: The Brookings Institution, 1967), pp 19-20, and referring the reader to Department of Health, Education & Welfare, Pub No SSA 74-10050, Your Medicare Handbook (1974), 44-45. (Note that effective May 4, 1980, HEW has been redesignated the Department of Health and Human Services.)
Witherspoon, supra, 644.
42 USC 1395d; Department of Health, Education & Welfare, Pub No SSA 79-10043, A Brief Explanation of Medicare (May, 1979), 4-6.
42 USC 1395c; Witherspoon, supra, 645.
HEW, A Brief Explanation of Medicare, supra, 13.
According to Department of Health, Education & Welfare, Pub No SSA 05-10050, Your Medicare Handbook (1980), 45, "[t]he basic hospital insurance premium is $69 a month through June 30, 1980. It will increase to $77 a month for the 12-month period starting July 1, 1980. This premium represents the present cost of Medicare hospital insurance protection”.
Witherspoon, supra, 645; Rev Rul 66-216, 1966-2 Cum Bull 100. However, voluntary payments made by a participant for Medicare A coverage qualify as amounts paid for medical insurance under IRC § 213. Rev Rul 79-175, 1979-1 Cum Bull 117.
HEW, A Brief Explanation of Medicare, supra, 8; 42 USC 1395j; 42 USC 1395o; Witherspoon, supra, 645.
Mathews v Diaz, 426 US 67; 96 S Ct 1883; 48 L Ed 2d 478 (1976).
A person receiving social security or railroad retirement benefits is automatically enrolled in Part B of Medicare at the same time he or she becomes eligible for Part A benefits, unless he or she indicates that participation in Part B is not desired. Automatic Part B enrollment does not occur for individuals who are 65 but are not eligible to participate in Part A, or who have permanent kidney failure, or who live in Puerto Rico or foreign countries. HEW, A Brief Explanation of Medicare, supra, 8-9; 42 USC 1395p.
42 USC 1395r; HEW, Your Medicare Handbook (1980), supra, 45.
42 USC 1395q; HEW, Your Medicare Handbook (1980), supra, 46.
42 USC 1395p; HEW, Your Medicare Handbook (1980), supra, 46.
HEW, A Brief Explanation of Medicare, supra, 9-11.
According to HEW, Your Medicare Handbook (1980), supra, 44, "[t]he basic medical insurance premium is $8.70 a month through June 30, 1980. It will increase to $9.60 a month for the 12-month period starting July 1, 1980”.
Witherspoon, supra, 645-646.
HEW, A Brief Explanation of Medicare, 13.
"For the year starting July 1, 1980, the federal government will pay more than two-thirds of the premium cost of medical insurance.” HEW, Your Medicare Handbook (1980), supra, 44.
See IRC § 213(a); Rev Rul 66-216, 1966-2 Cum Bull 100; Witherspoon, supra, 646.
See IRC § 104(a); Rev Rul 70-341, 1970-2 Cum Bull 31 (revoked in part by Rev Rul 79-173, 1979-1 Cum Bull 86, to the extent that it had ruled that basic benefits were includable in determining support for purposes of IRC §§ 151 and 152 — the revocation is not pertinent to our discussion here); Witherspoon, supra, 646.
Defendant’s Brief on Appeal, 4.
Blue Cross and Blue Shield, provided under the auspices of state law, MCL 550.301 et seq., 550.501 et seq.; MSA 24.591 et seq., 24.621 et seq., is not technically a private form of health and accident insurance. BC/BS has been described as a "non-profit, tax-exempt 'charitable and benevolent institution’ incorporated pursuant to special enabling legislation enacted by the Michigan Legislature in 1939, for the purpose of providing a mechanism for broad health care protection to the people of the State of Michigan.” Blue Cross & Blue Shield of Michigan v Insurance Comm’r, 403 Mich 399, 415-416; 270 NW2d 845 (1978). It is interesting to note that Blue Shield of Michigan presently handles medical insurance claims for Michigan Medicare participants. HEW, Your Medicare Handbook (1980), supra, 54.
Part B of Medicare is also akin to traditional forms of health and accident insurance because a contractual sort of relationship arises between the provider of payment and the premium-paying participants. See, generally, Witherspoon, supra. Although it might be said that Part A of Medicare departs from usual modes of insurance because premiums are not directly paid by the participant, we do not exclude Part A of Medicare from application of § 3109a on the basis of this distinction. Part A of Medicare is rendered no less a form of "health and accident coverage” by reason of its peculiar financing structure.
Imvris, supra (Medicare is not "individual, blanket or group accident, disability or hospitalization insurance” within the exclusionary clause of a policy providing payment for medical expenses); Witherspoon, supra (Medicare is not within the deductible amount of a personal catastrophe liability policy; nor does it come within the terms of an exclusion for charges paid for or reimbursable by or through a governmental unit); Wojtkowski v Hartford Accident & Indemnity Co, 27 Ariz App 497; 556 P2d 798 (1976) (Part A of Medicare is not included within a policy’s set-off for medical expenses paid by individual, blanket or group accident insurance, but Part B of Medicare constitutes group insurance within the exclusionary clause). See, also: Jones v Aetna Casualty & Surety Co, 497 SW2d 809 (Mo App, 1973). Note that the explanatory brochures issued by the Department of Health, Education & Welfare regarding Medicare typically refer to both Part A and Part B of Medicare as "insurance”. See, e.g., HEW, A Brief Explanation of Medicare, supra.
Our characterization of Medicare receipts as "benefits” does not contradict our determination that such receipts do not constitute governmental "benefits”, as that term is employed in § 3109(1).
By 1968, approximately 18.6 million elderly persons were covered by both Parts A and B of Medicare; by 1976, the number of elderly participants had grown to approximately 23 million. Witherspoon, supra, 653. | [
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Wiest, J.
(dissenting). June 2, 1942, plaintiff filed the bill herein for divorce, charging defendant with extreme cruelty in calling her vile and opprobrious names, swearing at her, using violence upon her person, coming home intoxicated, and neglecting her welfare and that of their children. Defendant, by answer, specifically denied the charges. Plaintiff appeals from a decree dismissing her bill.
The parties were married in January, 1919, and have five children, all girls, ranging in ages from 21 to 7 years. The two older girls had left home and were working in Grand Bapids. Defendant was a locomotive engineer, in the employ of the Pere Marquette Bailroad Company, operating a freight train. In the four years immediately preceding the filing of the bill the parties lived on a 40-acre farm near the village of Sidney, Montcalm county, but did no farming. The payroll records of the railroad company show that defendant in 1942, up to December 15th, earned $3,207.33, after deduction of pension, insurance and things like that. Plaintiff left defendant June 1, 1942, and went to Grand Bapids and the next day filed'the bill herein.
Plaintiff testified that in February, 1942, defendant took her by the neck, pushed her against the wall and hit her in the stomach. This defendant denied. Plaintiff claims two of her daughters had musical ability but were denied opportunity of developing the same by way of attending entertainments or having an instructor.
A witness called by defendant, upon cross-examination, was asked:
“Q. * * * You have heard Mr. Lund swear at or toward Mrs. Lund?
“A. No more than they swear at each other.
“Q. You heard Mrs. Lund swear?
“A. I have heard her swear at Charlie, you bet ■ I have.”
Defendant had an automobile and in 1942 used it to drive 18 miles to his work at Edmore. Plaintiff claims that in 1942 she was deprived of the use she had formerly had of the car when she had driven it 300 or 400 miles a month.
Two of the daughters testified that the father would come into the kitchen and strike their mother and say it was in fun. It might have been more than a light love tap but we are not inclined to disassociate the tap from his contemporaneous declaration of intention.
At the time plaintiff left the home and went to Grand Rapids she had a moving van come and she stripped the house of practically all its furnishings, leaving defendant the second-best radio, a chair, one bed, no sheets, a cotton blanket, one pillow, no pillow cases, an old kitchen table, and he paid her $50 for his own kitchen range.
Plaintiff complains that she had to make over for the younger children the clothing the older children, had outgrown. This was no more than a commendable act.
The daughter, Charlotte, 14 years of age, testified that about six months before the parties separated she heard her father use swear words towards her mother, calling her vile and opprobrious names, and he stated he was going to take her clothes off and hang her to a telephone pole and let her freeze. Defendant denied this charge and.we are not prepared to say it was established.
A reading of the record brings us to a conclusion in line with that of the trial judge, that the reason for disagreement in this family arose over a desire of the father to exercise supervision over his children and the unwillingness of the mother to cooperate. The father was opposed to the girls reading love stories and cheap magazines and the mother could see no harm in such indulgence. He opposed the visits of a young man who was a probationer, paying attention to his 13-year-old daughter, and to a married man keeping company with an older daughter. Defendant’s duties kept him from home for days at a time and what went on in the home during his absence was learned, mainly, from the neighbors and was contrary to his wishes and his desire for the welfare of the children.
Defendant carried a $3,000 life insurance policy, payable to his wife. Up to the time of the separation defendant supported his family and provided the home with suitable furnishings.
This is an instance where the weight to be given the testimony rested upon a view of the witnesses, their demeanor and disclosed partisanship. The circuit judge had this advantage over our review on the printed record and of right employed the same in reaching his decision and, upon review, we find no occasion to disturb his findings.
Plaintiff moved for a rehearing in the circuit court alleging she could produce additional evidence. Plaintiff was aware of such evidence at the time of the hearing, so it was not newly discovered, and the court very properly denied a rehearing.
The decree in the circuit court should be affirmed.
Sharpe, J., concurred with Wiest, J.
Starr, J.
I cannot agree with Mr. Justice Wiest’s opinion which affirms the trial court’s dismissal of plaintiff’s suit for divorce. Careful study of the record is firmly convincing that had this court occupied the position of the trial court, it would have reached a different conclusion.
A supplemental statement of facts is necessary. Plaintiff and defendant were married in 1919 and lived together until about May 31, 1942, when they separated. Eight children were horn o£ such marriage, five of whom, all girls, ranging in age from 7 to 21 years, were living at the time of trial. Plaintiff is about 42 and defendant about 54 years of age. In support of her allegations of extreme and repeated cruelty, plaintiff testified in part:
“When we went to town, I generally went after groceries or something essential and my husband went to a beer tavern.
“My husband used profanity towards me excessively. He called me a God-damned son-of-a-biteh, an old whore, a brainless idiot. He didn’t use these words just occasionally, but almost every day. He used these terms in the presence of others, in the presence of our children and in the presence of our younger children. * He used these terms in the presence of two or three of my friends.
“My husband threatened to do me bodily harm. He said he was going to Mil me and hang me to a telephone pole. He made these threats before our children.
“My husband struck me and his conduct toward me made me afraid of him and nervous. It made me sick at times.
“On frequent occasions my husband was intoxicated. One night in May, 1942, just a few days before I left, he was intoxicated at our residence at about 12 o’clock at night. Mr. and Mrs. Minard, our younger daughters, Evelyn, Charlotte and Trinna Jean and myself were there. * * * My husband and Mr. Minard were intoxicated and quarrelled over the claim that Mr. Lund (defendant) had been familiar with Mrs. Minard. The quarrel took place in the presence of my children, and profanity was used. Mr. Lund threatened Mrs. Minard with violence. * * *
“My husband’s attitude toward his children was that he wanted to be a dictator. He wanted to be God over them and tell them exactly what they could do. He informed my children that they didn’t have to mind me and only had to mind him. He did not furnish the necessary medical care for the children. # * #
“My husband didn’t want my children to read anything. If we were reading he would just take the magazines and burn them up or if we had a book he would just kick it away. * * *
“I left Mr. Lund with the intention of separating from him because it got so I couldn’t stand it to live with him any more. He never was good to me. He never came to the house but what he was swearing at me. I just couldn’t stand it any more.’’
• Their 14-year-old daughter Charlotte, called as a witness by plaintiff, testified in part:
“My father objected to our reading any literature or books of any kind. He objected to everything I read. I was even reading a book of fairy tales when he tore it out of my hands, kicked it and tore it all up. * * * My father said we didn’t have to mind our mother. * * *
“I heard my father use swear words toward my mother. He called her a dirty old whore, a Groddamned son-of-a-bitch, a dirty old bastard. He said he was going to take her clothes off and hang her to a telephone pole and let her freeze. He said these things recently, during the last six months my mother and father lived together.
“I saw my father hit and strike my mother. I saw him do it during the period between January and May, 1942. He would go into the kitchen and hit her just as hard as he could and then pretend it was a joke. * * * I was afraid of him. He was always so mean. He would bring up his fist as if to hit us when he spoke to us and he swore so much. # # #
“I heard my father threaten my mother. He said he would kill her. The last time he said it was just before we came here. * * *
“My father was intoxicated on frequent occasions that I know of. He was intoxicated a great deal of the time during the last six months my mother and father lived together. When he was intoxicated he would act silly, swear, and holler and get mad. He would bring liquor to our home. * * *
“I haven’t turned against my father. I was always afraid of him. * * * I don’t call my father a drunkard because he wasn’t drunk all of the time.”
Their 21-year-old daughter Ruth, called as a witness by her father, testified in part:
“I left home in 1939. There were lots of reasons. I couldn’t stand to see my mother and sisters mistreated. * * *
“Always she was crying and he was doing something mean. .* * *
‘ ‘ Did I hear my father use profanity ? Oh, always. Just like they said. He called her an old slut. Yes, he called her a son-of-a-bitch. Did he use the word God-damn quite often? Oh, always.
“When I visited my father after I was 18 years of age my father was always in an intoxicated condition when I was home. He would, come home over week-ends and he would always drink. I can never remember a week-end that he didn’t have a hangover. I was always afraid for my sisters and my mother. Not so much for myself or my sisters because kids can take a lot of hitting around. But I was always afraid for my mother. * * *
“My mother’s conduct toward my younger sisters was not reproachable in any way. She never drank, she never smoked, she never went any place but us children were with her. She never did anything wrong.”
Their 19-year-old daughter Ethel, called as a witness by her father, testified in part:
“My father considers himself God, I guess. I can’t remember my father acting very good to my mother unless it was in the first stages when he was drinking. Then he was very happy, but after he took a little more he was very ngly. He would be mean to the children. Many times he hit my mother. * *
“I have seen my father intoxicated many times. * * * He used to throw things, that was a common occurrence. My mother would pick them up and clean up the mess afterwards. She would try to calm him down. My father used to mistreat my cat and dog. He was always hurting some animal that was small, some little animal.
“Q. Did you ever hear your father call your mother names?
“A. All my life.
“Q. What did he call her?
“A. Do I have to answer?
“Q. Yes.
“A. He called her a slut, and a whore, and * * * a son-of-a-bitch.”
One of the daughters testified that defendant said “he could have Mrs. Minard any time he wanted her and that he had had her.” There was other evidence to his discredit, which it is unnecessary to relate. The trial court discredited the testimony of the daughters, but the superintendent of the school which three of them attended, and from which Ruth and Ethel were graduated, said that he had always found them honest and reliable and that “they seemed to be healthy, normal young ladies.” Although, in some instances, the daughters’ conduct might have been subject to criticism, we find no grounds for materially discrediting their testimony regarding their father’s conduct.
There was ample testimony establishing plaintiff’s good character and reputation in the community. A storekeeper who was also vice-president of the bank, called as a witness by defendant, testified, “I know that the reputation of Mrs. Lund in and about tbe community of Sidney is all right. ”v A neighbor, also called as a witness by defendant, testified that “there cannot nobody mar her reputation.” Defendant’s cousin said, “I know Mrs. Lund’s reputation in the community. Her reputation is good.”
Defendant denied that he had struck plaintiff or that he had been intoxicated or drank excessively. He denied calling her vile names or names imputing immorality, but admitted he told her “she acted like that.” On direct examination he testified in part:
“Q. It has been testified you called her names such as whore, son-of-a-bitch and other opprobrious epithets. Did you ever call her that?
“A. No, I haven’t. I said she acted like that but I never called her those names.”
Defendant’s cousin and other witnesses testified, in substance, that his character was good, that he did not drink excessively, and that they never had seen him abuse plaintiff or heard him call her vile names. Defendant accused his wife of deceitfulness, but it reasonably appears that their disputes and quarrels usually arose because of his attempt to dominate and rule her and the children in a dictatorial, cruel,'abusive, and iron-handed manner.
Reviewing the record de novo, we are convinced that the evidence establishes ample grounds for granting plaintiff a decree of divorce. The trial court erred in dismissing her bill of complaint. See Goodspeed v. Goodspeed, 300 Mich. 371; Brookhouse v. Brookhouse, 286 Mich. 151; McCue v. McCue, 191 Mich. 1; Emery v. Emery, 181 Mich. 146; Jarstfer v. Jarstfer, 162 Mich. 196; Berryman v. Berryman, 59 Mich. 605.
The parties own several parcels of real estate and also some personal property aside from their household furniture and furnishings, and as they had practically nothing at the time of their marriage, it may reasonably be inferred that the accumulation of such property resulted from their mutual efforts. Plaintiff is entitled to an equitable and proper share of such real and personal property.
It appears that plaintiff removed a substantial part of the household furniture and furnishings from the farm home at the time of their separation, and each party should retain and own that part of such furniture and furnishings now in his or her possession.
We recognize that because of her age and lack of business or industrial experience, plaintiff may find it difficult to support and maintain herself. A reasonable amount should be awarded for her support and maintenance, which amount should be subject to modification or change from time to time, depending upon the earnings, financial condition, and circumstances of the parties.
Plaintiff should be given the custody and care of the two youngest children, Charlotte and, Trinna Jean, and defendant should pay a reasonable amount for their support and maintenance until they attain the age of 17 years. He should also pay a reasonable amount for plaintiff’s attorney fees and pay the expenses necessarily incurred by her in connection with this suit and appeal.
The decree of the trial court dismissing plaintiff’s bill of complaint is vacated and set aside. A decree may be entered in this court granting plaintiff an absolute divorce and giving her the custody and care of the two youngest children. Such decree shall provide for remanding the case to the circuit court for determination of the property rights of the parties, for the granting of an allowance for the support and maintenance of plaintiff and the two youngest children and for an allowance to plaintiff for her at torney fees and expenses. Plaintiff shall recover costs of both courts.
North, C. J., and Butzel, Bushnell, Boyles, and Beid, JJ, concurred with Starr, J. | [
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North, J.
This appeal by defendant husband in a divorce action pertains only to the provisions of the decree relating to division of property, permanent alimony decreed to the wife, and support money for an 18-year-old son of the parties. Plaintiff and defendant are natives of Poland who during their minority came to the United States. Thereafter they were married in 1916 and became parents of 7 children. The separation occurred in 1941. One son, Edward, was killed in 1944, while in military service. When the case was heard in October, 1948, the 2 minor children were Paul, 18 years of age and a senior in high school, and Mary, 14 years of age, who was in her first year in high school.
In 1929, defendant purchased a farm of 43-g- acres for $7,000. He built a 10-room house thereon in 1930, which has been the family home. By trade defendant is a welder and steam fitter, and the property, including farm stock and equipment, was paid for from his earnings. The whole family appears to have taken part in carrying on the farm work, and the family lived largely on the farm produce and earnings from the farm. Since 1941 or 1942, following the separation, defendant occupied one room in the farm home but took his meals elsewhere. Notwithstanding his ample ability so to do, defendant in later years failed to properly provide for his family and in consequence plaintiff was compelled to expend approximately $2,500 of her own funds for household necessities. Defendant drank excessively. Frequently he came home in a drunken condition, abused and assaulted plaintiff and other members of the family. Defendant’s misconduct may have influenced to some extent the trial judge’s disposition of the parties’ property rights, but wé think not in an undue degree.
With a reasonably fair measure of - accuracy the property possessed by these parties and the disposition decreed by the court,' with valuatioh disclosed by the testimony, is set forth in plaintiff’s brief substantially as follows:
Property Decreed to Plaintiff
Dwelling, garage, and i acre .......... $ 7,500.00
Defendant decreed to pay plaintiff..... 1,000.00
Westerly half of 42i acres at $300 per acre 6,375.00
Total........................ $14,875.00
Property . Decreed to Dependant
Barn and outbuildings with i acre...... $ 2,500.00
Moneys deposited in two bank accounts.. 668.83
Cash in defendant’s possession ........ 404.00
War bonds with accrued interest...... 2,127.17
Steers on farm....................... . 875.00
Hay on farm......................... 144.00
Farm tools and equipment ............ 420.00
Wheat growing on farm............... 102.00
Easterly half of 42J acres at $300 per acre 6,375.00
Total ....................... $13,616.00
Deduct from above:
Note for purchase price of steers .............. $480.00
Amount defendant decreed to pay plaintiff .............. 1,000.00 $ 1,480.00
Net total $12,136.00
Some minor items do not appear in the above. For example, plaintiff was given the household furniture and furnishings, while defendant was given the 1940 Plymouth automobile. The circuit judge found that “counsel more or less conceded that one (of these items) might-be offset against the other.” Further in considering the quantum of property to be divided the circuit judge did not include $596 which plaintiff received as insurance and proceeds of the estate of her son Edward who, as above noted, was killed in 1944 while in military service. Another item, the omission of which is stressed by defendant,, is that plaintiff, as beneficiary under a government insurance policy issued to the son Edward, has since her son’s death received, and will during her life receive, monthly payments of $51.80.
The main aspect of defendant’s complaint relates to the disposition decreed of the home farm property located near the city of Kalamazoo, title to which property was held by the entireties. In objecting to the division made of the farm property it is defendant’s contention:
“That there was no evidence as a basis for the physical division of the farm; that such a division would leave the barn and outbuildings with only salvage value; that the farm had always been used as a farm, and should continue to be used as such until a sale thereof could be had; that the only disposition the court could make thereof on the record was to make the parties tenants in common, and grant plaintiff the sole use of the dwelling and garage and the defendant the sole use of the balance of the farm, until it should he sold; and that such a result would be fair to, and beneficial to the interests of, both.”
In considering the above matter the circuit judge in a filed memorandum said:
“It is urged that these parties should be made tenants in common of the real estate. This would never work and would only necessitate another suit to divide the property.”
Defendant now asserts there was no testimony as to the value of the farm as farm property, but instead that the valuation of $300 per acre was in •contemplation of platting the property. Further defendant points out the absence of any testimony that the easterly half of the farm is equally valuable as the westerly half, or that the house decreed to plaintiff is on the westerly half of the property and the barn and outbuildings awarded to defendant are on the easterly half. However the circuit judge did specifically find that the house and garage are located on the westerly half of the farm property. Defendant has made no showing that the house and garage decreed to plaintiff are not on the westerly half of the farm property, or that the bairn and outbuildings decreed to him are not on the easterly portion thereof. It is too late for defendant to now raise these issues. He should have made his record in the circuit court; if necessary incident to an application for rehearing in the circuit court.. Nothing appears in the record before us indicating that the physical division of the property was ill-advised; and it quite conclusively appears from the record that this property is too valuable to be evaluated as farm property, but instead is suitable for platting and on that basis has the market value adopted by the circuit judge. Our review of this record brings the conclusion that the decreed property adjustment between these parties was not inequitable, and we find no justification for altering in that respect the decree entered in the circuit court, especially in view of further facts about to be noted.
The remaining provisions of the decree of which appellant complains are the awarding to plaintiff of alimony at $15 per week until plaintiff remarries or until the further order of the court; and the awarding of $7.50 per week for the support of the 18-year-old son, Paul. No complaint is made of the provision that defendant shall also pay $7.50 per week for the support of his 14-year-old daughter Mary until the further order of the court.
The custody of both of these minors was decreed to plaintiff. There is testimony that owing to plaintiff’s xxervous condition she is at times under care of a physician. The testimony discloses, and the circuit judge found, that plaintiff had been a good axid faithful wife. In his finding he said: “This plaiixtiff has given the best years of her life to this marriage, axxd the court is satisfied has done all within her power to make a success of the marriage.” She has assumed in the main the burden of caxing for and rearing the children of this marriage; and incident thereto she has expended much, if not all, of the money she received in her personal right incident to the death of her son Edward. On the other hand, defendant, who at the time of the hearing in the circuit court was 55 years of age, and for a considerable time had be.en somewhat afflicted with asthma, as a welder and steam fitter has reasonably steady employment resulting in substantial earnings. In this particular the record discloses that his earnings are approximately $90 per week; that in 1946 he earned $3,557.57; in 1947, during which defendant was not continuously employed, he earned $3,205.64; and in 1948, during the 10 months preceding the trial, he earned about $3,180. In view of the record and especially in view of the fact that the decree for alimony to plaintiff is subject to modification by the trial court in the event of change of cir cumstances, we find no justification for altering this phase of the circuit court’s decree.
Nor do we find justification for altering the decree wherein it provided weekly payments of $7.50 for the support of the 18-year-old son, Paul, who at the time the decree was entered, was a high school senior. We note in the findings of the circuit judge it is stated that the decree “may provide for $7.50 a week for the support of Paul until he completes his high school education.” But the decree provided for such payments “until the further order of this court.” In view of the father’s abundant ability to assist in the support of his son Paul until the conclusion of his high school education, there could seem to be no question about the justness of the provision made for that period. Whether payments of this character should be continued in the future in the event Paul continues his education beyond high school, or whether there are other circumstances justifying further payments in support of Paul, is a matter which is also subject to review and alteration in the trial court.
In reaching our conclusion we are mindful the trial court ordered defendant to pay to plaintiff’s attorney an attorney fee of $250. The decree entered in the circuit court is affirmed, with costs to appellee. The case is remanded to the circuit court with jurisdiction to hear and determine any subsequent proceedings in this case.
Sharpe, C. J., and Bushnell, Boyles, Reid, Dethmers, Butzel, and Carr, JJ., concurred. | [
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Sharpe, C. J.
This is a suit in chancery to set aside a deed to property and for a money judgment.
Plaintiff, Emma C. Atzinger, is a widow approximately 60 years of age. Her husband, the father of defendant Frank X. Atzinger, died in 1941. Following Ms death, plaintiff continued to live in the homestead. On June 2, 1945, plaintiff executed a deed conveying the home to defendants, Frank X. and Pearl E. Atzinger, under circumstances which form the basis for the present suit in chancery.
After the death of plaintiff’s husband, her father lived with her. Plaintiff also has relatives in Illinois and Missouri. For some time prior to the death of plaintiff’s husband, Frank X. and Pearl E. At-zinger were friendly and maintained close relations with plaintiff who was afflicted with some difficulty with her feet. Because of her difficulty in walking the defendants performed many errands for her, went to stores for her where they purchased food and clothing, and often drove her to places where she wanted to go.
Prior to the execution of the deed in question, defendant Frank X. Atzinger consulted an attorney and had the deed prepared and on the day in question drove plaintiff to a point near where the attorney conducted his law office. Plaintiff remained in the car and the attorney came to where she was and had her sign and execute the deed. Following the execution of the deed, defendant Frank X. Atzinger paid taxes on the home and had it redecorated. Plaintiff continued to remain in the home.
In her bill of complaint, plaintiff says that on the day she signed the deed, she was told by Frank X. Atzinger to sign the paper; that she did- not read it nor was it read to her; that defendants also obtained two negotiable money orders from her in the amount of $1,990 and converted the same to their own use.
The cause came on for trial and considerable testimony was taken. The trial court dismissed plaintiff’s bill of complaint and in an opinion stated:
“As I have stated, this court cannot find that there was any fraud or undue influence used to get plaintiff to sign the deed. The transaction took place in 1945 and the plaintiff continued to reside in the premises after that date. The testimony did not show that she was in any way mentally incompetent either before or after the date the deed was signed. She allowed the defendants to pay the taxes on the property after June 2, 1945, as well as allowing defendants to make repairs and decorations in the house. There is no proof that the defendants did not show good faith and fairness in their part of the transaction. They have borne the expense of the taxes and repairs to the home and have allowed the plaintiff to reside therein. * * *
“The plaintiff also asked the return of the two money orders. * * * There was testimony on the part of the plaintiff that she had given checks to the defendant to be cashed for her many times in the past and that the defendant would turn the money over to her or would buy certain articles that the plaintiff wanted. The burden of proof is upon the plaintiff to prove by preponderance of the evidence that the defendants received the two checks in question. The plaintiff testified that she had turned the checks over to the defendant but she could not testify as to whether or not they had ever given all the money to her. It was the habit of the plaintiff to give money to the defendants so they could buy things for her. There is no proof as to how much of the money was used for the benefit of the plaintiff or if it was all used. This court could only guess as to any balance that might be left, if any. * * * This court finds that the plaintiff has not made out a sufficient case against the defendants for the value of the two checks. * * * There was no proof that the defendant Frank X. Atzinger had cashed checks but in view of the testimony of the plaintiff that she is not sure whether or not the money was returned to her, this court cannot find in favor of the plaintiff for the return of any money. * * *
“Therefore this court cannot find that there was undue influence, fraud or duress used in the securing of the deed from the plaintiff, nor can this court find that she was not mentally competent to dispose of her property in the way that she did, and the prayer of plaintiff to have the deed set aside is hereby denied. This court also cannot find by a preponderance of the evidence that the plaintiff is entitled to a judgment for the amount of the two checks in question. * * *
“Therefore plaintiff’s bill of complaint may be dismissed. No costs will be allowed.”
Plaintiff appeals and urges that the deed was obtained from her by fraud, duress and undue influence, and without consideration; and that the defendants fraudulently obtained and converted to their own use the two bank money orders aggregating $1,990. In considering the above issues the following facts must be taken into consideration. On August 19 and 20, 1945, the Bank of Lansing issued to plaintiff two bank money orders totalling $1,990. These money orders were made payable to Edward A. Schwanke. They were mailed to Mr. Schwanke in Illinois; he indorsed them so that they were made payable to plaintiff and returned them to her. Plaintiff indorsed each of these money orders and on September 7,1945, both orders were cashed, having been signed by Prank X. Atzinger. In the deposition of Prank X. Atzinger, taken during the trial, he denies that he indorsed the money orders or retained their proceeds. We have examined the exhibits and the testimony relating to this issue and conclude that the evidence is overwhelming that Prank X. Atzinger falsely testified when he stated that he did not indorse the money orders. Disregarding the evidence of Prank X. Atzinger on the issue relating to the transfer of the real estate, there is competent evidence from which the trial court could find that there was no undue influence, fraud or duress used in the securing of the deed from plaintiff.
Roy E. Smith, a witness called by the defense, testified :
“I am a practicing attorney in Lansing. On June 2, 1945, my office was located on South Washington avenue. I am acquainted with Frank X. Atzinger, but I do not know his wife. Frank X. Atzinger asked me to prepare a deed to a certain parcel of property in Lansing from Emma Atzinger to Frank X. Atzinger and his wife, Pearl. Plaintiff’s exhibit B is that deed. It was witnessed by my wife and myself. I took the acknowledgement. It is true that Emma Atzinger was in front of my office on June. 2,1945, and that my wife and I went out to the car and she signed the deed in our presence, and we witnessed it and I then notarized it. It is my memory that Frank X. Atzinger had been into my office and asked me to prepare this paper, and told me that within a day or two he would bring Emma At-zinger down, and because of some disability or age, or something, it would be better if we had the paper executed in the car. On June 2, 1945, he came and told me that the lady was outside in the car, so I went out there and I talked with her about a minute or so, and asked her if she knew what she was doing, that she was deeding the property to Frank, she told me that she did know what she was doing and that was what she wanted to do, and that she had been living with him and that he had been good to her and that was what she wanted to do, and she did sign the deed. I asked her whether she understood what she was doing, and she said she did and that was what she wanted to do. Frank asked me if I would record the deed, and I had it recorded and he picked it up after it was mailed back to me.”
Whether plaintiff was using her best judgment in conveying her home to her stepson is not in issue in this case. We only pass upon her mental capacity to convey and decide whether or not such convey anee was procured by fraud or undue influence. See Berthuine v. Scewczyk, 317 Mich 275.
In the case at bar the trial court had the advantage of seeing and hearing witnesses present and observing the mental and physical condition of plaintiff at the time of the trial. In speaking of plaintiff the court said: “She did not appear to this court to be a person who was mentally incompetent in any way.” We hear chancery cases de novo and arrive at our own conclusion on the issues involved. We are not restricted by the findings of the trial court, but due weight is given to such findings of fact. On the record before us we think the trial court correctly determined the issue relating to the deed.
The facts relating to the bank money order have been heretofore stated. We have examined the exhibits and read the record. We readily come to the conclusion that the testimony of Frank X. Atzinger should be discredited in so far as it relates to receipt of the bank money orders. The evidence warrants our finding that Frank X. Atzinger received and indorsed the money orders. The presumption follows that he received the proceeds therefrom. There is no evidence that he paid the proceeds of these money orders to plaintiff.
Plaintiff testified: “I never saw the money orders after Frank took them away. I have never had any money from Frank and Pearl in payment of those money orders.” In view of this testimony and the absence of any showing on the part of defendants that any part of the money was returned to plaintiff we conclude that plaintiff is entitled to the proceeds of these money orders. It is conceded by the attorneys for the interested parties that since the trial of this cause in the circuit court, Frank X. Atzinger has died. We have not been apprised whether or not an administrator has been appointed for his estate. However, if and when an administrator is ap pointed, the claim of $1,990 together with interest at 5 per cent, from September 1,1945, may be filed and allowed against said estate.
The decree will be entered to conform to this opinion. Neither party having fully prevailed, no costs will be awarded.
Bushnell, Boyles, Reid, North, Dethmers, Btttzel, and Carr, JJ., concurred. | [
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Carr, J.
The parties to this case were married on January 9, 1943, and lived together until September 27, 1947. There are no children of the marriage. Shortly after the separation, plaintiff started •suit for divorce, charging the defendant with extreme and repeated cruelty. Defendant filed an answer to the bill of complaint, and also a cross bill. "When the case was reached for trial the plaintiff withdrew his bill, and also his answer to defendant’s •cross bill. Following the hearing a decree was granted to defendant. Being dissatisfied with the provisions of the decree relating to the division of property, defendant has appealed.
The trial court found that at the time of the hearing the parties were the owners of a home worth .approximately $12,000, and that the balance due on the land contract under which they were purchasing the property was approximately $6,700. At the time of the marriage plaintiff owned some furniture, and also an interest in real estate from the sale of which he claimed to have realized the net sum of $3,846. Part of this money was used as the down payment on the property which the parties owned at the time of the trial. Some improvements were made on-such property, presumably resulting in increasing its value. Plaintiff also owned an automobile worth approximately $1,500. During the marriage furniture to the value of about $1,000 was purchased.
The opinion of the trial judge indicates that in dividing the property he took into consideration the value of the real estate and the furniture owned by plaintiff at the time of the marriage, and likewise the value of the home, automobile, and furniture acquired thereafter. The decree gave to the defendant approximately one-third of the total value of the property owned by the parties or by the plaintiff alone, which sum was about one-half of the value of the real estate and personalty acquired during the period of the marriage. The decree directed that plaintiff pay defendant the sum of $3,100 at the rate of $100 or more per month, and imposed a lien on the real estate and automobile to secure payment. It is the claim of the defendant that such provision was not adequate, and it is insisted in her behalf that the home and furniture should have been given to her rather than to the plaintiff. Emphasis is placed on the claim that defendant worked during the time that she was married to plaintiff, and that her earnings were used, in part at least, to defray the general expenses of the parties, including payments on the property. In his testimony before the trial court, plaintiff insisted that defendant worked outside the home in order to assist her daughter by a prior marriage, said daughter being 21 years of age at the time of the trial. It further appears that defendant is employed, and is capable of supporting herself.
It is apparent that the trial court gave careful consideration to the claims of the parties, and undertook to divide the property in a fair and equitable manner. We think that he accomplished that result. The provision made for defendant was certain and definite. It did not involve her assumption of any obligation involving the payment of indebtedness on the property. Such result was obviously to defendant’s advantage.
There are no definite rules that can he applied to the division of property interests in a divorce suit. It must be determined in each instance with reference to the particular facts and circumstances involved. There is nothing in the instant case indicating that the settlement made by the trial judge in the decree was unfair or unreasonable, or that there was any abuse of discretion on his part. On the record before us his conclusion should not he disturbed. Stalker v. Stalker, 313 Mich 209; Cooley v. Cooley, 320 Mich 209.
The decree of the circuit court is affirmed, with costs to plaintiff.
Sharpe, C. J., and Bushnell, Boyles, Reid, North, Dethmers, and Butzel, JJ., concurred. | [
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Boyles, J.
Plaintiff filed this bill of complaint in the superior court of Grand Rapids in chancery to cancel a deed. After issue was joined and the hearing of testimony, the trial court entered a decree granting plaintiff the relief prayed for and defendants appeal. We review the case de novo.
Plaintiff is a Polish woman who cannot read or write English. At the time of the hearing she was 77 years of age and in poor health. The defendants are her daughter Florence and the daughter’s husband. They have lived with the plaintiff in her home in Grand Rapids ever since their marriage in 1936. For some time the defendants paid rent to the plaintiff, but recently, by agreement, no rent is required until defendants recoup the cost of a new roof that Stanley Migocki put on plaintiff’s house.
Plaintiff was the only witness sworn in her behalf. Part of her testimony is not disputed. In June, 1945, an experienced Polish attorney who had 25 years’ practice was called to her home (by her son-in-law), “because I was sick and couldn’t walk.” She claims that she only told the attorney she wanted him to make her will. The attorney prepared a will, and at the same time prepared the deed here involved. Plaintiff signed the deed and the will on the same day and in the presence of the same witnesses. The execution of the deed was acknowledged before her attorney as a notary public. About a week later the deed was put on record. It would appear from the record that the persons who participated in these events are of the same nationality. This becomes of importance in view of the fact that much of their talk occurred in the Polish language with which the plaintiff was familiar.
The plaintiff testified that she did not ask the attorney to prepare a deed, and that she did not know she had signed a deed until 2 years later when she saw a “tax paper” with just the name of her son-in-law on it. Thereupon she asked them about it, and told them that she wanted her “paper” which was in a safety deposit box in the joint names of the plaintiff and her daughter Florence. Shortly afterward she started the instant case to set aside the deed.
As to her recollection of what occurred at-the time the papers were prepared, the plaintiff testified as follows:
“I wanted Mr. Zamierowski to make some disposition of my property. I told him I wanted him to make a will for me, and how many children I had. He didn’t ask me about what kind of property I had. I told him I wanted to sign a will so each child would share my property, and Florence get the house. I told Mr. Zamierowski about the children as follows: Oldest is Stella. $200 for her. Then Joey, also $200. Next Sophie, I told him $125. Then Celia, $300. Then Lottie, $200. • Last Florence, nothing, because she going to have the house. I wanted Florence to have the house because she is the youngest. I stay down there and she stay with me because we get along good. That is what I told Mr. Zamierowski I wanted in my will. I didn’t ask Mr. Zamierowski at that time for advice as to how he should do that. Mr. Zamierowski didn’t say anything — just when to sign it.”
On further examination, plaintiff testified:
“I said ‘I want to make a will.’ And he say ‘How are you going to make it? ’ I said ‘first the oldest,’ then he commence, he write it ; then he ask me ‘who next,’ I told him my son John, and then I say Sophie, and each, time and then Celia, you know, and then I say to him ‘this Florence, I give the house,’ that is What I am say, and then he start, he set down, he said ‘I going to read’ and he read me first English, then Polish, is anything like I tell you, and then you say ‘that is all’ and I said ‘yes.’ ”
. The record is plain that the plaintiff herself, and no. one else, instructed her attorney as to what she wanted him to do. The defendants knew nothing .about it at the time. The- record is plain that she told her attorney-.¡file wanted hex daughter Florence to have the home. There may be some doubt whether the plaintiff .intended this to be-accomplished by a deed reserving a life estate, or by a devise in her will, or both. The record is plain, however, that her attorney adopted both methods. The will, after providing for the specific legacies according to plaintiff’s instructions, gives Florence the residue which, under the, circumstances, would include the home in question. The deed conveys the home to the defendants, reserving a life estate to the plaintiff grantor. We are convinced from a full reading of plaintiff’s testimony that her recollection as to many essential details was confused. This might be explained by the reason why her testimony was taken in advance of the trial. In his opinion, the court said:
“Plaintiff is 77 years old and in poor health. The bill was filed August 1, 1947, and on November 10, 1947, her condition was such that she was brought into court and her testimony taken that the record might be perpetuated. November 12th the answer was filed, and thereafter the cause was tried.”
The attorney who prepared the papers, and both of the witnesses to .the deed, and the will, were sworn and testified. Their recollection of the circumstances is clear and distinct, and .to. the- same effect. The attorney first read the will to the plaintiff paragraph hy paragraph, first in English and then translated it into the Polish language. At the end, he asked the plaintiff “now is this the way you want the will?” When she said “yes,” the plaintiff and the 2 witnesses signed it. What then followed was testified by one of the witnesses, as follows:
“Q. Now witness, after the execution and signing of this will, will you tell just exactly what occurred thereafter?
“A. I believe there is in the will, there is a clause that home was to be assigned to the defendants, Mr. and Mrs. Stanley Migocki; and Mr. Zamierowski, the attorney, took the deed and said to Mrs. Dudkiewicz Mow in order to save future misunderstandings or any argument or any possible future probation, here is the deed to be assigned to your son-in-law and daughter.’
“Q. Did he explain the deed to her at that time?
“A. Yes, he did, and he explained it very carefully, with the understanding that Mrs. Dudkiewicz will have a life tenancy, life lease of the home as long as she lived, with the understanding that the son-in-law and daughter are to maintain repairs and keep care of Mrs. Dudkiewicz.
“Q. And that maintenance and care was to be for the rest of her life, was it?
“A. Yes, sir.
“Q. And whether or not Mr. Zamierowski at that time asked her whether that is what she wanted?
“A. Yes, he asked her.
“Q. And what was her answer to that question?
“A. She fully understood it.
“Q. And what occurred thereafter?
“A. After then he said Mere is the deed, you will sign on this line;’ then he turned around to Mr. Derezinski, senior, and to myself, who were acting as witnesses, to which we have subscribed our signatures to the foregoing instrument. * * *
“Q. He told her that and told her in order to save probate and save any arguments that she should sign the deed, is that right? * * *
. “Q. And what did Mrs. Dudkiewicz say to this proposition that in order to save probate and argument, what did she say, what were her words?
“A. She said ‘that is very well. It was translated correctly into Polish and Polish into English, I am fully satisfied.’
“Q. And did she say anything more than that?
“A. And she says ‘Now I don’t have to worry.’ ”
The other witness to the instruments testified:
“Q. Then what happened after that, after the will was signed? * * *
“A. After this Mr. Zamierowski said ‘we make the deed’ and she said ‘that is the same thing we are going to sign,’ because in the future there would be no arguments or anything.
“Q. And did he explain it?
“A. He explained what it means to Mrs. Dudkiewicz and asked her whether she was satisfied and she said yes.
“Q. Then what happened?
“A. Then we signed it. * * *
“Q. You say it was explained. What did he say about it?
“A. Mr. Zamierowski explained that she signed now in order so in the future if any death afterwards occurred they would have no trouble with the deed. ^ "H-
“Q. And that is what Mr. Zamierowski told her?
“A. Yes.”
Plaintiff’s attorney, Sigmund S. Zamierowski, an experienced lawyer, was equally definite in his recollection of the circumstances. He testified:
“I explained to her what could be done, because she wanted me to explain to her just how the Migockis could be compensated for her care.
“I told her one way was to make a contract; I have done it on other occasions; and I explained to her of handling it on a support contract, and as part of the contract the party'who was receiving support agrees to make an irrevocable will providing for reimbursement for such care. Well that was a little complicated for her, and she wanted to know if there was some other way to do it. Then I explained to her how it could be done with a deed to take care of the real estate, which was the main asset, and then we sort of figured out how much she wanted to give to the children; it amounted to somewhere between $800 and $900, and she at that time had $2,000, and I figured and told her that that was enough to take care of her illness and her funeral expenses and to make bequests to the children. So after talking, I had to be very patient with her, she was a sick woman, so I finally got all the details from her just exactly as she wanted them; I told her I would make the papers, come back some evening to have her execute them. * * *
“I returned to the plaintiff’s home a couple days after I had drafted the two instruments. * * * I arrived at plaintiff’s house about 9 o’clock. Mr. and Mrs. Migocki, Chester Derezinski senior and junior were there, and Mrs. Dudkiewicz. I told Mrs. Dudkiewicz I had the papers ready, and told the Migockis to go into another room. After they were gone I pulled out the will and read it paragraph after paragraph, first in English, then in Polish. Mrs. Dudkiewicz asked Mr. Derezinski a question. Finally, in the usual way, I asked her if she understood everything and she said she did. I said ‘all right, are you ready to sign the will ?’ She said she was, so she signed in the presence of the two gentlemen, Derezinskis.
“Q. After the execution and signing of the will what took place?
“A. Then I took the deed out and again I — that deed I didn’t read word for word because in my judgment I thought the formal legal language there would be somewhat meaningless to a layman-— * * *
“A. * * * But I did explain the contents, its meaning to Mrs. Dudkiewicz; explained fully the reservation of a life estate, and explained also the effect of a deed, that it was a transfer and conveyance of property from her to her son-in-law and daughter, but it all means that for the rest of her life she would have control of the property.
“Q. Did you request of her at that time if that is what she wanted?
“A. Oh, yes. That was definitely what she wanted, because that is what she told me a couple nights before to do, so all this was done in accordance with Mrs. Dudkiewicz’s instructions. The Migockis didn’t know anything about it, didn’t talk to them about # *
“A. Then I asked Mrs. Dudkiewicz if that was in accordance with the way she wanted it and she said it was; then I said ‘let us sign it up.’ Mrs. Dudkiewicz signed, Mr. Derezinski senior and junior signed, then I acted as notary.”
To some extent, this is corroborated by the plaintiff. She testified that she signed her name twice, but did not say whether it was on the same paper. As is usual, the deed and the will each contain but one signature of the plaintiff. She also testified, when asked whether one of the witnesses “read the papers” to her, as follows:
“A. I tell you Mr. Derezinski don’t read nothing, just Mr. Zamierowski read himself, Polish, first Polish, then English, he told me how long I live the house is mine, and after death that house is, and if you pay me rent, that was the way, and he say then when I die the house belong to them and I should take the rent for them and do everything what belongs to the house, you know, the repairs; I said well Mr. Zamierowski, yes, like you say it, and then he say so, then, he finished he said ‘I go to make it so, so there will be no trouble; (witness lapses into Polish).
“Q. Just talk English, not Polish.
“A. Because I can’t say good English.
“Q. So it was explained to'you that for your life you could live there?
“A. Yes.”
Plaintiff’s bill of complaint alleges:
“6. That this plaintiff is unable to read or write and was compelled to depend upon said defendants for an explanation of the contents of said documents. That said defendants fraudulently, wilfully, intentionally misled this plaintiff into believing that she had signed only her last will and testament.
“7. That plaintiff has lately learned that said defendants have wilfully, fraudulently deceived her and that they had her sign a last will and testament, and a deed to the premises described herein, granting to defendants the fee simple title to said premises, subject to a life estate to her. That this plaintiff did not know that she was signing a deed to said premises and never intended to part with her present ownership of said property.
“8. That said defendants wilfully misled and deceived plaintiff and persuaded her to sign said deed, knowing well that this plaintiff was unable to read, and this plaintiff relying upon the statements of said defendants that all she was signing was a last will and testament, did sign said documents and now has learned that she signed both a last will and testament and a deed.”
The proofs not only fail to support plaintiff’s allegations but, on the contrary, plainly show that the defendants had nothing to do with the entire transaction. Nor can we conclude that plaintiff’s attorney failed to correctly interpret her wishes. There was no mistake of fact or of law, nor is there any evidence that the plaintiff was deceived or misled by the defendants, or by her attorney.
The trial court, in his opinion, first said:
“The deed contained no reservation of a life estate, nor was there any clause inserted which bound the defendants to support the plaintiff.”
Later, the court’s attention was called to the provision in the deed (defendant’s exhibit 1):
“Saving and reserving unto grantor an estate for and during the term of her natural life.”
Thereupon the court, after hearing a motion to amend his findings of fact, struck out from his opinion all reference to a reservation of a life estate, and inserted:
“The deed contained no clause which hound the defendants to support the plaintiff.”
We find no occasion to consider or discuss the matter of the plaintiff’s right to support and maintenance. The defendants have been paying the taxes, upkeep and repairs, as well as caring for the plaintiff and contributing toward her support. She does not seek cancellation on the ground that the defendants have not fulfilled an agreement to take care of her. Her hill of complaint makes no allegation of failure to support, or breach of any contract on the part of the defendants, nor is there any such reference in the proofs. We find no impelling reason why equity should cancel the deed in question. Plaintiff, at the hearing, still was willing that Florence should have the home in question at the time of the plaintiff’s death; plaintiff’s testimony indicates only that she did not want to be dispossessed of the property during her lifetime. Her right to possession and use is preserved by the reservation in the deed.
Reversed for entry of a decree dismissing the hill of complaint. Under the circumstances, no costs will be allowed.
Sharpe, C. J., and Bushnell, Reid, North, Dethmers, Butzel, and Carr, JJ., concurred. | [
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Adams, J.
Statement of Facts
On the evening of October 13, 1966, there was an armed robbery of a Wrigley’s Supermarket in Detroit. Pringle Johnson, the assistant manager, was forced at gunpoint to give the man about $350. A cashier, Fannie Evans, was under the impression the robber wanted to cash a check and spoke to him. Another employee, Douglas Ballard, was about to go on a break when the robber told him he had better not leave. Gary Harbin, an employee, and Mitchell Matthews, a customer, observed the robber from a distance.
After the robber left, Johnson summoned the police. Officer Jones, one of the first officers to respond to the call, asked for a description of the robber. He relied on Johnson for the bulk of this identification but his report was also based on the views of the other witnesses. According to Jones’ report and testimony, the robber was described as "a Negro Male, thirty to thirty-five, five foot five, slim build, with a heavy beard and a medium mustache; the man was wearing a brown squashed down hat, a brown Italian knit sweater and green pants. He [Johnson] stated that this man also had a limp in his left leg and that his mouth was distorted when he talks.” A teletype based on Jones’ write-up altered 5'5" to 5'8", "heavy beard” to "needed shave,” and "limp in left leg” to "limp in right leg.” See Exhibit A p 621.
Several files of mug shots were shown to the witnesses that evening by police officers other than Jones. Matthews and Harbin picked out a picture of Poe. Johnson and Evans picked out a picture of Poe and another man, "Two-zero,” but indicated that Poe came the closest. Ballard picked out two pictures. The next morning, pictures were again shown to Johnson, Evans and Matthews. The picture of Poe was again chosen as being the closest to the robber.
The police did not want to request a warrant based solely on the picture identification. As one officer explained, the other man, "Two-zero,” showed a background of 15 armed robberies and Poe had not been known to be involved in any armed robberies. Every witness, except Ballard, was asked to be present at a lineup. The men participating in the lineups were of various ages. While Poe was in each lineup, "Two-zero” did not participate in any of them. According to the notations on the showup sheets, Johnson and Evans "positively” identified Poe. Harbin stated that although Poe looked like the robber, he could not testify to that in court. Matthews identified another man.
Poe was arrested and charged with armed robbery. A jury trial was held in Recorder’s Court. Poe was represented by appointed counsel, Philip A. Gillis. Since Poe maintained that he was innocent, the whole trial rested on identification of him as the robber. Johnson testified the robber had a heavy mustache, was 5'8" or 5'9" tall, wore a suede-type jacket, and limped only once with his right leg. Other witnesses also disputed the description as testified to by Officer Jones. Poe was 32 years of age at the time of the trial and 5'9" tall. He showed no limp and, when testifying, showed no distortion of his mouth.
The jury found Poe guilty of robbery armed. Upon appeal to the Court of Appeals, that Court first remanded the case to recorder’s court "for post-conviction proceedings.” On the hearing on a motion for retrial, the trial court considered only the issue of whether the court-appointed lawyer, being inadequately paid, had inadequately represented his client. The trial court denied the motion for retrial on the ground that Mr. Gillis had performed an admirable job.
Appeal was again taken to the Court of Appeals. The trial court’s decision was affirmed. (27 Mich App 422.) This Court granted leave, limited to the issue of the admissibility of a police officer’s testimony pertaining to identification of defendant made by witnesses at showups and handwritten notations pertaining to lineup identification. (384 Mich 799.) The order was later amended to include the issue of whether Officer Jones should have been recalled for impeachment purposes with respect to the testimony of an identifying res gestae witness. (384 Mich 800.)
I. Identiñcation
As at trial, on this appeal the whole problem in this case is one of identification. Four interrelated issues are involved: (1) discrepancies in the testimony of witnesses; (2) pretrial identification procedure; (3) the admissibility of police notes entitled "Record of Showup” and their submission to the jury during its deliberation; and (4) the court’s refusal to recall the investigating officer who obtained the descriptions at the scene.
(1) Discrepancies in Testimony
Officer Jones’ report describing the robber, the testimony of the store witnesses, and the alterations in the police bulletin by interlineations to make it conform with the description given by the witnesses, and other discrepancies, would ordinarily be proper matters for jury resolution. The officer’s original notes from which he made his police report were never used by him to refresh his memory or admitted as past recollection recorded. We shall have more to say of them under (4).
(2) Pretrial Identiñcation
The witnesses were shown a number of police mug shots the night of the holdup and again the next morning. Defendant’s photo was in both groups. This would be within standard and proper identification procedures. However, two of the witnesses recalled having been shown photos on the day of the showup and Fannie Evans stated that when she went to the police station for the show-up, she was permitted to see defendant before the showup. "I really didn’t look at the others [in the showup] because I saw him [defendant] before I even got there and I recognized him.” When Gary Harbin viewed defendant at a showup, men used for it, besides the 32-year old defendant, were two teenagers and a 58-year old man.
(3) Admissibility of Police Notes
The defense elicited testimony by the police to show that although Matthews and Harbin swore at trial that Poe was the robber, they did not make such positive identifications during the lineups. The lineup sheets with the remarks made by these two witnesses recorded thereon were submitted into evidence to make this point. The use of these documents to refresh the witnesses’ memory and to test their reliability was proper. See, generally, 2 Gillespie, Michigan Criminal Law & Procedure (2d ed), § 598, p 775.
The defense objected, however, when the prosecution undertook to show by police testimony that both Johnson and Evans had made a "positive identification” of Poe. The sheets describing those two lineups were also admitted into evidence over defense counsel objection. According to the notations on these lineup sheets, Mrs. Evans, when identifying Poe, said: "That’s him with the trench coat on.” Mr. Johnson was quoted as saying: "That’s him, that’s him.”
The defense contended that, although the lineup sheets could be admitted to impeach the testimony of Matthews and Harbin, the sheets involving the lineups in which Evans and Johnson were present could not be admitted since they did not fall into any exception to the hearsay rule. The quotations only served to show prior consistent statements. The two witnesses were never impeached on their lineup identifications of Poe.
The jury examined these sheets during the trial and again during their deliberations.
The courts below and the prosecutor rely upon the holding in People v Londe, 230 Mich 484, 487 (1925):
"The third question presented by the record relates to the ruling of the court in permitting witnesses Mrs. Evans and John Kay to testify that they identified the defendant in the show-up room at police headquarters, and in permitting John Donovan, a police officer, to testify as to what took place at the time of the identifícation. It was proper for the witnesses who had seen the men at the time of the robbery to testify that they later identified the defendant as one of them. And it was equally proper for the officer to testify under what circumstances the identiffcation was made. That is as far as the witnesses were allowed to go in giving their testimony. '’’(Emphasis added.)
Londe restricts the police officer’s testimony to "what took place” and under "what circumstances the identification was made” and not, as here, the nature or quality of the identification.
In People v Mead, 50 Mich 228 (1883), a woman who was sleeping in the "burgled” house testified that she saw the burglar plainly enough to recognize him afterwards and that two days later, while in her husband’s company, saw defendant and told her husband she believed defendant to be the burglar. The husband was then put on the stand and related his wife’s observances and recognition. Justice Cooley, speaking for the Court, observed (p 230):
"The question was then put in this form: Did she recognize anybody? This was objected to, but allowed, and the witness answered: She did. The further question was then asked: Whom did she recognize? And the answer given was: This defendant. She recognized him as being the man that was in her bed-room on the first of November [the time of the burglary]. I told her to be sure, and she says, I am sure.
"It will be observed that in this the witness went altogether beyond the question, and beyond any permission that could be implied from the ruling of the judge. The question was simple: Whom did she recognize? It was also proper enough to put it, as introductory to what the witness himself had to say respecting his own subsequent investigations. But the witness, not content with giving a simple answer to it, added what in effect was a statement that his wife told him she recognized the respondent as the. burglar. The statement was hearsay, and it was likely to be exceedingly mischievous, for much depended in the case upon this recognition. "(Emphasis added.)
The police officer’s testimony and the handwritten notations purporting to be the statements of Evans and Johnson recorded on these sheets were hearsay and not admissible under any rules of evidence.
(4) Refusal to Recall Officer Jones
Officer Jones did not have the handwritten notes he had made on the night of the robbery with him at trial. After testifying, he was instructed to go home to find them. Meanwhile, Ballard, previously waived as a res gestae witness because of the prosecution’s inability to. locate him, was found and appeared in court. He was the first witness to say that the robber had only faked a limp and that the man had fled by a different route than that previously testified to. Ballard testified that he informed the police that the robber "kind of slipped and he jumped out of that limp; and he walked on out the door, walked across the street over to the empty parking lot.” Defense counsel requested that Officer Jones be recalled. The trial court refused on the basis that defense counsel had already thoroughly cross-examined Officer Jones.
Ordinarily we would agree with the Court of Appeals that this was a matter for the trial court’s discretion. In this case, however, we have identification procedures prior to trial that are at least open to the suspicion of unfairness, error in the trial in the admission of hearsay testimony that could tend only to reinforce identification and, finally, a refusal by the trial judge to allow cross-examination of the police officer as to his original notes taken at the scene immediately after the robbery. In People v Rosborough, 387 Mich 183 (1972), we recently discussed the problem of police testimony and records. We cannot stress too strongly the importance of retention by the police of their original notes and records, especially those made at the scene, as in this case. Appended hereto is Exhibit A, the police bulletin. The alterations in the description of the robber can readily be seen. Under the circumstances of this case, it was vital that Officer Jones be recalled for cross-examination. The trial judge erred in refusing to allow this..
Remanded to the trial court for new trial.
T. M. Kavanagh, C. J., and T. E. Brennan, T. G. Kavanagh, Swainson, and Williams, JJ., concurred with Adams, J.
APPENDIX | [
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Adams, J.
I. The Facts, Proceedings and Question
The statement of facts and proceedings in this case is set forth by Judge Quinn in his opinion in the Court of Appeals as follows:
"December 4, 1967, Whiteman took his automobile to a car wash owned by Goldfarb and turned it over to an attendant for washing. Whiteman had used this car wash before. The vehicle was pulled through the automatic car wash line by a chain; it was then driven to the drying area by Fox, an employee of Goldfarb. Plaintiff, an employee of Goldfarb, was drying another automobile. Fox drove Whiteman’s car into plaintiff causing severe injuries.
"Plaintiff filed his complaint against Whiteman under the owner’s liability statute, MCLA 257.401 (Stat Ann 1968 Rev §9.2101). Whiteman filed a third-party complaint against Goldfarb claiming indemnification and Goldfarb filed a cross-complaint seeking reimbursement for workmen’s compensation benefits he had paid plaintiff.
"Plaintiff moved for summary judgment (GCR 1963, 117.2) on the issue of Whiteman’s liability. Whiteman moved for summary judgment of indemnification against Goldfarb and for summary judgment of no cause for action against plaintiff. Goldfarb moved for summary judgment of no cause for action as to White-man and summary judgment for reimbursement for workmen’s compensation benefits paid plaintiff.
"On the basis of the pleadings, depositions, undisputed facts and the briefs of the parties, the trial court granted plaintiff’s motion and Whiteman’s motion for indemnification. All other motions were denied. A jury awarded plaintiff $100,000 damages against Whiteman; granted Whiteman $100,000 indemnification against Goldfarb, and gave a verdict of no cause for action against Goldfarb on his cross-claim against Whiteman. Judgments entered accordingly, and Whiteman and Goldfarb appeal.” 36 Mich App 533, 534-535 (1971).
The Court of Appeals held that Goldfarb breached an independent duty he owed to White-man to operate the latter’s vehicle through the car wash without negligence. It reduced plaintiffs judgment against Whiteman by the amount of workmen’s compensation benefits paid to plaintiff by Goldfarb and reduced Whiteman’s judgment of indemnification against Goldfarb in a similar amount.
In Husted v Consumers Power Co, 376 Mich 41 (1965), in the per curiam opinion, which dealt with joinder of an injured employee’s employer as a third-party defendant, it was concluded (p 56):
"Thus if Husted could not sue his employer (Hertel-Deyo), and we know he could not, Hertel-Deyo and Consumers cannot be joint tort-feasors by law. Consumers therefore cannot sue Hertel-Deyo for contribution should it be held to respond to plaintiffs in damages.”
It went on to say (p 56):
"We carefully avoid deciding that there cannot be, in any circumstances of noncontractual relationship between a sued defendant and the plaintiff’s employer, recovery over against the employer. * * * . An obligation to reimburse can be implied by equitable principles, provided always the relator is without personal fault.”
Though the question now before us was carefully preserved and not passed upon in Husted, the decision of the trial court was largely based upon the just-quoted statement from Husted and the decision of the Court of Appeals was based upon White v McLouth Steel Corp, 18 Mich App 688 (1969), following Husted.
The exclusive remedy provision of the Michigan workmen’s compensation law (Part I, § 4; MCLA 411.4; MSA 17.144), reads:
"Where the conditions of liability under this act exists, the right to the recovery of compensation bene fits, as herein provided, shall be the exclusive remedy against the employer.”
It is argued that taking into account one of the purposes of the workmen’s compensation law — to establish limits of liability of an employer to his employee for injuries — the language of the statute provides the exclusive remedy against an employer in any situation. Since plaintiff is receiving benefits from Goldfarb as an employee, Goldfarb maintains that § 4 bars any claim against him other than one for workmen’s compensation benefits.
Whiteman’s liability to plaintiff, even though he was without fault, is clear. In Frazier v Rumisek, 358 Mich 455, 457 (1960), Justice Talbot Smith, writing for the Court, said:
"The owner liability statute before us was passed in response to an overwhelming public need. Common-law liability, circumscribed as it was by the doctrine of bailment, respondeat superior, agency, and the like, was unable to cope with the rising tide of injuries resulting from the use of the new mechanism, the automobile. Principal among the legislative answers were the owner liability laws. Their purpose, as Mr. Justice Edwards held in Moore v Palmer, 350 Mich 363 [1957], was to extend and complement the common law. The legislative theory was simple to state and broadly applicable: An owner was liable for the negligent operation of the machine owned by him when he had consented to its use. The liability is broader than that imposed by the doctrine of respondeat superior * * * .”
In Ladner v Vander Band, 376 Mich 321, 331-332 (1965), involving owner liability for a car not driven on a public highway, but rather in a private parking lot, Justice Black, concurring separately, wrote:
"I do not see how the legislature could have titled and then written a plainer declaration of general owner liability; a liability which is qualified only by the express exceptions that are set forth in said section 401, no one of which is of present concern. That body told us that the owner 'shall be liable for any injury occasioned by the negligent operation of such motor vehicle.’ It did not say that such liability should be limited to negligent operation 'upon a public highway.’ It did employ the adjective pronoun 'any,’ prior to 'injury occasioned by the negligent operation of such motor vehicle,’ which pronoun courts, lawyers and lay folk have ever looked upon as synonymous with 'every,’ and 'each one of all.’ See detailed discussion in Harrington v Inter-State Business Men’s Accident Ass’n, 210 Mich at 327, 330, 331 [1920]; also the following approved quotation appearing in Gibson v Agricultural Life Ins. Co., of America, 282 Mich 282 at 289 [1937]:
" 'The clause uses the word "any,” which, to the ordinary understanding implies "of every kind.” The word negatives the idea of exclusion and would seem to mean just what it says.’ ”
Since it is also clear that Whiteman "is without personal fault”, the question is whether an obligation to reimburse can be implied by equitable principles in the face of the sweeping language of the workmen’s compensation law.
II. Indemnity
The basis for indemnification has been said to rest upon the equitable principle of a right to restitution. Courts have found various grounds for granting indemnity. Probably the simplest situation is one in which the parties have entered into a written contract in which one party has clearly agreed to indemnify the other. Next are those cases where the contract terms are such that a right of indemnification can be implied. See Ryan Stevedoring Co, Inc v Pan-Atlantic Steamship Corp, 350 US 124; 76 S Ct 232; 100 L Ed 133 (1956); McDonnell Aircraft Corp v Hartman-Hanks-Walsh Painting Co, 323 SW2d 788 (Mo, 1959). Then there are those cases where the courts have written into the agreement of the parties an implied contract to indemnify based upon the undertaking of one party, written or oral, to perform a certain service or furnish a product to the other party. See Diamond State Telephone Co v University of Delaware, 269 A2d 52 (Del, 1970).
Other decisions are based on the special relationship between the parties — such as a bailment. In these cases, the bailor has been given a right of indemnification from the bailee. See Lunderberg v Bierman, 241 Minn 349; 63 NW2d 355 (1954); Baugh v Rogers, 24 Cal 2d 200; 148 P2d 633 (1944).
Finally, there are a number of cases in which the right to be indemnified is based upon the theory that the party entitled to indemnification was a "passive” tortfeasor as opposed to the "active” tort of some other party. See Larson v Minneapolis, 262 Minn 142; 114 NW2d 68 (1962); Daly v Bergstedt, 267 Minn 244; 126 NW2d 242 (1964).
Whatever theory may be followed by the courts, the principle has been summed up in 42 CJS as follows:
"It is a well-recognized rule that an implied contract of indemnity arises in favor of a person who without any fault on his part is exposed to liability and compelled to pay damages on account of the negligence or tortious act of another, the former having a right of action against the latter for indemnity * * * .” (42 CJS, § 21, p 596.)
"This right of indemnity is based on the principle that everyone is responsible for his own negligence * * * . It exists independently of statute, and whether or not contractual relations exist between the parties, and whether or not the negligent person owed the other a special or particular legal duty not to be negligent.” (42 CJS, § 21, p 597).
In this case, the right to indemnity might be predicated upon the theory of a bailment, as was done in Lunderberg, supra. Or it might be implied as a part of the undertaking of Goldfarb to wash the car in a workmanlike fashion, as was done in Diamond State Telephone Co, supra. We prefer to base such right upon the equitable principle that Whiteman was without personal fault or as the United States Supreme Court reasoned in Italia Societa per Azioni di Navigazione v Oregon Stevedoring Co, Inc, 376 US 315, 324; 84 S Ct 748; 11 L Ed 2d 732 (1964): "[Liability should fall upon the party best situated to adopt preventive measures and thereby to reduce the likelihood of injury.”
III. Workmen’s Compensation Act Exclusive Remedy
Numerous courts have had occasion to consider whether the exclusive remedy provision of a workmen’s compensation statute is a bar to a claim of indemnity. The great majority, interpreting the varying language of their statutes, have found that it is not.
In Westchester Lighting Co v Westchester County Small Estates Corp, 278 NY 175; 15 NE2d 567 (1938), the majority opinion stated:
"It is provided by section 11: 'The liability of an employer prescribed by the last preceding section shall be exclusive and in place of any other liability whatsoever, to such employee, his personal representatives, husband, parents, dependents or next of kin, or anyone otherwise entitled to recover damages, at common law or otherwise on account of such injury or death * * * .’
"The whole point made by the defendant is that these provisions bar the present action.
"We think this position has no warrant in the text that has been quoted from the statute. Plaintiff does not sue for damages 'on account of Haviland’s death. Plaintiff asserts its own right of recovery for breach of an alleged independent duty or obligation owed to it by the defendant.”
In American District Telegraph Co v Kittleson, 179 F2d 946 (CA8, 1950), the Circuit Court of Appeals, in construing the Iowa compensation act, said:
"We can discover nothing in the language of the Iowa Compensation Act indicating a purpose to abolish common law actions in tort except as between employer and employee. On the contrary, the language of the Act relied on by appellees points the other way. By section 85.3 every employer subject to the Act is required to 'pay compensation * * * for any and all personal injuries sustained by an employee arising out of and in the course of the employment, and in such cases, the employer shall be relieved from other liability for recovery of damages or other compensation for such personal injury.’ The language quoted imposes upon the employer liability to the extent provided by the Act to an employee injured in the course of his employment, and relieves the employer from further liability to his employee. To say that this language relieves an employer from liability to a third party, to one not in his employ, for the employer’s act of negligence damaging such third party is to read into the Act something that plainly is not there. Moreover, section 85.22 expressly shows that the common law actions in tort abolished by the Act were exclusively those between employer and employee by the provision that when an employee’s injury is caused under circumstances creating a legal liability against some person other than the employer, the employee may maintain an action against such third party for damages. This section of the Act preserves to the employee the common law actions in tort not arising out of his relation with his employer and is an express recognition by the legislature that the Act does not operate beyond that field.”
The reasoning of the Federal Court was subsequently adopted by the Iowa Supreme Court in Blackford v Sioux City Dressed Pork, Inc, 254 Iowa 845; 118 NW2d 559 (1962).
In Moroni v Intrusion-Prepakt, Inc, 24 Ill App 2d 534; 165 NE2d 346 (1960), the Appellate Court of Illinois, First District, First Division, said:
"The intention of the legislature when it included the blanket clause of exemption from liability is indicated by the words used in Section 5 abolishing any common law or statutory right to recover for such injuries 'to any one wholly or partially dependent upon him [the injured man], the legal representatives of his estate, or any one otherwise entitled to recover damages for such injury.’ It appears to us that this limitation indicates that the legislature had in mind those who might attempt to recover through some relationship with the injured party, and not any one such as the counter-claimant in the instant case, who seeks to recover on a duty separate and apart from that owing to the injured employee.”
We believe the reasoning in the above cases to be correct and that the exclusive remedy provision of the Workmen’s Compensation Act is intended to be a bar only to any action against an employer by the employee or one which is derivitive from his claim. In this case, if a passing pedestrian had been injured instead of an employee of Goldfarb, clearly Whiteman’s vicarious liability to that pedestrian should be indemnified by Goldfarb. We can see no reason for a different result here.
Under the Workmen’s Compensation Act, in an action by the employee or the employer against anyone "having a legal liability” to an injured employee, Goldfarb has a statutory right to be indemnified for workmen’s compensation benefits paid by him to his injured employee. By its holding, the Court of Appeals preserved this right of Goldfarb by cancelling out Goldfarb’s right of recovery from Whiteman and Whiteman’s judgment against Goldfarb in the amount of compensation paid by Goldfarb.
A secondary issue raised by third-party defendant goes to the claim that Goldfarb was prevented from litigating an issue of fact regarding plaintiff Dale’s possible contributory negligence. GCR 1963, 111.9(2) permits inconsistent claims or defenses. The question was never raised at the trial court level. We therefore do not pass on it at this time.
The Court of Appeals is affirmed. Costs to appellee.
T. M. Kavanagh, C. J., and Black, Swainson, and Williams, JJ., concurred with Adams, J.
This act was repealed by 1969 PA 317. The new section is MCLA 418.131, MSA 17.237(131). | [
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' Dethmers, J.
In conformity with our opinion in Ashburn v. Ashburn, 329 Mich 314, a decree, was entered in this Court vacating an order of the trial court which modified the alimony provisions of a decree of divorce, the effect of this Court’s decree being; to require defendant husband to continue payment of permanent alimony at the rate of $25 per week and to award costs of appeal to plaintiff, with a remand of the cause to the trial court for further proceedings. Plaintiff then brought garnishment to collect costs of appeal. The trial court, sua sponte, dismissed the writ of garnishment by an order entered in this cause. Subsequently plaintiff wife died. There was then due her on account of unpaid alimony, $795. The administrator of deceased wife’s estate, having been substituted as plaintiff herein, filed a petition for an order to show cause why defendant should not be held in contempt of court for nonpayment of alimony and praying for a writ of execution, foT collection thereof. The trial court en tered an order denying plaintiff’s petition,' holding that “the issues involved are controlled by the case of Sonenfeld v. Sonenfeld, 331 Mich 60” and that “the arrearage of alimony due is abated by the death of, the said decedent and is therefore not collectible by. the administrator.” From such order and the order dismissing writ of garnishment, plaintiff appealed.
Defendant has'filed no brief in this Court, but since submission of the case has filed a motion to dismiss that portion of the appeal relating to' garnishment on the. ground that plaintiff has filed no Supersedeas bond to stay enforcement of the order dismissing the writ of garnishment. ■.
We are not confronted here, as in the' Sonenfeld Case, with undue delay by the wife in seeking to enforce her rights to alimony or a, trial court- order requiring payment to a full grown son of the alimony arrears due a living wife. That case is!,in ,no- sense authority for the. proposition that the ■•üi'gh'(--.to- -en-, force payment of alimony arrears abates upon the wife’s death. We hold that it does not so abate (see Hagerty v. Hagerty, 222 Mich 166), although the courts may, under appropriate circumstances, modify the decree to ease the burden on the husband as relates to alimony arrears, as was done in the Sonenfeld Case. No reason appears for doing so here.
In support of his motion to dismiss appeal from the order dismissing writ of garnishment, defendant points to the requirement of CL 1948, § 650.21 (Stat Ann § 27.2611) for filing of a bond in order to stay proceedings on appeal and says that, because plaintiff has filed no such bond, defendant has properly proceeded to judgment against the garnishee defendant and that, in consequence, plaintiff’s appeal in regard to the garnishment has become moot. The bond is a prerequisite to stay of proceedings but not to consideration by this Court on appeal of the correctness of the trial court’s order dismissing garnish ment. The affidavit of garnishee defendant’s attorney, on file herein, discloses that an appeal by garnishee defendant from defendant’s judgment against it is now pending. Nothing to the contrary appearing in the record, garnishee defendant is evidently still in possession of the money. The question raised in relation to the garnishment on this appeal is, therefore, not moot. Garnishment is a proper remedy for recovery of costs taxed under decree of this Court. CL 1948, § 628.1a (Stat Ann 1951 Cum Supp § 27.1855 [1]). The order dismissing the writ was in error and is, together with the order denying plaintiffs right to recover alimony in arrears at the time of decedent’s death, reversed, vacated and set aside. The cause is remanded for further proceedings in conformity herewith. Costs to plaintiff.
North, C. J., and Btjtzel, Carr, Bushnell, Sharpe, Boyles, and Reid, JJ., concurred. | [
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Reid, J.
Plaintiffs filed their bill of complaint praying (a) that an instrument signed by them purporting to be a release of right of way over the lands of plaintiffs be declared to be null and void; (b) that a declaratory judgment be entered determining the description of the lands conveyed by such instrument; (c) that the title to the lands, including the lands covered by the release, be quieted in the plaintiffs, excepting as the lands covered by the release are determined to be immediately contiguous to M-91; and (d) for other equitable relief.
The defendant asserts its claim to sovereign immunity and claims that the plaintiffs are guilty of laches.
On motion, the trial court dismissed the bill of complaint. Plaintiffs appeal.
The question involved, as stated by plaintiffs, is : Is this suit a part of a proceeding authorized by statute in which the immunity of the State has been waived as found by this Court in Church v. State Highway Department, 254 Mich 666?
Plaintiffs in their brief set forth the following as facts:
“The plaintiffs are the owners of the land involved which consists of the south half of a government lot of which the easterly boundary is the shore line of Green Bay. The land lies about 12 miles northeasterly of the city of Menominee and is traversed by State trunk-line highway M-91 which parallels the shore of the bay some 200 feet westerly thereof. All these conditions have existed during all times involved and a 66-foot right of way for said M-91 was acquired by user prior thereto.
“In January of the year 1927 plaintiffs were asked by one George G. Black, agent of the then State highway commissioner, to execute a release of right of way to the State to permit the straightening and improving of said M-91. Said agent represented that the State required a right of way 150 feet wide instead of the existing 66 feet and that the additional land taken would be east of the existing State trunk-line highway. He further represented that a modern concrete highway would be built in the then near future and that plaintiffs’ land would soon receive great benefits without loss of any substantial area.
“Said Mr. Black was accompanied by George Grabowsky, supervisor of the township, and plaintiffs’ neighbor, who introduced Mr. Black and vouched for him.
“Mr. Black thereupon produced and plaintiffs signed the document in question without any other consideration.
“This document is a printed form of release of right of way then in use by the State highway department. In the proper blank space appear the words ‘description and plat attached.’
“No plat is attached.
“On a sticker, attached, appears a typewritten description by metes and bounds of a 150-foot right of way across said lands.
“This typewritten description is faulty and ambiguous but the fault is not apparent without projecting the metes and bounds onto a plat.
“The description begins at a section corner about the location of which there is no doubt but which is not marked and can only be ascertained by survey
“ ‘Thence east on said section line * * * a distance of 359.0 feet to station 460/16 on the surveyed center line of S.T.L. 91-1
“Said section line is the center line of a road running easterly and westerly and its point of intersection with M-91 was well marked and well known.
“The given distance, 359.0 feet, falls short of reaching this intersection.
“Projected from the named monument, the intersection of the said section line with M-91, the description covers substantially the right of way of said road widened to 150 feet.
“Projected from a point 359.0 feet easterly along the section line from the section corner and without regard to the location of M-91 the description covers an entirely different right of way 150 feet Avide across plaintiffs’ fields parallel to M-91 but westerly thereof and behind plaintiffs’ barn.
“The point 359.0 feet easterly of the section corner does not coincide with the intersection of the center line of US-35 [the highway now known as M-35, evidently formerly known as S.T.L. 91] as recently constructed across said land but the improved portions thereof Avould be substantially within the 150 feet right of way as projected from that point.
“The project of improving M-91 languished and was generally considered to be abandoned. Plaintiffs sold three small parcels of their land lying between M-91 and the shore of the bay and substantial residences have been erected upon them. The descriptions of such parcels are such that no access is afforded to US-35 and ingress and egress depends on M-91.
“The typewritten sticker refers to S.T.L. 91-1 bnt in the form .proper the effect of the conveyance is limited ‘to permit the altering, widening and improving of the existing [italics supplied] highway * * * commonly designated and referred to as State trunk-line road No 91.’
“In the spring of 1947 construction was started by the State highway department of US-35 and it became apparent that the new road would not cross such land along the old right of way as plaintiffs expected.
“Negotiations were opened up between the parties and plaintiffs were furnished a plat of the proposed new construction but not until after it was well under way.
“These negotiations continued until after such road was substantially constructed when the agents of said highway commissioner notified plaintiffs that they intended to stand on the old release. Plaintiffs then brought this suit.”
Plaintiffs pray that the court construe the release and conyeyance of the right of way in such manner and to such result that the right of way in the release and conveyance be determined to be along the old right of way of M-91 and not along the course of the new pavement (now M-35) put down by the State and in use by the public.
Defendant filed a motion to dismiss the bill of complaint and attached to the motion is an affidavit (which affidavit is not denied by plaintiffs) of H. C. Coons, deputy State highway commissioner, in which Coons deposes and says that he had charge of and directed the construction of trunk-line M-35, formerly called M-91, in Menominee county, but within the boundaries of land described in the release and conveyance in question. The construction over this line was completed as an integral part of State trunk-line M-35 in July, 1947 (across lands of plaintiffs), at a cost of approximately $20,000 for grading and paving. Said, highway has been used since August, 1947, for public travel over the lands so released. The improvements were placed upon the lands and open- to public travel without any prior act on the part of the plaintiffs to give effect to their presently asserted claim in this suit.
The bill of complaint in this case was filed on March 1, 1948. The release and conveyance in question was recorded in the office of the register of deeds of Menominee county in January, 1927.
Negotiations were going on between plaintiffs and the State highway commissioner’s department during the progress of the construction of the cement pavement in question. Doubtless the State could not, without very great loss, stop the construction to await the result of negotiations with plaintiffs. No definite step to bar or stop the construction of the pavement along the right of way described in the release and conveyance was taken prior to the filing of the bill. Under such circumstances and in view of the great lapse of time since signing and delivery of the release and conveyance, followed by the making by defendant of great and costly improvements to the right of way and use by the public of the paved highway for 7 months before suit was begun, the principle of laches is applicable and plaintiffs are barred from asserting their rights in this lawsuit.
It is not necessary to pass upon the question of sovereign immunity, as the plaintiffs must fail for laches.
The decree appealed from dismissed the bill, which decree is affirmed. Costs to defendant.
Sharpe, C. J., and Bushnell, Boyles, North, Dethmers, Butzel, and Carr, JJ., concurred. | [
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Starr, J.
Plaintiff Star Transfer Line instituted this interpleader suit for the purpose of determining title to 799 eases of imported Scotch whisky stored in its bonded warehouse in Detroit. Defendants General Exporting Company and John J. McKeown appeal from a decree determining defendant Southard & Company, Ltd., to be the owner of such whisky and the warehouse receipt therefor. This being a chancery case, we consider the same de novo.
Plaintiff is a Michigan corporation engaged in business as a public warehouseman under 2 Comp. Laws 1929, § 9623 et seq. (Stat. Ann. § 19.491 et seq.), and maintains a warehouse in the city of Detroit. Defendant Southard & Company, Ltd. (herein referred to as Southard), a British corporation with its principal offices in London, England, is engaged in the business of exporting whisky, wine, and other liquors. Defendant McKeown, a resident of Chicago, Illinois, is engaged in the wholesale bakery business and also ip the operation of “currency exchanges.” Defendant General Exporting Company (herein referred to as General Exporting), an Illinois corporation with its principal 'office in Chicago, was engaged in the business of importing and selling whisky and other liquors. General Exporting was organized about 1934 by one Benjamin I. Salinger, Jr., a Chicago attorney, and the record clearly indicates that it was a dummy corporation controlled and dominated by Salinger for the purpose of conducting his liquor business. All the capital stock of General Exporting was held by its secretary and treasurer, Helen Booker, also known as M. H. Booker, who was Salinger’s secretary and who later became his wife. George Witt, one of the original incorporators and president of General Exporting until about March, 1938, testified in part:
“There never was any directors meeting. There never were any directors. * * * Salinger was not an officer or director of General Exporting. * * # °
• “I was the ‘dummy’ president of the corporation. Doing just what Salinger told me to do. * * * He was the whole works. * * * He was the corporation. ’ ’
At the time of the transactions involved in the present case, one C. D. Gallagher was president of General Exporting.
While Salinger and his secretary Booker were in London in 1936, he interviewed Leonard Chambers, a director of Southard. Such interviews resulted in a written contract between Southard and General Exporting whereby the latter was to act as agent for Southard’s liquors in certain specified territory in the United States. Chambers, whose deposition was taken in London, testified regarding such contract in part as follows:
“I believe it was the summer of 1936 I first met Benjamin I. Salinger. '* * * The purpose of this * * * interview was in reference to negotiation of an order to be placed by the Iowa liquor control board with Southard & Company in which Salinger was to be the agent. * * *
“The gist of the conversations * * * were efforts on the part of Salinger to convince me that he was in a position to influence a considerable volume-of business in the United States if I would have sufficient confidence in him and appoint him as an agent for Southard. * * *
“Southard & Company entered into business relations with General Exporting Company in the year 1936. * * *
“There was an unwillingness, if not an actual inability on the part of the General Exporting Company and Salinger, to invest money in merchandise shipped by Southard. * * *
“The original contract between Southard & Company and General Exporting Company had been the usual form of agency contract between a prin cipal and agent; it gave exclusive representation in certain specified areas; it reserved the right to the principals either to accept or decline business offered by the agent. * * * Salinger, appended his signature to the original and counterpart of the contract, signing as ‘duly constituted attorney.’ ”
In pursuance of such contract, Southard continued its business relations with General Exporting until the spring of 1940. In April of that year Chambers, representing Southard, went to Chicago to secure an accounting from General Exporting as to the amount of liquor in warehouses and as to charges and remittances for liquor shipped. Being unable to get satisfactory information from Salinger, who pleaded illness and other excuses, Chambers interviewed Helen Booker, secretary and treasurer of General Exporting, who previous to that time had married Salinger. She assisted Chambers in obtaining payment for previous shipments to General Exporting and also endeayored to assist him in obtaining from Salinger the warehouse receipts for certain whisky stored in Chicago and for the whisky in question stored in plaintiff’s warehouse in Detroit. Being unable to obtain such warehouse receipts, Mrs. Salinger referred Chambers to her Chicago attorneys.
About May 29, 1940, Southard began suit (herein referred to as the Illinois suit) against General Exporting and Benjamin Salinger in the district court of the United States for the northern district of Illinois to recover the above-mentioned whisky and warehouse receipts. An order was entered in the district court restraining General Exporting and Salinger from assigning or disposing of the warehouse receipts and appointing one Arthur L. Schwartz as receiver thereof. General Exporting and Salinger appealed from such restraining order. The circuit court of appeals, seventh circuit, in its opinion rendered January 29, 1941, held that the district court’s restraining order, having been granted without notice, expired within 10 days after entry. See Southard & Co., Ltd., v. Salinger (C. C. A.), 117 Fed. (2d) 194. In December, 1940, Southard had filed a petition in the Illinois suit alleging in substance that the warehouse receipt for the whisky stored in Detroit had been assigned to and was in the possession of John J. McKeown, and asking that he be made a party defendant. In pursuance of such petition, an order was entered making McKeown a party defendant. He then filed answer claiming that prior to the institution of the Illinois suit, General Exporting, for a valuable consideration, had aS' signed and delivered to him the warehouse receipt covering the whisky stored in Detroit and that he was the owner of such receipt and whisky. The record indicates that no further action has been taken in such suit, and apparently the same is still pending but dormant.
About December 21, 1940, defendant McKeown began a chancery suit in the circuit court for Wayne county, Michigan, against Star Transfer and General Exporting as defendants, but did not make Southard a party defendant. In his bill of complaint McKeown alleged in substance that General Exporting had assigned and delivered to him the warehouse receipt issued by Star Transfer covering the 799 cases of whisky in its Detroit warehouse. He asked that he be decreed to be the owner of such warehouse receipt and whisky and that Star Transfer deliver the whisky to him upon payment of storage charges. Star Transfer filed answer denying McKeown’s right to the -relief sought. It also filed motion to dismiss such suit on the ground of prior suit pending in the district court of Illinois. General Exporting answered, admitting that on April 27, 1940, it had assigned and delivered the warehouse receipt in question to plaintiff McKeown and that he was entitled to the relief sought. Apparently such suit is still pending but dormant.
On January 22, 1941, while the Illinois and the Wayne county suits were pending, Star Transfer, in pursuance of the provisions of the uniform warehouse receipts act (2 Comp. Laws 1929, §§ 9580, 9581 [Stat. Ann. §§ 19.437, 19.438] ), began the present interpleader suit in the superior court of Grand Eapids against General Exporting, McKeown, Southard, and Schwartz, receiver, as defendants. In its bill of complaint plaintiff alleged in substance that the whisky in question had been stored in its Detroit warehouse and negotiable warehouse receipt issued to defendant General Exporting; that suits involving title to such whisky and warehouse- receipt were pending in the United States district court in Illinois and in the circuit court for Wayne county in chancery; that in the Illinois suit defendant Schwartz had been appointed receiver for such warehouse receipt; and that it was unable to ascertain which of the defendants was lawfully entitled to the receipt and whisky. Plaintiff asked that the court determine the ownership of such whisky and warehouse receipt. It also asked that, in addition to its lien for storage charges, it be given a lien for its reasonable costs, expenses, and attorney fees, in connection with such interpleader suit. Defendant Schwartz did not appear, and his default was duly entered. Defendant McKeown answered, asserting title to the warehouse receipt and the whisky in question, and by cross bill asked that the court decree him to be the owner of said receipt and whisky. General Exporting answered, alleging in substance that it had purchased the whisky in question from defendant Southard; that it owned such whisky at the time it was stored in plaintiff’s warehouse; that it had assigned and transferred the warehouse receipt to defendant McKeown; and that McKeown was the owner of such receipt and whisky. Defendant General Exporting also contended that the superior court of Grand Bapids was without jurisdiction to entertain such interpleader proceedings or to determine title to the whisky. Southard filed answer asserting that it was the owner of the whisky; that title thereto had newer passed to defendant General Exporting; and that General Exporting had stored such whisky and obtained the warehouse receipt as its agent. Southard also alleged that General Exporting had assigned the warehouse receipt to defendant McKeown without consideration and as a subterfuge for the purpose of defeating Southard’s claim of title to such receipt and whisky. Southard asked that it be decreed to own the warehouse receipt and whisky and that the whisky be delivered to it upon payment of plaintiff’s'storage charges and expenses.
Trial was begun in superior court on November 5, 1941, and during trial the court ordered the warehouse receipt, which was introduced in evidence by defendant McKeown, to be impounded and held by the clerk of the court. During an adjournment of the trial, defendants General Exporting and Mc-Keown filed motions to dismiss the entire proceedings on the ground that the court was without jurisdiction to adjudicate title to the whisky which, they alleged, was in the custody of the United States government. Such motions were denied. Motions by defendants General Exporting and McKeown to exclude certain depositions presented by defendant Southard were also denied.
On May 5, 1942, the trial court filed opinion determining that defendant Southard was the owner of the warehouse receipt and whisky in question. On May 19, 1942, subsequent to the filing of such opinion, but prior to the entry of decree on July 6,. 1942, General Exporting “as consignee and for the benefit of John J. McKeown” began suit in the United States district court for the eastern district of Michigan against Star Transfer, .the United States collector of. customs at the port of Detroit, and Judge Thaddeus B. Taylor of the superior court of Grand Bapids. Defendant Southard was not made a party defendant in such suit. In its bill of complaint General Exporting alleged that McKeown was the owner of the warehouse receipt and whisky in question, and that the superior court of Grand Bapids was without jurisdiction or authority to determine the title or ownership of said whisky. It asked that Judge Taylor be enjoined “from taking any further proceedings” in the present interr pleader suit pending before him, and that all proceedings in the superior court “be declared null, void and of no effect.” Star Transfer and Judge Taylor filed motion to dismiss such suit on the grounds that the complaint failed to state a cause of action; that the Federal district court had no jurisdiction and should not enjoin a State court of co-ordinate jurisdiction; that another suit was pending between the same parties in the superior court of Grand Bapids; and that the commencement of such suit was in violation of the superior court’s injunction. Following a hearing the district court entered decree dismissing the suit. General Exporting then appealed from such decree to the United States circuit court of appeals for the sixth circuit.
On June 4,1943, pending the present appeal from the superior court of Grand Bapids, the circuit court of appeals entered opinion affirming the dismissal of the Detroit district court suit (General Export ing Co. v. Star Transfer Line, 136 Fed. [2d] 329, rehearing denied August 31, 1943). As such opinion determines certain questions raised in the present appeal, we shall quote at some length therefrom, pp. 332, 333:
“Appellant contends that a Federal court, alone, possesses jurisdiction to determine title to and ownership of whisky in bond; and that the superior court of Grand Rapids, Michigan, was not vested with jurisdiction and could exercise none to adjudge the title and ownership of the 799 cases of whisky involved in this controversy. * * *
“The superior court of Grand Rapids carefully refrained from interference with the rights and powers of the United States collector of customs and, in its decree, expressly protected collection of the customs duties and internal revenue taxes due the United States so as not in any manner to disturb the position of the government. Both principle and authority support the jurisdiction of the Michigan trial court, properly invoked, to adjudicate, as between buyer and seller, the title to the whisky and the warehouse receipts.
“No merit is found in the argument of appellant that under Michigan statutes, the superior court of. Grand Rapids is only a municipal court, possessing no equity jurisdiction of the character which it exercised in entertaining the interpleader suit of the Star Transfer Line, wherein title to the whisky and warehouse receipts was determined. In Stowell v. Johnson, 280 Mich. 627, 630, the Supreme Court of Michigan declared that the statute governing the jurisdiction of the superior court of Grand Rapids is 3 Comp. Laws 1929, § 16351 (Stat. Ann. § 27.3623), which provides that the superior court has jurisdiction ‘ of all equity suits * * * in which any complainant or defendant shall be resident of said city, or in which the subject matter of such suit is situate in said city;’ and that this statute clearly confers jurisdiction upon the superior court in equity cases, if any of the parties to the suit reside in Grand Rapids. The United States district court has found upon evidence that the office and principal place of business of the appellee, Star Transfer Line, is in the city of Grand Rapids. That Michigan corporation was, therefore, privileged under Michigan law to file its interpleader suit in the superior court of Grand Rapids.
“The Michigan statute, supra, confers upon the superior court of Grand Rapids original jurisdiction, concurrent with the circuit court of Kent county, of all equity cases in which either party is a resident of Grand Rapids. All Michigan circuit courts in chancery have jurisdiction to hear and determine suits begun by bills of interpleader, filed by any individual or corporation domiciled in Michigan having in its custody or possession property to which there are two or more adverse claimants. Such interpleader suit may be brought in the circuit court in chancery of the county in which the custodian of the property resides (3 Comp. Laws 1929, § 13944, subd. 7, as amended by Act No. 41, Pub. Acts 1939 [Comp. Laws Supp. 1940, § 13944, Stat. Ann. 1943 Cum. Supp. §27.545]). The circuit court (superior court) of Grand Rapids, being vested with concurrent jurisdiction with the circuit court of Kent county, had a concurrent right to entertain the interpleader bill filed by the appellee.
“It may be added that jurisdiction already assumed and exercised under State law by a State court is not subject to collateral attack in a Federal district court. See Mutual Reserve Fund Life Association v. Phelps, 190 U. S. 147, 159, 160 (23 Sup. Ct. 707, 47 L. Ed. 987); Kohn v. Central Distributing Co., 306 U. S. 531, 534 (59 Sup. Ct. 689, 83 L. Ed. 965).”
The contentions of defendants General Exporting and McKeown in the present appeal, that the superior court of Grand Rapids was without jurisdic tion to entertain the interpleader suit and to determine title to the warehouse receipt and whiskyin question, were fully answered and adversely determined by the above-quoted opinion of the circuit court of appeals.
Defendants General Exporting and McKeown contend that the deposition of Leonard Chambers, a director of defendant Southard, should have been excluded and suppressed, because he was furnished with a copy of the written interrogatories prior to the taking of his deposition and that in giving his deposition he “frequently referred for the purpose of refreshing his memory” to memoranda or answers which he had prepared. Such deposition was taken upon interrogatories and cross-interrogatories in London before a commissioner, vice-consul of the United States, in pursuance of letters rogatory issued by the judge of the superior court of Grand Bapids. In his certificate the commissioner said in part:
“He (Chambers) stated that he had to rely completely on his memory, and that his records, to which many of the interrogatories referred, had been entirely destroyed, and they involved a period of some five years. There was no reason to believe that Mr. Chambers’ written notes referred to anything that was not within his personal knowledge.”
In 26 C. J. S. p. 888, § 67, it is stated :
“Prior information of witness. The deposition is not invalidated by the fact that before testifying the witness was furnished with or read the interrogatories and cross-interrogatories in advance of his examination, where no attempt was made or influence brought to bear on him to affect his testimony, and the party complaining has not been prejudiced. ’ ’
See, also, Allen v. Seyfried, 43 Wis. 414; Warner v. Daniels, 1 Woodb. & M. 90 (Fed. Cas. No. 17,181); Amee v. Wilson, 22 Me. 116; North Carolina R. Co. v. Drew, 3 Woods, 691 (Fed. Cas. No. 17,434).
We are satisfied that witness Chambers’ deposition was not improperly taken and, except as to certain interrogatories and answers stricken, was admissible in evidence.
During the trial defendant General Exporting filed written motion to strike certain of the interrogatories propounded to witness Chambers and certain of his answers. The trial court struck certain of the interrogatories and answers objected to and admitted the remainder. From examination of the record we conclude that such action by the trial court was entirely proper. Other objections of defendants General Exporting and MeKeown to the Chambers deposition and to other depositions presented by defendant Southard are without merit.
Southard contends that it retained title to the whisky in question and that General Exporting-stored such whisky and received the warehouse receipt as its agent. General Exporting denies that it was Southard’s agent. It contends that it purchased the whisky from Southard; that it received and held title thereto; and that it owned the warehouse receipt issued by plaintiff. It further contends that it sold and assigned the warehouse receipt to defendant MeKeown in consideration of the cancellation of its indebtedness to him in the amount of about $5,000, and that MeKeown thereby became the absolute owner of such receipt and whisky. Therefore, we must first determine whether defendant Southard or defendant General Exporting owned the whisky at the time it was stored in plaintiff’s warehouse.
Southard’s offices, books, records, and its copy of the contract with General Exporting were destroyed on May 10,1941, as a result of direct hits by enemy bombs. General Exporting claims that its copy of such contract was delivered by its secretary to Chambers in the spring of 1940. In any event, the contract was not put in evidence, and the relationship between the parties and the question of title to the whisky must be determined from the testimony and exhibits presented. Defendants General Exporting and McKeown argue that the bills of lading and invoices covering the whisky show that General Exporting purchased it from Southard and received title thereto.
Witness Chambers, a director of Southard, whose testimony is hereinbefore quoted in part, stated that the contract made in 1936 appointed General Exporting as agent for Southard. George Witt, president of General Exporting until 1938, testified that “General Exporting Company was an agent for anybody that we done business with, not only Southard but all other liquor houses. * * * We acted as agents for Southard & Company.”
Southard did not have a basic permit for importing liquor into the United States. However, General Exporting had obtained such a permit, entitling it to import liquor shipped by Southard. In many instances orders for liquor obtained by General Exporting were sent to Southard which shipped directly to the customers, made collections, and then remitted commissions to General Exporting. In other instances Southard made shipments of stocks of liquor, which were placed in warehouses and from which General Exporting withdrew stock as it was sold, made collections, retained its commissions, and remitted the base or net price to Southard. As to all these transactions, witness Chambers, who had charge of the export business for Southard, testified that “General Exporting Company has never been anything but agents for Southard & Company, nor did they want to be anything but agents, because of lack of funds.” He testified regarding interviews with Salinger in 1939 in part as follows:
“During the course of conversations in London in the summer of 1939 he (Salinger) was most insistent that because of the imminence of war Southard & Company, Ltd., should build up substantial stocks or reserves of whisky in America, where it would be safe and where he could have the use of this whisky for drawing upon from time to time as required in his capacity as agent and in soliciting business in particular from State liquor control boards. It was his view, as propounded during these conversations, that such stocks should be held in the United States by Southard & Company, Ltd., as the principal, because it was their good will and their merchandise that he was developing, or attempting co develop, as an agent, and that it would be unfair or unduly burdensome upon him as an agent to have to finance such business. * * *
“Southard & Company agreed, at the suggestion of Salinger, that they would from time to time make shipments to the United States of America on the authority of Salinger, and consign to the General Exporting Company, but not for payment by them, such stock being merely available on the spot for quick delivery as and when the General Exporting Company as agents received orders from State boards ^to make deliveries.
“It should be pointed out that the extent or frequency of these orders was never known in advance, so that the creation of some small reserve for quick delivery was obviously the only practical course, unless the General Exporting Company were willing to make purchases on their own accounts, which they were not. To facilitate the business, such stocks placed in what I believe are referred to as field warehouses, had to be consigned to some one or body.
“As to the remuneration to General Exporting Company, the method generally adopted was for the shipper to advise his agent of the base or net price that he required for his merchandise, and to give the agent liberty to arrange the price to the ultimate buyer, such price being a matter of negotiation. The difference between the base price agreed upon with the agent and the price quoted to the ultimate buyer would be credited to the General Exporting Company when the principals were placed in funds.”
Two hundred cases of the whisky in question were shipped by Southard in October, 1939', on bill of lading which provided that it was to be delivered “to order or to his or their assigns * * * notify— the General Exporting Company. ’ ’ The 'remaining 600 cases were shipped by Southard in January, 1940, on bill of lading which provided “consigned to order of Messrs. Southard & Co. Ltd., notify the General Exporting Company.” One case from the first shipment was lost or destroyed, leaving 199 cases which, together with the second shipment of 600 cases, comprise the 799 cases involved in the present suit. The bill of lading for the second shipment was indorsed in blank by Southard, but the bill for the first shipment does not appear' to have been indorsed. Both bills of lading were sent to General Exporting, which received the whisky and stored it in plaintiff’s warehouse. On April 20, 1940, plaintiff issued its negotiable warehouse receipt for such whisky to General Exporting.
As hereinbefore explained, Chambers was unable to obtain an accounting or satisfactory information from Benjamin Salinger in the spring of 1940. However, he obtained a written statement or certificate of General Exporting, signed by its president and its secretary and treasurer, reading as follows:
“May 14, 1940.
“I, M. H. Booker, duly authorized secretary and' treasurer of the General Exporting Company, Inc., an Illinois corporation doing business under the laws of the State of Illinois, do hereby certify that all stocks of Scotch whisky held in our name in warehouses in Chicago, Illinois, or in warehouses in the State of Michigan, or in any other warehouses in any other State, are the property of Southard & Co., Ltd., London, England, and do further certify that said stocks were shipped by them in our care for their anticipated needs and estimated requirements, but are not our property.
“General Exporting Company
“by M. H. Booker, Secretary and Treasurer
“Attest: C. D. Gallagher, President.”
On May 27, 1940, General Exporting sent the following letter, signed by its president and its secretary and treasurer, to plaintiff Star Transfer:
“This is to advise you that the undersigned are the only officers of the General Exporting Co., Inc., and are the only persons authorized to indorse any warehouse receipts which you have issued.
“We furthel wish to call your attention to the fact that you have issued warehouse receipts bonds #88 and 132, for approximately 800 cases of whisky in. the name of the General Exporting Co., Inc. These are not now in our hands and are held against our wishes. Do not honor any indorsements on warehouse receipts other than the indorsements of the undersigned.
“We will advise you further as to the disposition that we wish. * * *
‘ ‘ General Exporting Company, Inc.
“By C. D. Gallagher, President
“M. H. Booker, Secretary-Treasurer.”
The warehouse receipt in question was issued by plaintiff April 20, 1940. It is claimed that on April 27, 1940, General Exporting by Salinger as “counsel and duly authorized agent” and M. H. Booker, secretary, executed an assignment of such receipt to McKeown.
It should be noted that on May 14, 1940, about 18 days after such purported assignment to McKeown, General Exporting executed and delivered to Chambers the above-quoted certificate, signed by its president and by said M. H. Booker as secretary and treasurer, that the whisky in question was the property of Southard; also that on May 27th General Exporting notified plaintiff by letter that “these (warehouse receipts) are not now in our hands and are held against our wishes. ’ ’ Such letter also advised Star Transfer that C. D. Gallagher, president, and M. H. Booker, secretary and treasurer, “are the only officers-of the General Exporting Co., Inc., and are the only persons authorized to indorse any warehouse receipts which you have issued.” It is particularly significant that neither Benjamin Salinger, who was present in court, nor C. D. Gallagher, who signed both the certificate and letter above quoted, was called as a witness.
The attorney to whom Mrs. Salinger had referred Southard’s director Chambers testified regarding his interviews with her on May 27 and 28, 1940, in part as follows:
“She (Mrs. Salinger) said that General Exporting had owed Southard & Company a great deal, that she herself, wanting to see that Southard & Company was taken care of, had paid Southard, or Chambers for Southard, $9,000. * * * That there was some cases of liquor which had been received in this country from Southard, and that there was one group of cases * * * in a warehouse in Detroit, and one it seems to me were in Chicago. * * * That Southard & Company were entitled, in addition to the $9,000 that she had paid them, * * * to the liquor stored in those two warehouses. * * *
‘ ‘ She said that Mr. Salinger, her husband, had the warehouse receipt. * * * That she was afraid he would negotiate them. * * *
“She wanted me to represent Chambers to get this whisky for Southard.& Company. * * * She said right at the start that this liquor belonged to Southard & Company.”
Another attorney associated with the last above-mentioned witness, who was present at the interviews with Mrs. Salinger on May 27th and 28th, testified in part:
“She (Mrs. Salinger) also said that certain liquor, was stored in two warehouses, Chicago and I believe Detroit, and that that liquor belonged to Southard & Company, but the warehouse receipts had been issued in the name of General Exporting Company, and her husband, Benjamin Salinger, had those warehouse receipts, and had failed to turn them over. * ? *
“She told us that there was just no question but what the warehouse receipts and liquor belonged to Southard, and that Mr. Salinger arbitrarily refused to surrender them, * * * and I remember that her greatest concern was to take action which would prevent Salinger from negotiating the warehouse receipts because she feared, * * * that if he were given time he would negotiate them or he might do something which would put it out of our power to recover the warehouse receipts from him. * * *
‘ ‘ She told us at the first conference that General Exporting Company was the agent of Southard & Company in the sale of liquor here.”
"When called as a witness, Mrs. Salinger denied that General Exporting was agent for Southard and, in effect, denied statements attributed to her by 'other witnesses that Southard was the owner of the whisky and warehouse receipt in question. She could not, or at least did not, satisfactorily explain her action in executing the purported assignment of the warehouse receipt to McKeown on April.27, ■1940, and her signing of a certificate on May 14, 1940, that the whisky was the property of Southard.
Such whisky was shipped by defendant Southard to its order, “notify General Exporting Co.” The ,law seems well established that a bill of lading which provides for delivery to the order of the shipper indicates an intention to reserve title in the shipper. In Hamilton v. Jos. Schlitz Brewing Co., 129 Iowa, 172 (105 N. W. 438, 2 L. R. A. [N. S.] 1078), the court stated, p. 182:
“The doctrine of the cases (and many others .might be cited to the same effect) is thus stated by ,Mr. Benjamin: ‘The fact of making the bill of lading deliverable to the order of the vendor is, when not rebutted by evidence to the contrary, almost decisive to show his intention to reserve the jus dis■ponendi, and to prevent the property from passing to the vendee.’ Benjamin on Sales (1888), p. 333.
“As already stated, however, the question, in its •last analysis, is one of intention; and ‘the prima .facie conclusion that the vendor reserves the jus ■disponendi, when the bill of lading is to his order, may be rebutted by proof that in so doing he acted .as agent for the vendee, and did not intend to retain ■control of the property, and it is for the jury to determine as a question of fact what the real intention was.’ Benjamin on Sales (1888), p. 333.”
In Thomas Emery’s Sons v. Irving National Bank, 25 Ohio St. 360, 365 (18 Am. Rep. 299), the court said:
“In all such transactions, the bill of lading is an important item of proof as to the intention, but it is not necessarily conclusive of the question. If the bill of lading shows that the consignment was made for the benefit of the consignor or his order, it is very strong proof of his intention to reserve the jus disponendi. * * *
“As between the consignor and consignee, the bill of lading cannot be regarded as a contract in writing, but merely as an admission or declaration on the part of the consignor as to his purpose, at the time, in' making the shipment, and such admission is subject to be rebutted by other circumstances connected with the transaction.”
See Sturges v. Detroit, G. H. & M. R. Co., 166 Mich. 231; Bank of Litchfield v. Elliott, 83 Minn. 469 (86 N. W. 454); Hooper v. Railway Co., 27 Wis. 81 (9 Am. Rep. 439); 9 Am. Jur. p. 674.
In its assertion of title to the whisky, General Exporting places great stress upon Southard’s invoices. The record indicates that Southard prepared an invoice for each shipment on a form entitled, “American consular service at London,” and headed, “invoice of purchased merchandise .(for Great Britain).” Such invoices bear the American consular certificate and also .the declaration of Southard as shipper that the “merchandise is sold- or agreed to be sold * * * and that it is intended to make entry of said merchandise * * ’* in the' United States of America.” The invoices also indicate that the shipments were delivered “duty paid” and show a total basic price of approximately. $18,000. Such invoices were apparently for customs purposes in America. Southard also prepared another form of invoice for each shipment, which' stated in part: “Invoice of blended Scotch whisky shipped by Southard & Company * * * by order and for account and risk of the General Exporting Co. * * * Terms, payment @ 45 days from date of invoice for withdrawals.”
Although admissible in evidence as bearing upon the intent of the parties, such invoices are not conclusive of the question as to whether or not title to the whisky passed to General Exporting. The provision for payment “45 days from date of invoice for withdrawals” is entirely consistent with Southard’s claim that, upon the request of Salinger, it was establishing stocks of whisky in American warehouses and that it retained title to such whisky, which could be withdrawn from time to time to fill orders obtained by General Exporting. In explanation of the bills of lading and invoices covering the whisky in question witness Chambers stated in part:
“The procedure between Southard & Company and the General Exporting Company as to bills of lading, invoices, warehouse charges and disbursements would vary somewhat with the circumstances attaching to various shipments, but in the present case (of the 799 cases), since the shipments had to be stored on arrival, it was necessary to send the bill of lading to the General Exporting Company or consign the merchandise to their order. * * * This practice is universally recognized and has been employed by Southard & Company in various countries. * * *
“The invoice in question was not in fact a sales invoice. * * * This invoice was prepared for customs purposes in America, and for purposes of record in the United Kingdom. * * *
“It (bill of lading) was sent to General Exporting Company so that it might make arrangements for warehousing and take charge of the shipment on arrival. The purpose was to create a stock of whisky for prompt delivery, and was done because Salinger always stressed the need to make prompt delivery. * # * .
“It (invoice) does not evidence a sale to General Exporting Company, nor does it disclose the terms of the arrangement of the shipment. * * *
“This invoice would not be an invoice for payment but for customs and record purposes.”
A letter from General Exporting, signed by Benjamin Salinger, to the Illinois liquor control commission about February 14, 1940, indicates that liquor shipped by Southard and stored in American bonded warehouses was intended to remain the property of Southard. Such letter stated in part:
“Referring to our conference this afternoon in connection with an importing distributor’s license, I inclose you herewith the order form on which we generally accept business in the United States. The general policy, is that remittances are direct to Southard & Company and they in turn remit to us by credit memorandum or check for the commissions received.
“We have acted upon the assumption in Illinois as we have in other States that the liquor shipped from Southard (& Company in bond was the property of Southard & Company until released and the duty paid. * * * Otir position has been that all of the liquors while in bond remained the property of Southard S Company.”
In determining that Southard retained title to the whisky in question and that General Exporting acted only as its agent, the trial court said in part:
“From the oral testimony, however, the court finds that it was agreed that the General Exporting Company of Chicago was to act as distributing agent for Southard & Company in the United States, and particularly in Illinois, Iowa and Michigan. Shipments of whisky were to be made to them as agent only and they were to receive and store the whisky and then remit to Southard & Company within 45 days after they had consummated a sale.”
Defendants General Exporting and McKeown claim that, because defendant Southard did not have a basic permit to import liquor into the United States and had not complied with Federal and State statutes and regulations regarding the importation or sale of liquor, it could not, in the present inter-pleader suit, assert title to the whisky in question. Under the facts and "circumstances shown, such claim is without merit. General Exporting was Southard’s agent, and it had obtained a basic permit to import whisky. Furthermore, Southard was brought into this interpleader suit as a party defendant and was entitled to defend itself and, in defense, to assert its claim of title to the whisky and warehouse receipt. The fact that Southard did not have a basic permit or that it may not have complied with Federal or State statutes and regulations would not operate to transfer title to the whisky to defendant General Exporting. In the case of Julius King Optical Co. v. Royal Insurance Co., 24 Pa. Sup. 527, the court said:
“The principal objects of the statute were to bring foreign corporations within reach of legal process and to subject them to the taxing power of the State. It was not intended to deny to them the right of ownership or to effect a forfeiture of title. Much léss does it work a conversion of title to the agent of the corporation in whose possession the property may be. Even if the corporation were engaged in doing business in violation of the statute, the property of the company in possession■ of the agent tvould still belong to it, and it could maintain an action against the agent for it. ‘"While the courts will not enforce an illegal contract yet if the servant or agent of another has in the prosecution of an illegal enterprise for his master received money or other property belonging to the master, he is bound to turn it over to him, and cannot shield himself from liability therefor upon the ground of the illegality of the original transaction. ’ "
See, also, United States Express Co. v. Lucas, 36 Ind. 361.
It is admitted that General Exporting never paid or offered to pay Southard for the whisky, which it now claims is owned by defendant MeKeown. The record indicates that General Exporting has closed its office and discontinued its business.
A careful study of the record convinces us that Southard retainéd title to the whisky in question and that General Exporting received and stored such whisky, with plaintiff and obtained the warehouse receipt therefor as agent for Southard.
A more serious question arises regarding the purported sale and transfer of the warehouse receipt by General Exporting to defendant MeKeown. Both General Exporting and MeKeown contend that title to the warehouse receipt and whisky represented thereby was'sold and transferred to MeKeown in payment of an indebtedness of about $5,000, which he claims General Exporting then owed him. Such warehouse receipt was negotiable, and the following provisions of the uniform warehouse receipts act are pertinent:
“A person to whom a negotiable receipt has been duly negotiated acquires thereby:
“(a) Such title to the goods as the person negotiating the receipt to him had or had ability to convey to the purchaser in good faith for value, and also such title to the goods as the depositor or per son to whose order the goods were to be delivered by the terms of the receipt had or had ability to convey to a purchaser in good faith for value-,
“(b) The direct obligation of the warehouseman to hold possession of the goods for him according to the terms of the receipt as fully as if the warehouseman had contracted directly with him.” 2 Comp. Laws 1929, § 9604 (Stat. Ann. § 19.461).
“The validity of the negotiation of a receipt is not impaired by the fact that such negotiation was a breach of duty on the part of the person making the negotiation, or by the fact that the owner of the receipt was deprived of the possession of the same, by loss, theft, fraud, accident, mistake, ■ duress, or conversion,' if the person to whom the receipt was negotiated, or a person to whom the receipt was subsequently negotiated, paid value, therefor, in good faith, without notice of the breach of duty, or loss, theft, fraud, accident, mistake, duress or conversion.” 2 Comp. Laws 1929', §9610 as amended by Act No. 180, Pub. Acts 1933 (Comp. Laws Supp. 1940, §9610, Stat. Ann. § 19.467).
“A thing is done ‘in good faith’ within the meaning of this act when it is in fact done honestly, whether it be done negligently or not.” 2 Comp. Laws 1929, § 9620 (Stat. Ann. § 19.477).
Southard had placed the whisky in the possession of its agent General Exporting and had permitted it to store such whisky and obtain the warehouse receipt in its own name. Under the above-quoted provisions of the uniform warehouse receipts act, the question is whether or not defendant McKeown acted “honestly” in acquiring such warehouse receipt and whether or not he “paid value therefor, in good faith, without notice” of any defects or infirmities in General Exporting’s title to such receipt or whisky represented thereby.
In determining title to a negotiable warehouse receipt for cotton placed in storage, in City National Bank of Decatur v. Nelson, 218 Ala. 90 (117 South. 681, 61 A. L. R. 938), the court said, p. 93:
“There was proof of such facts from which the jury could infer that the defendant could have easily ascertained that the cotton was subject to the plaintiff’s lien, facts which would have put a prudent man on inquiry and which if followed up would have disclosed the plaintiff’s claim. * * *
“But it is contended, that this rule has been changed by the uniform warehouse receipt act and that a purchaser is protected, unless he has notice of the claim of another and is not chargeable with facts which would put a prudent man on inquiry, and which if followed up would lead to a discovery of the said claim. We cannot agree to this contention, and do not think that the act in question was intended to change or modify a well-defined definition or rule as to what constitutes a bona fide purchaser.”
See, also, Commercial National Bank of New Orleans v. Canal-Louisiana Bank & Trust Co., 239 U. S. 520 (36 Sup. Ct. 194, 60 L. Ed. 417, Ann. Cas. 1917 E, 25).
The testimony of defendant McKeown is particularly important as bearing upon the question of his honesty and good faith in taking the warehouse receipt from General Exporting. He first testified in substance that he had loaned Benjamin Salinger money and that Salinger had given him the warehouse receipt as security; that Salinger was to sell the whisky and pay back such loans; and that he took Salinger’s promissory note for about $5,000 and the warehouse receipt on the same day. He later testified that he purchased and owned the warehouse receipt and was to receive the full proceeds from the sale of the whisky regardless of the amount of the note; that he was “going to make a couple of dollars on it;” and that he still held Salinger’s note for approximately $5,000. Upon prompting, McKeown testified that he had loaned the money to General Exporting but added, “I don’t know who got the money.” Later he testified in substance that he took the warehouse receipt from Salinger as security and that he was to get oiit of it “just what (he) had in it.’’ McKeown introduced in evidence four promissory notes executed by General Exporting by M. H. Booker, aggregating $5,080. He testified that these notes represented loans that were paid in full by the assignment to him of the warehouse receipt. He had previously testified that such loans were made to Salinger, and it should be noted that the last of the four notes was dated April 20, 1910, the same day that the warehouse receipt was issued to General Exporting. However, McKeown apparently took a new note from Salinger for $5,080 at the same time that he took the warehouse receipt. We do not overlook the fact that the warehouse receipt, which McKeown claims he received in payment of Salinger’s or General Exporting’s indebtedness to him of $5,080, represented whisky which Southard had invoiced, duty paid, at a basic price of about $18,000. We shall quote a small portion of McKeown’s testimony to show the confusion in his statements.
“I had loaned him (Salinger) money from time to time. * * *
“He certainly does owe me money — and he gave me security for it. * * *
“It was up to Salinger according to my agreement with him to pay, to collect this money for me and, pay me. * * *
“The Court: * * * you mean that at the time this warehouse receipt was indorsed that Mr. Salinger was indebted to you * * * in the sum of approximately $5,000?
“A. That is right. * * *
“The Court: And then on that day, he gave you that warehouse receipt and his promissory note for the total amount of what he owed you?
“A. That is right, and also a letter that said he would sell the whisky, because I couldn’t sell it. # * *
“That was my warehouse receipt. * * * As far as he (Salinger) is concerned, I was paid off. *f$ %
“The Court: How much of the whisky when it was sold were you supposed to receive?
“A. I was supposed to receive it all.
“The Court: Regardless of the amount of the note?
“A. Yes, but 1 was going to make a couple of dollars on it there, you know. * * *
“I was fool enough to take it in the first place because I didn’t know that the whisky was in that kind of a warehouse. * * *
“I still hold a note (of Salinger’s) for approximately $5,000. ’ ’
On cross-examination by counsel for General Exporting, defendant McKeown further testified:
“Q. The money you loaned in question here was money you loaned direct to the General Exporting Company?
“A. In their office. * * *
“Q. But it was the General Exporting Company that got the money, wasn’t it?
“A. I don’t know who got the money.”
McKeown further testified in part:
“Q. Ton testified under oath a few moments ago that you still have a note for $5,000?
“A. That is it. * * *
“Yes, that is what I figure on getting, the amount of $5,080. * * *
“The first time I talked to Mr. Salinger or anyone in the corporation with respect to the warehouse receipt was when I wanted my money back on those notes and he (Salinger) said ‘John, I will secure you with this warehouse receipt/ and I said swell. # # #
“1 would only get out of it just about what I had in it, is the way I understood it from him.
“Q. Then you say you took this warehouse receipt as security for the $5,080?
“A. That is right.”
In its answer filed in the Illinois suit defendant General Exporting stated that the warehouse receipt in question was “negotiated and pledged as collateral. ’ ’
We again call attention to the fact that neither C. D. Gallagher, president of General Exporting, nor Benjamin Salinger, who was present in court, was called as a witness. Mrs. Salinger’s testimony that General Exporting owned the whisky and warehouse receipt and her testimony as to the regularity of the transfer of such receipt to McKeown April 27, 1940, must be considered in connection with the certificate which she signed on May 14, 1940, that Southard was the owner of the whisky. Her testimony must also he considered in connection with the statements attributed to her by witness Chambers and by her own attorneys to the effect that Southard was the owner of the whisky and warehouse receipt.
The testimony of defendant McKeown and of Mrs. Salinger is not convincing that McKeown acquired the warehouse receipt for value, in good faith, and without notice of defects or infirmities in the title of General Exporting to such receipt or the whisky represented thereby. The trial court saw and heard defendant McKeown; Mrs. Salinger, and other witnesses and was in a better position to judge the credibility of and weight to be given their testimony. After examining the entire record, we are disposed to agree with the trial court, who said in part:
“The alleged delivery (of the warehouse receipt) was not in good faith, for value, and without notice. Mr. McKeown has failed, even with the assistance of the General Exporting Company, through the able efforts of Mrs. Salinger testifying in its behalf, to satisfy this court that he, McKeown, took this warehouse receipt either as collateral, security for a loan, or as an absolute assignment for the payment of a loan. ’ ’
The fact that Southard did not have a basic importation permit or that it may not have complied with Federal and State statutes and regulations, would not operate to transfer title to such warehouse receipt to McKeown. See Julius King Optical Co. v. Royal Insurance Co., supra; United States Express Co. v. Lucas, supra. Other contentions by defendants General Exporting and McKeown regarding title to the whisky and warehouse receipt do not merit consideration.
Therefore, we conclude that defendant Southard is the owner of the 799 cases of whisky stored in plaintiff’s warehouse and of the warehouse receipt therefor, and that neither defendant General Exporting nor defendant McKeown has any right, title or interest in or to such whisky and warehouse receipt. Such receipt, which was impounded by the trial court, shall be delivered to Southard. Its ownership of said whisky shall be subject to the liens or claims of the United States government for customs duties and taxes thereon, to the lien of Star Transfer, for storage charges, and also to the lien of Star Transfer for the fees and expenses of its attorneys incurred prior to this appeal in connection with the present interpleader suit, which were determined by the trial court to be $1,832.18.
Star Transfer shall also have a lien upon said whisky for its expenses and reasonable attorney fees incurred in connection with the present appeal, the amount of which shall be determined by the trial court.
The trial court’s decree determined defendants General Exporting and McKeown to be personally liable to defendant Southard and plaintiff Star Transfer for plaintiff’s storage charges accruing subsequent to the commencement of this suit on January 22,1911, and also for the attorney fees and expenses incurred by plaintiff in connection with this suit. Under all the facts and circumstances, we believe that such provisions of the trial court’s decree were inequitable and should be vacated and set aside. Defendants General Exporting and McKeown shall not be personally liable for any part of plaintiff’s storage charges or for its attorney fees and expenses, except for costs as hereinafter provided.
Defendants General Exporting and McKeown shall, immediately on demand therefor, execute and deliver to Southard and/or to Star Transfer all such assignments, conveyances, releases, and other documents that may be necessary in order effectually to vest title to said whisky and warehouse receipt in defendant Southard and that may be necessary to enable said Southard or its assigns to sell or otherwise dispose of said whisky or warehouse receipt. In the event that either said General Exporting or McKeown shall fail, neglect or refuse to execute any such assignments, conveyances, releases' or other documents referred to above, the decree to be entered in this court shall operate and be construed as effecting such execution.
In order to terminate the prolonged litigation over the whisky and warehouse receipt in question, said defendants General Exporting and McKeown and their attorneys, agents, representatives, and any person claiming by or through them shall be permanently enjoined from commencing or prosecuting any other suit or proceedings against said Star Transfer, Southard, and the customs authorities or agencies of the United States, involving title or claim to said whisky and warehouse receipt.
As we have determined Southard to be the owner •of the whisky and warehouse receipt, the provisions of the trial court’s decree authorizing Star Transfer to. sell said whisky are unnecessary and accordingly are vacated and set aside.
The decree of the trial court is affirmed except as amended, modified or changed by this opinion. A decree- may be entered in this court in accordance with this opinion. Such decree shall provide for remanding the case to the trial court for determination of the reasonable attorney fees and expenses incurred by plaintiff in connection with this appeal and for such further proceedings and the entry of such further orders as may be necessary.
Plaintiff Star Transfer and defendant Southard shall recover their costs of both courts from defendants General Exporting and McKeown.
North, C. J., and Wiest, Butzel, Bushnell, Sharpe, and Boyles, JJ., concurred with Starr, J. Reid, J., took no part in the decision of this case. | [
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Bushnell, J.
Petitioner Dale Kader, in his application for writ of habeas corpus, claims that he is illegally imprisoned and restrained in the State prison of southern Michigan. We issued our writ to inquire into the matter and, in response to the ancillary writ of certiorari, we have the records pertaining to Kader’s detention. He was arrested in December of 1941, on the charge of indecent liberties with a 6-year-old female child. Qualified psychiatrists made a personal examination, filed written reports and testimony was taken in open court. On May 15, 1942, the circuit judge of Lenawee county adjudged Kader to be a “criminal sex(ual) psychopathic person,” in accordance with the provisions of PA 1939, No 165 (see CL 1948, § 780.501 et seq. [Stat Aim 1949 Cum Supp § 28.967(1) et seq.] ).
Kader was committed to the State hospital commission (now department of mental health) “to be confined in an appropriate institution under the jurisdiction of either the State hospital commission or the department of corrections until the said Dale Kader shall have fully and permanently recovered from such psychopathy.”
On May 18th, by order of the commission, Kader was confined in the Ionia State Hospital. About 2 years later, on order of the commission, he was admitted to parole in the custody of his father, on the verbal condition that he would conduct himself as a good citizen. He was returned to the hospital as a parole violator on November 30, 1944, after having been accused of committing indecent acts upon several small children. In February of 1946, Kader was transferred to the State prison because the hospital was unable to help him readjust his abnormal sexual behavior. In December of 1948 he was returned to the hospital, and he was again released on parole on February 11, 1949, for the reason that he had sufficiently improved. In December of that year he was convicted of using obscene language in a public place, he appealed to the circuit court, where his conviction was affirmed. In May of 1950 he was re-examined at the hospital, but his parole was not'revoked. ' '
In March of 1951, the prosecuting attorney of Washtenaw county advised the director of the mental health commission that Kader was convicted and given the maximum sentence of 90 days on a charge of simple larceny. The director’s attention was ■called to the evidence, which disclosed that the offense appeared to have the characteristics of a planned sex crime rather than simple larceny. was recommended that he be returned to institutional "custody as. a parole violator. On March 17, 1951, •Kader was returned to the Ionia State Hospital :on a warrant issued by the director of the department of mental health. In May of 1951 he was transferred to the State prison as a criminal sexual psychopathic visitor.
.Kader claims that, because his last release was not preceded by a written agreement setting forth the terms of his parole or any definite understanding relating thereto, such release was outright and unconditional. He further claims that the order of the director of the department of mental health was not within the authority of the director and, therefore, void; and, if the order was based upon ;his conviction for larceny, it was unreasonable.
Section 6 of the criminal sexual psychopathic act '(CL 1948, §780.501 et seq., as amended [Stat Ann 1949 Cum Supp § 28.967(1) et seq.]), provides:
“The State hospital commission shall have the right to release such person upon parole to such persons and under such conditions as his condition, in the judgment of the State hospital commission .merits.”
At the time of Kader’s parole, section 7 of the act read:
“Such criminal sexual psychopathic person shall be discharged only after he shall have fully recovered from such psychopathy.”
This section further provided that if it is claimed that a person has recovered, a petition may be filed in the court which committed him, and such court 'shall proceed to determine whether or not ho has •recovered from such psychopathy.
Kader’s parole must have had some conditions attached to it, at least by implication. An uncon ditional parole would amount to complete discharge, which would be contrary to the statute; and, the word “parole” itself implies a conditional release. In re Eddinger, 236 Mich 668, 670. People v. Pippin, 316 Mich 191, cited by petitioner in support of his argument, is inapplicable to the parole of a criminal sexual psychopathic person.
"We agree with petitioner’s statement, “that conditions of parole under this particular public act should bear some relation to the .main object of the act which is to prevent sexual deviates preying upon society.” If a person exhibits abnormal sexual behavior while on parole, he has breached an implied condition of his parole. What constitutes such behavior is primarily a matter for -medical determination. •
If Kader had been merely convicted of simple larceny, this fact of itself might be an insufficient basis for rehospitalization. However, where the circumstances of the theft for which he was convicted, plus his previous conviction for indecency indicate abnormal sexual behavior and a 'medical decision follows, we cannot say that the director’s determination was an abuse of his discretion.
Kader was committed in the first instance until he should have fully and permanently recovered from his psychopathy, and when the director decided that he should be returned for further treatment, he acted within his authority to confine Kader until he had recovered.
The petition for habeas corpus is denied, and the writ is dismissed.
Dethmers, Butzel, Carr, Sharee, Boyles, and Reid, JJ., concurred.
The late Chief Justice North did not sit.
The above statute was amended by PA 1950, No 25 and PA 1952, No 58. | [
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T. E. Brennan, J.
This case deals with the admissibility in evidence of a written memorandum.
Defendant on trial for armed robbery interposed the defense of alibi. The prosecution sought to impeach one of the alibi witnesses by showing that the witness had made a prior inconsistent statement to one Taylor, a detective.
During the cross-examination of the alibi witness, one King, a foundation for the admission of the prior inconsistent statement was laid — that is to say King was asked if he had made the prior statement, and he denied having made it.
The making of the prior inconsistent statement being put in issue, Taylor was called to establish that the prior inconsistent statement was made.
The following then occurred:
"Q. Can you tell me what Mr. King told you that evening relating to the facts in this case?
"A. Mr. King related to me—
"Mr. Sherman [counsel for defendant]: That would be hearsay, Your Honor. I would object. It is out of the presence of the Défendant.
"The Court: What purpose is it on?
"Mr. Bianco [assistant prosecuting attorney]: Impeachment, Your Honor.
"The Court: The objection is overruled.
"Mr. Bianco: Thank you.
"Q. (By Mr. Bianco) Did you take a written statement from Mr. King?
"A. I wrote it down and Mr. King was talking.
"Q. As Mr. King was talking to you, you wrote it down?
"A. Yes, exactly word for word what he said.
"Q. All right, I’m going to show you a piece of paper and ask you if you can identify that.
"A. Yes.
"Q. All right, can you tell me what it represents to you?
"A. That is a statement of Mr. King given to me by him.
"Q. All right, will you read that to the jury?
’Mr. Sherman: Well, I’d like to see that. I think I am entitled.
”Mr. Bianco: Don’t talk to me about it.
’’The Court: All right, Mr. Sherman.
”Mr. Sherman: Thank you, Your Honor. May I have the voir dire as to this, Your Honor?
’’The Court: Yes.
"EXAMINATION BY MR. SHERMAN:
”Q. Now, Detective Taylor, when was the first time you talked to Sam King?
’’The Court: Use a lectern while you’re questioning the witness.
”Q. (By Mr. Sherman) When was the first time you talked to Sam King about this case?
”A. The very first time I talked to him?
”Q. Yes.
”A. Back the night of the armed robbery.
”Q. The night of the armed robbery? Did you take a statement from him then?
”A. No, I didn’t.
”Q. You did not? When was the next occasion that you talked to him?
”The Court: Now, Mr. Sherman, that isn’t voir dire. If you want to voir dire the witness as to the use of this document, that’s not so.
”Mr. Sherman: Well, Your Honor, his statement was, as I recall, that he interviewed — the first time he interviewed Sam King was on the 13th of June or the 16th of June.
”Mr. Bianco: He said the 14th of June. He didn’t say it was the first time, he said it was when he took this statement.
”Mr. Sherman: I wanted to find out whether he has taken other statements.
’’The Court: That would be the subject of cross examination.
”Q. (By Mr. Sherman) Where was this statement taken?
”A. This statement was taken at 2249 South Electric in the City of Detroit.
”Q. And had you acknowledged ever taking a statement from Mr. King to me before?
"A. I don’t recall.
”Q. Did Mr. King sign that statement?
”A. No sir.
”Q. And whose handwriting is that statement in?
”A. This is my handwriting.
”Q. Did you ask Mr. King to sign that statement?
’A. Yes, sir, I did.
”Q. And he refused?
'A. Yes, sir.
"Mr. Sherman: I have nothing further but I object to the use of that statement.
"The Court: On what grounds?
"Mr. Sherman: On the grounds that the statement is solely hearsay given out of the presence of the Defendant, unsigned, uncooperative in any respect.
”The Court: It isn’t offered in evidence.
’Mr. Sherman: Well, it is being offered by impeachment, Your Honor, and there is no basis for the admission of this statement.
’’The Court: It isn’t offered.
”Mr. Sherman: Well, he is asking him to read it.
’’The Court: That’s present recollection, the classic case of present recollection.
"Go ahead.
”Mr. Bianco: Thank you, Your Honor.
’’The Witness: This is the statement of Samuel King taken by Detective Charles Taylor at 2249 South Electric, Detroit, Michigan. Time: 1:30 A.M. Saturday, June 14, 1969: T went to the game that night. I saw Larry there but it wasn’t until after the game. Anyway, the game was over I don’t know what time it was but Larry did not go to the Castle with me. We were parked in the Castle parking lot. Larry might have come over sometime during the time he was at the Castle and got in my car and got right back out but he didn’t go to the Castle with me. They told me to say that he was with me but I told them I wasn’t going to lie for them and I didn’t want to get involved.’
"That is what he told me.
"Mr. Bianco: You realize you’re still under oath?
"The Witness: Yes, sir.
"Mr. Bianco: And that’s what he told you?
"The Witness: Yes, sir.” (Emphasis added.)
The written memorandum was read to the jury. This constituted its admission in evidence. This was error. The writing was prepared by the Detective Taylor, out of court and was not signed by the witness King. The writing was hearsay. It was an extrajudicial statement (by Taylor) offered to prove the truth of the thing said (that King had spoken the words imputed to him).
There was nothing to prevent Taylor from testifying verbally. He could have related his conversation with King. If he could not recall the conversation, he could have been shown the memorandum to refresh his memory. If he could not then testify without the aid of the memorandum, the written memorandum might then have been introduced in evidence and read to the jury provided a proper foundation was laid. Jaxon v City of Detroit, Department of Street Railways, 379 Mich 405, 413 (1967).
Under the circumstances here, the writing was inadmissible. The dissenting opinion of Judge Levin in the Court of Appeals contains an exhaustive analysis. We adopt it.
Reversed and remanded for new trial.
T. M. Kavanagh, C. J., and Adams, T. G. Kavanagh, Swainson, and Williams, JJ., concurred with T. E. Brennan, J.
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Carr, J.
The accident out of which this case arose occurred on Junction avenue in the city of Detroit about 5 o’clock in the afternoon of June 4,1948. The street in question is 28 feet in width from curb to curb. A streetcar track is located in the center, on which cars are operated only in a northerly direction.
Immediately prior to the accident plaintiff, then 12 years of age, alighted from a northbound streetcar on which he had been a passenger. He waited for the car to continue its course, and then started across the track in a westerly direction. He was at the time carrying a sack or bundle. It is his claim that he looked to the north, where his view was in part obstructed by the moving streetcar, and saw no traffic approaching. He then looked to the south, where he discovered an automobile some distance away. The' proofs disclose that automobiles were permitted to park on the east side of Junction avenue, but not on the west, and that as a result northbound traffic frequently, and perhaps customarily, used a portion of the space between the rails of the streetcar track.
Plaintiff further claims that having made his observation for vehicles coming from the south he, while still standing in the center of the street and between the rails of the streetcar track, started to turn to the north to make an observation in that direction. At that instant a Ford 2-door automobile, owned by defendant and driven by one of its employees in a southerly direction, came in forcible contact with plaintiff, resulting in serious injuries to him. The present suit for damages was brought on the theory that the driver of defendant’s car was. guilty of negligence constituting the proximate cause of the accident.
At the conclusion of plaintiff’s proofs on the trial, counsel for defendant moved for a directed verdict, claiming that plaintiff had failed to establish his freedom from contributory negligence. Said motion was taken under advisement under the provisions of the Empson act (CL 1948, § 691.691 et seq. [Stat Ann and Stat Ann 1951 Cum Supp § 27.1461 et seq.\). It was renewed after the introduction of defendant’s proofs. Decision was again reserved, and the case was submitted to the jury which returned a verdict in plaintiff’s favor in the sum of $15,000. Motions for judgment notwithstanding the verdict and for a new trial were denied, and defendant has appealed.
The principal question in the case has reference to the alleged contributory negligence on the part of plaintiff. Emphasis is placed on the fact that he apparently came in contact with the side of defendant’s automobile rather than with the front. The testimony, however, is in conflict as to exactly how the accident happened and where the plaintiff was at the time of the impact. A police officer of the city of Detroit, who was called to the scene of the accident shortly after it occurred and examined the automobile, gave the jury the results of his observations. He stated in substance that there were scratches along the side of the car beginning at a point near the extreme rear skirt of the left front fender, then along the door and on to the rear of the car. The witness further testified that the handle of the door was bent out. It is not disputed that plaintiff’s right arm was lacerated to such an extent that amputation subsequently became necessary. It is a fair conclusion that the handle of the door caught plaintiff’s arm, with the result indicated.
The driver of defendant’s car was called by plaintiff for cross-examination under the statute, and' testified that when he first saw plaintiff the latter was “within a step” of the car. He testified that he was; driving between 25 and 30 miles per hour, but there ’ is other testimony indicating a speed of 40 miles.1 The conclusion of the jury that he was guilty of negligence is not questioned, the claim being stressed, as before noted, that plaintiff was guilty of contributory negligence as a matter of law. The trial judge in denying defendant’s motion for judgment notwithstanding the verdict stated in substance that because of the conflicting proofs on the trial the issues of negligence were for the determination of the jury.
It is a fair conclusion from all the evidence in the case that the plaintiff was at the time of the accident a normal lad in all respects, and fully capable of exercising for his own safety the measure and degree of care that the ordinary boy of his age and his physical and - mental development may reasonably be expected to exercise under circumstances of the character here involved. The following excerpt from his testimony fairly- indicates his claim as to’ his position and conduct at the time he was struck by defendant’s car:
“Q. Then at that time whereabouts were you with' regard to the rails of that streetcar track?
“A. Just about midway of the rails. .-
“Q. Midway, between the rails?
“A. Yes.
“Q. Then what did you do ?
“A. I was standing there, .1 turned to look to my right.
“Q. You had been looking south.
"A. That is right.
“Q. You were standing there and then you did what?
“A. I turned to look to my right, to the north, then that is when I was hit.
“Q. You were at that time about where ?
“A. Just between the rails.
“Q. Between the 2 rails ?
A. Yes, sir.
“Q. Approximately where with regard to the 2 rails ?
“A. You mean how far in between them?
“Q. Yes.
“A. It must have been just, well, I think just about midway.
“Q. Just about midway?
“A. I couldn’t give you the exact measurements.
“Q. At the time you were struck were you moving west or were you otherwise ?
“A. I wasn’t moving.”
He testified further that he was not completely turned around at the instant of the impact, and that he did not see the defendant’s car. The testimony of plaintiff to the effect that he. was between the rails of the streetcar track at the time the accident occurred was corroborated by a witness in his behalf, Lorene Kama, who stated positively that plaintiff was not across the west rail of the streetcar track. Defendant’s driver stated that he stopped his car following the accident, went back to the place where it had occurred, and found plaintiff lying between the rails of the streetcar track in a position that the witness described as “the middle of the tracks.” ;
While other testimony introduced on the trial was not in accord with the claim of the plaintiff, it was within the province of the jury to find that he was in the center of the street, between the rails of the streetcar track, and standing still, at the moment of the impact. If such was the situation, the inference clearly follows that defendant’s driver, after meeting the streetcar from which plaintiff had alighted, veered to his left and operated his car in such manner that the left side of the vehicle extended across the west rail of the streetcar track. It may not be said as a matter of law that plaintiff was bound to anticipate that the driver of a southbound vehicle would follow such a course, or that he would approach at an excessive rate of speed without keeping a reasonable and proper outlook. Carter v. C. F. Smith Co., 285 Mich 621; Burnash v. Compton, 298 Mich 70. The trial judge was not in error in denying the motion for judgment notwithstanding the verdict.
It is also claimed that the verdict was against the great weight of the evidence, and that for such reason the motion for a new trial should have been granted. We are not in accord with such contention. Under the testimony in the case the conclusion of the jury to the effect that plaintiff was exercising due and proper care for Ms own safety, in view of his age and of all other circumstances involved in the case, finds adequate support in the record. The disputed issues of fact relating to questions of negligence were properly submitted to the jury for determination, and the verdict reached should not be set aside for the reason claimed.
Appellant further insists that the trial court was in error in not granting a motion to declare a mistrial based on a claimed improper and prejudicial reference to the matter of insurance. For the purpose of impeaching the testimony of the plaintiff, defendant offered the testimony of a shorthand reporter as to questions propounded to plaintiff while he was in the hospital, apparently shortly following the amputation of his arm, and the answers thereto. Such questions wore asked by a Mr. Lawrence, who was referred to by counsel for defendant in Ms cross-examination of the plaintiff as “an investigator.” The reporter testified that the questioning was done in the presence of the parents of the plaintiff. Subsequently plaintiff’s mother was called as a witness in his behalf and was questioned with reference to what occurred in connection with the interview by the investigator. After testimony to the effect that the witness undertook to enter plaintiff’s room after Ms return from the operating room, and was requested to remain outside temporarily, the following occurred:
“Q. Who did you see ?
“A. Then when I walked out there were 2 men standing there.
“Q. Who were they?
“A. I believe this man said he was from an insurance—
“Mr. Maride (interposing): Now, just a moment.
“Q. Who were — -
“Mr. Marble: Just a minute. I would like to challenge counsel’s good faith in that matter.
“Mr. Groefsema: I didn’t expect that answer.
“Mr. Marble: I think it is a deliberate attempt— this is a suit against the city. They are afraid they are not going to recover against the city. They are trying to bring in something outside that has nothing to do with this case.
“Mr. Groefsema: There isn’t any such purpose at all. I just wanted to know who the men were in the hall.
“The Court: Mr. Groefsema, you should warn your witness. You understand that very well.
“Mr. Groefsema: Pardon?
“The Court: It is your duty to warn the witness.
“Mr. Groefsema: I certainly — there is no reason, for having any question like that in this lawsuit, your Honor. I openly admit there is no reason for it.
“Mr. Marble: There is no other reason for Mr. Groefsema to ask that question. He must know the answer. He isn’t putting the witness on there without knowing what she is going to say. That is the mother of his client.
“Mr. Groefsema: I didn’t know that answer. I don’t practice law that way. Counsel can sustain me on that. '
“Mr. Marble: I would like the court to instruct this jury on that, or, if not, to declare a mistrial.
“The Court: Well, counsel here on both sides are trial lawyers of long experience and they understand that any reference to any outside thing of that kind is improper in the trial of a case.
“Now, if by one method or another it is brought' in, it becomes a question of good faith and whether or not a mistrial should not be declared on that account. I don’t like, under the circumstances, to say that this was anything that resembled bad faith but certainly you should have been careful in instructing your witness with reference to things of that kind which you know are apt to come out in the trial of a case.
“Mr. Oroefsema: I appreciate that, your Honor.
“The Court: This idea of bringing it in at the last moment is prejudicial undoubtedly, but I think under the circumstances we will proceed with the trial of the case.
“Mr.Markle: I move for a mistrial. I take it then the motion for mistrial is denied 1 .
“The Court: Denied.”
The charge of the trial court submitting the case to the jury is not contained in the record before us. In consequence we do not know whether the matter of insurance was referred to therein. Neither does it ■appear that any request for an instruction on the matter was presented by counsel for defendant. It is apparent that the trial judge, who had the advantage of observing the witness at the time the statement was made, did not believe that a finding of “bad faith” was justified. We think it may be said also that the statements of the court, together with the remarks of counsel, were of such nature as tó reasonably inform the jury that any reference to the matter of insurance was highly improper and as such not entitled to consideration in the determination of the case.
In Morris v. Montgomery, 229 Mich 509, the reference in the plaintiff’s testimony to the matter' of insurance was, on motion, stricken out by express direction of the trial court. In discussing the question whether such reference constituted reversible error, it was said:
“Plaintiff testified to a conversation with defendant at a hospital and stated an insurance adjuster was present. The testimony about an insurance adjuster was struck out. This cured the error. The time has come when probably a majority of persons on every jury own automobiles and the policy of carrying insurance is so common that it is not surprising if jurors sense the fact. The rule of exclusion, perhaps, ought to continue, even though everyday affairs have moved beyond its original reason, but it ought not to be employed to set aside judgments except in cases of flagrant violation.”
In White v. Makela, 304 Mich 425, 436, the position that this- Court has taken in prior decisions with reference to the matter of insurance was summarized as follows:
“We have had occasions to discuss the question here raised, and our conclusions have quite uniformly been that the mere fact that the defendant has-insurance has reached the ears of the jurors during* the trial does not constitute reversible error, unless-an improper use of it is made by counsel for the evident purpose of inflaming the passions of the jury and thereby affecting the result or increasing the size of the verdict,' Or unless such testimony was designedly injected into the case for such purpose -or purposes. See Sutzer v. Allen, 236 Mich 1; Nicholas v. Maxwell Motor Corp., 237 Mich 612; Morris v. Montgomery, 229 Mich 509; Nicewander v. Diamond, 302 Mich 239. In the instant cáse, the issue of defendants’ liability was not involved, and the record of the trial and proceedings is barren of prejudicial error.”
Under the circumstances here involved, we think that the trial court was not in error in denying the .motion to declare a mistrial, or in subsequently denying a.motion for a new trial based in part on such alleged error. The record does.not justify a conclusion that the matter of insurance was deliber ately injected into the case by counsel for the plaintiff. The statements of the trial judge as set forth in the excerpt from the record, above qnoted, could scarcely have failed to indicate to the jury that whether defendant carried insurance against public liability resulting from the operation of its automobiles was not involved in the case, and that in consequence the use of the term by tbe witness should be disregarded.
We find no reversible error in the case, and the judgment is affirmed, with costs to plaintiff.
Dethmbrs, Btttzel, Bushnell, Sharpe, Boyles, and Reid, JJ., concurred.
North, C. J.} did not sit.
CL 1948, §617.66 (Stat Ann §27.915).—Reporter. | [
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Carr, J.
Under date of December 16, 1948, the plaintiff instituted an action in the court of claims to recover a judgment for damages against the State of Michigan. Prom the petition filed by him it appears that his alleged cause of action was based on certain proceedings in the probate court of Kent •county which resulted in his commitment to the State psychopathic hospital at Ann Arbor for a period of 35 days, and subsequently to an adjudication that he was an insane person, followed by his commitment to the Kalamazoo State hospital. Plaintiff asserted in his pleading that as a result of such actions he sustained damages, that the proceedings against him were null and void because of the failure of the court to observe provisions of the statute relating thereto, and that, in consequence, the State of Michigan is liable for the various elements of damage sustained by him, as set forth in his bill of particulars.
Defendant moved to dismiss the ease on the general g'round that the facts stated were not sufficient “to constitute a valid cause of action against said defendant.” The motion was granted, the trial .judge concluding that under pertinent statutory provisions relating to the court of claims defendant was not precluded from raising the defense of governmental immunity, that the acts of the probate judge of Kent county of which the plaintiff complained were judicial acts for which the State cannot be held liable, and that the proceeding in the court of claims was not seasonably instituted. Plaintiff has appealed from the order of dismissal.
The case having been disposed of in the trial court on the issues raised by the motion, the well-pleaded allegations of fact in plaintiff’s petition must be accepted as true. It appears therefrom that on the 10th of June, 1927, plaintiff’s father filed in the probate court of the county of Kent a petition seeking plaintiff’s commitment to the State psychopathic hospital at the University of Michigan. Such order of commitment was made for a period not exceeding 35 days. Subsequently and under date of April 6,1928, plaintiff’s father filed a second petition in the probate court alleging that plaintiff was insane and seeking his admission to the Kal amazoo State hospital for treatment. As a result of the proceeding's taken, plaintiff was so committed as a public patient. The petition further alleges that the proceedings and orders of the Kent county probate court were null and void, and in violation of plaintiff’s constitutional rights because the petition by which the proceeding's were instituted was insufficient, no hearing to determine the matter of insanity was held, and plaintiff was denied the right to be present at a proper hearing held pursuant to the statute. Reference is made to PA 1923, No 151, § 11, which, as amended by PA 1925, No 283, was in force and effect at the time of the commitment. The petition alleges that by reason of the void proceedings plaintiff was injured in his reputation, was wrongfully deprived of his liberty, and has sustained financial losses.
Attached to the petition is a decree rendered by the circuit court for the county of Washtenaw on the 13th day of June, 1947. The record indicates that plaintiff herein brought suit against the commissioner of revenue of the State for injunctive relief. The case was not contested, defendant’s default being taken. The decree entered declared the orders and commitments of the probate court for the county of Kent, referred to by plaintiff in his petition, to be null and void, and recited that plaintiff had been deprived of his constitutional rights to his damage. In terms he was authorized to assert in any court of the State “any cause of action which may inure to him” because of the void commitments; and the defendant, the commissioner of revenue, was enjoined from instituting any proceeding against plaintiff to recover because of the expenditures by the State in caring for him in the State institutions.
Approximately 6 months after the entering of the default decree a motion to set it aside was denied. Plaintiff apparently relies to some extent on the recitals in such decree. Obviously, however, the statements referred to cannot be regarded as creating any new right of action in his behalf, or as imposing on the State any liability in addition to that, if any, created through legislative enactment.
The primary question at issue is whether the State of Michigan has by statute waived the right to assert governmental immunity in cases of the character here involved, and has subjected itself to liability therein. The court of claims was created, and its jurisdiction defined, by PA 1939, No 135, which, as subsequently amended, appears as CL 1948, § 691.101 et seq., as amended by PA 1948 (1st Ex Sess), No 47, and PA 1949, No 253 (Stat Ann 1951 Cum Supp §27.3548[1] et seq.). In section 8 of the act as originally passed in 1939 the court was given power:
“To hear and determine all claims and demands, liquidated and unliquidated,' ex contractu and ex delicto, against the State and any of its departments, commissions, boards, institutions, arms or agencies.”
Said section 8 (CL 1948, § 691.108 [Stat Ann 1951 Cum Supp §27.3548(8)]) was amended in certain respects not material in the instant case by PA' 1941, No 137, and PA 1945, No 199. The clause, above quoted, was not changed in any way. Plaintiff relies thereon, asserting that under its terms the State is liable to him for the damages alleged in his petition, and that the State has thereby waived its right to raise against him the defense of governmental immunity.
The question at issue is in effect one of statutory interpretation. In City of Grand Rapids v. Crocker, 219 Mich 178, 182, 183, it was said:
“There seems to be no lack of harmony in the rules governing the interpretation of statutes. All are agreed that the primary one is to ascertain and give effect to the intention of the legislature. All others serve but as guides to assist the courts in. determining such intent with a greater degree of certainty. If the language employed in a statute is plain, certain and unambiguous, a bare reading suffices and no interpretation is necessary. The rule is no less elementary that effect must be given, if possible, to every word, sentence and section. To that end, the entire act must be read, and the interpretation to be given to a particular word in one section arrived at after due consideration of every other section so as to produce, if possible, a harmonious and consistent enactment as a whole.”
See, also, Gardner-White Co. v. State Board of Tax Administration, 296 Mich 225; In re Chamberlain’s Estate, 298 Mich 278; In re Petition of Bryant, 323 Mich 424.
On the specific point in issue here the legislature, in the enactment of PA 1939, No 135, did not leave the question of intent to be determined by the application of general rules of construction. In section 24 of said act it was specifically provided:
“This act shall in no manner be construed as enlarging the present liabilities of the State and any of its departments, commissions, boards, institutions, arms or agencies.” (OLS 1940, § 13862-24, Stat Ann 1942 Cum Supp §27.3548 [24]). '
It will be noted that the quoted section was not in the form of a limitation on, or an exception to, any other specific provision or provisions of the act, but, rather, was a general statement with reference to the legislative purpose in the adoption of the act, and a guide for observance by the courts in its interpretation. It was accordingly held in Manion v. State Highway Commissioner, 303 Mich 1, and in Mead v. Michigan Public Service Commission, 303 Mich 168, that the legislature, by the court of claims act, had not waived or abrogated the right to rely on its sovereign immunity. See, also, McNair v. State Highway Department, 305 Mich 181.
It is a fair inference that the legislature in declaring that it was not its intention to enlarge the then existing liability of the State and its agencies had in mind the commonly accepted rule with reference to sovereign immunity. In 49 Am Jur, pp 315, 316, it is said :
“It is well established that by consenting to be sued the State does nothing more than waive its immunity from action. It does not thereby concede its liability in favor of the claimant or create a cause of action in his favor which did not theretofore exist. Thus, liability of the State for tort cannot be predicated upon- the fact that the State has entered its general statutory consent to be sued, directing the manner in which suits may be brought by those having claims against the State. Neither does a special statute permitting suits on particular claims concede the justice of the claims. Statutory consent to be sued merely gives a remedy to enforce a liability and submits the State to the jurisdiction of the court, subject to its right to interpose any lawful defense.”
In an annotation appearing in 169 ALB, p 105 et seq. many decisions relating to the question at issue are cited and discussed. The holdings are summarized in the following statement there made:
“The decisions discussed herein add further support to the uncontroverted proposition noted in the earlier annotation that a general statute authorizing suits against the State does not permit a recovery in actions in tort, upon the principle that the State is not liable for the torts of its officers, agents, or servants, and it will only be so liable upon its clear and definite consent.” ,
The general principle recognized is in accord with the decisions of this Court. Board of Supervisors of Sanilac County v. Auditor General, 68 Mich 659, 665; McDowell v. Warden of Michigan Reformatory at Ionia, 169 Mich 332, 337. See, also, United States v. Sherwood, 312 US 584 (61 S Ct 767, 85 L ed 1058).
Plaintiff concedes in his brief that under the act of 1939 as originally passed the State could avail itself of the defense of governmental immunity in tort actions brought against it in the court of claims. It is claimed, however, that the act in its present form should not be so construed because section 24, above quoted, was amended by PA 1943, No 237, and was repealed by PA 1945, No 87. As so amended, it read as follows:
“Upon the happening of any event subsequent to November 1, 1943, which gives rise to a cause of action, the State hereby waives its immunity from liability for the torts of its officers and employees and consents to have its liability for such torts determined in accordance with the same rules of law as apply to an action in the circuit court against an individual or a corporation, and the State hereby assumes liability for such acts, and jurisdiction. is hereby conferred upon the court of claims to hear and determine all claims against the State to recover damages for injuries to property or for personal injury caused by the misfeasance or negligence of the officers or employees of the State while acting as such officer or employee. Such claim must be submitted pursuant to procedural provisions of the court of claims act. The provisions of this act shall not apply, to (a) any claim for injury to or death of a prisoner, or for services rendered while ah inmate of a penal institution; (b) any claim arising out of the injury to or death of an inmate of any State institution in connection with, the rendition of medical or surgical treatment; (c) any claim for property damage or personal injury caused by the Michigan State troops and/or the national guard when called into the service of the State.” (CLS 1945, § 13862-24; Stat Ann 1944 Cum Supp § 27.3548 [24]). ¡
In Benson v. State Hospital Commission, 316 Mich 66, the constitutionality of said section, as amended, was sustained against the objection that it was not within the scope of the title of the act and, hence, violated article 5, § 21, of the State Constitution. There the cause of action arose while the amendment enlarging the liability of the State was in effect. It also appears that the action was brought in the court of claims and an appeal taken to this Court prior to the repeal of the section by the act of 1945, above cited. Since plaintiff seems to rely on this decision, it may be further noted that under the averments of his petition it does not appear that any cause of action in his behalf against the State, under the above-quoted amendment, arose during the period that it was in effect. He raises no question based on the theory that he became vested with rights.of which he may not be deprived by virtue of any provision of the statute that has since been repealed.
As above stated, section 24 of the court of claims act, as amended by PA 1943, No 237, was expressly repealed by PA 1945, No 87. Apparently by way 'of substitution for such repealed section, the following provision was enacted: ^
“In all actions brought iii the court of claims against the State of Michigan to recover damages resulting from the negligent operation by an officer, agent or employee of the State of Michigan of a motor vehicle of which the State of 'Michigan is owner as defined by Act No 302 of the Public Acts of 1915, as amended, the fact that the State of Michigan was in the ownership or operation of snch motor vehicle, engaged in a governmental function, shall not be a defense to such action: Provided, however, That this act shall not be construed to impose upon the State of Michigan a liability other or greater than the liability imposed upon- other owners of motor vehicles by the provisions of Act No 302 of the Public Acts of 1915, as amended.” (CL 1948, § 691.141 [Stat Ann 1951 Cum Supp § 27.-3548(41)].)
In substance, it is appellant’s claim that with section 24 eliminated from the original act the provision of section 8, above quoted, becomes subject to a broader interpretation than was previously given it, and that it must now be construed as imposing liability on the State in all- actions, ex contractu and ex delicto, and as abrogating the doctrine of governmental immunity in all such cases. Such claim is not justified by a fair interpretation of the language of the provision, nor is it in accord with the intent evidenced by legislative action. As before pointed out, section 24, as originally enacted, was not in the nature of a limitation on the provision of section 8 in question here, but was a legislative declaration of intention. The statute, including section 8, was construed accordingly. When the provision on which appellant relies was reenacted in PA 1941, No 137, and again in PA 1945, No 199, it must be presumed that the action was taken in the light of the prior construction placed on such provision and with the intent in mind, since there was no change in language, to adopt such construction, which was, obviously, in accord with the legislative intent existing at the time of the creation of the court of claims. McEvoy v. City of Sault Ste. Marie, 136 Mich 172; In re Chamberlain’s Estate, supra; Knapp v. Palmer, 324 Mich 694.
If, as appellant argues, the quoted provision of section 8 became subject to a new interpretation on the amendment of section 24, as adopted at the session of 1943, it is apparent that the object sought by such amendment might have been attained by a simple repeal. Apparently such was not the legislative theory. Acting on the principle that liability on the part of the State in actions ex delicto may result only from affirmative legislation clearly manifesting such intent, the amendment was adopted in the form hereinbefore quoted.
The conclusion would seem to follow, under plaintiff’s theory, that the attempt of the legislature by the enactment of PA 1945, No 87, § 1, to limit the liability of the State to cases of the character specified therein was ineffective to accomplish such pur-, pose. - If by virtue of the provision in section 8 the State is liable in all actions' ex delicto for the tortious conduct of its officers, agents, and employees, liability because of the negligent operation' of State-owned and operated motor vehicles obviously would be, included. In this connection- it may be noted that said Act No 87 became operative on September 6,, 1945, and that Act No 199 of the same year, which, reenacted the provisions of section 8 of the court of claims act, on which appellant relies, went into effect the same day. Relating to the same subject •matter they must be construed together for the purpose of determining the legislative intent. Reed v. Secretary of State, 327 Mich 108; Michigan Good Roads Federation v. State Board of Canvassers, 333 Mich 352. The conclusion follows that the provision of section 8 in question here may not be given the effect claimed by plaintiff.
The theory on which appellant relies is at variance with settled rules of statutory construction, and with the clearly expressed intention of the legislature with reference to the matter at issue. The claim that the State of Michigan has by statute waived the right to rely on its sovereign immunity in the instant case is not tenable. The provision of section 8 of the court of claims act, above quoted, may not be construed as claimed hy appellant. Such conclusion renders it unnecessary to consider the other questions in the case.
The order of the trial court dismissing plaintiffs petition is affirmed.
Dethmers, Btjtzel, Bttshnell, Sharpe, Boyles, and Reid, JJ., concurred.
The late Chief Justice North did not sit.
See CL 1948, § 330.21, as amended by PA 1949, No 313 (Stat Ann 1951 Cum Supp § 14.811). Amendments made since plaintiff’s commitment in 1927 are not involved in the controversy. | [
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Boyles, J.
Plaintiff Katberine Batbke brought suit against the city of Traverse City for damages resulting from a collision between an automobile wbicb she was driving on a street in Traverse City and a Ford pickup truck owned by tbe defendant, operated by defendant’s employee; also claimed damages by reason of an assignment to ber from ber husband of bis claim against defendant for tbe expense of hospital and medical care for bis wife, and for his loss of ber services as a result of ber injuries. Plaintiff Helen Bathke, a sister-in-law of Katherine Bathke, who was riding with Katherine at tbe time of tbe accident, also brought suit against tbe city for damages resulting from tbe accident, and likewise for damages by reason of a similar assignment from ber husband for bis damages. Tbe two cases were consolidated for trial before a jury. Separate verdicts of $15,000 for Katherine Bathke and $3,500 for Helen Bathke were rendered. Defendant’s motions for new trial were denied and judgments entered on tbe verdicts, from wbicb defendant appeals. Tbe cases are consolidated on this appeal, tbe same questions being involved in each.
Tbe city claimed governmental immunity as a defense to tbe suits; and also claimed that tbe assignments from tbe husbands were in effect assignments of rights of action wbicb were personal to them, claims for personal services wbicb would not survive and, therefore, not assignable. Tbe trial court ruled otherwise, and defendant now urges the same questions as grounds for reversal.
G-overnmental immunity. These consolidated cases were tried twice. During tbe first trial tbe defendant did not claim governmental immunity— it was conceded during tbe first trial that tbe city was acting in a proprietary capacity in tbe maintenance and operation of the pickup truck. At tbe second trial tbe defendant claimed governmental immunity as a defense. Plaintiffs now argue that the defendant is bound by the position taken by it on the first trial and cannot claim governmental immunity as a defense. There is no merit in the argument.
“Upon each new trial the case must be tried just as if it never had been tried before.” Donahue v. Klassner, 22 Mich. 252.
“A new trial is a rehearing of the cause before another jury, but with as little prejudice to either-party as if it had never been heard before. 3 Stephen’s Commentaries, 626.” Gott v. Judge of Superior Court of Detroit, 42 Mich. 625.
See, also, Shippy v. Village of Au Sable, 85 Mich. 280; Kruk v. Railway Co., 249 Mich. 685.
Under some circumstances, the defense of governmental immunity may be interposed in this court on appeal. Morris v. Radley, 306 Mich. 689.
Defendant claims that the trial court should
“have granted defendant’s motion for a directed verdict made upon the ground that the only liability claimed by the plaintiffs was that the defendant city failed to properly maintain and service the steering gear and brakes of its motor vehicle, and the proofs showed that the maintenance -and repair of city vehicles and equipment was performed by the street department which performed only a governmental function, and therefore the city was immune from liability.”
Plaintiffs claim:
“The facts do not support the defense of municipal immunity,”
and that
“The question of municipal immunity is not controlling in any event, because the trial court would have been justified in directing a verdict against the defendant because of acts of negligence^ occurring outside of the claimed municipal immunity.”
On April 1, 1942, the plaintiff Katherine Bathke was driving a Ford sedan in a northerly direction on the right-hand or easterly side of Woodmere avenue in the city of Traverse City. Woodmere avenue at the scene where the accident occurred is a gravel road 20 to 24 feet in width, rough and “washboardy,” with some loose gravel on the street, and a ridge of gravel in the center. Katherine Bathke was accompanied by her sister-in-law, Helen Bathke, the other plaintiff, who was riding in the front seat with her. The plaintiff Katherine Bathke was driving at approximately 25 to 30 miles an hour. A Ford pickup truck, owned by the defendant city of Traverse City and used by the municipal light department in a proprietary capacity, was being driven in a southerly direction on Woodmere avenue at a speed of 30 miles or more per hour, by one Gard Tharp, an employee of the light department, who was driving out to the private home of a customer of the light department to turn on the lights. The defendant’s truck was an old Ford pickup, purchased by the defendant city in 1937; prior to that time it had been owned by Michigan Bell Telephone Company, and it was of unknown vintage. The equipment repairman in the defendant city’s garage testified that the truck was in a worn-out condition. The brakes on the truck were in poor condition. Gard Tharp, the employee of the defendant city’s light department who was driving the truck at the time of the accident, testified:
“Q. Tell me, now, whether the brakes on that truck on the day you drove it were good or poor?
“A. I would say they were poor.”
He testified that within two or three weeks or a month before the accident he had reported the condition of the brakes to his foreman and that the defendant city’s garage had worked on them. He further testified:
“Q. After they worked on them, they still were not in good condition, were they?
“A. No.”
Another employee of defendant’s light department, who drove the truck part of each day, testified that previous to the accident while he drove the truck he found the brakes to be bad. That he also had reported them to the foreman about a month before the accident. That the truck was taken into the garage for work on the brakes but after it came out the brakes were still not very good. He testified:
“Q. How did you drive the car — were you able to drive that or did you drive it as fast as you would an ordinary car, on the road?
“A. No, sir.
“Q. Why not?
“A. We were afraid to.
“Q. Could you make a quick or reasonable or average stop in any distance with that truck that you could with an ordinary car or truck?
“A. No, sir.
“Q. When you had stops to make, how did you make stops?
“A. Well, we hardly ever drove it more than 20 miles an hour, and then we took time enough to stop it in time to make a stop-light, if we could.
“Q. With the brakes in the condition they were in?
“A. With the brakes in the condition they were in.
“Q. In other words, when you had to mate a stop, and you could foresee it, driving that truck, you would start slowing up in advance so the car would sort of brake itself?
“A. Yes, sir.
“Q. Was that the condition of the brakes on the day of this accident?
“A. To my knowledge, it was.”
Tharp also testified that he was afraid to drive the truck fast because of the brakes. He testified:
“Q. So, you didn’t have to apply the brakes there, because the ramp would slow you down? As a matter of fact, you have to drive that truck slow, because you didn’t dare to take a chance on the-brakes; isn’t that right?
“A. That is right.”
Tharp, the driver of the defendant’s truck, testified that when he was between 30 and 50 feet from the plaintiffs ’ car, without warning something went wrong and his truck started toward the wrong side of the road, that he turned his steering wheel, the truck continued to go toward the east and struck plaintiffs ’ car. He did not apply the brakes and the truck was going at approximately the same speed at the time of the impact as it was when it left its right-hand side of the road. Plaintiff Katherine Bathke testified that when she saw the city truck coming over to her side of the road about 150 feet away she drove over to the right-hand side of the road, slowed down and almost stopped-, against a sand bank at the side of the road. There was testimony that when defendant’s truck started to come over onto the wrong side of the road it was about 150 feet distant from plaintiff’s car. After defendant’s pickup truck started across the road plaintiff had slowed down from 20 or 25 miles an hour to 3 or 4 miles an hour, before her car was struck.
There was much testimony that certain parts of the steering apparatus of defendant’s truck were worn out and not properly maintained. The pitman arm and the drag link, connecting the steering post to the wheel of the truck, were in evidence. The defense was that the truck was maintained by the city garage 'operated by the city street department, a governmental agency of the city, and that therefore the city was immune from liability for negligence in the maintenance of the truck. However, it was established that the truck was operated by the city light department in a proprietary capacity and there was much testimony tending to prove negligence in the operation of the truck. It was the duty of the light department to use reasonable care to see that the brakes as well as the steering apparatus of the truck were properly maintained, as much as it was its duty to use due and reasonable care in the operation of the truck on the highway. Had the light department employed a private garage to grease, inspect and maintain the truck it could hardly be said that the city would be immune from liability in the operation of the truck in a proprietary capacity because the garage repairman was guilty of negligence in the inspection and maintenance of it. Plaintiffs claimed that the city was guilty of negligence, not only in failing properly to inspect and maintain the truck in proper condition for use on the highway, but also in failing to operate the truck in a reasonable and proper manner, to have, the truck under control, and to refrain from operating it on the highway at an unreasonable and excessive rate of speed in view of its condition. There was sufficient evidence of negligence to raise an issue of fact for the jury. The issue as to whether the verdicts are against the great weight of the evidence has not been raised in this court.
We next consider defendant’s claim that the court erred in allowing the assignments to be considered . as an element of damages. The assignments by each husband to his wife were the same, the one from Katherine’s husband being as follows:
“Know all men by these presents, that I, the undersigned Heber C. Bathke, for and in consideration of one dollar and other valuable considerations, to me in hand paid by my wife, Katherine M. Bathke, the receipt of which is hereby acknowledged, do hereby assign, transfer, and set over unto the said Katherine M. Bathke all of my right, title, and interest in and to a claim for damages against the city of Traverse City as set forth in the attached ‘claim for damages,’ and I do hereby give the said Katherine M. Bathke full power and authority, for her own use and benefit, to ask, demand, collect, receive, compound, and receipt or give acquittance for said claim or any part thereof, and in her own name or_otherwi.se, to bring, prosecute, and withdraw any suits and proceedings at law or in equity therefor. ’ ’
The claims for damages referred to in the assignments as filed with and against the city by each husband were also substantially identical, except that Katherine’s husband claimed that “she will be unable hereafter to pursue her duties as a housewife,” and Helen’s husband claimed that she “has been unable to pursue her duties as a housewife.” The claim as assigned to Helen concluded:
“That as a result of said accident the undersigned claims damages for the hospital, medical and surgical care and treatment of his wife both past and future, for the loss of her services as a result of said injuries, in the sum of $5,000.”
The claim for Katheriné was substantially the same, except the amount claimed was $10,000.
Defendant’s claim of error because these assignments were included as a part of plaintiffs ’ cases is stated as follows:
“Did the court err in permitting the plaintiffs to introduce in evidence assignments to plaintiffs of their husbands ’ claims for loss of services because a right of action for loss of services is a personal right, and not assignable, and further because it allowed the splitting of a cause of action1?”
. As argued in defendant’s brief, the substance of this claim of error goes further than a mere question of admissibility of evidence. As a result of admitting the assignments in evidence and receiving testimony as to the damages claimed by plaintiffs under these assignments, the court submitted to the jury certain elements of damages claimed to have been covered by the assignments. During the trial, in the course of plaintiff’s testimony to prove damages, defendant objected to receiving the assignments in evidence on the ground that these assignments were attempts to assign claims for loss of services, which were not assignable. Counsel for plaintiffs thereupon stated his claim to the court (in the presence of the jury):
“We claim, if the court please, that there would arise to him a right of action for all the expenses of the hospital, medical, and doctors; there would be a loss of services of the wife in connection with such of the household duties as she would have performed had it not been for the injuries.”
The court received the assignments in evidence, ruling as follows:
“You may have it in evidence, but I will say this: The services that may be claimed under this assignment must be solely the household services. It can not be services of the wife working ont somewhere,” and counsel for plaintiffs conceded:
" That' is right. That is for the wife to recover herself.”
Later, after some discussion between the court and counsel, plaintiffs ’ attorney stated in open court the specific items claimed under each assignment, as follows:
“In the case of Katherine Bathke, in the assignment of claims from her husband to her, we claim the assignment covers these items, concerning which proof was offered: Dr. • Brownson, $150; Munson Hospital, $295.20; X-ray in Detroit, $10; 25 treatments in Detroit at $2 each, $50; board at the plaintiff’s mother’s home, five weeks at $10, $50; insurance, deductible, $25; laundry, 28 weeks at $2.50, $70. And the future expense, the probable future expense of removing the nail from the ankle, if the jury is satisfied under the evidence that at some later time it will have to be removed, of $225 — or whatever the jury believes would be adequate. Those are the only items that we claim now are covered by the assignment from Heber Bathke. I cannot recall — I don’t now know of any others that might be necessary in the future, unless the jury might find there would be some additional medical expense. * * *'
“Now, in the case of Helen Bathke, the items we claim are covered by the assignment are: The statement from Dr. Lemen, $24; Munson Hospital, $57.75; X-rays in Traverse City, $10; Dr. Manting, $5; daughter’s board, two weeks at $5, $10; Mrs. Bathke’s board for one week, $10; one coat, $35; Dr. Pinchert in Dearborn, 10 calls at $2, $20. Those are the only items that we now claim are covered by that assignment.”
This testimony was received without further objection. Plaintiffs had eliminated from the claims assigned by the husbands any claim or proof of loss of the services of their respective wives. The total amount thus claimed for Katherine Bathke under her husband’s assignment was $875.20, and the total similarly claimed for Helen Bathke was $171.75. Under the course thus charted by counsel for plaintiffs in presenting proofs of damages, and as allowed by .the court, there is no merit in defendant’s argument that the court erred in receiving evidence of damages for the husbands’ loss of services of their respective wives. The court did not receive such evidence, and that is a complete answer to the argument. Plaintiffs’ counsel, in presenting their claims to the jury in his argument, correctly itemized the amount of their respective claims, in accordance with the proofs, and further argued that plaintiffs were entitled in their own right to certain amounts for loss of their own earnings during the time they were prevented from working as a result of their injuries. Each had been working at a garment factory and receiving $16 per week. It was claimed that each was entitled to damages for loss of earnings, covering the time they were incapacitated. There was proof that Katherine Bathke was permanently injured, that she would never be able to work again, and that it would be some time before Helen Bathke would be able to resume work. Damages were claimed on behalf of both plaintiffs for future loss of earning capacity. Defendant does not attempt to argue that plaintiffs could not include as an element of their damages their loss of earnings during incapacity, and their loss of future earning capacity. Such earnings would be their own,' not merely a part of their husbands’ claims for loss of services. The court, in submitting the question of damages to the jury, properly charged that plaintiffs could recover for the amounts their respective husbands had expended or incurred liability for, or might be compelled to expend, on account of plaintiffs’ injuries. Under these circumstances, we find no error in admitting the assignments in evidence and allowing consideration of damages within the ruling of the court.
Defendant claims the court erred in denying its motion for new trial on the ground that the element of insurance was injected into the trial. We have examined the record. The only possible showing of any connection with insurance is that an attorney, not representing plaintiff Katherine Bathke or her husband and not shown to be connected with an insurance company, called on her several times while she was in the hospital, asking for a statement; and that someone else, not shown before the jury to be identified with any insurance company, was allowed by a court officer to sit for a time inside the rail of the courtroom. If there were any merit in this claim of error, the court should require attorneys and others present during a trial to wear badges or otherwise identify themselves if they were connected with an insurance company. There is no merit in this claim of error. See White v. Makela, 304 Mich. 425.
Defendant claims error in the court’s charge to the jury because the court in the course of instructing the jury said:
“And it is the duty and obligation of every driver to avoid, so far as possible, endangering the life or limb of other persons, as well as their property.”
Standing alone, without any other instruction on the subject, this would constitute reversible error. It would hold the defendant to a higher degree of care than the law demands. Pearl v. Detroit United Railway, 188 Mich. 84; Simmons v. Petersen, 207 Mich. 508. But a charge must be considered in its entirety, and error will not lie on a detached part óf a sentence where the whole charge fairly submits the issues and states the law. Freeman v. Hoag, 217 Mich. 587; Finkel v. Otto Misch Co., 291 Mich. 630. The entire sentence in the court’s charge, from, which appellant’s quotation is gleaned as ground for reversal, was:
“I shall make this suggestion: It is a provision of the law of this State that every person driving a vehicle on the highway shall drive the same at a careful and prudent speed, not greater nor less than is reasonable and proper, having due regard for the traffic, surface and width of the highway, and of any other condition then existing; and it is the duty and obligation of every driver to avoid, so far as possible, endangering the life or limb of other persons, as well as their property.”
The concluding part of this sentence might well have been omitted, but it did not affect the result and we hold this inadvertent statement to be harmless error when considered with other parts of the charge.
The gist of plaintiffs’ claim of negligence on the part of the defendant city was that the defendant failed to properly inspect, and to maintain, the steering apparatus of its truck in safe condition, that the truck was not properly equipped with brakes, that in its known condition it was carelessly driven at an excessive and unsafe rate of speed on a rough ‘ ‘washboard” road without knowing or heeding the distance it would take to stop the truck. The court’s charge was complete, fair and accurate on the essential elements of the case. The elements to be considered by the jury in computing damages, if the jury reached that phase of the case, were carefully and properly explained. Each of the requests to charge submitted by both the plaintiffs and the defendant was given by the court. The duty of the defendant and its employees was fully and completely and correctly given. The terms negligence, contributory negligence, proximate cause, burden of proof, and all of the other elements were carefully defined. The law in reference to unavoidable accidents was emphasized by repetition at the request of, the defendant. So, also, was the law in reference to sudden emergencies and the care required. At the conclusion of the charge, the court asked counsel for both parties whether there was anything else they could think of. No further suggestions were made, no objections stated.
There is no occasion to find error by selecting isolated sentences from the charge. As a whole, it accurately and fairly submitted the issues of fact to the jury. We fail to find any reversible error on account of the charge.
The verdicts were in a considerable amount— $15,000 in the case of Katherine Bathke and $3,500 for Helen Bathke. The proofs showed that Katherine Bathke had sustained serious, painful and permanent injuries, that she will continue to suffer pain during the rest of her life as a result of the injuries, will always have difficulty in walking, may ultimately require aid to get around. In addition, there was proof'of permanent loss of earning capacity. She was 29 years of age, with an expectancy of approximately 40 years, previously in good health, suffered a broken ankle, was hospitalized for more than two months with a limb in a cast from foot to hip for 6 or 7 weeks. The verdict was well within the range of the testimony as to actual damages, permanent injury, pain and suffering, and loss of earning capacity. We do not substitute our opinion for that of the jury, especially where permanent injuries and pain and suffering are an important element of the damages. In the ease of Helen Bathke, the proofs show she was 23 years of age, a high school graduate, her face was disfigured by the accident, she was still suffering pain, was otherwise injured. We do not hesitate in holding that the verdicts were not excessive. The trial court was not in error in denying defendant’s motion for new trial on that ground.
Judgments affirmed.
North, C. J., and Starr, Wiest, Butzel, Bush-hell, Sharpe, and Reid, JJ., concurred. | [
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Butzel, J.
Plaintiff’s guardian in her declaration alleged that Prances Merskin, the owner, and Clarence Plotkowski, her brother, the driver of an automobile, defendants herein, were guilty of “gross and/or wilful and/or wanton negligence” in the operation of. an automobile, resulting in serious injuries to plaintiff’s ward, a pedestrian. No claim is made that defendant Merskin was responsible in any manner except that as owner of the car she was liable for injury under 1 Comp. Laws 1929, § 4648 (Stat. Ann. § 9.1446), which reads as follows:
‘ ‘ The owner of a motor vehicle shall be liable for any injury occasioned by the negligent operation of such motor vehicle whether such negligence consists of a violation of the provisions of the statutes of the State or in the failure to observe such ordinary care in such operation as the rules of the common law require.”
The jury rendered a verdict against both defendants for a substantial amount, and answered in the affirmative the special question propounded as to whether defendant Plotkowski was guilty of gross negligence. The record indicates that no such question was submitted as to defendant Merskin. Plaintiff thereupon filed a motion asking the trial judge to enter a judgment for the amount of the verdict against both defendants for gross negligence. This the judge declined to do, saying that he would enter judgment against defendant Merskin for .ordinary negligence, and against defendant Plotkowski for gross negligence. He further stated that Merskin was not guilty of gross negligence, but that the judgment would stand in accordance with the verdict of the jury which had found defendant Plotkowski, the driver of tbe car, guilty of gross negligence. The trial judge stated in his opinion that the legislature never intended to make the owner of the car, under the facts as presented in this case, guilty of gross negligence.
Plaintiff was granted leave to appeal, because she sought to have the question of the owner’s liability for gross negligence determined, in view of the statute, section 4648, supra, hereinbefore quoted. She frankly stated that she wanted the judgment in the form requested so as to oppose the granting of petitions by owners for a discharge in bankruptcy which might be filed in this and similar cases. The appeal is in the nature of certiorari. The question is presented on a very meager record.
Cases from other States are not helpful. In fact, our attention has not been called to any case where the precise question based on similar facts has been adjudicated.
The statute relied upon (section 4648, supra), in imposing liability upon the owner, refers to liability for the “injury” arising out of the “negligent operation” of a car by its driver. Except as hereinafter indicated it does not speak of gross negligence. The liability is purely a statutory one in derogation of the common law under which there was no liability on the part of the owner under the circumstances of this case. See Hartley v. Miller, 165 Mich. 115 (33 L. R. A. [N. S.] 81, 1 N. C. C. A. 126). The statute must be strictly construed and we may not go beyond it to impose liability. Under the law of this State, gross negligence and ordinary negligence are of different character. The former is not a higher degree of the latter, for we do not subscribe to the doctrine of comparative negligence. Gibbard v. Cursan, 225 Mich. 311; Finkler v. Zimmer, 258 Mich. 336. Ordinary negligence does not signify the wantonness or wilfulness that are necessary elements of gross negligence, which, however, does include ordinary negligence combined with a wilful and wanton disregard for public safety. Schlacter v. Harbin, 273 Mich. 465; Finkler v. Zimmer, supra; Bobich v. Rogers, 258 Mich. 343; Wyma v. Van Anrooy, 260 Mich. 295; Grabowski v. Seyler, 261 Mich. 473; Mater v. Becraft, 261 Mich. 477.
The statute imputes ordinary negligence, not gross negligence, to the owner in making him respond in damages for the injury. The owner’s liability for an injury is the same whether the driver is guilty of gross or ordinary negligence. The statute imposes liability only because of negligent operation. Since the driver would be guilty of negligent operation if he committed an act of ordinary or gross negligence, the owner is liable in each case for the ordinary negligence committed. As stated in Howton v. Kearns, 226 Mich. 20, “the greater includes the lesser and a plaintiff may recover for ordinary negligence where he has alleged gross negligence as that term is commonly understood.” The principle is paraphrased in White v. Center, 218 Iowa, 1027 (254 N. W. 90), as follows:
“One who is guilty of negligence may not be guilty of recklessness, but one who is guilty of recklessness is also guilty of negligence.”
Plaintiff calls attention to Lucas v. Lindner, 276 Mich. 704, and Goss v. Overton, 266 Mich. 62, where the owner was held liable to a guest passenger because of the gross negligence of the driver. There was no request to include the term gross negligence in the judgment of either of these cases. The statute (section 4648) contains the following proviso:
“That no person, transported by the owner or operator of a motor vehicle as his guest without payment for sneb transportation shall have a cause of action for damages against such owner or operator for injury, death or loss, in ease of accident, unless such accident shall have been caused by the gross negligence or wilful and wanton misconduct of the owner or operator of such motor vehicle and unless such gross negligence or wilful and wanton misconduct contributed to the injury, death or loss for which the action is brought.”
It will be seen that liability under the guest passenger act attaches to the owner or operator only in the event of gross negligence or wilful and wanton misconduct of the owner or operator of the car. The statute, while imposing this liability for the injury, does not make the owner guilty of the gross negligence of the driver though the owner remains responsible for the injury resulting from the negligent act of the driver.
Even had the judge entered a judgment for gross negligence against the owner, we have not before us the question of whether a discharge in bankruptcy would release her, nor whether a judgment of this character would be within the exception that precludes a bankrupt from obtaining a discharge from a liability arising out of wilful and malicious injuries to the person or property of another. Bankruptcy Act, § 17 (2) (11 USCA, § 35). We, however, call attention to Bonnici v. Kindsvater, 275 Mich. 304, wherein we also stated that the court may examine the entire record supporting judgment to ascertain whether it is covered within the bankruptcy act excepting wilful and malicious injuries to person or property from release by discharge. Also, see Horner v. Nerlinger, 804 Mich. 225.
The order of the trial judge, refusing to insert in the judgment against appellee the further statement that she was guilty of gross negligence, is affirmed, with costs to appellee.
North, C. J., and Starr, Wiest, Bushnell, Sharpe, and Boyles, JJ., concurred. Beid, J., took no part in the decision of this case. | [
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Reid, J.
These 2 cases were consolidated for purposes of trial. In each case separately the plaintiff appealed hut the appeals are submitted on one record. The plaintiffs in the 2 cases are husband and wife. Jury trial was waived in each case and the cases were tried by the court without a jury. In each case the finding and judgment was in favor of the defendants.
The cases were brought to recover damages claimed by the plaintiffs to have been sustained by reason of an automobile owned by defendant Hart-wick and driven by defendant Kopaczewski, colliding with the rear end of an automobile driven by plaintiff Rollin C. Gordon. The accident occurred on US-23 about a mile north of Kawkawlin in Bay county at about noon on September 24, 1946. The day was bright and clear and the pavement was dry. At the point of the accident there is a 3-lane highway of cement, which was level and straight. The highway consisted of three 11-foot slabs, a total of 33 feet in width, with gravel shoulders about 8 or 10 feet wide. Plaintiff Rollin C. Gordon was driving his Oldsmobile two-door sedan south, accompanied by his wife, plaintiff Beatrice M. Gordon.
•Plaintiffs claim that Gordon was driving in the west lane, had been going 40 to 45 miles per hour, and slowly decelerated to a speed of approximately 20 miles per hour; that shortly before the accident Mr. and Mrs. Gordon intended to stop at a place of business along the highway to look at some stones about which they knew, which were apparently displayed there for sale purposes; that as they approached this place Gordon slowed down his auto mobile and intended to park it on tbe west shoulder of the highway south of a car with two-wheel trailer attached which had been parked on said shoulder near the pavement in front of the place where the stones were on exhibition. Plaintiffs claim that as Gordon prepared to turn off the pavement on the right shoulder, the Gordon car was Struck in the left rear by the defendant car with so great violence that the back of the Gordon car and the gasoline tank were stove in and articles in the trunk of the car were smashed up against the back seat and that the front seat of the Gordon car was broken from its attachment to the floor of the car, that each of the two plaintiffs suffered great personal injuries, and that the Gordon car was driven so that it turned at a right angle to the pavement and struck the pile of stones which were on. display.
Plaintiffs claim that the collision was caused by the sole negligence of defendant Kopaczewski, who was driving the car owned by Hartwick at an excessive speed, that Kopaczewski did not have his car under control so as to be able to stop within the assured clear distance ahead, did not observe the proper rules for passing the Gordon car, and did not do everything he could have done to avoid the accident. Plaintiffs further claim that defendant Kopaczewski was arrested because of his negligent actions on this occasion and paid the costs of prosecution, as an acknowledgment that he had violated the rules of the road.
Defendants claim that plaintiff Gordon was negligent because he did not observe that defendant car was near behind him when he slowed for the purpose of observing the pile of stones, that- after applying his brakes, the Gordon car swerved to the left into the middle lane at least so far that the front of the car was 3 feet into the center lane, and defendants claim this blocked off the defendant driver so that he could not pass the Gordon car, because of the approach of a car from the south on the easterly lane.
The trial judge found that the left side of the plaintiffs’ car was a short distance over on the center lane at the time of impact, and there was no testimony of proper observation by the driver to the rear or signal before turning into such center lane. The trial judge found that each of the plaintiffs had failed to establish negligence of defendant driver and freedom of plaintiff driver from contributory negligence, and that the plaintiffs had failed to meet that burden on each of such questions. While both plaintiffs deny that their car swerved into the center lane even a few feet, still there is testimony to sustain the finding of the trial judge on the question of plaintiff Rollin C. Gordon’s contributory negligence. We do not find that the testimony clearly preponderates against that portion of the finding; by the trial court, and the judgment of no cause of action as to plaintiff Rollin C. Gordon is affirmed.
This leaves for our consideration the question of the negligence of defendant Kopaczewski in the case of plaintiff Beatrice M. Gordon. The negligence of Rollin C. Gordon, the driver, is not imputable to his wife, Beatrice M. Gordon. Bricker v. Green, 313 Mich 218 (163 ALR 697).
It is necessary to consider in some detail the testimony of defendant Kopaczewski. His father-in-law Byron Hartwiek was with him but was not sworn as a witness. The testimony as to defendant Kopaczewski’s control of his car preceding the accident is chiefly the testimony of Kopaczewski himself, together with evidence as to skid marks on the pavement. The testimony of Kopaczewski is not self-consistent; his testimony is full of self-contradictions, so that it is difficult to find out exactly from his testimony what he did preceding the .impact. However, he does say that he did not see plaintiffs’ car until he was 50 feet back of it. Kopaczewski testified:
“Q. How far were you behind the car when you first saw him, the lights ?
“A. About 50 feet.
“Q. 50 feet. You will say 50 feet?
“A..Within about 50 feet.
“Q. You were 50 feet and he was then turning, according to your testimony, in to the left, is that right?
“A. Not until after I applied the brakes.”
Further on in his testimony defendant says:
“Q. Now, let us get this story again. You said you saw his lights 50 feet.
“A. I didn’t say 50 feet.
“Q. You were 50 feet behind when you first saw the fights?
“A. I saw the car.”
Defendant Kopaczewski nowhere in his testimony claims that he saw plaintiffs’ car any further distance away than the 50 feet mentioned in the two excerpts just cited. At one time in his testimony he said:
_ “Just prior to the accident I would be going possibly around 45, and as I approached the scene of this accident Mr. Gordon’s car was going about the same speed as my car was because we were traveling in the same direction.” .
Defendant further testified:
“Q. You were in the same lane he was in, weren’t you?
“A. That is right.
“Q. At all times?
“A. Sure.
“Q. Never left it?
“A. All except when I see he applied his brakes and pulled in the left lane, I tried to pass him.”
Another time in his testimony, defendant testified:
“I was in this center lane at the time of the accident and I hit Mr. Gordon’s car on the left rear.
“Q. Left rear. And your right-hand side of the car was damaged, right?
“A. Right front.
“Q. So therefore, you turned abruptly to the left, didn’t you, to try to avoid the accident?
“A. That is right. To the left, yes.”
At another place in his testimony defendant testified :
“If he had stayed in the right-hand lane, I would have had an opportunity to go by him in that manner. He just had his front end just started to turn at the impact.”
There was conflicting testimony as to skid marks of defendant’s car. Witness Confer testified that he found the skid marks “come across the black mark, and into the center lane,” that the skid marks were first in thé west lane and his best recollection is that they were in the neighborhood of 21 feet long.
Witness Barkell, upon being recalled, testified:
“Q. How far to the west of this center line with reference to these 2 lines, did your skid marks first start, to the best of your recollection?
“A. That I wouldn’t venture to state, because I hadn’t measured them.
“Q. But they did start back there in the other lane ?
“A. That is right. Right back here.
“Q. So, if you are to extend this line up further, it would show the skid marks started in this lane here, is that right?
“A. It would be 9 paces or 27 feet.”
While the testimony is somewhat uncertain and conflicting, there can he no doubt that defendant Kopaczewski did nothing whatsoever to decelerate until he was somewhat nearer than 50 feet to the plaintiffs’ car. He had paid no attention to that car until he was within 50 feet of it, and did not know that the plaintiffs’ car was slowing down until he saw the rear lights come on.
That defendant Kopaczewski traveling at 45 miles an hour or even at his claimed lower speed of 35-miles an hour, came within 50 feet of the car ahead of him without seeing it or at least without paying any attention to it, is persuasive proof of his negligence. In this case defendant driver claims he did all that he could after he saw the red lights of the car ahead of him, to avoid the collision, lout was unable to do so. There is persuasive evidence that defendant driver was guilty of violation of the statute, CL 1929, § 4697, as amended by PA 1939, No 318 (Comp Laws Supp 1940, § 4697 [Stat Ann 1946 Cum Supp § 9.1565]), the pertinent part of subd (a) of which is as follows:
“No person shall drive any vehicle upon a highway at a speed greater than will permit him to bring* it to a stop within the assured clear distance ahead.”
The fact that the collision was a rear-end collision is presumptive evidence of negligence on the part of the driver of the following car.
“In any action, in any court in this State when it is shown, by competent evidence, that a vehicle traveling in a certain direction, overtook and struck the rear end of another vehicle proceeding in the same direction, or lawfully standing upon any highway within this State, the driver or operator of such first mentioned vehicle shall be deemed prima facie guilty of negligence. This act shall apply, in appropriate cases, to the owner of such first mentioned vehicle and to the employer of its driver or operator.” CL 1948, § 256.511 (Stat Ann § 9.1691).
In addition, defendant Kopaczewski admits that he was arrested on account of his actions in the matter of this collision, and paid the costs. Defendant Kopaczewski’s own testimony shows him guilty of negligence. The finding of the trial judge that defendant Kopaczewski was not shown guilty of negligence causing the injuries complained of is against the clear weight of the evidence.
Defendants did not claim in the trial court nor on appeal in this Court that plaintiff Beatrice M. Cordon failed to show herself free from contributory negligence.
The judgment in the case of Beatrice M. Cordon against Don Hartwick and Joseph Kopaczewski is reversed and new trial ordered. Costs to plaintiff Beatrice M. Cordon.
In the case of Rollin C. Cordon v. Don Hartwick and Joseph Kopaczewski, the judgment of no cause of action is affirmed, with costs to the defendants.
Sharpe, C. J., and Bushnell, Boyles, North, Dethmers, Butzel, and Carr, JJ., concurred.
This section, as amended, by PA 1947, No 354, appears as CL 1948, § 256.305. — Reporter. | [
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