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Wiest, J.
This case was commenced before a circuit court commissioner to recover possession of premises under a complaint alleging plaintiff to be the owner and that “defendant is a trespasser under him.” Defendant moved to dismiss the proceeding, alleging that, as trustee under a mortgage contain ing an assignment of rents, he was, of right, in possession and his right to so continue had been adjudged in three mentioned cases in the circuit court. Plaintiff countered by claim that defendant held all of the trust mortgage obligations and, therefore, had no rig*ht to possession. The commissioner held that he was without jurisdiction to adjudicate rights under the mortgage. Upon appeal to the circuit court the motion to dismiss was again pressed. The circuit judge, limiting consideration to matters within jurisdiction of a circuit court commissioner, made the same finding and dismissed the appeal. Plaintiff prosecutes an appeal in the nature of mandamus, asking that the circuit judge be directed to restore the appeal from the circuit court commissioner.
The record is unsatisfactory. No testimony was taken and, outside of the motion made before the circuit court commissioner and its supporting affidavit and renewal thereof in the circuit, we have but the colloquy in the circuit court. It is clear, however, from statements of counsel for plaintiff made before the circuit judge, that plaintiff cannot succeed unless the trust mortgage is adjudged to have become a mere mortgage as to an individual by reason of events subsequent to its execution and contrary to its import and terms. ■ Such a determination commanded the exercise of judicial power not within the jurisdiction of a circuit court commissioner. ■
The circuit judge was in error in thinking the case was on the border line of trying title. Title, subject to the trust mortgage, is without question, so far as this case is concerned, in the plaintiff, but right to the rents and such possession as may be necessary for the collection thereof, is in defendant, unless and until the mortgage contract to such effect is held void. Such an issue is not within the scope of a summary proceeding to obtain possession.
Writ denied, with costs to defendant.
Nelson Sharpe, C. J., and Potter, North, Fead, Bushnell, and Edward M. Sharpe, JJ., concurred. Butzel, J., did not sit. | [
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Wiest, J.
This action was brought against defendants to recover damages for alleged assault and battery. The jury found a verdict of $1,500 against one defendant and, when asked by the court, “Against Frank Knowles? Just the one verdict?” answered: “That is all.” Thereupon the court entered judgment on the verdict against defendant Frank Knowles and, on motion of plaintiff’s attor ney, dismissed the suit, with costs, as to defendant Walter Knowles.
Defendants were conservation officers and discovered plaintiff illegally spearing fish in a river. Plaintiff sought to escape and was pursued and overtaken by Walter Knowles and held until Prank Knowles arrived, and was then taken into custody and to the county jail.
Plaintiff claimed that Walter Knowles, while pursuing him, struck him on the back of the head and finally threw him to the ground and sat upon him for about five minutes, until Prank Knowles arrived and then Prank struck him on the back of the head. Walter admitted striking plaintiff several times on the back of the head with the butt end of a revolver, in order to overcome his resistance to arrest, and Prank Knowles denied striking him at all.
At the trial defendants contended that plaintiff’s proofs showed. separate assaults, and asked that plaintiff be required to elect which assailant he would proceed against. The court refused to require an election and, at the close of the proofs, sent issues to the jury involving joint and several assaults and permitted joint or several verdicts, with instruction as to damages, thereunder. Defendant Prank Knowles, upon appeal, contends that there was no valid verdict and the court had no right to supplement the verdict by judgment of dismissal against Walter Knowles.
We find no occasion to determine whether the verdict was defective in not making any return as to Walter Knowles. Walter is not complaining, and Prank may not make it his grievance.
Plaintiff and two others were spearing suckers, steelhead trout and pickerel, by aid of a jack-light, when he discovered what he believed to be game wardens approaching, and knowing it was illegal to spear fish, tried to escape apprehension by flight. Plaintiff took off his boots to aid in his flight, claims that as he was running away Walter Knowles pursued and struck him, that he fell, got up and ran again, was struck again, fell, got up and ran, was struck the third time on the back of the head and fell and lay with Walter sitting on him until Frank came up and struck him, and then he was unconscious until he came to in the county jail.
Walter admitted striking plaintiff on the back of the head with his revolver, and claims he did so to overcome the resistance plaintiff was making by way of an assault upon him.
We find it necessary to consider but three grounds alleged for reversal. Upon cross-examination of Frank Knowles, the following occurred:
“Q. Mr. Knowles, it is a fact, is it not, that you make a practice of beating up fellows?
“Mr. Matthews: I object to that.
“Mr. Wetmore: I will take that,up as a question of law and submit authorities. We are asking this question in good faith, and I expect to follow it up. # # *
“The Court: I will sustain the objection. Proceed.
“Q. It is true that you were sued and found guilty of beating up a man by the name of Earl Davis, were you not?
“Mr. Mattheivs: I object to that and ask for a mistrial at this time.
“The Cou-rt: I sustain the objection, and instruct you not to consider it for any purpose, gentlemen of the jury.
“Mr. Wetmore: I could pursue this further, but I will take the ruling of the court as it is.”
The remark by counsel, after the court had sustained the objection and instructed the jury to pay no attention thereto, was prejudicial and well cal culated to impress upon the jury the thought that counsel could pursue the subject further with benefit but for interference by the court.
Injuries inflicted by Walter Knowles could not be charged to Frank Knowles. All the evidence showed injuries were inflicted by Walter before Frank came on the scene. The verdict in this case indicates that Frank was cast in damages, in great part at least, for injuries inflicted by Walter.
The verdict was also against the great weight of the evidence. Plaintiff was apprehended along about three o’clock in the morning and taken to a doctor’s office at Ludington about four o’clock in the morning. The doctor found six or seven small scalp wounds, varying in length from a half inch to an inch, and caused, evidently, by something heavy and blunt and not by a man’s fist. The doctor testified that plaintiff, at that time, was not in bad physical condition, was able to sit up in a chair while he did the dressing, was not bleeding profusely, the cuts did not require any sutures or stitches, nor were they gaping wounds, and were just covered up with a surgical dressing; that he talked with plaintiff and plaintiff fully cooperated with him while he was doing the work, and there was no sign of any unresponsive condition at all, and he walked out of the office with the officer and seemed perfectly able to walk and function in that way. Yet plaintiff testified that, from the time Frank hit him he remembered nothing for he was unconscious until he was in the- jail and his head was being examined, and the next he remembered after that was in a hospital in Ludington.
Plaintiff also testified:
“I don’t remember talking to Dr. Gray. I don’t remember having adhesive tape stuck on my head. I don’t remember going down to the justice court; I don’t remember talking to people in the justice court; I don’t remember anything at all about that.”
Complaint was made against plaintiff before a justice of the peace the day of his arrest, charging him with unlawfully hindering, obstructing and interfering with a county officer, appointed by the director of conservation, while such officer was engaged in arresting him for violation of the conservation law. The same day he was taken before the justice the complaint and warrant were read to him and he was asked if he understood the charge and stated he did and said he was guilty and, upon his plea of guilty, he was fined $50 and costs, or 30 days in the county jail. The fine and costs were paid May 3, 1932.
Plaintiff knew he was violating the law in spearing fish. He endeavored to evade apprehension and, beyond question, was injured by blows on the back of his head, inflicted by Walter Knowles, and there w;as no support to his testimony that Frank struck him and rendered him unconscious during the dressing of his injuries and plea of guilty when arraigned before the justice, yet the jury cast Frank in damages and found no verdict at all as to Walter.
Whether Walter was justified in striking plaintiff with his revolver was a question of fact for the jury and, evidently, the jury found justification, otherwise the failure to return a verdict against Walter is unexplainable.
For the reasons pointed out the judgment is reversed as to Frank Knowles, and a new trial granted, with costs.
Nelson Sharpe, C. J., and Potter, North, Fead, Butzel, Btjshnell, and Edward M. Sharpe, JJ., concurred. | [
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Nelson Sharpe, C. J.
In the declaration filed in this case it was alleged, in substance, that the defendant Hurwich was the president and treasurer of the St. Joseph Board & Paper Company, the defendant Nicely the vice-president and general manager, and the defendant Furkas an employee thereof; that on July 13, 1927, plaintiff, at the request of said company, issued a policy in the sum of $5,000 insuring the company against loss and damage by fire to certain buildings constituting its plant at the city of St. Joseph; that the buildings insured were situate upon lands owned by one Frank S. Bicking and under lease with option to purchase, in which said Hurwich and Nicely were lessees and who had assigned their interest therein to the company. The concluding paragraphs read as follows:
“8. Thereafter and on the 29th day of January, 1928, the said defendants, unlawfully conspiring together to defraud the plaintiff, caused the buildings so insured to be set afire, from which fire a loss resulted, the plaintiff’s portion of which was the sum of $4,310.34.
“9. The said defendants individually and as officers and employees of St. Joseph Board & Paper Company thereafter presented to the plaintiff proofs of loss, and the plaintiff paid to the St. Joseph Board & Paper Company, as a result of said fire and in settlement of its proportion thereof, the sum of $4,310.34 for which amount, with interest from date of payment, the plaintiff now claims judgment.”
The answer of the defendants Hurwich and Nicely contained a denial of liability. The default of the defendant Furkas was duly entered. The order therefor provided “that the assessment of damages herein shall be by the court or jury upon the trial of the principal issue.”
After the proofs had been submitted, the trial court directed the jury to find a verdict against the defendant Furkas for the amount of plaintiff’s claim. He instructed them that, to entitle the plaintiff to recover against the other defendants, they must find that they entered into a conspiracy with Furkas to burn the buildings, and that, pursuant thereto, the fire was set and the buildings destroyed by it. The jury returned a verdict against all of the defendants for the amount of plaintiff’s claim. De fendants Harwich and Nicely, hereafter called the defendants, have appealed.
As its first witness, the plaintiff’s attorney called the defendant Furkas for cross-examination under the statute (3 Comp. Laws 1929, § 14220). He denied that he entered into a conspiracy with the other defendants to burn the buildings. He also denied that he had personally set the fire which destroyed them. He admitted that he was at that time an employee of the paper company.
Victor V. Troyer, the superintendent of the company at the time of the fire, was then called. He testified that on Saturday, the 28th day of July, 1928, he and Furkas were in the office of the defendant Nicely in South Bend, Indiana; that “Mr. Nicely said the affairs of the mill were in pretty bad shape financially and told me about the only way out would be to have a fire and proposed that Mr. Furkas and I being the logical ones and being over there all the while should set the fire;” that he (Troyer) asked that the defendant Hurwich be brought in, and that Hurwich came and he asked him if the proposition of burning the mill was his (Hurwich’s) idea, and that Hurwich replied, “Whatever Claude says is all right with me;” that the question came up as to when the fire should be set, and Furkas said “he thought at night would be a bad time to do it because somebody might get hurt and he preferred to do it the next day on Sunday;” that he then went with Furkas to St. Joseph and then on to his home in Constantine; that the buildings were burned on the next day (Sunday), and he was called on the telephone and so informed.
Proof was then submitted of the issuance of the policy by plaintiff in the sum of $5,000 and those of other insurance companies, making a total of $72,500. It seems to be undisputed that tbe insurance had been increased from $32,500 to that amount about 10 days before tbe fire. Proofs of loss were also submitted, and it is conceded that tbe loss was adjusted at $62,500 and paid to tbe paper company, of which sum plaintiff paid $4,310.34.
Furkas was then again called to tbe witness stand and, over tbe objection of defendants’ counsel, cross-examined relative to tbe testimony be gave on tbe criminal trial in which be and tbe other defendants were convicted, and to tbe statements made by him in an affidavit used on a motion for a new trial thereof. See, People v. Furkas, 255 Mich. 533; People v. Hurwich, 259 Mich. 361. In admitting this testimony tbe trial court stated that for tbe time being it would be received in its bearing upon tbe liability of Furkas alone and “with tbe instruction unless other circumstances arise that tbe jury shall not consider it as bearing upon tbe liability or non-liability of tbe other defendants in tbe case.”
Counsel for tbe defendants at that time argued, that, as Furkas bad been defaulted, it was unnecessary to impeach him and that its only purpose was to create prejudice against tbe defendants. Tbe court answered this contention by saying that—
“Tbe jury will be directed that they are not to be controlled by their prejudices but by tbe testimony that is admitted and which they have a right to consider and base their verdict upon that testimony.”
Furkas then admitted that be bad testified before a justice of tbe peace and upon tbe criminal trial that be was present at the meeting in South Bend at which be and Troyer were requested to burn tbe buildings and that be set tbe fire on tbe following day, but be insisted that tbe testimony so given was untrue. He stated that bis reason for thus perjur ing himself was due to his desire to secure a reward which he had heard the insurance companies would pay for “information leading to the fire” and an assurance on the part of one of théir agents that “there wouldn’t be any question about absolute immunity and, also, a nice reward for me.”
The defendants were called as witnesses in their own behalf. They denied that they had entered into a conspiracy to burn the buildings, but admitted that they had been convicted on the criminal trial and were then serving time in the State prison at Jackson.
Error is assigned upon an instruction to the jury reading as follows:
“The defendant Furkas having permitted a default to be entered against him, you are instructed to return a verdict against the defendant for the amount of the plaintiff’s claim, with interest to date.”
In ordinary actions founded on contract or tort the rule seems well established that a default in appearing, or pleading admits the right to recover, but not the amount of the damages.
“On the assessment of damages in assumpsit on a contract of sale, after the default of defendant, the amount of the damages alone is in issue; the liability of defendant on the contract being fixed by the default.” Grinnell v. Bebb (syllabus), 126 Mich. 157.
“A default in appearing or pleading where the action is in tort or upon an unliquidated claim, while it admits the right to recover, does not admit the amount, and further proceedings are required to determine the amount of the judgment.” 17 C. J. p. 1042.
See, also, 1 Green’s Michigan Practice (3d Ed.), p. 684; 15 R. C. L. p. 663 et seq.; 15 L. R. A. 614; Cromwell v. County of Sac, 94 U. S. 351.
Defendants’' counsel admit that the general rule is as stated and applies alike to actions ex contractu and in tort, but insist that it cannot be applied in this case for the reason that under plaintiff’s proof “if one defendant is liable all defendants are liable,” and that the instruction “in effect directed the jury that they must find the conspiracy and the burning established, ’ ’ and as a result of such finding impose liability on the other two defendants.
We are not in accord with the claim of counsel that under plaintiff’s proofs “if one defendant is liable all defendants are liable.” Immediately following the instruction complained of, the court gave one of plaintiff’s requests, reading as follows:
“ ‘If you find for the plaintiff under the instructions that I have heretofore given you and against the other two defendants, or either of them,’ that is Hurwich and Nicely, ‘you will find a verdict for the plaintiff against such defendants, naming them, and stating the amount of the damages which would be the amount paid by the plaintiff plus interest at five per cent.’ ”
This action is not brought to punish the defendants as conspirators for violating the law. The injury of which plaintiff complains, and for which it seeks to recover damages, was the wanton destruction of the buildings insured by it. There was evidence tending to prove that Furkas set the fire and, while it was strongly supported by the evidence of the conspiracy, an action against Furkas alone might have been brought to recover therefor and the evidence of the conspiracy submitted in support thereof. The foundation of the action is the dam ages plaintiff sustained by reason of tbe fire, and not tbe conspiracy. Tbe injury for which tbe plain!tiff seeks compensation was not one tbat could have been caused only by two or more of tbe defendants acting in concert.
‘ ‘ Conspiracy is not the ground of these actions on tbe case. Tbe cause of action does not result from tbe conspiracy, but from tbe thing done and tbe damage flowing from it.” Bush v. Sprague, 51 Mich. 41, 48; quoted with approval in Auto Workers’ Temple Ass’n v. Janson, 227 Mich. 430, 434.
“A joint action may be maintained against tbe conspirators for tbe damages caused by their wrongful act, but all tbe conspirators need not be joined; an .action may be maintained against but one.” 5 R. C. L. p. 1103.
“But tbe liability of conspirators to civil damages is joint and several, and, a conspiracy being shown prima facie, tbe plaintiff may give in evidence the acts and sayings of any conspirator done or said in furtherance of tbe common purpose, whether tbat conspirator be a party defendant or not.” Schultz v. Frankfort Marine, Accident & Plate Glass Ins. Co., 151 Wis. 537 (139 N. W. 386, 43 L. R. A. [N. S.] 520).
Error is assigned upon tbat portion of tbe charge in which tbe court, after referring to tbe fact tbat Furkas bad been called for cross-examination, said:
“Tbe plaintiff is not bound by tbe testimony of this witness under tbe law except to tbe extent and only to tbe extent tbat it stands uncontradicted, and in this case it does not stand uncontradicted, in tbe material features of it because tbe witness himself in this case or another case tbat was tried before, tbe case of tbe people against Harwich and Nicely be testified to tbe. contrary. In other words, tbe witness Furkas has contradicted bis own testimony by the testimony he gave in another case. Accordingly the plaintiffs in this case are not bound by Furkas’ testimony. ’ ’
This was at once followed by the further instruction:
“On the other hand, the testimony of Furkas in the other case is not binding upon the defendants; they are not bound by his, testimony in the other case and you haven’t any right to consider as bearing against the defendants in this case the testimony that Furkas gave in the other case. You haven’t any right to consider it for any purpose as against these defendants. He has come into this court and given his testimony here and this case has been heard and it will be determined by you in the jury room by the testimony in this case. In that connection I will say that the defendants in this case are entitled to the benefit of Furkas’ testimony in t.his case to such an extent as you may find that it is credible or believe it and to that extent only. ’ ’
When the plaintiff’s attorney called Furkas for cross-examination under the statute, defendants’ attorneys made no objections thereto. By his default he had admitted his liability to plaintiff under the declaration and, had objection been made, could have been cross-examined only as to the amount of the damages sustained.
Both parties apparently sought to gain an advantage from his examination. Plaintiff’s counsel doubtless had information of the testimony he had given on the trial of the criminal case wherein he had admitted that he had set the fire pursuant to the request of the defendants, and cross-examined him in the hope, if not the expectation, that he would again so testify. Defendants’ counsel were doubt less certain that he would not, and that his denial would be of benefit to the defendants. Had they made objection to the plaintiff’s right to cross-examine as to the facts on which the witness was interrogated, the trial court, impressed as he then was with the effect of the default, would doubtless have sustained the objection, and plaintiff’s counsel, had he persisted, would necessarily have been required to examine Furkas as Ms own witness, and his impeachment would not have been permitted. But when the cross-examination was indulged in without objection, the court had the right to treat it as proper, and his impeachment in the maimer disclosed was permissible, and under the circumstances there was no error in the instruction given relative thereto.
It appears in the record that a compromise settlement was effected between the insured and the insurance compames under wMch the insured accepted from the plaintiff a sum somewhat less than the full value of the policy. It is urged on the part of the defendants that the failure of the plaintiff to allege in its declaration that it “relied upon any false representations or concealments in paying the loss” and failed to prove upon the trial that the plaintiff “had no knowledge at the time of payment of loss of the incendiary origin of the fire,” entitled them to a directed verdict, or at least to have “the question of reliance and lack of knowledge” submitted to the jury.
In the proof of loss signed by the paper company by the defendant Hurwich, its secretary, and verified by Mm, it was stated that the “fire occurred, on the 29th day of January, 1928, about the hour of 1:15 o’clock p. m., which upon the best knowledge and belief of insured originated cause unknown.”
It was also stated therein—
“The said loss or damage did not originate by any act, design or procurement on the part of insured or this affiant.”
On these statements in the proof of loss the plaintiff had a right to rely, and in making the settlement it will be assumed that it did rely thereon. The total amount of the insurance at the time of the fire was $72,500. In the compromise settlement the insured received $62,500. The adjuster who made the settlement was a witness, and in his cross-examination by defendants’ counsel there is no intimation that the reduction was due to any suspicion on the part of the insurers that the fire had been set. It must be assumed that the value of the property destroyed, alone, was then considered. Had this action been brought to recover from the paper company the money paid them under the policy, and based upon the claim that it had caused the buildings to be destroyed by fire, a different question would be presented. But it is here planted against the defendants for their fraudulent action in destroying by fire the property insured, by reason of which the plaintiff was damaged to the amount paid to the insured under the policy issued to it. Reliance is not placed upon the representations made in the proofs of loss. It is placed upon the unlawful conduct of the defendants, by reason of which the plaintiff was defrauded to the extent of the payment made by it to the insured.
Error is assigned upon the following instruction, given at the request of plaintiff’s counsel:
í i i qr^g ciaim 0f ffre plaintiffs here that these men defrauded the plaintiffs amounts to an allegation of the commission of a crime but inasmuch as this is a civil case a different rule as to the extent of the testimony required to make out the plaintiff’s case is to he applied. In a criminal ease the proof of the commission of a crime is required to he made out beyond a reasonable doubt, that is, the jurors in such a case must have no reasonable doubt of the guilt of the defendant before they can convict,' while in a civil case it is only required that the plaintiff prove his claim by a preponderance of the evidence, that is, by evidence that is more convincing to your minds than the evidence produced by the defendants. ’
“So, the rule in this case, this being a civil case, is not that the plaintiff must establish his claim beyond a reasonable doubt but by a preponderance of the evidence.”
Preponderance of evidence was then defined in terms of which no complaint is made. We find no error in the giving of this request. Some of the jurors may have sat in the trial of criminal cases and have known that the wanton destruction of a building by fire is an offense punishable as a crime, and that to convict there must be no reasonable doubt of guilt. The distinction as here pointed out was in no way prejudicial to the defendants.
It is urged that the charge of the court was argumentative and unduly emphasized the claims of the plaintiff. In this we cannot agree with counsel. The instructions very carefully presented the issues of fact and the law applicable thereto. The jury were told to— “remember that in stating these claims of the plaintiff I am not in any wise stating my own ideas or my own opinions, I am merely stating the claims of the plaintiffs.”
After being out for a time, the jury returned for further instructions, and the questions then asked by the foreman quite clearly indicate that they understood the facts which they must find to entitle the plaintiff to recover.
There was proof to support the verdict, and, on a consideration of the entire record, it cannot be said that it was against the great weight of the evidence. The judgment is affirmed.
Potter, North, Read, Wiest, Butzel, Bushnell, and Edward M. Sharpe, JJ., concurred. | [
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Per Curiam.
Defendant was convicted of first-degree criminal sexual conduct, a violation of MCL 750.520b(l)(e); MSA 28.788(2)(l)(e), and was sentenced to serve from 10 to 20 years imprisonment. The Court of Appeals affirmed. We consider this case upon defendant’s request for a review pursuant to Administrative Order 1977-4, 400 Mich lxvii.
Over defense objection at trial, the court’s jury instruction included the following statement:
"The first lesser included offense which you may consider, if you ñnd the defendant not guilty of ñrstdegree sexual conduct, you may consider whether the prosecutor has proven beyond a reasonable doubt the elements of criminal sexual conduct in the second degree.” (Emphasis supplied.)
The court instructed on the lesser included offenses of criminal sexual conduct in the second degree, assault with intent to commit criminal sexual conduct involving sexual penetration, assault with intent to commit criminal sexual conduct in the second degree, and felonious assault.
Defense counsel objected:
"The court has written out a verdict form. I believe both counsel have reviewed it. The form reflects: 'Not guilty, first-degree criminal sexual conduct,’ and then states 'lesser included offenses’ and then lists them. I object to the fact that lesser included offenses are listed separately. I think it’s compounded in this case for two reasons. The court at one time stated upon reviewing that document that the first choice was 'not guilty of anything’; then 'guilty of first-degree criminal sexual conduct’; and the court went on to say 'or guilty of one of the lessers,’ at which time she read the four or five lesser includeds. This compounded with the fact the court earlier stated that the first lesser included — I should quote that — quote, 'First lesser included: if you should find the defendant not guilty of criminal sexual conduct,’ at which time the court then went on to list the lesser includeds. The basic objection, I think, is I think the court is definitely pointing out to the jury they are lesser charges and, secondly, giving them the impression they need to consider the main charge and find him not guilty of that before considering the lesser includeds. I think that’s contrary to the law here in Michigan. * * *
"The Court: The record may indicate that you made that objection verbally to the court before the instruction was given so that protects you in that regard. % sf: J?
On appeal defendant argued that the instructions given had the effect of telling the jury the order in which they were to consider lesser included offenses. The people responded that even if the instruction given did suggest consideration in a particular order, that alone did not constitute reversible error. They claimed that the trial court did not tell the jury that they must unanimously find defendant not guilty of the charged offense before considering lesser included offenses.
In People v Hurst, 396 Mich 1, 10; 238 NW2d 6 (1976), this Court considered a similar contention:
"In instructing the jury the judge said:
" 'If you find either of the defendants not guilty of the charge of manslaughter then you should proceed to determine whether that defendant not guilty of the crime of manslaughter is guilty of the crime of assault and battery.’
"We agree with Hurst that this instruction improperly interfered with the jury’s deliberations by requiring agreement of all 12 jurors to acquit the accused of the charged offense before considering a lesser offense.
"Under the judge’s instruction, even if the jurors were 11 to 1 for acquittal and a significant number of jurors desired to discuss the possibility of convicting the defendant of a lesser offense, consideration of a lesser offense could not begin unless the one juror holding out for conviction were dissuaded from that view.
"The instruction is unrealistic and improper.”
The error noted in Hurst, outlined by counsel’s explicit objection, is apparent on this record. Proper jury consideration of lesser included offenses was impeded by the trial court’s manner of instructing.
It is not error to suggest an order of consideration of offenses. The jury probably should be reminded to consider the charged offense first and it probably would be helpful to suggest that consideration be given to offenses with a "greater” number of elements before considering those with a "lesser” number.
In this respect an instruction will not be deemed erroneous unless the instruction or manner of giving it conveys the impression that there must be acquittal on one charge before consideration of another.
Pursuant to GCR 1963, 853.2(4), in lieu of granting leave to appeal, we reverse the defendant’s conviction and remand this case for new trial.
Kavanagh, Williams, Levin, Fitzgerald, Ryan, and Blair Moody, Jr., JJ., concurred.
Coleman, C.J.
(to affirm). Defendant-appellant Grady Mays was convicted by a jury of first-degree criminal sexual conduct contrary to MCL 750.520b(l)(e); MSA 28.788(2)(l)(e).
In the course of giving jury instructions at trial, the court informed the jury that defendant was charged with first-degree criminal sexual conduct, and then proceeded to outline the elements of that offense. The court next stated that the jury could consider lesser included offenses, and prefaced a description of the elements of each lesser included offense by the following statement: "The first lesser included offense which you may consider, if you ñnd the defendant not guilty of ñrst-degree criminal sexual conduct * * *” (emphasis supplied). The lesser included offenses charged included criminal sexual conduct in the second degree, assault with intent to commit criminal sexual conduct involving sexual penetration, assault with intent to commit criminal sexual conduct in the second degree, and felonious assault. After presenting the elements of the lesser included offenses charged, the court directed the jury to reach a unanimous verdict. The jury foreman was handed a verdict sheet listing the possible verdicts for use during deliberations. At the close of the instructions, defense counsel registered an objection to the lesser included offense instruction, which, in his estimation, gave the jurors "the impression they need to consider the main charge and find [defendant] not guilty of that before considering the lesser includeds”.
The Court of Appeals affirmed defendant’s conviction in a memorandum opinion, released May 31, 1979, from which defendant appeals. The per curiam opinion would dispose of this matter by reversing and remanding in lieu of granting leave to appeal, pursuant to GCR 1963, 853.2(4), on the authority of People v Hurst, 396 Mich 1; 238 NW2d 6 (1976). I would affirm the conviction.
I
The question presented is whether the trial court’s instruction to the jury that it could consider lesser included offenses if it found defendant not guilty of first-degree criminal sexual conduct constitutes reversible error.
Defendant contends on appeal that the trial court’s instruction required the jury to agree unanimously to acquit defendant on the principal offense charged before it could consider lesser included offenses and that this represented reversible error entitling defendant to a new trial.
The prosecutor urges a finding that the trial court did not err in instructing the jury with regard to possible verdicts. The instruction permissibly emphasizes that in addition to a principal charge there are lesser included offenses which may be considered. A trial judge may direct the jury to consider the verdicts in a particular order. The prosecutor agrees, as do I, that it would be error for a trial judge to require a unanimous agreement of innocence to a higher charge before deliberation on lesser included offenses may begin, but states that because the court’s instruction in the instant case did not require unanimity, there is no reversible error.
II
The issue here presented is similar to that in Hurst, supra. In Hurst, three of the four participating Justices agreed with Hurst’s assertion that the jury instruction which directed the jury to consider a lesser included offense "[i]f you find either of the defendants not guilty of the crime of manslaughter”, was "unrealistic and improper”. They said that the instruction impermissibly infringed upon the role of the jury in conducting deliberations. The plurality set forth an extreme hypothetical situation in which the jurors believed there must be a unanimous vote to acquit and so were deadlocked, voting 11 to 1 for acquittal. From this hypothetical, the plurality opinion reasoned that the instruction given would require a lone juror holding out for conviction to be dissuaded from his or her view before consideration of lesser included offenses could begin, even should a significant number of the other jurors desire to discuss the possibility of convicting the defendant of a lesser included offense. From jury instructions requiring a unanimous vote to convict, I find it unrealistic to attribute to any reasonable juror the mental leap to a belief that a unanimous vote is required to acquit. Although it is true that the Hurst plurality expressed disapproval of the instruction, it expressly declined to decide whether such an instruction would constitute reversible error. Thus, Hurst does not purport to supply the definitive answer to this case.
Ill
The Court of Appeals has considered comparable instructional issues on numerous occasions. Two lines of cases are apparent. One finds that an instruction which requires unanimous agreement of innocence on the principal offense before deliberations on lesser included offenses may commence constitutes reversible error. The other holds that an instruction which does not demand unanimous agreement is not erroneous, but instead represents a permissible structuring of jury deliberations.
Chief among the first line of decisions is People v Ray, 43 Mich App 45; 204 NW2d 38 (1972). A supplemental instruction requiring the jury to continue voting on the first charge until either all the jurors found the defendant not guilty or all found him guilty was held to be coercive, unduly restrictive of the jury’s prerogative and grounds for reversal of the defendant’s conviction. Ray was subsequently recognized by the Court of Appeals as imposing a "unanimity” requirement in the instruction before reversal may be ordered. See, e.g., People v Bankston, 61 Mich App 275; 232 NW2d 381 (1975). Other decisions in which the Court found reversible error in the giving of an instruction expressly requiring unanimity include People v Summers, 73 Mich App 411; 251 NW2d 311 (1977), and People v Jerry Johnson, 83 Mich App 1; 268 NW2d 259 (1978). One case, People v Harmon, 54 Mich App 393; 221 NW2d 176 (1974), aligned with Ray in its conclusion that a reversible instructional error existed, although the instruction, which informed the jurors that before lesser included offenses could be discussed they must first find that the defendant did not commit the offense charged, did not expressly require unanimous agreement on acquittal. Bankston, supra, disavowed Harmon as failing to recognize Ray’s unanimity requirement.
The second group of Court of Appeals decisions proposes that an instruction which suggests a logical, orderly method of considering verdicts is not erroneous. Essentially, these cases involve instructions in which unanimous agreement of de fendant’s innocence on the principal charge is not expressly (or at times even impliedly) required.
IV
Decisions of other jurisdictions may be of some assistance to our discussion here. One case frequently cited in Court of Appeals decisions, Ballinger v State, 437 P2d 305 (Wyo, 1968), involved a supplemental instruction nearly identical to the one given in Ray, supra. A majority of the Wyoming Supreme Court in Ballinger held that the instruction was not reversibly erroneous because the defendant had failed to demonstrate how the instruction injured or prejudiced him. The Court refused to speculate with regard to the jury verdict obtained.
In Payne v State, 199 Wis 615; 227 NW 258 (1929), the Supreme Court of Wisconsin considered a supplemental instruction which directed the jury to treat the charges in the order given by the court and to agree unanimously to any verdict. In the Court’s estimation, the jury was not given the impression by this instruction that it could not consider the lesser offenses until it had unani mously agreed to acquit on the higher charge. No error was found.
A supplemental instruction to the jury that it had to reach a verdict on the main charge before it could consider a lesser included offense was said to be prejudicial and thus reversibly erroneous in State v Ogden, 35 Or App 91; 580 P2d 1049 (1978). Citing both Hurst and Harmon, the Oregon Court of Appeals viewed the instruction as "effectively inhibiting] the right of the jury to consider the lesser offense of trespass”. Ogden, supra, 97. The Court recognized that there was a reasonable inference that the jury was divided; had the instruction been properly given, the jury might well have reached a different verdict. The potential for coercion dictated reversal. However, the Court said its decision was not to be read as foreclosing instructions which methodically order jury deliberations, since a trial court has little opportunity to police deliberations other than through its instructions.
V
In summary, the plurality in Hurst, supra, disapproved an instruction which, it concluded, impliedly required unanimous acquittal on the principal offense before lesser included offenses could be considered, but declined to say whether or not such an instruction would be cause for reversal. The Court of Appeals in its various decisions has implemented a rule which mandates reversal if unanimous agreement is expressly required, but which generally finds no error if the unanimity requirement is not evident.
The policy considerations advanced to invalidate an instruction such as the one which concerns us here are imbedded in the reasons for a lesser included offense doctrine. The Ogden special con currence by Judge Johnson sets forth two rationales for permitting discussion of lesser included offenses. The first is to assist the prosecution in obtaining a conviction where there has been a failure of proof. This first reason also embraces the possibility of compromise verdicts, recognized by this Court in People v Chamblis, 395 Mich 408, 425-426; 236 NW2d 473 (1975). Of importance is the second reason given for a lesser included offense theory, the jury’s inherent power to pardon.
I cannot agree with a disposition which would reverse defendant’s conviction on the basis of the instruction given in the instant case. Latitude must be given to trial judges in the giving of jury instructions. See, e.g., Wright, Adequacy of Instructions to the Jury: II, 53 Mich L Rev 813 (1955). Some ordering is not only desirable, it is frequently necessary. Given the acceptability of structuring jury instructions, it seems only logical to begin with the charged offense and then proceed to lesser included offenses. If a defendant is unanimously found guilty of the principal crime, it follows that there is no need to consider lesser offenses. Thus, when viewed from this perspective, an instruction such as the one given here is not coercive, but represents a logical method of jury deliberations.
The instruction should be viewed as introductory rather than directory, as was the instruction in People v Allen, 90 Mich App 128; 282 NW2d 255 (1979). The language claimed to be error was but a small portion of a lengthy instruction. A fundamental rule when reviewing instructions is that jury instructions must be considered as a whole. People v Dye, 356 Mich 271, 279; 96 NW2d 788 (1959). Moreover, the coercive potential is not apparent here as it is in Ray and Ogden. There is no direction or apparent implication that the jury should find a unanimous verdict of innocence before proceeding to the other offenses.
Indeed, it strains the imagination to believe that this jury may have been misled.
Defendant’s conviction should be affirmed. The instruction in issue does not provide an adequate basis for reversal.
Instruction to this effect may be given:
"You should begin your deliberations by considering (the charged offense). Unless all of you agree to find the defendant guilty of (the charged offense), you may consider the other offenses upon which I have instructed you in the order in which the instructions were given. You may consider any of those offenses without having reached agreement concerning the defendant’s guilt or innocence of any other of those offenses.”
The foregoing instruction is suggested but is not mandatory. Another formulation consistent with this opinion or eschewing instruction on this subject is not error.
See People v Robert Hall, 56 Mich App 10; 223 NW2d 340 (1974); People v Bates, 55 Mich App 1; 222 NW2d 6 (1974); People v James, 51 Mich App 777; 216 NW2d 473 (1974); People v Szymarek, 57 Mich App 354; 225 NW2d 765 (1975); People v Britt, 57 Mich App 375; 225 NW2d 771 (1975); People v Freeman, 57 Mich App 90; 225 NW2d 171 (1974); People v Walker, 58 Mich App 519; 228 NW2d 443 (1975); Bankston, supra; People v Don Francisco Lopez, 65 Mich App 653; 237 NW2d 599 (1975); People v Waldron, 64 Mich App 648; 236 NW2d 732 (1975); People v Jacobson, 72 Mich App 489; 250 NW2d 105 (1976), rev’d on other grounds 400 Mich 859 (1977); People v Erwin, 70 Mich App 60; 245 NW2d 173 (1976); People v Embry, 68 Mich App 667; 243 NW2d 711 (1976); People v Ross, 69 Mich App 705; 245 NW2d 335 (1976); People v Shears, 73 Mich App 683; 252 NW2d 563 (1977); People v Ronald L Johnson, 74 Mich App 250; 253 NW2d 722 (1977); People v Major, 85 Mich App 583; 272 NW2d 143 (1978); People v Allen, 90 Mich App 128; 282 NW2d 255 (1979). | [
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Bitshnell, J.
Plaintiff Walter G. Wiseman, receiver of Musgrave Tire Sales & Service, Inc., a Michigan corporation, in voluntary dissolution, brought suit against defendant Robert R. Musgrave, the former president, treasurer, and controlling stockholder of the corporation, and1 defendant Howard L. Philippart, a stockholder, charging the unlawful withdrawal of corporate funds by Mus-grave, with the assistance of Philippart while the corporation was insolvent.
Musgrave became connected with the corporation in 1923 or 1924, and in 1931 acquired all of its shares of stock, except two, one of' which was held by his wife, Kathryn A. Musgrave, and the other by the company’s attorney, defendant Howard L. Philip-part. The company was in the business of selling and servicing automobile truck tires.
Prior to 1933 the corporate by-laws provided that each director should receive $75 per week as compensation. At that time, however, because of past due obligations to Kelly-Springfield Tire Company, the by-laws were amended to provide that no salary or compensation should be paid to any director or officer until the Kelly-Springfield obligation had been paid in full. The minutes show that in 1934 an adjustment had been made with Kelly-Springfield Tire Company and it was unanimously agreed that some of the duties relative to the operation of the business be allotted to the vice-president, Kathryn A. Musgrave, without remuneration to her until a salary should be determined by the directors and stockholders. In 1935 compensation of $75 per month was authorized for additional services formerly performed by Philippart.
On July 27, 1940, the corporate records show the acceptance of the resignation of Musgrave and the transfer of his stock to G-. P. Shelby, who was elected president and treasurer in his place. On the same date an agreement was made between the company and Manufacturers Trading Corporation of Cleveland, Ohio, for the sale to it of accounts receivable and the advancement by it of certain funds. On August 2, 1940, the company paid Musgrave $4,095.96 out of funds totaling $4,580.01, obtained from the Manufacturers Trading Corporation as the proceeds of pledged accounts arid a mortgage. On May 17, 1940, the title to an automobile had been transferred to Musgrave. He testified that the automobile belonged to him although its value was charged to him on the company’s books, and that the money he received from the company represented accrued unpaid salaries due him and his wife.
Prior to 1935 Musgrave received a salary of $150 a week. During 1935, 1936 and 1937 Mrs. Musgrave was allowed $75 a month for part-time work, consisting of handling collections, locating bad debtors, and securing the names and addresses of possible buyers of truck tires. When she became ill in 1937 and could1 no longer do this work, it was done by Musgrave after hours, with the understanding that he was to receive this additional compensation. Sometime thereafter Mrs. Musgrave died. The business continued to show a loss for five successive years, with the consequence that Musgrave did not regularly receive this $75 a month. He did receive, however, during this period the sum of $75 a week for Ms regular services to the company. The dissolution proceedings were instituted in 1941.
The instant case was heard by the trial judge sitting without a jury, and the receiver has appealed from a judgment in favor of defendants. Appellant raises questions pertaining to the validity of the corporate resolution of 1935, which “purported” to authorize additional compensation of $75 a month, and the liability, if any, which accrued under such resolution; also, whether or not defendant Mus-grave and his wife were creditors of the corporation and whether the subsequent payments to Musgrave were in fraud of creditors. The trial judge did not specifically pass upon the validity of the corporate resolution, but did hold that liability had accrued and that Musgrave was a creditor and the payments to him were not a fraud upon other creditors. This conclusion was based entirely upon the factual situation. The minutes of the corporation recite:
“That inasmuch as Howard L. Philippart, the secretary, will not be able to devote as much time as formerly to the company business, and that this will necessitate additional remuneration for such additional services to the corporation, the sum of $75 per month until changed by proper action on the part of the stockholders and directors of the company, and to be paid when possible and when the funds are available, or- to accumulate and to be liquidated at the earliest possible time within the discretion of the officers and stockholders of the company. ’ ’
The receiver argues that the above resolution is void because Musgrave at that time controlled the corporation and1 owned all but two shares of its corporate stock. Musgrave replies that he actually performed the extra services which were reasonably worth $75 per month to the company, and that the action of the corporation after he had disposed of his stock and severed connection with it in paying him $4,095.96 was lawful and valid. To support his claim that a majority stockholder cannot legally vote himself an increase in salary as an officer or director of the corporation, plaintiff receiver relies on Miner v. Belle Isle Ice Co., 93 Mich. 97, 111 (17 L. R. A. 412). In that case the court said:
“The contracts fixing salaries and rentals must therefore be held not only voidable, but absolutely void.”
But this is qualified by what is said in the same paragraph immediately following the above sentence :
“In any case the burden is upon the director to show fairness, reasonableness, and good faith, and upon this record these transactions must not only be held to be constructively fraudulent, but fraudulent in fact.”
Plaintiff also relies on McKey v. Swenson, 232 Mich. 505. In that case the court held that the action of the officers of the corporation in voting certain salaries to themselves and then approving such action as controlling stockholders was wholly void. It is obvious that this conclusion was reached because the officers failed to prove the reasonableness of the salaries. That opinion says (p; 514):
“These officers voted the salaries to themselves and then, as controlling stockholders, approved such action. Such action was wholly void, required refund thereof or, at least, casts upon the officers the burden of showing the salaries were reasonable or to give the court information upon which reasonable compensation could be fixed. Defendant officers offered no justification for the salaries.”
Plaintiff also cites Alfred J. Brown Seed Co. v. Brown, 240 Mich. 569. There again the conclusion hinged upon failure to prove the value of services. The opinion says:
“We are not persuaded that their services were worth the sum fixed by themselves. They should account for the money received1 as increased salaries. See McKey v. Swenson, 232 Mich. 505.”
The McKey Case was again cited by this court in Nahikian v. Mattingly, 265 Mich. 128, where Mat-tingly was the general manager of the corporation and became the dominant factor in the company. The court said:
“In McKey v. Swenson, 232 Mich. 505, we held action in fixing salaries wholly void and cast the burden upon the officers to give the court information upon which reasonable compensation could be fixed. Such, however, is not the case at bar, for here we do not have wholly void action but only assertion of unreasonable compensation and the burden is on plaintiff to establish the charge.”
From the foregoing it is apparent that the action of the stockholders of the corporation here involved, even though Musgrave owned practically all of the stock, would be void only in the absence of convincing proof that he actually rendered additional services worth $75 a month. On the record before us the testimony reasonably establishes that Musgrave earned the additional compensation, and that his extra services were worth $75 a month. This distinguishes the case at bar from those relied on by the receiver.
We have examined the testimony and are not disposed to disagree with the trial judge’s findings which, in part, were:
“In the last analysis the issue narrows itself down to one of fact—that is, to a determination of whether or not honestly and fairly services worth $75 a month to the corporation were rendered by claimant, Mr. Mnsgrave. The fact that this money was paid after he had severed his connection with the company and upon the vote of the successor stockholders and directors might raise a puzzling problem in the effort to hold Mr. Musgrave for official misconduct after he had ceased1 to be an official. This point becomes unnecessary to determine however. It must he assumed, reasonably, that this is not a trumped-up charge of $75 a month which was conceived on the eve of dissolution and then spread backward over the hooks to give it an air of legitimacy. It has its genesis in the minutes of the corporation several years before the dissolution and was carried as an item payable month by month over a long period of time. * * *
“It does not take much intelligent work to he worth $2.50 a day, and the court does not hesitate to find that the efforts contributed by Mr. and Mrs. Musgrave to this business were worth that amount of money. This is the controlling finding in the case and makes any other determination of solvency or insolvency or of any other of the issues unnecessary.”
Furthermore, as said in Mallory v. Pitcairn, 307 Mich. 40, 47:
“We have repeatedly said that in cases tried without a jury the trial judge may give such, weight to the testimony as in his opinion it is entitled to, and that in such cases we do not reverse unless the evidence clearly preponderates in the opposite direction. Hazen v. Rockefeller, 303 Mich. 536; Hanson v. Economical Cunningham Drug Stores, Inc., 299 Mich. 434.”
The judgment is affirmed hut without costs, no brief having been filed by the appellees. It is so ordered.
North, C. J., and Starr, Wiest, Butzel, Sharpe, Boyles, and Reid, JJ., concurred. | [
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Bushnell, J.
Plaintiff Lucille Richardson, with her husband, Samuel A. Richardson, for some years occupied, as a residence and also for business purposes, premises in the city of Ypsilanti, owned by her father-in-law and mother-in-law, defendants Joseph H. Richardson and Harriet Richardson.
On June 23, 1941, defendants instituted an action before a circuit court commissioner to recover possession of the premises. A stipulation in the record states that the original judgment for restitution was entered by the circuit court commissioner on February 19, 1942, from which an appeal was taken, and a like judgment was entered in the circuit court for the county of Washtenaw on December 17, 1942, which judgment is still in full force and effect. On March 4,1943, a writ of restitution was issued by the circuit court. On March 12, 1943, plaintiff filed a bill of complaint in which she sought to restrain the execution of the writ, on the ground that defendants had not complied with the regulations pertaining to the so-called rent control act, promulgated by the office of price administration, which regulations became applicable to Washtenaw county on July 1, 1942. Plaintiff also claimed that no statutory notice to quit had been given prior to the issuance of the writ of restitution of March 4, 1943.
On appeal from' an order denying an injunction, plaintiff argues that she was entitled to the statu tory notice to quit because sbe became a tenant at will subsequent to the entry of the judgment of restitution when defendants tacitly consented to her continued tenancy, and that if she is not a tenant at will, she at least occupies the premises by sufferance and, in either event, she was entitled to such statutory notice prior to the issuance of the present writ of restitution. See 3 Comp. Laws 1929, § 13492, as amended by Act No. 145, Pub. Acts 1935 (Comp. Laws Supp. 1940, § 13492, Stat. Ann. § 26.1104), and 3 Comp. Laws 1929, § 14975 (Stat. Ann. § 27.1986).
The testimony does not support plaintiff’s contention. On the contrary, it indicates that, during the period in which plaintiff claimed such tenancy, negotiations were being had relative to an amicable settlement of the differences between the parties. If, as it is now claimed, there were any procedural or statutory defects in the possessory proceedings, an appeal should have been taken from that judgment and it cannot now be attacked collaterally.
The O.P.A. rent regulation, designated as maximum rent regulation No. 11, became applicable to Washtenaw county on July 1, 1942. That regulation reads as follows:
“At the time of commencing any action to remove or evict a tenant (except an action based on nonpayment of a rent not in excess of the maximum rent) the landlord shall give written notice thereof to the area rent office stating the title and numbér of the ease, the court in which it is filed, the name and address of the tenant and the grounds on which eviction is sought.” (7 F. R. 4072, 4075.)
This regulation was not in effect in Washtenaw county at the time the action was begun before the. -circuit court commissioner; nor was it in effect when a judgment was entered by the commissioner on February 19, 1942, and it is not applicable to the situation in the instant case, for the reason stated in Home Owners’ Loan Corp. v. City of Detroit, 292 Mich. 511, where the court, in referring to an act which provided a lien for water furnished by municipalities, said:
“The act cannot be considered in our determination of the matters now in controversy, it having been enacted subsequent to the filing of plaintiff’s bill of complaint.”
It is a well-established rule that conditions existing at the time of the commencement of a legal action will govern. As said in Black v. Spears, 209 Mich. 1, in discussing section 9 of the statute of limitations of actions, which reads:
“ ‘All actions and rights shall be governed and determined according to the law under which the right accrued, in respect to the limitations of such actions or right or-entry.’ 3 Comp. Laws 1929, §13972 (Stat. Ann. §27.601).
“This is a general provision and in our opinion affects all actions whether personal or involving real estate.”
The O.P.A. rent regulation, by its very terms, does not affect actions commenced and judgments entered prior to its effective date.
The order of the circuit court is affirmed, with costs to appellees.
North, C. J., and Starr, Wiest, Butzel, Sharpe, •Boyles, and Reid, JJ., concurred.
See 50 TTSCA, § 901 et seq.—Reporter. | [
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Bttshnell, J.
Shortly before midnight on July 22, 1942, Harold Carter, an employee of plaintiff McNamara Motor Express, Inc., a common carrier of freight between Kalamazoo and Chicago, left the company’s terminal in Kalamazoo with a 30-foot tractor and semi-trailer loaded with about 15 tons of paper. He had driven this route every other day for about 3 weeks, and had come from Chicago that morning. The road on which he traveled was being reconstructed and resurfaced from the junction of old US-12 and new US-12, and there was a sign west of the city of Kalamazoo at the junction of these two roads, reading, “Road under Construction.” Beyond this junction is Snake hill, on which US-12 winds down grade from east to west, a distance of about two and one-half city blocks from top to bottom.
On this night there were no signs or lights at the top of Snake hill, but there were flares along both sides of the highway. Carter, driving at a reasonable rate of speed, was following an automobile which had been in front of him for some time. He was about 60 feet behind this car and there was some dust in the air. As he reached the bottom of the hill the car in front of the truck suddenly stopped and .made a quick turn to the right. Carter set his brakes and made a quick turn to the left in order to avoid striking this car. Just beyond this point, defendant Globe Construction Company had made an excavation in the highway 38 inches deep and 67 feet long. The testimony is conflicting as to whether or not there were any flares along the east edge of the excavation, but it is undisputed that there was a picket fence, similar to that used for snow fences, across the highway about 3 or 4 feet from the edge of the excavation. Carter was unable to stop his equipment before it went into the excavation, and turned over.
Suit was brought by plaintiff Norwich Union Fire Insurance Society, Ltd., as assignee and subrogee of McNamara Motor Express, Inc., resulting in a judgment in favor of the insurance company in the sum of $708.74 for damages to the cargo, and a judgment in favor of the express company in the sum of $852.50, for damage to its equipment.
Defendant’s motions for a judgment notwithstanding the verdict and for a new trial were denied by the trial court and it appeals on the sole ground that plaintiff express company’s driver was guilty of contributory negligence as a matter of law. In denying the several motions, the trial judge filed memoranda in which he said that the excavation in the pavement was not readily observable for a very great distance, and that the express company’s driver did not turn out for the purpose of passing the vehicle ahead of him, but was confronted with a sudden emergency; that he governed himself accordingly; attempted to avoid a collision with the vehicle that had stopped so suddenly ahead of him, and that, in pulling slightly to the left, was immediately confronted with the excavation without any earlier warning of it. Because of the weight of his vehicle and its momentum and his inability to turn to the right, he had no choice but to go ahead into the excavation.
The trial judge also commented upon the fact that because the flares had been there for some days and nights, Carter and others traveling the highway almost daily were familiar with the fact that it was under repair and might perhaps have assumed that the flares were there to mark the sides of the road, rather than to warn travelers of an “unexpected and suddenly created excavation of the entire pavement. ’ ’
The trial judge concluded that Carter was not guilty of contributory negligence as a matter of law, but that his negligence, if any, was a question of fact for the jury. In passing upon the motion for a new trial, the trial judge concluded that: .
“The jury apparently weighed the testimony of Harold Carter, driver of plaintiffs’ truck, very carefully and, it seems to me, rendered the only just and true verdict possible on the whole record including his testimony. If I had been the trier of the facts I could not have found otherwise. ’ ’
The trial judge also directed attention to the fact, that, although Carter had made three or four round trips each week between Kalamazoo and Chicago during the progress of the road construction, the excavation had been made after he had passed over that part of'the highway on his return from Chicago. He stated that:
“This is not a case in which it satisfactorily appears that there was a proper barricade at a proper distance from the end of the excavation or other proper warning properly placed and readily discernible which a driver negligently failed to discover and to heed.
“It clearly appears from the testimony of Carter' and other witnesses that the east end of the excava-' tion at the foot of Snake hill was not reasonably discernible in the circumstances and conditions then present for sufficient distance to the east to afford travelers approaching it'reasonable protection or to charge them with a want of due care if they failed to discover it in time to avoid driving into the excavation. The happening of this serious accident should surprise no one acquainted with the fact. In no respect am I able to find that Carter is subject to censure or failed to use reasonable care. As already stated, it cannot be said that he negligently failed to heed a warning of a danger that was clearly visible for a proper distance. It may more reasonably be said that he fell into a trap negligently placed by defendant’s agents and employees.”
Our examination of the testimony brings us to the same conclusion reached by the trial judge, i.e., that Carter’s negligence, if any, was a question of fact for the jury. Martin v. J. A. Mercier Co., 255 Mich. 587 (78 A. L. R. 520), and Bard v. Baker, 283 Mich. 337.
The several judgments are affirmed, with costs to appellees.
Starr, Wiest, Butzel, Boyles, and Reid, JJ., concurred with Bushnell, J. | [
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Kelly, J.
{for affirmance). Plaintiff’s action for damages for injuries received when the automobile she was riding in as a passenger collided with' the rear of defendant’s car resulted in an Ingham county jury verdict of no cause for action. Judgment for defendant was affirmed by the Michigan Court of Appeals (Johnston v. Narmore, 1 Mich App 160).
Plaintiff was a passenger in the front seat of an automobile driven by Lewis E. Preston as it proceeded north about 4 o’clock in the afternoon on US-127, a four-lane, divided highway. It was a clear day and the pavement was dry.
A school bus was stopped on the right shoulder of US-127 waiting for the traffic to clear before making a left turn on Edgar road.
The appellate court briefly and accurately described the events preceding the accident as follows (p 162):
“Approaching the bus from the rear and in the right lane of traffic were two automobiles, a semi truck, defendant, and Preston, in that order. It is not clear what happened to the two automobiles first mentioned, but the semi stopped in the right lane of the highway, about 10 feet behind the school bus. Defendant drove into the left lane to pass the truck; braked suddenly without signaling and was struck in the rear by Preston. The collision occurred about opposite the rear of the bus.”
Plaintiff’s counsel did not object to the court’s proposed instructions as same were read by him before being presented to the jury, nor did he object at the conclusion of the court’s instructions as the jury was being instructed for the night. The nest morning when the jury returned for deliberation plaintiff presented for the first time his objections to the omission of his proposed instructions 11 and 12 from the charge.
Proposed instruction 11 read:
“Members of the jury, I instruct you that if you find that the collision occurred as a result of the combined negligence of tbe defendant Narmore and plaintiff’s driver, Mr. Preston, then you would still be required to bring back a verdict in favor of the plaintiff.
“In other words, if you find that Mr. Preston was guilty of some negligence which contributed to the collision, but you also find that the defendant Narmore was also negligent and contributed to the happening of the accident then it would be your duty to return a verdict in favor of 'the plaintiff and against the defendant.”
Proposed instruction 12 was as follows:
“The proximate cause of an accident does not necessarily .mean the sole cause or the only cause thereof. I instruct you that there may be more than one proximate cause of an accident. Therefore, even though you might find that the driver of the plaintiff car, Mr. Preston, was in some way negligent in his manner of driving, if you further find that defendant Narmore was also negligent in suddenly stopping his car on the traveled portion of the highway or in failing to warn plaintiff’s driver that he was going to stop and that such negligence on the part of the defendant Narmore was at least one of the contributing causes to the accident and the resulting-injuries to the plaintiff, then in that event it would be your duty to bring back a verdict in favor of the plaintiff and against the defendant.”
In denying plaintiff’s request, the court stated:
“The court is of the opinion that it would tend to highlight this one particular phase of the case if given at this time and the court.is further of the opinion that the charge taken as a whole is not misleading on this matter of proximate cause.”
Plaintiff presents the following question:
“Did the trial court err in failing to clearly instruct the jury that if the jury found both the de fendant and plaintiff’s own driver gnilty of negligence which, contributed to the happening of the accident, plaintiff could still recover a verdict?”
The appellate court answered plaintiff’s question as follows (pp 164, 165) :
“Under the factual situation here presented, plaintiff’s requests were proper. Whether it was reversible error not to give them requires determination. In making this determination, the first inquiry is whether the charge as given contains instructions on the points to which requests 11 and 12 are addressed. Appellant concedes this point, but she contends proper explanation of the application to the facts was not given and because of this, she was denied a fair trial. * * * The rule that appellate courts view a trial court’s instructions as a whole in determining their adequacy is elemental. The test to be applied is succinctly stated in Huffman v. First Baptist Church of Flushing (1959), 355 Mich 437, 446:
“ ‘Did the instructions as given adequately inform the jury on the applicable law reflecting and reflected by the various evidentiary claims in the particular case?’
“Applied to the case before us the answer is in the affirmative. This does not mean that plaintiff’s requests 11 and 12 should not have been given, nor that it was not error to refuse to give them. It means that such refusal did not deny plaintiff a fair trial and thus constitute reversible error.”
We agree with the Court of Appeals that the instructions as given adequately informed the jury on the applicable law and the refusal of the trial court to give proposed instructions 11 and 12 did not deny plaintiff a fair trial and thus constitute reversible error.
The court’s instructions plus plaintiff’s forceful closing argument to the jury convince us that the jury understood “that if the jury found ho'th the defendant and plaintiff’s own driver guilty of negligence which contributed to the happening of the accident, plaintiff could still recover a verdict.”
Counsel for plaintiff in the closing argument stressed, without interruption or objection, the point that even though the jury found that both drivers were “at fault” plaintiff should recover from defendant and, as counsel concluded his argument on the question of damages, he again advised the jury without objection or interruption that plaintiff was not insisting on her rights to full damages if her driver was also at fault, as evidenced by the following :
“Now, you will remember when I talked about if you found that there was some fault on the part of both drivers and the court will instruct you that nevertheless you could hold Mr. Narmore’s side here for the full amount of the damage she has coming. I have discussed this with our people and even though they would be entitled, if you find for this woman, to full compensation, we ask that in all justice and fairness, even though the law doesn’t command that you do, that whatever damages you arrive at, deduct the percentage that you think, if you do find, that Mr. Preston may have contributed to this accident. In other words, I am not saying that what you should find, but assuming that you find that both drivers were equally at fault and the law would permit you to find against Mr. Narmore’s side here for the full amount, I am asking you in all justice and fairness, even though the law is to the contrary, to give less. If it is fifty-fifty, cut that sum in half and award her a lesser sum than the law would give her as full compensation.”
Plaintiff also claims the trial court erred in denying plaintiff’s motion for discovery of extrajudicial statements of defendant and other witnesses for the purposes of possible impeachment.
Plaintiff predicates error upon the court’s denial of the 'motion after the jury had been impaneled and sworn.
We are in complete accord with appellate court Judge Quinn’s opinion that the trial court did not err in denying plaintiff’s motion. (1 Mich App 160, 165, 166.)
Affirmed. Costs to appellee.
Dethmers, J., concurred with Kelly, J.
Black, J.
(for affirmance). It is advisable that we retain in the appellate focus what this appellant plaintiff brought before the Court of Appeals for review, and what she did not. No question of erroneous jury instruction was raised and saved in the trial court and no such question Avas attemptedly urged in the Court of Appeals. The plaintiff did insist bekrw, and insists here, that the trial judge’s refusal to grant her requests to charge 11 and 12 constituted reversible error. With that question, only that question, is this Court presently concerned.
I regard requests 11 and 12 as argumentatively improper. I hold also that the circumstances of their once-waived and ultimately tardy advancement (after completion of jury argument and jury instruction) provides no basis for test of the trial judge’s discretion to reopen the charge for instruc tion' according to the theory of snch requests and such additional requests as defendant naturally might offer to counter them.
The trial judge went out of his usual painstaking way to assure for counsel that which GCR 1963, 516.1 pointedly contemplates, that is, firm advices to them, prior to jury argument, of the nature and content of the charge to be given. Indeed, having reviewed with counsel all requests to charge of the parties, and having heard all objections to grant or refusal to grant requests with no .reference made by plaintiff’s counsel to denial of said requests 11 and" 12, Judge Salmon prepared the charge to be delivered and permitted counsel to examine it “in detail.”
It is emphasized that this was done prior to jury argument and jury instruction. Thus plaintiff’s counsel with full knowledge of the charge to follow was permitted to urge his legal and factual theory of recovery upon the jury, even unto the novel suggestion that the jury should “cut that sum in half” should it find both drivers negligent. (For full quotation, see Justice Kelly’s opinion.) To more than all this, plaintiff was not entitled excepting at discretion of the trial judge; a discretion I hold on. this record was not abused.
The former rule was that “better practice requires that requests should be presented at such times as will enable the trial court to consider them before the arguments are completed.” Niemi v. Brady, 230 Mich 217, 219, 220; Sedorchuk v. Weeder, 311 Mich 6, 10. The present “better practice” is that requests shall be presented (filed) “at any time the court reasonably directs.” GCK. 1963, 516.1. The' purpose of course is to provide (a) more time for judicial consideration of requests and (b) more time for such judicial determinations as are requisite to advising counsel about the content of the forthcom ing charge before the arguments commence. Now for the -record.
At the close of proofs this beginning of a comprehensive record of objection and consideration of objection to the submitted requests to charge (Nos. 11 and 12 included) was made:
“The Court: Well, gentlemen, yon have conferred with the court pursuant to the rule concerning .the court’s charge, more specifically, the requests to charge, is that correct?
“Mr. Collins: That is correct, if the court please, insofar as the defendant is concerned.
“Mr. Cicinelli: This is correct.
“The Court: And I have shown counsel my proposed charge which I have in writing?
“Mr. Cicinelli: Yes, you have.
“The Court: And I am going to have it marked as an exhibit. Would you mark it, please, Mr. Reporter, as the court’s exhibit, I guess.
“Mr. Cicinelli: The court has permitted us to examine this exhibit in detail. We have discussed it with the court.
“Mr. Collins: That is correct, if the court please, as far as the defense is concerned.
“The Court: If you gentlemen have any objections to it, would you make it known now, please?
“Mr. Collins: Mr. Cicinelli, do you want to go first ?
“Mr. Cicinelli: Well, I would respectfully object to the court’s not having placed therein all of the proposed instructions, which I understand the court has in part and not in part, plaintiff’s proposed instructions.
“Your honor, we also object to the court’s accepting in totality each and every one of the proposed instructions as submitted to the court by defense counsel.
“The court’s own instructions, which I see is a part of the exhibit the court has just referred to, we have no objection to.
vThe Court: You have objected on the grounds that I have not included some of your instructions?
“Mr. Cicinelli: Right.
“The Court: Would you be-a little more specific on that, please?
“Mr. Cicinelli: Plaintiff’s proposed instruction 6 and 6-B and plaintiff’s proposed instruction No. 3.
“The Court: 3. Well, as to 6, the court is of the opinion that it is otherwise covered in the instructions. As to 6-B, the court is of the opinion that some phases of that, Mr. Cicinelli, are not consistent with other phases of your requests to charge. And as to 3, I think we have discussed in detail the reasons for not giving that. * * *
“Mr. Collins: With regard to plaintiff’s request to charge 10, the only comment I have with regard to that, if the court please, I think that that has been previously covered under portions of the previous discussion by the court under 6-D.
“The Court: Which one is that, Mr. Collins?
“Mr. Collins: 10 of plaintiff’s requests to charge. I think it has also been covered in 6-D and I am somewhat fearful with regard to repetition.
“The Court: Well, I am inclined to agree with you on that.
“Mr. Cicinelli: I agree also.
“The Court: All right. We will take out 6-D then, if that is agreeable.
“Mr. Cicinelli: Satisfactory.”
The record concluded with no further objection by plaintiff’s counsel to the charge he knew was to be delivered. Jury arguments proceeded and concluded. Then came the charge, ending with these overnight instructions:
“Members of the jury, it is now about 5 o’clock. We have taken several days of testimony here. I hesitate in giving you this case now to go to your jury room to deliberate. I think we will not swear the officer now. I will let you go home now and come back tomorrow morning to deliberate. I wish you would be here at 9:30. Now when you get here we will have to have you come to the jury box and the officer then will be sworn and then you will go to your deliberation. But may I please caution you, don’t talk with anybody about this case. It is entirely in your hands now. Don’t discuss it among yourselves until you get to your jury room in your deliberations and don’t permit anyone to discuss it in your presence. And if you have any problems along this line, report it to the court. And with that admonition, we will recess now until tomorrow morning at 9:30.”
The next morning, for the first time, plaintiff’s counsel raised question about denial of his requests 11 and 12 and moved for grant of same. He said “I was not aware, frankly, that the court had not selected one or both of these instructions to give to. the jury.” The jury at this time waited in the juryroom for authority to commence deliberations. After hearing both counsel at length, Judge Salmon announced his ruling and the reasons for it:
“The Court: Having in mind the fact that the court did, pursuant to the court rule, have a conference with counsel relative to the proposed requests to charge and, in addition thereto, came back into the courtroom and put the matter on the record, advised counsel of the charge that the court was going to give and it is now a part of the file and having in mind the fact that counsel did object to all of the requests that were not given or objected because all his requests were not given and the court then asked for more detail, I don’t believe that this was raised by you, Mr. Cicinelli, at that time. Further, the court is of the opinion that it would tend to highlight this one particular phase of the case if given at this time and the court is further of the opinion that the charge taken as a whole is not misleading on this matter of a proxi mate cause. And I didn’t realize that I had unduly emphasized either side or the claims on either side, or the law on either side of this matter. In fact, this is the first time I have heard of that and the court still believes that this is a fair charge.
“With that in mind, the court will deny your request, Mr. Cicinelli.”
Judge Salmon, proceeding as authorized by rule, having reached that point in the trial where the jurors were ready to deliberate, was possessed of discretion to deny a request for additional instructions; there being no claim that the instructions already given were erroneous in whole or in part. The time for advancement and recorded insistence upon grant of requests 11 and 12 was the. day before, during the time allotted by the court for that purpose. At that time court and counsel might well, have agreed upon some simpler and less objectionable form of instruction; leaving out that “in other words” and “therefore” phrasing; inserting the required “by a preponderance of the evidence” condition ; defining “combined negligence” if indeed the rightful applicable expression “concurrent negligence” was not to be employed, and providing for such adjusted form of instruction a sequential place in the charge. That was not done, however, through no fault of the trial judge.
Argument of one or the other or of both sides of a. case being tried does not belong in jury instructions. Nor should it be permitted entry by means of artfully drafted requests to charge. Requested instructions, once they are adopted by the trial judge, become “the court’s instructions, — not requested instructions.” People v. Hunter, 370 Mich 262, 267, following Reetz v. Rigg, 367 Mich 35, 39, 40. That is the reason for continued judicial insistence that argument of a theory or cause must ■be left out of requests to charge on penalty of denial thereof.
To be sure, G-CR 1963, 516.2 provides firm right to 'assign as error “the failure to give an instruction,” the only condition being that an objection to such failure, stated “specifically” with assigned grounds, must be made before the jury retires for deliberation. But 516.2 provides no more than that; certainly no warrant that the objection will be upheld as of course or that it is to be tested on review other than .on merit in the circumstances of its presentation. To be sharply precise, 516.2 does not mean that one party, by holding back his “objection” until all of the arguments are completed and the trial judge’s instructions have been delivered in accordance with the impeccably fair procedure followed here, may thereby gain the advantage of a final argument — from the bench — of his theory of the case.
¡ From time to time in the pages of our reports some members of the Court have noted that a searching test of any posed legal question may be had by trying it on inside out, that is, in reverse. Suppose an indulgent Judge Salmon had granted plaintiff’s last minute request for delivery of Nos. 11 and 12-as instructions the jury should follow, and suppose the jury’s verdict had been affirmative — in favor of the plaintiff. Would we say then that the defendant’s vehement objection to such procedure was weightless as assigned error! The sum of that objection was: "
“I would say this, further, to the court, that at this time the court having completed its instructions last evening at, approximately 5 o’clock, the jury at that time being discharged because of the lateness of the hour, that for the court at this time immediately before this jury retires to give the instructions which plaintiff’s counsel now says must be given, I submit to the court it would be highly prejudicial to this defendant. It would pinpoint a claim which Mr. Cicinelli argued vigorously to the jury. I can’t conceive that there would be any doubt in their mind.”
In the circumstances presented here I' find no error, reversible or otherwise. I therefore- agree with Justice Kelly that the judgment of the Court of Appeals should be affirmed.
O’Hara, J., concurred with Black, J.
Souris, J.
(for reversal). It is the law of'this State that when a plaintiff’s injuries result, from the concurrent negligence of defendant and another, each proximately contributing to such injuries,- recovery may be had against defendant. Stabler v. Copeland (1942), 304 Mich 1; and Bishop v. Plumb (1961), 363 Mich 87. As the issues developed in this case at trial, by pleadings and proofs, the plaintiff was entitled to have the jury so instructed. The Court of Appeals so stated, but decided that the instructions given adequately informed the jury on the applicable law, including the foregoing proposition of law. 1 Mich App 160, 164, 165. Mr. Justice Kelly agrees. I do not.
Viewing the circuit judge’s jury charge in its entirety and excluding his brief statement therein of plaintiff’s “claims,” as distinguished from the judge’s subsequent instructions on the “law” of the case, I find only the following language even remotely pertinent to the legal issue of proximate cause, sole, superseding, or concurrent:
“The plaintiff has the burden of proving each of the following propositions: First, that the defendant driver acted, or failed to act, in one of the ways claimed by the plaintiff as stated to yon in these instructions and that in so acting, or failing to act, the defendant was negligent. Second, that the plaintiff was injured in her person and suffered damage. Third, that the negligence of the defendant was a proximate cause of the injury to the plaintiff.
“If you find from your consideration of all the evidence that each of the propositions required of the plaintiff has been proved, then your verdict should be for the plaintiff. But if, on the other hand, you find from your consideration of all the evidence that any of these propositions has not been proved, then your verdict should be for the defendant.
“The defendant has no burden of proof in this case. It is not the defendant’s burden to prove his claim that the plaintiff’s driver’s conduct was the sole and proximate cause of the collision; rather, the burden is on the plaintiff to prove that the defendant was guilty of negligence which was the or a proximate cause of the collision. * * *
“When I use the expression 'proximate cause,’ I mean that cause which in natural or probable sequence produced the injury complained of.
“In determining the question of proximate cause you should consider that there may be more than one proximate cause in an accident of this character and in considering proximate cause, I wish to say that there must be a causal connection between the negligent act of the party to be charged with the injury and it is sufficient if the negligence of the party to be charged with the injury was the original moving cause which set in motion the chain of circumstances leading up to the injury and which in natural continuous sequence, unbroken by any new independent or intervening cause, produced the injury. So in considering ivhether or not the defendant or the operator of plaintiff’s vehicle was negligent and whether such negligence was the proximate■ cause of the injury, that is the standard you should use.
“In considering proximate canse during your deliberations, you may consider the defendant’s claim that the driver of plaintiff’s vehicle was negligent and his negligence was the sole as distinguished from a proximate cause of the injury. * * *
“I further instruct you that if you find by a preponderance of the evidence that the defendant did violate the statute that plaintiff may still not recover unless you also find that the failure to comply with the statute was one of the proximate causes of the injury to the plaintiff. * * *
“Now with regard to this presumption [presumption of negligence by driver of car that rear-ends another], if you find from a preponderance of the evidence that the evidence offered to rebut this presumption is reliable and believable, then you shall not consider this presumption in determining whether the driver of plaintiff’s car was guilty of negligence in this regard, as claimed by the defendant. On the other hand, if you find and believe from a preponderance of the evidence that is before you that such evidence does not rebut or overcome this presumption, then the driver of plaintiff’s vehicle would be presumed guilty of negligence and if you further find that this negligence on the part of the plaintiff’s driver was the sole cause of the plaintiff’s injuries, then your verdict should be for. the defendant. * * *
“In this case some of the injuries claimed by the plaintiff consist of an aggravation of a pre-existing condition. I instruct you that here again the plaintiff has the burden of proving by a preponderance of the evidence the fact that such aggravation did occur and the nature and extent thereof. In the event that you should find by a preponderance of the evidence that there was in fact such aggravation and that the same was proximately caused by the defendant’s negligence, then you'should award reasonable damages for such pain, suffering or other loss sustained by the plaintiff as a result of the aggravated condition.”
‘ Nowhere in the foregoing instructions do I find any statement of the applicable law of the case, that plaintiff would be entitled to recover her damages from defendant if the jury should find that her injuries were caused by the concurrent negligence of defendant and some other person, each proximately contributing to plaintiff’s injuries. Instead, the jury was instructed that if it should find there was more than one proximate cause of the collision that injured plaintiff, she may recover from defendant if (and, apparently, only if) defendant’s negligence “was the original moving cause which set in motion the chain of circumstances leading up to the injury and which in natural continuous sequence, unbroken by any new independent or intervening cause, produced the injury.” The language quoted from the instruction, given at defendant’s request, does not refer to the legal issue of concurrent negligence. Instead, it refers to the wholly distinct issue of superseding negligence and, even as to that issue, it is not an accurate statement of the law of Michigan, White v. Huffmaster (1949), 326 Mich 108, notwithstanding. See Mr. Justice Black’s discussion of this issue in his opinion for the entire Court in Berry v. Visser (1958), 354 Mich 38, 44-48.
In Michigan, responsibility for instructing the jury with respect to the basic and controlling issues in a case rests upon the trial judge. This is so notwithstanding the following language in GrCR 1963, 516.2:
“.2 Objections. No party may assign as error the giving or the failure to give an instruction unless he objects thereto before the jury retires to consider the verdict, stating specifically the matter to which he objects and the grounds of his objection. Opportunity shall be given to make the objection out of the hearing of the jury.”
Less than two years ago, in May of 1965, in Hunt v. Deming, 375 Mich 581, after having noted and quoted that subrule, this Court said, unanimously (p 585):
“This is not to say that this Court may not, in' unusual circumstances, and to prevent manifest injustice, take note of instructions which err with respect to basic and controlling issues in a case even though objection thereto was not made before the jury retired. See 2 Honigman and Hawkins, Michigan Court Buies Annotated (2d ed 1963), p 567. It is to say, however, that the Court will exercise its discretion in this fashion but sparingly. To do otherwise would he to, encourage counsel to maintain silence in the face of correctable erroneous instructions, hoarding their objections for use in the event of an unfavorable jury verdict. The course of expeditious justice is furthered by requiring that such objections be made while time yet remains to set the record straight.”
Even had plaintiff’s counsel not objected to the failure of the trial judge to instruct on the issue of concurrent negligence, the substance of which was contained in plaintiff’s requested instructions 11 and 12, quoted in Justice Kelly’s opinion, the issue of concurrent negligence being a basic and controlling issue in this case, failure to instruct thereon would require our reversal to prevent the manifest injustice of permitting a litigant’s cause to be judged by an uninformed and, indeed, misinformed, jury.
It is true that when the trial judge advised counsel for the parties before their jury arguments what instructions lie proposed to give, plaintiff’s counsel did not note then an objection to omission of his requested instructions 11 and 12. It is fair to assume that plaintiff’s counsel simply was unaware at that time that the trial.judge did not propose to give at least the substance of plaintiff’s concurrent negligent requests, for the record discloses that in his argument to the jury plaintiff’s counsel argued the issue of concurrent negligence and said to the jury that the judge would instruct on that issue of law. :
We should not attribute to counsel a purpose thus unethically to mislead the jury by arguing an issue he knew was not going to be included in the judge’s charge to the jury; nor should we on this record attribute to counsel unethical conduct in deliberately refraining from noting his objection to such omission until after the judge had completed his jury charge in order to gain what is claimed would have been an advantage of undue emphasis by a corrective instruction. The profession deserves more from this Court than a factually unsupported presumption of venality.
But the fact is that plaintiff’s counsel did object to the trial court’s omission in this case, and his objection was timely, well within the time limitations of the above-quoted subrule, GrCB 1963, 516.2. Following counsel’s argument to the jury, the trial judge delivered his charge to the jury, apparently at the very end of a trial day. He thereupon recessed the court, advising the jury to return to the courtroom the following morning before beginning deliberation on its verdict. The transcript of proceedings at this point shows what transpired next on the following morning. It commences as follows:
“(Forenoon session, proceedings continued out of the presence of the jury.)
“The Court: All right. Mr. Cicinelli has some-, thing he wants to put on the record.
“Mr. Cicinelli: Your Honor, yesterday, immediately after the court’s instructions last evening, both counsel, after the jury had left the room, stepped up to the court, counsel for the other side stepped up,' and I indicated that I wanted to take a matter up with the court in reference to the instructions so that the court would be given an opportunity to hear what objections I had in reference to the omission of certain instructions that we had proffered in reference to the question of two proximate causes, combined negligence. I am referring to the combined, possible combined negligence of the plaintiff [plaintiff’s?] driver and the defendant Narmore. This, so that the record could be set straight and the court given an opportunity to submit further instructions along the line if he thought we-were correct in our position before the jury was sent in to the jury room to deliberate.
“Now, as of now, as I understand it, the jury is waiting in their waiting room, waiting to he sworn in and to be sent out to deliberate. Before they do that, I would like to complete what we took up last night partially on the record and partially off the record, at which time you decided, I think, to delay it until this morning and take it up again.
“Now the objection that I have is the deep concern with the court’s not having given either one or both of plaintiff’s requested instructions, proposed instructions, being paragraphs 11 and 12 of the instructions which we submitted to court and counsel yesterday morning, Tuesday, about 9 o’clock.”
Neither the trial judge nor defendant’s counsel objected then, nor does defendant now, that Mr. Cicinelli did not state the facts accurately, that is to say, that on the preceding evening the trial judge decided to delay considering objections to the charge as given, as distinguished from those proposed, until the following morning when in fact Mr. Cieinelli made the specific objection that the trial judge’s charge to the jury omitted his requested instructions on the issue of concurrent negligence. Having made his objection before the jury retired to consider its verdict, plaintiff’s counsel complied fully with the requirements of GCR 1963, 516.2.
Under such circumstances, plaintiff was entitled to have a corrective instruction given on the issue of concurrent negligence before the jury began its deliberations. There was time then to prevent manifest injustice. It was not done, and thus we must reverse and remand for new trial. Plaintiff may tax her costs.
T. M. Kavanagh, C. J., and Smith and Adams, JJ., concurred with Souris, J.
A second question submitted for review is whether the trial judge erred in denying plaintiff’s motion for discovery of documents (see discussion of this question by the Court of Appeals, 1 Mieh App at 165, 166). For approval of disposition by the Court of Appeals of this question, see Justice Kelly’s opinion. I agree with Justice Kelly in such regard.
See' present quotation of the particularly pointed portion of defense counsel’s objection to plaintiff’s motion for grant of requests 11 an'4 13,
CLS 1961, § 257.648 (Stat Aim 1960 Rev § 9.2348).
We reject Justice Kelly’s relianee upon the contents of counsel’s jury argument as pertinent to Ms conclusion “that the jury understood ‘that if the jury found both the defendant and plaintiff’s own driver guilty of negligence which contributed to the happening of the accident, plaintiff could still recover a verdict.’ ” The jury should have been instructed that that was the law to be applied by it to the facts it found, but it was not so instructed by the only ageney we recognize in our system of justice as legally empowered to instruct a jury upon the law— the trial judge. | [
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North, C. J.
In April, 1942, plaintiff filed an application for determination of his liability for contributions or assessments under the Michigan unem ployment compensation "act. Act No. 1, Pub. Acts 1936 (Ex. Sess.), as amended. Upon being advised that he was liable for contributions he appealed to a referee, and from the decision of the referee to the appeal board. Thereafter from a decision adverse to plaintiff an appeal in the nature of certiorari was taken to the circuit court of Ingham county. The final determination held plaintiff liable for contributions in so far as certain men designated as “applicators” were engaged in rendering services in the performance of specific contracts incident to plaintiff’s business. From the decision of the circuit court this appeal in the nature of certiorari has been taken by plaintiff.
Plaintiff is doing business in the city of Lansing as Mineralite Products Company, and he designates himself as “a merchandiser and jobber of composition roofing and siding materials.” In connection with his business plaintiff enters into contracts for furnishing the material and labor for roofing or siding buildings. Such contracts in some instances are obtained with the property owners by solicitors whose relations to the transactions are not involved in this appeal, and in some instances such initial contracts are obtained by the parties who apply the roofing or siding. When such contracts are presented to plaintiff, they are accepted by him if found satisfactory. For brevity we herein refer to George N. O’Brian as plaintiff; to the men who undertake to perform the labor in applying the roofing or siding as application contractors or subcontractors; and to the persons whom such subcontractors employ to perform labor as employees.
From time to time as the contracts for the performance of such jobs are available through plaintiff’s office any one of numerous so-called application contractors, men who are carpenters or shilled in construction and roofing business, enter into agreements with plaintiff to perform the necessary labor in applying the roofing of siding on designated jobs. Such relationship is established with plaintiff by means of two instruments, one of which is referred to as the master contract and the other as a separate job sheet. The former is a continuing agreement without any fixed period of duration. It sets forth the terms, including the “price per square” of footage at which the work will be done, and establishes the relation which, without reference to any particular job, would generally be > applicable between plaintiff and the ‘ ‘ applicator. ’ ’ The job sheet embodies the details of the particular job to be performed. The plan results in plaintiff furnishing the material with which the job is to be done at his price per square or lineal foot, while the application contractor performs the service of applying the roofing or siding at a price agreed upon between him and plaintiff.
Aside from infrequent instances the application contractor in doing the work uses his own tools and ladders. He may perform the actual labor in person or engage employees to do the work. He is not under the' control of plaintiff as to whom he will employ or at what rate of pay or as to hours of labor or the time or manner in which the work will be done except that the completed job is to be done in a good and workmanlike manner in accord with the contract for the particular job. Except as he receives pay under the terms of his agreement as performed, the application contractor receives no compensation for services from plaintiff; and the application contractor bears bis own loss, if any, or benefits from tbe profits, if any, derived from a particular job. In exceptional circumstances plaintiff has paid wages to the application contractor’s employees; but such is not the rule and, when done, the amount so paid is charged against what would otherwise be due the application contractor on the particular job. The question for determination is whether under such circumstances the application contractors are to be considered1 as plaintiff’s employees and plaintiff required on that basis to make contributions to the unemployment compensation fund under the Michigan act, or whether on the other hand the applicators are independent contractors, as claimed by plaintiff.
Decision must be made in the light of the Michigan unemployment compensation act, which furnishes its own test, rather than by common-law principles which normally determine the distinction between an employee and an independent contractor. Acme Messenger Service Co. v. Unemployment Compensation Commission, 306 Mich. 704. As to what constitutes “employment” within the act the following provisions control:
“(1) Subject to the other provisions of this section ‘employment’ means service, including service in interstate commerce, performed for remuneration or under any contract of hire, written or oral, express or implied. * # *
“(6) Services performed by an individual for remuneration shall be deemed to be employment subject to this act unless and until it is shown to the satisfaction of the commission that:
“(a) Such individual has been and will continue to be free from control or direction over the performance of such services, both under his contract of service and in fact; and
“(b) Such service is either outside the usual course of the business for which such service is performed1, or that such service is performed outside of all the places of business of the enterprise for which such service is performed; and
“(c) Such individual is customarily engaged in an independently established trade, occupation, profession or business.” (Act No. 1, §42, subd. (1), (6), Pub. Acts 1936 (Ex. Sess.), as amended by Act No. 324, Pub. Acts 1939, and Act No. 18, Pub. Acts 1942 (2d Ex. Sess.) (Comp. Laws Supp. 1940, § 8485-82, Stat. Ann. 1942 Cum. Supp. § 17.545).
Subdivision 7 of section 42 enumerates various exceptions to the above-quoted subdivision 6 of section 42, but such exceptions in no way affect decision in the instant case. Nor is decision herein affected by the fact that subdivision 6 above quoted was omitted from section 42 as amended by Act No. 246, Pub. Acts 1943 (Comp. Laws Supp. 1943, § 8485-82, Stat. Ann. 1943 Cum. Supp. § 17.545).
In a former case we have held that paragraphs (a), (b), (c), above quoted, which limit the preceding-words of subdivision 6 of section 42, are to be construed conjunctively. Acme Messenger Service Co. v. Unemployment Compensation Commission, supra, 710. We have also held that the unemployment compensation act should be liberally construed in accomplishing its purpose. Godsol v. Unemployment Compensation Commission, 302 Mich. 652 (142 A. L. R. 910).
The so-called master contract or “agreement” is of such length that we refrain from quoting it in full. It contains in the paragraphs indicated the following-provisions :
“First: Contractor agrees that he will accept any job for applying, laying and/or repairing roofs, siding- and general repair worji on buildings within the State of Michigan, which may he tendered to him by the company (plaintiff), and that he will apply, lay and/or repair the roofs, siding or do general repair work on those jobs which he accepts in a neat, workman like manner, and in accordance with the instructions furnished to him hy the company.
“Second: Contractor agrees that he will not do any extra work on said jobs not specified in such instructions above mentioned without express written authority from the company. * * *
“Fifth: Contractor guarantees that all roofs or siding applied, laid1 and/or repaired or general work performed by him under and hy virtue of this contract shall be free and clear from any defect in workmanship for a reasonable length of time. * * *
Contractor agrees to remedy said defects without delay and without cost to the company. * * *
“Sixth: Contractor agrees to indemnify, protect and hold the company free and harmless from any and all claims, and demands whatsoever, and all suits in law or in equity, and any and all expenses (including court costs and attorney fees) incurred by the company in and about defending against and settling such claims. * * *
‘‘ Seventh: Contractor shall employ and discharge at his own expense and have complete control and supervision over all men used in or about any of said jobs.* * *
“Ninth: Company agrees to pay contractor, and contractor agrees to accept from the company as full payment for work done by the contractor on any job tendered hy the company to the contractor and accepted by the contractor hereunder * * * compensation in accordance with schedule marked exhibit ‘A’, signed by the parties hereto and attached to this contract and hereby made a part hereof.”
Other provisions in the so-called master contract are that the contractor upon the completion of a job will return to the company all ladders, scaffolding and other equipment loaned to him; that he will deliver to plaintiff waivers of lien signed by the contractor and “each laborer employed by him,” and a statement signed by the property owner that the job has been done in a manner satisfactory to him; that materials delivered to the job but not used thereon will be returned to plaintiff’s place of business ; and that the contractor will pay all charges of any kind for unemployment insurance or old age pension for men employed by him on jobs taken from plaintiff.
Because of the character of the record on this appeal we should note in part the statutory provisions governing such appeals to the circuit court and from the circuit court to the Supreme Court.
“Review of questions of fact and law by court. The findings of fact made by the appeal board acting within its powers if supported by the great weight of the evidence, shall, in the absence of fraud, be conclusive, but the circuit court of the county, in which the claimant resides or in which the employer’s principal place of business in Michigan is located, if no claimant is a party to the case, or the circuit court for the county of Ingham shall have power to review questions of fact and' law on the record made before the referee and the appeal board involved i-n any such final decision, but said court may reverse such decision of said appeal board upon a question of fact only if it finds that said decision of the appeal board is contrary to the great weight of the evidence : Provided, That application is made within 15 days after delivery of a copy of such decision, by certiorari or by any other method permissible under the rules and practices of the circuit courts of this State, and to make such further orders in respect thereto as justice may require. The commission shall be deemed to be a party to any judicial action involving any such decision. An appeal may be had from the decision of said circuit court in the same manner as provided by tbe laws of this State with respect to appeals from circuit courts.” Act No. 1, § 38, Pub. Acts 1936 (Ex. Sess.), as amended by Act No. 364, Pub. Acts 1941 (Comp. Laws Supp. 1943, § 8485-78, Stat. Ann. 1943 Cum. Supp. § 17.540).
Our review of the record discloses phases of tbe relation between plaintiff and the applicators which tend to sustain plaintiff’s contention that these applicators are in fact and in law independent contractors ; but on the other hand much in the record supports defendant’s contention that the applicators under the provisions of the controlling statute are employees of the plaintiff. Decision of this controlling question must be made from an over-all consideration of the record. We deem it unnecessary to attempt to review every detail of the record but note the following.
As tending to establish the relation of an independent contractor rather than that of an employee plaintiff notes and urges the following.
(a) The applicator renders services under an agreement in which he is designated as a “contractor.” While worthy of consideration, this circumstance is not conclusive, and particularly so since the statute above quoted provides that the one rendering the service is an employee “until it is shown to the satisfaction of the commission” that such person is free from control or direction “both under his contract of service and in fact.”
(b) The so-called master contract provides: ‘ ‘ Contractor shall employ and discharge at his own expense and have complete control and supervision over all men used in or about' any of said jobs.” Admittedly the quoted provision is indicative of full control and of an independent contractor status, but its persuasiveness must be viewed in the light of other portions of the record. It appears by plaintiff’s own testimony that the applicators were paid by plaintiff for work done “at tbe end of each week, according to footage.” Further, that in some instances plaintiff paid wages direct to tbe men who assisted tbe applicators, and that plaintiff kept book accounts in which entry of payments to applicators was under the beading “labor.”
(c) Tbe testimony discloses that the applicators fixed tbe amount of the compensation to be paid to their helpers, and this, plaintiff urges, is in keeping with bis claim that tbe applicators were independent contractors. However it may be noted as a matter of common knowledge that men employed as foremen frequently have tbe power to “hire and fire” employees and to fix tbe compensation for which they will work; but such authority on tbe part of the foremen does not render him an independent contractor. And-so in tbe instant case the circumstance just noted is not conclusive.
(d) Another circumstance urged in support of plaintiff’s contention is that the application contractors carried on other jobs during tbe same period they were performing services for plaintiff. Here again tbe circumstance noted tends to sustain plaintiff’s claim; but it must be considered in the light of tbe fact that tbe ordinary employee may and often does render services to parties other than bis employer and during the period of bis employment. This, however, does not change bis status of an employee to that of a contractor.
In support of defendant’s contention that tbe applicators are employees of plaintiff rather than independent contractors, tbe following among other phases of tbe record are stressed.
(a) It plainly appears from tbe record that tbe contract with tbe property owner for tbe roofing or siding is between the' owner and tbe plaintiff. Tbe job is plaintiff’s job, and be merely employs tbe services of tbe applicators in performing tbe con tract. If either the material used or the workmanship proves defective the property owner would look to plaintiff for correction; but in this connection the record shows that the cost of correcting- defective workmanship is charged back by plaintiff against the applicator, as would be done in the case of a subcontractor.
(b) The testimony discloses that there is great uncertainty both in plaintiff’s mind and in his record's as to who rendered services for him as alleged contractors and who were persons otherwise employed to assist in the work. The decision rendered by the appeal board states: “The employment status of the services of 77 individuals designated as ‘application contractors’ * * # is up before us for consideration.” To say the least, this is seemingly a large number of persons to be considered “independent contractors” rather than employees.
(c) The so-called master contract (including the attached schedule) solely in and of itself did not create any contractual relation between plaintiff and the applicators. This is true because this instrument does not identify any work or job to be done. By itself it created no obligation on the part of plaintiff or the subscribing applicator. If any legally enforceable contract relation arose, it was only brought into being by the so-called “work sheet,” which embodied data pertinent to a particular job.
(d) The record discloses that the “work sheet” memorandum was sometimes signed by the applicator who took the job, but in other instances seem-ingly it was not executed at all as a formal contract. And the record fails to show whether such work sheets were or were not signed by plaintiff.
(e) Further, the so-called master contract provides: “Company agrees to' loan contractor, wherever company shall have available, any necessary ladders, scaffolding and other equipment required by contractor in and about * * * jobs undertaken by contractor hereunder;” but it is further provided in the master contract that the contractor “assumes any and all liability arising or growing out of the use thereof,” and further (as hereinbefore noted), the loaning of such tools or equipment by plaintiff to an applicator occurred rather infrequently. Furnishing. tools to a workman is more commonly indicative of his status as an employee, rather than an independent contractor.
(f) It also appears from plaintiff’s own testimony that he employed one or more inspectors who check on the jobs being done. Plaintiff testified: “I have one man in my employ who makes the rounds, goes around and just looks at the job. * * * We cannot tell a man (an applicator) what to do, if he is staying within the frame of the contract. If a man is not staying within the frame of the contract, we can break the contract with him.”
The trial judge, in holding that the applicators were plaintiff’s employees, seemingly relied much on the provision for inspection just above quoted and the provision in the first paragraph of the master agreement hereinbefore quoted wherein the contractor “agrees that he will accept any job * * # which may be tendered to him by the company” and that he will do the work “in a neat, workmanlike manner, and in accordance with the instructions furnished to him by the company.” Plaintiff contends that the word “instructions” above quoted should be held to mean specifications as contained in the so-called work sheet. But the circuit judge did not so construe this provision in the agreement, nor does it so read. And it cannot be overlooked that this provision goes to the very heart of the instant case, because if plaintiff bas the right to give “instructions” to the applicator, the latter is not free from control. Herein lies the distinction between the instant case and our decision in McCormick v. Sears, Roebuck & Co., 254 Mich. 221. Concerning the phrase “and in accordance with the instructions furnished to him by the company” the circuit judge said:
“It seems to me that the language quoted is especially significant with reference to the matter of supervision and control. It will be noted that the contract does not undertake to limit the instructions as to character, detail, or time of furnishing. Doubtless the parties in making such agreement have in mind that the job to be performed is, after all, plaintiff’s undertaking with the owner and that in consequence responsibility for proper performance rests with plaintiff. It is, I believe, a fair interpretation of the language used that the parties contemplated that instructions with reference to the doing of the work might be given in advance, or from time to time as the work progresses, or. a combination of such methods. The right to give such instructions logically involves the incidental rights of inspection. The duty to follow instructions given at plaintiff’s election indicates that the actual control and direction of the work rests with him. The fact that he employs in the carrying out of his contracts men of experience who do not require specific directions does not change the rights and duties of the parties as created by their agreement, nor does it alter the status of those engaged in the performance of the work.' * * *
“I am brought to the conclusion that the holding of the appeal board with reference to the status of the so-called application contractors is not repugnant to the great weight of the evidence.”
The above determination is controlling of the status of the other men who worked with the applicators in applying the roofing and siding. The following portion of the act is pertinent to this phase of the case.
“Each individual employed to perform or to assist in performing the work of any agent or employee of an employing unit shall be deemed to be employed by such employing unit for all the purposes of this act, whether such individual was hired or paid directly by such employing unit or by such agent or employee, provided the employing unit had actual or constructive knowledge of the work. ’ ’ Act No. 1, § 40, Pub. Acts 1936 (Ex. Sess.) (Comp. Laws Supp. 1940, § 8485-80, Stat. Ann. 1943 Cum. Supp. § 17.542).
The conclusion that all men engaged in applying plaintiff’s roofing and siding materials were his employees obviates need for comment concerning plaintiff’s contention that the Michigan unemployment compensation act would be unconstitutional, if construed to require him to make contributions on the basis of men who were rendering service but were not plaintiff’s employees.
From the record as a whole the circuit judge found that the applicator in performing services for plaintiff did not ‘ ‘ continue to be free from control or direction over the performance of such services” as provided in the statute, and therefore plaintiff was not exempt from liability for contributions under the Michigan unemployment' compensation act. On this appeal by certiorari under the statutory provisions it cannot be said that the circuit-judge’s determination was “contrary to the great weight of the evidence.” The judgment entered in the circuit court is affirmed. Costs to appellee.
Starr, Wiest, Btjtzel, Bushnell, Sharpe, Boyles, and Reid, JJ., concurred1.
This act had been amended prior to April, 1942, by Aet No. 347, Pub. Acts 1937, Aet No. 324, Pub. Aets'1939, Aet No. 364,. Pub. Acts 1941, and Aet No. 18, Pub. Acts 1942 (2d Ex. Sess.). It has sinee been amended by -Act No. 246, Pub. Acts 1943 (see Comp. Laws Supp. 1940, 1943, §§ 8485-41 et seq., Stat. Ann. 1943 Cum. Supp. § 17.501 et seq.).—Reporter. | [
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Dethmers, J.
Defendant appeals from an order of tbe department of labor and industry reversing tbe award of the deputy commissioner which denied plaintiff compensation. The deputy commissioner’s award was filed and copies mailed to the parties on May 21, 1945. On August 13, 1945, plaintiff filed with the commission a petition for a delayed appeal, supported by the -affidavit of plaintiff’s attorney, which recited, in substance, that he had been retained by plaintiff after the statutory 10-day period for appeal had expired, that he had examined the records of the case and believed plaintiff had a meritorious case, and that the' delay was due to circumstances beyond the control of plaintiff and his attorney and was not due to the negligence of either. On September 10, 1945, the commission granted a delayed appeal and on January 15, 1946, reversed the award of the deputy commissioner and granted plaintiff compensation. Defendant appeals on the ground, inter alia, that the commission’s order granting a delayed appeal amounted to an abuse of discretion.
Section 8447, 2 -Comp. Laws of 1929, as amended by Act No. 245, Pub. Acts 1943 (Comp. Laws Supp. 1945, § 8447, Stat. Ann. 1946 Cum., Supp. § 17.182) reads in part:
“Unless a claim for a review is filed by either party within 10 days, the decision shall stand as the decision of the compensation commission: Provided, That said commission may, for sufficient cause shown, grant further time in which to claim such review. ’ ’
"Was sufficient cause shown? Plaintiff contends that this question, raised by the statute, is addressed to the sole discretion of the commission, that this Court does not substitute its discretion for that of the commission which cannot come before us for consideration in the absence of a finding of an abuse of discretion. As authority for this proposition, plaintiff cites the case of Curley v. Beryllium Development Corp., 281 Mich. 554. But in that case, in which lack of an attorney and plaintiff’s ignorance of the time limit on appeals were advanced as the reasons and cause for delay, Mr. Justice Wiest, speaking for the Court, said (558):
“It would have been an abuse of discretion on the part of the department had recognition been given to the reason alleged.”
And in the case of Brunette v. Quincy Mining Company, 197 Mich. 301, 306 (16 N. C. C. A. 743), it was said:
“When, the time fixed by statute expires without any claim of review filed by either party, the award stands as the decision of the industrial accident board. Only in exceptional cases and for some special reason the board may, upon a meritorious application showing in its judgment sufficient cause for further delay, grant an extension of time.”,
While the affidavit supporting plaintiff’s petition alleges, as a matter of conclusion, that the delay was due to reasons beyond the control of plaintiff and his attorney and not due to their negligence, it recites no facts in support thereof nor any which show the cause for delay beyond the statutory 10-day period. The commission’s -order for delayed appeal is contrary to the statute and an abuse of discretion.
But plaintiff contends that defendant has abandoned its rights in this connection because it neither sought review in this Court by certiorari within 30 days after date of the order nor preserved the question for review in this Court by raising it affirmatively before the commission on review. What defendant did do was to file a written answer to plaintiff’s petition, objecting thereto on the ground that it showed no cause for delay. Defendant’s objection was overruled by the commission’s order granting delayed appeal. There was no necessity or occasion for defendant to renew its objections before the commission, on review, inasmuch as such review, provided for by statute (section 8447, 2 Comp. Laws of 1929, as amended by Act No. 245, Pub. Acts 1943 [Comp. Laws Supp. 1945, § 8447, Stat. Ann. 1946 Cum. Supp. §17.182]), is for the sole purpose of reviewing the decision of the deputy commissioner and not the previous interlocutory orders of the commission itself. This was not a final decision or determination of the commission, but an interlocutory order which did not dispose of the ease but left it for further action by the commission in order to settle and determine the entire controversy on the merits. At that stage an appeal to this Court would not have been proper. Lucas v. Ford Motor Co., 299 Mich. 280. On the other hand, this Court previously, as now, has considered in connection with' the appeal from the final decision of the commission on the merits' of the case the validity of the commission’s interlocutory order for a delayed appeal. Meyers v. Iron County, 297 Mich. 629.
Sufficient cause for delayed appeal was not shown. The appeal was too late. The commission had no jurisdiction to hear it. The decision of the deputy commissioner stands as the decision of the commission and remains in force.
Reversed, with costs to defendant.
Carr, C. J., and Bushnell, Sharpe, Boyles, Reid, and North, JJ., concurred. Butzel, J., did not sit.
The powers and duties of the industrial accident board hav<> be< m transferred to the department of labor and industry, are administered by the compensation commission thereof, and the board abolished. See 2 Comp. Laws 1929, §§ 8310, 8312, as amended by Act No. 241, Pub. Acts 1943 (Comp. Laws Supp. 1945, §§ 8310, 8312, Stat. Ann. 1946 Cum. Supp. §§17.1, 17.3).—-Reporter. | [
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Reid, J.
Upon leave granted, defendant took an appeal in the nature of certiorari from an award of compensation by the department of labor and industry. Plaintiff entered the employment of defendant September 30, 1943, as a lumber piler. On November 25, 1943, plaintiff and a fellow employee were handling six-quarter green lumber, 16 feet long 8 inches wide. Each board weighed' about 130 pounds. Plaintiff’s fellow employee was handing the boards from the tram to plaintiff. Plaintiff would take each board and then walk over and pile it on a car. The happening of the injury complained of is described by plaintiff in his testimony as follows :
“Q. "While your partner was handing you the lumber and you were transferring it to the car * * * what happened?
“A. My partner was handing me one of those heavy boards and I put my both hands on the board and had the board against my body and when I took a step forward to put it on the car I slipped with my right leg and got an awful wrench in my back.
“Q. Tour right leg?
“A. My right foot — I slipped with my right foot -and got an awful wrench in my back.
“Q. Did anyone see what happened?
“A. Then when I got that awful wrench in my back I left the board drop in front of me and put my both hands behind my back and braced myself from that -awful pain I got. ’ ’
Plaintiff further testified that his fellow employee told him to report to the boss right away and plaintiff further says that on the same day he went to his foreman, Mr. Mainville, who wrote out a first-aid card ancl told plaintiff to report to the first aid; fur-' ther,, that he reported to the first-aid department and told them that as he was handling some heavy lumber he slipped with his right foot and got an awful wrench in his back, and that the factory service took him to the hospital where he saw Dr. Menzies. Further, that he was told by the doctor that lie could not do heavy work, that either he should get a light job or go home, whereupon plaintiff again reported to Mr. Mainville, who said that he had no light work for him and sent him to another person, apparently a foreman in the employ of defendant, who gave him light work, which employment continued for several days. After some further interviews with a foreman at the plant and with Dr. Menzies, finally his foreman directed him to report to Margaret Erickson, who was in charge of defendant’s local office for compensation matters. Finally upon being told by Dr. Menzies on December 2, 1943, that he could not give him any more treatments, plaintiff says he stayed in bed on and off and worked as much as he could and that defendant gave him light work. About December 16th, he again saw Mrs. Erickson and, after being told by her, “I suppose you have to pay for your own doctor,” he said to Mrs. Erickson, “Then I am asking the Ford Motor Company to pay my compensation right away because I have a family at home to feed and I can’t do no heavy work,” whereupon Mrs. Erickson telephoned to somebody at the body plant and the answer was that there was no light work for plaintiff. He then returned to his own department and continued until some, time in 1944, in a light job, piling light boards'. After being absent from his employment, plaintiff reported back some time in May, 1944, to the Ford Motor Company and asked for a time card to go to work and was informed by the employment man,- “You don’t work in this plant lio more,” and plaintiff has been ont of employment ever since. » '
Defendant had notice and knowledge of the injury' immediately after it happened. On January 10, 1944, plaintiff made and filed with the department an application for adjustment of claim. Plaintiff did not withdraw this application, but wrote the following letter:
“Iron Mountain, Mich.
. Jan. 22, 1944.
“Dear Sir:
I am writing to say I was called to the compensation dept, of the Ford Motor Co., and they explained that you were going to court and sue them. I do not intend to go on with the court now. As my back is getting better.
yours truly
Michael Schinderle.”
The department did not treat this letter as a withdrawal of the claim, but regarded it as an indication that plaintiff wished a delay in the hearing. The letter was evidently an act of good faith and honesty of purpose on the part of plaintiff, who was waiting to see whether he would recover sufficiently'so that further prosecution of the claim might prove to be unnecessary.
The later filing of another application for hearing and adjustment of claim on August 28, 1944, for the same injury, is considered by us to be a renewal of the former claim after the necessity for hearing was found to exist. The original claim (January 10, 1944) was therefore timely filed. 2 Comp. Laws 1929, § 8431, as amended by Act No. 245, Pub. Acts 1943 (Comp. Laws Supp. 1945, § 8431, Stat. Ann. 1946 Cum. Supp. § 17.165).
Defendant asserts (citing LaRosa v. Ford Motor Co., 270 Mich. 365) that the claim filed by plaintiff on January 10, 1944, does not show that plaintiff is making a claim for compensation. * However, the claim is addressed to the compensation commission and contains the statement, “That this claim relates to a personal injury or disablement from occupational diseases which occurred on or about November 26, 1943, at Ford Motor Company, Dickinson county, Michigan.” It indicates the'occurrence of the injury and asks the commission to set'the matter for a hearing for determination of the rights of the parties.
The compensation commission could not very well determine any other claim than a claim for compensation and we consider the word “claim,” as used by plaintiff, must be understood to be a claim for compensation. The injury was described. The employer was further given such information as the law intends.
Defendant claims (1) that the legislature by its amendment to the compensation act, which amendment became effective July 30, 1943, being Act No. 245, Pub. Acts 1943, did not eliminate the necessity of an accidental cause for a compensable injury under the provisions of the workmen’s compensation law. Defendant further claims (2) that plaintiff is not entitled to compensation for personal injury when the department of labor and industry failed to find that the personal injury was the result of an accidental cause or failed to find" that the personal injury was due to a disability from an occupational injury or disease.
Defendant claims the injury is noncompensable and that the finding by the department is not specific enough to be a basis for an award of compensation.
Defendant in its report dated November 26, 1943, to the question, “How did it occur?,” answered, “Employee is authority for the statement that while loading dry kiln cart his partner was handing him a board and he slipped and felt pain in his back.” But to the next question, “Nature and location of same,” defendant answered, “Myositis of the back, lumbar region.” There is no qualification that this was the statement of plaintiff.. It seems to stand as an admission that the injury was myositis. Defendant evidently had the opportunity of consulting with the attending physician, who seems to have been in the employ of the defendant, and who had examined the plaintiff and knew of the character of the injury.' It was competent for defendant to waive any question as to the nature of the injury and to give the unqualified answer, “Myositis of the back, lumbar region.” *
Dr. D. B. Smith, a witness on behalf of plaintiff, testified as follows:
“Q. Doctor, did you observe any facial expression that might indicate pain?
“A. "Well, there was evidence of pain.
“Q. In his expression?
‘‘A. Yes. Otherwise too.
“Commissioner: Now, “otherwise too” what is that?
“A. Well, on motion, rotation, principally twisting his body to the right and left, there is definite evidence of limitation of motion and that is evidenced principally by tenderness and spasticity— stiffness in the muscle.
“Commissioner: Were the muscle spasms observed?
“A. Yes.”
Dr. Smith further testified as to what he found on S-ray plates of the plaintiff, as follows:
“A. The principal thing here is the arthritic process and that is primarily between the last vertebra — the lumbar vertebra and the sacrum. There is loss of space between the two vertebrae and it has a fuzzy appearance. It is not a clean joint. It is better demonstrated in the lateral than it is here. This is “A.” This picture shows the loss of space here (indicating) and the spur formation here (indicating), the roughness here of the spape between the sacrum and the 5th lumbar. It is a picture of arthritis, hypertrophic and atrophic.”
Dr. Smith described myositis as ‘ ‘ some inflammatory process in the muscles,” and further testified,
“Commissioner: Doctor, can you tell us what some of the causes of myositis are?
“A. Any time there is a spasm of the muscle it is myositis. It may be temporary or it may be acute or a chronic thing.”
We have carefully considered the testimony by the three doctors whose testimony is in the record. While we may consider therefrom, and as well from what is common knowledge, that a sudden jar or jerk may cause great pain to an arthritic person, still the medical testimony in this case clearly points out a muscular spasm as having been observed. The testimony does not show the relationship, if any, between the arthritis and the muscular spasm. Wc cannot assume that the department based its finding, even in part, upon the proposition that the arthritis caused the muscular spasm.
The deputy commissioner found, “That on 11-26, 1943 the above named employee did receive a personal injury arising out of and in the course of his employment by the above named employer.” This award was affirmed by the department on appeal. The award is construed by us to be a finding that the injury was, as stated in the report of defendant, i. e., myositis. The injury is attributable to a single event, which occurred as plaintiff turned while handling a heavy board. The myositis did not exist before the injury.
Under the authority of Anderson v. General Motors Corp., 313 Mich. 630, the injury in the instant case is compensable. In the Anderson Case the plaintiff felt a severe pain in his left leg while lifting a heavy gun barrel and though requesting permission to cease his work for the day, he was directed to remain at work for the rest of the day. He was afterward found to be disabled for that kind of heavy work. His condition was diagnosed as ‘ ‘ ruptured nucleous polyposis ’ ’. The award of compensation in that case was affirmed.
The parties in the instant case dispute as to whether defendant’s report denying compensability precludes defendant from claiming the benefit of the statute of limitations as to claim of plaintiff filed August 28, 1944. This question requires no decision in view of our determination that the claim filed January 10, 1944, was properly acted on by the department as timely filed and was alive as a claim when the hearing before the department was in progress. '
Defendant claims that there was no showing in the record of the loss of time on various dates between January 3, 1944 and April 25, 1944, as set forth in the award. We have examined the testimony of witness Swanson and find that the dates for compensation are correctly found by the department, with the doubtful exception of 2 or 3 days. Defendant’s objection is not as to this minor discrepancy, but as to whether plaintiff offered testimony to show that the time lost was because of the injury and not through plaintiff’s mere refusal to work for defendant. We find that plaintiff testified he worked when he could, until the final termination of his employment, and that this testimony was in connection with time lost in defendant’s employment.
The award appealed from is affirmed. Costs to plaintiff.
Carr, C. J., and Butzel, Bushnell, Sharpe, Boyles, North, and Dethmers, JJ., concurred. | [
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Butzel, J.
On presentation of the petition of William G. Kemmerer, we issued a writ of habeas corpus to the warden of the State prison at Jackson and an ancillary writ of certiorari to the recorder’s court of the city of Detroit. Returns were duly made. The record shows that on January 21, 1941, a warrant was issued charging petitioner with indecent and obscene exposure in the presence of a young girl. Complaint was made under section 335, Michigan penal code, Act No. 328, Pub. Acts 1931 (Comp. Laws Supp. 1940, § 17115-335, Stat. Ann. § 28.567), which defines such an offense as a misdemeanor punishable by imprisonment for not more than one year or by fine of not more than $500. On arraignment defendant stood mute. On examination he was bound over for trial. Prior to the trial, how ever, a petition was presented by the prosecuting attorney for the examination of the defendant by psychiatrists in accordance with the provisions of Act No. 165, Pub. Acts 1939 (Comp. Laws Supp. 1940, § 6991-1 et seq., Stat. Ann. § 28.967 [1] et seq.). The petition alleged that defendant was suffering from a mental disorder but was not insane or feeble-minded ; that this psychosis had existed for not less than one year; that it manifests itself in criminal tendencies and in the commission of sex offenses; and that Kemmerer was a criminal sexual- psychopathic person. It was shown that he had been convicted of indecent exposure and similar offenses on November 20, 1929, July 20, 1932, September 27, 1932, October 7, 1936, when he was convicted of disturbing the peace (window peeping), and November 17, 1937. He has served sentences for all these offenses except one for which he was placed on one year’s probation. The prosecutor’s petition was granted on January 31,1941, and a psychiatric commission was appointed to examine Kemmerer in accordance with Act No. 165, Pub. Acts 1939. The commission filed a written report on April 1, 1941, and a hearing was held in open court at which the two members of the commission testified in the presence of defendant and defendant’s counsel. Petitioner claims that there was no examination in open court, but the return of the trial judge shows that petitioner was mistaken. The record further shows that defendant had previously in writing waived a jury trial notwithstanding his present statement to the contrary. It further shows that petitioner was represented by counsel who stated in open court that petitioner had been advised of his rights and that he had desired to waive a trial by jury. The trial judge adjudged him to be a criminal sexual psychopath within the meaning of Act No. 165, Pub. Acts 1939, and committed him to the State hospital commission to he confined in an appropriate institution under the jurisdiction of the commission or of the State corrections commission until he shall have been fully and permanently recovered, or otherwise discharged in proper legal proceedings.
The prisoner was first sent to Ionia State hospital but later was transferred to Jackson prison in accordance with an agreement between the State hospital commission and the State corrections commission under which the corrections commission would accept for' therapeutic observation, care and treatment such persons who had been legally committed to the care of the hospital commission as criminal sexual psychopathic persons, and1 who were turned over to its care by the hospital commission. The agreement further recited that No. 12 block of the State prison of southern Michigan, located in Jackson county, Michigan, would constitute and be recognized as the official clinic for the transfer, observation, care and treatment of such designated persons. The Michigan corrections commission agreed to send psychiatrists periodically to the designated clinic located in No. 12 block, State Prison, Jackson, Michigan, for psychiatric examination of the “visitors.”
The return from the recorder’s court of the city of Detroit further states that on April 30, 1943, petitioner was paroled from the State prison to Detroit, that on July 2, 1943, he was recommitted as a parole violator, the violation consisting of indecent exposure and bestial conduct in the presence of some young girls, and that petitioner had not acquired sufficient self-control to refrain from such criminal indecencies, particularly when under the influence of liquor from which he did not have sufficient self-restraint to abstain. Petitioner, evidently a man of superior intellect, has marked psychopathic deviations. In Ms petition for habeas corpus, petitioner attacks Act No. 165, Pub. Acts 1939, on the same grounds as were considered in People v. Chapman, 301 Mich. 584. It would serve no useful purpose for us to repeat what was so well stated in the carefully prepared opinion in that case. Had petitioner been convicted of the charge of indecent exposure, the maximum sentence could only have been one year, which now would have expired. He finds himself a prisoner for an indefinite period; possibly for life, because of the commission of a misdemeanor. The record fully shows that he is not being punished for a crime but he has been placed in the care of the State hospital commission until he 'recovers from his uncontrollable habit of committing sex offenses.
Petitioner further alleges that he is confined to Jackson prison and the sole distinction between his status and that of an ordinary convict is that he is called a “visitor” in accordance with Act No. 165, Pub. Acts 1939, and that he is kept in a separate cellbloek exclusively used for criminal sexual psychopathic persons. He claims that his “visit” has been prolonged and he is asking to have it curtailed. The record indicates that the petitioner is an unfortunate person and, until cured, is unfit to enter society, and that he should be institutionalized until it is safe for both him and society that he be released. He alleges that he is not receiving proper care although the prison psychiatrist evidently visits him. Pie is entitled to proper care such as his condition and the good of society demands. If he is not receiving it and is suffering any unusual punishment, he can always present a petition for habeas corpus preferably to the circuit court of Jackson county where proper and full inquiry can be made into the facts. It is not within our province to prescribe the treatment that should1 be accorded petitioner. It must be borne in mind that he is not being, punished, that he is an unfortunate psychopath, and that he is entitled to such treatment as his condition requires.
Subsequent to his commitment, petitioner filed a petition for discharge, requested a hearing thereon in the lower court and filed a demand for a jury trial. The return of the trial judge of the recorder’s court shows that the petitioner presented' no factual basis in this petition showing recovery as required by Act No. 165, § 7, Pub. Acts 1939, the act under which petitioner is committed. The act does provide for jury trial but a petition for discharge first must contain a factual showing which, if proven to be correct, would result in a discharge. We have examined the petition and find that there is no such factual showing therein. The judge was correct in denying it.
Under the circumstances, we therefore hold1 that the prisoner is not entitled to habeas corpus and he is properly committed, and that, therefore, the writs are dismissed.
North, C. J., and Starr., Wiest, ' Bushnell, Sharpe, Boyles, and Reid, JJ., concurred. | [
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Butzel, C. J.
On March 1, 1943-, Alfred A. and Louise Bechard, plaintiffs, entered into a land contract to purchase from Miriam Gf. Bolton, defendant, 200 acres of land in Alcona county for the sum of $3,500. They made an initial, payment of $1,000 and agreed to pay the balance with 6 per cent, interest at the rate of $75 quarterly, beginning June 1, 1943. The contract provided for an abstract of' title showing a merchantable title and a warranty deed subject to liens and incumbrances thereafter created. Prior to the purchase, defendant’s husband wrote to Mr. Bechard that there were 40 acres on the north side of Hubbard Lake Road and 160 acres on the south side, and that 55 acres of the latter were cleared and 105 acres in heavy woods. Shortly thereafter Mr. Bolton drove out to the farm with Mr. Bechard. There was heavy snow on the ground. They went to the house on the premises and Mr. Bolton pointed out the line as they drove down the road. . Mr. Bechard testified that Mr. Bolton told him there were 40 acres on one side of the road and 160 acres on the other. The abstract was furnished plaintiff when they were prepared to pay the balance and take title. The abstract showed (a) that a strip, 33 by 2,640 feet long, of the 160-acre tract had been conveyed to the county off the west side; (b) that in a prior conveyance the State of Michigan had reserved the mineral rights to ’ 40 acres of the property; (c) that the power company had an easement over a small portion of the property. Plaintiffs claimed that they did not know of these incumbrances until plaintiffs were furnished with the abstract. Upon discovering these defects in the title they brought suit in equity to rescind the contract and recover the moneys paid to defendant and the amounts expended for taxes and improvements.
The record does not show that there was any bad faith on defendant’s part. The court, however, found, and the testimony sustains him, that the plaintiffs had also acted in good faith, and there was something more substantial on their part than a desire to ‘ ‘ escape a bad bargain; ’ ’ that there was no evidence that the price agreed upon in the first instance was unreasonable, and tbe court also found that the farm prices bad continued on tbe increase since tbe date of tbe contract. He further found that bad plaintiffs given notice of rescission, surrendered possession and sued at law for tbe money paid on the contract, they would have been entitled to a directed verdict. Lavey v. Graessle, 245 Mich. 681 (64 A. L. R. 1477), and Porter v. Ridge, 310 Mich. 425. In tbe latter case, it was held that a right of way to lay, maintain, operate and remove telephone lines over property sold under a land contract was an incumbrance and would prevent the purchaser from obtaining a merchantable title. Frequently where, suits have been brought in equity, and tbe parties cannot be restored to tbe status quo that previously existed, tbe trial judge has made an equitable adjustment by decreasing tbe purchase price or making allowances because of some slight defect in tbe title.
In tbe case at bar, tbe trial judge denied rescission to tbe plaintiffs but gave them an election to be made within 10 days either to accept a deed subject to tbe defects and incumbrances mentioned with a reduction of $400 in tbe purchase price, or take a deed to tbe land as described except tbe southeast quarter of tbe northwest quarter of section 31 (in which tbe State owns tbe mineral rights), and subject to tbe other defects and incumbrances listed, with a reduction of $700 in tbe purchase price. Further, if defendant believed that her loss would be less by tbe entry of a decree of rescission, she might so elect. Neither party having made an election within the time stipulated, tbe court entered a final decree fixing $400 as tbe damages because of tbe three defects, and reduced tbe purchase price from $3,500 to $3,100, less taxable costs of tbe suit.
Plaintiffs appeal, and claim that under the facts, the court should have granted rescission. Defendant claims that there should he no rescission, because she claims the property cannot be restored 1o the condition it was in before the contract was. made. It was shown that an old garage that had been used as a shelter for an automobile, had been lorn down by the plaintiffs. The testimony shows that it was in such a dilapidated condition that there was imminent danger of its falling down, and, therefore, it was razed.
We have held that rescission and accounting should not be granted if the result would be unjust and inequitable. Amster v. Stratton, 259 Mich. 683. We, however, find nothing unjust or inequitable in allowing rescission in the instant case. The granting or withholding rescission is not a matter of right but rather one of grace, and lies largely within the court’s discretion. Baughan v. Mortgage & Contract Co., 263 Mich. 249; Bonninghausen v. Hall, 267 Mich. 347. The court referred to Hyman v. Boyle, 239 Mich. 357; Amster v. Stratton, supra; Baughan v. Mortgage & Contract Co., supra. There were circumstances in these cases which would have made it inequitable to order rescission, and, therefore, a reduction in the purchase price or some other relief was granted, because of the defects. We find no such circumstances in the present case and believe under the facts contained herein rescission should have been ordered. However, the plaintiffs had the right of. possession to the property from the date of the contract and have used it to a considerable extent. We, therefore, hold that the rental value of the property should offset all interest and taxes paid, and that there should be no recovery because of the improvements made or crops sown. Plaintiffs should not be obliged to accept a title with the defects mentioned which later would affect its merchantability and would in other respects make the property less valuable.
The decree may provjde that defendant shall repay to plaintiffs $2,034.73 with interest at the rate of 5 per cent, per annum from the date of the decree to be entered in this Court, • and that such payment shall be secured by a lien upon the land in suit. Plaintiffs shall have costs.
Carr, Bushnell, Sharpe, Boyles, Reid, and North, JJ., concurred. Starr, J., took no part in the decision of this case. | [
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Sharpe, J.
This is an action instituted by Katherine Grooms, plaintiff, against the Union Guardian Trust Company, as defendant, for the recovery of damages for an injury sustained by plaintiff on March 14, 1940.
The record shows that on the day in question plaintiff fell on a sidewalk adjacent to or near the vicinity of premises known as 8339 Oakland1 avenue, in the city of Detroit, as the result of an accumulation of snow and ice, and was severely injured. The record also shows that the ordinance in effect in the city of Detroit on the day in question, in so far as it is material in this action, reads as follows:
‘ ‘ Chapter 197, Compiled Ordinances:
“Section 1. No person, firm or corporation shall permit any snow or ice to remain on the sidewalks in the front, rear or sides of any house, premises, building or lot owned, occupied or controlled by him or it, longer than 24 hours after it has fallen or formed; and where either has fallen or formed on any such sidewalk, such owner, occupant or agent as above provided shall, within 24 hours after the same had fallen or formed, remove said snow or ice, or cause a sufficient quantity of salt, sand or ashes to be strewn thereon in such manner as to render the same safe for purposes of walking thereon.
“For the purpose of this ordinance, the phrase ‘sidewalks in the front, rear or side of any house, premises, building or lots’ shall be construed to mean that sidewalks or walks forming a part of the public highway. (Approved February, 1925, effective March 6,1925.)
‘ ‘ Chapter 201, Compiled Ordinances:
(Effective September 3,1926, Ordinance 249-B)
‘ ‘ Sec.. 11. When ice and snow have accumulated on sidewalks and it is impossible to remove them by usual methods, sawdust, salt, sand, ashes or cinders may be sprinkled in sufficient quantities to make such sidewalks safe for traffic, et cetera.
‘ ‘ Fine: $100 or 30 days in Detroit House of Correction, or both such fine and imprisonment.”
It also appears that from July 12,1927, to November 15, 1939, the defendant acted as trustee under an agreement with Frank S. Werneken in the management of certain property owned by him, including the property known as 8339 Oakland avenue. This agreement was terminated by the death of said Frank S. Werneken on November 15, 1939. Subsequently, and on January 15, 1940, an agreement was entered into between defendant and Frank E. Werneken, Helen S. Werneken, Marguerite E. Tilton and Maude W. Taylor, who acquired title to all property held under the agreement with said Frank S. Werneken at the time of his death, whereby said defendant was to continue to manage said property for the above-named persons.
On April 10, 1935, an application for tenancy was made to defendant trustee by Eobert Boutry and Lula Boutry, his wife, and accepted by defendant, as agent of Frank S. Werneken, for the premises known as 8339 Oakland avenue, in the city of Detroit, which application for tenancy provided:
“2. Not to use the premises in contravention of any law or any police or sanitary regulation imposed by any government authority.
“3. To keep the premises in good repair during occupancy and at the expiration of occupancy to deliver premises in same condition as when taken, usual wear and tear excepted. ’ ’
The same tenants occupied the premises on the day of the accident.
The cause came on for trial and at the close of plaintiff’s proofs the defendant moved to direct a verdict of no cause of action upon the ground that the ordinance upon which plaintiff’s cause of action is based1 imposes a public duty and confers no right upon an individual. The trial court took the motion under advisement and submitted the cause to a jury. The jury rendered a verdict in favor of plaintiff. Subsequently, defendant made a motion for judgment notwithstanding the verdict on the ground that the pleadings and proofs did not create any liability on the part of defendant. The trial court granted the motion and held that the ordinance in question made only a public duty and' that a personal or private action for a violation of the ordinance could not be maintained by an individual.
It is to be noted that plaintiff’s claim for damages is based upon a violation of the ordinance by defendant.
In Taylor v. Lake Shore & Mich. Southern Railroad Co., 45 Mich. 74 (40 Am. Rep. 457), plaintiff brought suit against the railway company for an injury suffered1 by her in consequence of slipping and falling upon ice which had formed on a sidewalk in front of premises occupied by defendant in the city of Monroe, which ice the defendant company failed to remove within 24 hours, as required by the ordinance. We there held that an ordinance requiring all persons to keep their sidewalks free from ice imposes a purely public duty, and persons injured by slipping on the ice cannot bring private actions against the owners of the premises.
See, also, Blickley v. Luce’s Estate, 148 Mich. 233; Maclam v. Hallam, 165 Mich. 686; and Bolden v. Grand Rapids Operating Corp., 239 Mich. 318 (53 A. L. R. 183).
The rule announced in the foregoing cases is determinate of the issue involved in the case at bar, and the judgment of the circuit court must stand1 affirmed, with costs.
North, C. J., and Starr, Wiest, Btjtzel, Btjshnell, Bowles, and Reid, JJ., concurred. | [
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North, C. J.
This is an appeal in a summary proceedings in which plaintiff sought repossession of premises occupied by defendant as tenant. Plaintiff is the owner of two flats, an upper and a lower, located at 7600 E. Morrow Circle, Dearborn, Michigan. Defendant has rented and occupied the lower flat for eight years. Plaintiff also owns and together with the members of his family occupies a dwelling at 7025 Hartwell avenue. Shortly after Office of Price Administration rent regulations became effective and thereby defendant’s rent was reduced from $60 to $52 per month, plaintiff by summary proceedings sought to terminate defendant’s tenancy. Judgment was entered against plaintiff. About a year later the present summary proceedings were instituted before a justice of the peace; and upon hearing plaintiff had judgment for possession of the Morrow Circle flat occupied by defendant. From the judgment entered defendant appealed to the circuit court of Wayne county where the case was heard without a jury. Judgment was entered in favor of defendant and plaintiff has appealed.
It appears from the record that except for the restrictions contained in the O. P. A. rent control regulation, plaintiff would1 have been entitled to terminate defendant’s tenancy and to repossess the property. Incident to . the present proceedings plaintiff, in an attempt to conform to the O. P. A. rent control regulations, served on defendant and on the O. P. A. a notice of eviction wherein he assigned as grounds for proceeding against defendant the following:
“1. My present quarters are overcrowded, since my married daughter and grown son live with me and my wife in a one-family dwelling.
“2. My wife’s age and physical condition require that my wife have peace and all rooms on one floor, present quarters consisting of three rooms down and three up,
“3. My daughter, who to date is under the care of the University of Michigan Hospital, will live with me, because I no longer can afford to pay for her keep at said hospital, and because she needs a room all of her own.
“4. My present residence is absolutely unsuitable for quartering my daughter now at the U. of M. Hospital.”
The pertinent portion of the O. P. A. rent control regulation is embodied in the Rent Regulation for Housing, section 1388.1181, subsection 6 (a) (6) (8 F. R. 7322, 7326 [CCH War Law Service, par. 49,-129]). It is therein provided in substance that under circumstances presented by the instant case a landlord may not dispossess a tenant unless the landlord ‘ ‘ seeks in good faith to recover possession of such accommodations for immediate use and occupancy as a dwelling for himself.” The circuit judge was of the opinion that plaintiff in seeking to dispossess defendant was not acting “in good faith” because of plaintiff’s desire to occupy the premises, but instead that plaintiff in prosecuting the instant proceedings was motivated by ulterior reasons about to be noted.
There is testimony from which it may fairly be inferred that plaintiff determined to oust defendant from possession because under O. P. A. rent control regulations the rental was reduced from $60 to $52 per month. It also is a reasonable conclusion from the testimony that the primary purpose of plaintiff in seeking to dispossess defendant is that plaintiff wished to permit his married daughter and her husband and one of plaintiff’s sons who was contemplating marriage to occupy plaintiff’s property on Hartwell avenue, rather than plaintiff having any bona fide need of- occupying the Morrow Circle flat. Further the testimony is quite decidedly against plaintiff’s statement in the notice of eviction that his wife’s age and physical condition require and would be benefited by moving from plaintiff’s present residence into the flat occupied by defendant. As to the condition of plaintiff’s daughter who is afflicted with pulmonary tuberculosis the record discloses that her needs can be met as well and perhaps better in plaintiff’s present place of residence rather than in the flat of which he seeks to dispossess defendant.
On the two phases of the case last above noted the trial judge took commendable pains in making a careful personal investigation. This was done by the circuit judge with consent of counsel in the case. It is therefore apparent that the judge was in a much more advantageous position to pass upon the merits of plaintiff’s contentions than a reviewing Court having access to a printed record only. We quote the following from the opinion filed by the trial judge:
“It is the court’s opinion that the plaintiff wants possession of the lower flat on Morrow Circle for the only purpose of providing space for his married daughter and son-in-law and for his son who expects to be married. It is obvious to the Court that if his son did not marry, that the place on Morrow Circle would not be large enough to accommodate plaintiff and his wife, his two sons and the daughter who is now at the University of Michigan Hospital. # #
“The court is of the opinion that the plaintiff should not be allowed to do indirectly what he cannot do directly. In other words, that the court would not evict the defendants, in order to place the plaintiff’s daughter and son-in-law in the flat; nor, should the court evict these tenants, in order to allow the daughter and her husband to live in the home on Hartwell,
“The court is, therefore, finding a lack of good faith on the part of the plaintiff and finding the defendant not guilty, with costs to the defendant.”
The two contentions made by appellant are that (1) the trial court erred in holding that the evidence disclosed lack of good faith on the part of plaintiff, and (2) that the finding and judgment of the trial court was contrary to the great weight of evidence and contrary to the applicable law. Our conclusion from a careful review of the record is that neither of the above contentions on the part of appellant is well founded. The judgment entered in the circuit court is affirmed. Appellee not having filed a brief no costs will be allowed on this appeal.
Starr, Wiest, Butzel, Bushnell, Sharpe, Boyles, and Beid, J J., concurred. | [
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Levin, J.
The issue is whether an indigent person may be found in civil contempt and incarcerated for failure to testify before a grand jury unless offered counsel at state expense at the contempt proceedings.
David C. Johnson, following his refusal to be sworn or to answer any questions before a citizens’ grand jury, was fined $10,000 and sentenced to one year in jail. He would be released upon purging himself of the contempt or expiration of the grand jury term.
The Court of Appeals reversed and held that an indigent witness has a right under the Due Process Clause of the Michigan Constitution to assigned counsel at contempt proceedings in respect to a citizens’ grand jury. We affirm.
A witness summoned to appear before a grand jury, whose testimony or failure to testify is such that contempt proceedings are initiated, requires the assistance of counsel because of the nature and purpose of the grand jury and contempt proceedings. Counsel could advise him regarding the efforts of the state to compel his testimony and how he could purge himself of the alleged contempt without waiving his Fifth Amendment privilege or involving himself in criminal proceedings, and also defend him in the contempt proceedings against the state’s efforts to incarcerate him for failing to testify and, if he indicates a desire to purge himself of the alleged contempt, counsel him in further proceedings before the grand jury.
Fundamental fairness requires that, if indigent, a witness be provided with counsel at state expense since the state is the moving party in such contempt proceedings, since the state seeks to compel the witness’s testimony, since waiver of Fifth Amendment privilege is involved, since by his testimony the witness may involve himself in the crimes being investigated and since the witness might avoid being held in contempt if counseled regarding his failure to testify and the manner in which he can purge the alleged contempt consistent with exercise of the Fifth Amendment privilege.
A number of courts have held that an indigent witness cited for civil contempt of a grand jury is entitled to counsel at state expense; we find no contrary authority.
Cases involving civil contempt for failure to obey orders in private litigation, where the state is not involved (typically involving non-payment of alimony or child support), are readily distinguishable.
I
Johnson, while an inmate in the state penitentiary at Jackson, was subpoenaed to testify before a citizens’ grand jury.
When called as a witness and asked to take the oath, he responded, "I’m taking the Fifth Amendment. I don’t want no oath.” "I don’t know why I’m here.” The assistant prosecutor explained to him that the "oath involves your swearing to tell the truth. Then you may assert your Fifth Amendment rights, and I will give you your rights after the oath has been administered.” Johnson said, "I won’t take no oath.” He did not respond to any other questions.
The assistant prosecutor then advised Johnson that he had "the right to remain silent”, to have an attorney outside the grand jury room with whom he could confer and that "[a]nything that you say can and will be used against you” and that at any time he could "exercise these rights and not answer any questions or make any statements”. Johnson was asked whether he wished to have an attorney and was advised that if he could not afford an attorney he could "petition the presiding judge of the circuit court for Wayne County and ask for the appointment of an attorney”.
Johnson made no response to inquiries whether he understood his rights, wished an attorney and understood that he could petition the presiding judge for the appointment of an attorney.
Johnson was then taken before a circuit judge who inquired whether he had been duly served with a subpoena. Johnson responded, "I don’t know. I don’t know what this is.”
The assistant prosecutor testified that the grand jury was engaged in the investigation of a homi cide, that Johnson had been removed from Jackson prison and brought before the grand jury on a writ of habeas corpus. Johnson had refused to be sworn. The assistant prosecutor had attempted to advise him of his constitutional rights "as well as his statutory rights concerning his right to counsel”. Johnson had not answered any questions.
The judge asked Johnson whether he wished to question the assistant prosecutor or say anything. He shook his head indicating a negative answer. The judge did not advise Johnson of the nature of the contempt proceedings, inquire whether he wished an opportunity to obtain counsel, whether he was indigent or desired that counsel be appointed for him.
The judge then found Johnson guilty of contempt pursuant to MCL 767.19c; MSA 28.959(3), and pronounced the sentence.
II
This Court, in Artibee v Cheboygan Circuit Judge, held that an indigent defendant in a paternity action has a right under this state’s Due Process Clause to appointed counsel, and, in Sword v Sword, that an indigent defendant need not invariably be provided with appointed counsel in proceedings to enforce a child support order.
Our colleague would distinguish Artibee on the ground that the factual and legal issues in a paternity action are likely to be more complex than in civil contempt proceedings. Contempt proceedings ordinarily present a relatively simple factual issue which will be summarily determined without a jury in a proceeding not involving "the complexities of fact-finding, jury persuasion or resolution of sophisticated legal issues” involved in a paternity action.
While the factual issues in a contempt proceeding for failing to testify may be simpler than in a paternity action and, indeed, often there is no factual dispute, there may be difficult legal questions. A witness may be confused and probably is uninformed regarding the subtleties of Fifth Amendment analysis and cannot be expected to know how to exercise his privilege in a manner which will avoid contempt proceedings nor how to defend himself against the state’s efforts to compel his testimony or incarcerate him for failure to, or until he does, testify.
Johnson had indicated to the prosecutor that he did not understand why he was there, that he did not wish to take the oath and desired to assert his Fifth Amendment privilege. He apparently thought that the Fifth Amendment protected him from taking the oath. He may have thought that if he took the oath or said anything he was waiving his Fifth Amendment privilege. He may have been so advised by a jailhouse lawyer before he left the prison for Wayne County.
Applying the test suggested by our colleague, there is "reasonable likelihood” that the nature of the matter is of such complexity that without the assistance of counsel Johnson was "unlikely to be capable of understanding the nature of the proceedings, articulating his position or appreciating the options available to him”.
Whenever a witness indicates that he wishes to exercise his Fifth Amendment privilege as did this defendant ("I’m taking the Fifth Amendment”), the issues are sufficiently complex to require the assistance of counsel and the appointment of counsel, pursuant to the Due Process Clause, for an indigent witness in contempt proceedings which may result in incarceration.
Ill
If a lawyer whose function was to represent him and not the state had been appointed for Johnson, the lawyer could have informed Johnson that he could exercise his Fifth Amendment privilege after being sworn. Johnson might have had confidence in such a statement by his lawyer and might thereby have purged himself of the alleged contempt. Providing counsel to an indigent witness is consistent with this Court’s statement: "Defendants in contempt proceedings should be given every opportunity to exonerate themselves.”
If a lawyer had been appointed for Johnson and had persuaded him to be sworn, the lawyer would have been available to provide counsel regarding and to defend his exercise of his Fifth Amendment privilege in further proceedings.
A lawyer could, additionally, have raised legal defenses:
—Johnson was punished pursuant to § 19c which provides for potentially greater penalties than the general contempt provisions. It appears that § 19c concerns neglect or refusal to testify after a grant of immunity. Johnson was not granted immunity. A lawyer might have argued successfully that a witness, not granted immunity, who appears before a grand jury is not subject to § 19c punishment merely because he refuses to be sworn, the more severe penalties being applicable only to witnesses who have been granted immunity. Since Johnson could not have been punished so severely for refusing to testify after being sworn, it is beyond the intendment of the statute to so punish him for refusing to be sworn.
—A lawyer might have claimed that summary contempt proceedings were unjustified because the contempt was not in the presence of the court.
—A lawyer might further have claimed that Johnson’s failure to testify was innocent in that he thought he had (the assistant prosecutor told him he had) the right to remain silent. He did only what he was told he could do — he remained silent.
Our colleague says that Johnson is "charged with no crime, faces no conviction”. That is an assumption which ignores Johnson’s assertion of the Fifth Amendment privilege. Johnson may have faced criminal charges. He was called as a witness in an investigation of a homicide. Not infrequently witnesses before grand juries implicate themselves in the crimes being investigated.
A grand jury investigation is, in a sense, more akin to a criminal prosecution than is a paternity action. It is an inquisition conducted by the state in which the witness generally sits alone without counsel at his side. Counsel, whether retained or appointed, generally must remain outside the grand jury room. A result of the inquiry may be indictment of the witness.
The purpose of such civil contempt proceedings is to coerce testimony, to force the witness back into the grand jury room, to compel him to testify, to provide testimony which, indeed, may implicate him in the crime under investigation.
IV
The United States Courts of Appeals for the Second, Fourth and Ninth Circuits have held or said that there is a right to counsel where there is a possibility of incarceration in civil contempt proceedings for failing to testify before a grand jury. The United States Court of Appeals for the Eighth Circuit so concluded in civil contempt proceedings for failing to comply with a court order requiring production of records for the Internal Revenue Service.
The Colorado Supreme Court and the Maryland Court of Appeals have also held that there is a right to appointed counsel in civil contempt proceedings for failing to testify before a grand jury.
We find no contrary authority in contempt proceedings for failing to testify before a grand jury.
Sword is not inconsistent with the disposition we think appropriate. Here there are the added factors of the state being the moving party, the state’s purpose to compel testimony in a criminal investigation, and the witness’s assertion of Fifth Amendment privilege.
The Court of Appeals is affirmed.
Kavanagh, Williams, Fitzgerald, and Blair Moody, Jr., JJ., concurred with Levin, J.
Ryan, J.
On August 13, 1975, David C. Johnson, an inmate at Jackson State Prison, was called before a Wayne County citizens’ grand jury pursuant to a writ of habeas corpus ad testificandum. When presented to the grand jury, Johnson refused to be sworn or to answer any questions whatever. He was then taken before a circuit judge for a contempt hearing. During this proceeding the assistant prosecuting attorney from the office of the Wayne County Prosecutor, who summoned Johnson before the grand jury, was sworn as a witness and described the defendant’s behavior before the grand jury. The trial judge asked the defendant if he wished to question the prosecutor about his testimony or if he wished to make any statement at all about his conduct before the grand jury. Defendant responded to both questions by shaking his head in a negative manner.
The circuit judge found Johnson in contempt, fined him $10,000 and sentenced him to confinement for one year or until the term of the grand jury expired, whichever occurred first. MCL 767.19c; MSA 28.959(3). The judge explained to Johnson that he could purge himself of the contempt by testifying before the jury panel as to any matter which would not be self-incriminating.
The Court of Appeals reversed the trial court’s judgment and sentence, holding that "[t]he Michigan Constitution affords a due process right to counsel in a grand jury contempt proceeding under MCL 767.19c; MSA 28.959(3)”. 77 Mich App 426; 258 NW2d 504 (1977). We granted leave to appeal. 402 Mich 848 (1978).
In addressing defendant’s claimed right to the assistance of counsel, it is necessary to examine the nature of the proceeding at issue and the interests which may be affected by it.
The principle is elemental that courts have inherent power to enforce compliance with their lawful orders through contempt proceedings. Shillitani v United States, 384 US 364, 370; 86 S Ct 1531; 16 L Ed 2d 622 (1966); United States v United Mine Workers, 330 US 258, 330-332; 67 S Ct 677; 91 L Ed 884 (1947). Equally basic is the proposition that courts must be able to compel the appearance and testimony of witnesses in judicial proceedings. United States v Bryan, 339 US 323, 331; 70 S Ct 724; 94 L Ed 884 (1950). In instances where a witness refuses to obey a court order to appear or testify in a judicial proceeding, the witness may be confined until the court’s order is obeyed. Shillitani v United States, supra, at 370; McCrone v United States, 307 US 61; 59 S Ct 685; 83 L Ed 1108 (1939). Witnesses refusing to appear or testify in response to the summons of the grand jury risk an adjudication of contempt and are subject to a fine of $10,000 and imprisonment not exceeding one year. A contemptuous witness is entitled to purge himself of the contempt and receive commutation of the sentence upon testify ing before the grand jury. MCL 767.19c; MSA 28.959(3).
In the case before us the court imprisoned the defendant for the purpose of compelling him to obey the order to testify. The sentence was clearly intended to operate in a prospective manner in order to coerce and not to punish the defendant. In terms of the commonly used expression, "defendant carried the keys of his prison in his own pocket”. Because by its very character and purpose such an adjudication and sentence is coercive and remedial, rather than punitive, it is deemed civil in nature. Shillitani v United States, supra, at 368; Sword v Sword, 399 Mich 367, 380; 249 NW2d 88 (1976). As the court said in Shillitani, supra: "While any imprisonment, of course, has punitive and deterrent effects, it must be viewed as remedial if the court conditions release upon the contemnor’s willingness to testify.” Shillitani, supra, at 370.
This analysis of the lower court proceedings is significant in order to properly identify the constitutional guarantees to which a defendant is entitled in such proceeding. Because the contempt proceeding is civil in nature, a defendant’s right to counsel, if any, must be predicated upon US Const, Am XIV or Const 1963, art 1, § 17. The right to the assistance of counsel, guaranteed by US Const, Am VI, binding upon and applicable to the states via US Const, Am XIV and Const 1963, art 1, § 20, is inapplicable to the contempt proceeding below since that right to assistance of counsel is confined to criminal proceedings.
In Sword v Sword, supra, a case involving an adjudication of contempt for disobedience of an order to pay child support, it was argued that on the rational of Argersinger v Hamlin, 407 US 25; 92 S Ct 2006; 32 L Ed 2d 530 (1972), the threat of immediate imprisonment for as much as one year carried with it the right to assistance of counsel. In that connection this Court said:
"The heart of the argument in favor of defendant’s constitutional right to an appointed attorney if he is indigent is that he may be incarcerated.
"There is heavy reliance upon Argersinger v Hamlin, 407 US 25, 37; 92 S Ct 2006; 32 L Ed 2d 530 (1972), in which the United States [Supreme] Court held that 'absent a knowing and intelligent waiver, no person may be imprisoned for any offense, whether classified as petty, misdemeanor, or felony, unless he was represented by counsel at his trial’. Argersinger contemplates punishment for a criminal act whereas civil contempt is remedial or coercive. The objective is to bring about compliance with a court order entered after trial, not punishment for the offense of which defendant was determined guilty at the time of trial.” Sword, supra, at 380-381.
While the assistance of counsel guarantees of US Const, Am VI via Am XIV, or Const 1963, art 1, § 20 are not applicable to a civil contempt proceeding, the defendant’s due process rights, including the assistance of counsel, must be honored if fundamental fairness in the due process sense requires such assistance.
Drawing upon a portion of this Court’s analysis in Artibee v Cheboygan Circuit Judge, 397 Mich 54; 243 NW2d 248 (1976), the Court of Appeals in this case focused upon the following three factors in concluding that the defendant had a due process right to counsel at his contempt hearing.
"First, the contempt proceeding is an action in which the power of the state is brought to bear against the defendant.”
"Secondly, it is undeniable that a recalcitrant grand jury witness faces a substantial penalty.”
"Third, although the grand jury contempt hearing may not involve complex factual issues, it does involve complex legal and procedural issues.”
While the Court of Appeals very understandably looked to Artibee, supra, for precedential guidance on the right to counsel issue, we think the Court fixed its focus too narrowly on the three factors it enumerated and failed to distinguish between the nature of the proceeding involved here and those involved in Artibee.
While the majority in Artibee discussed a number of considerations in reaching the conclusion that in paternity proceedings, Const 1963, art 1, § 17 requires the appointment of counsel for an indigent person, the focus was less upon the three isolated factors enumerated by the Court of Appeals below than upon the broader consideration that paternity pretrial and trial proceedings are very much akin to a criminal prosecution.
In determining whether due process requires the assistance of counsel in paternity proceedings, Justice Fitzgerald wrote:
"Const 1963, art 1, § 17, embodies this state’s guarantee of due process of law. An analysis of what process is due in a particular proceeding must begin with an examination of the nature of the proceeding and the interests which may be affected by it. Paternity proceedings are quasi-criminal. The interests of the individuals affected are substantial, and the nature of the proceedings is sufficiently complex so as to require counsel to insure a fair trial.
"The statute requires that the county prosecute the action if the complainant is without the means to employ an attorney. Both Federal and state law provide a monetary incentive to prosecute. A defendant’s interest in being free from bodily restraint is directly affected from the beginning of the proceedings, since a warrant may issue upon the filing of the complaint. Upon arraignment, a defendant’s failure to make the required recognizance or cash deposit may result in his commitment to the county jail. Although the immediate consequence of the paternity judgment is an order of filiation and for support, the order is enforceable by contempt proceedings. Penalties for contempt include up to one year in the county jail or state prison or until the amount due is fully paid.
"Not only will an indigent defendant be less likely to remain free from bodily restraint, but also an uncounseled defendant will be less able to defend himself at trial against an untrue allegation of paternity. In contrast with support ordered following divorce, there is often a sharply disputed factual question concerning the relationship of the parties to a paternity action. The object of the proceedings is to determine with finality the obligation of support, and not merely to determine on the basis of present circumstances an appropriate level of support. An unrepresented paternity defendant may be unaware of his obligation to file notice of alibi if he intends to rely upon that defense. He may be unaware of his statutory right to demand blood tests or unable to analyze the legal implications of the results.” Artibee, supra, pp 56-58.
Thus, in Artibee, there was involved the adversary process of quasi-criminal litigation with all the procedural complexities incident to warrant issuance, arraignment, setting bail, discovery, notice of defenses, jury voir dire and challenge, pretrial motions, the examination and cross-examination of witnesses expert and otherwise, closing argument, instructions to the jury, and verdict. By contrast, a civil contempt proceeding for failure to testify before a grand jury, while carrying potentially severe consequences, involves virtually none of the procedural and substantive complexities of a paternity trial. It is a proceeding of a summary character with a purely remedial purpose. Normally such a proceeding, as is the case here, involves a single, simple issue: will the witness answer the question put to him in whatever fashion he deems appropriate or, upon refusal to answer, be imprisoned for the refusal? Typically, as seen in this case, the proceeding is brief, simple to understand and does not involve the complexities of fact-finding, jury persuasion or resolution of sophisticated legal issues.
We wish to emphasize that while it is true that in civil contempt proceedings of the kind involved here, the defendant faces the serious prospect of immediate imprisonment for up to one year and a fine not to exceed $10,000, those dire consequences alone do not create a due process right to counsel. It is the potential complexity of the proceedings which may result in imposition of the serious penalties and not the penalties themselves which implicate the assistance of counsel guarantee of the Due Process Clause.
Stated otherwise, due process does not require counsel in every instance in which the possibility of imprisonment exists, but depends upon circumstances showing that in view of the nature of the proceedings the defendant would probably suffer unfair treatment if counsel were not provided. See Gagnon v Scarpelli, 411 US 778, 787-791; 93 S Ct 1756; 36 L Ed 2d 656 (1973); Sword v Sword, supra, at 381-383.
While in Argersinger v Hamlin, supra, the court focused upon the fact of imprisonment for six months in declaring the existence of a Federal constitutional right to counsel in a misdemeanor prosecution, it must be remembered the Court did so only in cases of criminal prosecution.
That is not the case before us. The defendant, Johnson, is charged with no crime, faces no conviction or final adjudication and cannot be made to suffer an involuntary penalty. By obeying the court’s order to appear and give testimony before the grand jury, the defendant can purge himself of the adjudication of contempt and cause his sentence to be commuted.
Instead of the three factors delineated by the Court of Appeals as the appropriate criteria to be examined for determining whether there is a due process right to counsel in a civil contempt proceeding of any kind, we think the following to be a better standard:
If there exists a reasonable likelihood that the civil contempt proceedings by their very nature involve matters of such factual, procedural or substantive complexity that it must be concluded that without the assistance of counsel the defendant is unlikely to be capable of understanding the nature of the proceedings, articulating his position or appreciating the options available to him, or any one of them, then it must be said that the process due him includes the assistance of counsel.
Certainly all civil contempt proceedings for all defendants do not present such a situation. The need for assistance of counsel as a due process requirement must be determined on a case-by-case basis.
Here, the defendant, in the grand jury chambers, before being asked any questions at all, refused to be sworn. After the prosecuting attorney advised him of his right to remain silent when questioned, of the fact that anything he said could be used against him and that he had a right to the assistance of counsel and, if indigent, appointed counsel, he was asked if he understood. He refused to answer. When asked if he wanted an attorney he again refused to respond.
In view of the defendant’s obvious willful refusal to cooperate with the grand jury and the court, even to the point of refusing to indicate before the grand jury whether he understood what was being said to him, or whether he wished the assistance of counsel during the intended grand jury interrogation and merely nodding his head when asked by the court whether he had anything he wished to say, it cannot be reasonably concluded that he was treated unfairly or that the nature of the proceedings, either procedural or substantive, was such that without the assistance of counsel fair treatment was not possible.
While we agree with the Court of Appeals that exceptional cases may arise in which due process will require the appointment of counsel in contempt proceedings brought for refusal to testify before a grand jury, this case is not one of them. We decline to adopt a sweeping rule requiring the assistance of counsel in all civil contempt cases of this character in order to fit the exceptional one.
The decision of the Court of Appeals is reversed.
Coleman, C.J., concurred with Ryan, J.
The order granting leave to appeal states the issue as: "Whether a defendant has a right to counsel in a civil contempt proceeding under MCL 767.5; MSA 28.945 and MCL 767.19c; MSA 28.959(3).”
The circuit judge found that Johnson violated MCL 767.19c; MSA 28.959(3). The Court of Appeals considered only that section. The prosecutor states in his brief on appeal to this Court that MCL 767.5; MSA 28.945 is the applicable statute.
MCL 767.5; MSA 28.945 applies to the one man grand jury, see Spalter v Wayne Circuit Judge, 35 Mich App 156, 164, fn 8; 192 NW2d 347 (1971), and provides for a maximum fine of $1,000. Johnson was called before a citizens’ grand jury and fined $10,000, the maximum fine under MCL 767.19c; MSA 28.959(3). MCL 767.19c; MSA 28.959(3) is the pertinent statute.
Const 1963, art 1, § 17.
People v Johnson, 77 Mich App 426, 433; 258 NW2d 504 (1977).
The citizens’ grand jury statute provides the right to have counsel present at his side at all times to a witness who has been granted immunity while he is being questioned about matters within the grant of immunity. MCL 767.19e; MSA 28.959(5).
The one-man grand jury statute provides that a witness "shall at all times be entitled to legal counsel”. MCL 767.3; MSA 28.943.
We find no other pertinent statute.
Johnson was not offered counsel by the assistant prosecutor. He was told, rather, that if he could not afford an attorney he could petition the court and ask for appointment. Johnson might not have understood how one petitions a court. If a formal petition was required, it was probably beyond his ability to prepare. He was not assured that counsel would be appointed if he were indigent and did petition.
Another witness, not as cautious or, perhaps, as fearful as this witness, might have responded, "Yes, I would like an attorney. Yes, I would like to make such a petition. How do I petition? Will the questioning stop if I tell you I want a lawyer?” This witness did not, perhaps out of ignorance, misinformation, bad advice or just plain fear. Perhaps he was just obstinate and, indeed, contumacious in failing to make that response. But he cannot be so characterized and no such determination can be made without inquiry by a judge, not a prosecutor, after the witness has had an opportunity to obtain counsel, of whether he has a basis for asserting the Fifth Amendment privilege. Before any such inquiry by a judge, an indigent witness should be offered counsel.
In all events, the issue here is not whether counsel was properly offered at the grand jury proceedings, but whether Johnson was entitled to counsel at the contempt proceeding. There was no inquiry at the contempt proceeding whether Johnson desired to obtain coun sel, or if he was indigent and, if so, wished to have counsel appointed for him.
"Any witness who neglects or refuses to appear or testify or both in response to a summons of the grand jury or to answer any questions before the grand jury concerning any matter or thing of which the witness has knowledge concerning matters before the grand jury after service of a true copy of an order granting the witness immunity as to such matters shall be guilty of a contempt and after a public hearing in open court and conviction of such contempt shall be fined not exceeding $10,000.00 or imprisoned not exceeding 1 year, or both. * * MCL 767.19c; MSA 28.959(3) (emphasis supplied).
Artibee v Cheboygan Circuit Judge, 397 Mich 54; 243 NW2d 248 (1976).
Sword v Sword, 399 Mich 367; 249 NW2d 88 (1976).
Johnson said in so many words that he wished to exercise his Fifth Amendment privilege. To imprison him without inquiry and a determination regarding the merits of his exercise of the privilege, simply because he refused to take the oath and his assertion of the privilege was one or possibly two questions premature, is somewhat formalistic. If his exercise of the privilege was meritorious, and there is no reason on this record to conclude that it was not, then he needed counsel who could show him how to exercise his privilege without waiving it.
"If there exists a reasonable likelihood that the civil contempt proceedings by their very nature involve matters of such factual, procedural or substantive complexity that it must be concluded that without the assistance of counsel the defendant is unlikely to be capable of understanding the nature of the proceedings, articulating his position or appreciating the options available to him, or any one of them, then it must be said that the process due him includes the assistance of counsel.”
Our analysis makes it unnecessary to consider whether this is a sound test, and we do not adopt it.
In re White, 327 Mich 316, 317; 41 NW2d 882 (1950).
See fn 6, supra.
MCL 600.1701, 600.1715; MSA 27A.1701, 27A.1715.
It appears that is also the prosecutor’s reading of the statute. In his brief in support of the application for leave to appeal, he said: "appellant would note that the appropriate section is 767.5, 767.19c dealing with immunized witnesses, and it does not appear that defendant was an immunized witness”. See fn 1, supra.
Summary contempt proceedings are not permitted unless the contempt is "direct”, i.e., in open court. If the contempt is not direct the contemnor must be served with notice of the charges and given an opportunity to prepare a response:
"Except for a narrowly limited category of contempts, due process of law as explained in the Cooke case requires that one charged with contempt of court be advised of the charges against him, have a reasonable opportunity to meet them by way of defense or explanation, have the right to be represented by counsel, and have a chance to testify and call other witnesses in his behalf, either by way of defense or explanation. The narrow exception to these due process requirements includes only charges of misconduct, in open court, in the presence of the judge, which disturbs the court’s business, where all of the essential elements of the misconduct are under the eye of the court, are actually observed by the court, and where immediate punishment is essential to prevent 'demoralization of the court’s authority’ before the public. If some essential elements of the offense are not personally observed by the judge, so that he must depend upon statements made by others for his knowledge about these essential elements, due process requires, according to the Cooke case, that the accused be accorded notice and a fair hearing as above set out.” In re Oliver, 333 US 257, 275-276; 68 S Ct 499; 92 L Ed 682 (1948). See, also, Cooke v United States, 267 US 517; 45 S Ct 390; 69 L Ed 767 (1925).
There is a difference of opinion whether failure to testify before a grand jury is a direct contempt. See, generally, Anno: Refusal to answer questions before state grand jury as direct contempt of court, 69 ALR3d 501. See, also, State v Roll, 267 Md 714; 298 A2d 867; 69 ALR3d 483 (1973); and compare with People v Lucero, 196 Colo 276; 584 P2d 1208 (1978).
See, also, United States v Hawkins, 501 F2d 1029 (CA 9, 1974); Jessup v Clark, 490 F2d 1068 (CA 3,1973).
In People v Johns, 384 Mich 325, 331, 333; 183 NW2d 216 (1971), this Court held that a criminal contempt conviction for failure to answer questions before a one man grand jury requires "compliance with the procedural safeguards established for the prosecution of any other crime of equal gravity”. The Court said:
"However we hold that the time of sentencing was far too late in the criminal process and the context of these proceedings was far too ambiguous to adequately inform the defendant of the nature of the charge against him and afford the defendant that fundamental fairness of process guaranteed by both the Michigan and the United States constitutions.”
The Court did not consider the Due Process requirements in civil contempt proceedings for failing to testify before a grand jury. There is, however, an intimation that the contempt would not be considered to have been direct/in open court. See id., p 333, fn 6.
MCL 767.19c; MSA 28.959(3) indicates that a "hearing” is required. Compare MCL 600.1711; MSA 27A.1711, providing procedural protection when the contempt is not committed in the immediate view and presence of the court.
Our disposition does not require that we consider i) whether a failure to testify before a grand jury is a direct contempt, ii) the due process requirements in civil contempt proceedings for failing to testify before a grand jury, or iii) whether Johnson, who was not "advised of the charges against him” before he entered the courtroom, had "a reasonable opportunity to meet them by way of defense or explanation [and to] have the right to be represented by [retained] counsel”. In re Oliver, supra.
But see fn 4, supra.
In re DiBella, 518 F2d 955 (CA 2, 1975); In re Kilgo, 484 F2d 1215 (CA 4, 1973); United States v Sun Kung Kang, 468 F2d 1368 (CA 9, 1972).
United States v Anderson, 553 F2d 1154; 567 F2d 839 (CA 8, 1977).
People v Lucero, supra; State v Roll, supra. In Roll, although the sentence provided for purging, the court classified the contempt as criminal.
Similarly, see Duval v Duval, 114 NH 422; 322 A2d 1 (1974); Ex parte Wilson, 559 SW2d 698 (Tex Civ App, 1977). But see Henkel v Bradshaw, 483 F2d 1386 (CA 9, 1973); Tetro v Tetro, 86 Wash 2d 252; 544 P2d 17 (1975); Otton v Zaborac, 525 P2d 537 (Alas, 1974); Commonwealth ex rel Brown v Hendrick, 220 Pa Super 225; 283 A2d 722 (1971).
The following occurred before the grand jury:
"The Foreman: Would you raise your right hand, please?
"Do you solemnly swear that the testimony that you will give before the grand jury will be the truth, the whole truth and nothing but the truth?
"The Witness: I’m taking the Fifth Amendment. I don’t want no oath.
"[Assistant Prosecuting Attorney] Mr. Healy: Give him the oath and then we will worry about the Fifth Amendment.
"The Witness: I’m not going to give no oath. I don’t know why I’m here.
"Mr. Healy: The oath involves your swearing to tell the truth. Then you may assert your Fifth Amendment rights, and I will give you your rights after the oath has been administered.
"The Witness: I won’t take no oath.
"Mr. Healy: Get back on your feet.
"The Foreman: I will repeat the oath. Please raise your right hand.
"Mr. Healy: Do you refuse to take the oath?
"The Witness: (No response.)
"Mr. Healy: All right. Sit down.
"Examination
"Q. [By Mr. Healy]: You have the right to remain silent. You do have the right to have an attorney present but not in this grand jury room, and the attorney can be outside and you can confer with him at any time. Anything that you say can and will be used against you. Do you understand that?
"A. (No response.)
"Q. You can decide at any time to exercise these rights and not answer any questions or make any statements. Do you understand that?
'A. (No response.)
"Mr. Healy: Let the record show that the witness has been silent to these questions.
”Q. [By Mr. Healy]: Do you want an attorney?
’A. (No response.)
"Q. If you cannot afford an attorney you may petition the presiding judge of the circuit court for Wayne County and ask for the appointment of an attorney. Do you understand that?
'A. (No response.)
”Q. I repeat the question: Do you want an attorney?
'A. (No response.)
"Mr. Healy: Let the record show that the witness refuses to answer any of those questions, as well as taking the oath.”
"Any witness who neglects or refuses to appear or testify or both in response to a summons of the grand jury or to answer any questions before the grand jury concerning any matter or thing of which the witness has knowledge concerning matters before the grand jury after service of a true copy of an order granting the witness immunity as to such matters shall be guilty of a contempt and after a public hearing in open court and conviction of such contempt shall be fined not exceeding $10,000.00 or imprisoned not exceeding 1 year, or both. If the witness thereafter appears before the court to purge himself of such contempt, the court shall order the recalling of the grand jury to afford such opportunity, and after appearance of the witness before the grand jury upon a transcript of the testimony there and then given, the witness shall be brought before the court and after examination, the court shall determine whether the witness has purged himself of the contempt and shall commute the sentence upon a finding that the witness has purged himself.”
"All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside. No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.”
"No person shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty or property, without due process of law. The right of all individuals, firms, corporations and voluntary associations to fair and just treatment in the course of legislative and executive investigations and hearings shall not be infringed.”
"In all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial, by an impartial jury of the State and district wherein the crime shall have been committed, which district shall have been previously ascertained by law, and to be informed of the nature and cause of the accusation; to be confronted with the witnesses against him; to have compulsory process for obtaining witnesses in his favor, and to have the Assistance of Counsel for his defence.”
"In every criminal prosecution, the accused shall have the right to a speedy and public trial by an impartial jury, which may consist of less than 12 jurors in prosecutions for misdemeanors punishable by imprisonment for not more than 1 year; to be informed of the nature of the accusation; to be confronted with the witnesses against him; to have compulsory process for obtaining witnesses in his favor; to have the assistance of counsel for his defense; to have an appeal as a matter of right; and as provided by law, when the trial court so orders, to have such reasonable assistance as may be necessary to perfect and prosecute an appeal.”
Civil contempts not "committed in the immediate view and presence of the court” may not be punished summarily. MCL 600.1711(1); MSA 27A.1711(1). (Emphasis supplied.) However, such contempts may be punished after a hearing, summary in character, at which proof of the contempt has been made and opportunity has been given to defend. MCL 600.1711(2); MSA 27A.1711(2).
The verbatim record of the contempt proceeding, conducted in accordance with MCL 600.1711(2); MSA 27A.1711(2), is as follows:
"The Clerk: In the matter of David C. Johnson.
"Mr. Healy: If the court please, I am Robert H. Healy, chief trial attorney for the Wayne County Organized Crime Task Force. I bring to the court David Charles Johnson who is down here on a writ from Jackson Prison under a lawful subpoena to appear before the Wayne County grand jury of this date.
"The Court: Mr. Johnson, have you been duly served with a subpoena to appear before the grand jury?
"The Defendant: I don’t know. I don’t know what this is.
"The Court: Mr. Healy, I think that it is going to be necessary for you to have an oath administered to you and to make a further statement as to why you are here this afternoon.
"(Whereupon, Robert H. Healy was duly sworn on his oath by the clerk.)
"Mr. Healy: Do you want me to just give a narrative?
"The Court: Please do.
"Mr. Healy: If the court please, the grand jury is engaged in the investigation of a homicide. Pursuant to that investigation, we caused David Charles Johnson to be removed from Jackson Prison and brought down to the Wayne County Citizens Grand Jury pursuant to a writ of habeas corpus by the Honorable Myron H. Wahls, judge of the circuit court. The witness, David Charles Johnson was presented to the grand jury this morning and I was the prosecuting officer for the grand jury. There were 14 grand jurors present and the court reporter. The witness was asked to take the oath by the grand jury foreman. I was present during that and have personal knowledge of it. He refused. I then attempted to give him his constitutional rights as well as his statutory rights concerning his right to counsel. He would not acknowledge no questions [sic] put to him by me, as again, he would not acknowledge the giving of the oath. We therefore terminated his presence before the grand jury and I ordered that he be remanded to the detention area on the seventeenth floor of this building, pending disposition by you.
"The Court: Mr. Johnson, do you wish to ask Mr. Healy about any statement that he has made concerning your conduct this morning before the Wayne County Citizens Grand Jury?
"The Defendant: (Nods head.)
"The Court: Let the record reflect that Mr. Johnson indicated no by nodding his head in a negative manner. Do you have anything that you would like to say at all at this time?
"The Defendant: (Nods head.)
"The Court: Again, let the record reflect that Mr. Johnson has indicated a negative answer by nodding his head in such manner. Mr. Johnson, the court, based upon Mr. Healy’s testimony, is going to find you guilty of contempt pursuant to the provisions of Michigan Compiled Laws Annotated, § 767.18c [sic]. The court is going to punish you in the following manner: fine you in the sum of $10,000, commit you to the Wayne County Jail for a period of not more than one year unless prior to the expiration of such year, you come before this court, in a good faith manner, and are willing to purge yourself of the contempt by answering questions or testifying before the grand jury as to those matters that would not incriminate you if you did in fact invoke your privilege against self-incrimination. A further proviso insofar as the one year commitment is concerned, absent purging, your one year commitment is to be served unless the citizens grand jury term expires prior to your serving the one year term in the Wayne County Jail. He is to be committed to the Wayne County Jail until he purges himself or until the grand jury term expires.
"Mr. Healy: Your Honor, I have one further matter and that is he is down here on a writ of habeas corpus and I am not sure what we should do about relieving the Michigan State Police of their accountability for the prisoner at Jackson. I guess what we do is release this writ. With the release of this writ—
"The Court: I have a commitment order for conveyance to the Wayne County Jail.
"Mr. Healy: Can we get the commitment order so that the State Police then will be off the hook?
"The Court: I think that your office will have to prepare that.
"Mr. Healy: Okay. Thank you, your Honor.”
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Brickley, J.
We granted leave to appeal in this case limited to the following two questions: (1) whether an agreement under the Malpractice Arbitration Act (maa) deprives a circuit court of jurisdiction to resolve a controversy, and (2) whether a defendant waives enforcement of an arbitration agreement by failing to assert the existence of the agreement in the first responsive pleading. We find that such an agreement does not oust the court of jurisdiction and that it must be asserted in the first responsive pleading. We remand this case to the circuit court for further proceedings.
I. FACTS
On January 3, 1982, Mamie Sutton was admitted to St. John Hospital in order to undergo a hysterectomy. She signed an agreement that day to arbitrate claims arising from health care provided at St. John. She died in the hospital following surgery on January 30, 1982.
On January 25, 1984, Deborah Campbell, as personal representative of the estate of her mother, Ms. Sutton, brought a wrongful death action in Wayne Circuit Court against Dr. Ronald Rourke and Dr. Louis Gregory. The plaintiff filed an amended complaint on March 29, 1985.
Dr. Gregory answered the original complaint and included the following affirmative defenses:
1. The claim of the Plaintiff is barred by virtue of the application of the Michigan Arbitration Act;
2. The claim of the Plaintiff is time barred by virtue of the Michigan Statute of Limitations.
Dr. Gregory’s response to the amended complaint indicated reliance upon his previously filed affirmative defenses. (Dr. Gregory’s specific contention that his affirmative defenses "included a claim that plaintiff’s case was barred by virtue of the Michigan Medical Malpractice Act” is not borne out by the record.)
Dr. Rourke’s responsive pleadings did not refer in any way to an agreement to arbitrate.
The parties participated in discovery, including the taking of depositions and the exchange of interrogatories and responses.
In April, 1986, both defendants moved for summary disposition on the basis of a valid medical malpractice arbitration agreement. The trial court found the agreement to be valid and granted the defendants’ motions. The Court of Appeals reversed, 170 Mich App 551; 428 NW2d 711 (1988). The Court first affirmed the trial court’s ruling that the arbitration agreement was valid and binding under the maa. Id., pp 556-558. The existence of such an agreement, however, was held not to deprive a circuit court of subject matter jurisdiction. Id., p 558. The Court determined that a defendant must raise the agreement as an affirmative defense in the first responsive pleading in order to preserve the rights to demand arbitration and to assert the agreement as the basis of a motion for summary disposition. Id., pp 558-559. Rourke was deemed to have waived his rights under the arbitration agreement. Gregory’s case was remanded to the trial court for a determination of whether his conduct following his answer to the complaint worked a waiver of his contractual right to arbitration notwithstanding his assertion of the arbitration defense in his first responsive pleadings. Id., pp 559-560.
II. SUBJECT MATTER JURISDICTION
As noted by the Court of Appeals and the parties, various panels of that Court have reached different results regarding the effect of a valid medical malpractice arbitration agreement on the subject matter jurisdiction of the circuit court. Id., p 558, n 1, and accompanying text. In this regard, we agree with and adopt the result of the Court of Appeals panel in the instant case, id., pp 558-559, which in turn was based on the analysis in Hendrickson v Moghissi, 158 Mich App 290, 294-298; 404 NW2d 728 (1987):
Although we find no Michigan cases directly relating to medical malpractice arbitration agreements, a detailed blueprint for analyzing the jurisdictional effects of arbitration agreements has been developed in the context of automobile insurance policies. In DAIIE v Maurizio, 129 Mich App 166; 341 NW2d 262 (1983), lv den 419 Mich 877 (1984), the plaintiff insurer sought a declaratory ruling as to the "stacking” of insurance coverage. The trial court ruled in favor of the plaintiff and enjoined the defendant from proceeding with arbitration. Nearly three years later, the defendant filed a motion to vacate the judgment and injunction as void for lack of subject matter jurisdiction. The trial court granted the defendant’s motion. The sole issue on appeal was whether a statutory arbitration agreement deprives the circuit court of subject matter jurisdiction over an arbitrable controversy, thus allowing a party to challenge a judicial decision as void, undeterred by any time constraints.
In rejecting the defendant’s position in DAIIE v Maurizio, regarding lack of subject matter jurisdiction, this Court first observed that the Michigan Constitution vests the circuit court with broad original jurisdiction over all matters, particularly civil, so long as jurisdiction is not expressly prohibited by law. Const 1963, art 6, § 13. 129 Mich App 172. Subject matter jurisdiction in particular is defined as the court’s ability " 'to exercise judicial power over that class of cases; not the particular case before it, but rather the abstract power to try a case of the kind or character of the one pending.’ ” 129 Mich App 172, citing Joy v Two-Bit Corp, 287 Mich 244, 253; 183 NW 45 (1938). Circuit court jurisdiction over a particular subject matter is denied only by constitution or statute. MCL 600.605; MSA 27A.605. In construing such statutes or constitutional provisions, retention of jurisdiction is presumed and any intent to divest the circuit court of jurisdiction must be clearly and unambiguously stated. 129 Mich App 174, citing Leo v Atlas Industries, Inc, 370 Mich 400, 402; 121 NW2d 926 (1963), and Crane v Reeder, 28 Mich 527, 532-533 (1874).
Application of the above analysis to the instant case persuades us that the circuit court is not deprived of subject matter jurisdiction over medical malpractice controversies governed by arbitration agreements. Medical malpractice claims constitute traditional civil actions for money damages and clearly fall within the circuit court’s original subject matter jurisdiction. Neither party disputes this proposition. Defendants contend, however, that §5044(2) of the Malpractice Arbitration Act, MCL 600.5040 et seq.; MSA 27A.5040 et seq., and the uniform arbitration act, MCL 600.5001 et seq.; MSA 27A.5001 et seq., expressly deprive the circuit court of jurisdiction to hear medical malpractice claims where the complaining party has signed a valid and binding arbitration agreement. We disagree.
Contrary to defendants’ claim, § 5044(2) does not vest exclusive jurisdiction in a three-member panel of arbitrators. Moreover, our review of the entire Malpractice Arbitration Act fails to disclose a single sentence which could be construed as such a legislative mandate.
Even when we read the Malpractice Arbitration Act in conjunction with the uniform arbitration act, we are unable to infer any intent on the part of the Legislature to deprive circuit courts of subject matter jurisdiction in these controversies.
In our view, an arbitration agreement is in the nature of a release or a statute of limitations, narrowing a party’s legal rights to pursue a particular claim in a particular forum. These rights are enforceable by the courts such that a valid release or the expiration of an applicable limitations period will defeat an otherwise valid claim. The circuit court is thus bound to apply and enforce the law as to releases or statute of limitations defenses, but is not deprived of subject matter jurisdiction over the controversy. The same principles are true with regard to medical malpractice arbitration agreements.
III. WAIVER OF THE RIGHT TO DEMAND ARBITRATION
We also agree with the result of the Court of Appeals regarding the defendants’ waiver of their arbitration rights. Campbell, supra, pp 559-560. Our court rules require that affirmative defenses be stated in a party’s responsive pleading, and they provide that defenses not asserted in the responsive pleading are waived. MCR 2.111(F). While it is true that an arbitration agreement is not among the defenses enumerated in MCR 2.111(F)(3)(a), the inclusion of the words "such as” in that subsection indicates that the enumerated defenses were not intended to form a closed class, but were included by way of illustration only. See also FR Civ P 8(c) (enumerated defenses are not exclusive).
We first note our agreement with the observation in Hendrickson that "an arbitration agreement is in the nature of a release or a statute of limitations, narrowing a party’s legal rights to pursue a particular claim in a particular forum.” Hendrickson, supra, p 298. Releases and statutes of limitation are among the enumerated defenses in MCR 2.111(F)(3)(a). Moreover, the arbitration agreement is not a negative defense which goes to the merits of the plaintiff’s claim; instead, by asserting the agreement, a defendant seeks to foreclose the plaintiff from continuing a civil action for reasons unrelated to the plaintiff’s prima facie case. Therefore, in our judgment, an arbitration agreement is properly regarded as an affirmative defense.
Even if we were to interpret subsection MCR 2.111(F)(3)(a) restrictively, other language in MCR 2.111(F)(3) suggests that it was incumbent upon the defendants to assert the arbitration agreement in their responsive pleadings. MCR 2.111(F)(3)(c) requires the inclusion of "a ground of defense” which "would be likely” to surprise the adverse party. While the instant plaintiff may or may not have been surprised in fact by the existence of the arbitration agreement, personal representatives of patients who die following the signing of an agreement generally may be quite likely to be taken by surprise by the existence of such a document.
Finally, the broad language employed in MCR 2.111(F), coupled with case law recognizing the existence of affirmative defenses not specifically set forth in MCR 2.111(F)(3)(a) provides adequate warning to the practitioner that defenses which go beyond rebutting the plaintiff’s prima facie case, other than lack of subject matter jurisdiction and failure to state a claim, should be stated in the responsive pleading, lest they be deemed to have been waived._
Defendánt-appellant Rourke has not preserved his right to rely on the arbitration agreement because of his failure to assert that defense in his first responsive pleading. Defendant-appellant Gregory asserted arbitration as an affirmative defense, but, as noted by the Court of Appeals, it is unclear from the record if the trial court decided whether Dr. Gregory’s participation in circuit court proceedings and his delay in raising a motion for summary disposition on the basis of the arbitration agreement waived his rights under the agreement and the maa. This issue is not before us, and the circuit court shall make this determination on remand as directed by the Court of Appeals.
rv. conclusion
A valid medical malpractice arbitration agreement does not deprive a circuit court of subject matter jurisdiction to hear a medical malpractice case. A defendant seeking to arbitrate a medical malpractice claim waives arbitration rights if the arbitration agreement is not set forth as an affirmative defense in the first responsive pleading. The judgment of the Court of Appeals is affirmed, and the case is remanded to the Wayne Circuit Court for proceedings consistent with this opinion.
Riley, C.J., and Levin, Cavanagh, Boyle, Archer, and Griffin, JJ., concurred with Brickley.
MCL 600.5040 et seq.; MSA 27A.5040 et seq.
432 Mich 920 (1989). Although the grant order with respect to the application of defendant-appellant Rourke is not limited to the two above-described issues by its terms, resolution of these issues is dispositive of Dr. Rourke’s appeal.
The complaint also named St. John Hospital, which is not a party to the instant appeal.
See 2A Moore, Federal Practice, ¶ 8.27[3], p 8-182 ("Any matter that does not tend to controvert the opposing party’s prima facie case as determined by applicable substantive law should be pleaded [as an affirmative defense]”).
See, e.g., Shaw Investment Co v Rollert, 159 Mich App 575, 580; 407 NW2d 40 (1987) (usury); Booth Newspapers, Inc v Univ of Michigan Regents, 93 Mich App 100, 108-109; 286 NW2d 55 (1979) (defense of potential invasion of privacy in an action to enjoin closed meetings).
These defenses are not waived if omitted from the responsive pleading. MCR 2.111(F)(2).
We note that while parties may take depositions and obtain discovery whether the case is being pursued in circuit court or in the arbitral forum, such depositions and discovery are undertaken pursuant to arbitration under the maa only "[a]fter the appointment of the panel of arbitrators . . . .” MCL 600.5048; MSA 27A.5048. There is no. institution of arbitration requiring the empaneling of arbitrators unless and until a party to the agreement exercises the option of demanding arbitration. MCL 600.5044(2), 600.5046; MSA 27A.5044(2), 27A.5046. It does not appear from the record that Gregory made such a demand prior to his participation in discovery or that arbitrators were ever appointed. | [
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Brickley, J.
Defendant, Albert Lee, III, was convicted of first-degree felony murder and sentenced to life imprisonment. We granted leave to appeal limited to:
(1) Whether the testimony of witnesses who had been hypnotized was properly admitted; and
(2) Whether similar acts evidence was properly admitted.
We hold first that the rules of People v Gonzales and People v Nixon were violated and thus that it was error for the trial court to admit the identification testimony of the hypnotized witnesses. Second, the similarities between the charged crime and the similar acts testimony satisfies the standards of People v Golochowicz, 413 Mich 298; 319 NW2d 518 (1982).
i
Procedurally this case has a long history. Following his conviction, defendant moved for a new trial which was denied. Defendant appealed by right. The Court of Appeals held that the standards of People v Gonzales, 415 Mich 615; 329 NW2d 743 (1982), modified 417 Mich 968; 336 NW2d 751 (1983), dealing with hypnotized wit nesses were not satisfied. However, the Court of Appeals held that because this case was decided before Gonzales its holding was inapplicable "but that reversal is nevertheless required in a preGonzales case if defendant was prejudiced by admission of testimony as to recollections induced by hypnosis.” Thereafter the Court found that the identification procedures were not "unnecessarily suggestive or conducive to irreparable misidentification,” upholding the trial court’s admission of the testimony of hypnotized witnesses.
Judge Maher dissented on the hypnosis issue. He concluded that on the basis of the factors pronounced by this Court in People v Hampton, 384 Mich 669; 187 NW2d 404 (1971), People v Gonzales, supra, should be applied retroactively. Thus, he found that defendant was denied a fair trial because the eyewitness testimony was tainted by hypnosis.
Relative to the similar acts testimony, the Court of Appeals found that the facts were sufficiently substantial to justify admission to show identity. The Court held that the trial court did not abuse its discretion and that the evidence was not erroneously admitted.
A request for review was filed with this Court and it was held in abeyance pending release of another hypnosis case, People v Nixon, 421 Mich 79; 364 NW2d 593 (1984). Following the release of Nixon, the case was remanded to the Court of Appeals for reconsideration. On remand, the case was reaffirmed. We granted leave to appeal. 429 Mich 885 (1987)._
II
The undisputed facts of this case are that an eleven-year-old Grand Rapids girl was abducted from her school safety patrol post on the morning of February 12, 1979. Later that same day her body was found near the Regency Park Apartments. The cause of death was strangulation.
The extensive investigation by police produced four categories of evidence: (1) eyewitness identifications, (2) physical evidence, (3) similar acts evidence, and (4) testimony of defendant’s former cellmate which is not at issue in this appeal. The propriety of the similar acts evidence is discussed below. We therefore turn to a discussion of the eyewitness identification and the physical evidence.
A
There were seven key prosecution witnesses (Jack Hill, James Vos, Jack Vos, Greg Start, David Orr, Jr., Timothy Wilcome, and Jim Bonnema), all of whom were hypnotized. Moreover, five of the witnesses were hypnotized on two separate occasions by different hypnotists. The first hypnotic session was conducted by Mr. Robert Mazur, a local hypnotist, who operates the Grand Rapids Hypnotic Clinic. Mr. Mazur is not a psychiatrist or a psychologist and did not testify at trial. Dr. Donald Rossi of the Michigan Department of State Police conducted the second hypnotic sessions. Most of the hypnotic sessions were audiotaped but not videotaped. According to the experts who listened to the tapes, the hypnosis sessions themselves were conducted without any deliberate “attempt to alter [witnesses’] memories.”
Police were notified of the incident by Jack Hill who witnessed the last stages of the abduction. At the intersection of the abduction, Jack Hill noticed a car parked on the wrong side of the road and stopped to oifer assistance. He spoke to a black man standing outside the vehicle and noticed a young white girl in the back seat. As the black man drove off Mr. Hill attempted to follow the car. Mr. Hill described the car as a clean, shiny black two-door. He originally told the police that he thought the car might be a Chrysler; however, at trial he testified that the car was a black Grand Prix. The driver was described as a neatly dressed black man with a neat haircut. Mr. Hill did not notice any facial hair on the man.
James Vos was driving his son, Jack Vos, to school at the time of the abduction when he noticed a black car skidding fast around a corner towards his vehicle. Mr. Vos was stopped for traffic when Mr. Hill informed them that he needed assistance pursuing a vehicle because a young girl had been abducted. James Vos described the car as a clean black two-door hardtop Pontiac Grand Prix with fancy wheel hubs and white walls. Mr. Vos noticed a black man driving the car who was approximately twenty-five to thirty years old, clean in appearance, wearing a dark leather jacket, and having an afro haircut moderate in length. However, he was unable to clearly identify the man driving the car. He did not notice anyone in the car and, in fact, stated that his main concentration was on the car and not on the person driving the car. At trial he was confident about his testimony concerning the make and model of the car.
Like his father, Jack Vos observed the car as being a Grand Prix because of the insignia and the grill on the vehicle. He was confident about the description of the car. However, unlike his father, he did observe a small girl in the back seat. He testified that she was a white girl, with blond hair, wearing a blue hat and a green coat.
On the day of the incident, February 12, 1979, Jack Hill was taken to the police department where two composite drawings were made. The first composite drawing was made prior to Mr. Hill being hypnotized. A second composite was compiled during the hypnotic session with Mr. Mazur. Jack Hill, James Vos, and Jack Vos were also all hypnotized on February 12 by Mr. Mazur.
Greg Start, a school crossing guard, gave testimony that he had seen a black car with red pinstriping and a red interior drive by his patrol corner twice. He noticed the car a second time because the driver had run a stop sign. Greg’s testimony was more specific in that he identified the car as a Grand Prix because he saw the letters on the front fender of the car. Further, he described the driver as a young black man with a mustache and an afro hair style.
The victim’s knapsack was recovered from a dumpster at the Georgetown Condominiums by the rubbish collector sometime on the afternoon of February 12, 1979. The Georgetown Condominiums are located within one mile of where the victim’s body was found. On the morning of February 12, a black car driven by a black man was lodged in a snowbank at the condominium. Two grounds maintenance men, David Orr, Jr., and Timothy Wilcome testified that they helped the man free his vehicle. Specifically, Mr. Wilcome testified that a black man with neat hair (not an afro style), wearing a leather jacket walked up to the shed and asked for assistance to push his car out of a snowbank. Wilcome stated further that the black man smoked Kool cigarettes and that the car looked like a black Monte Carlo. Mr. Orr stated specifically that the car was a black Monte Carlo because of the emblem on the back of the car. Also that the car had bicentennial license plates and spoke-type wheels with curb feelers. Thereafter, Mr. Orr saw him get out of the car and throw something away in a nearby dumpster. Two days after the incident, February 14, 1979, Timothy Wilcome and David Orr, Jr., were hypnotized.
As the police continued to receive tips on the abductor, three mugbooks were compiled. Defendant’s picture appeared in mugbooks one and two, however he was not pictured in the third mug-book. The first photo showing (mugbook one) occurred on February 15, 1979. Jack Hill, David Orr, Jr., James Vos, Jack Vos, and Timothy Wilcome participated, but no positive identification was made. In fact, each witness identified persons other than defendant as possessing features similar to the abductor.
Mr. Jim Bonnema notified the police about see ing the particular vehicle on the morning of February 12 after reading about the incident in the newspaper and seeing a story on television. He was hypnotized on February 16, 1979, and while under hypnosis he gave á license plate number. However, he was unable to positively identify the driver of the vehicle.
On February 23, 1979, Jack Hill, Jack Vos, David Orr, Jr., and Timothy Wilcome were hypnotized for the second time by Dr. Donald Rossi. During the hypnotic session with Mr. Hill, a police artist was present who attempted to sketch a third composite drawing while Mr. Hill was under hypnosis. Following the hypnotic sessions each witness participated in a second photo showing (mugbook two). Mr. Orr identified defendant among others from this mugbook. Otherwise there was no positive identification by any other witness.
On February 26, 1979, defendant went to the police department for a polygraph examination, at which time he agreed to participate in a corporal lineup. The participating witnesses were Jack Hill, Jack Vos, James Vos, David Orr, Jr., and Timothy Wilcome. Of these witnesses, only Timothy Wilcome picked defendant from the lineup; however, he could not make a positive identification.
On March 15, 1979, mugbook three was shown to Hill, Orr, Wilcome, James Vos, and Jack Vos. The witnesses did not positively identify any person (defendant was not pictured). Mr. Wilcome is the only witness who did not pick anyone from these photographs.
Defendant participated in a second lineup on March 29, 1979. At this lineup the defendant was identified by Mr. Hill, Jack Vos, and Mr. Wilcome. Mr. Orr picked someone other than defendant from this lineup as being the alleged perpetrator. James Vos also participated in the lineup, but could not identify the perpetrator.
Two months later, on June 19, 1979, Greg Start was hypnotized by Dr. Rossi. The next day he participated in a corporal lineup and picked defendant.
Prior to the second lineup, March 29, 1979, one day prior to defendant’s arrest, most witnesses at one time or another had made false identifications or at least identifications of persons other than defendant. Mr. Wilcome was the only witness who picked defendant from both lineups. However, he did not make a positive identification at either.
All of the in-court identifications of defendant, except by Jack Hill, were tentative. Mr. Hill made two in-court identifications of the defendant, the first being at the preliminary examination and the second during trial. He was extremely confident about each in-court identification.
At trial, Jack Vos made an in-court identification of the defendant as the man he picked from the second lineup. However, he testified that, while defendant looked identical to the man, he could not identify defendant as the man he saw on February 12. Greg Start positively identified defendant as the man he picked from the lineup on June 20. However, this identification occurred after considerable publicity attendant to defendant’s arrest, and at trial he stated that he expected to see the suspect in the lineup.
Timothy Wilcome made an in-court identification of defendant as the person he selected from both lineups. At trial he testified that he was not confident in his identification of defendant but that he looked the closest to the person he saw on February 12. At the time of trial James Vos did not make an in-court identification. Rather, he testified that he could not state, one way or the other, whether defendant was the person driving the vehicle on the morning of February 12: Jim Bonnema was unable to positively identify the defendant at trial. However, he did state that there was nothing unusual about defendant to rule him out as the driver of the Grand Prix.
B
Our analysis on the issue of admissibility begins with two basic premises offered by the prosecution from the Rules of Evidence. First, all relevant evidence is admissible, absent prejudice, confusion, or waste of time. MRE 401, 402, 403. Second, all witnesses are presumed competent to testify. MRE 601, 602. The relevancy of an eyewitness identification is not questioned. Therefore our only concern is the admissibility of a witness’ testimony after being subjected to hypnosis.
The test to be applied is derived from our holdings in People v Gonzales and People v Nixon, supra. In Gonzales, we held that hypnotically induced testimony is inadmissible, but left open the question whether a hypnotized witness could testify regarding facts recalled and related prior to hypnosis. We answered the question in People v Nixon, holding that a witness may testify regarding facts " 'demonstrably recalled prior to hypnosis.’ ” The burden is on the party offering the testimony of a hypnotized witness to "establish its reliability by clear and convincing evidence.” Nixon, supra at 90. The clear and convincing standard adopted in Nixon does not, as the dissent would suggest, extend to the question whether any posthypnotic testimony is reliable. Rather, testimony of a hypnotized witness is reliable only when the clear and convincing evidence offered by the proponent of the testimony demonstrates that the witness is testifying only with regard to those facts which were recalled and related prior to hypnosis.
Further, in Nixon we reaffirmed our position, quoting with approval the following language from Gonzales:
"The process of hypnosis is not a reliable means of accurately restoring forgotten incidents or repressed memory, and to permit posthypnotic testimony would unfairly denigrate the defendant’s right to cross-examination. Therefore, we hold that until hypnosis gains general acceptance in the fields of medicine and psychiatry as a method by which memories are accurately improved without undue danger of distortion, delusion or fantasy, and until the barriers which hypnosis raises to effective cross-examination are somehow overcome, the testimony of witnesses which has been tainted by hypnosis must be excluded in criminal cases.” [People v Nixon, supra at 88, quoting People v Gonzales, supra at 626-627. Emphasis in original.]
The dissent advances that this Court erred in Nixon by applying the Davis/Frye test to hypnosis. However, hypnosis is a scientific procedure which renders a subject susceptible to external influences which could distort the memory. "[S]cientific understanding of the phenomenon and of the means to control the effects of hypnosis is still in its infancy.” "[N]o expert can determine whether memory retrieved by hypnosis, or any part of that memory, is truth, falsehood, or confabulation .... Such results are not scientifically reliable as accurate.” Accordingly, we can find no justifiable reason for overturning clear precedent established in this state.
Defendant argues that the procedures established by this Court in People v Nixon, were not followed, so corrupting the identification process by the suggestive effect of hypnosis as to deny defendant his right to a fair trial. The prosecutor admits that the hypnotic sessions were not conducted in light of the safeguard procedures adopted by the Court in People v Nixon. However, the prosecutor asserts that under a totality of the circumstances, the testimony of each eyewitness was not tainted by hypnosis and, in fact, was based on prehypnotic recollection. We disagree that such an approach is allowable under the precedent of Gonzales and Nixon.
The investigation in this case took place before Gonzales was decided. In Nixon, we ruled with regard to the application of Gonzales, holding that the principles set forth therein are not to be applied retroactively but are applicable to all cases tried after its release and to those pending on appeal where the hypnosis issue is preserved. Defendant’s case was pending on appeal when Gonzales was released, and the hypnosis issue was properly preserved. Thus defendant is entitled to application of Gonzales.
Although the rules enumerated in Gonzales and Nixon are applicable, factually the two cases differ from this case because neither involved a posthypnotic lineup identification. The only case we have dealt with involving posthypnotic lineup identification was People v Centers, 422 Mich 951 (1986). We addressed the issue of admissibility of a witness’ testimony after submitting to hypnosis to resolve a conflict in the Court of Appeals. See People v Centers, 141 Mich App 364; 367 NW2d 397 (1985), and People v McIntosh, 142 Mich App 314; 370 NW2d 337 (1985).
Centers and McIntosh were tried together, and both were convicted of murder and armed robbery. Following an evidentiary hearing, the trial court allowed testimony concerning the identification of the suspect made at a posthypnotic lineup. The lineup occurred eight months after the hypnotic session. Prior to hypnosis, the witness gave police a description of the suspect on two occasions. During the hypnotic session, the witness gave basically an identical description of the suspect. The hypnotic session was tape recorded and transcribed, as well as reviewed by the court during the evidentiary hearing. The trial court reached its decision to allow the testimony by comparing the descriptions made by the witness pre- and posthypnosis. On appeal, both defendants argued that the trial court erred in admitting testimony of an eyewitness who had been hypnotized during the police investigation.
The Court of Appeals in Centers ruled that identification of a suspect at a corporal lineup by a witness who had been hypnotized was error requiring reversal. The Court found significant the fact that identity was central to the issue at trial, so that the testimony of the witness regarding identi fication of the defendant was not harmless error. The Court remanded the case to the circuit court holding that
the circuit court shall not admit any posthypnotic testimony or testimony concerning posthypnotic statements unless it is demonstrated that the testimony is based solely on facts recalled and related by the witness or declarant prior to hypnosis and the party offering the testimony establishes its reliability by clear and convincing evidence. [Centers, supra at 371.]
Contrary to the holding in Centers, the McIntosh panel found that because of the similarity in the witness’ descriptions of the suspect, both pre- and posthypnosis, the identification at the lineup was based on facts recalled and related prior to the hypnotic session.
In lieu of granting leave to appeal, we vacated the decision in People v Centers and affirmed the decision of People v McIntosh, 422 Mich 951 (1986). Justice Levin dissented, stating that the prosecutor had failed to establish by clear and convincing evidence that the witness was recalling facts related prior to the hypnotic session.
In McIntosh and Centers, testimony from the eyewitness was admitted on the basis of a comparative analysis of the information given during hypnosis and the prehypnotic statements. Because the information was substantially the same, the Court found that the identification was based on information recalled and related prior to hypnosis. However, in this case, we cannot make such an analysis. We do not have prehypnotic statements from the witnesses, nor an identification of the defendant prior to the hypnotic sessions.
It is obvious in this case that the police department was in a most difficult investigative posture, knowing as they did that an eleven-year-old girl had been abducted and that she, and possibly other potential victims, were in serious jeopardy. Thus, they devoted their efforts to extract every conceivable bit of information from the witnesses as quickly, and as thoroughly, as possible. The dissent suggests that under the rule adopted in Michigan the state must "choose between use of hypnosis during the investigative stage and the potential loss of a witness’ testimony at trial . . . .” (Post, p 108, Boyle, J., dissenting.) However, the use of hypnosis as an investigatory tool is not foreclosed by today’s decision. The error in this case resulted from the fact that the investigation was conducted with little or no thought to the preservation of evidence for testimonial purposes. It is admitted that there was virtually no attempt to establish a record of the prehypnotic state of mind of each witness.
Three witnesses were hypnotized on the day of the abduction, and three other witnesses were hypnotized two days after the incident. Furthermore, five of the seven key prosecution witnesses were hypnotized twice. This further complicates and accentuates the inherent difficulties that are present in even a single hypnotism of a witness and that have already led us to exclude hypnotically induced testimony. The administration of hypnosis to the witnesses was interspersed among the photographic and corporal lineups, making it nearly impossible to track the purported state of each witness’ memory, even if such evidence were available.
The prosecution argues and the defense experts agree that the hypnotic sessions were conducted without any deliberate attempt to alter witnesses’ memories. However, even if, as proposed by the dissent, nonsuggestiveness eliminates the unrelia bility of posthypnotic testimony, the fact that the police originally did not have a suspect toward whom the interrogator could possibly nudge an uncertain witness, there undoubtedly was in this case, and understandably so, a strong desire to have an identification made. While the dissent suggests we "ignored” the lack of a suspect at the time of the "initial” hypnosis, the dissent ignores the fact that Mr. Wilcome was the only witness to identify defendant from the first lineup. The identification of defendant by Mr. Wilcome during the first lineup was not positive. Mr. Wilcome initially did not identify any individual, but rather as an afterthought picked the defendant as the man who looked the closest to the perpetrator. Further, defendant was a primary suspect at the time of the second hypnosis which occurred one month prior to the identification of the defendant at the second lineup. The second hypnotic session took place after police had an opportunity to verify defendant’s alibi statement which resulted in discrepancies in times and places.
The prosecutor further argues that because there was a uniformity of reactions by all the witnesses at the lineups, the identifications were based on prehypnotic memory. We disagree; first, because even though each witness gave a general description of a black man prior to hypnosis, it was not until after the hypnotic sessions that the witnesses were given the opportunity to select or reject the defendant. Furthermore, each witness at one time or another identified persons other than defendant as the perpetrator. Lastly, there is no record of the prehypnotic descriptions of the perpetrator available upon which to make a comparison, as we did in Centers and McIntosh, to support the admission of identification testimony by the hypnotized witnesses.
Further, the plaintiff did not argue, nor can we conclude, that the prehypnosis composite drawing by witness Jack Hill can be considered a statement recalled and related under Nixon. The composite drawing represents the work of the artist and cannot substitute for oral testimony related and recorded.
The dissent also claims that the uniformity among witnesses of the identification of the vehicle driven by the abductor supports the conclusion that the identification was reliable. The record, however, paints a fuller picture. Jack Hill, the man who witnessed the last stages of the abduction, initially and while under hypnosis identified the vehicle as a shiny, black Chrysler. Subsequent to both hypnotic sessions Mr. Hill saw de fendant’s vehicle in the police garage and thereafter testified at trial that the vehicle was not a Chrysler. Further, David Orr and Timothy Wilcome, the grounds maintenance men who freed a black car from a snowbank near where the victim’s body was found, both testified that the car was a black Monte Carlo. The dissent states that "Orr did identify the car as a black Monte Carlo” but discounts the inconsistency in its analysis by suggesting that the purpose of Orr’s testimony was merely corroborative. The procedures employed in this case were totally lacking in safeguards to ensure the reliability of the testimony being offered. The standards and analysis employed by the dissent suggest that reliability of posthypnotic memory can be tested on the basis of the other independent evidence offered in the case. However, this Court has never proposed that the proper test for admissibility of evidence should be based on the strength of the case against a defendant. If there is enough independent evidence to prove identity, there would be no need to introduce unreliable evidence of identification. Merely because the other evidence offered in the case corroborates defendant’s guilt or innocence does not mean that it confirms the reliability of a hypnotized witness’ identification of defendant. To establish the reliability of testimony offered by a hypnotized witness would require an evaluation of evidence that would suggest that the memory produced from hypnosis was actual memory and not merely evidence which would further corroborate defendant’s guilt or innocence.
The dissent relies on testimony from Dr. Orne to support its conclusion that the testimony received from the hypnotized witness was reliable. At trial, Dr. Orne was allowed to comment about the nature of the physical evidence presented and whether, in his opinion, it corroborated the hypnotized witness’ testimony. We note first that such an evaluation is beyond the expertise of Dr. Orne and should not have been permitted. Further, the physical evidence served only to circumstantially support defendant’s guilt and did not operate to afford a basis for distinguishing between what was the witness’ actual memory and what was confabulation.
The dissent has, in our view, mischaracterized the work of this Court in Gonzales. In that case, we unmistakably expressed the view that posthypnotic testimony was "inherently unreliable.” Gonzales, supra, p 626. However, we recognize that hypnosis does not always produce unreliable information, and in some cases the technique may have no effect on memory. But because the science of hypnosis itself cannot aid us in distinguishing which effect is being achieved in individual cases, we have and should continue to consider as unreliable all posthypnotic testimony that is not recalled and related prior to hypnosis.
The purpose of the Davis/Frye doctrine is to determine if the scientific technique as a general rule produces reliable evidence. We cannot agree with the dissent that reliability can be determined in every case. The tenet that the trial judge can make a determination in each individual case and place the stamp of reliability and credibility on a hypnotized witness’ testimony is without merit. The dissent today would scrap the Davis/Frye decision of Gonzales that
[w]e agree with the conclusion that the process of hypnosis and its outcome is inherently unreliable. Hypnosis has not received sufficient general acceptance in the scientific community to give reasonable assurance that the results produced under even the best of circumstances will be sufficiently reliable to outweigh the risks of abuse or prejudice [Gonzales, supra, p 626 (emphasis supplied),]
and put the trial courts in the position of determining on an ad hoc basis when hypnotically induced testimony is reliable and, therefore, admissible. This Court has over the years not deviated from application of the Davis/Frye doctrine to new scientific discoveries. The best way to achieve reliability of the results of scientific principles is to only allow admissibility of the results when the technique has gained general acceptance within the recognized field.
In a further attempt to recast Nixon from a rule that posthypnotic testimony is inherently unreliable into a rule that the trial courts can determine whether or not hypnotically induced testimony is reliable, the dissent states that "[w]hile we did say in Nixon that a witness could testify on the basis of facts recalled and related prior to hypnosis, we did not say that this was the only way” that you could establish its reliability. (Post, p 105, Boyle, J., dissenting.) First, the "recalled and related” rule did not make posthypnotic testimony reliable. Rather, because posthypnotic testimony is so unreliable, the rule ensures that a hypnotized witness only testifies with regard to prehypnotic memory if the facts from that prehypnotic memory were recalled and related prior to the hypnosis. If there is any doubt about what we said on that point in Nixon, it should be resolved by the very language of the Nixon opinion.
In order to ensure that the witness’ trial testimony is based solely on facts recalled and related prior to hypnosis, we hold that the party offering the testimony must establish its reliability by clear and convincing evidence. [Nixon, supra, p 90. Emphasis supplied.]
Nixon did not, as the dissent advocates, establish a "heightened reliability standard” for hypnotically affected testimony. (Post, p 108, Boyle, J., dissenting.) To the contrary, it established a reliability and burden threshold for testimony supported by prehypnotic actions.
We adhere to the standards adopted by this Court in Gonzales and Nixon, and hold that testimony of the hypnotized witnesses is inadmissible absent proof by clear and convincing evidence that the testimony being offered was based on facts recalled and related prior to hypnosis.
c
Where the reviewing court finds that evidence was improperly admitted it must also make a determination regarding whether the error was harmless. As defined by the court rules, "[a]n error in the admission ... of evidence ... is not ground for granting a new trial . . . unless refusal to take this action appears to the court inconsistent with substantial justice.” MCR 2.613(A). The prosecution asserts that the physical evidence corroborates the eyewitness identification and therefore that any error in the admission of testimony from the hypnotized witnesses was harmless.
Justice Levin, writing for the Court, in People v Young (After Remand), 425 Mich 470, 505; 391 NW2d 270 (1986), defined the standards for determining if an error is harmless.
As an appellate court, we do not independently evaluate this evidence. "[I]t is not the appellate court’s function to determine guilt or innocence. . . . Those judgments are exclusively for the jury . . . .” Our responsibility is to determine, how the error might have affected the jury’s decision. The inquiry is "what effect the error had or reasonably may be taken to have had upon the jury’s decision.”
If it were clear that the erroneous admission of the . . . evidence did not prejudice [the defendant], the error would be harmless. [Citing Kotteakos v United States, 328 US 750, 763-764; 66 S Ct 1239; 90 L Ed 1557 (1946).]
The error in the instant case was prejudicial to defendant. Defendant was identified as the perpetrator of the crime only by witnesses who were hypnotized. The jury was apprised of the fact that the key witnesses for the prosecution were hypnotized, and we do not know what significance it had in their determination of defendant’s guilt. Furthermore, absent the testimony of the hypnotized witnesses, the remaining evidence does not positively link defendant to this crime. Thus we cannot conclude that the evidence against defendant was overwhelming.
The dissent criticizes our conclusion that the error in this case was not harmless for two reasons. The first is because of the "wholesale application of Nixon to all the witnesses who were hypnotized . . . .” (Post, p 105, Boyle, J., dissenting.) However, by accepting the rule as set forth in Nixon as clear precedent in this state, there is no need to separate and examine individually each witness’ testimony. The dissent’s analysis and charge that we have "fail[ed] to engage in any meaningful separate analysis of the testimony of each witness” (post, p 104, Boyle, J., dissenting) is the best fortification of our decisions in Gonzales and Nixon that all posthypnotic testimony which is not based on prehypnotic memory recalled and related is unreliable.
The second is that we have "[inexplicably ignored . . . the fact that the defendant admitted to a cellmate that he 'accidentally’ killed the victim while attempting to sexually molest her.” (Post, p 105, Boyle, J., dissenting.) We note first that the cellmate stated on the record that the only reason he contacted police with any information concerning defendant’s purported confession was because he found the crime "sickening.” Yet, at the time of trial, the cellmate had pending against him two counts of criminal sexual conduct in the first degree. Further he testified that he received no promises from the state in exchange for his testimony. One month after defendant’s trial the cellmate entered into a plea bargain agreement where these charges were reduced to esc iv, a misdemeanor. Additionally, defendant testified that he observed his cellmate reading documents pertaining to his case prior to testifying.
The evidence that was particularly incriminating to the defendant was that he was one of three black men in Kent County who owned a 1976 or 1977 black Grand Prix with a red interior. Evidence found on the victim’s body at the time of the autopsy included a number of short black Negroid hairs and reddish-orange carpet fibers, the source being unidentifiable. Additionally, a barrette was combed out of the victim’s hair. When the police searched defendant’s car, they found several long blond hairs and feathers that allegedly came from the victim’s down mittens. Additionally, under the seat, police found a plastic barrette. The barrette found in defendant’s car and the one combed from the victim’s hair were manufactured by the same company, although the manufacturer could not state specifically that the barrette came from the same package as the barrette found in the victim’s hair.
The prosecution brought in various expert witnesses to testify as to the similarities between the physical evidence found on the victim and in defendant’s car. However, these experts could not positively state that the evidence comparatively matched that produced from defendant’s car. As a result of the experts’ testimony, the trial judge stated:
As I understand it, Mr. Murray [defendant’s attorney] objects to Exhibits 139 through 144[ ] because they apparently have no probative value other than to show what the authorities have done in an attempt to investigate this matter, and I suppose to head off any defense argument that they didn’t do enough.
But, really, I have been surprised I haven’t heard this argument a long time ago. I have been listening to this type of testimony for two days, now. It is really just a failure to link the Defendant with any of the evidence.
The dissent described the trial judge who expressed these doubts as "a scrupulously fair judge” (post, p 106, Boyle, J., dissenting). We agree.
Although the totality of the evidence makes for a stronger circumstantial case, the physical evidence was not overwhelming, even though circumstantially significant. It has a limited probative value, absent the eyewitness identification of de fendant, and therefore we cannot conclude that all reasonable doubts would have been eliminated in the jurors’ minds.
in
We now turn to the question whether the similar acts evidence offered by the prosecution was properly admitted.
A
The prosecution was allowed to admit the testimony of ten-year-old Judy Sanchez and nine-year-old Amy Combs over objection. The trial court endorsed the witnesses pursuant to MRE 403 and 404. They testified that on February 6, 1979, approximately one week prior to this incident, a black man in a black car approached them while they were walking to school. Defendant did not work on February 6, 1979. He called in sick and claimed to have been home all day.
The testimony of the two girls varies somewhat, although they generally testified that the man stopped his car and put one foot outside the door. He asked them for the time and the location of Hall Street. The girls responded to the questions, and after doing so the man motioned to the girls to come closer to the car. Both girls testified that they were scared and that the man recognized their fear. Judy had apparently run from the car, but Amy had stayed longer. As Judy gradually came back, the girls testified that the man got into the car and left.
The two girls identified defendant from a mug-book consisting of six photographs. Both girls identified defendant in a corporal lineup on March 29, 1979. While participating in the corporal lineup on March 29, Judy Sanchez identified two persons, one being the defendant and a second individual whose voice she felt sounded closest to the person. At trial neither of the two girls were able to positively identify the defendant as the man who approached them on February 6, 1979. On cross-examination Judy Sanchez made the following statement concerning the in-court identification of defendant:
Q. Judy, you are not saying that this man, here, Mr. Lee, Albert Lee, is the man you saw on that particular date, are you?
A. No, it [sic] looks the closest description to the guy.
Amy Combs testified that she was "pretty sure, but not positive” that Mr. Albert Lee was the man who approached her and Judy.
B
The introduction of similar acts evidence is an exception to the general rule that evidence of other crimes is inadmissible. In order to be admissible, the prosecution must show a high degree of similarity between the charged and uncharged acts. These standards are to be strictly applied and have been narrowly defined by this Court in an attempt to safeguard the defendant’s right to a fair trial. The policy considerations underlying the safeguards are an attempt to avoid convicting the defendant because of prior misconduct rather than on the proofs of the charged offense. The standards governing the admissibility of similar acts testimony were set forth by this Court in People v Golochowicz, 413 Mich 298, 309; 319 NW2d 518 (1982).
[B]efore evidence of defendant’s other misconduct may be admitted: (1) there must be substantial evidence that the defendant actually perpetrated the bad act sought to be introduced; (2) there must be some special quality or circumstance of the bad act tending to prove the defendant’s identity or the motive, intent, absence of mistake or accident, scheme, plan or system in doing the act and, in light of the slightly different language of MRE 404(b) we add, opportunity, preparation and knowledge; (3) one or more of these factors must be material to the determination of the defendant’s guilt of the charged offense; and (4) the probative value of the evidence sought to be introduced must not be substantially outweighed by the danger of unfair prejudice.
The two girls testified that it was a black man in a black car that approached them on their way to school. That alone probably does not constitute substantial evidence to show that it was defendant who committed the bad act. However, there was testimony that defendant is one of three black men in Kent County who owns a black Pontiac Grand Prix, and, that defendant was absent from work on February 6, 1979, and could not verify his whereabouts.
The facts which weigh against the substantiality of the evidence include defendant’s own testimony that he was not the man, and, additionally, the tentativeness of the girls’ identifications. Further, one of the girls testified that the man did not have a mustache. Defendant had a mustache and noticeable sideburns a week later on February 12, 1979.
Although the identification of defendant was tentative, the identification is bolstered because two witnesses identified defendant. This alone would not constitute substantial evidence. However, the identifications, coupled with the fact that the man had a black car and that defendant drives a black car, as well as the fact that defendant did not go to work on February 6, leads us to conclude that the prosecution has shown by substantial evidence that defendant was the perpetrator of the similar act.
To test whether there is a special quality or circumstance sufficient to justify admission of the evidence on the issue of identity, this Court has made the following statements:
It is the distinguishing characteristics which constitute the acts as similar within the meaning of. . . MRE 404(b), not the fact that all constitute the same crime or are violative of the same statute. The distinguishing, peculiar or special characteristics which are common to the acts and thus personalize them are said to be the defendant’s "signature” which identifies him as the perpetrator .... [People v Major, 407 Mich 394, 398-399; 285 NW2d 660 (1979).]
Where . . . the only conceivable justification for admission of such similar-acts evidence is to prove the identity of the perpetrator, the link is forged with sufficient strength to justify admission of evidence of the separate offense only where the circumstances and manner in which the two crimes were committed are "[s]o nearly identical in method as to earmark [the charged offense] as the handiwork of the accused. Here much more is demanded than the mere repeated commission of crimes of the same class .... The [commonality of circumstances] must be so unusual and distinctive as to be like a signature. . . .”
It is because of the combined value of those two factors, the unique and uncommonly distinctive style employed by the defendant in committing the "substantially proved” uncharged similar offense, and the same distinctive modus operandi employed in the charged offense, that the jury is permitted to infer, if it believes the evidence, that both crimes were the handiwork of the same person, the defendant.
... It is the uniqueness and the distinctiveness with which both crimes were committed, combined with the proof that the defendant committed the "like act,” that is the key. [People v Golochowicz, supra at 310-312. Citations omitted.]
The similarity between the two incidents upon which the prosecutor bases its admission are that (1) both incidents involved a black man driving a black car, (2) each occurred in the early morning hours when children would be walking to school, (3) both incidents involved young girls, and (4) both occurred in the same general area. Generally, it could be argued that these factors are not peculiar or do not constitute the defendant’s signature because they are common to many child molestation cases. However, the manner and circumstances of stalking and attracting victims can be and is, in this case, sufficiently distinctive and unique that it can pass the Golochowicz "signa ture” requirement. Child abduction cases, in the overall scheme of criminal activity, are rather rare and unique and relate to aberrant behavior, i.e., there is really no "run of the mill” child abduction, as in the case of a run of the mill robbery, or car theft. The coaxing of these two girls to the actor’s car is in and of itself somewhat distinctive and, when coupled with the similarities in place and time, lend to the entire act a uniqueness and distinctiveness.
The central issue in this case is identity. The evidence is material because identity is the only proposition at issue. Identity is a material issue, not because it is a factor of proof in generally all criminal cases, but because the defense has made it a genuinely controverted matter. Here, defendant does not offer any explanation for the killing, i.e., that it was unintentional or that he had some innocent purpose in inviting the victim into his car, rather he offers only an alibi defense that he could not have been the person to commit the act. Thus, the evidence, if admissible at all under MRE 404(b), could be used only to show identity.
Defendant claims that he was prejudiced by the manner in which the prosecutor argued the similar acts incident. The trial judge did not abuse his discretion in finding that the probative value of the evidence outweighs its prejudicial effect.
In his closing argument, the prosecutor argued that Amy Combs and Judy Sanchez were in fact lucky to have gotten away from this man. He argued that what happened to the victim was intended by the defendant with regard to the two girls, however, it did not come about. Thus, in effect, the prosecution stressed the defendant’s bad character and his propensity to commit such an act. Although the prosecution agrees with the defense that the acts towards Judy Sanchez and Amy Combs did not constitute a crime, he argued that the acts in effect constituted an attempt, that the defendant intended to kidnap and kill the two girls. In his closing argument the prosecutor stated:
[Tjn addition to those three eyewitnesses, you heard some testimony, quite frankly, if you listened to it, the implications of what may have happened probably had to scare you a little bit, and that was Amy Combs and Judy Sanchez, and they described an incident that sounded awfully familiar, except for the ending, as to what happened to [the victim]. . . . He said, "Come here.” Why did he ask her to "come here”? Why did he ask her to do that? Not only did he do it once, he did it a couple of times. Mr. Murphy will say, Well, there is nothing wrong with what that person did, even assuming it was Mr. Lee, but we don’t know what he wanted to do to her. Fortunately, Amy Combs ran away before he ever got a chance. But, again, who did both of them identify? Just another coincidence. It was Albert Lee.
The law says that I can bring these people in here to prove to you the identity of the person, the abductor and murderer of [the victim herein].
Again, compare all the similarities of what almost happened to those little girls to what did happen to [the victim], and it scares us.
It is clear that the prosecutor’s closing arguments were specifically designed to convey to the jury an improper purpose for the evidence. Indeed the trial judge gave a cautionary instruction to the jury concerning the limited scope for which the evidence could be considered. In light of the fact that we have ordered a new trial on the basis of the hypnosis issue, we hold that in and of itself (i.e., absent the prosecutor’s arguments) the simi lar acts evidence is more probative than prejudicial. While the prosecutor’s use of the evidence was inappropriate in this trial, on this record the evidence was admissible. We are confident that on retrial the prosecution will confine its arguments within the permissible scope of MRE 404.
CONCLUSION
Defendant was prejudiced to the extent that reversal is required on the basis of the admission of identification testimony by hypnotized witnesses. Although the ruling of this Court in Gonzales was not available at the time of trial, defendant is entitled to the benefit of the Gonzales holding on the basis of the retroactivity analysis under Nixon. The prosecution has failed to show by clear and convincing evidence that the hypnotic process and the resulting testimony was reliable and based on the facts recalled and related prior to the hypnotic sessions.
On this record, the similar acts evidence offered by the prosecution in and of itself complies with the standards of Golochowicz.
The decision of the Court of Appeals is reversed, and we remand the matter for a new trial.
Levin, J., concurred with Brickley, J.
MCL 750.316; MSA 28.548, kidnapping being the underlying felony.
415 Mich 615; 329 NW2d 743 (1982), modified 417 Mich 968; 336 NW2d 751 (1983).
421 Mich 79; 364 NW2d 593 (1984).
People v Lee, unpublished opinion per curiam of the Court of Appeals, decided May 9,1983 (Docket No. 51044).
The law on hypnosis has been changed considerably since then and the basis on which Judge Maher dissented is no longer applicable.
People v Lee (On Remand), unpublished opinion per curiam of the Court of Appeals, decided November 21,1985 (Docket No. 85840).
A police officer testified that he stopped the defendant on February 12, 1979, and described defendant as having a mustache and noticeable sideburns. The defense attempted to emphasize at trial that none of the eyewitnesses remembered the perpetrator as having facial hair or sideburns thus suggesting that defendant could not have been the abductor. Additionally, the girls who testified about the similar act do not recall the man having a mustache or sideburns.
A police officer testified that during an investigatory interview with defendant, he smoked Kool cigarettes.
During the investigation stage of this case, Mr. Wilcome told defendant’s attorney that the vehicle he saw on the morning of February 12 could not have been a Pontiac Grand Prix.
To free the car from the snow he had to attach a tow rope to the back of the vehicle.
Defendant apparently got new license plates sometime during business hours on February 12, 1979. Testimony suggests that it was sometime before noon. However, we would note that this was not a spontaneous attempt on the part of defendant to "cover his tracks.” In the week preceding the slaying, defendant had attempted to transfer title on the vehicle and obtain new license plates but was unable to complete the transaction.
The tape of Mr. Bonnema’s hypnotic session was not available to defendant. It was apparently lost or erased during the investigation. However, defendant did receive a copy of the synopsis made after the session.
Polygraph testing and the results were not introduced at trial. However, according to testimony given during the pretrial motions, defendant apparently failed the polygraph testing.
Eight men participated in the lineup. All the men had their hair in comrows, and thus defendant fixed his hair in a similar fashion. However, on the day of the incident, the perpetrator was described as having a neat, small to medium afro. As a result the participating witnesses claimed that identification was impossible because defendant was disguised.
Greg Start is one of the few witnesses who admits at trial that he does think he was hypnotized. The audiotape of his hypnotic session with Dr. Rossi was played to the jury; however, it was not transcribed in the record. At trial, defendant’s attorney cross-examined Greg Start as to various statements he made to Dr. Rossi during the hypnotic session. Relevant to the issue of identification, Greg Start made the following statements: "No, I didn’t get a good look at him either time”; in response to Dr. Rossi’s question "Did you see his face a little bit?” he answered, "A little bit”; in response to a question concerning whether or not Greg saw the car, he answered "Not too good, not at all”; he also stated, "I didn’t pay much attention to him.”
This occurred after the arrest of defendant (March 30, 1979) and after pictures of the defendant appeared in the newspapers and on television.
Defendant filed two motions relative to the publicity surrounding the incident. First, defendant sought to have the proceedings closed on the basis of a balancing of the substantial amount of publicity and defendant’s ability to obtain a fair trial. The trial court denied defendant’s motion. The court found that the First Amendment rights of the press were a substantial interest in this case and that defendant could still receive a fair trial with an open courtroom. Second, defendant moved for a change of venue, consideration of which was reserved until the jury was selected. Defendant raised two grounds for his motion, (1) damaging media coverage, and (2) the emotional effect of the crime on potential jurors and the community. The court denied the motion, stating that an impartial jury had been empaneled.
In People v Nixon, we rejected the defendant’s arguments that a witness was totally incompetent because of being placed under hypnosis relying on the holding of the Arizona Supreme Court in State ex rel Collins v Superior Court, 132 Ariz 180; 644 P2d 1266 (1982), and the New York decision of People v Hughes, 59 NY2d 523; 453 NE2d 484 (1983). For a summary of the development of the law on hypnosis in other jurisdictions, see People v Gonzales and People v Nixon.
The dissent justified our holding in Nixon concerning the admissibility of posthypnotic testimony by labeling it as a "heightened reliability standard” which would require "that reliability must be shown by clear and convincing evidence.” (Post, p 108, Boyle, J., dissenting.)
We note that the parties in this case did not raise or argue on appeal the applicability of the Davis/Frye doctrine to the hypnotic process. People v Davis, 343 Mich 348; 72 NW2d 269 (1955); Frye v United States, 54 App DC 46; 293 F 1013 (1923).
See, generally, Scholder, The argument against use of hypnosis to improve or enhance the memory of courtroom witnesses, 7 Law & Psychology R 71 (1982); Curato, Plifka & Schroeder, Recent decision: Evidence: Hypnotically enhanced testimony — A question of admissibility or credibility for criminal courts? 58 Notre Dame L R 101 (1982); comment, Hypnosis — Should the courts snap out of it? — A closer look at the critical issues, 44 Ohio State L J 1053 (1983).
Rock v Arkansas, 483 US 44, 61; 107 S Ct 2704; 97 L Ed 2d 37 (1987).
State v Mack, 292 NW2d 764, 768 (Minn, 1980).
Defendant’s expert, Dr. Martin T. Orne, whose testimony the dissent relied upon in its finding of reliability and admissibility of posthypnotic testimony stated that hypnosis, although a valid investigatory tool, should not be used as a means by which to get an accurate eyewitness account of an event for testimonial purposes. He cautions against such use because it is virtually impossible to separate an actual memory from that created while in a hypnotic state. Dr. Ome is a renowned expert in the area of hypnosis and hypnotically refreshed memory.
We note that the safeguards announced by Dr. Orne and adopted by the dissent in formulating a new test were not adhered to in this case. (See post, p 110, Boyle, J., dissenting). First, the initial hypnotic sessions of six of the seven hypnotized witnesses were conducted by Mr. Robert Mazur, a local hypnotist. Mr. Mazur is not a psychiatrist or psychologist. Second, Dr. Donald Rossi, who conducted the second hypnotic sessions, although a psychologist, is not independent of the state. Third, neither hypnotist extracted from the subjects a prehypnosis description of the events. Fourth, all contacts between the hypnotist and the subject were not preserved for review by a recording. Finally, outside third parties were present during the hypnotic sessions.
In a footnote, the McIntosh panel recognized that a conflict existed between its holding and the holding in People v Centers.
We recognize that the panel in People v Centers, supra, concluded that admission of evidence in Faulkner’s identification of suspects at the posthypnotic lineup was reversible error because the actual identiñcation was not something recalled and related prior to hypnosis. We are unable to agree with this conclusion because we understand Nixon to permit trial testimony which is based on facts recalled and related prior to hypnosis even if the statement (including identification) was obtained after hypnosis. We base this analysis on the Nixon Court’s statement in footnote 3 that "[statements obtained after hypnosis are inadmissible per se under Gonzales, except as otherwise stated in this opinion and in accordance with applicable evidentiary rules.” 421 Mich 91. In this case, we find, as did the trial court, that Faulkner’s tentative identification of defendant at the posthypnotic lineup was based solely on facts recalled and related by her prior to hypnosis. Her in-court testimony about this identification was, therefore, solely based on facts recalled and related prior to hypnosis. [142 Mich App 321-322, n 5. Emphasis in original.]
In a footnote, the Nixon Court ruled as to the admissibility of tape recordings of the hypnotic sessions. The Court stated:
The trial court correctly ruled that statements made during hypnosis are inadmissible to prove the truth of the matters asserted therein .... Given the inherent problems of investigative hypnosis, we also hold that statements obtained from a witness during hypnosis cannot be used to bolster or impeach the witness’ credibility. [Nixon, supra at 91, n 3. Citations omitted.]
The hypnotic state is a condition of altered consciousness marked by heightened suggestibility. A subject in a hypnotic state may not have accurate recall. A hypnotized subject is highly susceptible to suggestion, even that which is subtle and unintended. Such suggestion may be transmitted either during the hypnotic session or before it .... The person under hypnosis experiences a compelling desire to please either the hypnotist or others who have asked the person hypnotized to remember or who have urged that it is important that he or she remember certain events. The subject may produce the particular responses he believes are expected of him. In this state of hypersuggestibility and hypercompliance the subject will unconsciously create answers to the questions which the hypnotist asks if he cannot recount the details being sought. This process of filling the gaps of memory with fantasy is called confabulation. Neither the person hypnotized nor the expert observer can distinguish between confabulation and accurate recall in any particular instance. [Gonzales, supra, pp 623-624.]
The Grand Rapids Police Department received two tips concerning defendant. Defendant was first contacted by police on February 16, 1979. Defendant was again contacted one week later to clarify discrepancies in the statements he gave to police concerning his whereabouts on the day of the incident. This is the same day that the second hypnotic sessions were conducted. It was at this time that arrangements were made for polygraph testing. Only six to eight other individual suspects were contacted on more than one occasion by police and only one other suspect took a polygraph exam. Defendant was the focus of the police investigation on February 23,1979.
On cross-examination Mr. Hill gave the following testimony:
Q. As you approached the car, did you see the front of the car, the grill, any name brand markings?
A. No, sir.
Q. In fact, Mr. Hill, wasn’t it your belief on February 12 that the car was a Chrysler?
A. I — I assume I thought it was. I wasn’t sure.
Q. Do you remember telling Mr. Mazur on February 12 that it was a shiny, black Chrysler?
A. Yes.
Q. Do you remember telling Mr. Mazur on February 12, the night of this incident, "I’m damn sure it was a Chrysler”?
A. I assumed it was, yes.
Q. Do you remember telling the police, the first statement on February 15, that it was a black Chrysler?
A. I thought it was.
Q. My question is: Do you remember telling them that?
A. Yes.
Q. Do you remember telling them, also, that it was black and you were sure it was a Chrysler?
A. Yes, sir.
Q. Do you remember telling Dr. Rossi on February 23 that you remember seeing on the chrome on the top of the grill, "I’m sure it said Chrysler there. Letters staggered. I didn’t see all of Chrysler — Chrysler, but spelled something similar to Chrysler.”
A. I think I did.
Q. But, now, you don’t think you did?
A. Yes, I believe I told him that.
Q. What about now?
A. I know it’s not.
Q. Why do you know it’s not?
A. I just know it wasn’t a Chrysler.
Q. You know it is not because Mr. Lee does not have a Chrysler, is that true?
A. No, sir. I just assumed it was. I told them I wasn’t positive. It was a black, shiny car.
Q. But you weren’t positive . . .
A. That it was a Chrysler, no. Never was.
Q. Your statement "damn sure it was a Chrysler,” to you is not being positive?
A. (No response)
Q. Pardon?
A. At times I thought it was a Chrysler. I admit that.
Memory hardening and confabulation as a result of suggestion from external sources are dangers inherent in the hypnotic process.
Mr. Wilcome testified:
Q. And the car you saw in your view was a Monte Carlo?
A. Yes.
Q. Do you remember telling me [defendant’s attorney] at that time the car you saw could not have been a Grand Prix?
A. Yes.
Q. Is that your view today?
A. Yes.
Mr. Orr testified:
Q. Now, the car that you helped tow on February 12, did you touch that car with your hands?
A. Yes.
Q. The car you saw was a Monte Carlo?
A. Yes.
Q. You remember seeing the emblem on the back saying that it was a Monte Carlo?
A. Yes.
We recognize that the standards adopted by this Court in Gonzales and Nixon, as to the admissibility of testimony from a hypnotized witness, were not available at the time of this investigation. However, the issue had been addressed by the Court of Appeals in People v Hangsleben, 86 Mich App 718; 273 NW2d 539 (1978). In Hangsleben, the Court did not allow the testimony of a psychiatrist who was willing to testify that defendant claimed innocence while under hypnosis. The Court held that defendant had failed to demonstrate the general theory that hypnotically induced memory had achieved general scientific acceptance.
The dissent finds "preferable” and has incorporated into its rule the safeguards of the "reliability centered approach . . . articulated in State v Hurd, 86 NJ 525, 538; 432 A2d 86 (1981) . . . .” (Post, p 109, Boyle, J., dissenting.) However, in Gonzales, supra, pp 624-625, this Court specifically considered and rejected the Hurd standards as insufficient to guard against the dangers inherent in the hypnotic process. (See n 24.)
See n 24.
See, generally, Rock, n 22 supra at 59-61.
The witnesses’ identification of the vehicle varied regarding whether it was a 1976 or 1977 Grand Prix or Monte Carlo. The police received a list from General Motors of the vehicle identification numbers of all 1976 and 1977 black Pontiac Grand Prixs with "firethome red carpet.” Over five thousand vehicles were manufactured during the two-year period. Three hundred thirty-four vehicles were titled in Michigan, of which twelve were in Kent County. Of the twelve titled in Kent County, three were owned by a black person, one of whom was the defendant. The police did not obtain statistics on Monte Carlos manufactured during 1976 and 1977.
Exhibits 139 through 144 consisted of hair fragments described as being of Negroid origin that were found on the victim’s body and clothing. Additionally Exhibit 142 also contained several orange fibers found on the gag.
Amy Combs on her first viewing of the book identified someone other than Albert Lee. However, she was asked by the police officers to go through the book a second time more carefully and thoroughly. Following her second viewing of this picture book she did identify defendant as the man who had approached them on February 6. At trial she stated that on the first viewing she did not pick defendant because of the mustache he had in the picture.
Prior to the introduction of the similar acts testimony the trial judge gave the following instruction:
You are the sole judges of whether to believe any such testimony. However, should you believe such evidence, you are cautioned that it is before you for a limited purpose. That is, for the purpose of determining if it .tends to show the.identity of the assailant of [the victim] on February 12,1979.
This evidence must not be considered by you for any other purpose. You must not, for instance, regard this evidence as showing that the Defendant is a person of bad character or that he has the disposition to commit crimes. You must not convict the Defendant because you believe he is guilty of some other improper conduct. | [
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J. C. Kingsley, J.
Plaintiffs appeal by leave granted from an order granting defendants’ motion to add Scott Troutman, the minor son of plaintiffs Clyde R. and Mary Troutman, as a necessary party plaintiff.
This action arises out of a motor vehicle accident that occurred on August 5, 1980, in which plaintiffs were injured. At the time of the accident, Mary Troutman was pregnant with, and on September 26, 1980, gave birth to, Scott. Plaintiffs sued defendant Weaver as the owner of the other vehicle involved in the accident, defendant Ollis as driver of that vehicle and defendants Deneff, Miller, and Schaftenaar as joint venturers allegedly engaged in a joint enterprise with defendant Ollis.
Scott was not a party to the action in plaintiffs’ original complaint. Plaintiffs later moved to amend their complaint to add Scott as a permissive party plaintiff pursuant to the provisions of GCR 1963, 206. Plaintiffs alleged Scott sustained prenatal injuries resulting in encephalopathy with bilateral upper motor neuron disfunction (hypo-tonic cerebral palsy) and development disfunction. Plaintiffs voluntarily withdrew this motion, claiming that, because Scott was still an infant, the full extent of his damages caused by the injuries, including any future complications, could not be fully known at that time. Defendants Miller, Schaftenaar, and Deneff (hereinafter defendants) then moved to add Scott as a plaintiff, claiming that he was a necessary party to the action pursu ant to GCR 1963, 205. This motion was granted by the trial judge and is challenged on appeal.
Plaintiffs claim that, while he is a proper permissive party plaintiff, Scott is not a necessary party required to be joined as a plaintiff under GCR 1963, 205. That rule requires joinder as parties of all persons "having such interests in the subject matter of an action that their presence in the action is essential to permit the court to render complete relief’. GCR 1963, 205.1. An important distinction must be noted between a "necessary” party and a "proper” party as those terms relate to rules for necessary and permissive joinder.
"The designations ’necessary’ and "proper’ parties connote their ordinary meaning. All 'necessary’ parties must be joined or brought in so that there can be a complete adjudication of rights and interests. 'Proper’ parties, on the other hand, may be joined or brought in, but their omission does not result in a nonjoinder or give ground for motion to dismiss. As to them, plaintiff has an election to join them or leave them out as he sees fit.” 1 Callaghan’s Michigan Pleading & Practice (2d ed), § 15.36, p 505.
The Michigan court rule concerning necessary joinder has seldom been construed in the context of the issue presented in this appeal. The federal rule which governs the joinder of necessary parties, FR Civ P 19, is based upon the same principles and objectives that led to the formulation of GCR 1963, 205. Construction of this federal rule is therefore helpful to an understanding of the application of the Michigan rule in this case. See 1 Honigman & Hawkins, Michigan Court Rules Annotated (2d ed, 1983 Supp), p 299.
FR Civ P 19 does not generally necessitate the joinder of plaintiffs advancing tort claims against the same defendant for injuries arising out of the same transaction or occurrence, even where the potential co-plaintiffs are related by blood or marriage, provided that each plaintiff has a separate, independent cause of action. Cortez v Los Angeles County, 96 FRD 427, 428 (CD Cal, 1983); see also 7 Wright & Miller, Federal Practice and Procedure, § 1623, p 245.
In the case of Field v Volkswagenwerk AG, 626 F2d 293 (CA 3, 1980), multiple plaintiffs asserted rights against the defendant arising out of the same occurrence and presented common questions of law and fact. The trial court denied a motion to dismiss one of the plaintiffs in her individual capacity, emphasizing that her continued presence in the action individually as well as in her representative capacity minimized delay and expense and avoided the risks to the defendant inherent in having to litigate the same basic questions in two forums against different parties. The appellate court reversed that decision and emphasized the distinction between necessary and permissive joinder requirements:
"The right to separate and individual relief asserted against VWAG by Ivana in her individual capacity, however, even though it arises out of the same occurrence, exists quite apart from the claims asserted by Michael Field and Arthur Field’s estate and, if upheld, would impose upon VWAG an obligation separate and distinct from its obligations to the other parties. Complete relief under Rule 19(a)(1) 'refers to relief as between the persons already parties, not as between a party and the absent person whose joinder is sought, and mere theoretical considerations of disposing of the whole controversy should not be employed’ to dismiss an action 'where it appears unlikely that absent persons could be adversely affected.’ Indeed, to dismiss the action on the ground that Ivana is indispensable would appear 'to deny a principal aspect of several liability.’
"If the right of either Michael Field or Arthur Field’s estate to relief against VWAG were established, these parties would be awarded a judgment; if their claims are not sustained, their complaint would be dismissed. In either event, the district court will be able to grant complete relief as between the parties without the joinder of Ivana, and, as we have shown above, it is unnecessary to join Ivana as a party in order to enable VWAG to defend against these claims. VWAG, while it may be entitled to contribution or indemnity from Ivana, cannot be subjected to multiple obligations since its liability, if any, will be serveral. Nor, as Professor Moore has emphasized, does the possibility of a subsequent adjudication that may result in a judgment that is inconsistent as a matter of logic, trigger the applica tion of Rule 19. For when, as alleged here, 'several persons are injured by the same tort and proof of damage is individual, the fact that want of estoppel may leave a defendant who has defended successfully against one of the injured parties with the risk that he will be liable to another in a subsequent suit does not make it necessary that all of the punitive plaintiffs to be joined in the same suit, even if * * * there is no jurisdictional inhibition to their joinder.” Field, supra, pp 301-302 (footnotes omitted).
Defendants claim they cannot obtain complete relief in the present action without the inclusion of Scott’s claim. They also allege that plaintiffs, by withdrawing their motion for permissive joinder while pursuing settlement negotiations on Scott’s behalf, seek to settle Scott’s claims while at the same time avoiding any discovery with respect to them. Defendants further claim the factors relied on by the trial court, to-wit: judicial economy, avoiding circuity of litigation, promoting full adjudication of all claims with a minimum of effort, allowing defendants to avoid multiple litigation of separate claims arising out of the same transaction and the best interests of Scott himself, compel the joinder of Scott as a plaintiff.
We believe that the term "relief’ is used in the Michigan court rule on necessary joinder to denote legal relief only. In this case, the legal relief is the right to money damages. To hold otherwise would require that all claims against a defendant arising out of the same transaction or occurrence be brought in the same action, regardless of the fact that each plaintiff may have a separate and distinct claim for damages. The adoption of such a rule would erase the distinction between necessary joinder and permissive joinder. We conclude that an injured person with a distinctly recognized claim for damages is not in every instance a necessary party plaintiff under GCR 1963, 205 in an action brought by another person or other persons injured in the same occurrence by the same tortfeasor.
Defendants also argue that the rights of Scott will be prejudiced if plaintiffs’ action proceeds in his absence. This prejudice will stem from the possibility that, although Scott can assess his damages more accurately in the future, plaintiffs in the present action will have exhausted the insurance proceeds that constitute the only assured source of recovery for his damages.
We share with the trial judge a concern that failure to bring suit at this time on Scott’s behalf may ultimately prejudice any efforts by Scott to recover for such damages as he may have suffered in the accident. We believe, however, that the necessary joinder provisions cannot be expanded to cover the present situation. As noted above, that rule necessitates joinder of such persons whose presence "is essential to permit the court to render complete relief’. This requirement is not met in a case in which the only relief sought is a money judgment. The proof of his damages is individual to Scott; the liability of the defendants is several to the plaintiffs. While many of defendants’ arguments concerning the desirability of joinder in this case have merit, none bring the case within the scope of the necessary joinder rule. It is clear that, while Scott may be permitted to join the action as a plaintiff, he should not be compelled to join the action as a necessary party plaintiff.
We do not address plaintiffs’ claim that the rules concerning joinder conflict with the minority saving provisions of MCL 600.5851; MSA 27A.5851. We note, however, that there is persuasive merit to the trial judge’s conclusion that no such conflict exists.
We do not reach plaintiffs’ second claim on appeal regarding adjournment of the trial date and expanded discovery on the part of the defendants. Resolution of that claim appears necessary only if the order joining Scott as a party plaintiff had been upheld.
Reversed and remanded.
".1 Permissive Joinder. All persons may join in 1 action as plaintiffs
“(1) if they assert any right to relief jointly, severally or in the alternative, in respect of or arising out of the same transaction, occurrence, or series of transactions or occurrences and if any question of law or fact common to all of them will arise in the action; or
"(2) if it appears that their presence in the action will promote the convenient administration of justice.”
".1 Necessary Joinder. Subject to the provisions of Rule 208 and of sub-rule 205.2, persons having such interests in the subject matter of an action that their presence in the action is essential to permit the court to render complete relief shall be made parties and be joined as plaintiffs or defendants and aligned in accordance with their respective interests.
".2 Effect of Failure to Join. When persons described in sub-rule 205.1 have not been made parties and are subject to the jurisdiction of the court, the court shall order them summoned to appear in the action, and may prescribe the time and order of pleading. If jurisdiction over such persons can be acquired only by their consent or voluntary appearance, the court may proceed with the action and grant such appropriate relief to persons who are parties as will prevent a failure of justice. In determining whether to proceed, the court shall consider:
"(1) whether a valid judgment may be rendered in favor of the plaintiff in the absence of the person not joined;
"(2) whether the plaintiff has any other effective remedy should the action be dismissed because of the nonjoinder;
"(3) the prejudice which may result from the nonjoinder to the defendant or to the person not joined;
"(4) whether such prejudice, if any, may be avoided or lessened by a protective order of the court or provision included in its final judgment.
"Notwithstanding the failure to join any person who should have been joined, the court may render a judgment against the plaintiff whenever it is determined that the plaintiff is entitled to no relief as a matter of substantive law.” | [
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M. Warshawsky, J.
Defendants appeal as of right from a February 8, 1983, judgment entered in favor of plaintiffs following a nonjury trial. The primary question in this appeal is whether certain fringe benefits should be included in the base for computing pension amounts payable to plaintiff-retirees.
Plaintiffs are former employees of the Highland Park police and fire departments who retired after 1968. They are members of a retirement system established in Chapter 19 of the Highland Park City Charter and are entitled to receive pension benefits thereunder. Defendant board of trustees is charged with administering the retirement system. The relevant sections of Chapter 19 are set forth below:
"19-2(12) 'Compensation’ means the salary paid a member by the city for service rendered by him as a policeman or ñreman; provided, that the term 'compensation’ shall not include any portion of salary in excess of the salary for the higher of (1) the third rank above the rank of patrolman, or (2) the third rank above the rank of pipeman, nor shall it include remuneration for overtime, clothing and equipment, and travel expense. If there be more than one classification within a rank, the highest classification within the rank shall be used for the purpose of the definition of 'compensation’.
"19-2(13) 'Final average salary’ means the average of the compensations, as ñxed in the city budget for the ñscal year in which employment by the city as a policeman or ñreman last terminates, of the ranks held by the member during the 5 years of credited service immediately preceding his retirement; provided, that a member’s 'final average salary’ shall not exceed the compensation for the third rank above the rank of patrolman or the third rank above the rank of pipe-man, whichever is higher, as fixed in the city budget for the fiscal year in which the member’s employment by the city as a policeman or fireman last terminates. If there be more than one classification within the rank, the highest classification within the rank shall be used for the purpose of this definition. If a member has less than 5 years of credited service^] the period used in determining his final average salary shall be his total period of credited service.
"19-18 Age and service pension. — Upon his retirement, as provided in this chapter, a member shall receive a straight life pension equal to 2 per cent of his ñnal average salary multiplied by the number of years, and fraction of a year, of his credited service not to exceed 25 years. His said pension shall be subject to sections 19-30 and 19-31.
"19-30 Pension escalation. — If the compensation for the rank held by a member at the time his employment by the city as a policeman or fireman last terminates is subsequently increased or decreased[,] any pensions payable on account of his employment by the city shall be correspondingly increased or decreased.” (Emphasis supplied.)
In June, 1977, plaintiffs filed a complaint for writ of mandamus and other appropriate relief, alleging that the formula for computing pension amounts should include not only regular salary but also certain fringe benefits. Defendants filed a counterclaim which will be discussed later in this opinion. Following a nonjury trial, the court entered a judgment on February 8, 1983, ordering that certain fringe benefits be included in the computation of average final compensation in determining the amounts of plaintiffs’ pensions. The fringe benefit items in dispute are: (1) shift differential pay, (2) longevity pay, (3) holiday pay, (4) call-back pay, (5) premiums paid for health and hospitalization insurance, (6) premiums paid for eye care program, (7) premiums paid for dental program, and (8) terminal leave pay. Defendants appeal as of right.
I
Did the Trial Court Err in Holding That the Listed Fringe Benefits Must Be Included in the Base for Calculating Plaintiffs’ Pensions?
Defendants first focus on the phrase " 'Final average salary’ means the average of the compen sations, as ñxed in the city budget as found in § 19-2(13) of the city charter. Defendants contend that only the regular salaries are fixed in the pay plan of the city budget, and that fringe benefits, on the other hand, are not fixed but are considered expenses which can be paid only with an express appropriation in the budget. We reject defendants’ attempt to distinguish between fixed and non-fixed items in the budget. The finance director testified that only regular salaries are fixed in the pay plan (a predetermined schedule of pay by rank) in the budget. However, he stated that no item can be paid unless there is a specific appropriation for it in the budget. There was no testimony that the term "fixed in the city budget” in § 19-2(13) is a term of art or carries any special meaning. We find that the proffered distinction between fixed and non-fixed items is one of semantics rather than substance.
Defendants next assert that fringe benefits should not be included in the computation because the members’ contributions to the system under § 19-34(b) of the charter did not take the value of the fringe benefits into account. While this factor is not dispositive, see Banish v Hamtramck, 9 Mich App 381; 157 NW2d 445 (1968), lv den 381 Mich 779 (1968), it does logically weigh in defendants’ favor. It appears that defendants have for many years acted under the reasonable belief that fringe benefits were not to be included in the computation of either pension payments or employee contributions to the system. Plaintiffs’ longtime acquiescence in this state of affairs weakens their present claim.
Defendants further contend that their reasonable and consistent construction of the retirement system provisions over the years should be given great weight by this Court. This general principle was recognized by the Court in Lansing Fire Fighters Ass’n, Local 421 v Bd. of Trustees of City of Lansing Policemen’s & Firemen’s Retirement System, 90 Mich App 441, 445; 282 NW2d 346 (1979), lv den 407 Mich 957 (1980):
"Additionally we point out that the board, being in charge of administration of the pension program, has reasonably interpreted the charter in light of objects and purposes sought to be accomplished. As such we find no cogent reasons for overruling the board’s construction of the charter as it relates to the exclusion of accrued vacation time from retirement benefit computation. See Michigan State Police Command Officers’ Ass’n, Inc v Dep’t of Public Safety, 80 Mich App 278; 263 NW2d 47 (1977).”
Therefore, the burden is on plaintiffs to establish cogent grounds for overruling the board’s decision.
Plaintiffs point to § 19-2(12) of the charter which expressly provides that compensation shall not include "remuneration for overtime, clothing and equipment, and travel expense”. Plaintiffs reasonably assert that express exclusion of some fringe benefits implies inclusion of those not mentioned. See, e.g., Sebewaing Industries, Inc v Village of Sebewaing, 337 Mich 530, 545; 60 NW2d 444 (1953). In our opinion, however, this general rule should not determine the outcome of this case. One reason for not applying this general rule is that some of the fringe benefits listed in the judgment are not of the same kind as those expressly excluded in § 19-2(12). For example, the exclusion for clothing and equipment and travel expenses merely refers to reimbursement of out-of-pocket expenses incurred by the employees. Such reimbursement is not a fringe benefit in the true sense and is quite different from many of the items listed in the judgment. Furthermore, the term "salary” is ambiguous as used in this context and is not defined in the charter. It is unwise to assume that the drafters intended to include all other fringe benefits merely because they chose to exclude three specific types of employee remuneration from the pension calculation. Rather, it appears just as reasonable that had the drafters intended "salary” to include all fringe benefits, they would have expressly so stated.
The trial court found Banish v City of Hamtramck, supra, controlling. The plaintiffs in that case were retired firemen and policemen entitled to pensions at the rate of one-half the pay of the rank in which they served at the time of retirement. The charter provided that in the event of any change after retirement "in such rate of pay” the pension thereafter would be "at the rate of 1/2 the pay for said rank so changed”. Banish, supra, 9 Mich App 385. For approximately 20 years, the retirees received their 50% share of adjustments whenever pay changes were approved for active employees. In the fiscal year 1959-1960, the common council adopted a proviso increasing the pay of its Class B employees but providing that retirees would not receive one-half of the increment. The proviso stated:
" 'that the basic pay of the Class B employees for all intents and purposes shall be the same as was prevailing in the 1958-1959 fiscal year and that any amounts paid over and above such basic pay shall be construed as payments only while in active service for the city of Hamtramck and not constituting part of any salary upon which pension payments are to be computed and paid in the future. ’ ” 9 Mich App 385-386. (Emphasis in Banish.)
The opinion refers to the increment over basic pay paid only to those in active service as "in service pay”.
The plaintiff retirees sought a writ of mandamus requiring payment of increased pension benefits. The defendants argued that, under the charter provision, plaintiffs were entitled to one-half of regular salary and not any other pay. The testimony at trial indicated that the proviso was a deliberate austerity measure by the common council intended to reduce pension outlays. The Court of Appeals held:
"The distinction sought to be created between 'regular salary’ and 'any other pay’ is clearly foreclosed by the charter language, which speaks simply in terms of 'pay.’ A fair reading of the charter language requires that the term 'pay,’ as used in the clause T/2 the pay for said rank so changed’, be interpreted to mean the regular compensation currently paid to those of the rank held by the retiree at the time of his retirement. The crucial question, then, is what is regular compensation? We have no hesitancy in holding, on the facts of this case, that in service pay and hazard risk pay are regular compensation. Those terms were devised in an attempt to take two bites out of the cherry with the deliberate purpose, and none other, of depriving retirees of the full pension rights which the charter mandates.”
"The charter provision requiring escalation or reduction of retirement pay expresses a purpose that retirement benefits will, in fact, escalate and reduce as the pay of the rank in which the retiree was serving at the time of retirement changes. The defendants’ argument would permit the city to keep the retirees’ pay constant —or, indeed, to effect only reductions and no increases —by simply adopting the correct nomenclature and dividing the pay of active service employees into categories plausibly packaged and labeled. We look beyond form to substance.” 9 Mich App 388-389.
The Court further found that under the facts there involved, holiday pay and longevity pay were part of regular salary and hence, "pay”.
We find that Banish should be distinguished from the present case. In contrast to Banish, there is no indication that defendants in the instant case deliberately sought to prevent retired members from sharing in pay increases awarded to active service employees. Rather, it appears that defendants have reasonably and consistently interpreted the term "final average salary” as not including fringe benefits. Furthermore, Banish simply held that the term "pay” in the charter included not only regular salary but other types of pay as well. It does not necessarily follow that the clause "salary paid a member” in § 19-2(12) was intended to include all types of fringe benefits.
Plaintiffs cite several decisions from other states in support of their contention that fringe benefits should be included. However, a fair number of other courts have held in varying circumstances that pensions based on "salary” do not include fringe benefits. See, e.g., State ex rel Henderson v Schuele, 25 Ohio St 2d 179; 267 NE2d 590 (1971); City of Manitowoc v Police Pension Bd for City of Manitowoc, 56 Wis 2d 602; 203 NW2d 74 (1973); Hilligoss v LaDow, 174 Ind App 520; 368 NE2d 1365 (1977); Jahn v City of Woodstock, 99 Ill App 3d 206; 425 NE2d 490 (1981).
An Illinois appellate court in Jahn v City of Woodstock, supra, interpreted a provision granting a disability pension of 50% of the "salary” attached to the member’s rank on the date of retirement. The court found some guidance in a defini tion of the word "salary” in another provision of the pension code. The court also stated:
“We note that the word 'salary’ has been defined in other contexts to mean a 'fixed annual or periodical payment’ [Commonwealth Life & Accident Ins Co v Bd of Review, 414 Ill 475, 485; 111 NE2d 345 (1953)]. The word is most often used to mean a fixed amount rather than a fringe benefit such as insurance premiums would be considered.
"While no case in Illinois has decided this point, we are assisted by a number of cases from foreign jurisdictions which have addressed the specific issue raised by the parties before us.
"In Hilligoss v LaDow, 368 NE2d 1365 (Ind App, 1977), an Indiana statute with the same language as +hat in § 3-144.2 was examined to determine whether employer insurance programs and clothing allowance payments form a part of the 'salary’ of policemen or 'monthly wage’ of firemen for computing pension benefits. The court held that such benefits were not a part of a 'salary’ or 'monthly wage’ under the applicable pension provisions. The court found that the legislature intended a restricted meaning because it had not used more embracing terminology than it did.
"A similar result was reached by the Supreme Court of Wisconsin in State ex rel City of Manitowoc v Police Pension Bd, 56 Wis 2d 602; 203 NW2d 74 (1973). In this case the State appealed from a pension board determination that a retired police officer was entitled to a pension that included health and life insurance contributions by the employer. The statute provided for a pension equal to one half of the police officer’s monthly compensation, which the court interpreted to exclude health and life insurance coverage. The court noted that the legislature could provide otherwise if they deemed it the better policy.
"A similar result was reached in State ex rel Henderson v Schuele, 25 Ohio St 2d 179; 267 NE2d 590 (1971), where the statutory wording provided for 'salary for the rank held’ was deemed by the court to not include employer contributions of insurance premiums in the computation of police and fire pension benefits.
"We deem the reasoning of our sister States to be most persuasive.” 99 Ill App 3d 209-210.
Based on the arguments and authority discussed above, we conclude that final average salary does not include holiday pay, call-back pay, terminal leave pay, and payment of hospitalization, eye care, and dental insurance. We further find that shift differential pay and longevity pay are to be included in computing final average salary. According to the testimony, shift differential refers to a small premium paid to employees who work the second or third shifts. Longevity refers to. increased amounts paid to employees based on years of service, regardless of rank. Unlike the other types of fringe benefits, both of these items result in enhancement of the regular periodic salaries paid to employees based on their individual circumstances. We conclude that final average salary does include shift differential pay and longevity pay.
II
Was Judgment Properly Entered Against Defendant City of Highland Park and the City’s Mayor, Finance Director, and Treasurer?
This Court agrees that plaintiffs have no cause of action against the individual defendants, i.e., the mayor, finance director, and treasurer. Defendants correctly point out that no proofs were adduced against these individuals. However, we find that the City of Highland Park, being ultimately responsible for payment of the pension benefits under the retirement system established in Chapter 19 of the city charter, is a proper defendant.
III
In Recalculating Pension Amounts, Should the Items of Shift Differential Pay and Longevity Pay Be Taken Into Account as of the Time Each Benefit Became Available to Active Members, and Should Interest Be Awarded?
The pensions should be recalculated taking into acount the fringe benefit items of shift differential pay and longevity pay from the time each of those items became available to active members. The amounts due to plaintiffs should be reduced by the amounts they would have been required to contribute to the retirement system taking into account longevity pay and shift differential pay. Judgment interest under MCL 600.6013; MSA 27A.6013 should be awarded on the net increase in pension amounts due to plaintiffs.
IV
Are the 39 Plaintiffs in This Case Who Erroneously Received Monies as the Result of a Consent Judgment Entered in Prior Pension Litigation Involving Pre-1969 Retirees Foreclosed From Obtaining Judgment in the Present Case?
A class action suit was commenced in 1971 seeking increased pension benefits for pre-1969 retirees. That suit concerned different charter provisions dealing only with pre-1969 retirees. A consent judgment was entered in that case in 1972. It appears that a supplemental judgment entered July 9, 1973, erroneously included 39 post-1968 retirees who are also plaintiffs in the present action. It is undisputed that a payment was made to these 39 members in 1973 pursuant to the supplemental judgment. The 1973 payment is the only payment in issue. Defendants’ counterclaim sought return of the monies erroneously paid.
Defendants contend that a judgment of no cause of action should be entered against these 39 members because they failed to return the excess payment in 1973. We disagree, and find that defendants are entitled only to a set-off of the pertinent amount against the recoveries of the 39 plaintiffs.
The trial court’s February 8, 1983, judgment is reversed and the case is remanded for entry of a judgment awarding pension benefits and interest consistent with this opinion.
Reversed and remanded.
The judgment included three additional items, namely, sick leave, funeral leave, and personal leave. However, inclusion of these three items is not contested since the city’s finance director testified without contradiction that these items were taken into account in computing the pensions.
E.g., State ex rel Parsons v Ferguson, 46 Ohio St 2d 389; 348 NE2d 692 (1976); Newhouse v Bd of Pensions & Retirement, 33 Pa Commw Ct 81; 380 A2d 1315 (1977); Hebbler v New Orleans Fire Dep’t, 299 So 2d 825 (La App, 1974). | [
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Boyle, J.
An issue regarding the validity of a provision in an ordinance may be resolved in a forfeiture proceeding on a summary disposition motion for purposes of collateral estoppel. We find, however, that the city failed to persuade this Court that the ruling holding the storage provision valid was necessary to the 1982 judgment concerning forfeiture of fireworks seized in 1979. Therefore, we hold that the defendant was not precluded from raising the issue as an affirmative defense when prosecuted in 1984 in 36th District Court. In addition, we conclude that the state did not preempt local communities from regulating the quantity of fireworks a retailer can store within its boundaries and that the storage provision in the ordinance does not conflict with the statutory scheme.
Having found that the state has not preempted this area of regulation, we address the issue whether there is any rational basis for the storage provision in the ordinance. We conclude that the storage limitation provision is a valid and reasonable exercise of the city’s police power within the ambit of due process and equal protection.
Accordingly, we affirm the Court of Appeals holding that the storage provision in the ordinance did not conflict with state law, and vacate that part of the Court of Appeals decision which addresses the collateral estoppel issue. Further, we reverse the panel’s decision affirming the 36th District Court’s dismissal of the misdemeanor charge on the basis of its determination that the storage provision in the ordinance was unconstitutional. However, we stay entry of judgment in this case pending resolution of the remaining cases involving these parties in the Court of Appeals.
I
Defendant Qualls operates a retail fireworks business in the City of Detroit and has been engaged in litigation with the plaintiff city since he began operations in 1978. A review of the background and prior litigation between the parties is pertinent to resolution of the issues in this case.
In 1981 the city brought a suit in Wayne Circuit Court against defendant for forfeiture of fireworks seized from the defendant’s premises in 1979, alleging defendant’s license only permitted him to sell and store legal fireworks in amounts of one hundred pounds or less, and that the confiscated fireworks were over one hundred pounds of illegal fireworks which were stored on defendant’s premises in violation of the ordinance. In his answer defendant argued that the city was not entitled to forfeiture of the confiscated fireworks because the ordinance conflicted with state law, under which no limit was stipulated as to the amounts of class c or class b fireworks a retailer could sell and store, and that the one-hundred-pound limitation was unreasonable.
At the hearing, defendant argued that the storage limitation was unreasonable and that the ordinance conflicted with state law and was not a valid exercise of the city’s police power. In response, the city claimed the provision of the ordinance governing the storage of fireworks was not preempted by the state statutory scheme in MCL 750.243d; MSA 28.440(4), and that the provision was reasonable and clearly addressed a local concern, providing limitations consistent with the statutory language.
The court found that the state had not preempted local communities from regulating the storage of fireworks for retailers within their boundaries, that the ordinance did not conflict with the statute, and that the storage provision in the ordinance was a valid and reasonable exercise of the city’s police power. The order, issued May 14, 1982, adjudging the Detroit fireworks ordinance valid, provided:
[T]he City of Detroit Ordinance No. 314-H, Chapter 23, as it relates to the storage for retail sale of fireworks, is a valid exercise of the City’s power, and the State of Michigan has not preempted this area of legislation and regulation, and the ordinance in that respect is valid and enforceable. [Detroit v Qualls, No 81-129784 CZ.[ ]
The defendant never appealed the judge’s ruling that the storage provision in the ordinance was valid and that the state had not preempted this area of regulation.
The case now before the Court began on July 2, 1984, when the city charged the defendant in the 36th District Court with three misdemeanor violations concerning the storage provision in the fireworks ordinance. The defendant moved to sup press and for dismissal, arguing that the ordinance was unconstitutional because it conflicted with state law, and that by enacting comprehensive legislation in the area, the state Legislature preempted local ordinances in conflict with the state law. Further, defendant argued that the municipality prohibited that which the state allowed, the storage of reasonable amounts of us dot class c common fireworks and that a limitation of one hundred pounds was not rationally related to public safety.
The city responded that Judge Hausner’s 1982 order ruling that the storage provision in the ordinance was valid was final, and that pursuant to that ruling the defendant was in violation of the city ordinance as interpreted in 1982 when he stored more than one hundred pounds of fireworks. Further, the city noted that the municipal ordinance was clothed with the presumption of constitutionality,
By virtue of the police powers, the Michigan Home Rule Statute and the Michigan Constitution which allows cities like Detroit to regulate in areas that relate to their municipal concern, and certainly the lives and protection and health and safety of our citizens is a municipal concern. Explosives are a municipal concern and by virtue of the police powers we are permitted to regulate in this area.
The defendant argued that there was evidence which proved that there was no danger from an explosion of any amount of us dot class c common fireworks under any conditions. Defendant’s expert, Dr. Conklin, testified at the hearing concerning the hazards associated with the storage of ten types of us dot class c common fireworks when loaded into tubes, the means by which they are sold commercially. He stated that storage of these types of fireworks in tubes, in amounts over one hundred pounds, did not pose a mass explosive hazard.
The city asked defendant’s expert whether he was aware that defendant’s license allowed him to have not only class c fireworks on the premises but also class b materials and whether, if class B fireworks were stored in the same facility, his opinion would be different concerning the hazards associated with storing amounts in excess of one hundred pounds. The expert acknowledged that there would be a greater hazard in the storage of class b fireworks.
The 36th District Court judge dismissed the misdemeanor charge for failure to limit storage of fireworks to under one hundred pounds on the basis that the ordinance was unconstitutional as applied to defendant in that he stored only us dot class c common fireworks and the limitation was not rationally related to any interest in the safety and health of the citizens of Detroit:
I find . . . the City’s interpretation of the ordinance limiting the amount stored to 100 pounds gross weight is not reasonably related to the City’s interest in the health, safety, and welfare of its citizens. And, as such, is an arbitrary and unreasonable deprivation of the defendant’s property.
The court did not reach the issue of preemption on the basis of its belief that that issue, in and of itself, was not dispositive._
At a contempt hearing held the following day in Wayne Circuit Court, defense counsel urged Judge Hausner to reconsider his 1982 decision and the record adopted in the 36th District Court. The judge stated that his prior order was the law in Wayne County until reversed by a higher court, and held that his 1982 decision that the storage limitation in the ordinance was valid was final.
In 1986, Judge Hausner conducted hearings in response to defendant’s complaint for declaratory and injunctive relief. He addressed the issue whether the city’s refusal to issue a license for the sale and storage of fireworks, which under state law can be sold and stored without a permit, was reasonable.
In addition, the city appealed the dismissal of the citation in the 36th District Court, claiming that the storage provision in the ordinance was valid and that the district court was bound by Judge Hausner’s 1982 determination in circuit court to that effect. The Recorder’s Court overturned the decision invalidating the ordinance:
On December 11, 1984 the trial court granted the defendant motions dismissing each of the plaintiff’s actions. The court found Ordinance 314-H Chapter 23 unconstitutional.
As the Wayne County Circuit Court is a superior court in relation to the 36th District, the latter court was bound by the determination of constitutionality. This court, not being one which is superior to the Circuit Court, is likewise bound by that determination.
Initially, the Court of Appeals affirmed the decision of the Detroit Recorder’s Court to remand the case to district court for trial on the charge of storing excess fireworks. People v Qualls, 157 Mich App 552; 403 NW2d 594 (1987). The panel rejected the defendant’s arguments that the storage limitation in the ordinance conflicted with the state statute or that the storage provision in the ordinance was not rationally related to public safety.
The defendant appealed, and, in lieu of granting leave, this Court remanded the case to the Court of Appeals, where the panel reversed its earlier decision and affirmed the holding of the 36th District Court. People v Qualls (On Remand), 166 Mich App 587, 592-593; 421 NW2d 248 (1988). The panel decided that the Detroit Recorder’s Court erred in holding that the circuit court’s judgment operated as binding precedent because of the superiority of that court, and, in view of the essentially unrebutted testimony of defendant’s expert witness, that the storage limitation in the fireworks ordinance was not rationally related to public safety, and that the enactment of the ordinance did not represent an exercise of the city’s police power within the ambit of due process and equal protection. Id., p 593.
The panel also found Judge Hausner’s 1982 ruling not to be significant to the resolution of the issue whether the ordinance was a reasonable and valid exercise of the city’s police power be cause at that time the defendant failed to present any evidence which supported his claim that the ordinance was invalid. Id., pp 599-601. In addition, the panel found that Judge Hausner’s 1986 decision, Case No. 85-515546 CZ, was not significant to resolution of the present case because it addressed only whether the ordinance conflicted with the statute, an issue not before the panel on remand.
However, the panel did note that it adhered to its previously expressed view that the fireworks ordinance did not conflict with, nor was it preempted by, state law:
[T]he Detroit fireworks ordinance at issue was not in direct conflict with either state statute, MCL 750.243d; MSA 28.440(4), or the national standards found in the National Fire Protection Association Code, No. 1124 (formerly 44A), because, unlike the state and federal provisions, the ordinance specifically applies to retail stores. 157 Mich App 555-556. [166 Mich App 601.]
This Court granted leave to appeal, and the issues briefed and addressed at oral arguments were: 1) whether the constitutional challenge was precluded by the doctrine of collateral estoppel because of the final judgment in the 1982 civil case that involved the same parties, 2) whether the fireworks ordinance is consistent with the Michigan fireworks act, and 3) whether there is a rational basis for the ordinance.
ii
While we agree with the dissent that the defen dant was not precluded from raising the issue whether the ordinance was valid in 1984, we disagree with the basis for the dissent’s conclusion, that is, that a ruling made on a summary disposition motion in a forfeiture proceeding, by its very nature, cannot have a binding effect. There is no support for the application in this case of the proposition that the nature of the prior proceed ings prevents application of estoppel in the subsequent suit.
Appropriate resolution of the collateral estoppel question turns not on whether the inquiring court characterizes the first proceeding as summary, but rather upon a finding that in the prior proceeding the issue of fact or law was actually litigated and actually determined by a valid and final judgment, and that the determination was essential to the final judgment. 1 Restatement Judgments, 2d, §27, p 250. Among the requirements courts have set out in order that collateral estoppel may apply are the following:
The issue to be concluded must be the same as that involved in the prior action. In the prior action, the issue must have been raised and litigated, and actually adjudged. The issue must have been material and relevant to the disposition of the prior action. The determination made of the issue in the prior action must have been necessary and essential to the resulting judgment. [IB Moore, Federal Practice, ¶ 0.443[1], p 759.]
The city is asserting collateral estoppel as a defense, and therefore, it is its burden to persuade the Court that the defendant was precluded from raising the issue that the storage provision in the ordinance was invalid as an affirmative defense in 1984 in the 36th District Court.
The issue in 1982 concerned forfeiture of fireworks seized by the city in 1979, which the city alleged were sold illegally at defendant’s place of business. The court ruled that the ordinance, insofar as it related to the sale and storage of fireworks for retail sale, was valid. The court also issued an order that the storage provision should be construed to mean that a retailer could store up to one hundred pounds of fireworks in any combination of class b and class c. It has never been established whether the fireworks which were confiscated in 1979 were class b or c, or whether the determination that the storage provision in the ordinance was valid was essential to the final judgment. In fact, the record indicates that some of the fireworks were returned to the defendant on the basis of what types of fireworks the items were and how they were classified under state law, and not on the basis that the amounts did not exceed the storage limitation.
In 1984, the city cited the defendant for violating the one-hundred-pound storage provision in the ordinance. The defendant asserted that the storage provision was invalid in that he stored only us dot class c common fireworks and that there was no rational reason for a one-hundred-pound storage limitation. Thus, the determination whether the city was authorized to issue a citation for exceeding the storage limitation in the ordinance was necessary to the judgment whether the defendant could be prosecuted for violation of the ordinance.
The issue whether the storage provision in the ordinance was valid was raised in 1982. However, the city has failed to persuade this Court that the ruling that the storage provision in the ordinance did not conflict with statutory language and that the limitation was reasonable and a valid exercise of the city’s police power was actually litigated and determined and that that determination was necessary and essential to the resulting judgment concerning forfeiture. Therefore, we hold that the defendant was not precluded from raising the issue as an affirmative defense when prosecuted in 1984 in 36th District Court.
Accordingly, we find that the Court of Appeals erred in concluding that Judge Hausner’s ruling in 1982 was not significant to resolution of the present case because in 1982 the defendant failed to present any evidence which supported his claim that the ordinance was invalid. If an issue is raised, and the party who has the burden fails in his proof and the issue is decided against him, he is just as much bound by collateral estoppel as though he had presented an abundance of evidence.
In addition, the panel erred in concluding that Judge Hausner’s 1986 decision was not significant to resolution of the present case because the ruling addressed only whether the ordinance conflicted with the statute, an issue not before the panel on remand. In 1986, Judge Hausner conducted hearings for the purpose of determining whether the provision in the ordinance which required a license to sell and store fireworks which are unrestricted for use in Michigan conflicted with the statutory scheme. MCL 750.243a(3)(a)-(f); MSA 28.440(l)(3)(a)-(f). Thus, that ruling is not significant to resolution of the present case because the court addressed an issue which had never been raised or litigated by the parties in the 1982 proceeding, and not for the reason stated by the panel.
In this case, the city asserted that the defendant was precluded from raising the issue concerning the validity of the storage provision in 1984 by the doctrine of collateral estoppel. We find that the city has not persuaded this Court that the ruling holding the storage provision valid was necessary to the 1982 judgment and, thus, that relitigation of the issue was precluded. Accordingly, we vacate that part of the decision of the Court of Appeals which addresses the collateral estoppel issue.
III
We also disagree with the dissent that the storage provision in the ordinance conflicts with or is preempted by state law. The dissent reasons that the state impliedly permits what it does not prohibit, and thus, since the statute does not prohibit retailers from storing over a specified amount of fireworks, a retailer should be permitted to store any amounts of class c or class b fireworks and any regulation concerning the storage of fireworks by the city would conflict with state law.
What the dissent appears to be saying is that because the state allows storage of greater than one hundred pounds of class c or class b fireworks upon compliance with all of the requirements under the statute, i.e., local approval for storage buildings, distance requirements from railways, highways and inhabited buildings, the city could not limit the amount of fireworks a retailer kept at his place of business, which in this case was a building located less than twenty-five feet from the highway, next to a residential home, and across the street from a gas station.
The conclusion reached by the dissent is not supported in law or in fact. Absent a showing that state law expressly provides that the state’s authority to regulate is exclusive, that the nature of the subject matter regulated calls for a uniform state regulatory scheme, or that the ordinance permits what the statute prohibits or prohibits what the state permits,
The mere fact that the state, in the exercise of the police power, has made certain regulations does not prohibit a municipality from exacting additional requirements. . . . The fact that an ordinance enlarges upon the provisions of a statute by requiring more than the statute requires creates no conflict therewith unless the statute limits the requirement for all cases to its own prescription. Thus, where both an ordinance and a statute are prohibitory, and the only difference between them is that the ordinance goes further in its prohibition but not counter to the prohibition under the statute, and the municipality does not attempt to authorize by the ordinance what the legislature has forbidden or forbid what the legislature has expressly licensed, authorized, or required, there is nothing contradictory between the provisions of the statute and the ordinance because of which they cannot coexist and be eflfec tive. [56 Am Jur 2d, Municipal Corporations, § 374, pp 408-409.]
The only requirement under state law, in regard to the amount of fireworks a retailer may maintain on the premises, is that it be a reasonable amount. In other words, the municipality retains reasonable control of fireworks which is such control as cannot be said to be unreasonable and inconsistent with regulations established by state law. People v McGraw, 184 Mich 233, 238; 150 NW 836 (1915). This construction allows a municipality to recognize local conditions and enact rules and regulations peculiarly adapted to such conditions. It would be a strange rule indeed were it otherwise.
While general problems with reference to fireworks, i.e., wholesale storage of fireworks for shipment within or out of state, regulation of shipment within and out of state, and the use of different classes of fireworks within the state, are statewide concerns, the retail sale and storage of fireworks raise concerns that are local in character, i.e., the location of retailers with respect to densely populated areas, the number of retailers in an area, the amount of use of the materials, and the conflict between the dangers of fireworks and the use of these materials in the community. As hazardous materials, the very nature of fireworks lends itself unquestionably to regulation adapted to local conditions.
Therefore, we reject the rationale employed by the dissent that that which the Legislature does not prohibit, it impliedly permits, and instead find that the storage limitation provision for retailers in the ordinance did not conflict with state law. Accordingly, we affirm that part of the Court of Appeals decision which held the storage provision of the ordinance to be a valid exercise of the police powers of the City of Detroit.
iv
Having found that the state has not preempted this area of regulation, we address the issue whether the storage provision in the ordinance is unconstitutional. It is well established in Michigan that ordinances are presumed valid and the burden is on the person challenging the ordinance to rebut the presumption. People v Sell, 310 Mich 305; 17 NW2d 193 (1945); 1426 Woodward Ave Corp v Wolff, 312 Mich 352, 357; 20 NW2d 217 (1945).
In this case, the defendant challenged the constitutionality of the fireworks ordinance after he was charged with violating the storage limitation in 1984, admitting he had approximately four hundred pounds of explosives on the premises, but arguing that he stored only class c common fireworks and the ordinance as related to the storage of these fireworks was not reasonably related to the city’s interest in the health, safety, and welfare of its citizens.
In analyzing claims involving due process and equal protection challenges to statutory schemes, courts first determine the type of matters to which the governmental action relates. When the action relates to matters of economics or general social welfare, the test to determine whether the law comports with due process is whether it bears a reasonable relation to a legitimate governmental purpose. In this case, the defendant’s claim is that the ordinance interferes with his business, and, thus, because it regulates an economic matter, the ordinance need only rationally relate to a legitimate governmental purpose.
The city asserts that the purpose of the storage limitation is to prevent fire and explosions and, thus, to protect the safety of the people, homes, and businesses in the city. This is clearly a legitimate purpose, and a limitation on the amounts of fireworks which a retail establishment can store within a city bears a rational relationship to public safety.
The defendant does not argue that the ordinance is unconstitutional on its face. Instead, the defendant asserts that it is unconstitutional as applied to him on the basis that he stores only us dot class c common fireworks on the premises and that there is no danger in storing those types of fireworks in amounts exceeding one hundred pounds. The 36th District Court agreed with the defendant that the ordinance was unconstitutional as it applied to him because the city could not rebut the defendant’s expert’s testimony that class c fireworks stored alone were not dangerous, nor could it prove that the defendant stored both class b and class c fireworks. The court concluded the storage limitation, indeed, was "not reasonably related to the City’s interest in the health, safety, and welfare of its citizens,” and was "an arbitrary and unreasonable deprivation of the defendant’s property.”
However, the lower court erred in failing to recognize that it was defendant’s burden to rebut the presumption that there was a rational basis for the storage provision in the fireworks ordinance which limited retailers, who under state law need a permit to sell and store class b fireworks for shipment directly out of state, to storage of one hundred pounds of fireworks, in any combination or class, and that
in 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). A corollary to this rule is that where 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 Thompson, 276 Mich 172, 178; 267 NW 608 (1936). [Shavers, supra, pp 613-614. Emphasis in original.][ ]
Thus, whether the defendant did, or did not, store class B fireworks was not determinative of the constitutional question. When asked whether amounts over one hundred pounds represented a danger from fire or explosion to persons outside the building, the expert testified, that if
[properly situated within the building, that quantity of material could be stored without posing any hazard to people external .... I would strongly recommend that if one had a thousand pounds of gross weight, ... to separate the cases so not all . . . would be involved in a fire at any one time .... [Emphasis added.]
Further, the danger of storing mixed fireworks in amounts over one hundred pounds was sufficient justification for the storage limitation in the ordinance. The record supports the city’s claim that it was not unusual for dealers to mix class b and class c fireworks and that, when mixed, the fireworks are more likely to explode. The defendant’s expert testified that there is a greater hazard involved in the storage of class b fireworks, and also that his assumption that the defendant stored only class c fireworks was based on information from the defendant. In fact, the defendant’s expert testified he saw items which looked like class b fireworks when he was on the defendant’s premises. In fact, contrary to the defendant’s claims, the expert witness did not state that the storage of only class c fireworks in any amounts stored alone was not dangerous.
Thus, the city’s storage limitation of one hun dred pounds was rationally related to a legitimate objective in light of the following: state law permitted the sale and storage of class B fireworks without a permit, it was not uncommon for retailers to store both class c and b fireworks, the defendant himself admitted he sometimes had both types on the premises, and the expert witness testified that storage in amounts over one hundred pounds is hazardous if fireworks are mixed.
Thus, on the basis of the "facts either known or which could reasonably be assumed” the city’s judgment must be accepted, and, therefore, we find the storage provision in the ordinance is rationally related to public safety.
Accordingly, we vacate the decision of the Court of Appeals affirming the 36th District Court’s finding that the ordinance was unconstitutional.
CONCLUSION
The defendant was not precluded from relitigating in 1984 the issue whether the ordinance was valid, insofar as it restricted the storage of fireworks by retailers to one hundred pounds or less, because the city has not persuaded this Court that the ruling that the ordinance was valid was actually litigated and determined in the prior proceeding and was essential to the judgment issued in 1982.
The Court of Appeals was correct in finding that the storage provision in the ordinance did not conflict with the storage limitations in the statute. However, we find that the Court erred in affirming the decision in 36th District Court that the ordinance was not rationally related to public safety and thus was unconstitutional.
Accordingly, we affirm the decision of the Court of Appeals that the storage provision in the ordi nance did not conflict with the Michigan fireworks act. We vacate that portion of the opinion which addresses the collateral estoppel issue and the decision affirming the 36th District Court’s dismissal of the misdemeanor charge upon the basis of its determination that the ordinance was unconstitutional.
This legal tug of war has generated a decade of litigation between these parties. It may well be that the Court of Appeals will sustain the ruling of the able trial judge who has lived with this situation for years, but we do not yet know that that is so. To avoid the possibility of setting off another round of fireworks below, we stay the effect of judgment in this case pending resolution of the cases now pending in the Court of Appeals.
Riley, C.J., and Brickley, Archer, and Griffin, JJ., concurred with Boyle, J.
Fireworks Ordinance of the City of Detroit; Ordinance 314-H as amended, Municipal Code, § 19-3-70.
MCL 750.243d; MSA 28.440(4).
People v Qualls (On Remand), 166 Mich App 587, 592-593; 421 NW2d 248 (1988).
We emphasize that this opinion addresses only whether any regulation by the city concerning the retail storage of fireworks, which is not regulated under state law, necessarily conflicts with the fireworks act, and whether there is any rational relation between such a provision and public safety. In doing so we express no opinion on the validity of Judge Hausner’s ruling in 1986 that the ordinance was invalid in its entirety, when addressing the sale and storage of items which under state law a person needs no permit to sell and store, and those items which can be sold for direct shipment out of state without a permit under state law. The city appealed the orders entered pursuant to that ruling, and the Court of Appeals granted the city interim relief by order of June 27, 1989, pending resolution of the appeals growing out of the civil action below which have been consolidated and are presently under submission to the Court of Appeals as Nos. 93518, 94209, 115434,118836,118837, and 118908.
The complaint for forfeiture of contraband, filed July 31, 1981, sought permission to destroy the confiscated fireworks, which the city alleged had been stored contrary to city ordinance and state law.
The city then filed a motion for summary disposition, on the basis that defendant failed to state a valid defense to the claim brought against him, and that except as to the amount of damages there was no genuine issue as to any material fact. The city asserted defendant’s answer to the city’s complaint for forfeiture admitted his retail license restricted storage to one hundred pounds of fireworks and that he had over that amount of fireworks on the premises. Motion for summary judgment, filed February 22, 1982.
Court: But the Attorney General didn’t say that a hundred pounds would be unreasonable, he just said that that statute limiting wholesalers to a hundred pounds didn’t apply to retailers. Why is it unreasonable for the City of Detroit to set a hundred pound limit?
Ms. Cumbey: A hundred pounds could be sold in half an hour. There’s just no way you could keep sufficient inventory on hand.
Court: Well, but the legislature didn’t authorize more than 100 pounds.
Ms. Cumbey: Well, we maintain that by exempting retail dealers from the storage requirements, in effect, they did.
The trial judge stated:
I’m saying that the state has not preempted — as a matter of law, the State has not preempted local communities from regulating the retail sale of fireworks within their boundaries, and that Detroit’s ordinance, the presumption is of reasonableness, that of validity, and I have nothing to show me that it’s invalid for them to adopt a hundred pound limitation.
Defense counsel argued that the issue concerning the validity of the ordinance was not before the court, and the court disagreed, noting that the city’s forfeiture motion raised the issue whether the seizure was within the law and that the defendant’s response was that the ordinance was invalid.
The order of June 17, 1982, relative to the construction of the court’s ruling given June 3,1982, stated:
It is hereby ordered that the City of Detroit Fire Ordinance Code is construed to mean that a retail seller may store no more than 100 pounds of fireworks in any combination of Class b and Class c. Class b items may be stored only for immediate sale for out of state transportation. Net weight is the weight of fireworks not including shipping cartons, but does include the pyrotechnic material, any fuse material, and any paper or other restraining material.
Defense counsel further noted that she intended to bring a declaratory action on this claim and asked the court whether it constituted res judicata because she raised the claim in an answer. The court advised defense counsel to appeal the decision.
After viewing the storage in the magazine, the inspector informed the defendant that he might be exceeding the storage limit of one hundred pounds, and left to summon additional help in weighing and listing the fireworks. When the inspector returned, the defendant refused to allow anyone to enter the premises for the purpose of determining the amount of fireworks in storage.
The Detroit Consumer Affairs Department which licensed the defendant’s fireworks business issued Citation V-87-516, charging defen dant with failure to maintain storage of fireworks to an amount under one hundred pounds, pursuant to city ordinance 314-H, contrary to the Municipal Code of the City of Detroit, § 23-4-9.
The Detroit Fire Department issued Citation V-87-517, failure to allow officials to perform the inspection, and V-250-085, refusal to allow entry by city officials for the purpose of making a lawful inspection.
Defense counsel noted,
[T]he City’s interpretation of the 100 pound limitation as gross rather than net is inconsistent with the accepted interpretations of the term in the various official codes and statutes and it is apparently inconsistent with the enabling paragraphs of the City’s own fire code, and I am referring now to the Fire Prevention Code, Article 1, Section 23-1-1 which says in the last complete sentence of the first paragraph, "Compliance with all existing ordinances of the City of Detroit and laws, rules or regulations of the State of Michigan or compliance with approved nationally recognized safety standards shall be deemed to be prima facie evidence of compliance with this intent and purpose.”
Defense counsel also noted that the ordinance itself provided that it shall give way in the face of a conflict with state and federal regulations. Section 19-3-18(c) provides that the ordinance "is intended to be used in conjunction with existing laws and nothing in the article shall be construed as rendering other applicable laws invalid. In any situation where a conflict exists between a provision of this article and any existing law, the existing law shall prevail.”
The defendant argued that the state statute and the city ordinance conflicted because the former required only that a reasonable amount of fireworks be kept in storage for retail sale, whereas the Detroit scheme defined a specific amount, i.e., one hundred pounds.
In response to the court’s inquiry regarding the 1982 decision in Wayne Circuit Court the defendant asserted that the order was not controlling because (1) the determination at that hearing concerned whether or not under Michigan law retail sales for shipment out-of-state could be made within the state when they otherwise would be prohibited, (2) that a contempt hearing before Judge Hausner was scheduled in December of 1984, and at that time the judge planned on reviewing his earlier determination, and (3) even if the judge’s order could be said to stand for the proposition that this question had been decided, all such determinations were subject to reopening, given a change or development in the state of knowledge with regard to the regulated subject.
Citation No. V-87-516. In addition, the court held the search and seizure illegal and granted defendant’s motions to suppress and for dismissal with respect to the remaining two counts. The court found that while the inspector had the initial authority to inspect the premises, once the inspector determined that there was a violation of the law, it became an investigation rather than an inspection, thus requiring consent or warrant or an emergency situation for any legal reentry. The court rejected the city’s argument that there were extenuating circumstances, to wit: that it was very close to the Fourth of July and that if the defendant continued to sell his merchandise the result would be that there could be no citation and no follow-up inspection because the goods would be gone.
The parties appeared before Judge Hausner on a motion filed by the city that defendant be held in contempt of his 1982 order that the ordinance, insofar as it regulated retail dealers to one hundred pounds, was valid.
The judge concluded that he could not hold the defendant in contempt because that would be action he would take if the 1982 judgment had been rendered in a declaratory judgment action. In this case the court had made a ruling, as opposed simply to issuing an order. In other words, the action appropriate for the city to take would be to enforce the license as interpreted by the court in 1982 by revoking the defendant’s license if he was found to be in violation of the law. Then, if this case were to come to the circuit court and defendant’s license was revoked, the court would apply the law pursuant to the June 17, 1982, ruling.
Qualls v Detroit, No. 85-515546 CZ, complaint for declaratory and injunctive relief, issued June 23,1986.
Judge Hausner addressed different issues in 1986, that is, (1) whether the city could require a license to sell and store those items [classified as us dot class c "common” fireworks] which under the statute, MCL 750.243d(a)-(g); MSA 28.440(4)(a)-(g), a person would need no permit to sell and store, and (2) whether the city could prohibit the sale of items to consumers for direct shipment and use out of state which is not prohibited by state law under MCL 750.243a(3)(g); MSA 28.440(l)(3Xg).
The plaintiff also asserted that the defendant consented to the search by implication in requesting a license from the city since under Ordinance No. 314-H, § 19-3-19(h)(5), the fire inspector has the right to inspect licensed businesses and, further, that it was a regulatory inspection, not an administrative or criminal search.
The court did uphold the decision as to the illegality of the search and seizure, finding that once the inspector determined that there was a violation of the ordinance and left the premises, he and any other inspector returning for the purpose of investigating the violation needed a search warrant. (Opinion issued May 23, 1985, by Judge Gardner of the Detroit Recorder’s Court.)
The panel found,
We hold that the Detroit fireworks ordinance is not in direct conflict with either the state statute or the national standards. The state statute applies to wholesalers, dealers, and jobbers. It was specifically amended to except retailers in 1980. The national standards apply to process buildings, magazines, and storage buildings. The ordinance applies to retail stores.
Statutes are presumed valid; the burden of rebutting that presumption is on the person challenging the statute. [Citing Shavers v Attorney General, 402 Mich 554, 614; 267 NW2d 72 (1978) , reh den 403 Mich 958 (1978), cert den 442 US 934 (1979).] The presumption of validity also applies to city ordinances. 1426 Woodward Avenue Corp [v Wolff, 312 Mich 352, 357; 20 NW2d 217 (1945)].
We believe that the ordinance in question is rationally related to the city’s power to protect safety, health, and welfare. Obviously, fireworks are explosive and can cause great harm, especially when a large quantity is ignited. Clearly, limiting the amount of stored fireworks in a retail store located in a highly populated area is rationally related to safety. [Id., pp 556-557.]
The panel further noted that defendant’s argument that because the district court’s determination as to the constitutionality of the ordinance was based on evidence, it was a finding of fact and, thus, should not be overturned unless the finding was clearly erroneous, without merit:
Defendant failed to support its argument with citations to any authority. . . . Furthermore, it is well established that constitutionality is not a question of fact but one of law. 75 Am Jur 2d, Trial, § 414, p 452. Consequently, defendant’s suggestion that the district court’s decision should be reviewed under the standards used for review of factual questions must be rejected. [Id., p 558.]
People v Qualls, 428 Mich 918-919 (1987). The following recommended order entered:
In lieu of granting leave to appeal, the judgment of the Court of Appeals is vacated and the case is remanded to the Court of Appeals for an expanded opinion. MCR 7.302(F)(1). On remand, the Court of Appeals shall address (a) the content and the significance, if any, of the factual record made in the 36th District Court, (b) the significance, if any, of the proceedings in Wayne Circuit Court files 81-129784-CZ and 85-515546-CZ (including any resolution of the pending appeals in the latter case), and (c) the rationale employed by the Detroit Recorder’s Court in its decision to reverse in part the judgment of the 36th District Court and remand this case for trial. Jurisdiction is not retained.
The panel noted,
[T]he 1981 statutory amendments provided that a final judgment or order made by the Detroit Recorder’s Court in a misdemeanor or ordinance violation case from the 36th District Court is appealable to the Court of Appeals by leave granted. MCL 600.308(2)(c); MSA 27A.308(2)(c). See also MCR 7.203(B)(2). Thus, in ordinance violation cases reviewed on appeal from the 36th District Court by the Detroit Recorder’s Court, an aggrieved party must seek further appellate review not in the circuit court, as before, but in the Court of Appeals. As a consequence, in such ordinance violation cases, the Detroit Recorder’s Court and the Wayne Circuit Court no longer share a relationship of inferiority and superiority, respectively, but instead now enjoy an equal footing, with their final judgments and orders being subject to review by this Court.
In light of these statutory changes, we believe that the rationale of the Recorder’s Court in this case recited in support of its decision to reverse in part the judgment of the 36th District Court — i.e., that a circuit court judgment upholding the constitutionality of the challenged fireworks ordinance operated as binding precedent on the Recorder’s Court — is incorrect. [Id., pp 592-593.]
The defendant argued also that there is no rational reason for the storage limitation and that the ordinance is in conflict with state and federal law.
Case No. 81-129784 CZ.
The city appealed, arguing that the 1982 judgment in the prior litigation between the parties precluded relitigation of the same issue in this case and that, if the Court did reach the merits, the ordinance is valid and does not conflict with state law and is rationally related to protecting the health and safety of the people of Detroit and therefore constitutional.
A judgment is considered a determination of the merits, and thereby triggers the doctrine of collateral estoppel on relitigation, even if the action has been resolved by a summary disposition, see, e.g., Detroit v Nortown Theatre, Inc, 116 Mich App 386; 323 NW2d 411 (1982). In fact,
"[i]t would be strange indeed if a summary judgment could not have collateral estoppel effect. This would reduce the utility of this modern device to zero .... Indeed, a more positive adjudication is hard to imagine.” [18 Wright, Miller & Cooper, Federal Practice & Procedure, § 4444, p 392, n 2, citing Exhibitors Poster Exchange, Inc v National Screen Serv Corp, 421 F2d 1313, 1319 (CA 5, 1970).]
Thus, it is not surprising that the dissent fails to cite any legal authority whatsoever to support this strange contention, and we believe the Court should continue to recognize that, for purposes of collateral estoppel, a ruling rendered on a summary judgment motion will be considered a final disposition on the merits.
The dissent would find:
We agree with the Court of Appeals that the decision of the Court of Appeals in the 1982 Wayne Circuit Court litigation does not control the disposition of this appeal. Qualls is not precluded from defending, on the basis that the one-hundred-pound storage requirement is invalid, against the charge that he committed a misdemeanor in storing more than one hundred pounds of fireworks. [Post, p 373. Emphasis added.]
The dissent incorrectly characterizes the Court of Appeals opinion as one which addresses an appeal of the 1982 ruling; however, the defendant never appealed Judge Hausner’s 1982 ruling.
We note that this situation is not one in which the forfeiture proceeding and the criminal prosecution involve the same goods, and the issue becomes whether an acquittal on criminal charges has any effect on forfeiture. See United States v One Assortment of 89 Firearms, 465 US 354; 104 S Ct 1099; 79 L Ed 2d 361 (1984); One Lot Emerald Cut Stones v United States, 409 US 22; 93 S Ct 489; 34 L Ed 2d 438 (1972).
A judgment in an equitable action may be pleaded in a suit for money damages, or a judgment in a criminal proceeding can be pleaded in a civil case. In fact, a judgment of an administrative agency may sometimes be pleaded as an estoppel in an action in the district court. United States v Karlen, 645 F2d 635 (CA 8, 1981).
Further, as the United States Supreme Court has recognized, there is no rule that the doctrine of collateral estoppel is made inapplicable per se by the fact that the subsequent proceeding involved a criminal case, even though the prior proceedings were civil in character. Yates v United States, 354 US 298; 77 S Ct 1064; 1 L Ed 2d 1356 (1957).
It is a flexible judge-made rule generally said to have three purposes: To "relieve parties of the cost and vexation of multiple lawsuits, conserve judicial resources, and, by preventing inconsistent decisions, encourage reliance on adjudication,” Allen v McCurry, 449 US 90, 94; 101 S Ct 411; 66 L Ed 2d 308 (1980).
If the answer is yes, we need not reach the question whether the ordinance was rationally related to public safety under the well-established principle that we do not determine constitutional questions if the case may be disposed of without such a determination. MacLean v State Bd of Control for Vocational Ed, 294 Mich 45; 292 NW 662 (1940).
The judge held that the one-hundred-pound storage limitation bore a reasonable relation to the city’s objective of protecting the safety, health, and welfare of its citizens, representing a valid exercise of the city’s police power within the ambit of due process and equal protection. Shavers v Attorney General, n 21 supra, pp 612-614.
The ordinance prohibited the "storage of fireworks in a place of retail sales ... to a gross weight of less than one hundred (100) pounds . . . .” Section 19-3-70(b).
United States v Silliman, 167 F2d 607, 617 (CA 3, 1948). See IB Moore, supra, ¶ 0.441[2], p 729.
We note that the panel’s discussion, on remand, concerning the rationale employed by the Recorder’s Court in concluding the 1982 circuit court’s judgment was binding on the 36th District Court in 1984, implies erroneously that in Michigan, under the doctrine of stare decisis, an inferior court is bound by opinions of any higher court. However, it is only opinions issued by the Supreme Court and published opinions of the Court of Appeals that have precedential effect under the rule of stare decisis. MCR 7.215(C). Thus, the doctrine of stare decisis has no application regarding the question whether the circuit court judgment was binding on that district court in this case.
Although the temporary injunction entered on July 3, 1985, addressed only the issue whether the city could restrict the sale and storage of fireworks which are unrestricted under state law, Judge Hausner’s permanent order also addressed whether the city should permit the defendant to sell and store more than one hundred pounds gross weight of us dot class c common fireworks only, in accordance with the storage provisions of the statute and in a new facility. Qualls v Detroit, No. 85-515546 CZ, complaint for declaratory and injunctive relief, issued June 23,1986.
The dissent concludes that from a finding that the Legislature intended to exempt a retail dealer "from complying with the storage requirements of the statute in respect to fireworks displayed for sale at retail,” it follows that the statute "permits the 'storage’ by retailers of class b and class c fireworks in quantities exceeding one hundred pounds . . . (Post, pp 375, 376.)
MCL 750.243d; MSA 28.440(4).
Noey v Saginaw, 271 Mich 595; 261 NW 88 (1935).
Walsh v River Rouge, 385 Mich 623, 635, 639; 189 NW2d 318 (1971). In Walsh v River Rouge this Court preempted a municipal ordinance granting certain emergency powers to the mayor on the basis of a finding that the Legislature intended that the state should retain sole control of the circumstances under which emergency powers would be exercised.
Miller v Fabius Twp Bd, 366 Mich 250, 258; 114 NW2d 205 (1962). A municipality cannot pass ordinances that contravene state law, i.e., prohibit that which is permitted by the state, People v McDaniel, 303 Mich 90; 5 NW2d 667 (1942), and the enactment of an ordinance Which directly conflicts with state law or is part of a field of regulation which the state has intended to preempt is prohibited. People v Llewellyn, 401 Mich 314; 257 NW2d 902 (1977), cert den 435 US 1008 (1978).
The defendant conceded that state law does not expressly preempt local regulation and restriction of fireworks, and argued only that it is clear from the detailed and pervasive statutory control scheme that the Legislature intended to establish uniform, statewide requirements with only certain specified controls being expressly delegated to the local governments, and that the Legislature did not intend to allow municipalities to regulate the sale and storage of fireworks for retail dealers within its locality. Id., p 325, n 12.
Both the defendant and the dissent have failed to recognize that it is well established in Michigan that portions of a field not covered by state law are open to local regulation, and that where the nature of the regulated subject matter calls for regulation adopted to local conditions, supplementary local regulation will be upheld, even where the activity is in fact not local but statewide. Miller v Fabius Twp Bd, n 41, supra, pp 257, 259.
See Alco Universal Inc v City of Flint, 386 Mich 359; 192 NW2d 247 (1971) (home rule government is based on the theory that' local governments are in the best position to assess needs and desires of a community).
The ordinance prohibited the "storage of fireworks in a place of retail sales ... to a gross weight of less than one hundred pounds.”
The plaintiff never conceded, as the 36th District Court noted, that "there is no question but these were class [C] fireworks which were stored on [defendant’s] premises” when he was issued a citation for violation of the ordinance in 1984.
Further, although the defendant also raises an equal protection claim, where the law does not classify individuals, the test will be the same as under the due process guarantee. Nowak, Rotunda & Young, Constitutional Law (3d ed), ch 14, § 14.2, p 525.
A court only examines a due process or equal protection claim concerning a regulation in light of the eifects on one individual, or a certain group of individuals in very limited circumstances, as for example, when testing legislation as it affects the handicapped or the aged. Tribe, American Constitutional Law (2d ed), § 16-31, pp 1597-1601.
See n 43.
The test whether an ordinance enacted pursuant to the police power comports with equal protection is, essentially, the same as
[t]he 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. [Shavers, supra, p 612. See Michigan Canners v Agricultural Bd, 397 Mich 337, 343-344; 245 NW2d 1 (1976).] | [
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Per Curiam.
Defendant husband appeals as of right from a judgment of divorce entered April 15, 1983, which divides the marital estate in accordance with the findings of fact and conclusions of law contained in the trial court’s written opinion entered March 22, 1983. The principal issues raised on appeal concern: (1) an award of $14,000 to plaintiff wife to be used by her to pay towards her attorney fees; (2) the equitableness of the division of the marital estate; and (3) the trial court’s finding that a $20,000 certificate of deposit and $175,000 in bearer bonds had been given to defendant as a gift by his father, Dr. Harold T. Donahue, and thus were a part of the marital estate.
The parties were married on December 15, 1961, and lived together until their separation in April, 1976. During this time two children were born of the marriage. Defendant worked as an electrician, automobile mechanic, carpenter and plumber, and managed drive-in theaters. Plaintiff was never employed, and at the time of trial was taking courses to become a dental assistant. During the marriage the parties accumulated a substantial marital estate, mostly through gifts from their parents. Plaintiff acquired some $53,000 by gift from her father. Defendant’s father, Dr. Donahue, gave as gifts to the parties shares of stock in a number of corporations, some of which became quite valuable.
Depending upon whether the $195,000 in bearer bonds (BB) and certificate of deposit (CD) are included or excluded from the marital estate and depending upon whether one accepts the plaintiff’s or the defendant’s computation, the marital estate as valued at the time of trial was divided as follows:
According to Plaintiff
Total value of estate $758,500 (includes CD and BB)
Awarded wife 357,750
Awarded husband 400,750 (includes CD and BB)
According to Defendant
Total value of estate $517,000 (excludes CD and BB)
Awarded wife 400,000
Awarded husband 117,000 (after deduction for wife’s attorney fees)
Retained by Dr. Donahue 195,000 (CD and BB)
From testimony taken at trial, it clearly appeared that the principal fault lay with the defendant. During the marriage defendant was away from home many nights. After defendant separated from his wife, he carried on a relationship with another woman and that woman had a child by him. Defendant acknowledged paternity and pays for the child’s support. Defendant conceded that he was having sex with plaintiff at the same time he was having sex with this other woman. After defendant left in April, 1976, he did not inform plaintiff or his children where he was living for some two and one-half years.
It also became obvious during the pretrial period that defendant and his parents attempted to conceal from plaintiff the nature and value of the marital estate. Defendant testified during pretrial discovery that he had no interest in any municipal bonds but later admitted that his testimony to that effect was untrue. The first attempt at concealment discovered by the court was during the first day of trial. Defendant told the court that a safe in his apartment contained approximately $1,000 in cash and some income tax forms. An inventory of the contents of the safe revealed that defendant had various valuable undisclosed assets in the safe.
During trial defendant admitted that he knowingly failed to include taxable interest income he had received from his savings accounts on his income tax returns, that he purchased bank money orders payable to himself in an effort to conceal money from his wife, and that he left the money orders with his girlfriend, and that his purpose in obtaining them was to conceal the assets from his wife. The record also reveals that defendant’s parents aided him in the concealment of his assets. Defendant’s mother stated at her pretrial deposition that she had never made a gift to defendant which she had not entered on a gift tax return. She also stated that she had made no gifts to defendant after 1976 as she and her husband "ran out of money”. At trial defendant’s mother admitted that they had made gifts to him in 1977, 1978, and 1979, and did not file gift tax returns including the gifts. She admitted that they were making an effort to conceal the gifts to defendant. The trial court warned defendant regarding the penalties which could come to bear upon him if he gave perjured testimony.
I
Award of Attorney Fees
The trial court awarded plaintiff some $147,500 in cash. Because of this award, defendant argues that the trial court erred in ordering defendant to pay $14,000 toward plaintiff’s attorney fees. The court rule governing the payment of attorney fees is GCR 1963, 726.1. At the time of the proceedings in this case, the court rule read:
".1 Attorney Fees and Expenses.
"(1) In an action for divorce, separate maintenance, annulment, or affirmation of marriage, and in subsequent petitions to modify the judgment, either party may request that the court order the other spouse to pay an attorney the sum specified as necessary to enable that party to carry on or defend the suit.
"(2) The moving party shall allege facts showing that he or she is unable to bear the expense of the action without this aid. The trial judge may require the disclosure of what attorney fees have been paid.
"(3) The court may order, in the judgment or in a separate order, that whatever sum it finds necessary and reasonable be paid to the wife’s attorney, either by the husband or out of the assets of the husband over which the court has jurisdiction.”
This Court has generally followed the rule that " 'attorney fees are not awarded as a matter of right but only if necessary to enable a party to carry on or defend the litigation’ ”. Gove v Gove, 71 Mich App 431, 435; 248 NW2d 573 (1976), quoting Mixon v Mixon, 51 Mich App 696, 700; 216 NW2d 625 (1974); Vaclav v Vaclav, 96 Mich App 584, 593; 293 NW2d 613 (1980).
Nevertheless, the rule is not hard and fast and under special circumstances may not be followed. The allowance of attorney fees basically rests in the sound discretion of the court. Abadi v Abadi, 78 Mich App 73, 78-80; 259 NW2d 244 (1977), and will be overturned only where manifest abuse of discretion can be shown. Schilleman v Schilleman, 61 Mich App 446, 450; 232 NW2d 737 (1975). We think special circumstances existed here. The trial court explained that its reason for granting attorney fees was because "[a]lmost all of these legal fees and expenses are directly attributable to the defendant’s efforts to conceal the assets of the parties”. The court noted that but for the unusual skill and diligence of plaintiffs counsel, defendant would have been successful in perpetrating a fraud upon the court and would have succeeded in causing a serious miscarriage of justice. Thus, even though the court acknowledged that plaintiff had some funds from which she could pay her attorney fees, the court was satisfied that the costs of the litigation should be borne by defendant. The court’s decision was based on its view of the division of property and the fact that defendant’s actions caused plaintiff to incur those costs.
We agree with the trial court. Defendant’s actions were reprehensible and disclosed a total lack of respect for the judicial proceedings below. His efforts at concealment of assets caused plaintiff’s counsel to go to great lengths in order to ferret out all distributable marital property. It would be inequitable to require plaintiff to pay for expenses which never would have occurred if defendant had conducted himself in an honest and conscientious manner. For these reasons, we find no abuse of discretion and affirm the award of attorney fees.
II
Equitableness of the Division of the Marital Estate
The relative equity, or lack thereof, of the trial court’s division of the marital estate largely turns on whether $195,000, represented by the certificate of deposit and the bearer bonds, was a gift from Dr. Donahue to his son and thus was part of the marital estate. If the $195,000 was a gift to John Donahue, as earlier noted in this opinion, the total estate was approximately $758,500. Of this, the wife was awarded $357,750 and the husband $400,-750, from which he was to pay $14,000 in attorney fees for his wife. On its face the property division, as so set forth, is more than fair and equitable to the defendant, particularly when defendant was the person primarily at fault. Even if the marital estate were divided according to the figures pre sented by defendant, viz.; wife $400,000; husband $117,000, with $195,000 being treated as a gift to the husband but retained by Dr. and Mrs. Donahue, the property division would still be equitable. Dr. Donahue and his wife would simply be holding $195,000 of defendant’s share of the marital estate. If they refused to turn these sums over to defendant, defendant could proceed against them. A $400,000 — $312,000 differential is justified by many of the factors that the trial court took into consideration. Among these are the health of the parties. The facts indicate that plaintiff has had a radical mastectomy and stands a good chance of having recurring cancer in the future. Defendant is in good health. The earning abilities of the parties also mandate that plaintiff be allowed a larger share of the marital property. Plaintiff has never had a job and, despite defendant’s contentions, still has not obtained one. Defendant is a "jack of all trades” and seems to be able to provide for himself very well. A factor not considered by the trial court but one we find relevant is the fact that defendant is in a position to receive gifts from his father which plaintiff will no longer be able to share with him. Another reason justifying a substantial differential is defendant’s fault. He was the person who left the marital home and took up housekeeping with another woman. Testimony given at trial reveals that plaintiff made diligent efforts to reconcile their differences, such as wanting to go to a marriage counselor.
The problem is that each of the above two examples assume that the trial court did not err when it determined that the certificate of deposit and bearer bonds were given as gifts to defendant. The equity is less apparent and well may not exist if (a) the CD and BB never became a part of the marital estate, or (b) the trial court was without jurisdiction to determine who was the owner thereof. For, as defendant points out, if the trial court did not have the jurisdiction to determine the ownership or had the jurisdiction and erred, the entire matter of the division of property must be remanded for a redetermination. These questions are examined in part III of this opinion.
Ill
Jurisdiction and Validity of the Trial Court’s Determination That $195,000 Was Not the Property of Defendant’s Parents
Defendant argues that it was beyond the power of the trial court to adjudicate the rights of third parties in a divorce action — in this case Dr. Harold Donahue and Alice Donahue. In support of this argument defendant relies on Yedinak v Yedinak, 383 Mich 409; 175 NW2d 706 (1970). Additional support for this rule is found in Stock v Stock, 250 Mich 295, 297; 230 NW 143 (1930), a case not cited in either party’s brief. See, also, Krueger v Krueger, 88 Mich App 722, 724-725; 278 NW2d 514 (1979), and Hoffman v Hoffman, 125 Mich App 488, 490-491; 336 NW2d 34 (1983).
However, the rule is subject to an exception where it is claimed, as it is claimed here, that the third party has conspired with the husband to defraud the wife out of her rightful interest in the marital estate. Berg v Berg, 336 Mich 284, 288; 57 NW2d 889 (1953); Pruitt v Pruitt, 90 Mich App 230, 233-234; 282 NW2d 785 (1979). This well-recognized exception to the general rule that third party claims may not be resolved in a divorce action is fully discussed in Anno: Propriety of consideration of, and disposition as to, third persons’ property claims in divorce litigation, 63 ALR3d 373, 395-399. In the case before us, the proofs clearly showed that both defendant and his parents were concealing assets from the plaintiff. This fact was commented on more than once by the trial court.
Although Dr. and Mrs. Donahue were not made parties to the suit, they were represented by counsel at trial, they testified at length, and they were cross-examined. Likewise, their pretrial depositions were used in examination. Accordingly, we hold that the trial court was well within its jurisdiction and right to determine whether Dr. Donahue and his wife or defendant were the owners of the certificate of deposit and the bearer bonds.
Having found that the trial court had jurisdiction to determine the third parties’ interests in the securities, we next inquire whether the trial court erred in determining that the securities did not belong to Dr. and Mrs. Donahue but instead were part of the marital estate. It is defendant’s claim that the record is barren of evidence demonstrating that the securities had been given as gifts or otherwise were the "sole and separate” property of the defendant. We disagree.
The $20,000 certificate of deposit at the Mutual Savings & Loan Association had been purchased by Dr. Donahue. It bore the inscription "John Donahue or Harold Donahue” but it had John’s social security number on it. It did not bear Dr. Donahue’s social security number. Dr. Donahue testified that John collects the interest from the account. John reported the interest received on the certificate in his tax returns. In our opinion sufficient indicia of John’s ownership was found to justify the trial court’s finding that the certificate of deposit belonged to defendant.
The bearer bonds bore no name or serial number. The safe deposit box in which the bonds were originally kept was in the joint name of John Donahue and his mother. That box was taken out in 1971 and closed in March, 1978. All entries during that period were made by John. The second box, in the same branch of the bank, was taken out in March, 1978. Again it was in the joint name of John and his mother, and again all entries were made by John. That box was closed in April, 1979, and a new box was taken out in a different branch of the bank. This time the box was in the name of John alone, but his mother was authorized to enter the box as a "deputy”. John’s mother entered the box as deputy three times between April, 1979, and January 27, 1981. After trial commenced on December 30, 1980, she removed $175,-000 of the bonds from the box but left $25,000 of bonds issued by the St. Joseph School District. She placed the bonds so removed in a box in the Manufacturer’s Bank in Bay City in her name alone.
We find the issue close. Some testimony and evidence supports the conclusion that the parents never intended to make a gift of the bonds. This was the testimony of the parents who explained that they only placed them in a safe deposit box with John having joint access on the advice of legal counsel in order to minimize problems of the administration of their estate. Dr. Donahue’s federal income tax returns disclosed that gifts of the St. Joseph School District bonds had been made to John, but that the bonds which John’s mother removed and placed in a box in her own name had not been given to him.
On the other hand, there is testimony supporting the trial court’s finding. The box from which the bonds were removed was in the name of John alone. It was John who collected the interest and reported it on his tax returns. Plaintiff testified that in late 1969 or early 1970 she was present at a conversation between John and his mother, at which time the mother said they were giving bonds to John to equalize a gift of farm land made to another son and John wouldn’t have to pay taxes on the bonds and the amount would be comparable to a gift made to another son.
The gift tax returns filed by the senior Dona-hues for 1970 showed that they indeed gave John’s brother and his wife a gift of farm property having a value then of $105,000. John and his mother deny that any conversation regarding such gifts took place.
Given the sharp conflict in testimony, we cannot say that the trial judge abused his discretion or made findings of fact totally unsupported by the record. The trial judge observes the witnesses and is the best judge of their credibility. Eglash v Detroit Institute of Technology, 375 Mich 592, 595; 134 NW2d 710 (1965). The transcript is replete with instances where John and his parents were untruthful. The senior Donahues made gifts to John in 1977, 1978, and 1979, and did not file gift tax returns in an effort to conceal gifts to their son. Other instances of the lack of credibility of defendant and his parents have been referred to earlier in this opinion.
Absent a showing of abuse of discretion or unless it is clear that the reviewing court would have reached a different result had it occupied the position of trial judge, this Court does not substitute its judgment for that of the trial judge. Me- Lain v McLain, 108 Mich App 166; 310 NW2d 316 (1981); York v York, 113 Mich App 306; 317 NW2d 604 (1982). Where the trier of fact finds a witness has testified falsely, it may disregard all of the witness’s testimony or believe such parts as are corroborated by other testimony, Hillman v Schwenk, 68 Mich 293; 36 NW 77 (1888). Given the conflicting testimony in this case and the lack of credibility on material issues with respect to some of defendant’s witnesses, we are not persuaded that the trial court abused its discretion or that we would have found differently had we occupied the position of the trial judge.
Affirmed. Costs to plaintiff.
Subsequent to the trial, Dr. Donahue cashed the CD. Mrs. Donahue, defendant’s mother, removed the BB from the safe deposit box at the People’s Bank, to which defendant had access, and placed them in a box controlled exclusively by her. Thus, although the trial court awarded the CD and BB to defendant, defendant has never received the same, and, • according to defendant, the court should not have considered them part of the marital estate.
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Per Curiam.
In November, 1982, defendant, Vernard Cohens, was convicted by a jury of second-degree murder, contrary to MCL 750.317; MSA 28.549, armed robbery, contrary to MCL 750.529; MSA 28.797, and felony-firearm, contrary to MCL 750.227b; MSA 28.424(2). Defendant was sentenced to life imprisonment for second-degree murder, not less than 40 nor more than 60 years in prison for armed robbery and the consecutive 2 years in prison for felony-firearm. He now appeals as of right.
In September, 1979, charged with two counts of felony murder (murder in the first degree) and accompanying felony-firearm charges arising out of two separate incidents, defendant pled guilty to two counts of murder in the second degree and felony-firearm, under a plea agreement which dismissed the first-degree murder charges. After sentence, defendant appealed to this Court.
In People v Cohens, we specifically provided that defendant’s two convictions of second-degree murder were affirmed, but set aside the sentences and remanded the cause for resentencing. We held that the plea agreement under which defendant pled contemplated eligibility for parole after 10 years pursuant to MCL 791.234(4); MSA 28.2304(4).
Shortly after imposition of the sentences based on the guilty pleas, the Attorney General rendered an opinion construing Proposal B, which was an initiated law ratified in the November, 1978, general election, to preclude parole consideration for prisoners serving life sentences. Thus, in 111 Mich App 788 (1981), supra, we concluded that defendant’s reliance on the possibility of parole after 10 years was illusory and set aside the sentences, saying:
"The trial judge and the prosecutor, on appeal, have stated their desire and intent that defendant be sentenced to parolable life terms. Because the Department of Corrections cannot presently honor that intent, defendant’s sentences for second-degree murder are vacated, and the case is remanded for resentencing. In order to effectuate the trial court’s intent, defendant may now be resentenced to a minimum of 10 years and a maximum of x number of years greater than 15 and less than life.” People v Cohens, supra, p 795.
On remand, Judge Clarice M. Jobes disqualified herself, indicating that at the time of sentence, contrary to the subsequent opinion of the Attorney General, she did not believe Proposal B would affect those serving life sentences. Apparently she indicated that, while she had been considering a sentence with a minimum of around 30 years, she had been assuming she would have no control over when defendant might be reviewed for possible parole. Acknowledging that both she and defendant likely misunderstood the law relating to parole, she offered defendant the alternative of withdrawing his guilty plea to imposition of a sentence with a 30-year minimum. Obviously, she did not interpret this Court’s opinion in 111 Mich App 788 (1981), as limiting the sentence she might impose to a 10-year minimum.
Faced with this choice, defendant withdrew his plea. Then Judge Jobes disqualified herself, and the case was reassigned to Judge Edward M. Thomas for trial. Prior to trial, counsel for defendant objected at length to the choice given defendant and argued that defendant was entitled under the Court of Appeals opinion reported in 111 Mich App 788, 797 (1981), to be resentenced with a minimum sentence of 10 years. We agree with defendant.
We believe we are bound by the panel’s decision reported in 111 Mich App 788 (1981), affirming defendant’s convictions of two counts of second-degree murder and imposing a sentence with "a minimum of 10 years and a maximum of x number of years greater than 15 and less than life”. We do not believe under the circumstances of this case that defendant waived his right to the benefit of our decision reported in 111 Mich App 788 (1981). Neither an appeal nor a motion for rehearing was made attacking that decision. It remains intact and is the law of this case._
In accordance with that decision, we modify defendant’s sentences to provide two concurrent sentences of not less than 10 years nor more than 60 years in prison.
111 Mich App 788, 797; 314 NW2d 756 (1981).
The conviction for felony-firearm was affirmed as to one of the incidents out of which the original charges arose and vacated as to the other.
No transcript of that hearing has been filed.
Presumably all counsel.
Consistent decisions are People v Penn, 102 Mich App 731; 302 NW2d 298 (1981), and People v Lad Peete (Docket No. 57346, decided May 13, 1982 [unreported]). | [
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M. E. Dodge, J.
Following a jury trial, defendant was convicted of filing a false or fraudulent sales tax return, MCL 205.27; MSA 7.657(27). He was sentenced to four years probation, the first year to be served in the Detroit House of Correction, and ordered to pay tax deficiencies and penalties of $155,542.96 and a $5,000 fine. We affirm.
Defendant owned three Detroit-area gas stations at 18111 West Eight Mile Road, 23891 West McNichols Road, and 17700 East Nine Mile Road. He was charged with seven counts of sales tax evasion for failing to report gross sales accurately and understating gasoline purchases for January, 1982, through July, 1982. The information alleged a sales tax deficiency of approximately $54,000.
The case against defendant consisted primarily of documentary evidence. This included invoices, freight bills, and other similar evidence of deliveries introduced through the testimony of defendant’s various gasoline wholesalers. Also intro duced were defendant’s tax returns for the months in question, as well as testimony concerning audits by the Michigan Department of Treasury.
Defendant’s first issue concerns a subpoena issued pursuant to MCL 205.3(a); MSA 7.657(3)(a) by the treasury department to Terrie Makolin, an employee of the accounting firm used by defendant. This preceded the commencement of these proceedings. The existence of the subpoena, however, was discovered during the later trial of defendant’s business associate. Makolin was interviewed by treasury department agents. While there is some question as to what was actually produced pursuant to the subpoena, or if any of defendant’s records were produced, the prosecutor has conceded that records were produced and examined by treasury agents.
MCL 205.3(a); MSA 7.657(3)(a) empowers the revenue commissioner and duly appointed agents to examine a taxpayer’s books, records, and papers concerning tax matters. It provides for subpoenas, including those for production of the necessary books, records, and papers. It also provides:
No person shall be excused from testifying or from producing any books, papers, records, or memoranda in any investigation, or upon any hearing when ordered to do so by the commissioner, upon the ground that the testimony or evidence, documentary or otherwise, may tend to incriminate or subject him to a criminal penalty; but no person shall be prosecuted or subjected to any criminal penalty for or on account of any transaction made or thing concerning which he may testify or produce evidence, documentary or otherwise, before the board or its agent. No person so testifying shall be exempt from prosecution and punishment for perjury committed in so testifying.
Defendant argues that, because MCL 205.3(a); MSA 7.657(3)(a) grants immunity from prosecution based on any transaction concerning which the production of documents was compelled, he was immune from the present prosecution and his conviction must be reversed. Specifically, defendant argues that failure to give him immunity violates his privilege against self-incrimination under the United States and Michigan Constitutions, US Const, Am V; Const 1963, art 1, § 17.
The statute has been construed as preserving a person’s state and federal constitutional privileges against self-incrimintion. Such a transactional immunity provision must be at least as broad as the constitutional protections against self-incrimination for which it is a substitute. People v Parsons, 142 Mich App 751, 756-757; 371 NW2d 440 (1985), citing In re Colacasides, 379 Mich 69, 84; 150 NW2d 1 (1967), and In re Watson, 293 Mich 263, 276; 291 NW 652 (1940).
The Fifth Amendment privilege against self-incrimination is a personal privilege and cannot be asserted on behalf of another. Paramount Pictures Corp v Miskinis, 418 Mich 708, 715; 344 NW2d 788 (1984). Nothing in the decisions of the Michigan Supreme Court requires an interpretation of the Michigan constitutional privilege against self-incrimination different from that of the United States Constitution. Paramount Pictures, supra, p 726.
The statute embodies the personal nature of the privilege by its very terms. It protects the person who produces documents pursuant to a subpoena from prosecution "for or on account of any transaction made or thing concerning which he may testify or produce evidence . . . The subpoena was issued to defendant’s accountant and defendant’s accountant received immunity.
We find the case of Couch v United States, 409 US 322; 93 S Ct 611; 34 L Ed 2d 548 (1973), instructive. In Couch, the United States Supreme Court considered whether a taxpayer may invoke her Fifth Amendment privilege against compulsory self-incrimination to prevent the production of her business and tax records in her accountant’s possession, records which the taxpayer owned. Emphasizing the personal nature of the privilege, the Court found the ingredient of personal compulsion lacking. The summons and order were directed at the accountant and the taxpayer was not compelled to do anything. The accountant had no claim that anything produced would incriminate the accountant. 409 US 327-329.
Our reading of Couch convinces us that, by analogy, if the defendant in the instant case cannot claim a privilege against self-incrimination by reason of his accountant’s production of the records, he is also not entitled to the transactional immunity from prosecution granted by the statute. Such a holding, of course, does not implicate whatever Fifth Amendment privilege the defen dant might have enjoyed from being compelled to produce the documents and records himself. See Fisher v United States, 425 US 391, 402; 96 S Ct 1569; 48 L Ed 2d 39 (1976).
Defendant also argues that he should be granted a new trial because of newly discovered evidence. According to defendant’s brief, this consists of the testimony of John Baker, a delivery driver for Royal Gas & Oil, one of defendant’s suppliers, at the later trial of defendant’s relative. Baker testified that Royal on occasion delivered "short loads,” not delivering all of the gasoline for which it billed its customers. Baker also testified that he would sometimes be instructed to deliver gas to one location then later told to deliver it elsewhere, but he would not change the paperwork. Defendant emphasizes the importance of this evidence in light of the testimony by Royal’s president that the drivers recorded the amount of gasoline delivered to customers and the fact that the case against defendant was built by comparing records of gasoline sold to defendant with the gasoline reported in sales tax returns.
A motion for a new trial based on newly discovered evidence should only be granted if defendant meets a four-part test: (1) the evidence itself, not merely its materiality, is newly discovered; (2) the evidence is not cumulative; (3) the evidence is such as to render a different result probable on retrial of the case; and (4) the defendant could not with reasonable diligence have discovered and produced the evidence at trial. People v Somma, 123 Mich App 658, 665; 333 NW2d 117 (1983). We will not disturb the trial court’s ruling in the absence of a clear abuse of discretion. People v Miller, 141 Mich App 637, 642; 367 NW2d 892 (1985).
The prosecutor has conceded that the first two parts of the test are satisfied. With regard to the remaining two, however, we note that defendant received a list of Royal’s delivery truck drivers which included Baker’s name. Defendant failed to exercise reasonable diligence to uncover Baker’s evidence for his own trial. Moreover, of defendant’s four suppliers during the period in question, Royal supplied the second smallest volume of gasoline. Even if the jury discounted all of Royal’s deliveries, defendant would be left with an enormous understatement of gasoline sales for the period. It is unlikely that this evidence would produce a different result on retrial.
Defendant next argues that the trial court erred in admitting the business records of defendant’s gasoline suppliers under the business records exception to the hearsay rule, MRE 803(6). In particular, defendant argues that the prosecutor failed to establish an adequate foundation for the records.
MRE 803(6) provides:
The following are not excluded by the hearsay rule, even though the declarant is available as a witness:
(6) Records of Regularly Conducted Activity. A memorandum, report, record, or data compilation, in any form, of acts, transactions, occurrences, or events, made at or near the time by, or from information transmitted by, a person with knowledge, it kept in the course of a regularly conducted business activity, and if it was the regular practice of that business activity to make the memorandum, report, record, or data compilation, all as shown by the testimony of the custodian or other qualified witness, unless the source of information or the method or circumstances of preparation indicate lack of trustworthiness. The term "business” as used in this paragraph includes business, institution, association, profession, occupation, and calling of every kind, whether or not conducted for profit.
The admission of such evidence is justified on the grounds that business records by their very nature are precise and unusually reliable because of the systems employed in recording them and the reliance placed upon them by the business world. Muilenberg v Upjohn Co, 115 Mich App 316, 327; 320 NW2d 358 (1982).
With regard to the Mobil Oil Company records, the testimony of Charles J. Rullo, a district sales manager, established that the records were made in the ordinary course of business as a regular part of Mobil’s business, and were made at or near the times of the transactions. There was further testimony that the records were compiled from information submitted by persons with knowledge of the information, and that the information was checked for accuracy. It was not necessary that the employee who actually fed the information into Mobil’s computers be present to lay the foundation, as Rullo testified he was familiar with the company’s computer operations and demonstrated that familiarity. See People v Kirtdoll, 391 Mich 370, 390, n 11; 217 NW2d 37 (1974), interpreting MCL 600.2146; MSA 27A.2146, an analogous statutory business records exception. Rullo was thus a "qualified witness” within the rule’s meaning. We find no merit in defendant’s argument that he was denied an opportunity to inquire into the accuracy of Mobil’s computer procedures, as it was defense counsel who consistently interrupted Rullo’s attempts to explain company computer procedures.
We similarly find no merit in defendant’s objections concerning the records for Knowles Oil Company. Roxanne Knowles, the corporate secretary, testified that the company records and invoices were prepared in the regular course of business as a regular practice, and that the records were prepared at or near the times of the transactions. Knowles was custodian of the records, had personally typed many of them, and explained the procedure by which the records were maintained. With regard to defendant’s objections to the business records of Royal and Knight Oil Company, our review of the record also discloses an adequate foundation under MRE 803(6).
We find no abuse of discretion in the trial court’s admission of the business records.
Defendant finally argues that, even assuming a proper foundation for these business records under MRE 803(6), their admission violated the confrontation clauses of the United States and Michigan Constitutions, US Const, Am VI; Const 1963, art 1, § 20.
Although courts have often recognized the similarity in origin and purpose of the hearsay rule and the right of confrontation, the two are not completely congruent. Evidence admissible under a recognized hearsay exception may violate confrontation rights. California v Green, 399 US 149, 155-156; 90 S Ct 1930; 26 L Ed 2d 489 (1970). Such instances, however, are rare. United States v King, 613 F2d 670, 673 (CA 7, 1980). Moreover, merely because evidence has, for example, been admitted in violation of a long-established hearsay rule does not automatically mean that confrontation rights have been denied. Green, supra. The focus must be on whether there are "indicia of reliability” in determining whether a statement may be placed before the jury though there is no confrontation of the declarant. Mancusi v Stubbs, 408 US 204, 213; 92 S Ct 2308; 33 L Ed 2d 293 (1972); Dutton v Evans, 400 US 74, 88-89; 91 S Ct 210; 27 L Ed 2d 213 (1970).
This Court has also previously noted that nothing in the confrontation clause automatically requires exclusion of all hearsay. Whether a particular hearsay statement may be admitted without infringing on a defendant’s confrontation rights depends on the nature of the declaration and the circumstances of its making. People v Sullivan, 97 Mich App 488, 494; 296 NW2d 81 (1980), lv den 412 Mich 902 (1982).
We find the Michigan Supreme Court’s pronouncements in Kirtdoll, supra, controlling. Following a long and scholarly discussion of the confrontation clause and its relationship to recognized hearsay exceptions and exclusions, the Court concluded that admission of evidence in a criminal case pursuant to the business entry statute, MCL 600.2146; MSA 27A.2146, does not violate a defendant’s confrontation rights, thus treating the business records exception on a similar footing as other hearsay exceptions. The nature of the exception secures the trustworthiness of the evidence. As a consequence, the safeguard of cross-examination is not necessary to assure the truth. Kirtdoll, supra, pp 380-390.
We see no difference under MRE 803(6). Having determined that adequate foundations were laid for the evidence in question, we find nothing suggesting that defendant’s confrontation rights were violated in this case. Defendant’s insistence on only the custodian of records or the person actually creating the records testifying would defeat one purpose of the hearsay exception recognized in Kirtdoll. Limitations on the right of confrontation generally include an element of necessity. In the case of the business records exception, this is the avoidance of breakdown in business operations by calling away persons from critical work to verify trustworthy records that speak for themselves and which can be effectively identified by other persons. Kirtdoll, supra, pp 389-390.
Accordingly, we affirm defendant’s conviction.
We find no merit in defendant’s contention that the trial court erred in limiting defendant’s cross-examination of the treasury agents, thus preventing the existence of the subpoena from coming to light at his trial. Our review of the cross-examination as well as a subsequent discussion by defense counsel reveals that the trial court limited the cross-examination only in regards to the defendant’s selective prosecution theory and not in other areas.
MCL 205.3(a); MSA 7.657(3)(a) grants transactional immunity. Transactional immunity has been defined as "immunity from prosecution for offenses to which compelled testimony relates.” Use immunity is defined as immunity from "use of compelled testimony and evidence derived therefrom.” Kastigar v United States, 406 US 441, 443; 92 S Ct 1653; 32 L Ed 2d 212 (1972); People v Patterson, 58 Mich App 727, 730; 228 NW2d 804 (1975), lv den 394 Mich 796 (1975). The Kastigar holding was that a use immunity statute was coextensive with the Fifth Amendment privilege. It follows that transactional immunity affords a witness considerably broader protection than does the Fifth Amendment. Kastigar, supra, p 453.
Defendant’s abbreviated argument couches the analysis only in terms of his privilege against self-incrimination, which will be the same under either use or transactional immunity statutes. We need not decide if some other additional protection afforded by a broader transactional immunity can bring defendant within the protection of a statute applying to his accountant. We think, however, that the same reasoning as used for the Fifth Amendment privilege and the clear wording of the statute require that even the broader transactional immunity protection be personal to the person testifying or producing evidence, not a third party incidentally incriminated.
We note that defendant has not raised any claim pertaining to an accountant-client privilege such as that found in MCL 339.713; MSA 18.425(713). We have not been given sufficient facts concerning the nature of the records defendant’s accountant allegedly produced to decide such a claim even if it were properly before us. The lack of a federal accountant-client privilege was noted in Couch v United States, 409 US 322, 335; 93 S Ct 611; 34 L Ed 2d 548 (1973), wherein the Court also noted the lack of justification for such a privilege where records relevant to income tax returns are involved in a criminal investigation or prosecution. Cf. Fisher v United States, 425 US 391, 404-405; 96 S Ct 1569; 48 L Ed 2d 39 (1976), which analyzed a situation similar to the facts of the instant case but involving an attorney-client privilege. The Court concluded that whether documents obtained by the taxpayers from their accountant and transferred to their attorneys for legal advice were obtainable by a summons directed to the attorney depended on whether the same documents would have been obtainable directly from the taxpayers, which question had to be answered in terms of the Fifth Amendment privilege against self-incrimination. | [
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Per Curiam.
Defendant George Shavers (hereafter defendant) appeals by leave granted the trial court’s order denying his motion for summary disposition pursuant to MCR 2.116(C)(7) and 2.116(C)(8) in this wrongful death action. Defendant claims that he was entitled to summary disposition on the basis of governmental immunity and because he owed no duty to plaintiffs decedent, Justine Brown. We reverse.
Mrs. Brown, along with her two daughters and a niece, were approached at gunpoint outside a party store by defendant Michael Parker. Parker demanded money from the women and succeeded in taking one of the women’s purses. Defendant, an off-duty Detroit police officer who observed the incident, drew his own weapon, identified himself, and ordered Parker to halt. Parker fired several shots at defendant and defendant reciprocated. Plaintiffs decedent was fatally wounded by one of the bullets fired by Parker. Plaintiff filed the instant wrongful death action alleging gross negligence and wilful and wanton misconduct. Defendant’s motion for summary disposition pursuant to MCR 2.116(C)(7) and (8) was denied.
Defendant first argues that the trial court erred in denying his motion for summary disposition because plaintiffs complaint failed to allege an actionable duty, owed by defendant to Justine Brown, not to intervene in the ongoing robbery. We agree.
Absent a special relationship between, the parties, a public official owes a duty to the general public and not to any one individual in society. Jones v Wilcox, 190 Mich App 564, 568; 476 NW2d 473 (1991). A duty is owed to a specific individual only when performance would affect the individual in a manner different in kind from the way performance would affect the public. Harrison v Director of Dep’t of Corrections, 194 Mich App 446, 457; 487 NW2d 799 (1992).
In determining whether a legal duty should be imposed, the trial court should balance the societal interests involved, the severity of the risk, the burden upon the defendant, the likelihood of occurrence, and the relationship between the parties. Id. at 456. Taking precedent from other jurisdictions into account, this Court, in Harrison, id. at 457-459, noted that in order to establish the existence of a special relationship, most jurisdictions require at least some contact between the governmental agency or official and the victim, and also justifiable reliance on the part of the victim upon the promises or actions of the governmental agency or official.
In the present case, there were no facts alleged that would support any "justifiable reliance” on the part of the victim upon the promises or actions of defendant. This is true despite the fact that there was arguably some "contact” between defendant and the decedent during the incident. Accordingly, plaintiff has failed to plead or show facts to support a finding of a "special relationship” between defendant and the decedent that would give rise to any specific duty different from that owed to the general public. Id.
It would appear that defendant’s intervention, rather than being a violation of his duty, fulfilled his duty to protect the general public, and these four women in particular. In fact, it reasonably could be argued that a failure to intervene would have been a violation of his duty. The trial court erred in denying defendant’s motion for summary disposition pursuant to MCR 2.116(C)(8), because plaintiffs claim was so clearly unenforceable as a matter of law that no factual development could possibly justify a right of recovery. Harrison, supra at 449-450.
Next, defendant argues that the trial court erred in denying his motion for summary disposition under MCR 2.116(C)(7) on the ground that defendant was not protected by governmental immunity. Again, we agree. It is undisputed that defendant was acting within the scope of his authority as a Detroit police officer during the incident and that the Detroit Police Department is engaged in the exercise of a governmental function. Therefore, plaintiff had to allege facts showing that defendant’s conduct constituted "gross negligence.” MCL 691.1407; MSA 3.996(107), which addresses the issue of governmental immunity, defines "gross negligence” as "conduct so feckless as to demonstrate a substantial lack of concern for whether an injury results.”
Plaintiff merely alleged in the trial court that defendant came upon the armed robbery, identified himself as a police officer, and ordered the robber to "hold it.” It is clear that the robber, defendant Parker, was still brandishing the weapon when defendant arrived at the scene. In Zavala v Zinser, a companion case to Ross v Consumers Power Co (On Rehearing), 420 Mich 567, 659-660; 363 NW2d 641 (1984), the Michigan Supreme Court stated as follows:
Police officers, especially when faced with a potentially dangerous situation, must be given a wide degree of discretion in determining what type of action will best ensure the safety of the individuals involved and the general public, the cessation of unlawful conduct, and the apprehension of wrongdoers. The determination of what type of action to take, e.g., make an immediate arrest, pursue a suspect, issue a warning, await backup assistance, etc., is a discretionary-decisional act entitled to immunity. Once that decision has been made, however, the execution thereof must be performed in a proper manner, e.g., the arrest must be made without excessive forcé, the pursuit of the suspect must not be done negligently, the request for assistance must include reasonably accurate information, etc.
Defendant, being present during the commission of an armed robbery, elected to put his own life at risk in order to extricate the decedent and her companions from the perilous situation. Consistent with this Court’s pronouncement in Zavala, we conclude that defendant’s decision to draw his weapon and confront the robber was discretionary and entitled to immunity. Regarding the execution of his decision to confront the robber, it is clear that defendant Parker is the person who initiated the shoot-out. Having been fired upon, defendant was entitled to defend himself. In any event, it is clear that plaintiff has set forth nothing that can be characterized as gross negligence. See Jennings v Southwood, 446 Mich 125; 521 NW2d 230 (1994). Because plaintiff failed to allege facts sufficient to show that recovery is not barred by governmental immunity, we conclude that the trial court erred in denying defendant’s motion for summary disposition pursuant to MCR 2.116(C)(7).
Finally, defendant argues that he was entitled to the defense of governmental immunity because plaintiff failed to show this his actions were the proximate cause of Justine’s death. We disagree. In Dedes v Asch, 446 Mich 99; 521 NW2d 488 (1994), our Supreme Court concluded that the use of the word "the” before the words "proximate cause” may not be read to limit recovery where the conduct of the government employee constitutes gross negligence and another person is also a cause of the accident. In any event, this determination does not affect our decision because plaintiff has not shown gross negligence.
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Per Curiam.
This case involves a tort action for injuries suffered in an automobile accident. The plaintiffs, Abraham and Hattie Williams, sued the defendant, Clifford Edward Payne, for negligence. Mrs. Williams alleged serious impairment of body function; Mr. Williams alleged serious impairment of body function and permanent serious disfigurement. At the close of proofs, the plaintiffs moved for a directed verdict on the serious impairment issue. The trial judge stated that he felt the plaintiffs’ proofs were sufficient to meet the threshold injury requirement of MCL 500.3135; MSA 24.13135, but he sent the issue to the jury. The jury returned a verdict for the defendant. The plaintiffs appeal, raising two issues. We affirm in part and vacate and remand in part.
I. Threshold Injuries Under Section 3135
A. History
The no-fault act was intended in part to reduce excessive litigation of automobile accident cases while assuring that insurers make adequate and prompt payment for certain losses. Shavers v Attorney General, 402 Mich 554, 579; 267 NW2d 72 (1978). The Legislature also intended, though, to retain some tort remedies "to allow the catastrophically injured victim * * * compensation in addition to that provided by * * * the act”. Workman v Detroit Automobile Inter-Ins Exchange, 404 Mich 477, 509; 274 NW2d 373 (1979). This case has been brought under § 3135 of the no-fault act, which states:
"A person remains subject to tort liability for noneconomic loss caused by his or her ownership, maintenance, or use of a motor vehicle only if the injured person has suffered death, serious impairment of body function, or permanent serious disfigurement.” MCL 500.3135(1); MSA 24.13135(1).
The question of whether "serious impairment of body function” and "permanent serious disfigurement” are issues of fact or law leads to the dispute in our case. In 1973 the Michigan Supreme Court declared in an advisory opinion that those phrases "are within the province of the trier of fact”. Advisory Opinion re Constitutionality of 1972 PA 294, 389 Mich 441, 481; 208 NW2d 469 (1973). Decisions of the Court of Appeals applied this standard, and the trial court here applied it as the law of this case. On December 23, 1982, however, the Supreme Court declared the phrases to be matters of statutory interpretation — questions of law for the court:
"We believe several considerations are instructive in determining whether the threshold requirement of 'serious impairment of body function’ is primarily a phrase presenting a fact question for the trier of fact, or a phrase requiring judicial definition as a matter of law. First, it is not a term commonly used, for which juries would have a clear sense of the intended meaning. Hence, the phrase differs from 'intoxication’, as used in the dramshop act, see Rizzo v Kretschmer [389 Mich 363; 207 NW2d 316 (1973)]. It also differs from more specific requirements that could have been enumerated as threshold requirements for the no-fault act, e.g., broken bones, dismemberment, etc.
"Second, and important especially in conjunction with the first factor, one of the important reasons behind the no-fault act was to reduce litigation in automobile accident cases. Considering that the phrase involved is unspecific and one concerning which reason able minds can usually differ regarding specific applications, if the interpretation of the phrase is a matter to be left to the trier of fact, a trial would in most instances be required to determine whether the threshold requirements have been met. Such a consequence would certainly be contrary to the legislative intent in creating the threshold requirements.
"Third, we cannot believe that the Legislature, when limiting the continued existence of traditional tort liability to certain specified exceptions, intended that the limits which they created would vary according to the specific jury impaneled or the specific part of the state in which a case was to be tried. Although the requirement of serious impairment of body function lacks specificity, uniformity in its application is to some extent attainable through statutory construction by the appellate courts. Unlike traditional tort litigation where differing views among differing juries are generally acceptable, the question whether tort immunity attaches is not a question which we believe the Legislature intended to leave as primarily a question for the trier of fact.
"The responsibility of effectuating the legislative will is primarily a matter of law for the court and not properly left to determination by a jury. Cf. Rusinek v Schultz, Snyder & Steele Lumber Co, 411 Mich 502; 309 NW2d 163 (1981). Therefore, we conclude that the meaning of 'serious impairment of body function’ is a matter to be determined by statutory construction. We hold that when there is no factual dispute regarding the nature and extent of a plaintiff’s injuries, the question of serious impairment of body function shall be decided as a matter of law by the court. Likewise, if there is a factual dispute as to the nature and extent of a plaintiff’s injuries, but the dispute is not material to the determination whether plaintiff has suffered a serious impairment of body function, the court shall rule as a matter of law whether the threshold requirement of MCL 500.3135; MSA 24.13135 has been met.” Cassidy v McGovern, 415 Mich 483, 501-502; 330 NW2d 22 (1982) (emphasis added).
It is the Cassidy rule which we are bound to apply here.
B. Serious Impairment of Body Function
At this stage in its legal evolution, "serious impairment of body function” must be decided on a case-by-case basis. Cassidy v McGovern, 415 Mich 503. A few standards have developed, though, which will assist the courts. First, "impairment of body function” actually means "impairment of important body functions”. Cassidy v McGovern, 415 Mich 504. Second, by its own terms, the statute requires that any impairment be "serious”. MCL 500.3135(1); MSA 24.13135(1); McKendrick v Petrucci, 71 Mich App 200, 210; 247 NW2d 349 (1976). Third, the section applies only to "objectively manifested injuries”. Cassidy v McGovern, 415 Mich 505.
The general character of Mrs. Williams’ injuries is not seriously disputed. Her sole claim at trial was of an injury to the base of her right thumb. It was not fractured and no other medical abnormalities were found. Mrs. Williams experienced pain, though, and this pain was variously diagnosed as a sprained ligament and as tendonitis. The pain radiated through her wrist and into her arm. The pain made it difficult for her to perform household duties, but she testified that there were no specific chores which she could not do. On these facts, we conclude that Mrs. Williams’ injuries did not seriously impair any important body functions.
Additionally, Mrs. Williams’ soft tissue injuries were not subject to medical measurement. Thus, they are not "objectively manifested” in a scientific or medical context. The symptoms of her injuries, however, have found objective manifesta tion: pain makes certain activities difficult. The Cassidy opinion did not expressly designate which standard of manifestation to employ, objective medical measurements of injury or a patient’s complaints of pain substantiated only by the patient’s limited activities. We conclude that Mrs. Williams’ injuries are not "objectively manifested” within the meaning of Cassidy. Medically unsubstantiated pain will always be present in a tort action for pain and suffering. The Legislature could not intend so low a threshold for avoiding the no-fault act’s proscription against tort actions. General pain and suffering is not sufficient to meet the threshold. Cassidy v McGovern, 415 Mich 505. As the Supreme Court pointed out in Cassidy, the "serious impairment of body function” standard
"should be considered in conjunction with the other threshold requirements for a tort action for non-economic loss, namely, death and permanent serious disfigurement. MCL 500.3135; MSA 24.13135. The Legislature clearly did not intend to erect two significant obstacles to a tort action for non-economic loss and one quite insignificant obstacle.” 415 Mich 503.
Additionally, the Cassidy decision spoke of "objectively manifested injuries”, not symptoms. Mrs. Williams’ injuries do not meet the "objectively manifested” requirement.
We hold, then, that the Legislature did not intend to allow tort actions based on the type of injuries suffered by Mrs. Williams. Mrs. Williams is left to her remedies under the no-fault act.
We reach the same conclusion on Mr. Williams’ "serious impairment” issue. Mr. Williams complained of pain in his left shoulder, back, and legs. No medical abnormalities were found, but one examining physician did note a slight limitation of movement in the shoulder. Another doctor testified that Mr. Williams also experienced limited movement of the hips and neck. The second doctor also testified that Mr. Williams’ hands were in pain, but Mr. Williams denied this affliction. Mr. Williams testified that he was transferred to another job because he had some difficulty when lifting his left hand over his head and when gripping with his left hand.
Mr. Williams’ case for serious impairment of an important body function is much closer than his wife’s, but we hold that he too falls short of the threshold. His injuries are not objectively manifested. While his injuries no doubt impaired his ability to work, x-ray results were negative and no neurological disorder was found. Under Cassidy, Mr. Williams is also left to the no-fault act remedies for these noneconomic losses.
C. Permanent Serious Disfígurement
Mr. Williams also claims a permanent serious disfigurement. The record shows that he suffered a cut to the forehead requiring 11 or 12 stitches. This left a scar which apparently was not visible to the jury from 15 feet, but was visible at closer distande. Scars on both legs had significantly healed, but were still partially visible.
Disfigurement goes to the physical characteristics of an injury rather than the injury’s effect on the victim’s lifestyle. Ascertaining the seriousness of disfigurement may often require physical observation by the trial court. On the other hand, ascertaining an injury’s effect on important body functions will usually depend on verbal descriptions rather than demonstrative evidence. The appellate courts generally will be in as good a position as the trial court to judge, on these verbal descriptions, the extent of impairment. In disfigurement cases based on physical observation, however, the appellate courts must grant great deference to the observations of the trial court on what is, in effect, a factual conclusion about the severity of an injury. The victims cannot be expected to parade their maladies through an appellate courtroom. The trial court is expected to make adequate findings on the record. GCR 1963, 517.1. It will describe the injuries and reach a legal conclusion on whether they meet the threshold. We will review the trial court’s determination, reversing only when the court has abused its discretion.
We do not know whether Mr. Williams’ scars form the basis for a tort claim. Although the trial court indicated that the scar on Mr. Williams’ head was the type of injury intended to be covered by § 3135, the issue was sent to the jury. We do not know whether the jury’s general verdict of no cause was due to a failure of proofs of proximate cause **or the jury’s disbelief that the scars constituted "permanent serious disfigurement” — an issue the jury is not to decide under Cassidy. Accordingly, we must vacate the judgment relating to Mr. Williams’ claim of permanent serious disfigurement and remand for a new trial consistent with the Cassidy opinion.
II. Jury Instructions
In their second issue the plaintiffs claim error in the jury instructions used. The trial court used the general verdict form contained in SJI 65.01:
"Members of the jury, if you agree upon a verdict in favor of the plaintiff Abraham Williams, you may return your verdict as follows:
"We the jury find in favor of the plaintiff Abraham Williams and assess his damage in an amount that you deem fair and just.
"If you agree upon a verdict in favor of the defendant, Clifford Edward Payne, you may return your verdict as follows:
"We the jury find in favor of the defendant Clifford Edward Payne no cause for action.
"As to the plaintiff Hattie Williams you may return your verdict as follows:
"We the jury find in favor of the plaintiff Hattie Williams and assess her damages in an amount you deem fair and just.
"If you agree upon a verdict in favor of the defendant Clifford Edward Payne, you may return your verdict as follows:
"We the jury find in favor of the defendant Clifford Edward Payne no cause for action.”
The plaintiffs argue that the court should have used a modification of the special verdict form contained in SJI 67.02. When discussing the jury instructions to be used, the trial judge said he would give the general form. The plaintiffs’ attorney stated: "Well, I have no objection to the form the court is using.” Their attorney later asked that SJI 67.02 be given on the loss of consortium count. The court indicated that no loss of consortium instructions would be given in light of this Court’s opinion in Rusinek v Schultz, Snyder & Steele Lumber Co, 98 Mich App 380; 296 NW2d 262 (1980) (tort action for loss of consortium not al lowed). The plaintiffs did not ask that the special verdict form be used for the underlying claims. By failing to request or properly object to the general form’s use, and in fact by expressly accepting it, the issue is not properly preserved for appeal unless manifest injustice would otherwise result. Hunt v Deming, 375 Mich 581, 584; 134 NW2d 662 (1965). Manifest injustice would not result here because the trial court used an otherwise proper instruction.
We do not rest our decision on the procedural failure, though. Instead, we hold that SJI 67.02, as drafted, is an improper instruction on our facts under Cassidy because it treats the serious impairment/permanent disfigurement issue as a jury question. The instruction is proper, however, in cases where a factual dispute exists regarding the nature and extent of plaintiff’s injuries and such dispute is material to the determination of serious impairment of body function. From the arguments on appeal, it appears that the plaintiffs wanted a special verdict form which would have allowed the jury to decide the serious impairment/permanent disfigurement question where the necessary fac tual dispute was missing. Thus, we must assume that the plaintiffs’ proposed modified jury instruction suffers the same infirmity as the verdict form upon which it is based. Although the trial court did not realize it at the time, it would have been improper to instruct as the plaintiffs now request.
For the reasons stated, we affirm the judgments for the defendant against Mrs. Williams and Mr. Williams on the issue of serious impairment of body function. We vacate and remand the judgment for the defendant and against Mr. Williams on the issue of permanent serious disfigurement for further proceedings consistent with the Supreme Court’s opinion in Cassidy v McGovern.
MCL 500.3135; MSA 24.13135, quoted infra.
Two other issues, relating to loss of consortium and vagueness of MCL 500.3135, were withdrawn at oral argument by the plaintiffs. We express no opinion on those issues.
E.g., Earls v Herrick, 107 Mich App 657, 664; 309 NW2d 694 (1981); Abraham v Jackson, 102 Mich App 567, 570; 302 NW2d 235 (1980); Watkins v City Cab Corp, 97 Mich App 723, 725; 296 NW2d 162 (1980).
On the use of thermograms to measure muscular injuries or spasms, see Deshotel v Avondale Shipyards, Inc, 413 So 2d 208 (La App, 1982).
Duty and breach of duty were stipulated to at trial. The questions of proximate cause, serious impairment and disfigurement were the main issues submitted to the jury.
Cassidy was decided after the trial in this matter. Thus, the record in our case was not prepared in recognition of the Cassidy principles. On remand the trial court will have an opportunity to rule on the threshold injury question under Cassidy and the parties will have an opportunity to develop a sufficient record for possible review. We hope the bar will recognize the difficulties of appellate review and consider introducing photographic documentation of asserted "permanent serious disfigurement”.
The trial court and the parties did not know that the Rusinek case was reversed weeks before this trial. See Rusinek v Schultz, Snyder & Steele Lumber Co, 411 Mich 502; 309 NW2d 163 (1981).
The limited mandate in Cassidy was as follows:
"We hold that when there is no factual dispute regarding the nature and extent of a plaintiffs injuries, the question of serious impairment of body function shall be decided as a matter of law by the court. Likewise, if there is a factual dispute as to the nature and extent of a plaintiff’s injuries, but the dispute is not material to the determination whether plaintiff has suffered a serious impairment of body function, the court shall rule as a matter of law whether the threshold requirement of MCL 500.3135; MSA 24.13135 has been met.” 415 Mich 502.
Thus, whether or not the dispute is material to the determination is a question for the court. Upon such finding SJI 67.02 appears to be an appropriate instruction. See Note on Use, SJI 36.01, 63 Mich B J 79 (1984).
The plaintiffs’ proposed instruction appears nowhere in the record or in the briefs. We must base our estimation of the proposed instruction’s particulars on the gist of the plaintiffs’ appellate arguments.
Had the court given the special verdict form to the jury, we would now know whether remand is necessary on the permanent disfigurement issue discussed in section I of this opinion. While it would help settle the disposition of the case on appeal, the instruction would nevertheless be improper under Cassidy. | [
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Per Curiam.
Defendant appeals as of right his jury conviction of armed robbery, MCL 750.529; MSA 28.797, and his conviction as a third-felony offender, MCL 769.11; MSA 28.1083, following a bench trial.
At about 10:30 p.m. on September 9, 1980, a man approached the clerk, Aaron Hochman, of the Sensually Yours Bookstore in Ann Arbor and demanded money at gunpoint. Hochman complied, then telephoned police about the robbery five minutes after the robber left the bookstore. Hochman gave a description of the robber to the police.
Two police officers who responded to Hochman’s call went to a restaurant approximately 35 to 40 feet from the bookstore and asked several restaurant employees if a man fitting Hochman’s description of the robber had recently entered the restaurant. A waitress replied yes and pointed to an empty table where the man had been seated. Another restaurant employee, Lloyd Gary, told the officers that the man had gone into the men’s restroom. The officers found defendant in the restroom. Because he fit Hochman’s description of the robber, the officers detained and searched him. They found a gun, a bundle of currency, and a black valise in defendant’s possession.
At defendant’s jury trial, Hochman and six other witnesses testified. Defendant did not take the stand or present any defense.
Defendant raises four allegations of trial error in this appeal. We find one to be reversible error.
In closing argument the prosecutor stated:
"I have prepared about eleven questions that I am going to direct defense counsel, and I am going to ask him to answer these questions in his closing argument. I would ask the jury to pay attention to see first of all whether or not defense counsel responds to these ques tions, and secondly, whether or not he adequately answers those questions in your mind.
"I would ask the defense attorney, if the defendant was not the person who took the money, why did Mr. Hochman identify him as being the person who took the money?
"If Mr. Hochman was unsure of the appearance of the defendant why was he able to provide a description of the defendant accurate enough so that Mr. Wingo, Rhonda Wishnew, Patrolman Brown, and Patrolman Melby were able to identify the defendant at the Big Boy in the Ann Arbor Inn.
"If the defendant was not the person who committed the armed robbery, why was the defendant arrested fifteen minutes and a block and a half aways from the location of the crime?
"If the defendant was not the person who committed the armed robbery, why did he have a gun that was described to be the gun used at the time of the crime?
"If the defendant did not commit the armed robbery, why was he carrying a valise or a bag matching the description of that as having been used during the commission of the crime?
"If the defendant was not the person that committed the armed robbery, why did the defendant have such a large amount of money is his right front pocket, that being $182?
"If the defendant was not the person that committed the armed robbery, why wasn’t this money in his wallet rather than in his right front pocket?
"If the defendant was not the person that committed the armed robbery, why does the sum of money found upon the defendant match the sum of money that was taken from the theft?
"If the defendant was not the person that committed the armed robbery, why did the clothing description as given and as testified to in court by the complaining witness match the clothing as found on the defendant as worn by the defendant fifteen minutes and a block and a half away from the crime?
"And an interesting fact that arose in this case is, if the defendant did not commit the armed robbery, why did he give an explanation as to the fact that he was in a sweat to Rhonda Wishnew to the effect that he had just gotten out of night court or had just gotten out of divorce court, this being at 11:00 o’clock at night?
"Now, I suggest to you that perhaps the answers to some of these questions one might say are coincidence, but I suggest to you that the coincidences here are too numerous and too repetative [sic] and ergo we have the circumstantial evidence which supports and collaborates [sic] the testimony of Mr. Hochman. Thank you.”
Defendant’s counsel objected to the above colloquy and moved for a mistrial on the basis that the prosecutor was impermissibly commenting upon defendant’s failure to testify. The trial court denied the motion.
Defendant argues on appeal that the prosecutor’s questions called upon defendant, through his attorney, to explain the evidence presented against him and thus impermissibly shifted the burden of proof to defendant, deprived defendant of the presumption of innocence, and violated defendant’s Fifth Amendment right to remain silent. Therefore, argues the defendant, the trial court erred by denying his motion for a mistrial.
The grant or denial of a motion for a mistrial rests in the trial court’s sound discretion. Reversal by this Court is merited only upon a finding that the trial court abused that discretion. People v Daniel Meyers (On Remand), 124 Mich App 148, 163; 335 NW2d 189 (1983); People v Robertson, 87 Mich App 109, 111-112; 273 NW2d 501 (1978). This Court finds such abuse of discretion where the denial of the motion deprives the defendant of a fair trial and results in a miscarriage of justice. Robertson, supra.
In a closing argument a prosecutor may comment upon the evidence presented at trial and upon the witnesses’ credibility. People v Caldwell, 78 Mich App 690; 261 NW2d 1 (1977). A prosecutor may also argue that the evidence was uncontradicted even though the defendant is the only person who could have contradicted the evidence. People v Parker, 307 Mich 372; 11 NW2d 924 (1943); People v Peace, 48 Mich App 79; 210 NW2d 116 (1973).
Nevertheless, a prosecutor may not imply in closing argument that defendant must prove something or present a reasonable explanation for damaging evidence because such an argument tends to shift the burden of proof. People v Nabers, 103 Mich App 354, 369; 303 NW2d 205 (1981), aff'd in part and rev’d in part 411 Mich 1046 (1981); People v Heath, 80 Mich App 185, 188; 263 NW2d 58 (1977); United States v Smith, 500 F2d 293, 298 (CA 6, 1974). Furthermore, there is no real distinction between asking defendant or asking his or her counsel to provide such proof or explanation. Heath, supra. Moreover, such a technique indirectly focuses upon a defendant’s exercise of his or her Fifth Amendment right to remain silent should defendant decide not to testify. Nabers, supra.
We find that the prosecutor’s 11 questions in this case did require defendant to explain the evidence against him, thus shifting the burden of proof. Moreover, the prosecutor’s argument indirectly focused the jurors’ attention upon defendant’s failure to testify, thus violating defendant’s Fifth Amendment protections.
An error such as this is reversible where it is unduly offensive to the maintenance of a sound judicial system or, if not so offensive, the error is not harmless beyond a reasonable doubt. People v Robinson, 386 Mich 551, 563; 194 NW2d 709 (1972) ; People v Christensen, 64 Mich App 23, 25-33; 235 NW2d 50 (1975), lv den 397 Mich 839 (1976). In past cases, this Court has not reversed when it has found similar errors to be harmless. Nabers, supra; Heath, supra.
However, in People v Swan, 56 Mich App 22, 35; 223 NW2d 346 (1974), lv den 395 Mich 810 (1975), this Court said:
"In finding the error harmless in this case, we wish to emphasize that we do not condone conduct which directly or indirectly restricts or penalizes the exercise of the constitutional right to remain silent in the face of accusation. People v Bobo, 390 Mich 355; 212 NW2d 190 (1973) . We will find it difficult in the future to believe that prosecutors and police are ignorant of the well-established principle of law which forbids comment upon an accused’s silence or that clear violations of the principle arise from inadvertence. Deliberate violations of this rule may lead us to reverse convictions even where evidence might be overwhelming. The prosecutor who comments, or elicits comment, on a defendant’s silence thus risks the loss of a perfectly good case for no reason.”
This Court in Nabers, supra, p 370, extends the application of that principle:
"This principle from Swan holds true for violations of the equally well-established legal principle that a prosecutor may not comment on the defendant’s failure to take the stand and explain away evidence. It is extremely hard to believe that any prosecutor is not familiar with this principle which has been part of Michigan jurisprudence since before the turn of the century. People v Lange, 90 Mich 454, 458-459; 51 NW 534 (1892).”
Despite the warning given to prosecutors in Swan, supra, this Court in Nabers did not reverse the defendant’s conviction because it found the egregious comment to be fleeting and inadvertent, thus not a violation of the first prong of the harmless error test. Robinson, supra.
In this case we cannot similarly find the prosecutor’s questioning to be fleeting and inadvertent. Instead, it was obviously considered and deliberate. Therefore, we find the error to be unduly offensive to the sound maintenance of the judicial system. Although the thrust of the prosecutor’s questioning was that there was no reasonable explanation of the evidence other than that defendant was guilty, Heath, supra, the form of this argument was a deliberate, albeit indirect, violation of defendant’s right to be presumed innocent and have his case proven against him beyond a reasonable doubt and of his right to remain silent.
Because we find the prosecutor’s error to be reversible, we find that the trial court’s failure to grant defendant’s motion for mistrial was an abuse of discretion that resulted in a miscarriage of justice.
We address defendant’s remaining allegations of error only to the extent that discussion of them will assist the trial court upon retrial.
We agree with defendant’s argument that the evidence that Aaron Hochman identified defendant as the robber from a photographic display should have been suppressed. Defendant was in custody at the time of the display, and the people failed to show that they made any effort to conduct a corporeal lineup. People v Anderson, 389 Mich 155, 186-187; 205 NW2d 461 (1973). While it was possible that defendant’s appearance was so distinctive that there were insufficient persons available for a lineup with defendant’s physical characteristics, Anderson, supra, the officer in charge did not even attempt to find such persons. Nevertheless, this error was not reversible in this case because Hochman had an independent basis for his in-court identification. People v Kachar, 400 Mich 78, 95-96; 252 NW2d 807 (1977). However, the photographic display identification evidence should be excluded at defendant’s new trial.
As to defendnat’s argument regarding prior conviction evidence, the trial court did properly interpret the time limit of MRE 609(b). Because defendant was not released from confinement on his 1965 breaking and entering conviction until 1971, that prior conviction came within 10 years of defendant’s 1980 trial. This, of course, will no longer be an issue on retrial. As to defendant’s argument that the trial court failed to properly articulate admissibility factors, MRE 609(a)(2), we note that defendant failed to provide us with the transcript for a review of this issue.
Finally, we find that the trial court properly granted the prosecutor’s motion to strike Lloyd Gray as an endorsed witness. The court properly found, either expressly or implicitly, that Gray was not a res gestae witness, his testimony was not material or necessary, and his testimony would have been cumulative.
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Boyle, J.
Defendant Engelman was convicted, following a jury trial, of third-degree criminal sexual conduct involving the sexual penetration of a fifteen-year-old boy. MCL 750.520d(l)(a); MSA 28.788(4)(l)(a). He claims error in the admission of a photograph showing him standing nude with a minor female who is exposing herself. Specifically, he contends that the photograph should have been excluded under MRE 404(b) as improper evidence of his character or propensity to commit the charged offense. We agree that the photograph was improperly admitted in this case, and that the defendant’s conviction therefore should be reversed.
i
At trial, the victim testified that he first met the defendant in 1983 while visiting his cousin, and that over the next year he and the defendant became friends. The victim frequently visited the defendant at his home, and on several occasions spent the night there. The victim also indicáted that the defendant had given him "gifts” of beer, cigarettes, candy, meals, and occasionally clothes and money.
In July or August of 1984, the victim spent a weekend at the defendant’s home. The victim testified that after an uneventful Friday evening the two returned to his mother’s house on Saturday so that he could pick up a change of clothes. On the drive back to the defendant’s house that evening, the defendant told him that he had a pair of pants at his house which the victim could have if they fit. The defendant also spoke frequently of "some lady friend of his in prison that wanted some pictures of him and stuff and some other guys . . . .” Several times during the drive the defendant asked if he could take some pictures of the victim for his friend. The victim stated that he attempted to change the subject each time it was raised. He also stated that before reaching the defendant’s house they stopped at a party store, where the defendant purchased two six-packs of beer for the victim and himself. The victim consumed five cans of beer that evening, at least four of them before reaching the defendant’s house.
Upon arriving at the defendant’s house, the victim went into the living room to drink the beer. A short time later he was joined by the defendant, who had with him a pair of pants and an instant camera. The defendant handed the pants to the victim and knelt on the floor directly in front of him. The victim testified that when he lowered his pants the defendant leaned forward, placed the victim’s penis in his mouth, and simultaneously photographed the act with the instant camera. The victim stated that after about ten seconds he pulled away and went to the bathroom to shower. While he was showering the defendant appeared, completely nude, drew back the shower curtain and took a second photograph of the victim.
The defendant was arrested on February 11, 1985, and charged with one count of third-degree criminal sexual conduct. During a subsequent search of the defendant’s residence, the police discovered twenty-six photographs depicting the defendant and various unidentified children exposing themselves. The defendant moved to suppress all twenty-six photographs, claiming that none were relevant because the victim was not included. The defendant further claimed that if the photographs were admitted into evidence they would be "devastatingly prejudicial.”
In response, the prosecutor argued that the photographs were relevant to show the defendant’s modus operandi, or alternatively a scheme, plan, or system whereby the defendant would befriend minor boys and girls, gain their trust over time through gifts of various items, such as clothing and alcohol, and then sexually exploit and abuse the youths, often photographing his criminal acts. The prosecutor further argued that the probative value of the photographs was not outweighed by any unfair prejudice to the defendant._
Without viewing the photographs, the trial judge stated that any photographs of the defendant individually-nude or of individual nude children would not be relevant at trial, since the charge against the defendant was sexual penetration of a minor. He added:
However, I do find relevant, photographs that contain the picture of the defendant and a minor child, assuming that they are in a state of undress. Those would be relevant. They would show to the jury that the defendant was with minor children, younger children. He had his clothes off and/or they had their clothes off and as devastating as that may be, it does show and would support scheme, plan, system, the way a person does commit a crime, even though the two victims of the charges pending are not in those photographs.[ ]
Only one photograph fell within the relevancy parameters set by the trial judge. This photograph depicted the defendant standing nude in his living room holding a can of beer in one hand with his other arm around a minor female. The minor female, who also apparently was drinking beer, was wearing a nightgown given to her by defendant, and had raised the nightgown to expose her body.
The defendant subsequently moved in limine to exclude this remaining photograph, arguing that it was irrelevant under MRE 401, and that if found to be relevant it was unfairly prejudicial under MRE 403. In response, the prosecutor renewed his claim that the photograph was relevant to show a scheme, plan, or system to sexually abuse minor children. The trial judge agreed and concluded that, while damaging to the defendant, the photograph was probative of a scheme, plan, or system on defendant’s part in committing both acts, and that such probativeness was not outweighed by the potential for unfair prejudice to the defendant.
Following his conviction, the defendant pled guilty to a supplemental information charging him as a third-time habitual offender, and was sentenced to fifteen to thirty years imprisonment. The Court of Appeals affirmed in an unpublished per curiam opinion. The defendant has appealed in this Court.
ii
This case involves the admissibility of other acts evidence under MRE 404(b). Evidence of other crimes, wrongs, or acts of an individual is inadmissible to prove a propensity to commit such acts. MRE 404(a); People v Hall, 433 Mich 573, 579; 447 NW2d 580 (1989). Such evidence may be admissible, however, for other purposes under MRE 404(b), which provides:
Evidence of other crimes, wrongs, or acts is not admissible to prove the character of a person in order to show that he acted in conformity therewith. It may, however, be admissible for other purposes, such as proof of motive, opportunity, intent, preparation, scheme, plan, or system in doing an act, knowledge, identity, or absence of mistake or accident when the same is material, whether such other crime, wrongs, or acts are contemporaneous with, or prior or subsequent to the crime charged.[ ]
The purposes listed in MRE 404(b) are not all "on the same plane.” People v Golochowicz, 413 Mich 298, 313; 319 NW2d 518 (1982). Other acts evidence used as proof of intent, absence of mistake or accident, or identity, for example, is proof of an "ultimate” fact or issue. These ultimate facts or issues have been described as facta probanda. On the other hand, such evidence may also be used to prove some "intermediate” inference such as motive, opportunity, preparation, scheme, plan, or system, which may in turn tend to prove some ultimate fact or issue. These intermediate inferences are described as facta probantia.
Nor are these listed purposes the only purposes for which other acts evidence may be used. Properly understood, MRE 404(b) is a nonexclusive list of examples of situations in which the general rule excluding character evidence, MRE 404(a), is not offended because the evidence is probative of some fact other than the defendant’s criminal propensity. As explained in 2 Weinstein, Evidence, ¶ 404[8], p 404-52, "[o]nly one series of evidential hypotheses is forbidden in criminal cases by Rule 404: a man who commits a crime probably has a defect of character; a man with such a defect of character is more likely ... to have committed the act in question.” Put simply, the rule is inclusionary rather than exclusionary.
A
In People v Golochowicz, supra, p 309, this Court articulated a set of evidentiary safeguards creating a heightened threshold of preliminary admissibility, designed to protect against the misuse of other acts evidence under MRE 404(b). First, there must be substantial proof that the defendant committed the other act sought to be introduced. Second, there must be some ”special quality or circum stance” of the other act which tends to prove some issue or fact other than the defendant’s bad character. Third, the other acts evidence must be material to the case, in the . sense that the issue or fact proved by the proffered evidence must be in issue, or probative of some matter in issue. Finally, the probative value of the evidence sought to be introduced must not be outweighed by the potential for unfair prejudice to the defendant. See also People v Hall, supra, pp 579-580.
As a practical matter, however, since the other acts evidence sought to be introduced will always be used to establish some ultimate fact or issue, whether directly, through some factum probandum, or indirectly, through some intermediate inference or factum probans, it often is helpful first to identify the ultimate fact or issue the evidence is intended to prove. While there are any number of ultimate issues for which such evidence may be offered, its admission generally will be sought to prove one of three distinct matters that may arise in any criminal case:
First, proof of the other crimes may be offered to prove that the allegedly criminal act took place; this can be called the "corpus delicti” issue. Second, the disputed evidence may be tendered to show that the accused was the actor; this is the identity issue. Third, other crimes evidence may be introduced to show that the accused had the requisite mental state. Of course, evidence of another crime may be relevant on more than one of these ultimate issues. Nevertheless, it is important to identify the appropriate ultimate issue and not to confuse the ultimate issue with some evidentiary issue. [22 Wright & Graham, Federal Practice & Procedure, § 5239, p 460.][ ]
The second and third of these ultimate issues, identity and mental state (e.g., intent, lack of mistake or accident, and knowledge), are identified in the rule itself as proper purposes. The first, proof that the act was committed, is one of those purposes not expressly listed in the rule. It is, however, clearly a permissible purpose for other acts evidence:
The prohibition of Rule 404(b) does not apply simply because the prosecutor is using uncharged misconduct to draw the ultimate inference of conduct. The prohibition applies only when that ultimate inference is coupled with the intermediate inference of the defendant’s subjective character. If the prosecutor can arrive at the ultimate inference of conduct through a different intermediate inference, the prohibition is inapplicable. . . . [T]he two steps in reasoning in the forbidden theory of logical relevance trigger different probative dangers; drawing the intermediate inference raises the danger of prejudice because that step forces the jury to focus on the defendant’s character while drawing the ultimate inference raises the danger that the jury will overestimate the probative value of character as a predictor of conduct. Rule 404(b) comes into play only when both probative dangers are present. If the prosecutor can develop an alternative intermediate inference, Rule 404(b) will not bar the admission of uncharged misconduct. [Imwinkelried, Uncharged Misconduct Evidence, § 4:01, p 3.]
Although the admission of other acts evidence as proof that the act was committed is permissible, courts are understandably more reluctant to admit such evidence for that purpose:
When the prosecutor offers uncharged miscon duct to prove the commission of the actus reus, the judge should very carefully scrutinize the prosecutor’s theory of logical relevance. This is the theory of relevance in which it is easiest for the prosecutor to slip into improper character reasoning. Since the ultimate inference is conduct, this theory places the greatest strain on the prohibition in the first sentence of Rule 404(b). The courts are reluctant to admit uncharged misconduct to prove the actus reus, and that reluctance is well-founded. If the prosecutor wants to avoid Rule 404(b), the prosecutor must persuade the judge that the prosecutor is invoking an intermediate inference other than the defendant’s subjective character. [Id., § 4:01, p 5.]
Unlike identity and mental state, facta probanda which may be proved directly by the introduction of other acts evidence, the key to the admissibility of such evidence to prove the doing of the act, as acknowledged in the above references, is the existence of some intermediate fact, some factum probans, established by the other act which bridges the gap between that act and the charged act and ensures a purpose other than the proof of the defendant’s character. As Professor Wigmore explains:
At the outset of this entire prospectant class of inferences, it must be noted that when the doing of an act is the proposition to be proved there can never be a direct inference from an act of former conduct to the act charged; there must always be a double step of inference of some sort, a tertium quid. In other words, it cannot be argued: "Because a did an act last year, therefore he probably did the act x as now charged.” Human action being infinitely varied, there is no adequate probative connection between the two. . . .
Thus, whenever resort is had to a person’s past conduct or acts as the basis of inference to a subsequent act, it must always be done intermediately, through another inference. . . . The impulse to argue from a’s former bad deed or good deed directly to his doing or not doing the bad deed charged is perhaps a natural one; but it will always be found, upon analysis of the process of reasoning, that there is involved in it a hidden intermediary step of some sort .... This intermediate step is always implicit and must be brought out. [1A Wigmore (Tillers rev), Evidence, § 192, p 1857. Emphasis added.]
B
In this case, it is the doing of the act itself which is the ultimate fact or issue to be proved by the proffered evidence. Identity is not in question here. The defendant did not argue alibi, or that the victim was mistaken concerning his identification of the defendant. Similarly, the defendant’s state of mind is not in issue. He did not claim that he unintentionally fellated the victim or that he did so by accident or mistake. Rather, the defendant’s claim rests solely on his contention that the alleged criminal act never took place.
The question thus becomes whether the evidence offered tends to establish some intermediate inference, other than the improper inference of character, which is in turn probative of the ultimate issue in this case, the commission of the act. Or, in the language of the second leg of the Golochowicz test, whether there is some "special quality or circumstance” of the other act which tends to prove some fact or issue, other than the defendant’s bad character, which is probative of that ultimate issue. We agree with the defendant that no such intermediate inference has been established in this case.
hi
The Polaroid photograph admitted in this case shows the defendant standing nude with a minor female who is lifting her nightgown and exposing her body; the defendant is holding a can of beer, and there is another can of beer on the television set next to which the girl is standing. The picture was taken in the defendant’s home.
The trial court accepted the photograph under MRE 404(b) as evidence that the defendant had engaged in a scheme, plan, or system in which he befriended children, gaining their trust over time through gifts of items such as clothing and alcohol, and then sexually exploited the youths while photographing them. The prosecutor had also characterized the photograph as evidence of the defendant’s modus operandi and as being corroborative of the victim’s testimony that defendant took a Polaroid picture of him during the fellatio. The Court of Appeals agreed with the trial court’s ruling.
The defendant claims that the photograph should have been excluded as irrelevant, because it showed the defendant with a teenage girl rather than a teenage boy; immaterial, because .any scheme, plan, or system of the defendant in doing the act could only be material to the issues of his identity or state of mind, neither of which were controverted; and unduly prejudicial, for obvious reasons.
A
The defendant’s assertion that the photograph is not relevant because it shows the defendant with a young girl, while the charged offense involved a teenage boy, is simply without merit. The defendant contends, essentially, that MRE 404(b) would permit only evidence that tended to show a common scheme, plan, or system to fellate young boys. The motion transcript, however, establishes that defendant had previously been convicted of two incidents of sexual conduct with female minors and was currently charged with two separate incidents of penetration of teenage boys. Sexual interest in minors that is not gender specific is unfortunately a sufficiently common phenomenon that we cannot say as a matter of law that the proffered evidence did not tend "to make the existence of any fact that is of consequence . . . more probable or less probable than it would be without the evidence.” MRE 401; 1 Weinstein, Evidence, ¶ 401[06], p 401-33.
Defendant’s contention that the photograph must be excluded as immaterial even if it does establish a scheme, plan, or system on his part in committing such acts, since neither his identity nor his state of mind are in dispute, is similarly mistaken. Clearly, such a scheme, plan, or system on the defendant’s part, if properly established, would serve as the intermediate inference necessary to ensure that the evidence sought to be admitted is not character evidence, and thus not necessarily excluded under the rule.
While the focus of analysis here is on the existence of some fact or issue actually proved by the admission of the other acts evidence, and hence its relevance, the "materiality” requirement of the Golochowicz safeguards presents no obstacle to the admissibility of this evidence. The defendant concedes that commission of the act was a genuinely contested issue in this case; indeed, he describes it as the "only genuine controversy.”
If it could be shown in this case that defendant did indeed follow a common scheme or plan in committing such acts against young children, it would defy logic to limit the use of that evidence to proof of identity or state of mind. The former will never be in dispute where the defendant and the victim know each other, and the defendant’s state of mind is not an element of many of the offenses set forth in the criminal sexual conduct act. Yet, in many cases such evidence might be not only relevant to the determination of defendant’s guilt or innocence, but also material in the sense required by Golochowicz, as proof that the act was committed. As explained in 2 Wigmore (Chadbourn rev), Evidence, §304, p 249, "[w]hen the very doing of the act charged is yet to be proved, one of the evidential facts receivable is the person’s design or plan to do it . . . ,”
We agree with the defendant, however, that the photograph was in this case inadmissible as evidence of the defendant’s scheme, plan, or system in doing the charged act, since in our view the record in this case does not establish a "true plan” on defendant’s part. This is not a case in which the evidence of the uncharged act shows "that the defendant in fact and in mind formed a plan including the charged and uncharged crimes as stages in the plan’s execution.” Imwinkelried, §3:21, p 53. The defendant in this case did not have a single plan which encompassed both of these acts, and it does not appear on this record that the acts were in different stages of the same, comprehensive plan. The trial court, therefore, erred in admitting the photograph, on this record, as evidence of the defendant’s scheme, plan, or system in committing the act._
B
The prosecution also argued that the photograph was admissible to show the defendant’s modus operandi, and to corroborate the victim’s testimony. Again, however, we cannot find the photograph admissible for either of these purposes. Like proof of a common scheme, plan, or system, evidence of the defendant’s modus operandi in committing acts such as this clearly would be material to establish the doing of the act in this case. Yet, without any testimony from the other acts witnesses to the circumstances surrounding the taking of the photograph, the photograph alone does not establish such an inference. On this record, therefore, the photograph was not admissible to prove the defendant’s modus operandi.
Nor, under existing precedent, can the photograph be received as evidence "corroborative” of the victim’s testimony. The prosecution refers to our decision in People v DerMartzex, 390 Mich 410; 213 NW2d 97 (1973), in which this Court found admissible evidence of other acts of sexual intercourse between the defendant and the victim to corroborate the victim’s testimony, when to exclude such evidence would make the victim’s testimony seem incredible, and suggests that we find a similar use for the other acts evidence in this case. However, this Court has already declined to extend the DerMartzex rule once to cases involving prior acts between the defendant and persons other than the complainant. People v Jones, 417 Mich 285; 335 NW2d 465 (1983).
None of the remaining listed purposes, proof of motive, opportunity or preparation, offers any hope for admitting the photograph either. On a better record the photograph might have gone some distance toward establishing a motive on the defendant’s part for committing the charged act (i.e., to get a picture of it), which in turn could have been used as probative evidence of the commission of the act. If, for example, the record established that, as the victim testified the defendant told him, the defendant was providing pictures of himself and "some other guys” to a "lady friend” , in prison, the photograph well might have tended to show, along with that other evidence, the defendant’s motive in committing the charged act. The picture also might have helped to establish motive if it were shown that the defendant was selling similar photographs.
On this record, though, no particular motive on the defendant’s part is established by the photo graph. Similarly, neither opportunity nor preparation seems particularly well suited to this case. Nor has the prosecution suggested any alternative intermediate inference, nor do we believe that one has been established on this record. We must conclude, then, that since no allowable intermediate inference is established by the photograph, which inference is in turn probative of the ultimate issue in this case, the commission of the act, the trial court erred in admitting it.
Since we find that the proffered evidence does not meet the second part of the Golochowicz test, it is unnecessary to discuss at any great length its two remaining parts. We do observe, however, that if on retrial the prosecution is able to establish some permissible intermediate inference, whether listed in MRE 404(b) or not, it need only tend logically and reasonably to prove the ultimate issue of the commission of the act — or any other fact or issue in dispute — in order to be "material” as required by Golochowicz.
As for the fourth part of the Golochowicz test, we note only that the question whether the proffered evidence is more probative than prejudicial can be answered only once a proper purpose for the evidence has been identified. In this case, then, that determination must await explanation by the prosecution of some proper use for the photographs.
CONCLUSION
We hold that on the facts of this case the photograph was improperly admitted, since the prosecution failed to establish a proper purpose for it under MRE 404(b). We therefore reverse the defendant’s conviction.
We conclude, however, by acknowledging that the proper and improper purposes of other acts evidence are so variable, the state of proofs regarding materiality so infinite, and the precedents and commentators so inconsistent, that a rule of minimalism is the best rule of thumb in this area. Beyond the traditionally defined limits of other acts evidence, the prosecution is well advised to carefully consider in each case whether there is a proper purpose for the admission of the evidence that rests on some special circumstance of the other act, and whether that evidence is not only relevant, but material, at the time it is offered. The extraordinary proliferation of decisions under rule 404(b) admits of no further guidance.
Riley, C.J., and Brickley and Griffin, JJ., concurred with Boyle, J.
Levin, J.
Robert Engelman was convicted of third-degree criminal sexual conduct on evidence tending to show that he placed his mouth on the penis of a fifteen-year-old boy. At trial the prosecution introduced in evidence a photograph of Engel man casually standing nude approximately two feet from a partially nude young woman. The question presented is whether the photograph was admissible under the "similar acts” exception to the general rule barring evidence of a defendant’s other crimes, wrongs, or acts to prove his character to show he acted in conformity therewith. We join with the majority in holding that the Court of Appeals erred in deciding that the photograph was admissible, in reversing, and in remanding for a new trial.
i
Engelman and the complaining witness, were well acquainted. He often visited Engelman’s home, and on occasion spent the night there.
Engelman was a truck driver, who received calls to make out-of-state pickups. The witness testified that he had asked Engelman to take him along on such a trip. On a weekend in July or August, 1984, Engelman agreed to let him stay at his home and accompany him if he received a call to make an out-of-state pickup. He spent Friday night at Engelman’s home without incident. On Saturday, Engelman dropped him off at home so that he could pick up some clothes. Later that day Engelman picked him up.
According to the witness, during the drive back to Engelman’s home Engelman asked him to take some pictures of Engelman for "some lady friend of his in prison that wanted some pictures of him and stuff and some other guys . . . .” He testified that he was uncomfortable with this topic and kept changing the subject. According to the witness, Engelman then asked if he would like to try on a pair of pants which Engelman had back at his home. He could have them if they fit.
After he and Engelman arrived at Engelman’s home, they proceeded to the living room. He said that Engelman brought out the pants and an instant camera. The witness, who said that he habitually wears no underwear, took off his pants and began putting the other pair on. According to the witness, Engelman — who had been sitting on his knees in front of him — then leaned forward, put his mouth on the witness’ penis, and took a photograph of the act. He said that after about ten seconds he pulled away, and told Engelman that he was going to take a shower.
According to the witness, while he was showering Engelman appeared nude, opened the shower curtain, and took another picture. The witness told him to get out, and he left. He said that he then finished showering and returned to the living room, where he watched tv and talked to Engelman. According to the witness, Engelman apologized and said that the pictures were taken for "the lady in prison.” The witness spent the night at Engelman’s and accompanied him on an over night out-of-state trip the next morning. He reported no untoward incidents during the trip.
The photographs the witness said were taken of him were not found during the search that produced the photograph of Engelman and the young woman.
Engelman testified that he did not ask the witness to take pictures, or try on pants, that he did not place his mouth on the witness’ penis, and did not take pictures of that act or of him showering. Engelman’s lawyer attacked the witness’ credibility, focusing on discrepancies between his testimony concerning the out-of-state trip and company records, and on his poor scholastic record and troubled personal life.
The judge allowed the photograph of Engelman and the partially nude woman to be introduced in evidence on the basis that it showed a common scheme or plan by Engelman.
The Court of Appeals held that the photograph was properly admitted to show Engelman’s "scheme, plan, or system in doing an act,” and to bolster the witness’ credibility. Additionally, the Court held that because the judge twice instructed the jury on the limited use for which the photograph was admitted, any prejudicial effect "did not substantially outweigh” the photograph’s probative value.
ii
The general rule is that evidence of a defendant’s prior misconduct is not admissible in evidence unless it is offered for a purpose other than to show the defendant’s propensity to commit crime.
The rationale underlying this long-established rule of exclusion, well rooted in the common law, is that the jury is to decide each case solely on the basis of the evidence indicating that the defendant committed the particular act or acts charged. Evidence showing other misconduct of the defendant is therefore generally excluded out of concern that the jury will convict on the basis of what it sees as the defendant’s apparent propensity to commit particular crimes:
The policy consideration underlying general exclusion of similar bad-acts evidence for substantive purposes is the desire to avoid the danger of conviction based upon a defendant’s history of other misconduct rather than upon the evidence of his conduct in the case in issue. [People v Golochowicz, 413 Mich 298, 308; 319 NW2d 518 (1982).]
Over one hundred years ago, this Court said in People v Schweitzer, 23 Mich 301, 304 (1871):
The general rule is well settled that the prosecution are not allowed to prove the commission of another and distinct offense, though of the same kind with that charged, for the purpose of rendering it more probable in the minds of the jury that he committed the offense for which he is on trial; and this would be the natural and inevitable effect upon the minds of the jury, of the admission of such evidence, on whatever ground or pretense it might be admitted; and the defendant would thus be prejudiced on the trial of the offense charged, by proof which he has no reason to anticipate, of an offense for which he is not on trial, and to which, when properly called upon to defend, he may have a perfect defense.
Evidence of a defendant’s prior misconduct may, however, be admitted where it is probative of something other than the defendant’s propensity to commit crime. To qualify for admission there must be some special quality or circumstance of the prior misconduct, some link between the prior misconduct and the crime charged, that tends to prove one or more of the following: the defendant’s identity; absence of mistake or accident; the defendant’s motive, intent, scheme, plan, or system in doing the act; or the defendant’s opportunity, preparation, and knowledge:
Evidence of other crimes, wrongs, or acts is not admissible to prove the character of a person in order to show that he acted in conformity therewith. It may, however, be admissible for other purposes, such as proof of motive, opportunity, intent, preparation, scheme, plan, or system in doing an act, knowledge, identity, or absence of mistake or accident when the same is material, whether such other crime, wrongs, or acts are contemporaneous with, or prior or subsequent to the crime charged. [MRE 404(b)- Emphasis added.][ ]
The clause — "when the same is material” — does not appear in the Federal Rules of Evidence, from which the language of the Michigan rule is derived. The concept that materiality is required is, however, well established in the federal cases.
This Court in Golochowicz, supra, p 309, set forth a four-part test to determine when this special link has been established:
—The prosecution must prove by substantial evidence that the defendant actually committed the prior acts sought to be introduced;
—The prior misconduct must tend to prove some fact or issue other than the defendant’s bad character;
—The fact, which the evidence of prior misconduct tends to prove, must be material in that it relates to a proposition "in issue” in the case;
—The probative value must not be substantially outweighed by the danger of unfair prejudice.
m
The other misconduct evidence offered in this case fails to satisfy two of the four requirements stated in Golochowicz. The only requirement that was clearly satisfied was that the prosecutor show by substantial evidence that Engelman had committed the other act. _
A
The photograph does not satisfy the materiality requirement because it does not tend to prove — in a manner consistent with MRE 404(b) — any proposition in issue.
Engelman was charged with third-degree criminal sexual conduct for allegedly placing his mouth on the witness’ penis. The elements of this offense include that the accused engaged in "sexual penetration” with a person "at least 13 years of age and under 16 years of age.” It is uncontested that at the time of the alleged conduct the witness was fifteen years old. The only element of the offense in issue was whether the act of "sexual penetration” occurred. The only factual issue in dispute was whether Engelman had in fact placed his mouth on the witness’ penis. Unless the photograph tended to prove that Engelman had done so, it was not admissible.
Engelman’s prior sexual conduct with adolescents was not material under any of the rationales enumerated in MRE 404(b):
—Identity was not in issue. Engelman did not claim that someone else fellated the witness.
—Absence of mistake or accident was not in issue. Engelman did not claim that he leaned forward and placed his mouth on the witness’ penis by mistake.
—Engelman’s motive or intent was not in issue. Where criminal sexual conduct in the third degree is charged on the basis that the act was committed with an underage person, proof of the actor’s state of mind is not required; proof that the defendant committed the sexual act is sufficient.
—Opportunity, preparation, or knowledge was not in issue. Engelman did not claim that he could not have fellated the witness because he did not know how to do so, or that he did not have sufficient opportunity, or that he could not have made the preparations that commission of the act would have required.
—"Scheme, plan, or system in doing an act” is not an issue. Evidence of a "scheme, plan, or system in doing an act” that links the other conduct with the crime charged is admissible only to prove a proposition that is in issue. Showing that the defendant operated according to a common scheme or plan is not an end in itself. Otherwise, the common scheme or plan exception would swallow the general rule. The prosecutor could always theorize that the defendant’s prior conduct was part of some ultimate scheme or plan, or a series of separate schemes or plans, and obtain admission of any of a defendant’s other conduct under such a sweeping definition.
Thus, the photograph was not admissible on the basis that it was probative of identity, absence of mistake or accident, motive, intent, opportunity, preparation, or knowledge. Those were not material issues.
To the extent a photograph showing Engelman standing nude approximately two feet from a partially nude young woman renders more probable the fact that Engelman placed his mouth on the penis of a young man, the photograph’s probative value is based on the inference that since Engelman is the type of person who seduces or attempts to seduce children — a character trait allegedly shown by the photograph — he placed his mouth on the witness’ penis. This, of course, is the inference prohibited by MRE 404(b). Accordingly, the Court of Appeals erred in holding that the photograph satisfied the materiality requirement of MRE 404(b).
Analogous is People v Major, 407 Mich 394; 285 NW2d 660 (1979). There, the defendant was convicted of second-degree criminal sexual conduct for kissing the breast of an eleven-year-old girl. Major denied that he committed the act. At trial, the judge admitted in evidence under the "similar acts” exception the testimony of two other young girls that Major had on prior occasions exposed himself in their presence. One of the girls stated that Major had masturbated and touched her chest. The trial judge and the Court of Appeals held that the testimony was admissible as "similar acts” to show Major’s motive and intent.
This Court reversed, and ruled that the "similar acts” testimony offered at Major’s trial failed to satisfy the materiality or the probatory requirements. Other than showing that Major had misbehaved sexually in the past, the other misconduct testimony was not probative of his having subsequently kissed the breast of this eleven-year-old girl. Nor was the testimony material.
Intent and motive were not material issues in Major:
Except to the extent that proof of all criminal acts requires proof of wrongful purposes or mens rea, the defendant’s motive or intent were not material in this case in the sense of being propositions separately in issue. The defendant made no claim, for example, that he kissed [the complaining witness] unintentionally or with some innocent intent or purpose nor did he claim he did so out of any justifiable motive. Had he made such claims in defense or explanation of the behavior attributed to him, he would have placed his intent or motive in issue and thus constituted them propositions material to the case in the sense that term is used in the statute. Had that been the situation, evidence of the prior sexual acts may have been admissible as tending to show that since he performed similar acts of sexual degeneracy on small girls on earlier occasions, his claim that his intent and motive were innocent in this case is unlikely to be true. [Id., p 400. Emphasis added.]
B
In the instant case, the Court of Appeals said:
The photograph is probative evidence of defendant’s scheme, plan, or system in doing an act, since it does depict defendant and a minor child in the nude in defendant’s living room while the child was wearing a nightgown that defendant had bought her. Further, the evidence is probative of the victim’s version of what happened since the victim and defendant were the only witnesses to the alleged incident involving the victim. Finally, the trial court twice gave jury instructions on the limited use for which the photograph was admitted. Consequently, the prejudicial effect that the photograph may have had on the jury did not substantially outweigh its probative value.[ ] [Citations omitted; emphasis added.]
It is not enough that the photograph tended to prove a "scheme, plan, or system in doing an act.” Showing that the defendant operated according to a common scheme or plan is not an end in itself. Evidence of a "scheme, plan, or system in doing an act” that links the other conduct with the crime charged is admissible only to prove a material proposition.
To the extent the photograph of Engelman and the young woman tended to prove a common scheme, plan, or system of photographing the seduction of young persons, the photograph still did not prove a material issue in dispute. Identity, absence of mistake or accident, motive, intent, opportunity, preparation or knowledge, were not, again, in issue. The only issue in dispute was whether the act Engelman was charged with committing in fact occurred.
Proof of a common scheme or plan is generally offered to prove identity where there is ample evidence that a crime has been committed and the disputed issue is whether the accused was the person who committed it. Proof of a common scheme or plan may establish identity in several ways.
First, the prosecutor may through proof of the defendant’s other misconduct establish that the defendant acted according to a certain modus operandi that also was followed in the commission of the charged offense. The more peculiar the modus operandi, the more it acts as a signature, identifying the defendant as the perpetrator.
Second, the prosecutor may prove identity by showing that the defendant’s commission of the crime charged followed logically from a plan that can be inferred from the defendant’s other misconduct. This use of the common scheme or plan rationale should be carefully limited to avoid confusion that would result in the improper admission of other misconduct to establish only propensity to commit an offense.
Suppose that the defendant was accused of murdering one of his siblings. The prosecutor would be permitted to introduce evidence showing that the defendant had also murdered or attempted to murder his other siblings in hope of becoming the sole heir to his parents’ estate. Proof of the defendant’s other misconduct would be admissible, not because it shows a propensity to kill, but because it shows that the defendant had a common scheme or plan to kill his siblings, including the sibling in the crime charged, in hope of becoming the sole heir. Again, a crime has clearly been committed, and proof of a common scheme or plan is offered to prove the identity of the perpetrator — not whether a crime has been committed.
By contrast, in this case whether a crime was committed is the central disputed issue. Whether or not a crime was committed — whether Engelman had in fact placed his mouth on the witness’ penis —was the central factual issue at trial. Proof of a common scheme or plan by which Engelman seduced adolescents was offered not to prove identity, but rather to prove that a crime had in fact been committed. To admit evidence of a defen dant’s other misconduct to show that a charged offense had in fact been committed is to allow the admission of propensity evidence: because Engelman appears to have previously seduced an adolescent, it is likely or possible that he did it again.
c
This misuse of propensity evidence is closely tied to bolstering the witness’ credibility, the other rationale under which the Court of Appeals held the trial court properly admitted the photograph. The photograph tended in some measure to corroborate certain collateral aspects of his testimony (nudity, alcohol, photographs) and thus may have assisted the jury in determining whether it was the witness or Engelman who was telling the truth.
Bolstering a witness’ credibility is not, however, a sufficient basis on which to admit evidence of a defendant’s other misconduct. If similar act evi dence were admissible for the purpose of assisting the jury in deciding credibility, this new exception, however it might be disguised or characterized ("common scheme, plan or system”), would swallow the general rule barring the admission of a defendant’s other misconduct because credibility is an issue in most every case. As this Court said in Schweitzer, supra, p 305:
[E]vidence of [another] offense could not be admitted for the collateral, or at least mere subordinate, purpose of corroborating a witness in the cause. This would be to give more importance to such subordinate or incidental question than to the principal question in issue, the guilt or innocence of the party on trial. The admission of this evidence was therefore clearly erroneous.[ ]
D
This Court, over half a century ago, in People v Dean, 253 Mich 434; 235 NW 211 (1931), dealt with a case factually similar to this case. Dean was convicted of committing an act of gross indecency with a seventeen-year-old boy. The judge had permitted the prosecution to prove Dean’s commission of similar acts with other young boys. Construing the statute, identical in substance with MRE 404(b), this Court reversed.
Proof of Dean’s other misconduct, showed only propensity, and was therefore inadmissible:
The question of the defendant’s "motive, intent, the absence of, mistake or accident on his part” is clearly not involved in the charge as laid. Neither do we think that it can be said that in the commission of the crime charged he was acting in conformity with any "scheme” or "plan” theretofore formulated by him, or that proofs of similar acts with others in any way tend to inform the court or jury as to his "system” in doing the act complained of. [Id., pp 436-437. Emphasis added.]
The only purpose of submitting such proof in this case was to render it more probable in the minds of the jury that the defendant committed the offense with which he is charged, and on reason as well as authority it was not admissible for that purpose. [Id., p 438.]_
IV
The Court of Appeals also erred in concluding that the photograph’s probative value, if any, was not substantially outweighed by its prejudicial effect.
A photograph showing Engelman casually standing nude approximately two feet from a partially nude young woman is at most minimally probative of a scheme, plan, or system involving subsequent oral-genital contact between Engelman and the witness — which scheme, plan, or system is not an "issue” in itself. There is a considerable difference between evidence that Engelman stood nude next to a partially nude young woman and the charge that he placed his mouth on a fifteen-year-old boy’s penis. The latter involves intimate physical contact, and implies homosexuality. The photograph does not show intimate physical contact and implies heterosexuality. Looking at the photograph alone, a reasonable juror would most likely conclude that the witness was interested in girls and would eschew boys.
The charged offense is a felony, while standing nude next to a partially nude young woman is at most a misdemeanor. Allowing the introduction of evidence that might at the most tend to show commission of a misdemeanor, and possibly no offense at all, to convict Engelman of a felony would be to compound the bootstrapping in allowing the introduction of evidence that has no bearing on any disputed issue other than to establish the defendant’s propensity for committing the type of crime charged — the purpose for which evidence of other acts is inadmissible.
It may be offensive to take and collect photographs of young persons in the nude, but it is not claimed or charged that it is a criminal offense to do so. The issue in this case was not whether Engelman photographed the witness but whether Engelman fellated him. The photograph he said Engelman took of the charged offense would clearly be admissible. A photograph evidencing a possible tryst with another person, young or old, male or female, does not tend to prove — in a manner consistent with MRE 404(b) — any material factual issue in dispute.
The photograph’s prejudicial effect substantially outweighed any probative value. The photograph shows Engelman standing nude next to an apparently young, partially nude woman. The inference might be drawn that they had engaged or were about to engage in sexual activity. In common parlance, the photograph has a significant potential to convey the impression that Engelman is a pervert, a "crime” for which he was not on trial.
The prejudice most likely caused by the negative impression created by such an inference is so great that the photograph should be admitted only upon a strong showing of probativeness and materiality. The photograph, on the record in the instant case, is at most minimally probative with respect to Engelman’s scheme, plan, or system — which is not an "issue” in itself. The photograph was minimally probative with respect to the material issue whether Engelman committed the crime charged, but that probativeness is the result of an inference of Engelman’s propensity to commit the crime charged — the inference that is forbidden by MRE 404(b).
In Major, this Court held that prior testimony that the defendant had exposed himself to two young girls and kissed the breast of one of them was not probative or material respecting the charge that he kissed the breast of an eleven-year-old girl. Similarly, Engelman’s standing nude next to a partially nude young woman is not probative or material respecting the charge that he placed his mouth on the penis of a fifteen-year-old boy.
Cavanagh and Archer, JJ., concurred with Levin, J._
The defendant was also charged with criminal sexual conduct involving the victim’s cousin, and was acquitted.
The victim testified that he visitéd the defendant approximately fifty times and spent the night with defendant on at least ten occasions. The defendant indicated that the victim had spent the night at least "half a dozen” times.
The defendant at this time was employed by a trucking firm. The victim had on occasion expressed his desire to accompany the defendant on one of his out-of-state trips. Because the defendant was never certain when he would receive such an assignment, he suggested that the victim spend a weekend with him, so that in the event he was called out of town the victim could go along.
The pants turned out to be the victim’s.
The victim stated that he normally did not wear underwear and was not wearing underwear on this occasion.
The defendant had also moved to suppress the photographs on the ground that they were the product of an illegal search. This motion was denied, and that ruling is not part of this appeal.
The two victims referred to were the victim and his cousin, as to whom a separate charge was pending.
There is a can of beer on the television set next to which the girl is standing.
The defendant renewed this motion in limine just prior to trial on September 16,1985, but that motion also was denied.
The defendant had two previous convictions in 1979 for second- and third-degree criminal sexual conduct involving two minor females.
People v Engelman, unpublished opinion per curiam of the Court of Appeals, decided March 18,1987 (Docket No. 90335).
MRE 404(b) is substantially similar to Federal Rule of Evidence 404(b), which provides:
(b) Other crimes, wrongs, or acts. Evidence of other crimes, wrongs, or acts is not admissible to prove the character of a person in order to show action in conformity therewith. It may, however, be admissible for other purposes, such as proof of motive, opportunity, intent, preparation, plan, knowledge, identity, or absence of mistake or accident.
See Stone, The rule of exclusion of similar fact evidence: America, 51 Harv L R 988,1026, n 190 (1938).
Id.
As the rule indicates, there are numerous other uses to which evidence of criminal acts may be put, and those enumerated are neither mutually exclusive nor collectively exhaustive. [McCormick, Evidence (3d ed), § 190, p 558.]
A slightly more elaborate explanation of this "forbidden” theory of relevance is undertaken by Professor Imwinkelried in his treatise, Uncharged Misconduct Evidence, § 2:18, pp 48-49:
[T]he thrust of this theory is the use of the defendant’s uncharged misconduct as circumstantial proof of conduct. More specifically, the forbidden theory rests on two inferences that pose serious legal relevance issues.
[T]he first step in this theory of logical relevance is inferring the defendant’s character from the defendant’s prior misdeeds. Rule 404(b) refers to this step as introducing the uncharged acts "to prove the character of a person.” This step poses the legal relevance danger of prejudice. In the process of deciding whether to draw the inference, the jury must focus on the type of person the defendant is. . . .
The second step in this theory of logical relevance compounds the legal relevance dangers. The second step is inferring the defendant’s conduct on a particular occasion from his or her subjective character. In the words of Rule 404(b), the plaintiff or prosecutor introduces the evidence of the defendant’s subjective character "in order to show that he acted in conformity therewith.”
When the proponent uses the defendant’s subjective character as proof of conduct on a particular occasion, there is a substantial danger that the jury will overestimate the probative value of the evidence.
As explained above, there may be other ultimate issues for which the other acts evidence is offered. See, e.g., People v Oliphant, 399 Mich 472; 250 NW2d 443 (1976), in which the other acts evidence was offered to show lack of consent in a rape case. These three uses are identified only as "usual” uses of the other acts evidence.
Nor has either the prosecution or the defendant identified some other fact or issue in dispute, such as nonconsent. People v Oliphant, n 17 supra.
The four-part test established by Golochowicz, supra, does not serve to establish a necessary "special link” between the prior misconduct and the crime charged, as the concurring opinion states (post, p 230). Rather, the "special quality or circumstance,” of the second requirement supplies the "link,” Golochowicz at 3Í0, between the charged and uncharged offenses and ensures that the evidence of the separate offense is probative of some fact other than the defendant’s character. The four requirements are evidentiary safeguards to warrant proper submission into evidence.
The first part of the Golochowicz test is clearly satisfied. There is no dispute that the defendant actually committed the other act sought to be introduced. The photograph, which shows the defendant standing nude, in his own home, with a minor female who is exposing herself, speaks for itself.
People v Engelman, n 11 supra, p 2.
See, e.g., Webster’s New Collegiate Dictionary (1985), which defines "pedophilia” in terms that are not gender specific as a "sexual perversion in which children are the preferred sexual object.”
As the concurrence points out, the "gender distinction” is indeed germane to an assessment of the photograph’s probative value. Post, p 241, n 20. We question, however, its assertion that whether a man who has appeared nude in a photograph with a partially nude young girl is more likely to have committed the charged act with this minor victim is "a question for the social scientists . . . .” Id., p 241, n 20. On the contrary, it is in this context clearly a question for the trial judge alone, who must rely in making his determination on whatever resources are available, including such matters of "common knowledge.
See also 22 Wright & Graham, Federal Practice & Procedure, § 5244, p 502 "[E]vidence of a plan may also be admissible to show the doing of the criminal act.” As the authors of that treatise explain, proof of a plan "need not be sufficient [by itself] to prove the act in order to be admissible to support other evidence that the crime was committed.” Id., n 27. Here, there was also the testimony of the victim.
See 1 Wharton, Criminal Evidence (14th ed), § 186, pp 786-787, stating that evidence "is admissible when it tends to establish a common plan, design, or scheme embracing a series of crimes, including the crime charged, so related to each other that proof of one tends to prove the other”; 22 Wright & Graham, Federal Practice & Procedure, § 5244, pp 499-500; 2 Weinstein, supra, ¶ 404[16], pp 404-118 through 404-127.
We do not mean to suggest, however, that under existing precedent other-acts evidence which is corroborative of the victim’s testimony must necessarily be excluded. Such evidence may be admissible, for example, to rehabilitate a witness after a cross-examination placing his credibility in issue. Nor do we reject the appropriateness of the adoption of a rule such as that suggested by the prosecution. We note the existence of proposed rule of evidence MRE 803A, published for comment June 1, 1988, at 430 Mich 1203, creating a hearsay exception for statements made by children under the age of ten describing any sexual acts performed with or on the declarant by another. This Court may eventually reconsider our decision in Jones not to extend the DerMartzex rule in light of the concerns that led us to propose this change in the hearsay rule.
Our inquiry is not ended simply because the theories of admissibility advanced by the prosecutor or accepted by the trial court ultimately are found incorrect. While it is the prosecution’s duty "to identify, with specificity, the purpose for which such evidence is admissible,” Golochowicz, supra, p 314, for the benefit of the trial court, its failure to advance the correct theory at that time is not alone grounds for reversal; likewise, the trial court’s own misidentification of the grounds for admission of the evidence in and of itself does not merit overturning its decision to allow it. See, e.g., Templin v Nottawa Twp, 362 Mich 257; 106 NW2d 825 (1961); Plec v Liquor Control Comm, 322 Mich 691; 34 NW2d 524 (1948).
Evidence of motive "can ... be relevant to prove the commission of the actus reus.” Imwinkelried, § 4:19, p 43. See also, 22 Wright & Graham, supra, § 5240, p 480 ("Evidence of motive may be offered to prove that the act was committed . . .”); 1 Wharton, n 25 supra, § 185, p 782 ("Evidence of motive which suggests the doing of the act charged is always admissible . . .”).
Again, the prosecution is not limited to the purposes enumerated in the rule. Any purpose which does not violate the "forbidden” inference is allowable.
As noted on p 220, we do not believe that this case turns on an analysis of the materiality element discussed by the concurrence. In our view, the picture’s inadmissibility results from the prosecution’s failure to point to some fact or issue other than the defendant’s character that is proved by the picture, not its failure to then prove the materiality of that fact or issue.
The concurrence addresses this issue in light of the ruling below that the evidence was admissible to show scheme, plan, or system. Since we find that the photograph does not, in the first instance, establish a scheme, plan, or system on defendant’s part, we need not discuss its probative and prejudicial characteristics. We do, however, view with some skepticism the defendant’s argument that the photograph is "devastatingly prejudicial.” The photograph shows only frontal nudity, and the only physical contact involved is the defendant’s arm around the girl’s shoulders. As the concurrence points out, the photograph "might at the most tend to show commission of a misdemeanor, and possibly no offense at all . . . .” Post, pp 241-242.
MCL 750.520d; MSA 28.788(4).
MRE 404(b) provides:
Evidence of other crimes, wrongs, or acts is not admissible to prove the character of a person in order to show that he acted in conformity therewith. It may, however, be admissible for other purposes, such as proof of motive, opportunity, intent, preparation, scheme, plan, or system in doing an act, knowledge, identity, or absence of mistake or accident when the same is material, whether such crime, wrongs, or acts are contemporaneous with, or prior or subsequent to the crime charged.
At trial, the prosecutor and defense counsel presented contrasting rationales for this relationship. The witness was a troubled young man. He had repeated several grades in school, was in a special education program, and often cut classes. At the time of the alleged incident, his parents were obtaining a divorce. The prosecutor attempted to portray Engelman as befriending the witness to sexually abuse him. Defense counsel, on the other hand, portrayed Engelman as a helpful "big brother,” acting as a friend to a troubled young man.
The records of the trucking company for which Engelman drove indicated that he did not make a trip similar to the one described by the witness in July or August of 1984. He did make such a trip in late June, but it was on a Thursday, not a Sunday.
Evidence of other crimes, wrongs, or acts is not admissible to prove the character of a person in order to show that he acted in conformity therewith. [MRE 404(b). Emphasis added.]
MRE 404(b) lists purposes for which evidence of prior misconduct is customarily admitted. We agree with the view expressed in the majority opinion (see ante, pp 212-213) that there may be permissible bases for admission other than those specified.
Evidence of other crimes, wrongs, or acts is not admissible to prove the character of a person in order to show action in conformity therewith. It may, however, be admissible for other purposes, such as proof of motive, opportunity, intent, preparation, plan, knowledge, identity, or absence of mistake or accident. [FRE 404(b).]
(1) [Tjhere must be substantial evidence that the defendant actually perpetrated the bad act sought to be introduced; (2) there must be some special quality or circumstance of the bad act tending to prove the defendant’s identity or the motive, intent, absence of mistake or accident, scheme, plan or system in doing the act and, in light of the slightly different language of MRE 404(b) we add, opportunity, preparation and knowledge; (3) one or more of these factors must be material to the determination of the defendant’s guilt of the charged offense; and (4) the probative value of the evidence sought to be introduced must not be substantially outweighed by the danger of unfair prejudice. [Golochowicz, supra, p 309. Emphasis added.]
The photograph established that Engelman was standing nude two feet from a partially nude young woman.
With respect to the relevancy requirement, we assume, arguendo, that the photograph may have been probative of some immaterial fact or issue.
MCL 750.520c(l)(a); MSA 28.788(3)(l)(a).
The Court adopted the definition set forth in McCormick, Evidence (2d ed), § 185, p 434, in defining materiality:
"[Materiality in its more precise meaning looks to the relation between the propositions for which the evidence is offered and the issues in the case. If the evidence is offered to prove a proposition which is not a matter in issue or probative of a matter in issue, the evidence is properly said to be immaterial. As to what is 'in issue,’ that is, within the range of the litigated controversy, we look mainly to the pleadings, read in the light of the rules of pleading and controlled by the substantive law.” [Id., p 399.]
People v Engelman, unpublished opinion per curiam of the Court of Appeals, decided March 18,1987 (Docket No. 90335), slip op, p 2.
With respect to the use of other acts evidence to corroborate the witness’ testimony, see section m, part c.
In People v Kelly, 386 Mich 330; 192 NW2d 494 (1971), proof of the defendant’s modus operandi in a subsequent rape aided in identifying him as the rapist in the crime charged.
Other jurisdictions that have considered the question have reached the same conclusion. In Bolden v State, 720 P2d 957 (Alas App, 1986), defendant Bolden was convicted of sexually abusing his eleven- and twelve-year-old daughters. At trial the prosecutor introduced evidence that Bolden had also sexually abused other children. The court held that the trial court had erred in admitting the other misconduct evidence. As in this case, "[t]he only real question . . . was whether Bolden committed the acts with which he was charged. The only apparent purpose for admitting the evidence of the other alleged acts appears to be to corroborate the testimony of Bolden’s daughters that they were molested.” Id., p 960. The "common scheme or plan” exception did not apply. "[T]o be admissible, evidence of other crimes must relate to an actual issue in dispute at trial, such as the identity of the perpetrator or a claim that the alleged crime was an accident or mistake.” Id., p 961. Because such matters were not in issue, the other misconduct evidence was probative solely of Bolden’s propensity to molest children, and therefore inadmissible.
See also People v Tassell, 36 Cal 3d 77; 201 Cal Rptr 567; 679 P2d 1 (1984).
This Court has developed an exception where the defendant’s other sexual misconduct involves the complainant. See People v DerMartzex, 390 Mich 410, 413; 213 NW2d 97 (1973); People v Jenness, 5 Mich 305, 323-324 (1858).
By contrast, this case presents the question whether a defendant’s sexual misconduct with persons other than the complainant may be admitted to bolster the complainant’s credibility. This other misconduct does not reveal the full relationship between the defendant and the complainant, but rather simply tends to show Engelman’s propensity to seduce or attempt to seduce adolescents.
Where the victim is unable to testify and hence there is no issue of credibility, propensity evidence may be admissible, on a rationale similar to that which allows the admission of such evidence to negative accident or mistake, to negative the inference that morbidity or mortality was the result of natural causes.
Cf. United States v DeCicco, 435 F2d 478, 484 (CA 2, 1970) (where intent was in issue and a prosecution witness’ story, if believed, would lead "ineluctably to the conclusion that the defendants knew what they were doing,” the probative value of prior misconduct on the issue of intent was far outweighed by its prejudicial effect), Crinnian v United States, 1 F2d 643, 645 (CA 6, 1924), State v Roach, 109 Idaho 973, 976; 712 P2d 674 (1985), People v Ogunmola, 39 Cal 3d 120; 215 Cal Rptr 855; 701 P2d 1173 (1985), and Bolden v State, n 15 supra. See also State v Goldsmith, 122 Wis 2d 754; 364 NW2d 178 (1985), and State v Munz, 355 NW2d 576, 581 (Iowa, 1984).
In any criminal case where the defendant’s motive, intent, the absence of, mistake or accident on his part, or the defendant’s scheme, plan or system in doing an act, ip material, any like acts or other acts of the defendant which may tend to show his motive, intent, the absence of, mistake or accident on his part, or the defendant’s scheme, plan or system in doing the act, in question, may be proved, whether they are contemporaneous with or prior or subsequent thereto; notwithstanding that such proof may show or tend to show the commission of another or prior or subsequent crime by the defendant. [1927 PA 175; ch 8, § 27 (Code of Criminal Procedure), 1929 CL 17320; MCL 768.27; MSA 28.1050.]
We do not suggest that the photograph was not "relevant” — as that term is defined in MRE 401 — simply because the "victim” in the photograph was female and the alleged victim in this case is male. The gender distinction is, however, germane to an assessment of the photograph’s probative value.
In any event, the question whether a man who has appeared nude in a photograph with a partially nude young woman is more likely (than a man who has not appeared in such a photograph) to have placed his mouth on a young man’s penis, would seem to be a question for the social scientists, not the compilers of a "Webster’s” dictionary. See 2 Weinstein, Evidence, ¶ 404[11], p 404-83. Cf. ante, p 219, n 22.
See MCL 750.335a; MSA 28.567(1) (indecent exposure).
"One need not display an imposing list of statistics to indicate that community feelings everywhere are strong against sex offenders. . . . Once the accused has been characterized as a person of abnormal bent, driven by biological inclination it seems relatively easy to arrive at the conclusion that he must be guilty, he could not help but be otherwise.” [2 Weinstein, Evidence, ¶ 404[11], p 404-82.]
We acknowledge that propensity evidence is logically relevant. A person who has committed an offense may be more likely to commit that or another offense than a person who has not committed that or any other offense. If relevance alone were sufficient, MRE 404(b) would have no operative effect as a limitation on the use of propensity evidence.
See also People v Hernandez, 423 Mich 340; 377 NW2d 729 (1985) (the defendant was charged with having engaged in sexual contact with a child under thirteen years of age; evidence indicating that the defendant had previously kissed a young girl on the mouth was properly excluded under People v Major and People v Golochowicz, supra), and Ali v United States, 520 A2d 306, 309-310; 40 Cr L 2342 (DC App, 1987) (where the defendant was charged with repeatedly sexually abusing a young girl, evidence that he had also sexually abused the girl’s sister was improperly admitted because it established only impermissible propensity evidence). | [
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Griffin, J.
In view of a jury verdict of "no jurisdiction” in a child protective probate proceed ing, we are asked to determine whether the doctrine of collateral estoppel bars subsequent prosecution of the defendant for criminal sexual conduct where the factual allegations against defendant in both proceedings are essentially the same. Because the prior probate court verdict did not necessarily determine the guilt or innocence of the defendant, we hold that the principles of collateral estoppel do not apply.
i
In February, 1986, the Michigan Department of Social Services petitioned the juvenile division of the Jackson County Probate Court to take jurisdiction of a child, then three years and ten months old, on the basis of allegations that defendant, her father, had sexually abused her. The petition initiated child protective proceedings, the adjudicative phase of which leads to a determination of whether statutory grounds exist for juvenile court jurisdiction. If such grounds are found to exist and the court assumes jurisdiction, dispositional proceedings are conducted thereafter to determine what action, if any, should be taken with respect to the child. MCR 5.961 et seq.
At the time the petition was filed in probate court, the defendant father had been divorced from the child’s mother for a period of two months. Although the child lived with her mother, defendant had been awarded joint custody of the child from the date of the couple’s legal separation in February, 1985, and prior to the filing of the petition, he had physical custody of the child every weekend. However, following the filing of the petition, unsupervised visitations by the child in the home of her father were suspended.
Defendant contested the petition and requested a jury trial. After the petition was filed, but prior to the jury trial held in probate court, the prosecuting attorney, who represented the dss in the probate proceeding, filed a criminal complaint and warrant in the Jackson Circuit Court, charging defendant with second-degree criminal sexual con duct, on the basis of the same facts alleged in the probate court petition.
In the probate court trial which took place on June 16 and 17, 1986, the testimony dealt almost exclusively with the allegations of sexual abuse. At the close of the trial, the probate court instructed the jury that the issue it was to decide was whether the child came within the jurisdiction of the court. The jury was further instructed that a child comes within the jurisdiction of the court if the child’s home or environment is unfit for the child by reason of neglect, cruelty, criminality, or depravity on the part of a parent.
The jury was given a verdict form which allowed it to check off one of two verdicts: jurisdiction, or no jurisdiction. The jury returned a verdict of "no jurisdiction.”
The judge then asked the jury, "Do you say upon your oath that you find the minor ... is not a neglected minor in the manner and form as the People have in their information in this cause charged?” Each of the jury members responded affirmatively.
On July 28, 1986, the probate judge granted a motion for judgment notwithstanding the verdict, and then ordered a new trial. However, the Jackson Circuit Court subsequently reversed, reasoning that the jury verdict deprived the probate judge of jurisdiction to grant such relief.
Thereafter, the Jackson Circuit Court dismissed the criminal charges against defendant on the ground that the jury verdict in probate court determined "that the prosecution had not proved a case of sexual abuse by a preponderance of the evidence.” The Court of Appeals affirmed. 168 Mich App 384; 423 NW2d 668 (1988). We then granted leave to appeal, limited to the issue whether, in view of the prior proceedings in probate court, principles of collateral estoppel prohibited the subsequent prosecution of defendant. 431 Mich 904 (1988).
ii
Collateral estoppel precludes relitigation of an issue in a subsequent, different cause of action between the same parties where the prior proceeding culminated in a valid, final judgment and the issue was (1) actually litigated, and (2) necessarily determined. Jacobson v Miller, 41 Mich 90, 93; 1 NW 1013 (1879); Howell v Vito’s Trucking & Excavating Co, 386 Mich 37, 42; 191 NW2d 313 (1971); Restatement Judgments, §68, p 293. 1 Restatement Judgments, 2d, § 27, p 250.
We believe it is important at the outset to recognize that in the body of case law applying this principle the vast majority of cases involve the applicability of collateral estoppel where there are two civil proceedings. Cases involving "crossover estoppel,” where an issue adjudicated in a civil proceeding is claimed to be precluded in a subsequent criminal proceeding, or vice versa, are relatively recent and rare.
A
There is no set formula for determining whether relitigation of an issue is precluded by collateral estoppel. Initially it is necessary, according to the First Restatement of Judgments, to establish that the same parties are involved in both proceedings. This Court last affirmed the "same party” requirement in Howell, supra at 42, wherein we said that one of the "critical factors” in applying collateral estoppel is the determination of whether the respective litigants were parties or privy to a party to an action in which a valid judgment has been rendered.
Although the named-party plaintiff in the instant case is the People of the State of Michigan, in practical terms the party against whom collateral estoppel is asserted is the Jackson County Prosecutor, who also represented the Department of Social Services in the probate court proceeding. Defendant argues that even though the Department of Social Services was the nominal party in the earlier proceeding, both the department and the prosecutor’s office are creatures of the state and thus should be considered to be the same party. We agree. A functional analysis of the role of the prosecutor in both proceedings is appropriate in this case, and leads us to conclude that privity is sufficient to satisfy the "same party” requirement.
In analyzing whether an issue was "actually litigated” in the prior proceeding, the Court must look at more than what has been pled and argued. We must also consider whether the party against whom collateral estoppel is asserted has had a full and fair opportunity to litigate the issue. Blonder-Tongue Laboratories, Inc v Univ of Illinois Foundation, 402 US 313, 329; 91 S Ct 1434; 28 L Ed 2d 788 (1971).
It is clear that the issue of defendant’s alleged sexual abuse of his daughter was the factual focus of the jury trial in probate court. The transcript reveals that the testimony of the witnesses and the arguments of the parties centered on the allegation of sexual abuse that is also the basis of the criminal charge. At least in this sense, it can be said that the issue whether defendant sexually abused the child was "actually litigated.”
We do not overlook that the rules governing child protective proceedings in probate court are significantly different than the rules which apply to criminal trials. As we will later discuss, such procedural differences raise serious doubt about the soundness of applying "cross-over estoppel” in situations such as this case presents. However, we do not base our decision on a finding that the prosecutor was seriously disadvantaged or otherwise denied a full and fair opportunity to litigate the issue of defendant’s alleged criminal conduct. Indeed, in its brief the amicus curiae Prosecuting Attorneys Association stated that it is "fair to say that the issue was fully litigated.”
We move now to a discussion of the principal ground on which our decision rests.
B
Assuming arguendo that the issue as to which collateral estoppel is asserted has been fully litigated, we conclude that the instant case falls short with respect to another requirement, i.e., that the issue be "necessarily determined” by the judgment in the prior proceeding. An issue is necessarily determined only if it is "essential” to the judgment. 1 Restatement Judgments, 2d, §27, p 250, comment h, p 258. In order for collateral estoppel to operate as a bar to a subsequent prosecution, the jury in the earlier probate proceeding must necessarily have determined that defendant was not guilty of the criminal sexual conduct charged in the prosecutor’s complaint. MacKenzie v Union Guardian Trust Co, 262 Mich 563, 581-582; 247 NW 914 (1933).
The inability of a court to determine upon what basis an acquitting jury reached its verdict, is, by itself, enough to preclude the defense of collateral estoppel. See anno: Modern status of doctrine of res judicata in criminal cases, 9 ALR3d 203, 240. Collateral estoppel applies only where the basis of the prior judgment can be ascertained clearly, definitely, and unequivocally. See Dowling v United States, 493 US —; 110 S Ct 668; 107 L Ed 2d 708 (1990); Sealfon v United States, 332 US 575; 68 S Ct 237; 92 L Ed 180 (1948).
The verdict in the first proceeding need not explicitly have addressed the issue to be precluded, however. The fact that a verdict is a general verdict may make the determination of what issues have been decided problematic, but it does not automatically bar the application of collateral estoppel. Ashe v Swenson, 397 US 436, 444; 90 S Ct 1189; 25 L Ed 2d 469 (1970). In Ashe, the United States Supreme Court suggested that in the case of a general verdict of acquittal in a criminal trial the determination of what was necessarily determined by the verdict should start with an examination of the record of the prior proceeding and culminate in an inquiry "whether a rational jury could have grounded its verdict upon an issue other than that which the defendant seeks to foreclose from consideration.” Id. See also Dowling, supra.
That a verdict may conclusively determine certain issues by implication can be illustrated by the instant case. Had the jury in the earlier proceeding found that the probate court had jurisdiction of the child, that verdict would necessarily have determined that defendant had engaged in the conduct alleged, because that conduct was the only basis submitted to the jury for bringing her within the jurisdiction of the court. A finding that the petition’s allegations were proved by a preponderance of the evidence was thus essential to a verdict of jurisdiction.
The verdict of "no jurisdiction,” however, does not support the opposite conclusion. In the instant case, the probate judge stated to the jury:
I do instruct you that this is a child protection case. It is not a criminal case. Therefore, the issue before you is not that of guilt or innocence but the issue is whether [the child] comes within the jurisdiction of the Juvenile Division of the Jackson County Probate Court. You should not consider this proceeding to be in anyway [sic] involved with the criminal law so far as your deliberations are concerned.
The clear import of that instruction is that even if the jury believed that a criminal violation had occurred, it was not required to find the child’s home or environment to be unfit so as to warrant jurisdiction. In short, a finding of innocence was not essential to a verdict of no jurisdiction; thus, the verdict did not "necessarily determine” the issue of criminal guilt or innocence.
Furthermore, during the course of the trial the jury learned that the child’s mother had exclusive physical custody of the child and that visitations with her father had ceased. The jury might have concluded on that basis alone that the child did not require the protection of the probate court. Thus the jury’s verdict could rationally have been based on grounds other than a determination of defendant’s innocence of the allegations in the petition.
III
Apart from our conclusion that defendant’s guilt or innocence was not necessarily determined by the jury verdict in the probate proceeding, the purposes of a child protective proceeding and a criminal proceeding are so fundamentally different that application in this instance of collateral estoppel would be contrary to sound public policy.
The purpose and focus of a neglect or abuse proceeding in the juvenile division of the probate court is the protection of children. To this end, proceedings may be initiated by anyone who has information that a child is in need of the court’s protection. To maximize protection of the child, and at the same time safeguard the interests of parents whose children are the subject of a petition, the court rules provide for expedited proceed ings. The probate court’s protective function is also promoted by procedure which allows for a rehearing or a new trial whenever new evidence comes to light suggesting that the child needs court protection. MCR 5.992.
In contrast, the focus of a criminal proceeding is on the guilt or innocence of the accused. The interests of children may be affected, e.g., those related to the accused, but such interests are not taken into account in determining whether an accused is guilty of criminal charges. As the United States Supreme Court stressed in Standefer v United States, 447 US 10, 25; 100 S Ct 1999; 64 L Ed 2d 689 (1980):
"[T]he purpose of a criminal court is not to provide a forum for the ascertainment of private rights. Rather it is to vindicate the public interest in the enforcement of the criminal law while at the same time safeguarding the rights of the individual defendant.” [Quoting United States v Standefer, 610 F2d 1076, 1093 (CA 3, 1979). Emphasis added.]
The disparate purposes of the two types of proceedings argue strongly against the application of collateral estoppel. If we were to endorse the proposition that a determination of no jurisdiction in a child protective proceeding operates to collaterally estop criminal charges, we would invite the risk that the proper functions of the two proceedings would be compromised.
Typically, a child protective proceeding is initiated by the petition of a person other than the prosecutor. Once the petition is filed, however, the prosecutor must be available at the request of the probate court to review the petition for legal sufficiency and to appear at the proceedings. MCR 5.914.
To avoid the effect of collateral estoppel, if it were to be made applicable, a prosecutor would be required to develop criminal charges indicated by the petition and bring them to trial before a determination concerning jurisdiction could be reached in the probate proceeding. However, the burden of proving criminal charges beyond a reasonable doubt, added to problems presented by conflicting procedural and scheduling requirements of the two courts, would make it extremely difficult, and often impossible, for the criminal charges to be brought to trial in circuit court in advance of the jurisdiction determination in probate court.
Thus, the petitioner or the prosecutor would face an unfortunate choice that is not in the public interest: whether to proceed on the petition in probate court because of concern for the child, or to delay the probate proceeding because of concern that a verdict of nonjurisdiction would preclude criminal prosecution of the accused.
We are persuaded by public policy considerations that such an election between criminal and child protective proceedings should not be judicially imposed through the application of collateral estoppel. See Joiner v State, 500 So 2d 81 (Ala Crim App, 1986).
Our conclusion that collateral estoppel should not apply in such situations is reinforced by the Restatement of Judgments, 2d, which instructs that another exception to the general rule of issue preclusion is available when:
A new determination of the issue is warranted by differences in the quality or extensiveness of the procedures followed in the two courts or by factors relating to the allocation of jurisdiction between them .... [Id., § 28(3), p 273.]
This exception focuses on an "analysis of the comparative quality and extensiveness of the procedures followed in the two courts, of their relative competence to deal with the particular issue, and of the legislative purpose in allocating jurisdiction between them.” Reporter’s Note, 1 Restatement Judgments, 2d, § 28, p 287.
Even if it were to be assumed that the "quality” and "extensiveness of the procedures followed in the two courts” (probate and circuit) are comparable, we believe that the "competence” of the probate court to conclusively determine in a child protective proceeding the criminal guilt or innocence of an accused is necessarily compromised by the appropriate focus of the probate court on the protection of children. Further, the disparity of “legislative purpose in allocating jurisdiction” as between the two courts was underscored by the Legislature when it inserted this language in the statute under which the petition to protect the child was filed:
Proceedings under this chapter shall not be considered to be criminal proceedings. [MCL 712A.1; MSA 27.3178(598.1).][ ]
IV
Because the issue of defendant’s criminal guilt or innocence was not necessarily decided in the prior proceedings in probate court, principles of collateral estoppel do not prohibit the prosecution of defendant. Accordingly, we reverse the decision of the Court of Appeals and vacate the order dismissing the criminal charges against defendant. We remand this case to the trial court for further proceedings in conformity with this opinion.
Riley, C.J., and Brickley, Boyle, and Archer, JJ., concurred with Griffin, J.
The initial petition read:
On or about 02-13-86, [the child] was interviewed by petitioner. During this interview, [she] stated that her father had touched her "pee pee reeil hard.” While stating this, [she] showed petitioner what she meant by placing both of her hands on her vaginal area. [She] further illustrated this while using the sexually explicit dolls by placing the adult male doll’s hand on her . . . vaginal area. [She] stated that when this occurred, she had no clothes on.
[She] further revealed that she had not told her mother of her father’s actions because she was afraid of what her father would do.
After the petition was filed, the dss was represented by the Ingham County Prosecutor, who was allowed to amend the petition to add:
It is also alleged that: This touching by the father could be reasonably construed as being for purposes of sexual arousal or gratification.
The petition referred to MCL 712A.2; MSA 27.3178(598.2). As amended, the allegations fell within the scope of MCL 712A.2(b)(2); MSA 27.3178(598.2)(b)(2), which at the time provided:
Except as otherwise provided in this section, the juvenile division of the probate court shall have:
(b) Jurisdiction in proceedings concerning any child under 17 years of age found within the county:
(2) Whose home or environment, by reason of neglect, cruelty, drunkenness, criminality, or depravity on the part of a parent, guardian, or other custodian, is an unfit place for such child to live in.
The statutory grounds for juvenile court jurisdiction are found in MCL 712A.2; MSA 27.3178(598.2).
See MCL 712A.17; MSA 27.3178(598.17); also MCR 5.971(B). The child’s mother did not oppose the petition.
The criminal complaint alleged that defendant had violated MCL 750.520c(l)(a); MSA 28.788(3)(l)(a), which provides:
(1) A person is guilty of criminal sexual conduct in the second degree if the person engages in sexual contact with another person and if any of the following circumstances exists:
(a) That other person is under 13 years of age.
As defined by MCL 750.520a(k); MSA 28.788(1)00, "sexual contact” includes "the intentional touching of the victim’s or actor’s intimate parts or the intentional touching of the clothing covering the immediate area of the victim’s or actor’s intimate parts, if that intentional touching can reasonably be construed as being for the purpose of sexual arousal or gratification.”
The child testified that defendant touched her "hard” in the vaginal area, causing pain, once while she was sleeping in a living room chair, and that defendant told her not to tell her mother. She testified that defendant touched her "about five [other] times.” Karen DuPage, a family therapist, testified that she interviewed the child upon request of the Department of Social Services and that, in her opinion, the child had been molested by her father on a number of different occasions. Defendant took the stand and denied touching his daughter for any improper reason or abusing her in any way, although he admitted innocently touching her vaginal area at times when helping her use the bathroom or take a bath.
In this appeal we are not required to consider whether defendant’s prosecution is barred by the Double Jeopardy Clause of the United States Constitution. US Const, Ams V, XIV.
We use the term "collateral estoppel” to refer to issue preclusion. This Court generally uses the term "res judicata” to refer to what is often called "claims preclusion,” which covers the preclusive effect of a judgment upon a subsequent proceeding on the basis of the same cause of action. Jones v Chambers, 353 Mich 674; 91 NW2d 889 (1958).
The Second Restatement is limited to the effect of prior adjudications in civil litigation, and does not deal with the effect of a prior civil judgment in a subsequent criminal prosecution. The ensuing citations to the Second Restatement are made with this observation in mind.
We borrow the efficient term "cross-over estoppel” from Brenner, "Crossing-overThe issue-preclusive effects of a civil/criminal adjudication upon a proceeding of the opposite character, 7 N 111 L R 141 (1987), in which the phenomenon is reviewed and analyzed.
The rendition of a judgment in an action does not conclude parties to the action who are not adversaries under the pleadings as to their rights inter se upon matters which they did not litigate, or have an opportunity to litigate, between themselves. [Restatement Judgments, § 82, pp 384-385.]
A person who is not a party but who is in privity with the parties . . . is . . . bound by and entitled to the benefits of the rules of res judicata. [Restatement Judgments, § 83, p 389.]
This is the conclusion reached by the Court of Appeals in People v Watt, 115 Mich App 172, 175; 320 NW2d 333 (1982), lv den 413 Mich 926 (1982). The Court of Appeals in the instant case found Watt to be dispositive. 168 Mich App 384, 388; 423 NW2d 668 (1988).
One commentator has observed that "[i]n recent decades, there seems to have developed a nearly universal agreement among judges and scholarly commentators alike that res judicata cannot be soundly administered by means of resolute adherence to a battery of self-enclosed rules ... as constituting the sole and sufficient grounds of decisions in cases involving the preclusive effect of judgments.” Instead, collateral estoppel determinations increasingly are the product of "multifaceted analysis and balancing of competing and vaguely defined governmental and private interests . . . .” Holland, Modernizing res judicata: Reñections on the Parklane doctrine, 55 Ind L J 615, 618-619 (1980).
For example, see MCR 5.972(C)(1) (the burden of proof in a probate proceeding is a preponderance of the evidence); MCR 5.965(B) (6) (a referee, rather than a judge, may preside at the trial); MCR 5.972(C)(2) (statements by a child which do not fall within an exception to the hearsay rule are admissible under certain circumstances). See also n 20.
Of course, the heightened burden of proof in a criminal trial would prevent the prosecutor from asserting collateral estoppel against a defendant in the criminal trial.
The standard jury instructions approved by the Probate Judges Association of Michigan make this point even more emphatically:
Instruction 25
The legal definition of criminality is the same as the common understanding of the word criminality. Criminality is present when a person violates the criminal laws of the State of Michigan or of the United States. Whether a parent’s violation of the criminal laws of the State of Michigan or of the United States renders the home or environment of the child an unñt place for the child to live in is for you to decide based on [sic] all of the evidence in the case. [Owens, Juvenile jury instructions, Inter-com 21, 33 (April, 1989). Emphasis added.]
We are aware of the dangers of a "hypertechnical” analysis of what has been necessarily determined by a judgment, a danger warned of by the United States Supreme Court in Ashe, supra at 444. In the instant case, our conclusion that the jury verdict did not determine the issue of criminal guilt or innocence is not based on the fact that the verdict did not address that issue, but on the fact the instruction to the jury made clear that a determination of criminal guilt or innocence was not essential to its verdict.
The Supreme Court of Kentucky applied similar reasoning in its rejection of collateral estoppel in Gregory v Kentucky, 610 SW2d 598 (Ky, 1980). Gregory had argued that an express finding in a prior dependency hearing that he had not sexually abused his sons es-topped his subsequent prosecution for first-degree sodomy. Unlike the instant case, dependency was found in the first proceeding, on the basis of considerations other than the allegations of sexual abuse. The court rejected Gregory’s claim of collateral estoppel because the criminality of Gregory’s actions was not before the first court, which was charged generally with the well-being of the children, and because the first court’s express findings on sexual abuse were not essential to its decision.
Such a public policy exception is recognized by 1 Restatement Judgments, 2d, § 28, p 273:
Although an issue is actually litigated and determined by a valid and final judgment, and the determination is essential to the judgment, relitigation of the issue in a subsequent action between the parties is not precluded in the following circumstances:
(5) There is a clear and convincing need for a new determination of the issue (a) because of the potential adverse impact of the determination on the public interest or the interests of persons not themselves parties in the initial action ....
See State v Fagan, 66 NY2d 815; 498 NYS2d 335; 489 NE2d 222 (1985), and State v Alvey, 67 Hawaii 49; 678 P2d 5 (1984), for recent applications of this exception.
MOL 712A.1K1); MSA 27.3178(598.11X1).
If a petition is filed and the child has been removed from the home, a preliminary hearing must take place within twenty-four hours. MCR 5.965(A). If the child remains outside the home, the trial must take place within forty-two days. If the child has not been taken into court custody, the deadline for trial is six months. MCR 5.972(A).
See n 20.
At least one appellate decision in Michigan has relied upon a substantial difference in the purpose of the proceedings as a basis for denying collateral estoppel to issues common to both proceedings. Thangavelu v Dep’t of Licensing & Regulation, 149 Mich App 546; 386 NW2d 584 (1986), lv den 425 Mich 864 (1986).
Other state courts have applied similar reasoning. In re Katherine & Kimberly B, 126 Misc 2d 1085; 484 NYS2d 788 (1985); Gregory v Kentucky, n 17 supra at 600; State v Fagan, n 18 supra, and State v Alvey, n 18 supra. Cf. Lockwood v Superior Court, 160 Cal App 3d 667; 206 Cal Rptr 785 (1984).
A similar analysis was recently employed by this Court to reject the argument that an mesc adjudication denying unemployment benefits should operate to preclude litigation of issues in a subsequent suit for breach of an employment contract. Storey v Meijer, Inc, 431 Mich 368, 372-373; 429 NW2d 169 (1988).
Prior to 1988 PA 224, the second quoted sentence provided, "Proceedings under this chapter shall not be deemed to be criminal proceedings.”
Plaintiff also argues that collateral estoppel should not preclude defendant’s criminal prosecution because there is no mutuality of estoppel, citing Restatement Judgments, §80 et seq., and Howell, supra at 45-46. If the jury had found that the probate court did have jurisdiction over the child, defendant would not have been precluded from defending himself against the criminal charge. Cf. 1 Restatement Judgments, 2d, §§27-29, pp 250-303; IB Moore, Federal Practice, ¶ 0.441[3. — 2], p 734, and Bernhard v Bank of America Nat’l Trust & Savings Ass’n, 19 Cal 2d 807; 122 P2d 892 (1942). Since we are not required by this case to do so, we choose not to revisit the mutuality rule in Howell at this time. | [
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Per Curiam.
Plaintiff appeals as of right from the trial court’s grant of summary disposition in favor of defendant pursuant to MCR 2.116(0(10). The trial court’s order held that "[b]ecause plaintiff’s decedent had a policy of insurance in effect at the time of his injury and death, Auto Club Insurance Association is the proper priority insurer from whom plaintiff can claim benefits pursuant to MCL 500.3114(1).” On appeal, plaintiff argues that the prior transfer of his decedent’s ownership interest in the motor vehicle named in the no-fault insurance policy automatically terminated the personal protection insurance coverages of the policy and made defendant the priority insurer. We disagree with plaintiff and affirm the trial court.
Plaintiff’s decedent, Albert R. Madar, took out a six-month no-fault insurance policy from the Auto Club Insurance Association. The policy was effective, by its terms, from November 22, 1982, through May 22, 1983. On March 7, 1983, Albert Madar, while a pedestrian, was struck by an automobile driven by a person insured by defendant. As a result of injuries sustained in the accident, Madar died on April 16, 1983. However, prior to decedent’s accident, on February 23, 1983, plaintiff’s decedent transferred and sold the automobile named in the aaa policy.
On March 11, 1983, shortly after the accident, plaintiff submitted, on his father’s behalf, an application for benefits, and aaa made a payment under its policy on behalf of Albert Madar as a "medical benefit.” On May 20, 1983, plaintiff submitted a request that effective May 22, 1983, his father’s insurance policy not be renewed due to his death. Thereafter, on January 20, 1984, after the instant case was filed, plaintiff requested a cancellation of his father’s policy retroactive to February 23, 1983, the date the ownership of his vehicle was allegedly transferred by Albert Madar.
The trial judge found that the personal protection insurance coverage protects insured persons and that there was no requirement that an insured motor vehicle be involved. The judge held that "first party” personal protection benefits are in the nature of personal accident policies, which in the aaa policy focused on plaintiffs decedent and not his automobile, and therefore continued in effect after decedent’s car was transferred absent cancellation of the policy of decedent. Thus, the court ruled, since plaintiffs decedent had a policy of insurance in effect at the time of his injury and death, aaa, not defendant, which is the insurer of the driver whose vehicle struck Madar, is the proper priority insurer from whom plaintiff can obtain benefits.
The no-fault act provides that a person suffering accidental bodily injury while not occupying a motor vehicle shall claim no-fault insurance benefits from the insurer of the owner of the motor vehicle involved in the accident. MCL 500.3115(1)(a); MSA 24.13115(1)(a). The no-fault act, however, makes an exception to this requirement if the injured person is covered by a no-fault policy. If this is the case, MCL 500.3114(1); MSA 24.13114(1) requires the injured person to look to his own no-fault policy for coverage.
It is on this basis that defendant states that it is not the proper priority insurer under §§ 3114 and 3115 of the no-fault act. Defendant has denied any liability for personal protection benefits. Defendant asserts that, notwithstanding the sale of the automobile prior to the accident, the personal protection benefits of the aaa policy were still effective on the date of the accident since there had been no cancellation up to that time, and, thus, aaa is the proper party from whom plaintiff should seek personal protection insurance benefits. Plaintiff, however, asserts that all of aaa’s coverage terminated as a matter of law when plaintiffs decedent sold the automobile.
Plaintiff first argues that once the plaintiffs decedent transferred his ownership in the vehicle named in the policy, he no longer had an insurable interest and the personal protection insurance coverage automatically terminated. An insurable interest in property is broadly defined as being present when the person has an interest in property, as to the existence of which the person will gain benefits, or as to the destruction of which the person will suffer loss. Crossman v American Ins Co, 198 Mich 304, 309; 164 NW 428 (1917). Plaintiff would apply this principle in the automobile context by relying upon Payne v Dearborn Nat’l Casualty Co, 328 Mich 173, 177; 43 NW2d 316 (1950), for the proposition that automobile insurance is entirely dependent on ownership by the named insured of the automobile described in the policy, and that there is no insurance separate and distinct from ownership of the automobile. Consequently, plaintiff argues that since plaintiff’s decedent did not have an automobile on the date of the accident, he could not have no-fault automobile insurance as a matter of law because he had no insurable interest in an automobile.
Plaintiff’s argument fails to fully consider the substantial changes wrought in the automobile insurance area by the no-fault act. In Lee v DAIIE, 412 Mich 505; 315 NW2d 413 (1981), the plaintiff was injured while unloading mail from a government-owned mail truck, an insured vehicle. The Court held that the plaintiff’s personal insurer was liable for the payment of personal protection benefits under the no-fault act, despite the fact that this insurer had written no coverage for the vehicle involved. 412 Mich 516. The Court expressed the underlying basis for its decision as follows:
Our decision in this case rests, in the last analysis, upon our recognition that it is the policy of the nó-fault act that persons, not motor vehicles, are insured against loss. [412 Mich 509.]
The Lee Court made it clear, explicitly overruling Shoemaker v Nat'l Ben Franklin Ins Co, 78 Mich App 175; 259 NW2d 414 (1977), that it is not required, as Shoemaker previously held, that a vehicle intended to be covered under the no-fault act be involved in an accident for the insurer to be liable to its insured for personal protection benefits. 412 Mich 511. The Court found that, in enacting the no-fault act, the Legislature:
intended to provide benefits whenever, as a general proposition, an insured is injured in a motor vehicle accident, whether or not a registered or covered motor vehicle is involved; and in its narrower purpose, intended that an injured person’s personal insurer stand primarily liable for such benefits whether or not its policy covers the motor vehicle involved and even if the involved vehicle is covered by a policy issued by another no-fault insurer. [412 Mich 515.]
Thus, there is no requirement that there be an insurable interest in a specific automobile since an insurer is liable for personal protection benefits to its insured regardless of whether or not the vehicle named in the policy is involved in the accident. A person obviously has an insurable interest in his own health and well-being. This is the insurable interest which entitles persons to personal protection benefits regardless of whether a covered vehicle is involved.
Moreover, by its terms, the instant insurance policy, unlike the policy in Payne, supra, supports the trial judge’s conclusion that aaa was liable for personal protection benefits. The aaa policy had five separate coverages: liability insurance cover ages, Michigan no-fault insurance coverages, death indemnity insurance, uninsured motorist coverage, and car damage insurance coverage. A separate premium was set forth and charged for each of the coverages. The trial judge, in his opinion, is correct in holding that, while some of these coverages make reference to the involvement of an insured motor vehicle, i.e., the liability insurance coverage and motor vehicle damage insurance coverage, other coverages including the personal protection insurance coverage do not condition the insurance on the ownership or involvement of an insured auto, i.e., Michigan no-fault coverages.
The pertinent portion of the policy regarding personal protection insurance coverage states:
We agree to pay in accordance with the Code the following benefits to or for an insured person (or, in case of his/her death, to or for the benefit of his/her dependent survivor(s),) who suffers accidental bodily injury arising out of the ownership, operation, maintenance or use of a motor vehicle as a motor vehicle.
As is clear from the quoted provision, benefits are to be paid to an insured person for "accidental bodily injury arising out of the ownership, maintenance or use of a motor vehicle as a motor vehicle(Emphasis added.) There is no requirement that an insured motor vehicle be involved for these benefits to be payable to the injured person.
Additionally, the trial court noted that the uninsured motorist insurance coverage section of the policy also provided benefits regardless of the ownership of the vehicle involved. The conclusion to be drawn from the analysis of these different coverages under the aaa policy is that while some sections do require the involvement of an insured motor vehicle, other sections do not impose such a requirement. Moreover, it is worth noting that, on deposition, aaa’s manager of underwriting admitted that aaa often wrote no-fault insurance policies for individuals who did not own the vehicle they were operating.
Other jurisdictions have reached the same conclusion as that reached by the trial judge. In Royal Indemnity Co v Adams, 309 Pa Super 233; 455 A2d 135 (1983), a case relied on by the trial judge, the court, construing a policy with provisions similar to the aaa policy in the instant case, held that although the injured person had transferred the insured vehicle prior to his injury, the transfer of the vehicle did not terminate the medical payment coverage of his no-fault insurance policy as it pertained to him. Medical payment coverage and uninsured motorist coverage, the court found, focus on the person rather than on the liability arising out of the operation of a particular vehicle, whereas liability coverage must arise from the ownership or maintenance or use of an insured vehicle. See also Emick v Dairyland Ins Co, 519 F2d 1317, 1325-1327 (CA 4, 1975); Oarr v Government Employees Ins Co, 39 Md App 122; 383 A2d 1112 (1978).
The reasoning of the trial judge, and the policy itself, are consistent with the purpose of the no-fault act that individuals will insure their own personal protection with their own no-fault policies. They will first look to their own insurer before having to rely on whether any other party involved has insurance to cover their losses. The overriding purpose of the no-fault act is to provide protection for persons, not automobiles. Lee v DAIIE, supra.
Nor may, as plaintiff asserts, the insured’s estate and his no-fault insurer, after the insured’s death, retroactively cancel áll insurance coverage effec tive to a date prior to the accident, because the insured sold his automobile prior to the accident. Rights created under an insurance policy become fixed as of the date of the accident. In DAIIE v Ayvazian, 62 Mich App 94, 100; 233 NW2d 200 (1975), this Court stated that where coverage existed at the time of the accident, no subsequent acts by the parties could void that coverage. The Court in Ayvazian, in reaching this conclusion, adopted the following principle of insurance law:
"[T]he liability of the insurer with respect to insurance . . . becomes absolute whenever injury or damage covered by such policy occurs. The policy may not be canceled or annulled as to such liability by agreement between the insurer and the insured after the occurrence of the injury or damage.” 1 Long, The Law of Liability Insurance, § 3.25, pp 3-83-84.
It is clear that the policy behind this principle is to prevent an insurer from retroactively cancelling coverage on a date prior to the date of the accident in order to shift liability to another insurer under the priority provisions of the no-fault act.
We conclude that the trial court was correct in finding that there was no genuine issue of material fact and that defendant was entitled to summary judgment as a matter of law. The trial court correctly found that the first-party personal protection benefits of plaintiffs decedent’s policy with aaa are in the nature of personal accident policies which are independent of the insured’s ownership of an automobile. Moreover, since plaintiffs decedent did not cancel his no-fault policy with aaa when he transferred the vehicle prior to the accident, the personal protection insurance coverage was still in effect. We reemphasize that such cover age protects the person, not the motor vehicle. Therefore, aaa, not defendant, is the proper priority insurer under MCL 500.3114(1) since that policy was in effect at the time of the decedent’s injury and death. The trial court’s grant of summary disposition in favor of the defendant was correct.
Affirmed. | [
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Per Curiam.
Appellant, Board of Education of the Cadillac Area Public Schools, appeals as of right from a circuit court order affirming a decision of the State Tenure Commission which granted Jan Ward tenured status and ordered her reinstatement with lost salary. Three issues are raised for our consideration.
First, the board claims that the commission and lower court both erred in concluding that the board’s action in placing Ward on a third year of probation was ineffective because the board failed to notify the tenure commission of its action as required by MCL 38.82; MSA 15.1982. In this case, the commission held, as it has a number of times in the past, that the board’s action placing Ward on a third year of probation was not effective in the absence of notice as required by the statute. In Davis v Harrison Community Schools Bd of Ed, 126 Mich App 89, 97-98; 342 NW2d 528 (1983), lv den 418 Mich 912 (1984), this Court agreed with the commission’s interpretation that the third year of probation does not become effective until notice is given to the commission. We decline the board’s present invitation to disagree with our colleagues and believe that Davis mandates affirmance on this issue.
Second, the board argues that the tenure commission’s use of the anniversary method of computing a first-time probationary teacher’s probationary period is erroneous. This argument was likewise considered and rejected in Davis. We think the Davis panel was correct and decline to disturb the decisions below on this basis.
Third, the board argues that Mrs. Ward never completed two years of probationary service because of lapses or gaps in her service as a teacher. Specifically, the 1976-1977 school year began for teachers on September 9, 1976, and Mrs. Ward was not employed until November 1, 1976, by written contract to replace a fifth-grade teacher. She continued in that capacity until school ended on June 17, 1977. The 1977-1978 school year began for teachers on August 29, 1977. From September to November, Mrs. Ward taught for approximately 35 days as a substitute. She was thereafter employed on November 25, 1977, through the last day of school on June 9, 1978, replacing a teacher who was on leave. On April 28, 1978, the board informed Mrs. Ward that she would be placed on probation for a third year. The State Tenure Commission was not notified of the action. Mrs. Ward was employed during the entire 1978-1979 school year, the first semester as a substitute for a teacher on maternity leave and the second semes ter as a "traveling substitute” throughout the school district. On April 10, 1979, the board notified Mrs. Ward that her employment was terminated, effective at the end of the school year. The record demonstrates that Mrs. Ward taught 146 of the 183 school days during the 1976-1977 school year as a full-time fifth-grade teacher. During the 1977- 1978 school year she taught for a period of 129 days. Finally, Mrs. Ward taught the entire 1978- 1979 school year of at least 180 days under a probationary teacher’s contract and the collective-bargaining agreement. It is clear that Mrs. Ward was employed under contract and taught in a regular classroom position for more than two school years. The issue becomes whether or not the break in Mrs. Ward’s service prevented her from completing her probationary term. There is nothing in the statute, MCL 38.81; MSA 15.1981, which requires that the two-year period be continuous or unbroken. Although there may be situations where a break in service could effectively deprive the board of an opportunity to meaningfully evaluate a probationary teacher’s performance, service here by Mrs. Ward was sufficiently continuous to provide the board an opportunity to evaluate her performance. Although there may be situations where periods of service are so discontinuous or brief in duration that they could not be "tacked” together to meet the two-year requirement, we are of the view that the tenure commission and the circuit court did not err in this case in finding completion of the requisite two-year probationary term.
The decision of the circuit court is affirmed. No costs, a public question being involved. | [
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Per Curiam.
Defendant appeals as of right his jury conviction of one count of first-degree criminal sexual conduct, MCL 750.520b(l)(e); MSA 28.788(2)(l)(e), and four counts of third-degree criminal sexual conduct, MCL 750.520d(l)(a); MSA 28.788(4)(l)(a). The convictions arose out of a series of sexual assaults upon two 15-year-old girls occurring in the late evening of May 19, 1982, or the early morning of May 20,1982.
One of the girls, Randee, after being dropped off by the defendant at a friend’s house the morning of May 20, called the police. Officer Coffey took a statement from Randee concerning the sexual assaults which had occurred. Later, at approximately 4:00 p.m., another officer, Officer Sholander, and Randee drove to the area where the assaults had occurred in search of the other victim, Lenora, who had succeeded in running away from defendant’s truck which had been parked in a wooded area. While crusing through the area, Randee spotted defendant’s truck driving down the road, and Officer Sholander stopped defendant. Randee identified defendant as the assailant, and Officer Sholander arrested defendant and advised defendant of his Miranda rights. Miranda v Arizona, 384 US 436; 86 S Ct 1602; 16 L Ed 2d 694 (1966). Defendant was asked whether he understood his rights and whether he would be willing to answer questions, and defendant responded in the affirmative to both inquiries. Officer Sholander conveyed to defendant his concern for Lenora’s safety and asked defendant when he had last seen her; defendant responded that he saw her about an hour earlier at approximately 3:00 p.m. near Big Lake Road, about 7 or 8 miles away. Officer Sholander asked defendant no other questions.
Pursuant to Officer Sholander’s call for assistance, Officers Coffey and Baker arrived on the scene and placed defendant in their patrol car, and Sholander left to search for Lenora. While en route to the county jail, Officer Coffey advised defendant for a second time of his Miranda rights, and defendant stated that he understood his rights and would be willing to answer questions. Officer Baker then asked defendant some questions, such as: when he picked up the girls, whether he knew the girls previously, and when and where he had last seen Lenora. Defendant answered these questions, but the officers ceased questioning defendant when defendant indicated that he wanted to talk to Mr. Mather. Officer Baker testified at the suppression hearing that defendant "indicated that maybe he’d better talk with an attorney, and he mentioned Mr. Mather’s name”. Officer Coffey testified that defendant "said he didn’t want to ask any more — answer any more questions, he wanted to talk to Mr. Mather”. Mr. Mather was the prosecutor in the county in which defendant was arrested. After arriving at the county jail, the officers contacted Mr. Mather and told him that defendant wanted to speak to him. Mather arrived at the county jail to speak to defendant about two hours after defendant had been given his Miranda warnings a second time.
Defendant asserts on appeal that the trial court erred in ruling that defendant’s statements to Officer Sholander and to Officers Baker and Coffey were admissible. Defendant argues that these statements should have been suppressed because, by expressing their concern for the missing girl, the officers unfairly played on defendant’s emotions in eliciting the statements from defendant. In support of this contention, defendant relies on Brewer v Williams, 430 US 387; 97 S Ct 1232; 51 L Ed 2d 424 (1977). However, Brewer is distinguishable since there, prior to the police officers’ "Christian burial” speech, the defendant had not indicated a willingness to be questioned in the absence of an attorney and had stated that he would tell the whole story after consulting with his attorney. In the instant case, prior to the police officers’ questioning, defendant had been advised of his Miranda rights and stated that he understood his rights and was willing to answer questions. Brewer does not stand for the proposition that statements or questions which may arouse the emotions of the defendant require the suppression of the defendant’s responses. We find no error; defendant’s responses to the questions asked by the police officers were properly admitted at trial.
Defendant also argues that the court erred in denying defendant’s motion to suppress his statements made to Mr. Mather. On direct examination at the suppression hearing, Mr. Mather testified in pertinent part as follows:
”Q. Do you recall being called to the Baraga County Sheriffs office on the evening of May 20th of this year?
”A. Very clearly.
”Q. Could you tell us basically what happened when you got there?
"A. When I got there, Lieutenant Baker, as I recall, and I think Trooper Coffey, was in the outside room with Sarah Heikkinen and Sheriff Heikkinen and Jayson, whom I recalled from having talked to him in my office some years before.
"Q. Would that be the defendant in this case, Jayson Manges?
"A. Yes, I’ve known Jayson for sometime. And I think Willard Coffey repeated .again that Jayson wanted to talk to me; he had called me on the phone and told me that Jayson wanted to talk but only to me. So I remember asking the sheriff, 'Where’s a good place to talk?’ He said, 'Go in that room.’ And I went in and Jayson followed me in and I remember sitting down in a chair that was somewhat distant from the door to the office and that Jayson had a chair in between me and the office. There was no design or purpose, that just comes back in my mind’s eye that that’s how we were seated. And I have had the experience of being called by defendants from jail not infrequently and so I wasn’t too surprised at this. And I said to Jayson, 'What do you want to talk about, Jayson? Do you want to talk to me?’ He said, 'Yes.’ And the entire conversation was marked by long pauses, I remember that very definitely. And I’m not sure but what he was quite slow in even replying to that. Whatever he said later, I recall very clearly that he said to me, 'Well,’ he says, T remember you were very fair with me once or twice before and that’s why I want to talk to you.’ I said, 'What do you want to talk about?’ And he says, 'Well, I’d like to talk to you about making a deal. ’ And I told him that I thought I knew quite a bit about the case, but I was sure I didn’t know all about it, but no matter what I knew, it was insufficient for me to consider making a deal with him. And I clearly recall that he said, 'Well, I could tell you a lot more about it than you know. ’ And I said, 'I’m sure you can. ’ And he repeated many times, and I’m sure right again, he said, 'Well, isn’t there some way we can make a deal?’ And I had to repeat an equal number of times that we couldn’t make a deal because — the single reason I gave him is I just didn’t know enough about the case to even discuss a deal.
"And then I remember telling him that if he wanted to talk about the case, that’s what I was here for and so go ahead and talk about the case. As best I recall, there was a considerable pause after that exchange and he said, 'Well, I wouldn’t have done it if I hadn’t had so much brandy.’ I clearly recall that. And I guess again he brought up the deal because it came up at least eight, ten, twelve times, the topic of the deal. I gave him the same answer.
"He said several times, T didn’t mean to hurt them.’ He said several times that he was worried about the other girl. He referred — he didn’t use any name of a girl in talking to me, he kept saying the other girl.
"I listened very intently, interspersed with these pauses, and finally I asked him point-blank, I said, 'Jayson, did you sexually assault those girls?’ Long pause. He said, 'Yes, but they really didn’t resist very much.’ And I said, 'Well, maybe if they didn’t resist very much it’s because they were very aware of the knife that was on the seat of the truck.’ * * * The deal —the topic of the deal came up again, the topic of his being worried about the girl came up again, and I remember that each time he said somthing that I believed, I told him I believe it.
”Q. Did you yourself take any of the Miranda warning steps?
”A. None whatsoever. I had been advised that he’d been — I remember that very explicitly; I remember asking Trooper Coffey over the phone if that had been the case, and he said yes and he repeated that he’ll talk, but he only wants to talk to me.”
In addition, Mr. Mather’s testimony on cross-examination at the hearing included the following:
”Q. Mr. Mather, you said — testified that you’ve known Jayson for quite sometime. Is that through your position as Baraga County Prosecutor?
"A. Exclusively.
”Q. Do you feel that Mr. Manges approached you because he — or wanted to talk to you because he knew you and trusted you?
"A Yes.
”Q. And, in fact, Mr. Manges has been before the Baraga County court before. And has there been plea bargaining?
'A. Yes, there has.
”Q. And from the gist of your testimony, it appears that he — Mr. Manges was talking about a deal before ever talking about the incident, is that correct?
' A. Was talking about the deal — say that again.
"Q. He wanted to make a deal. Mr. Manges said, 'Let’s make a deal,’ and I’m shortening this up. * * *
"A. Yes, of course.
"Q. 'Let’s make a deal. I know more about — I can tell you more about this than you know.’
"A. Yes.
”Q. Okay. Did he make statements like that to you before he actually started talking about, T wouldn’t have done it if I hadn’t drank so much brandy’?
"A. Yes, he did.
"Q. So he was in fact talking abut making some sort of deal.
"A. Yes, and I — every time he mentioned the word, I reminded him that I was not in a position to make a deal.
”Q. Did you ever tell him that you in fact are the Baraga County Prosecutor and that anything that he does tell you about the incident * * *?
"A. No, I made no such statements as that.
”Q. Did it appear that Mr. Manges was in fact talking to you because he did want to make a deal, or he was attempting to convince you of a deal?
"A. Did it appear? I’d have to say that my perception, my experiencing of him, after I repeatedly told him that I wasn’t in a position to make a deal, was that he was speaking to me cathartically. I experienced it that way. That’s my answer to your question.
”Q. What do you mean by that?
"A. Well, that he was experiencing a relief, because he interspersed much of what he said with how sorry he was, he didn’t mean to hurt them, didn’t want to hurt them, was worried about the girl. And I perceived him to be getting emotional benefit, satisfaction, out of saying these things. Because when he said things that I believed he believed, I told him I believed him and
"Q- Okay.
"A. So all I can report is only my perceptions. You’ve asked me a question of how it appeared.
"Q. And this would be that he trusted you?
"A I had that impression; yes, that was an impression. ” (Emphasis added.)
We do not agree with defendant’s contention on appeal that defendant’s request to speak with Mr. Mather was equivalent to an invocation of his Miranda right to counsel. See Fare v Michael C, 442 US 707; 99 S Ct 2560; 61 L Ed 2d 197 (1979) (request to speak to probation officer not an invocation of Miranda right to counsel). The facts as revealed at the suppression hearing clearly reflect defendant’s awareness that Mather was a prosecutor; there was no indication that defendant perhaps erroneously believed, for example, that Mather was a defense attorney or public defender. We cannot conclude that defendant’s request to speak to Mather, known to defendant to be the county prosecutor, constituted even an ambiguous indication of an interest in having his own counsel, in contrast to the factual settings in People v Plyler, 86 Mich App 272; 272 NW2d 623 (1978) (defendant stated she did not want to write anything until she talked to an attorney) and People ex rel Wayne Prosecutor v Recorder’s Court Judge, 79 Mich App 495; 261 NW2d 63 (1977), lv den 402 Mich 879 (1978) (defendant asked police officer if he thought she should have an attorney).
However, we do agree with defendant that MRE 410 precluded admission at trial of Mather’s testimony relating defendant’s inculpatory statements to him. MRE 410 provides as follows:
"Except as otherwise provided in this rule, evidence of a plea of guilty, later withdrawn, or a plea of nolo contendere, or of an offer to plead guilty or nolo contendere to the crime charged or any other crime, or of statements made in connection with any of the foregoing pleas or offers, is not admissible in any civil or criminal proceeding against the person who made the plea or offer. However, evidence of a statement made in connection with, and relevant to, a plea of guilty, later withdrawn, a plea of nolo contendere, or an offer to plea guilty or nolo contendere to the crime charged or any other crime, is admissible in a criminal proceeding for perjury or false statement.”
As the express language of this evidentiary rule makes clear, not only pleas or offers to plea are inadmissible, but also any statements made in connection therewith. The principle underlying MRE 410 is that plea negotiations should be encouraged and that, for plea bargaining to work effectively and fairly, a defendant must be free to negotiate without fearing that his statements may later be used against him at trial. People v Jones, 416 Mich 354; 331 NW2d 406 (1982) (opinions by Kavanagh, J., and Ryan, J).
For purposes of determining whether a particular discussion constitutes a plea negotiation to which MRE 410 applies, this Court in People v Oliver, 111 Mich App 734, 756; 314 NW2d 740 (1981), lv den 411 Mich 863 (1981), explained that the focus is on the defendant’s perceptions and adopted the following two-tiered analysis articulated in United States v Robertson, 582 F2d 1356, 1366 (CA 5, 1978):
" 'The trial court must apply a two-tiered analysis and determine, first, whether the accused exhibited an actual subjective expectation to negotiate a plea at the time of the discussion, and, second, whether the accused’s expectation was reasonable given the totality of the objective circumstances.’ ”
In Oliver, this Court found that both prongs of the test were satisfied, since the defendant had made statements indicating a desire to plea bargain and his subjective expectation to negotiate was reasonable since, although the police officer stated that he was incapable of such negotiation and that defendant was talking to the wrong person, the officer had also told defendant that "he always tries to 'help a guy that tells me the truth’ ”, and admitted that "he attempts to leave a defendant with the impression that he is a 'good guy’ who can be talked to openly”. People v Oliver, supra, p 757.
Applying this two-part test to the present case, there is no question but that defendant’s subjective expectation in talking to Mather was to negotiate a plea. Mather testified that defendant repeatedly, from the time the discussion commenced throughout its course, asked if he could make a "deal” with Mather. We also conclude that defendant’s expectation was reasonable. As in Oliver, the prosecutor here gave defendant conflicting signals. Although the prosecutor told defendant he was not in a position to discuss or make a deal with defendant, he also told defendant that he did not know enough about the case to make a deal and expressly invited defendant to talk about the case. Also, the prosecutor admitted that defendant appeared to be reposing his trust in him, yet the prosecutor failed to stymie defendant’s trust by, for example, warning defendant of his Miranda rights or otherwise conveying to defendant that any statements he made were not confidential and might later be used against him. We conclude that defendant’s statements to Mather were protected by MRE 410, and the court’s erroneous admission of Mather’s testimony relating defendant’s inculpatory statements requires reversal of defendant’s convictions.
In view of our reversal, we need not address defendant’s claim that a comment by a member of the venire during jury selection deprived him of a fair trial. We also need not address defendant’s claim that the trial court erred in denying defendant’s motion for substitution of counsel and defense counsel’s simultaneous motion for withdrawal; however, to avoid any potential problem on retrial, we urge the court to appoint a different attorney to represent defendant at the new trial unless defendant now has no objection to representation by the same attorney. Finally, while the question of whether Officer Coffey’s testimony relating Randee’s statement to him constitutes inadmissible evidence might arise on retrial, we decline to address it in the context of this appeal. The issue was not preserved for appellate review since defense counsel not only failed to object to this testimony by Officer Coffey, but indeed made use of this testimony himself by pointing out discrepancies between Randee’s statement to Officer Coffey and her testimony at trial. People v Stull, 127 Mich App 14, 21-22; 338 NW2d 403 (1983); People v Horton, 98 Mich App 62, 71; 296 NW2d 184 (1980).
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Per Curiam.
Defendant appeals as of right from his conviction of receiving and concealing stolen goods with a value in excess of $100, MCL 750.535; MSA 28.803. The plea-based conviction included an agreement by defendant to pay restitution as determined by the court in the order of probation.
Defendant purchased "hot” fuel from Mr. Jack-man, and, over a course of time, paid Jackman $38,000 for the fuel. The estimated value of the fuel was $42,560. Jackman was tried separately and was found guilty of attempted embezzlement, is currently still working for the fuel company, and is paying his share of the restitution out of his paychecks.
Defendant’s sole contention on appeal is that he should not be required to pay $20,000 restitution as ordered by the trial judge since his "net profit” from this illegal enterprise was only $4,560. Defendant contends that Jackman should be required to pay the entire restitution less the $4,560 profit defendant made.
Defendant could have received a sentence of up to five years imprisonment; instead, he received probation with a condition of restitution. The purpose of restitution is to compensate the injured party, in this case, the fuel company. The amount and manner of payment of reasonable restitution is a matter for the judgment of the sentencing judge. People v Gallagher, 55 Mich App 613; 223 NW2d 92 (1974), lv den 393 Mich 766 (1974). Nothing limits restitution to the "benefit” received by the criminal; the defendant could have been held responsible for the entire amount of loss to the fuel company. People v Pettit, 88 Mich App 203, 206; 276 NW2d 878 (1979), citing People v Gallagher, supra.
Considering the above factors and defendant’s agreement in his guilty plea to pay restitution as determined by the court, defendant’s conviction is affirmed. | [
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Per Curiam.
Plaintiff, Ethel M. Dillon, filed a complaint for divorce against defendant, Percy B. Dillon. Defendant filed a counter-complaint for divorce. Trial began on October 30, 1981, before Judge Farrell Roberts of the Oakland County Circuit Court and continued for six days in November, 1981. Both parties testified extensively regarding marital assets and how such assets were obtained. The testimony diverged sharply on the issue of which party had contributed money toward the accumulation of property.
At a hearing held on May 6, 1982, Judge Roberts indicated from the bench that he was granting a divorce to the parties. He made no findings of fact or conclusions of law concerning the property disposition at this hearing. He did find that:
"The Court: It is very obvious from the evidence that the marriage is broken down to the extent it, that it’s not going to continue. I therefore find with respect to the marriage itself it is very obviously broken down to the extent that they can no longer live together. The judgment will be granted with immediate effect.” The parties were directed to file written closing arguments on the property disposition, which issue was reserved. On June 11, 1982, a "Property Disposition” was entered by the court. The property disposition reads:
"There was testimony presented in this case that, even in this 'no fault’ era, would indicate some very extraordinary efforts were taken by the husband to dispose of the house and its contents.
"However, given the testimony presented and the lapse of time, it is the finding of this court that each party will be awarded the property in its possession. There were some items of personal jewelry which at one time belonged to Mr. Dillon. The most credible evidence as to this property was that Mr. Dillon gave them to his son, Griffith Dillon.
"It is so ordered.”
No judgment of divorce was entered by Judge Roberts.
At some point subsequent to the entry of the property disposition, Judge Roberts retired and his successor, Judge Fred Mester, was assigned to this case. On July 9, 1982, plaintiff moved for entry of a judgment of divorce. Defendant objected, but on December 3, 1982, Judge Mester signed and entered a judgment of divorce which included Judge Roberts’s property disposition. Defendant filed a motion for new trial, which was denied by Judge Mester on April 23, 1983. Defendant presently appeals as of right from the judgment of divorce and the denial of his motion for new trial.
On appeal, defendant argues that Judge Mester lacked authority to enter a judgment of divorce because Judge Roberts failed to make sufficient findings of fact and conclusions of law. We agree in part, as we find the property disposition to have been unsupported by findings of fact and conclusions of law.
GCR 1963,' 531 authorizes a successor judge to perform duties necessary in a case "after a verdict is returned or findings of fact and conclusions of law are filed”. The rule also allows the successor judge, in his discretion, to grant a new trial.
GCR 1963, 517.1 requires that in all actions tried without a jury, "the court shall find the facts specially and state separately its conclusions of law thereon”. It is sufficient if the court makes "brief, definite, and pertinent findings and conclusions upon the contested matters without over elaboration of detail or particularization of facts”. GCR 1963, 517.1. The rule contemplates a degree of specificity which will disclose to a reviewing court the choices made between competing factual assertions. Holbern v Holbern, 91 Mich App 566; 283 NW2d 800 (1979).
Judge Roberts’s finding that there had been a breakdown of the marriage relationship was sufficient to support the judgment of divorce entered by Judge Mester. Although Judge Roberts’s factual findings are very brief, the record is clear that the marriage had completely broken down and that neither party wished its continuation. We accordingly affirm Judge Mester’s grant of a divorce to the parties.
The only statements made by Judge Roberts which were arguably findings of fact on the issue of division of marital assets were contained in the property disposition order. Although plaintiff argues that the trial court’s finding, based on the testimony presented, that each party would be awarded the property in his or her possession was sufficient, we are unable to so conclude. Both parties testified extensively as to purchases of real estate, vehicles, household furnishings and effects, other personal property, insurance policies, and a wide variety of other matters. The trial judge’s statement in the property disposition order in no way indicates what testimony was believed, what facts had been proven in the trial judge’s mind, or what the basis was for the trial judge’s decision.
Although we are reluctant to order retrial of a case which has already consumed seven days in testimony, the absence of any factual findings and conclusions of law by the initial trial judge relative to the question of the property disposition makes such action necessary. Judge Mester was without authority to resolve this issue. See Christopher v Nelson, 50 Mich App 710, 711-712; 213 NW2d 867 (1973), lv den 391 Mich 819 (1974).
Affirmed in part and reversed in part. Remanded for proceedings consistent with this opinion. No costs, neither party having prevailed in full. | [
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Per Curiam.
Petitioner, Mark F. Nolte, a tenured teacher at Port Huron Northern High School was discharged following a hearing before respondent, Port Huron Area School District Board of Education. This decision was affirmed by the State Tenure Commission and Ingham Circuit Court Judge Michael G. Harrison. Petitioner appeals as of right, raising four issues which do not require reversal.
Petitioner taught at Northern for the 1980-1981 school year. Northern’s principal, William Pierce, received a call from Larry Moeller, the district superintendent, asking him to investigate rumors that petitioner had furnished or procured marijuana for a student named Kathleen O’Connor, or that O’Connor was using marijuana with petitioner’s knowledge. Following the investigation, seven charges were eventually filed against petitioner, which essentially charged that petitioner furnished pills of an unknown content to students in violation of school rules concerning distribution of medication and that petitioner encouraged a student to use marijuana, helped the student to obtain marijuana, and failed to report the student’s use of marijuana.
A lengthy hearing was held before the board. The board found each of the seven charges proved, determined that petitioner’s conduct constituted reasonable and just cause for petitioner’s dismissal and, accordingly, terminated petitioner’s employment
A hearing was held before Commission Hearing Officer Lauren Sue Harkness on September 30, and October 2, 1981. At the outset, Hearing Officer Harkness denied petitioner’s motion to strike consideration of the testimony of several rebuttal witnesses before the board. On August 22, 1982, the commission affirmed the hearing officer’s refusal to strike the rebuttal testimony. On May 26, 1983, the commission issued a lengthy decision and order. Finding that all seven charges were proven by a preponderance of the evidence and concluding that such conduct constituted reasonable and just cause for petitioner’s discharge, the commission dismissed petitioner’s appeal.
Petitioner petitioned the Ingham Circuit Court for judicial review on July 7, 1983, joining the commission as a respondent based on alleged improprieties in its deliberations. The circuit court found no violation of due process or the Administrative Procedures Act (apa) in the commission’s deliberative procedure. The circuit court also found the rebuttal evidence properly admitted. Recognizing the importance of credibility determinations, the circuit court found that the commission’s decision was based on substantial, material and competent evidence on the whole record.
I
Petitioner first argues that he was denied due process because the commission permitted persons other than commission members to attend its deliberations. He also notes that the commission’s procedure has never been promulgated as a rule and argues that this should be considered prejudicial per se. Petitioner asks for reconsideration of his case utilizing § 81 of the apa, MCL 24.281; MSA 3.560(181), which requires that the proposed decision be made available to the parties for comment. We hold that petitioner was not denied due process of law.
At the close of the October 2, 1981, hearing before the hearing officer, petitioner’s counsel objected to the lack of an opportunity to review the hearing officer’s proposed decision. Petitioner had asked that the commission follow § 81 of the apa, MCL 24.281; MSA 3.560(181), but the commission denied this request, noting that, since all the commission members reviewed and studied the pleadings, briefs and transcripts, the procedure requested by petitioner need not be followed. Petitioner then moved in circuit court to permit the taking of proofs regarding alleged improprieties in the commission’s deliberations. Petitioner claimed that three staff members from the department of education had participated in the commission’s deliberations, denying him due process and a fair and impartial hearing. The circuit court permitted interrogatories to be served upon the parties already involved.
Interrogatories were sent to and answered only by administrative law examiner Paula A. Wise-man, who took over the case on April 29, 1982. Her answers indicate that she had received a written report on the credibility and demeanor of several witnesses from Hearing Officer Harness. She also discussed the credibility of these witnesses with Harkness. Also attached to her answers was a draft decision that was identical to the decision actually signed by the commission. Apparently, the commission held a closed session on May 20, 1983. Besides commission members, Wiseman, Harkness and Faith Bishop, the "Designee of Superintendent of Public Instruction,” attended. Wiseman summarized the draft decision, but did not recall that anyone else presented any statements or questioned the commissioners during their deliberations. In response to an interrogatory asking whether the commissioners asked questions of Wiseman or anyone else in attendance, Wiseman said she could not recall but that there was some discussion about the credibility of witnesses.
The procedure used did not deny petitioner due process. Petitioner believes that § 81 of the apa should have been utilized, but we think § 81 has no application to this case. Section 81 of the apa provides in part:
(1) When an official or a majority of the officials of the agency who are to make a ñnal decision have not heard a contested case or read the record, the decision, if adverse to a party to the proceeding other than the agency itself, shall not be made until a proposal for decision is served on the parties, and an opportunity is given to each party adversely affected to file exceptions and present written arguments to the officials who are to make the decision. Oral argument may be permitted with consent of the agency.
(2) The proposal for decision shall contain a statement of the reasons therefor and of each issue of fact and law necessary to the proposed decision, prepared by a person who conducted the hearing or who has read the record.
(3) The decision, without further proceedings, shall become the final decision of the agency in the absence of the filing of exceptions or review by action of the agency within the time provided by rule. On appeal from or review of a proposal of decision the agency, except as it may limit the issue upon notice or by rule, shall have all the powers which it would bave had if it had presided at the hearing. [MCL 24.281; MSA 3.560(181). Emphasis supplied.]
Here, the final decision clearly indicates that the commission members signing it read the record. Therefore, as recognized by the commission, § 81 has no application to this case. While a proposed decision is allowed by 1979 AC, R 38.176 and by § 81 of the apa, it need not be presented to the parties in a case such as this. The circuit court agreed with this interpretation.
Section 82 of the apa provides in pertinent part:
Unless required for disposition of an ex parte matter authorized by law, a member or employee of an agency assigned to make a decision or to make findings of fact and conclusions of law in a contested case shall not communicate, directly or indirectly, in connection with any issue of fact, with any person or party, nor, in connection with any issue of law, with any party or his representative, except on notice and opportunity for all parties to participate. This prohibition begins at the time of the notice of hearing. An agency member may communicate with otber members of the agency and may have the aid and advice of the agency staff other than the staff which has been or is engaged in investigating or prosecuting functions in connection with the case under consideration or a factually related case. [MCL 24.282; MSA 3.560(182).]
In the present case, no communications were had with any party beyond the hearing itself. There was no evidence that the commission and its hearing officers engaged in any sort of investigative or prosecutorial functions. It is unclear what Faith Bishop’s function was. However, communications with hearing officers Wiseman and Harkness, through her reports, for "aid and advice” seem not only proper but imperative, since no commission member conducted the actual hearing. Nothing in the record indicates that anyone but commission members participated in the actual deliberations or in reaching the final decision, however identical to the proposed decision it may have been. Thus, the commission actually decided the case as required by Luther v Alpena Bd of Ed, 62 Mich App 32, 35; 233 NW2d 173 (1975).
II
Plaintiff complains that the commission, on de novo review, should have disregarded the testimony of rebuttal witnesses John Tocco and Michael Cudlip regarding student use of alcohol on ski trips chaperoned by petitioner and petitioner’s alleged use of marijuana. We think the disputed rebuttal evidence was properly considered. Petitioner’s case in chief included testimony by several witness, including petitioner, as to petitioner’s attitude towards marijuana use, evidence that he was personally opposed to marijuana use, a denial that he ever used marijuana, and testimony concerning petitioner’s enforcement during ski club trips of both school policy and his personal attitude towards drugs. Over petitioner’s objections, respondent offered four rebuttal witnesses: John Tocco, Michael Cudlip, Jack Ploeger, and Scott Bannnister.
The commission declined to strike the evidence on either ground proposed by petitioner, stating that petitioner placed his character regarding drug use in issue by testifying that he never used marijuana. The commission believed the rebuttal evidence refuted this claim and had probative value which was not outweighed by its prejudicial effect under MRE 403. The commission further found that the evidence was not excluded by MRE 404(b). Because petitioner placed his character at issue by offering evidence of specific instances of good conduct, the school board must be permitted to rebut those incidents by showing that petitioner’s conduct was not as exemplary as claimed. Thus, the rebuttal evidence was offered to refute evidence of good character and to impeach credibility. We agree with the commission’s analysis.
The evidence was properly admitted for rebuttal. Admission of rebuttal testimony rests within the sound discretion of the trial judge and will not be disturbed unless a clear abuse is shown. Birou v Thompson-Brown Co, 67 Mich App 502, 510; 241 NW2d 265 (1976), lv den 397 Mich 808 (1976). In determining the admissibility of evidence, the trial judge may consider issues in the pleadings and issues injected by evidence already introduced. See 4 Callaghan’s Michigan Pleading & Practice (2d ed), § 36.196, p 37, citing Hart v Walker, 100 Mich 406, 410; 59 NW 174 (1894). Where one party has introduced evidence to disprove a certain fact, the other may introduce evidence proving it. The trial judge may admit evidence offered in rebuttal where it contradicts or negatives evidence offered by the adverse party even though it tends incidentally to show a matter as to which evidence is not usually admissible. Callaghan’s, supra, § 36.198, p 43. The relevance of such rebuttal evidence should be tested by whether it is justified by the evidence which it is offered to rebut. Id., citing Edwards v Common Council of the Village of Three Rivers, 102 Mich 153; 60 NW 454 (1894).
Here, petitioner offered evidence of his attitude towards drug use, he denied using marijuana, and he indicated that he enforced school policy during ski trips. Petitioner offered this evidence to prove his attitudes towards drug and alcohol use and to show that he was not given to encouraging marijuana use by anyone. This was central to the charge against him. Rebuttal evidence countering this character trait was properly admitted to contradict evidence petitioner put in on direct examination.
III
Petitioner contends that the commission’s decision against him was not supported by competent, material, and substantial evidence on the whole record. We do not agree.
The power of this Court in reviewing a decision by the commission is limited. This Court determines from the record whether the proof received by the controlling board or commission supports its findings. The standard of review is whether the decision is supported by competent, material and substantial evidence on the whole record. See Beebee v Haslett Public Schools (After Remand), 406 Mich 224, 231; 278 NW2d 37 (1979). The commission’s decision must not be contrary to law. Const 1963, art 6, § 28; MCL 24.306; MSA 3.560(206).
We have reviewed the record. Many of petitioner’s arguments concern credibility determinations which this Court will not disturb. The evidence concerning the school policy on distributing medication was vague and unclear as to what the policy actually covered and whether petitioner was aware of it. Petitioner testified however that he would not have given a student even vitamin pills, indicating his awareness of the policy. The issue actually turned on whom the commission believed. The decision contains a careful, detailed analysis of the facts and a clear explanation of its findings on both this and the marijuana issues. We hold that the commission’s decision was supported by substantial, material and competent evidence on the whole record, and that it was not contrary to law.
iv
Finally, we reject petitioner’s contention that the commission’s decision impermissibly shifted the burden of proof to petitioner to disprove the charges against him. A careful review of the decision as a whole indicates that the commission believed respondent had met its burden and proved reasonable and just cause for dismissing petitioner. See Luther v Alpena Bd of Ed, supra, p 36. The commission found respondent’s witnesses to be more credible than petitioner. The burden remained on respondent.
Affirmed.
Petitioner’s reliance upon Grand Rapids Bd of Ed v Barcheski (Docket No. 47481, decided August 7, 1981), an unpublished opinion of this Court, is misplaced. Petitioner is incorrect that this case has precedential value. Stine v Continental Casualty Co, 419 Mich 89, 95, n 2; 349 NW2d 127 (1984). Moreover, it was reversed in part on other grounds, see 413 Mich 940 (1982). Barcheski is distinguishable in any event. Here, there was no evidence that anyone had an "axe to grind” or acted as an advocate for a particular party. Petitioner’s fear that the hearing officer may have acted as an advocate for her proposed decision is unsupported by the record. The commission was given summary material concerning the hearing and the interrogatory answers reveal no advocacy. Actual deliberations involved only commission members. Finally, Barcheski does not refer to § 82 of the apa, which does give permission to communicate with agency members. Petitioner’s comparison of administrative procedure to the sanctity of jury deliberations is inappropriate. | [
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Per Curiam.
Defendants appeal as of right the trial court’s order disqualifying six commissioners from participating on the Commission on Services to the Aging (the commission). The order also voided the commission’s vote approving a new state funding formula affecting the fourteen local Area Agencies on Aging (aaas). Finally, through its order, the trial court ordered the Governor to appoint new members to the commission within sixty days and further ordered the contemplated reconstituted commission to reconsider the funding formula within 120 days. We reverse.
Under the Older Americans Act, 42 USC 3001 et seq., a state agency created to help the elderly is eligible to receive federal grants for funding programs to serve the elderly, provided that the agency develops a formula for distributing the funds received under the act. Consistent with the Older Americans Act, the commission and the Office of Services to the Aging (osa) were created under the Older Michiganians Act, MCL 400.581 et seq.; MSA 2.638(51) et seq. The commission, which consists of fifteen commissioners appointed by the Governor, is the policy-making body for the osa and the fourteen regional aaas in Michigan. As the policy-making body under the Older Michiganians Act, the commission is responsible for establishing a funding formula for the distribution (by the osa) of federal and state funds to the fourteen Michigan aaas. Plaintiff, the Detroit Area Agency on Aging, is one of the fourteen AAAS.
On September 18, 1992, the commission, by a vote of ten to five, approved a new state funding formula affecting the fourteen aaas. Under the new formula, plaintiff’s share of the funds are scheduled to decrease because of a decline in the elderly population in Detroit. In November 1992, plaintiff initiated this action for superintending control, mandamus, and declaratory and injunctive relief, alleging in relevant part that the commission’s approval of the new funding formula was unlawful and void because eight commissioners were ineligible to vote because they held incompatible public offices and acted under actual or potential conflicts of interest in violation of the incompatible public offices act, MCL 15.181 et seq.; MSA 15.1120(121) et seq., and the state ethics act, MCL 15.341 et seq.; MSA 4.1700(71) et seq. Among other things, plaintiff requested the trial court to void the commission’s vote approving the new funding formula and to disqualify the commissioners at issue from further participation on the commission.
At a December 9, 1992, hearing, the trial court ruled that Commissioner Michael Green was disqualified from voting on the new funding formula because of a conflict of interest. Defendants did not object. The trial court postponed consideration of the incompatibility issue until a later date. Defendants subsequently moved for summary disposition pursuant to MCR 2.116(C)(4), (8), and (10). Defendants denied that Commissioners Roselia Neumann, Barbara Mantila, Donald Hoffman, Elwin Johnson, and Liselotte Hoelzel-Seipp held positions that conflicted or were incompatible with their commission positions. Thus, defendants argued, a finding by the trial court that any one of these commissioners was eligible to vote on the new funding formula in September 1992 would result in a quorum approving the formula.
At the hearing pursuant to defendants’ motion for summary disposition, the trial court determined that commissioners Mantila, Hoffman, Hoelzel-Seipp, and Jacqueline Jolly should be removed from the commission. Also included within the ambit of the trial court’s order were Commissioners Theodore Brietenbach and Green, although no specific findings were made relative to these two commissioners. However, defendants acknowledged previously that the votes of Commissioners Brietenbach and Green were void or voidable because of the fact that they held incompatible offices when the new funding formula was adopted. Finally, as stated above, the trial court ordered the Governor to appoint new commission members within sixty days, and ordered the new commission to ratify or amend the new funding formula within 120 days. Having granted defendants’ motions for a stay and immediate consideration, we now address the substance of the trial court’s order.
Defendants first claim that the trial court erred in disqualifying the six commissioners from the commission on the basis of its conclusion that they held other incompatible positions. We agree.
The incompatible public offices act prohibits a public officer or public employee from holding two or more incompatible public offices at the same time. MCL 15.182; MSA 15.1120(122). Wayne Co Prosecutor v Kinney, 184 Mich App 681, 683; 458 NW2d 674 (1990); Contesti v Attorney General, 164 Mich App 271; 416 NW2d 410 (1987). Subsec tion b of §1 of the act, MCL 15.181(b); MSA 15.1120(121)(b), defines "incompatible offices” as
public offices held by a public official which, when the official is performing the duties of any of the public offices held by the official, result in any of the following with respect to those offices held:
(i) The subordination of 1 public office to another.
(ii) The supervision of 1 public office by another.
(iii) A breach of duty of public office.
This definition applies to public offices held by both public officials and public employees. Kinney, supra.
This Court need not address the issue whether members of the commission are public officers, because defendant commissioners have acknowledged that they are indeed public officers. Moreover, defendant commissioners concede that, as public officers, they are prohibited from simultaneously holding two or more incompatible public offices. Because it is established that the commissioners are public officers, we must determine whether the trial court erred in concluding that they held other incompatible public offices.
Under the Older Americans Act and the companion Michigan statute, the commission is required to designate an aaa for each planning and service area of the state. The commission is also responsible for developing a formula for the distribution of state and federal funds to these aaas, and may enter into contracts and agreements necessary or incidental to the performance of its duties. Suffice it to say, the foregoing clearly establishes that the fourteen aaas are subordinate to, and subject to the supervision of, the commission.
In the present case, Commissioners Brietenbach and Green voted to approve the new funding formula in September 1992. At the time of the vote, Commissioner Brietenbach was a member of an aaa advisory board, whereas Commissioner Green was a member of an aaa administrative board. Defendants concede that Brietenbach and Green held incompatible positions when they voted to approve the new funding formula. Accordingly, defendants concede that the votes cast by Brietenbach and Green were voidable in the discretion of. the trial court pursuant to MCL 15.185; MSA 15.1120(125). The trial court indeed exercised this discretion and voided the votes of Commissioners Green and Brietenbach. We find no error in the trial court’s decision in this regard.
However, notwithstanding the fact that the trial court had the discretion to void the two votes in question, defendants claim that the trial court erred in disqualifying Commissioners Green and Brietenbach from the commission because they each resigned from their respective "other” incompatible positions before the trial court’s ruling. We agree.
First, it is apparent from the record that the trial court treated as synonymous the issues of "incompatibility” and "conflict of interest.” The trial court’s failure to distinguish these two issues is significant. Vacation of one office will solve a public official’s dilemma of two incompatible offices. Kinney, supra at 684; Contesti, supra at 281. This is not necessarily the. case in "conflict of interest” situations. In the present case,. Commissioners Green and Brietenbach each resigned from the acknowledged "other” incompatible position before the trial court’s ruling. This being the case, the question of "incompatibility” effectively was resolved. Kinney, supra; Contesti, supra. Accordingly, the trial court’s decision to remove Green and Brietenbach from the commission was unwarranted because they had already renounced their "other” incompatible positions.
Next, regarding Commissioner Hoffman, a more difficult question exists regarding whether he, like Green and Brietenbach, held an incompatible office when the new funding formula was approved. At the time of the vote, Commissioner Hoffman was a member of an advisory board to the Portage Senior Center operated by the City of Portage, which received funds from the area aaa. However, the evidence also indicates that Commissioner Hoffman was not involved in that funding, that the Portage Senior Center was not controlled by and did not have a direct relationship with an aaa, the commission, or the osa, and that the advisory board on which he served did not make recommendations regarding which organizations should receive funding or advise the area aaa in any way.
With respect to MCL 15.181(b)(i) and (ii); MSA 15.1120(121)(b)(i) and (ii), it is clear that Commissioner Hoffman did not hold an "incompatible position.” The issue, therefore, is whether the duties of each office result in a breach of duty of public office pursuant to subsection b(iii). Under this subsection, an incompatibility of public offices would certainly exist if Commissioner Hoffman were involved in direct contractual negotiations with the commission on behalf of the Portage Senior Center or city commission relating to funds for the elderly. These circumstances are not supported by the evidence and, thus, we are of the opinion that the trial court erred in disqualifying Commissioner Hoffman from the commission.
The trial court also disqualified Commissioner Mantila from the commission. Again, the trial court erred in so doing. Suffice it to say, the volunteer positions held by Commissioner Mantila were not "incompatible” with her position as a commissioner. As for Commissioner Jolly, the record reveals that she resigned from the commission in December 1992 for personal reasons. Her disqualification from the commission is therefore moot. Detroit v Detroit Police Officers Ass’n, 174 Mich App 388, 391-392; 435 NW2d 799 (1989). (Commissioner Hoelzel-Seipp’s dismissal from the commission will be discussed later in this opinion under our "conflict of interest” analysis.)
Under the foregoing analysis it is clear that the votes of Commissioners Brietenbach and Green in favor of the new funding formula were the only votes that properly were disqualified by the trial court. Absent these votes, the new formula would have been approved by a vote of eight to five, instead of ten to five. The trial court declared the entire vote void. This action was inconsistent with the requirement of MCL 15.185; MSA 15.1120(125), namely, that any judicial relief under the incompatible public offices act shall operate prospectively only. Accordingly, the trial court erred in voiding the commission’s vote approving the new funding formula.
Finally, but not least significant, plaintiff lacked standing to raise the issue of incompatibility in the trial court. MCL 15.184; MSA 15.1120(124) specifically provides that an action for incompatibility may be brought by the Attorney General or a prosecuting attorney and that there is no private cause of action under the incompatible public offices act. Where a new right or a new duty is imposed by statute, the remedy provided by the statute for enforcement of the right or for nonperformance of the duty is exclusive unless the remedy is plainly inadequate. Forster v Delton School Dist, 176 Mich App 582, 584; 440 NW2d 421 (1989).
Plaintiff was not precluded from communicating its concerns to the Attorney General’s office or to the local prosecutor. These parties, being specifically designated by the Legislature to act in situations such as these, are sufficiently capable of forwarding plaintiff’s grievance in the appropriate forum when the circumstances so dictate. Because plaintiff is not without an adequate remedy, we conclude that it lacked standing to raise the incompatibility issue in the trial court. Id.; MCL 15.184; MSA 15.1120(124).
Next, we conclude that Commissioner Hoelzel-Seipp had a conflict of interest in this case. Although the trial court found that the new funding formula was not a contract, the aaas are authorized to enter into subcontracts for services to the elderly. MCL 400.589(2)(d); MSA 2.638(59)(2)(d). At the time of the commission’s vote in September 1992, Commissioner Hoelzel-Seipp held a management and stock ownership position with Michigan Home Care, a company that provided nursing and basic home care to the elderly. Through her affidavit, Commissioner Hoelzel-Seipp acknowledged that the company received funding from the Grand Traverse County Commission on Aging, which in turn received grants from the area aaa. In light of Commissioner Hoelzel-Seipp’s financial interest in aaa funds as a result of her involvement in Michigan Home Care, we conclude that her participation in approving the new funding formula created a conflict of interest under MCL 400.584(2); MSA 2.638(54)(2) and MCL 15.322(1); MSA 4.1700(52X1).
Addressing defendants’ third argument, we conclude that plaintiff had no standing to bring an action before the trial court pursuant to the state ethics act. As pointed out by defendants, the state ethics act is intended as a code of ethics for public officers and employees, and not as a rule of law for public contracts. See MCL 15.341 et seq.; MSA 4.1700(71) et seq.
Having reversed the trial court’s order on other grounds, we need not address defendants’ remaining issue that concerns the portion of the trial court’s order compelling the Governor to appoint new commissioners.
Reversed. | [
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Per Curiam.
Inmate Charles Shockley was granted parole by the Parole Board on September 5, 1991, and again on May 14, 1992. In each instance, the prosecutor and the victim of Mr. Shockley’s crimes appealed to the circuit court and the parole decisions were vacated. Mr. Shockley and the board appeal as of right from the first decision; Mr. Shockley appeals by delayed leave granted from the second decision. The parties’ separate appeals have been consolidated. We reverse and remand.
We first consider whether venue for this case was proper in Wayne County, where defendant was convicted, rather than in Ingham County, where the Parole Board acted. We conclude that venue was properly laid.
In Blue Cross & Blue Shield of Michigan v Comm’r of Ins, 155 Mich App 723, 728-729; 400 NW2d 638 (1986), this Court held that, in appeals from decisions of administrative agencies, venue is proper either where prescribed by statutes applicable to the agency, or as provided in MCL 600.631; MSA 27A.631, or as provided in the Administrative Procedures Act (apa), MCL 24.201 et seq.; MSA 3.560(101) et seq. In the case before us, the statutes regarding the agency do not address the question of venue. See MCL 791.231-791.246; MSA 28.2301-28.2316. Similarly, because a right to appeal has been specifically provided by law, MCL 600.631; MSA 27A.631, which controls general appeals from agency decisions, does not apply. See MCL 791.234(5); MSA 28.2304(5). Lastly, because this is not a contested case as defined by the court rules and the apa, the venue provisions of the apa do not apply either. See MCL 24.301; MSA 3.560(201); see also MCL 24.303; MSA 3.560(203); MCR 7.105(A)(2). We also note that the general provision of the Revised Judicature Act regarding actions against government agencies does not apply because this was an appeal and not an original action. See MCL 600.1615; MSA 27A.1615.
In the absence of any clearly applicable venue provision, we find that the general venue statute governing appeals from government agency decisions — although not technically applicable — is in pari materia with the parole appeal statute and therefore should apply by analogy. See MCL 600.631; MSA 27A.631. Thus, venue was proper either in "the county of which the appellant is a resident or [in] the circuit court of Ingham county.” Because appellants reside in Wayne County, venue was proper there.
Appellants next argue that the prosecutor and the victim of Mr. Shockley’s crimes had no standing to contest the board’s grants of parole. We disagree.
Since the trial court’s decisions in these two cases, the parole statute has been amended to specifically allow appeals from a grant of parole by the victim and the prosecutor of the county where the defendant was convicted. See MCL 791.234(5); MSA 28.2304(5). The legislative analysis specifically refers to this case and to the board’s argument that the victim and the prosecutor lack standing as reasons for enacting the amendment. It is well-settled that when an amendment is enacted soon after controversies arise regarding the meaning of the original act, it is logical to regard the amendment as a legislative interpretation of the original act. Detroit v Walker, 445 Mich 682, 697; 520 NW2d 135 (1994), and authority cited therein. Thus, the amendment clarifies that, all along, the Legislature intended to give the victim and the prosecutor standing to appeal the Parole Board’s decision. See id.
Next, appellants argue that the trial court applied the wrong standard of review when it decided that the board’s decision was not supported by substantial evidence. We agree and reverse and remand.
Review of agency decisions "in cases in which a hearing is required” must include the determination whether the decision is "supported by compe tent, material and substantial evidence on the whole record.” Const 1963, art 6, § 28. However, a "hearing” is not required before parole is granted except for prisoners "under sentence for life or for a term of years.” See MCL 791.234(4)(b); MSA 28.2304(4)(b); see also MCL 791.235; MSA 28.2305. Rather, the statutes provide for an "interview” with the prisoner and for consideration of a "statement” by the victim. See MCL 791.235(1), (4)-(6); MSA 28.2305(1), (4X6); see also MCL 780.771(1X2); MSA 28.1287(771)(l)-(2). Although the inmate is allowed to "present relevant evidence in support of release,” the statute does not provide for cross-examination and specifically prevents the prisoner from being represented by counsel. See MCL 791.235(6); MSA 28.2305(6). Finally, the decision whether to grant or deny parole is explicitly entrusted to the Parole Board’s discretion. See MCL 791.234(5); MSA 28.2304(5).
In light of the provisions quoted above and of the lack of an explicit standard of review in the statute, we conclude that the appropriate standard of review is abuse of discretion. See J & P Market, Inc v Liquor Control Comm, 199 Mich App 646, 651; 502 NW2d 374 (1993). This discretion, however, is not unfettered but, rather, is circumscribed by the many requirements of the statute. See, e.g., MCL 791.233(1); MSA 28.2303(1); MCL 791.235(1), (3), (4), (7X9); MSA 28.2305(1), (3), (4), (7X9).
In this case, the trial court vacated the Parole Board’s decision by using a higher standard of review than was warranted. Because we cannot guess whether the trial court would have upheld the board’s decision had it applied the proper standard of review, we remand for reconsideration. Compare J & P, supra at 649-652 (where the trial court upheld the agency’s decision using the higher standard of review, the error was harm less). On remand, the trial court is to determine whether, in light of the record and of the statutory requirements, the decision to grant parole constituted an abuse of discretion. The trial court is not to substitute its judgment for that of the Parole Board. Marrs v Bd of Medicine, 422 Mich 688, 694-695; 375 NW2d 321 (1985).
Next, the board argues that the trial court erred in finding that Mr. Shockley could not be granted parole in the absence of confirmed employment. We agree.
The statute provides that "[t]he grant of a parole shall be subject to all of the following: . . . (d) A prisoner shall not be released on parole until the parole board has satisfactory evidence that arrangements have been made for such honorable and useful employment as the prisoner is capable of performing.” MCL 791.233(l)(d); MSA 28.2303(1) (d) (emphasis added). It is clear from this subsection that the granting of parole is conditioned upon the inmate not being released until satisfactory evidence of useful employment is provided to the board. It would be unreasonable to require a prisoner to obtain employment before parole is granted. On the other hand, it is not unreasonable to withhold releasing a parolee until employment is obtained. The board’s longstanding interpretation of the statute is reasonable and should have been upheld. Southfield Police Officers Ass’n v Southfield, 433 Mich 168, 177; 445 NW2d 98 (1989).
Mr. Shockley next argues that the trial judge should have been disqualified from hearing the second case because he made public comments regarding his first decision. We disagree.
"A judge is disqualified when the judge cannot impartially hear a case, including a proceeding in which the judge ... (2) is personally biased or prejudiced for or against a party.” MCR 2.003(B) (2). Normally, the party seeking disqualification has the burden of proving actual prejudice. People v Houston, 179 Mich App 753, 756; 446 NW2d 543 (1989). However, that showing is not required in situations where experience teaches us that the possibility of actual bias is too high to be constitutionally tolerable, such as where the judge has a financial stake in the outcome, has been the target of personal abuse or criticism by a party, is enmeshed in other legal matters involving a party, or may have prejudged the case because of previous participation in the proceedings. Crampton v Dep’t of State, 395 Mich 347, 351; 235 NW2d 352 (1975).
In this case, Mr. Shockley alleges that the judge’s comments to the media show actual bias or prejudice. We disagree. The trial judge told a television reporter:
Once I was acquainted with the facts, the brutal nature of the crime, the amount of time — he had only served some five years [sic] for this horrible crime — his poor prison adjustment, plus the psychological reports, it seemed clear-cut to me that he should not be released early.
These comments are closely tied to the facts and the evidence in the case and do not reflect actual bias or prejudice, although they are colored by the judge’s erroneous perception of the applicable standard of review. Further, it is well-settled that "[Repeated rulings against a litigant, no matter how erroneous, and how vigorously and consistently expressed, are not disqualifying.” Mahlen Land Corp v Kurtz, 355 Mich 340, 350; 94 NW2d 888 (1959).
Lastly, Mr. Shockley argues that it was improper to assign the second case to the first trial judge, rather than by random lot, because the second grant of parole constituted a separate occurrence. We disagree.
In the absence of a different local rule, "[a]ll cases must be assigned by lot” except that, "if one of two or more actions arising out of the same transaction or occurrence has been assigned to a judge, the other action or actions must be assigned to that judge.” MCR 8.111(B) and (B)(1). There is little case law interpreting this rule.
This Court has held that "actions arise from the same transaction or occurrence only if each arises from the identical events leading to the other or others. For instance, several actions separately brought by various passengers of a train which derailed would arise out of one occurrence or transaction.” Armco Steel Corp v Dep’t of Treasury, 111 Mich App 426, 437; 315 NW2d 158 (1981) (finding that separate taxpayer actions involving the same statute did not arise out of the same transaction). In Ross v Onyx Oil & Gas Corp, 128 Mich App 660, 668-669; 341 NW2d 783 (1983) (Cynar, J.), a different panel held that separate suits did not arise out of the same transaction where one sought to invalidate a judgment purporting to affect the plaintiffs’ rights under a lease and the other sought a declaration that the lease had terminated and that further acts by the lessee constituted a trespass.
The present case differs from both Armco and Ross. Here, both actions arose out of parole proceedings attendant to defendant’s incarceration. Therefore, we conclude that the suits arose out of the same transaction — and involve the same legal issues — and that the cases were properly assigned to the same judge. We note that the judge was initially assigned the case by random draw, without objection, and that he was not the same judge that convicted defendant.
Reversed and remanded for proceedings consistent with this opinion. We do not retain jurisdiction.
In 1987, Mr. Shockley was convicted of first-degree criminal sexual conduct, MCL 750.520b(l); MSA 28.788(2)(1), and unlawfully driving away an automobile, MCL 750.413; MSA 28.645. On March 23, 1987, he was sentenced to concurrent terms of 6 V2 to 15 years and 3 to 5 years, respectively. His convictions were affirmed on appeal. People v Shockley, unpublished opinion per curiam of the Court of Appeals, decided April 7,1989 (Docket No. 101969).
The board’s subsequent grant of parole to Mr. Shockley was again vacated in January 1994. Mr. Shockley’s appeal from that decision, Docket No. 174741, has been held in abeyance pending resolution of this case.
We do not decide whether, in the interest of judicial economy and the similarity of legal and factual issues, the cases also could have been properly consolidated below. See Armco, supra at 437-438. | [
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Per Curiam.
Plaintiff, Leslie Dick, appeals from a judgment of divorce that disposed of the property and assets of the parties and awarded custody of their child to defendant, Linda Dick. On appeal as of right, plaintiff challenges the validity of the arbitration procedure to which he had agreed, as well as the substantive determinations of the arbitrator. He contests, in particular, the award of custody of the child to defendant. We affirm.
the procedural background
Plaintiff and defendant had been married approximately 2 Vi years before plaintiff initiated divorce proceedings. They had one son.
After both sides filed their initial pleadings, they agreed to submit all issues, including the division of property and child custody and support, to binding arbitration. On March 30, 1990, the court entered an order providing for binding arbitration, naming an arbitrator, and setting forth the parties’ agreed-upon conditions. Notable among them were the following:
B. The Arbitrator shall be considered, in all respects, to be a substitute for the Circuit Judge in this case and shall be accorded all of the powers, duties, rights and obligations of the Circuit Judge, including, but not necessarily limited to, the detérmination of all issues present in this divorce action, including all pre-judgment (discovery, etc.) and judgment matters involving the parties to this litigation and their minor child.
It is further ordered that the decision of the Arbitrator, as incorporated in the Judgment of Divorce, shall be appealable to the Court of Appeals on the same basis and with the same legal effect as though the decision had been rendered by the Circuit Judge;
It is further ordered that any appeal of this matter to the Court of Appeals shall not be based on the procedure which the Arbitrator has deemed to be reasonable, as set forth above, but shall be based solely on the substantive decision of the Arbitrator; neither party having the right to a trial de novo in this matter, except as it may be based upon errors of substance (as opposed to procedure) committed by the Arbitrator which the Court of Appeals determines to necessitate such trial de novo.
More than two years later, the arbitrator issued his opinion. The length of the arbitration proceedings is directly related to the acrimonious approach of the parties, especially plaintiff. But for the vexatious litigation tactics employed by the parties throughout the proceedings, this matter could have been resolved in a more expeditious manner. At this point, the parties’ divorce proceedings have lasted nearly twice as long as their marriage.
Ultimately, the arbitrator issued a comprehensive, detailed opinion. In determining custody, he made findings of fact regarding the "best interests of the child” factors set forth in MCL 722.23; MSA 25.312(3). The circuit court then entered a judgment of divorce that fully incorporated the arbitrator’s conclusions.
THE APPELLATE ISSUES
On appeal, plaintiff first attacks the validity of the arbitration agreement. He asserts that it was void ab initio, because it was tantamount to the appointment of a private judge by the circuit court. Alternatively, he argues that, if deemed valid by our Court, the arbitration agreement is void because Michigan does not recognize binding arbitration in divorce agreements. He stresses that arbitration is not an acceptable procedure for resolving issues of child custody and support. He requests that we vacate the order of divorce and remand the entire case to the trial court for expedited reconsideration before a different circuit judge.
THE EFFECT OF A CONSENT ORDER FOR BINDING ARBITRATION
We agree with plaintiff’s contention that the circuit court is without authority to appoint a private judge. Brockman v Brockman, 113 Mich App 233, 238; 317 NW2d 327 (1982).
The parties’ arbitration agreement variously characterizes the arbitrator as a "private judge.” We find that the references are at most colloquial expressions describing the extent of the arbitrator’s powers by analogy to judicial functions, and no more. The agreement does not purport to make of the arbitrator a judge "acting under the color of right as a duly appointed judge.” Id. The parties sought permission from the circuit court to enter into binding arbitration. The circuit court ordered binding arbitration. Later, it incorporated the arbitrator’s decision in the order of divorce. We hold that the agreement was one for binding arbitration, not one void ab initio as appointing a private judge.
Because the parties invoked binding arbitration, we must consider whether that procedure may be used in divorce proceedings. Moreover, we must determine whether the binding arbitration agreement at issue here is valid.
Both common law and statutory arbitration have well-established histories in Michigan. In recent years, practitioners have made widespread efforts, with some success, to add binding arbitration to the alternative-dispute-resolution methods available to resolve contested divorces. But no state appellate court has resolved the acceptability of binding arbitration in resolving divorce and, particularly, custody issues.
Authority to permit the use of binding arbitration may be found in MCR 3.216. Although the court rule concerns itself with mediation in domestic relations proceedings, it contains a fairly broad grant of authority regarding settlement procedures. It provides:
(A) Scope and Applicability of Rule. A court may submit any pending divorce, separate maintenance, or annulment proceeding, including post-judgment matters, to mediation under this rule for the purposes of attempting to settle contested issues. Nothing in this rule
(3) prohibits the court from ordering, on stipulation of the parties, the use of modified mediation or other settlement procedures.
We emphasize that the rule primarily is concerned with mediation rather than binding arbitration. But it does authorize specifically the use of other unenumerated "settlement procedures” to resolve domestic disputes. Binding arbitration certainly qualifies as a settlement procedure.
Moreover, our Court has approved the use of binding mediation to resolve property distribution issues in divorce cases. Marvin v Marvin, 203 Mich App 154, 157; 511 NW2d 708 (1993). In Marvin, our Court relied on MCR 3.211(A)(3), the provi sions of which are comparable to those of the present MCR 3.216(A)(3) set out above. In Marvin, we also reiterated the recent ruling of our Court that
where the parties to a divorce action agree to submit certain issues to a third party and to accept the decision of the third party as binding, they are bound by the third party’s decision absent a showing of such factors as duress or fraud. [Marvin, p 157, citing Balabuch v Balabuch, 199 Mich App 661, 662; 502 NW2d 381 (1993).]
Because authority exists in both court rule and case law for permitting parties to agree to "other settlement procedures,” we hold that binding arbitration is appropriate to resolve property distribution issues.
CHILD SUPPORT
However, because child custody and support are not property issues, we must examine separately the legal validity of an agreement to submit them to binding arbitration.
The Child Custody Act, MCL 722.21 et seq.; MSA 25.312(1) et seq., grants circuit courts the power to enter a support order to which the parties have agreed. The amount may deviate from the recommendation under the child support formula, if the requirements of MCL 722.27(2); MSA 25.312(7)(2) are met. Subsection 2 permits deviation from the recommendation if application of the recommendation would be unjust and the court has explained the reasons in writing or on the record. MCL 722.27(2); MSA 25.312(7). See also Balabuch, supra, p 662.
This provision permits us to conclude that child support disputes also may be submitted to arbitra tion pursuant to the agreement of the parties. However, because the provision deals solely with the question of support, it is insufficient, standing alone, to permit us to analogize that child custody may also be submitted to arbitration.
CHILD CUSTODY
Further analysis is required to determine whether child custody may be submitted to binding arbitration, especially because it is a matter of first impression in the state.
In our analysis, we must balance: (1) case law that has led to the widely held belief that custody decisions are the exclusive province of the circuit court, (2) the requirements of the Child Custody Act, and (3) the effect of the Uniform Arbitration Act, MCL 600.5001 et seq.; MSA 27A.5001 et seq.
Thirty-six years ago, our Supreme Court examined the role of the friend of the court in custody issues. Campbell v Evans, 358 Mich 128; 99 NW2d 341 (1959). It concluded that the friend of the court could not decide custody and said:
The responsibility for the ultimate decision and the exercise of judicial discretion in reaching it still rests squarely upon the trial judge. These grave prerogatives he may never delegate to others. [Id., p 131.]
The Court quoted with approval from an earlier opinion that also dealt with utilization of the friend of the court in a custody determination. There the Court said:
We believe that circuit courts have no more important or more difficult hearing function than that of careful handling of custody problems involving minor children. . . . [T]he circuit judge cannot delegate his ultimate responsibility in contested cases for the hearing of evidence and the determination of issues. [Bowler v Bowler, 351 Mich 398, 407; 88 NW2d 505 (1958). Citations omitted.]
Thus, from at least that time, circuit courts have zealously and carefully refrained from permitting the friend of the court or any other party Or agency to make custody determinations.
CASE LAW
As recently as 1994, our Court attempted to follow this instruction, while also permitting the parties to stipulate custody in a consent judgment of divorce. Koron v Melendy, 207 Mich App 188, 191-193; 523 NW2d 870 (1994). In Koron, the parties placed on the record their agreement regarding custody of and visitation with their minor daughter. The court’s order of divorce comported with the parties’ custody and visitation agreement. The defendant appealed, arguing that the trial court erred in accepting the stipulation without first making findings of fact regarding the best interests of the child, as required by MCL 722.23; MSA 25.312(3).
Our Court affirmed the order of divorce and custody. It first noted that a trial court is not bound by the parties’ stipulations or agreements regarding child custody, citing Napora v Napora, 159 Mich App 241, 245; 406 NW2d 197 (1986). However, the Court concluded that the trial court also is not precluded from accepting the parties’ agreement and including it in the court order.
The Court also disposed of the defendant’s claim that findings of fact regarding the best interests of the child must be made in every case. It concluded that, if the parties are in agreement regarding custody and visitation, it
need not expressly articulate each of the best interests factors. Implicit in the court’s acceptance of the parties’ agreement is its determination that the arrangement is in the child’s best interests. [Koron, supra, pp 192-193.]
STATUTES AND COURT RULES
The early and general statements of our Supreme Court regarding the grave duty of judges to dispose of custody matters require deference and compliance. However, they must be balanced against the language of the Uniform Arbitration Act, which became effective in 1963. MCL 600.5001; MSA 27A.5001 provides:
(1) All persons, except infants and persons of unsound mind, may, by an instrument in writing, submit to the decision of 1 or more arbitrators, any controversy existing between them, which might be the subject of a civil action, except as herein otherwise provided, and may, in such submission, agree that a judgment of any circuit court shall be rendered upon the award made pursuant to such submission.
We recognize our obligation to read the language of the arbitration statute in light of previously established rules of common law. In re Childress Trust, 194 Mich App 319, 326; 486 NW2d 141 (1992). We acknowledge that well-settled common-law principles are not to be abolished by implication; an ambiguous statute that contravenes common law must be interpreted so as to make the least change in the common law. Marquis v Hartford Accident & Indemnity (After Re mand), 444 Mich 638, 652-653; 513 NW2d 799 (1994); Energetics, Ltd v Whitmill, 442 Mich 38, 51; 497 NW2d 497 (1993).
Yet, if a statute is clear on its face, judicial construction is not required or permitted. Lorencz v Ford Motor Co, 439 Mich 370, 376; 483 NW2d 844 (1992). Furthermore, the Legislature is presumed to have intended the meaning it plainly expressed. Frasier v Model Coverall Service, Inc, 182 Mich App 741, 744; 453 NW2d 301 (1990).
The language of the arbitration statute is broad and seemingly all inclusive. It permits all persons to submit any controversy to arbitration upon their agreement. It does not specifically exempt any civil action from binding arbitration. Thus, bálancing the Court’s instructions to the lower courts regarding custody determinations with the arbitration statute’s more recent and broad language, custody disputes are not exempted from arbitration.
Furthermore, we find in no other statute a clear prohibition of arbitration of child custody. The Child Custody Act does not prevent it. Instead, it provides that, where a child custody dispute has been submitted to the circuit court as an original action under the act, the circuit court has the authority to "[t]ake any other action considered to be necessary in a particular child custody dispute.” MCL 722.27(1X0; MSA 25.312(7)(l)(f). Such language seems to raise a question whether custody disputes máy be decided only by the court. There is throughout the act language directing how to proceed where the dispute is handled by the court. For example, MCL 722.23; MSA 25.312(3) states:
As used in this act, "best interests of the child” means the sum total of the following factors to be considered, evaluated, and determined by the court.... [Emphasis added.]
Yet, even there, where the function and authority of the court are detailed, use of alternative methods to determine the best interests of the child are not specifically prohibited. Particularly when this portion of the statute is read in conjunction with the broad grant of authority found in MCL 722.27(l)(f); MSA 25.312(7)(l)(f), binding arbitration appears to be a legitimate alternative method.
We have also considered in our decision the language of MCR 3.210(C), Custody of a Minor. That court rule states:
(1) When the custody of a minor is contested, a hearing on the matter must be held within 56 days
(a) after the court orders, or
(b) after the filing of notice that a custody hearing is requested, unless both parties agree to mediation under MCL 552.513; MSA 25.176(13) and mediation is unsuccessful, in which event the hearing must be held within 56 days after the final mediation session.
The Friend of the Court Act, cited in the court rule, requires the friend of the court to provide domestic relations mediation to assist the parties in voluntarily settling custody or visitation disputes. MCL 552.513; MSA 25.176(13).
We do not believe that MCR 3.210(C) precludes binding arbitration. It requires a hearing in a contested case. Yet, if the parties agree to binding arbitration, they effectively move the dispute to a different forum. The court rule does not appear to prohibit such action. The requirement of a hearing, if voluntary nonbinding mediation fails, is equally understandable. If mediation is chosen and fails, the custody dispute remains to be resolved and, save intervention by the courts, there is no other means of resolution. That is not the case if binding arbitration is elected.
Thus, we find no clear prohibition in case law, court rule, or statute against the use of binding arbitration in the resolution of custody disputes. Binding arbitration is an acceptable and appropriate method of dispute resolution in cases where the parties agree to it. Furthermore, the decision of an arbitrator does not prevent a party from seeking to change Custody or modify support in the future.
THE AVAILABILITY OF JUDICIAL REVIEW
However, our analysis as it relates to the arbitration agreement at issue here is not yet complete. Several provisions of the agreement do not comport with the requirements of the arbitration statute. The agreement denies any appeal of the procedural methods adopted by the arbitrator but permits appeal of the substantive issues to our Court.
The parties have attempted to create a hybrid form of arbitration. However, we find no authority for it. Rather, we conclude that, having invoked binding arbitration, the parties are required to proceed according to the applicable statute and court rule. MCL 600.5001 et seq.; MSA 27A.5001 et seq.; MCR 3.602.
According to the court rule, an arbitration award may not be set aside unless (1) the arbitrator or another is guilty of corruption, fraud, or used other undue means; (2) the arbitrator evidenced partiality, corruption, or misconduct prejudicing a party’s rights; (3) the arbitrator exceeded the arbitrator’s power; or (4) the arbitrator refused to postpone the hearing on a showing of sufficient cause, refused to hear material evidence, or conducted the hearing to prejudice substantially a party’s rights. MCR 3.602(J); Gordon Sel-Way, Inc v Spence Bros, Inc, 438 Mich 488, 495; 475 NW2d 704 (1991). Otherwise, the agreement is to be given broad application. Only limited review by the courts is permitted. Id.
The parties’ agreement to appellate review in this case is reminiscent of a mechanism under which the initial ruling is by a private judge, not an arbitrator. We earlier concluded that the parties did not seek to create, and the circuit court lacked the authority to appoint, a private judge. What the parties agreed to is binding arbitration. Thus, they are not entitled to the type of review they attempted to create. See Brockman, supra.
Consequently, we reform the binding arbitration agreement to comport with the requirements of the statutes and the court rules. We strike the clause permitting appeal of substantive matters to our Court and conclude that the agreement may be reviewed only as permitted by court rule. MCR 3.602. There has been no allegation of fraud, duress, or the other factors set forth in MCR 3.602(J). Therefore, we decline to review the agreement further. See also Marvin, supra, p 157.
OTHER ISSUES
Plaintiff also asserts that the court misused its contempt powers in forcing plaintiff to sell the marital home, to pay $2,000 to defendant, and to return her personal property. We find no error in the court’s decision.
First, because plaintiff has acknowledged’ on appeal that he has paid the $2,000, his argument regarding that amount is moot. Furthermore, a court may find a party to a divorce action in contempt when the party fails to fulfill certain obligations of the judgment of divorce. Returning a specific piece of property is included among those obligations. See Guynn v Guynn, 194 Mich App 1; 486 NW2d 81 (1992).
Similarly, we find no error in the court’s decision to appoint a receiver to sell the marital home. The arbitrator ruled that plaintiff transferred ownership of the home to his self-created pension plan for the purpose of placing it beyond defendant’s reach. The actions of the trial court were entirely proper in light of this finding, and the parties’ rights with respect to the marital home were properly adjudicated. See Thames v Thames, 191 Mich App 299; 477 NW2d 496 (1991). Furthermore, the trial court did not err in ordering the receiver to sell the marital home. See Wayne Co Jail Inmates v Wayne Co Chief Executive Officer, 178 Mich App 634, 658-659; 444 NW2d 549 (1989).
Affirmed. | [
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Gribbs, J.
This case involves allegations of Medicaid fraud. The defendant, Edith J. Lee, is awaiting retrial on one count of obtaining money by false pretenses over $100* and one count of submitting false claims to the Medicaid program. Her first trial resulted in a mistrial due to a hung jury. In this interlocutory appeal the prosecutor challenges a pretrial order to indorse res gestae witnesses.
I. The Information
The information was divided into two counts. Both counts alleged that the defendant acted with one common plan and scheme to defraud the Michigan Medical Assistance Program by submitting claims for home visit services not rendered or for a higher fee than that to which she was entitled.
The second count covered the treatment period of July 28, 1977, through January of 1978. It was brought under the Medicaid False Claim Act, MCL 400.601 et seq.; MSA 16.614(1) et seq. That statute took immediate effect on July 27, 1977. Count I covered the pre-statutory period of January 1, 1976, through July 27, 1977, and was brought under the general “false pretenses” statute. _ $18 (the first patient at $10, all remaining patients at $2 each).
II. The Prosecutor’s Theory
The Medicaid program provides for reimbursement to doctors for treating patients in "home visits”. The fee for the first patient seen in the home varied between $8.90 and $12 during the period involved. (For simplicity, we will use an average estimate of $10 in our discussion.) Additional patients seen during the same visit entitled the doctor to $2 each. To assist in computer tabulations, code numbers are used in the claim for reimbursement. Different numbers are used to differentiate the first patient from subsequent patients.
The defendant allegedly treated several members of a family on the same day but submitted separate invoices for each patient seen on that day. Each invoice used code numbers indicating first patient status as opposed to first patient and subsequent patient status. Thus, Dr. Lee would receive reimbursement of $50 for seeing a family of five (five at $10 each) instead of the allowable
Dr. Lee allegedly submitted the invoices for treatments in the same family one at a time over an average of 11 months so that the Medicaid program could not detect that she had used the first patient diagnosis code for each of these patients seen during the same visit. Assuming that the defendant in fact treated each person for which a claim was submitted, the prosecutor estimated that approximately $500,000 of the sum paid to Dr. Lee by Medicaid was fraudulently obtained.
In the first trial the prosecutor relied on circumstantial evidence to show that Dr. Lee did not treat all the patients for which claims were submitted. The defendant’s patient records contained only 25% to 30% of the names for which she billed Medicaid. The defendant explained that each name in the record meant that the entire family was treated during the home visit. The prosecutor matched the defendant’s records with the invoices she submitted to the Medicaid program, comparing the number of "family” names with the number of invoices submitted for that day. For example, the defendant’s record for December 20, 1976, indicated 16 "families” were treated, for which Dr. Lee submitted 322 invoices for payment. The prosecutor also tabulated the top 125 billing days during this period and the number of minutes required to treat the number of patients claimed on the defendant’s invoices. On December 20, 1976, if the defendant worked an 8-hour or 12-hour day, she would have spent 2.01 or 3.02 minutes respectively on each patient. From these statistics, the prosecutor sought to create the inference that the defendant could not have treated all the patients for which she billed Medicaid. These statistics were tabulated from the invoices submitted for the two years and involved approximately 5,000 Medicaid patients and over 96,000 home visits.
For 1976 and 1977, only 13 invoices were found which did not involve home visits. No home visit invoices used the code number for subsequent patients.
III. The Motion to Indorse
While awaiting retrial, defendant moved to dismiss or, in the alternative, for a bill of particulars and for an order requiring the prosecutor to indorse all res gestae witnesses. Wayne County Circuit Court Judge Arthur M. Bowman denied the motion to dismiss and for a bill of particulars, but granted the motion to indorse. The court did not require that all 5,000 patients be indorsed. It required only that res gestae witnesses — of an undetermined number — be indorsed. The court encouraged the parties to agree to the number of witnesses. Apparently the parties were unable to compromise, and this appeal resulted.
IV. The Res Gestae Rule
The res gestae rule has its genesis in MCL 767.40; MSA 28.980:
"All informations shall be filed in the court having jurisdiction of the offense specified therein, after the proper return is filed by the examining magistrate, by the prosecuting attorney of the county as informant; he shall indorse thereon the names of the witnesses known to him at the time of filing the same. The information shall be subscribed by the prosecuting attorney or in his name by an assistant prosecuting attorney. Names of additional witnesses may be indorsed before or during the trial by leave of the court and upon such conditions as the court shall determine.” (Emphasis added.)
From this statute the Michigan courts have found a "duty of the prosecution to show the whole transaction as it was, regardless of whether it tends to establish guilt or innocence”. People v Tann, 326 Mich 361, 367; 40 NW2d 184 (1949). The purpose of the rule is to protect a defendant from the suppression of favorable testimony or from selective investigation by the state. People v Raider, 256 Mich 131, 135; 239 NW 387 (1931); Maher v People, 10 Mich 212, 225 (1862).
Only in Michigan has this rule found continued firm support. See 7 Wigmore, Evidence (Chadbourn rev, 1978), § 2079, pp 538-539. The rule has been criticized by commentators, courts, and counselors. For example, Professor Chadbourn, in his revision of Wigmore’s treatise on evidence, calls the rule "a doctrine of so little worth”. Id., p 543.
There has been at least one legislative attempt to abolish the rule. See HB 4394 (introduced 4/14/ 83). As discussed in the Criminal Defense Newsletter, "[proponents of the bill argue that Michigan’s res gestae witness rule is an anachronism unmatched in any other state’s rules of criminal procedure”. Res Gestae Witness Bill Sparks Debate, Criminal Defense Newsletter, vol 6, No 8, p 6 (July, 1983).
As stated by this panel in People v Cortez, 131 Mich App 316, 324; 346 NW2d 540 (1984), "the rule serves no useful purpose, because defendants may obtain the testimony of favorable witnesses through compulsory process without the assistance of the prosecution. See US Const, Am VI; Const 1963, art 1, §20; MCL 767.32; MSA 28.972, and MCL 767.33; MSA 28.973. In addition, the prosecutor has an ethical duty to disclose evidence favorable to the defense:
"A public prosecutor or other government lawyer in criminal litigation shall make timely disclosure to counsel for the defendant, or to the defendant if he has no counsel, of the existence of evidence, known to the prosecutor or other government lawyer, that tends to negate the guilt of the accused, mitigate the degree of the offense, or reduce the punishment.” DR 7-103(B).
From all this, we conclude that a defendant’s rights are sufficiently protected by sources outside the res gestae rule. The rule can result in delay or dismissal of cases even when the constitutional standards are met. This Court is powerless to change the res gestae rule; nevertheless we urge its abolition.
V. Patients As Res Gestae Witnesses
A. Elements of the Charged Offenses
Whether Dr. Lee’s patients are res gestae witnesses — that is, witnesses to the alleged criminal transaction — turns on the elements of the crimes charged. The elements of Medicaid fraud are: (1) a person makes, presents, or causes to be made or presented, (2) to an employee or officer of the state, (3) a claim under the Social Welfare Act, 1939 PA 280, (4) knowing the claim to be false, fictitious, or fraudulent. MCL 400.607; MSA 16.614(7); In re Wayne County Prosecutor, 121 Mich App 798, 801-802; 329 NW2d 510 (1982); People v American Medical Centers of Michigan, Ltd, 118 Mich App 135, 144; 324 NW2d 782 (1982). "False pretenses” is shown when (1) a person makes a false pretense, (2) with intent to defraud, and (3) the fraud is accomplished. MCL 750.218; MSA 28.415; People v Lee, 259 Mich 355, 356; 243 NW 227 (1932); People v Taurianen, 102 Mich App 17, 27; 300 NW2d 720 (1980).
B. The Patients
We now apply the elements of the offenses to the circumstances of Dr. Lee’s patients. The patients are not witnesses to the doctor’s procedure of billing the Medicaid program. They have no ability to witness those elements of the offenses relating to the billing process and thus are not res gestae witnesses. Cf. People v Anderson, 64 Mich App 218, 223; 235 NW2d 746 (1975) (person who is not in a position to observe the alleged crime, e.g., because of remoteness, is not a res gestae witness). Therefore, the patients do not have to be called to prove that Dr. Lee made, presented, or caused to be made or presented to an employee or officer of the state a claim under the Social Welfare Act.
The prosecutor concedes that the state is not concerned about which family member was in fact treated first and which members were subsequently seen. The state’s concern is that more than one patient per household was billed at the "first patient” rate. For this reason, the use of the first patient code numbers is purely a billing pro cedure, excusing the production of patients as witnesses. If, for some reason, the prosecutor had intended to prove that Patient A was treated second, not first as billed, Patient A would be a necessary witness to the fact of treatment and sequence. The statutes and the information do not require such a detailed showing, however, so this element of proof does not require indorsement of the patient as a res gestae witness.
The patients are not witnesses to the reimbursement procedure and therefore are not res gestae witnesses to the third element of the "false pretenses” count, the accomplishment of the alleged fraud.
At this juncture, the prosecutor does not seek to show Dr. Lee’s intent through statements to her patients. Unless the manifestation of her intent depends on the patients, they are not res gestae witnesses to the knowledge or intent elements.
The elements remaining, then, are related to the falsity of the claims made: "false, fictitious, or fraudulent” for Medicaid fraud and "false pretense” made to defraud under the false pretenses statute. For these proofs, we conclude that the patients are res gestae witnesses. If the prosecutor seeks to prove that a billed-for patient was not treated, the patient is a witness. If the prosecutor charges that Medicaid was billed for nonexistent persons, there can be no witness to the fact of "non-treatment”. Proof of the nonexistence of a person would rely on the Medicaid program’s listing of approved recipients. But to prove "non-treatment” of an existing person, that person is a res gestae witness. The res gestae rule includes those who would testify that they saw nothing. People v Abrego, 72 Mich App 176, 179; 249 NW2d 345 (1976).
The prosecutor cannot rely solely on computer compilations of data or statistical samplings to show the improbability of treatment. Patients exist, even if they are duplicative of the hard data presented. No amount of circumstantial evidence or well-based inferences can change the mandate that eyewitnesses be indorsed as res gestae witnesses.
We note that in People v American Medical Centers, supra, p 149, the prosecutor used the testimony of patients to show that a particular medical procedure, billed to the Medicaid program, had not been performed.
C. Number of Witnesses
Next, we consider the number of witnesses who must be indorsed. The prosecutor did not charge a definite number of criminal acts. Instead, the information alleges "one common plan and scheme to defraud”. Therefore, the number of res gestae witnesses is the number required to prove a "common plan and scheme”. There is no legal yardstick by which to measure the number of such wit nesses. It is largely a factual determination of how many fraudulent billings are needed to convince the trier of fact that the billings were not independent of each other, but comprised a larger scheme.
In other contexts, the proof of a "[c]ommon scheme or plan” has required the proof of, simply, more than one connected similar offense. State v Wright, 191 NW2d 638, 641 (Iowa, 1971) (proof of other acts in context of evidence rule similar to MRE 404[b]). In State v Frederick, 129 Ariz 269, 271; 630 P2d 565, 567 (Ariz App, 1981), two offenses were allowed to be joined in an indictment under a rule allowing joinder if the charges were part of a common scheme or plan. For purposes of determining the vagueness of a sentence enhancement statute, the Supreme Court of Nevada discussed two definitions:
"[T]he phrase 'common plan or scheme’ has acquired a common law usage in one context that means a single plan or scheme contemplating two or more offenses before the plan has been completed, and that means in another context the perpetration of two independent and unrelated offenses having a sufficient number of elements in common to make the commission of the first relevant to a determination of the identity of the perpetrator of the second.” Washoe County Sheriff v Smith, 91 Nev 729, 732; 542 P2d 440, 442 (1975).
As a caveat, the Court of Appeals for the Second Circuit determined in a mail fraud case that "sporadic deceits in the course of a business will not constitute a 'scheme’; that there must be some continuity in the representations, so that they can be said to be part of the continuous means by which the business is carried on”. United States v Billiard, 101 F2d 829, 834 (CA 2, 1938), cert den 306 US 635; 59 S Ct 484; 83 L Ed 1036 (1939), citing McLendon v United States, 2 F2d 660 (CA 6, 1924).
We recognize that the cited cases involve the sufficiency of evidence to convict or the propriety of evidentiary rulings, while our case involves the necessity of producing certain witnesses. Still, the cases offer guidance in our determination of what it takes to show a "common plan and scheme”. The prosecution is not required to prove 5,000 or even 50 fraudulent billings. The prosecutor must show at least two offenses linked by a common plan or scheme!
Beyond the proof of the barest plan or scheme, additional testimony would be cumulative. Our decision does not bar testimony of additional fraudulent billings. The quantum of proof is left to the judgment of the prosecutor, who is charged with persuading the trier of fact of the existence of a scheme beyond a reasonable doubt. We say only that the prosecution is not required by the res gestae rule to present additional witnesses because the res gestae — the scheme — stands proven.
Conclusion
The circuit court correctly decided that res gestae witnesses must be indorsed under MCL 767.40; MSA 28.980. There is no inherent exception to the res gestae rule when a prosecutor can prove his case with circumstantial evidence.
The trial court’s remarks during the motion hearing, however, indicate that there was some question as to which patients, and how many, should be indorsed. We have offered some guidelines to assist the court. Accordingly, we affirm the court’s order and remand for further proceedings consistent with this opinion.
Affirmed and remanded.
"Any person who, with intent to defraud or cheat, shall designedly, by color of any false token or writing or by any false or bogus check or other written, printed or engraved instrument, by spurious coin or metal in the similitude of coin, or by any other false pretense, cause any person to grant, convey, assign, demise, lease or mortgage any land or interest in land, or obtain the signature of any person to any written instrument, the making whereof would be punishable as forgery, or obtain from any person any money or personal property or the use of any instrument, facility or article or other valuable thing or service, or by means of any false weights or measures obtain a larger amount or quantity of property than was bargained for, or by means of any false weights or measures sell or dispose of a less amount or quantity of property than was bargained for, if such land or interest in land, money, personal property, use of such instrument, facility or article, valuable thing, service, larger amount obtained or less amount disposed of, shall be of the value of $100.00 or less, shall be guilty of a misdemeanor; and if such land, interest in land, money, personal property, use of such instrument, facility or article, valuable thing, service, larger amount obtained or less amount disposed of shall be of the value of more than $100.00, such person shall be guilty of a felony, punishable by imprisonment in the state prison not more than 10 years or by a fine of not more than $5,000.00.” MCL 750.218; MSA 28.415.
"(1) A person shall not make or present or cause to be made or presented to an employee or officer of the state a claim under Act No. 280 of the Public Acts of 1939, as amended, upon or against the state, knowing the claim to be false, fictitious, or fraudulent.
"(2) A person who violates this section is guilty of a felony, punishable by imprisonment for not more than 4 years, or by a fine of not more than $50,000.00, or both.” MCL 400.607; MSA 16.614(7).
Count II reads:
"Edith J. Lee, in the County of Wayne, State of Michigan, acting with one common plan and scheme to defraud the Michigan Medical Assistance Program, hereinafter referred to as the Medicaid program, did submit Medicaid practitioner Invoices to employees of the Michigan Department of Social Services, wherein Edith J. Lee requested payment from the Medicaid program, that such practitioner invoices were submitted during the time period of July 28, 1977, through January of 1979, that such practitioner invoices represented billings for medical services consisting of individual home visits which Edith J. Lee claims to have rendered to Medicaid patients between July 28, 1977, through January of 1978; whereas in truth and in fact the said Edith J. Lee knew that many of the practitioner invoices submitted by her were utterly false and that she had never rendered the billed-for services, or that she knowingly used billing code numbers which falsely represented the services actually rendered; and said Edith J. Lee did thereby cause false and fictitious claims under Act No. 280 of the Public Acts of 1939, as amended, upon or against the State of Michigan, to be made and presented to employees of the State of Michigan, knowing said claims to be false and fictitious, in violation of MCL 400.607; MSA 16.614(7), and against the peace and dignity of the People of the State of Michigan.”
Count I reads:
"Edith J. Lee, in the County of Wayne, State of Michigan, acting with one common plan and scheme to defraud the Michigan Medical Assistance Program, hereinafter referred to as the Medicaid program, did submit Medicaid practitioner invoices to the Michigan Department of Social Services which administers the Medicaid program, that such practitioner invoices were submitted during the time period of January, 1976, through July, 1978, that such practitioner invoices represented billings for medical services consisting of individual home visits which Edith J. Lee claims to have rendered to Medicaid patients between January 1, 1976, and July 27, 1977, that in reliance upon such practitioner invoices the Michigan Department of Social Services paid one Edith J. Lee for such claimed services; whereas the said Edith J. Lee knew that many of the practitioner invoices submitted by her were utterly false and that she had never rendered the billed-for services, or that she knowingly used billing code numbers which falsely represented the services actually rendered, and that as a result of these false practitioner invoices intentionally submitted by Edith J. Lee she fraudulently obtained in excess of $100.00 from the Michigan Department of Social Services, in violation of MCL 750.218; MSA 28.415, and against the peace and dignity of the People of the State of Michigan.”
We refer to the defenses presented at trial only because they indicate the direction the prosecution may take, in anticipation, upon retrial. This, in turn, affects the requirement of res gestae witnesses. A different attorney represented the defendant at the first trial; it is possible the defense strategy will change on retrial.
See also DR 1-102. We concede that a disciplinary rule does not have the equivalent authority of a statute in regulating conduct. However, we do not take the prosecutor’s ethical duty lightly, and we expect that trial courts will be diligent in assuring that defendants receive the intended benefits of DR 7-103(B).
These are the three factors of the first element of the Medicaid statute count and part of the first element ("makes”) of false pretenses.
Knowledge is part of the fourth element of Medicaid fraud; intent to defraud is the second element of false pretenses.
Those patients who the prosecutor concedes were examined are not res gestae witnesses to their own treatment because they did not witness any element of the charged offense. Proper treatment of some patients is immaterial to the alleged fraud involving other patients. The defendant conceded this point at the motion hearing in circuit court. If they witnessed another patient’s "treatment” for which the prosecution contends treatment was not provided, they are res gestae witnesses to the fact of treatment or non-treatment, as is the "non-treated” patient.
We thus reject the prosecutor’s claim that there is an inherent exception to Michigan’s res gestae rule when proof can be had by alternative means. The prosecutor’s reliance on federal cases is misplaced; they are not based on Michigan’s unique law. Beyond the exception for cumulative testimony (treated infra), we find no wholesale exemption from the rule due to a potentially large witness pool.
The second context is the evidentiary context. See MRE 404(b).
See fns 3 and 4 supra.
People v Raider, supra, 256 Mich 134-135; People v Sims, 62 Mich App 550, 554-555; 233 NW2d 645 (1975).
Additional offenses offered as further proof of the scheme may well require-indorsement of additional res gestae witnesses.
The prosecutor expresses concern that the defendant will present some form of a "mistake” defense — that with 96,000 billings some mistakes are bound to occur. In this instance, the prosecutor would be entitled under MRE 404(b) to introduce evidence of other acts to show intent or abence of mistake. In essence, this would reveal the far-reaching scope of the scheme. The fact of a scheme already having been shown, the res gestae rule would pose no obstacle to the admission of the additional evidence.
Similarly, our decision does not prohibit the prosecution from offering its computer data. Requiring compliance with the res gestae rule in no way prevents the use of circumstantial evidence. | [
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Per Curiam.
Petitioner appeals as of right an order of the Michigan Tax Tribunal (MTT) imposing costs of $126,177 in connection with petitioner’s request for a reappraisal of township property. On appeal, petitioner contends that the award of costs was improper because respondent’s bill of costs was untimely filed under MTT Rule 462.* We find no error and affirm.
Petitioner emphasizes that respondent waited over 40 days to file a bill of costs following the tribunal’s ruling dated October 22, 1982. According to petitioner, since MTT awarded costs anyway, MTT has failed to adhere to that portion of its Rule 462 which states that a party’s failure to provide a bill of costs "within ten days following a final decision of the tribunal * * * constitutes waiver of any right thereto”. Petitioner goes on to suggest that this is a case in which an administra tive agency (MTT) has arbitrarily "failed to follow its own rules”, analogous to Paselli v Utley, 282 Mich 267; 276 NW 444 (1937), and DeBeaussaert v Shelby Twp, 122 Mich App 128; 333 NW2d 22 (1982). We disagree.
In the cases cited by petitioner, there was neither a reasonable basis nor any practical necessity for the administrative agency’s decision to suspend or sidestep its own rules. Under these circumstances, it is quite understandable that the Court in each case would view the agency’s action as arbitrary and capricious in nature, Paselli, supra; DeBeaussaert, supra.
In the present case, strict compliance with MTT’s ten-day time limit for filing the bill of costs was impracticable. The appraisal which respondent had agreed to have performed in order to defend against petitioner’s appeal to MTT had not been completed at the time of MTT’s final order dated October 22, 1982, and the final cost figures would not be available within the ten-day time limit. MTT member Roy L. Spencer specifically took note of this extenuating circumstance. In granting respondent an extension of time to file its bill of costs, member Spencer observed:
"However, it was clearly understood by the tribunal and all parties concerned that the reappraisal in question was not completed as of trial, and that respondent was to file its bill of costs after completion of the reappraisal and final billing to the respondent. Thus, the tribunal extended the normal ten-day filing period in this cause.”
The record reveals that immediately upon receiving its final billing for the reappraisal in question, respondent (1) took its normal steps of approving the payment, and (2) filed the bill of costs to be considered by MTT. There was no unjustifiable delay.
The foregoing circumstances do not suggest a case in which an administrative agency or tribunal has arbitrarily indulged one party’s circumvention of rules to the detriment of his opponent. The suspension of the ten-day limit was not only proper, but inevitable under the circumstances. No demonstrable prejudice has resulted to petitioner from this delay; there has not even been a showing that petitioner was in any way inconvenienced or even surprised by the delay. If anything, the delay operated to petitioner’s slight benefit, by allowing it to retain for an extra few weeks possession of a sizeable sum of cash during a period of relatively high interest rates. Accordingly, we find that petitioner has misplaced reliance upon Paselli', supra, and DeBeaussaert, supra. MTT has not acted improperly in suspending the ten-day filing deadline set forth in its Rule 462, under the circumstances of this particular case.
Respondent makes one additional point which merits comment. No reported case has interpreted Tax Tribunal Rule 462(2) or its provision for a ten-day filing period. However, for guidance this Court could reasonably turn to GCR 1963, 526.10(2), which addresses taxation of costs in circuit court proceedings. Like MTT Rule 462, this court rule requires a party to present a bill of costs within 30 days, and goes on to state that "failure to present a bill. of costs within the time prescribed shall constitute a waiver of the right to such costs”. The only difference between the court rule and MTT Rule 462 is the latter’s reference to a ten-day filing period. In Cope v City of St Clair, 28 Mich App 380; 184 NW2d 464 (1970), a condemnation case involving appraisals similar to those involved here, the Court considered the issue of whether the court rule’s time limits applied to one party’s bill of costs for certain expert witness fees. The Court found that the time limit could properly be extended under the circumstances:
"Appellants contend that the taxing of costs for expert witness fees does not fall under the aforementioned court rule because that rule applies only to costs which are ministerial in nature and can be taxed easily by the clerk while the costs in the case at bar are to be taxed by the court.
"The logical extension of such an argument would lead to the conclusion that the time limits of GCR, 526.10(2) apply only where costs are to be taxed by the clerk in the first instance, and since expert witness fees are for determination by the court, the time limits do not apply. This argument makes a good deal of sense also in light of the wording of the rules and the extra time that may be required by the party desiring expert witness fees to determine their amount” 28 Mich App 381-382. (Emphasis added.)
The Court in Cope, supra, remanded the matter to the trial court for a determination of reasonable costs for the appellant’s expert witness fee. In the present case, respondent similarly requested reimbursement for expert appraisal fees incurred in defending an action. The circumstances are almost identical to those presented in Cope, supra. Here, as in Cope, supra, the governing rule, MTT 462, can be read to allow "extra time that may be required by the party desiring the expert witness fees to determine their amount”. In other words, the ten-day time limit is inapplicable where, as here, extra time is needed to determine the actual bill of costs.
The foregoing discussion makes it apparent that there are two ways to justify MTT’s decision to suspend the ten-day filing requirement as set forth under its Rule 462. One way is to find that compliance with the rule was impracticable, and that MTT did not act capriciously in suspending its application under the circumstances. The other approach suggested by Cope v City of St Clair, supra, is to construe the rule as being inapplicable to situations in which extra time is needed to determine the actual amount of the disputed bill of costs. Using either approach, we have little difficulty in concluding that MTT acted properly in allowing respondent to file its bill of costs after ten days had elapsed, and that there was no error in its decision to impose costs despite the delay. Its order imposing costs is affirmed.
Affirmed.
"Rule 462. (1) Costs shall be allowed only when provided for by the Tribunal in a final judgment or order. (2) When costs are allowed, the prevailing party shall file a Bill of Costs with the clerk within ten days following a final decision of the Tribunal and furnish a copy thereof to all other parties to the action. A party shall have ten days after the service of the bill of costs to protest it or any item thereon. A protest shall be filed with the Tribunal. If objections are filed, the Clerk may set the same for a hearing or present such objections as a motion before the Tribunal. Failure to ñle the Bill of Costs within the ten day period constitutes a waiver of any right thereto. (3) The Bill of Costs shall state each item claimed and the amount thereof separately and shall be verified by affidavit to the party or representative. The affidavit shall state that each item is correct and that the same was necessarily incurred.” (Emphasis added.) | [
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Per Curiam.
Defendant-appellant, Albert Ferrari, was sentenced to a prison term of from 2 to 15 years, having been convicted by a jury of breaking and entering an occupied dwelling with the intent to commit the crime of larceny, MCL 750.110; MSA 28.305. Defendant was tried jointly with Dale Thomas Mullins, who testified on his own behalf and who was subsequently acquitted.
Prior to trial, the prosecution moved to admit evidence of defendant’s prior burglary and attempted larceny of an automobile convictions. Defense counsel failed to object at that time and did not establish that defendant would testify if the evidence of his convictions were excluded. The trial court admitted the evidence of the prior convictions.
Defendant appeals as a matter of right alleging the trial court erred by allowing evidence of prior convictions which were too similar to the pending charge to be used for impeachment purposes, and by forcing defendant to forego testifying on his own behalf for fear of impeachment, thus limiting his defense.
The admission of evidence regarding prior convictions for purposes of impeachment is governed by MRE 609(a):
"For the purpose of attacking the credibility of a witness, evidence that he has been convicted of a crime shall be admitted if elicited from him or established by public record during cross-examination but only if "(1) the crime was punishable by death or imprisonment in excess of one year under the law under which he was convicted, or the crime involved theft, dishonesty or false statement, regardless of the punishment, and
"(2) the court determines that the probative value of admitting this evidence on the issue of credibility outweighs its prejudicial effect and articulates on the record the factors considered in making the determination.”
A trial court is empowered to use its discretionary powers to determine the probative value of admitting evidence of prior convictions for impeachment purposes. People v Jackson, 391 Mich 323; 217 NW2d 22 (1974). In exercising this discretion, a trial court must balance the probative value of the evidence of the prior convictions with its prejudicial effect. People v Hughes, 411 Mich 517; 309 NW2d 525 (1981), reh den 412 Mich 1101 (1981). In making its determination, a trial court must consider three factors:
(1) The nature of the prior offenses (did they involve offenses bearing directly on credibility, such as perjury?);
(2) Whether the prior offense is for substantially the same conduct for which the defendant is on trial (are the offenses so closely related that the jury will consider the defendant a bad man, creating prejudice?);
(3) The effect on the decisional process if the accused does not testify out of fear of impeachment by prior convictions (are there alternate means of presenting a defense?). People v Crawford, 83 Mich App 35, 39; 268 NW2d 275 (1978).
The defendant contends that the nature of the prior offenses and the similarity between them and the charged larceny should have weighed against their admissibility. Defendant relies on People v Williams, 413 Mich 72; 318 NW2d 462 (1982), where a prior voluntary manslaughter conviction was held to be too similar to a second-degree murder offense and should have been excluded as prejudicial. This Court, however, has distinguished Williams, supra, from cases where evidence of prior larceny convictions was involved. "Convictions of larceny * * * are much more probative of a witness’s credibility than convictions of voluntary manslaughter and reckless discharge of a firearm (the crimes admitted in the Williams case).” People v Rush, 118 Mich App 236, 240; 324 NW2d 586 (1982). Similarly, evidence of defendant’s prior convictions of burglary and attempted larceny was probative of his credibility and properly admitted.
Defendant also contends that error occurred because defendant feared impeachment through evidence of his prior convictions and subsequently refrained from testifying. This Court has recently addressed this same issue in People v Casey, 120 Mich App 690, 696; 327 NW2d 337 (1982), where we stated:
"In future cases to preserve the issue for review, a defendant must at least, by a statement of his attorney: (1) establish on the record that he will in fact take the stand and testify if his challenged prior convictions are excluded; and (2) sufficiently outline the nature of his testimony so that the trial court, and the reviewing court, can do the necessary balancing contemplated in Rule 609.”
In the case at hand, defendant’s attorney failed to establish the defendant’s desire to testify or what might be elicited from such testimony. It is clear that the defendant failed to preserve this issue for review, in accordance with Casey, supra, and is therefore precluded from assigning it as error on appeal.
Finally, the defendant also alleges that the trial court erred by failing to articulate the factors considered in rendering its decision pursuant to MRE 609.
The failure of a trial court to discuss on the record the criteria considered in the decision to deny a motion to exclude references to a defendant’s prior criminal record does not establish reversible error where the trial court recognized its discretion in admitting such evidence and there is the absence of an affirmative misapplication of the criteria to be considered in the exercise of such discretion. People v Avery, 114 Mich App 159; 318 NW2d 685 (1982), lv den 417 Mich 861 (1983). In the instant case, it is clear that the trial court recognized its authority to admit or exclude evidence of defendant’s prior convictions. The trial court quoted MRE 609 on the record and acknowledged that it had the discretion to admit the evidence.
We find no abuse by the trial court in the exercise of its discretion.
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Hood, J.
Defendant appeals as of right from a December 9, 1981, jury verdict awarding damages to plaintiff for wrongful discharge from employment by defendant and from the trial court’s August 31, 1982, order denying defendant’s motions for judgment notwithstanding the verdict, new trial, or remittitur. Plaintiff cross appeals the jury’s partial verdict for defendant on plaintiff’s theory that he was wrongfully discharged because of a handicap and from the trial court’s February 22, 1982, judgment reducing the jury’s $450,000 award, stipulated to be future damages, to a present value of $270,439.50, SJI 53.03, and holding that statutory interest on the reduced award need only be paid from the date of the verdict, not from the day plaintiff filed his complaint. MCL 600.6013; MSA 27A.6013.
Defendant hired plaintiff as a labor relations employee beginning September 6,1977, at its Wood-haven plant. Defendant discharged plaintiff on February 2,1978.
Plaintiff testified that prior to applying for employment at the Ford Woodhaven plant, he sought similar employment at Ford’s world headquarters and Monroe, Ypsilanti, and Rouge plants. Plaintiff filled out applications and medical history forms at all but the Ypsilant plant. The medical history forms asked the question, "Have you ever filed a state compensation claim due to industrial accident or disease?” Plaintiff said he answered the question affirmatively on all the forms but the one he completed at the Woodhaven plant. Plaintiff had sustained a work-related injury while employed for General Motors Corporation (GMC) in 1971 and received workers’ compensation benefits for that injury for nearly a year. Plaintiff said he did not disclose this fact at the Woodhaven plant because interviewers at the Ford Rouge plant and world headquarters had informed him that his affirmative response might cause the defendant to deny him employment.
Plaintiff said he told William Cottrell, his supervisor at Woodhaven, during his job interview that he had a speech impediment and also a disability due to a former knee injury sustained at GMC. Plaintiff also said he informed Cottrell that he had a pending third-party negligence suit related to the injury.
In October and November 1977, defendant took time off work to attend his third-party negligence trial. Immediately before that trial, plaintiff and another labor relations employee had prepared a computer program which erroneously caused Wood-haven employees to receive a shortage in their personal holiday pay.
Upon plaintiff’s return to work after his trial, Cottrell advised plaintiff he was fired because of the computer error and because Cottrell had discovered that plaintiff had falsified his answer on the medical history form. Cottrell testified at trial that plaintiff would not have been discharged for only the computer error. The principal reason for plaintiff’s discharge, according to Cottrell, was his falsification on his medical history form. Cottrell said plaintiff’s leg injury and speech impediment had no bearing on plaintiff’s discharge.
Before submitting his case to the jury, plaintiff withdrew the civil rights action he had pled. The jury was instructed that plaintiff’s theory was that he was discharged because of his handicaps in violation of the Michigan Handicapper’s Civil Rights Act, MCL 37.1101 et seq.; MSA 3.550(101) et seq., or that he was unlawfully discharged because he had filed a previous workers’ compensation claim with a former employer. The jury returned its verdict of $450,000 damages on only the latter theory.
I
In its motions for judgment notwithstanding the verdict, new trial or remittitur, defendant raised several issues: (1) That there exists no cause of action for wrongful discharge of an employee for filing a workers’ compensation claim during previous employment; (2) that even if such a cause of action does exist, plaintiff did not adequately plead it and, thus, it should not have gone to the jury; (3) that the trial court incorrectly instructed the jury regarding the workers’ compensation theory and as to damages; (4) the verdict was against the great weight of the evidence; and (5) the verdict was grossly excessive.
In an August 17, 1982, opinion, the trial court rejected all the above arguments. Defendant raises all of them again in this appeal.
Defendant’s first two arguments regarding the validity of plaintiff’s workers’ compensation theory and plaintiff’s failure to plead it adequately were raised in the motion for judgment notwithstanding the verdict.
"A judgment notwithstanding the verdict on defen dants’ motion is appropriate only if the evidence is insufficient as a matter of law to support a judgment for plaintiff. Basic Food Industries, Inc v Grant, 107 Mich App 685, 695; 310 NW2d 26 (1981). In reaching a decision, the trial court must view the evidence in the light most favorable to the plaintiff and give the plaintiff the benefit of every reasonable inference that could be drawn from the evidence. Isom v Farrugia, 63 Mich App 351, 354-355; 234 NW2d 520 (1975). If after viewing the evidence in this manner reasonable men could differ, the question is one for the jury and judgment notwithstanding the verdict is improper. Id. ” Drummey v Henry, 115 Mich App 107, 110-111; 320 NW2d 309 (1982).
Defendant argues that its motion for judgment notwithstanding the verdict should have been granted because plaintiffs workers’ compensation theory is not legally recognized. However, the trial court found:
"In determining whether or not defendant is entitled to a judgment notwithstanding the verdict the Court is persuaded that Suchodolski v Michigan Consolidated Gas Co, 412 Mich 692 [316 NW2d 710 (1982)] is dispositive of this issue. From the syllabus of the case summarizing the court’s opinion it is stated:
" '1. Courts have recognized that some grounds for discharging an employee are so contrary to public policy as to be actionable. Most often the proscription is found in explicit legislative statements protecting employees who act in accordance with a statutory right or duty. Occasionally a sufficient legislative policy has been found to imply a cause of action for wrongful discharge even in the absence of an explicit prohibition, as when the discharge is for failure or refusal to violate a law, or for the exercise of a right conferred by legislative enactment.’
"Certainly pursuing one’s right under the workers’ compensation statute is a right conferred by legislative enactment. Therefore, if the defendant discharged the plaintiff because plaintiff had filed a workers’ compensa tion claim, clearly such discharge would be contrary to the public policy of this state.
"There can be no question that plaintiff was discharged shortly after defendant learned of the workers’ compensation claim plaintiff had filed while employed with General Motors. It is also true that the defendant learned about the same time that plaintiff had lied on his application for employment with defendant concerning the workers’ compensation matter. It was, therefore, a question of fact as to why plaintiff was discharged; and defendant had the full opportunity of presenting to the jury all facts supporting its claim that defendant was discharged because of poor work performance and because he had lied on his application for employment. The jury, however, did not accept defendant’s theory of the case. Rather, it accepted plaintiff’s claim that he was discharged because during previous employment he had filed a workers’ compensation claim.”
The trial court also found that plaintiff presented sufficient evidence at trial to enable the jury to draw the inference that defendant discharged plaintiff because plaintiff filed a workers’ compensation claim against a previous employer.
We agree, and affirm the trial court on this point. Although generally at-will, indefinite-term employment contracts, such as the one in this case, are terminable at will, Lynas v Maxwell Farms, 279 Mich 684, 687; 273 NW 315 (1937), exceptions are recognized where a discharge violates a recognized public policy or the worker’s statutory rights. Suchodolski, supra, Schipani v Ford Motor Co, 102 Mich App 606, 619, 620; 302 NW2d 307 (1981). One such statutory right is that of a worker to file workers’ compensation claims. This Court holds that it is contrary to public policy for an employer to discharge an employee in retaliation for filing a workers’ compensation claim. Sventko v Kroger Co, 69 Mich App 644; 245 NW2d 151 (1976); Hrab v Hayes-Albion Corp, 103 Mich App 90, 94; 302 NW2d 606 (1981). We find no reason, as defendant suggests, to limit this rule only to employers who fire employees who file claims against them rather than against previous employers. The public policy extends to situations such as this where the employee argues an unlawful or retaliatory discharge because he or she filed a workers’ compensation claim against any employer, including a previous employer.
Moreover, we also agree with the trial court’s opinion that plaintiff sufficiently pled the workers’ compensation cause of action. The trial court found:
"In plaintiff’s complaint he states:
"Paragraph 11 — 'Prior to his employment with the defendant, the plaintiff had utilized the services of the Workmen’s Compensation Department of the State of Michigan in a claim for injuries sustained while in the employ of General Motors Corporation.’
"Paragraph 15 — 'The plaintiff’s discharge from his employment was in violation of the aforesaid acts and MCL 37.2302 in that the defendant, its agents, servants and employees in particular one William Cottrell were motivated in the discharge of plaintiff and in fact discharged the plaintiff because the plaintiff made use of the facilities of the Workmen’s Compensation Department and of the Wayne County Circuit Court in violation of the aforesaid acts.’
"Paragraph 16 — 'As the direct and proximate result of the aforesaid unlawful acts of the defendant, its agents, servants and employees, the plaintiff has suffered loss of earnings capacity has been subjected to embarrassment and humiliation and great emotional distress and anguish.’
"It is this Court’s view that the above language in the complaint was sufficient to reasonably apprise the defendant that it would be called upon to defend plaintiff’s claim that he was wrongfully discharged from his employment because he had filed a workers’ compensation claim during previous employment, and that he has suffered damages as a result thereof. Defendant’s claim that the cause of action was not properly plead [sic] is, therefore, without merit.”
A complaint need only contain "such specific averments as are necessary reasonably to inform the adverse party of the nature of the cause he is called upon to defend”. GCR 1963, 111.1(1). A complaint is sufficient if it gives notice of the nature of the claim sufficient to allow the opposing party to take a responsive position. Simonson v Michigan Life Ins Co, 37 Mich App 79, 83; 194 NW2d 446 (1971). We agree with the trial court that plaintiff’s complaint sufficiently apprised defendant that his action was brought because defendant discharged plaintiff for making use of the Bureau of Workers’ Disability Compensation. Pleadings are not expected to narrow issues; rather, the discovery process, pretrial conference, and summary judgment serve this function. Simonson, supra. Moreover, issues not raised in a pleading may be tried by implied consent and then treated as if they had been raised in the pleadings. GCR 1963, 118.3; Christy v Prestige Builders, Inc, 94 Mich App 784, 791-792; 290 NW2d 395 (1980), rev’d on other grounds, 415 Mich 684 (1982).
In conclusion, we find that the trial court properly denied defendant’s motion for judgment notwithstanding the verdict because plaintiff stated a cognizable claim for a wrongful discharge and adequately pled it.
A trial court has the discretion to grant or deny a new trial and, if that discretion is not abused, the trial court cannot be reversed on appeal. Kailimai v Firestone Tire & Rubber Co, 398 Mich 230, 232; 247 NW2d 295 (1976). When there is compe tent evidence to support the finding of a jury, its verdict should not be set aside. Bell v Merritt, 118 Mich App 414, 422; 325 NW2d 443 (1982).
In its motion for new trial, defendant argued that the trial court had committed several instructional errors. Those included: (1) the court’s failure to instruct on the genesis of plaintiffs workers’ compensation theory; (2) the court’s failure to instruct the jury that plaintiff could not invoke a public policy theory if the jury found plaintiff to have falsely answered a question on his medical history form; (3) the trial court’s failure to instruct the jury that plaintiffs workers’ compensation claim must have been the sole factor causing discharge rather than a significant factor; and (4) that the trial court’s damage instructions, sounding in tort, were inapplicable to this action.
Defendant did not object to the trial court’s failure to give an instruction on the genesis of plaintiff’s workers’ compensation theory nor does it support such an argument with legal authority. Failure to address an instructional error at trial precludes its appellate review absent manifest injustice. GCR 1963, 516.2; Danaher v Partridge Creek Country Club, 116 Mich App 305, 318; 323 NW2d 376 (1982). The trial court did not abuse its discretion by denying the motion for new trial based upon this argument.
Defendant also failed to object to the trial court’s alleged error in failing to instruct the jury that plaintiff could not invoke a public policy ground for wrongful discharge if he was found to have lied on his medical history form. Again, we find no abuse of discretion on the part of the trial court and no manifest injustice. Defendant’s reliance upon Dressler v Grand Rapids Die Casting Corp, 402 Mich 243; 262 NW2d 629 (1978), is misplaced. Dressier was concerned with the application of § 431 of the Worker’s Disability Compensation Act, which prohibits an employee from receiving benefits under the act if that employee misrepresented a prior occupational disease. In this case, plaintiff was not attempting to receive workers’ compensation benefits from defendant and had previously sustained a single-event injury at GMC, not an occupational disease, and had informed defendant’s doctor about the nature of his knee injury at his pre-employment examination. Thus, Dressier and defendant’s suggested instruction do not apply.
Defendant did object at trial to the court’s failure to instruct the jurors that they must find that plaintiff’s prior filing of a workers’ compensation claim was the sole cause of his discharge. The trial court instructed the jurors that they could find a wrongful discharge if they found that plaintiff’s prior workers’ compensation claim was a signiñcant factor in his discharge.
While there is no Michigan case law dispositive on this issue, we find cases involving wrongful discharges in other contexts helpful. In Gallaway v Chrysler Corp, 105 Mich App 1, 5-6; 306 NW2d 368 (1981), lv den 413 Mich 853 (1982), an age discrimination suit, this Court held that a plaintiff need only show that the plaintiff’s age was one significant factor in plaintiff’s discharge; plaintiff need not prove that age was the sole, critical factor causing discharge. See also Adama v Doehler-Jarvis Div of NL Industries, Inc, 115 Mich App 82, 89-90; 320 NW2d 298 (1982).
Also providing some guidance is Smith v Atlas Off-Shore Boat Service, Inc, 653 F2d 1057 (CA 5, 1981). That case involved a seaman’s exercise of his legal right to file a personal injury suit against his employer and his claimed retaliatory discharge for doing so. The court in Smith adopted a "substantial factor” test as plaintiff’s burden of proof. Id., p 1063.
We conclude that the trial court correctly instructed the jurors on plaintiff’s burden of proof. Where, as here, the plaintiff claims that he or she was unlawfully discharged for filing a workers’ compensation claim, plaintiff has the burden of proving that the filing of the workers’ compensation claim was a significant factor in defendant’s decision to discharge the plaintiff.
Finally, as to instructional error, defendant argues that the court’s instructions regarding future wages is proper only for a tort action. Defendant argues that plaintiff’s handicapper’s action was not a tort action and that his wrongful discharge action was an action in contract. Defendant’s argument regarding the handicapper’s claim is specious as the jury found for defendant on that cause. Moreover, plaintiff’s wrongful discharge cause is one sounding in tort, not contract. Sventko, supra. See also Scott v Union Tank Car Co, 75 Ind App 150; 402 NE2d 992 (1980). Therefore, the trial court’s damage instructions were entirely proper.
We also find that the trial court did not abuse its discretion by denying defendant’s motion for new trial on the grounds that the verdict was against the great weight of the evidence. Plaintiff presented competent evidence in support of the verdict. Bell v Merritt, supra. Plaintiff testified that Cottrell told him if he pursued this "General Motors thing” Cottrell could not guarantee plaintiff’s job. Plaintiff also testified that he told Cottrell shortly before Cottrell fired him that he had filed a worker’s compensation claim against General Motors.
Defendant also moved for remittitur, arguing that the evidence plaintiff presented on potential lost future wages should have been excluded and was too speculative. Plaintiff presented Cottrell’s testimony regarding the supervisor’s own salary and career. We find that the trial court did not abuse its discretion in admitting that evidence as it was relevant to the issue of plaintiff’s damages. MRE 401. Cottrell testified that he entered defendant’s labor relations department at an entry level position similar to plaintiff’s position. Cottrell also testified that plaintiff was hired as a potential replacement for himself. Thus, Cottrell’s testimony regarding his remuneration had a tendency to prove what plaintiff would likely be earning had he remained employed by defendant.
Defendant’s argument that the $450,000 verdict was excessive lacks merit. First, defendant failed to present its own evidence on damages. Second, the jurors’ dependence on Cottrell’s testimony to establish damages was not prejudicial or capricious. Tiffany v Christman Co, 93 Mich App 267, 280-281; 287 NW2d 199 (1979). The jurors apparently calculated plaintiff’s damages upon the difference between Cottrell’s salary and plaintiff’s present salary for the 40 years of plaintiff’s life expectancy. To so calculate based upon relevant evidence was not improper or overly speculative.
Defendant’s final argument is that the trial court erred by reducing the jury’s award by only 5% as instructed in SJI 53.03 rather than by the 12% provided in MCL 600.6013; MSA 27A.6013.
The substance of SJI 53.03 is as follows:
"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/she] will sustain the first year is to be divided by 1.05. The amount of damages you determine [he/she] will sustain the second year is to be divided by 1.10. The amount [he/she] will sustain 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/she] will sustain damages. The total of your yearly computations is the present cash value of plaintiffs future damages.”
The statute relied on by the defendant, § 6013 of the Revised Judicature Act, provides in pertinent part as follows:
"(1) Interest shall be allowed on a money judgment recovered in a civil action, as provided in this section.
"(2) For complaints filed before June 1, 1980, in an action involving other than a written instrument having a rate of interest exceeding 6% per year, the interest on the judgment shall be calculated from the date of filing the complaint to June 1, 1980 at the rate of 6% per year and on after June 1, 1980 to the date of satisfaction of the judgment at the rate of 12% per year compounded annually.” MCL 600.6013; MSA 27A.6013.
In Freeman v Lanning Corp, 61 Mich App 527; 233 NW2d 68 (1975), this Court remanded to the trial court for recomputation of an award for future damages to be reduced to present value according to the formula provided in SJI 34.03, the predecessor to SJI 53.03. However, the Lanning Court, without explanation, also ordered the jury award discounted by the 6% then provided in MCL 600.6013; MSA 27A.6013 rather than the percentage given in the jury instruction.
In Tiffany, supra, this Court rejected the application of the interest level provided in § 6013 as the reduction rate to be applied to future damages. The Tiffany Court applied a 5% reduction figure found in the jury instruction. We find that Tiffany represents the better view. Section 6013 addresses an entirely different matter than SJI 53.03. There is nothing within the language of § 6013 that suggests that it applies to the computation of future damages to present value. Consequently, we find that the trial court applied the proper formula in reducing the $450,000 jury award to present value.
II
In his cross-appeal, plaintiff has raised three issues. First, plaintiff argues that the jury award of $450,000, stipulated to be future damages, should not have been reduced because defendant did not request or object to the omission of a reduction instruction, SJI 53.03.
A trial court, even in the absence of such a request, is required to instruct a jury on reduction of future damages to present value, Grewe v Mount Clemens General Hospital, 404 Mich 240, 259; 273 NW2d 429 (1978); Harper v National Shoes, Inc, 98 Mich App 353, 357; 296 NW2d 1 (1979), or should itself reduce the award to present value, Freeman v Lanning Corp, supra.
Therefore, the trial court acted properly in this case by reducing the award to present value despite defendant’s failure to request the proper instruction.
Plaintiff’s second argument is that the trial court erred by awarding statutory interest, MCL 600.6013; MSA 27A.6013, on the reduced award from the date of the verdict rather than from the date the complaint was filed.
Section 6013 expressly provides that interest is to be paid from the date the complaint is filed. The allowance of interest under this provision is man datory. McGrath v Clerk, 89 Mich App 194; 280 NW2d 480 (1979). Nonetheless, because the award was for future damages only, the trial court interpreted § 6013 as inapplicable to plaintiffs claim.
We find that the trial court erred in so interpreting § 6013. First, the language of § 6013 does not distinguish between money judgments for past and future damages. Thus, on its plain unambiguous terms, § 6013 applies to all damages sought and sustained in a civil action brought for the recovery of money damages.
Second, the trial court’s interpretation does not follow the purpose of the interest statute. The statute is primarily remedial, intended to compensate the prevailing party for the expenses incurred in bringing an action for money damages for any delay in receiving such damages. Schwartz v Piper Aircraft Corp, 90 Mich App 324, 326; 282 NW2d 306 (1979); Johnston v DAIIE, 124 Mich App 212; 333 NW2d 517 (1983).
The case relied upon by the defendant, Foremost Life Ins Co v Waters (On Remand), 125 Mich App 799; 337 NW2d 29 (1983), is distinguishable. In Foremost, the plaintiff insurance company filed a complaint for a declaratory judgment seeking a determination that under its policy issued to its insured it was entitled to be reimbursed the $26,714.77 paid to defendant as insurance benefits because she might recover damages from the tortfeasor in a pending action.
The trial court in Foremost awarded plaintiff insurance company its declaratory judgment, ordering the insured to reimburse plaintiff, and added statutory interest from the date defendant filed the complaint in the tort action. On appeal, the defendant argued that statutory interest should only have been awarded from the date she entered into a consent judgment in the tort action awarding her $120,000, about seven and one-half months after plaintiff filed its action for declaratory relief.
This Court agreed with defendant based upon the facts of that case. Until defendant did reach a consent agreement in her pending tort action, plaintiff was not seeking money damages but a declaration of law: the interpretation of its policy of insurance. Therefore, plaintiff was not seeking money damages in a civil action until defendant established a collectible fund.
In this case, plaintiff sought money damages from the time he filed his original complaint. Whether or not the damages the jury awarded were future damages is not dispositive. Plaintiff is entitled to statutory interest from the date he filed his complaint. Thus, we remand to the trial court to modify its order accordingly. See Gerren v Kennedy Motors, Inc, 18 Mich App 564; 171 NW2d 548 (1969).
Plaintiff’s last argument on cross-appeal is that the trial court erred by failing to give the instructions plaintiff requested on his handicapper’s theory. Our review of the trial court’s instructions convinces us that the trial court did adequately instruct the jury on plaintiff’s handicapper’s theory and deleted only those requested instructions which were unsupported by any evidence. See Cryderman v Soo Line R Co, 78 Mich App 465, 471; 260 NW2d 135 (1977), lv den 402 Mich 867 (1978).
Affirmed; remanded for correct computation of statutory interest on the judgment. | [
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Per Curiam.
Plaintiff appeals as of right from a July 23, 1982, trial court opinion and judgment which held that the Solid Waste Management Act, MCL 299.401 et seq.; MSA 13.29(1) et seq., does not prohibit the Department of Natural Resources (DNR) from issuing a solid waste disposal area construction permit in an area for which no solid waste management plan has yet been approved. Plaintiff also appeals from the trial court’s denial of attorney fees under the Michigan environmental protection act (MEPA), MCL 691.1201 et seq.; MSA 14.528(201) et seq. Defendants Reid in turn have filed a cross-appeal, challenging the trial court’s decision not to grant them attorney fees under MEPA. Finally, defendant DNR has filed a separate cross-appeal from the trial court’s determination that the Solid Waste Management Act requires the DNR to approve a "site selection plan” before issuing a Type II solid waste disposal area operating license.
Defendants Reid own 43.6 acres of property in Dafter Township. They sought and obtained from defendant DNR a solid waste disposal area construction permit authorizing the construction of a Type II solid waste disposal area on their property. Plaintiff township filed a complaint seeking to set aside the construction permit on the ground that the permit was issued in violation of the Solid Waste Management Act because the act prohibited the DNR from issuing a construction permit until after the Eastern Upper Peninsula Regional Planning and Development Commission (EUP) had drafted, and the DNR approved, a 20-year waste management plan. Plaintiff township also sought to enjoin the operation of the Type II solid waste disposal area because its operation would be likely to pollute, impair, or destroy the single source aquifer for the Dafter Township area, and so would violate the provisions of the MEPA. After an 11-day bench trial, the trial court ruled in favor of the DNR under the Solid Waste Management Act, but held, that before the DNR issued a Type II solid waste disposal area operating license for the Reid site, the DNR should first determine that the Reid site was "consistent with a published site selection plan approved by defendant DNR”. The court defined such a plan as a "plan by which defendant DNR, in writing, makes a choice among alternative geographic sites, comparing and evaluating each alternative, and reciting its reasons for approval of any particular site”. The trial court then held that construction of the Type II solid waste disposal area, as already authorized by the DNR, would not, of itself, be likely to pollute, impair, or destroy the natural resources, and so was not prohibited by the MEPA. However, the trial court held that operation of the disposal area, if built to the specifications approved by the DNR, would violate the MEPA unless there was confirmation of adequate clay sealer and further evaluation of possible uplift. The court therefore ordered that the disposal area could not be operated until a study or tests established to the DNR’s satisfaction that operation of a disposal area on the Reid site complied with the rules promulgated pursuant to the Solid Waste Management Act. Finally, the court ruled that "inasmuch as no party hás fully prevailed, no costs and fees shall be assessed”.
We affirm the trial court’s judgment that the Solid Waste Management Act does not prohibit the DNR from issuing a solid waste disposal area construction permit in an area for which no solid waste management plan has yet been approved. MCL 299.430(3); MSA 13.29(3)(3) provides:
"(3) The director shall not issue a license for the development or operation of a new solid waste disposal area or resource recovery facility in a plan area unless the facility complies with and is consistent with an approved solid waste management plan.”
This language clearly prohibits the issuance of a license only where the facility does not comply with or is not consistent with an already-approved solid waste management plan. The statute does not prohibit the issuance of a license until after the approval of such a solid waste management plan. This conclusion is buttressed by the inclusion in the act of a self-executing provision in the sections which govern the issuance of construction permits. When application for a new solid waste disposal area construction permit is made to the DNR, the director must issue a construction permit once he or she has notified the affected municipality, state agencies, and local public of the proposed undertaking and the procedure for forcing a public hearing and has reviewed the proposed site and plan of operation and found that there is compliance with the Solid Waste Management Act and its implementing rules. MCL 299.411; MSA 13.29(11). If the director fails to make a final decision on a construction permit application, "the permit shall be considered issued”. MCL 299.412(1); MSA 13.29(12)(1). The issuance of licenses is governed by similar provisions. MCL 299.415(1); MSA 13.29(15)(1). Since a solid waste management plan had not yet been approved, the DNR was not prohibited from issuing the permit.
We are unable, however, to affirm the trial court’s determination to deny both plaintiff township and defendants Reid costs and attorney’s fees under the MEPA because it is unclear from the trial court’s opinion and judgment that the court was aware of, or exercised, its discretion in awarding such costs under the MEPA.
Under the MEPA, MCL 691.1203(3); MSA 14.528(203X3), "[c]osts may be apportioned to the parties if the interests of justice require”. "Costs” have since been interpreted to include both costs and attorney’s fees. Three Lakes Ass’n v Kessler, 101 Mich App 170; 300 NW2d 485 (1980); Superior Public Rights, Inc v Dep’t of Natural Resources, 80 Mich App 72; 263 NW2d 290 (1977), lv den 406 Mich 926 (1979); Taxpayers & Citizens in the Public Interest v Dep’t of State Highways, 70 Mich App 385; 245 NW2d 761 (1976). The award of such costs and attorney’s fees is within the "broad and unfettered discretion of the trial judge”, Taxpayers & Citizens in the Public Interest, supra, 70 Mich App 387-388, and the court’s decision will be reviewed only to see that the court recognized its discretion and exercised it. Superior Public Rights, Inc, supra, 80 Mich App 90.
In this case, the trial court noted only that it would not award costs and fees to either party because "no party has fully prevailed”. While costs normally should not be awarded under GCR 1963, 526.1 where neither party has prevailed in full, the MEPA constitutes a statutory exception to GCR 1963, 526.1. The trial court therefore may grant costs, including attorney’s fees, to a party even when it has not fully prevailed.
Because we are unable to determine from the trial court’s decision that the court was aware of its broader discretion under the MEPA, we must remand this cause to the trial court so that the court may fully exercise its discretion and apply the appropriate standards in determining whether or not costs, including attorney’s fees, should be apportioned. In so deciding, we do not express any opinion on the merits of either plaintiff township’s or the Reids’ motion for apportionment of costs.
Finally, we reverse the trial court’s determination that before the DNR may issue a Type II solid waste operating license for the Reid site, the DNR must first determine that the Reid site is consistent with a "site selection plan” involving a choice among alternative geographic sites. The Solid Waste Management Act requires only that upon receipt of a construction permit application, the director or an authorized representative of the director shall:
"Review the plans of the proposed operation to determine if it complies with this act and the rules promulgated under this act. The review shall be made by persons qualified in hydrogeology and sanitary landfill engineering. A written approval by the persons qualified in hydrogeology and sanitary landfill engineering shall be received before a construction permit is issued. If the site review, plan review, and the application meet the requirements of this act and the rules promulgated under this act, the director shall issue the construction permit which may contain a stipulation specifically applicable to the site and operation. An expansion, enlargement, or alteration of a facility beyond the specified areas indicated in the original construction application shall constitute a new proposal for which a new construction permit is required.” MCL 299.411(2)(d); MSA 13.29(H)(2)(d).
This review is clearly limited to a determination that the individual proposed site meets the requirements of the act, and does not extend to a comparison of the merits of the proposed site with the merits of other, perhaps nonexistent, sites. This focused review does not in any way inhibit public input into or opposition to the decision to grant a construction permit because, under MCL 299.411; MSA 13.29(11), the director of the DNR must notify the municipality in which the facility is to be located and other local entities that a construction permit application has been received, and must circulate a public newspaper notice "in the vicinity of the proposed undertaking”. The public is thus fully able to contribute to the decision of the DNR to grant or deny the requested permit.
Affirmed in part, reversed in part, and remanded for proceedings not inconsistent with this opinion. No costs, as a public question is involved. | [
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Cynar, P.J.
On the second day of the trial, December 23, 1981, the parties stipulated to a property settlement on the record. Prior to the entry of the judgment of divorce, plaintiff, on March 23, 1982, petitioned to set aside the property settlement and to continue the trial on the basis that the property settlement reached was not free and voluntary. The trial judge signed the judgment of divorce on April 8, 1982. Following a hearing on May 29 and June 23, 1982, the trial court denied the petition to set aside the judgment. Plaintiff appeals as of right from the November 1, 1982, order denying relief.
The parties were married on March 12, 1948. Born of the marriage were five sons, all older than 18 years of age at the time of these proceedings.
In 1974, the defendant sustained injuries in an automobile accident. In a personal injury action which followed, defendant received damages for her injuries and plaintiff recovered for loss of consortium. Mr. Steffen, counsel for defendant in the present action, represented both parties in the personal injury case.
Sometime before the parties came to him about the auto accident, Mr. Steffen had been a member of another law firm. Plaintiff and his mother had been in to see another attorney in that firm about an estate plan for plaintiff’s mother. Mr. Steffen was not involved in that matter and knew nothing of it until June 23, 1982, during the final hearing in the instant case.
At the trial, only the plaintiff testified. In his opening statement, plaintiff’s counsel stated that there had been a prior complaint for divorce filed by the defendant, which was withdrawn in an effort to achieve reconciliation. Plaintiff testified that the attempted reconciliation failed because of distrust and suspicion by defendant over plaintiff’s association with a woman. Plaintiff characterized this woman as an old acquaintance with whom he had not developed a physical relationship until after the first divorce action and the separation which followed. Plaintiff also testified about many other factors which led to the second divorce action.
During the trial in December, 1981, which resulted in the stipulated property settlement, plaintiff stated that he was suffering from numerous health problems. The problems included stomach surgery and repeated surgery thereafter, following complications. In addition, plaintiff stated that he was troubled by a hiatal hernia, a hernia following stomach surgery, severely infected sinuses, and a knee condition necessitating surgery.
Plaintiff’s testimony continued, relating to matters of his and defendant’s property holdings. On cross-examination, defense counsel questioned the plaintiff about his relationship with another woman. Several sentimental greeting cards were admitted. Plaintiff maintained that only a platonic relationship existed until the time that his wife filed for divorce in 1980 and left him.
During the course of the second day of trial, both parties stipulated to a property settlement on the record.
Following the December 23, 1981, trial date, plaintiff retained his present counsel, claiming that he did not understand the settlement and that he had been under duress because of his physical and mental health. Plaintiff maintained that for these reasons he had not entered the agreement freely and voluntarily. Plaintiff wanted the agreement set aside and the trial continued.
Prior to the judgment’s being signed by the court, plaintiff’s counsel petitioned for an evidentiary hearing. At the beginning of the hearing, the court was reminded that it had indicated that no judgment would be signed until the hearing was held. The judge responded that apparently he saw the judgment in the basket and signed it by mistake. Subsequently, the court observed that, because the judgment was signed, the hearing was in effect a motion to set aside the judgment.
It should be noted that the judgment of divorce follows the property settlement stipulated to by the parties except for the following provision. The judgment of divorce provides that the defendant shall receive 30 percent of the plaintiff’s gross pension benefits according to a stated schedule as part of the property settlement. In the event that the defendant should predecease the plaintiff, the payments would be made to the heirs of defendant’s estate. This is not in accordance with the property settlement on the record, which provided that 30 percent of the gross pension was to be paid as alimony to defendant upon the plaintiff’s retirement.
At the hearings to set aside the judgment on May 19 and June 23, 1982, the plaintiff introduced the testimony of Dr. Daros, his surgeon and treating doctor, and William M. Atchison, a psychiatric social worker. Essentially, their testimony was that plaintiff was under stress and impaired mental status at the time of the trial.
The plaintiff testified at the hearing in reference to his testimony at trial. He stated that his judgment was affected because he was upset. He was experiencing severe abdominal pain, gas and diarrhea, and could not eat. He could not remember much of the property settlement negotiations and would have signed anything to avoid being there.
In addition, plaintiff sought to show that he was under duress because of defense counsel’s familiarity with plaintiff. As noted herein, defense counsel had represented both plaintiff and defendant in a personal injury suit. Defense counsel’s former law firm had also advised plaintiffs mother regarding her estate. The trial court found that there was no basis for relief on this issue.
At the close of the evidence and following argument of counsel, the trial court determined that plaintiff had failed to show any duress or incapacity that would void the property settlement.
Whether or not the trial court abused its discretion by upholding the property settlement and judgment is the dispositive issue in this case. The following factual conclusion was made:
"The court is satisfied that he knew exactly what he was doing and that there should be no relief granted from a settlement that he entered into knowingly in open court without any pressure from anybody else other than his own knowledge that he could lose the whole thing if some of his peccadilloes with his girl friend came out.”
Our analysis is guided by the following general principles:
"The validity of property settlements reached through negotiations is generally upheld in the absence of fraud, duress, or mutual mistake. Consent judgments reached by agreement of the parties differ from litigated judgments reached after trial on the merits. The former primarily rest on the consent of the parties, rather than upon the judgment of the court, and generally cannot be set aside without the approval of the parties thereto.” (Footnotes omitted.) Madden v Madden, 125 Mich App 54, 58-59; 336 NW2d 231 (1983).
In Tinkle v Tinkle, 106 Mich App 423; 308 NW2d 241 (1981), a divorce was awarded pursuant to a property settlement agreement placed on the record in open court with both parties and their counsel present. The same is true of the instant case. In Tinkle, before the trial judge signed and entered the judgment of divorce, the plaintiff filed a "petition to set aside settlement judgment and bring matter on for trial”. The plaintiff claimed that she had been under stress with medical problems aggravated by the divorce pressures so that she "was unable to fully comprehend” the settlement. Again, the instant case is similar. The trial court in Tinkle held that the parties had knowingly and voluntarily entered into the settlement agreement. This Court affirmed the trial court’s denial of plaintiffs petition for trial, noting:
"[T]he trial judge, hearing both the divorce proceedings and the petition to set aside the settlement, found plaintiffs claim to be without basis. We decline to upset the trial judge’s finding in that regard; she did not abuse her discretion.” Tinkle, supra, p 426.
The Court in Tinkle made the following pronouncement which is consistent with earlier decisions of this Court:
"Settlements, duly arrived at by the parties and placed on the record in open court in the presence of counsel, are entitled to a high degree of finality.” Tinkle, supra, p 428.
In Pedder v Kalish, 26 Mich App 655; 182 NW2d 739 (1970), a settlement agreement put on the record in open court was later found void by the trial judge because the defendants had "exercised their right not to perform under this agreement”. This Court vacated the order voiding the settlement and remanded for entry of a judgment in conformity with the stipulated settlement.
"We cannot agree that litigants are free to disregard a settlement agreement knowingly entered into on the court record and, as to which, mistake, fraud, or unconscionable advantage is not claimed.
" 'A valid compromise and settlement is final, conclusive, and binding upon the parties; it is as binding as any contract the parties could make, and as binding as if its terms were embodied in a judgment; and, regardless of what the actual merits of the antecedent claim may have been, they will not afterward be inquired into and examined.’ 15 Am Jur 2d, Compromise and Settlement, § 21, p 956.
"A compromise and settlement is conclusive as to all matters included. It merges and bars all included claims and pre-existing causes of actions. To have such effect 'it is not necessary that the compromise shall have been performed.’ 5 Michigan Law & Practice, Compromise and Settlement, § 6, citing cases. That agreements and consents between parties litigant are binding when made in open court, see GCR 1963, 507.9.” Pedder, supra, pp 657-658.
In Kline v Kline, 92 Mich App 62; 284 NW2d 488 (1979), the parties reached a property settlement agreement on the record which the trial judge subsequently modified slightly by adding, among other things, an interest provision. This Court adhered to the strict provisions of the oral stipulation:
"We prefer to consider this issue on the basis that settlements should be encouraged and the parties to a controversy should be able to rely upon them. In keeping with that objective, we deem the addition of interest in the judgment of divorce to be a modification of the oral agreement and improper. In the case of Dana Corp v Employment Security Comm, 371 Mich 107; 123 NW2d 277 (1963), it was ruled that a referee of the Employment Security Commission is without authority to alter the terms of a stipulation after he has accepted it either by omitting anything therefrom or adding thereto.
"In the case of Keeney v Keeney, 374 Mich 660, 663; 133 NW2d 199 (1965), it is stated '[t]he property settlement provisions of a divorce decree or judgment may not be set aside, modified, or altered in the absence of fraud, duress, or mutual mistake, or from such causes as any other final decree may be modified.’ ” Kline, supra, p 78.
Plaintiff relies on Norton Shores v Carr, 59 Mich App 561; 229 NW2d 848 (1975), which is an apparent exception to the general rule. There, the parties "appeared in open court and, after a good deal of discussion, addition and deletion, placed the substance of an agreement on the record. The trial judge issued no opinion or judgment and simply adjourned the case at the conclusion of argument.” The defendant then revoked his consent to the agreement, but the trial judge entered judgment anyway. This Court reversed, holding that both parties must approve both the form and substance of the decree. It may therefore be said of the instant case as was said in Carr: "As to the form of the judgment, the proposed order was submitted after [plaintiff] had withdrawn his consent.” Carr, supra, p 564.
Plaintiff’s reliance on the Carr case is misplaced. First, Carr is inconsistent with the cases discussed above. The decision was directly criticized in Meyer v Rosenbaum, 71 Mich App 388, 393; 248 NW2d 558 (1976):
"As a matter of public policy, it is extremely difficult to find any rationale for permitting a litigant to eschew a bargain knowingly made in open court, on the record of the court, and with the intent that the court and opposite party should rely thereon. The results of the Norton Shores doctrine would make the life of a trial judge extremely difficult. A great many, if not most, settlements are arrived at on the day of joust, when the jury is in attendance and judge is waiting with instructions hopefully prepared. The attorneys then must be able to rely upon the knowledge that any stipulated agreement that they make will be final and binding on both parties. Otherwise, it will be extremely difficult to arrive at settlement, since the prepared litigant may not be willing to lose his day in court and be placed at the bottom of a ladder which may take him two years to climb.” See also Michigan National Bank of Detroit v Patmon, 119 Mich App 772, 777-778; 327 NW2d 355 (1982).
The Court in Meyer looked to GCR 1963, 507.9 in concluding that the stipulation made in open court was binding. Therefore, defendant’s claim of unilateral mistake did not warrant relief from the provisions of the agreement.
Second, if Carr is at all valid, its exception should be very limited. The proceedings in Carr were unusual in that the judge did not approve of the settlement or incorporate it into a ruling until after defendant revoked his consent.
Plaintiff sought to set aside the judgment by alleging duress. Plaintiff defined duress in a broad sense to include his bowel problems, his anxiety and his depression, the insights that he feared Mr. Steffen had possessed as his former counsel, and the length of time he was on the witness stand prior to the settlement.
As noted herein, the Court in Tinkle upheld a property settlement agreement where the plaintiff had alleged that her poor physical condition was connected with the pressures of the divorce. The Court distinguished the situation where lack of capacity to make a binding agreement is proven. Star Realty, Inc v Bower, 17 Mich App 248, 250; 169 NW2d 194 (1969), lv den 383 Mich 768 (1970), sets out the test for mental capacity:
"The well-settled test of mental capacity to contract, properly adopted by the trial court, is whether the person in question possesses sufficient mind to understand, in a reasonable manner, the nature and effect of the act in which he is engaged. However, to avoid a contract it must appear not only that the person was of unsound mind or insane when it was made, but that the unsoundness or insanity was of such a character that he had no reasonable perception of the nature or terms of the contract. See 17 CJS, Contracts, § 133(1); 2 Williston, Contracts (3d ed), Insane and Intoxicated Persons, § 256, p 94ÍF.”
Emotional disorders, alone, will not invalidate a contract. Star Realty, supra, p 258. In Star Realty, the defendant was examined by a psychiatrist before and after the time he entered into the agreement. The agreement was not made in court and was without the benefit of counsel. The psychiatrist testified that at both examinations the defendant’s judgment was impaired so that he could not relate the facts or put them together.
In contrast, plaintiff in the instant case was assisted by counsel and was observed throughout the trial and settlement by the judge. More than two months after the trial, he was examined by a psychologist at which time it is contended that he was neurotic and had impaired judgment.
The judge did not abuse his discretion by relying more on what he saw at the trial than on the testimony of the psychiatric social worker. Plaintiff was on the witness stand for a long time during the two days of trial. His answers to questions were always coherent and understanding. His attorney acknowledged his perception when the property settlement was put on the record:
"My client has indicated to me something not mentioned which would be a rather standard provision that we normally enter, but quite perceptively he did mention is the fact that Mrs. Van Wagoner does remarry, that her pension rights and alimony would, basically her alimony would terminate.”
In response to his counsel’s question, plaintiff expressly agreed with the property settlement he heard placed on the record.
The trial judge did not abuse his discretion in disregarding plaintiff’s allegations that he feared the insights that defendant’s counsel might have had because of earlier contacts. Mr. Steffen had represented the parties in a personal injury suit and was aware that plaintiff had stomach troubles. Mr. Steffen had also been asked, about the time of trial, whether plaintiff had a possible inheritance. Plaintiff feared that Mr. Steffen knew of this inheritance because his former firm had counseled plaintiff’s mother regarding her estate. Mr. Steffen denied knowledge of this matter.
We affirm the trial court’s order denying relief. The trial judge did not err in finding that plaintiff failed to prove incapacity or duress such that the property settlement should be set aside. However, the property settlement, as stipulated to, was binding, and a unilateral modification by defendant should not be allowed to stand.
The property provision under the judgment of divorce should be modified so that 30 percent of the plaintiff’s retirement benefits are alimony, not part of the property settlement. Further, under the alimony provision in the judgment of divorce, alimony is designated as permanent. However, under the settlement placed on the record, alimony is subject to change in the discretion of the court depending on the existing circumstances.
Therefore, this matter is remanded to the trial court for modification of the judgment of divorce in accordance with the original stipulation.
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Michael J. Kelly, J.
This is a products liability case arising out of an automobile accident during which plaintiff Caryl Haberkorn’s 1974 Jeep CJ-5 rolled over and ejected her. In Docket No. 148831, plaintiffs appeal as of right a judgment of the circuit court for, plaintiffs in the amount- of $861,477.60 (plus prejudgment interest). The judgment was entered after a jury trial in which the jury found $2.7 million in damages, which the court reduced in part by seventy percent consistent with the jury’s findings regarding plaintiff’s comparative negligence. Defendant cross appeals the same judgment, claiming that it was entitled to summary disposition or a directed verdict on all plaintiffs’ claims. In Docket No. 151110, plaintiffs appeal as of right an award of mediation sanctions to defendant in the amount of $562,712.40. The appeals were consolidated.
i
In 1981, the American Motors Corporation entered into a consent agreement with the Federal Trade Commission regarding its advertising about the driving characteristics of Jeep CJ-5, CJ-6, and CJ-7 models, which amc produced. Without admitting liability, amc agreed to affix labels to the windshields of all new Jeep CJ vehicles to warn drivers that these vehicles handled differently from passenger cars and that sudden sharp turns and abrupt maneuvers could result in a loss of control. Amc also agreed to place similar warnings in all new Jeep CJ owners’ manuals and to mail warning labels and manual supplements to all identifiable owners of 1972 and later model Jeep CJ vehicles.
In 1983, plaintiff Caryl Haberkorn purchased a 1974 soft-top Jeep CJ-5 from a private seller for her husband, plaintiff James Haberkorn. There was no warning label on the windshield, and the previous owner testified that he did not recall if he had received one in the mail. In the evening of June 26, 1986, plaintiff was driving the vehicle with her three children down a gravel road between twenty-five and fifty-five miles per hour. The vehicle bogged down in some sand or gravel, then began to fishtail. Plaintiff pumped the brakes and attempted to steer into the skid, but the steering was unresponsive. The vehicle headed for the side of the road and rolled over twice, ejecting plaintiff and two of her children. The children suffered only minor injuries, but plaintiff was left a paraplegic.
Plaintiffs initiated this action against defendant Chrysler Corporation, as successor to amc, in November 1988. After extensive discovery and mediation, a jury trial was held from April through June 1991. The case was submitted to the jury on eight theories: (1) negligent design with respect to handling characteristics; (2) negligent design with respect to roll stability; (3) negligent design with respect to occupant protection or crashworthiness; (4) negligent testing; (5) breach of express warranty; (6) negligent warning with respect to handling characteristics; (7) negligent warning with respect to rollover characteristics; and (8) negligent warning with respect to crashworthiness.
The jury found defendant liable only on the third theory, answering "yes” to the question on the jury verdict form that asked whether defendant was negligent in the design of the Jeep with regard to crashworthiness (i.e., occupant protection of the windshield, top, roll bar, or seat belts) and whether such negligence was the proximate cause of plaintiffs’ injuries. The jury found plaintiff Caryl Haberkorn’s damages to be $2.3 million and awarded an additional $400,000 to the remaining plaintiffs. However, the trial court reduced all plaintiff Caryl Haberkorn’s damages and portions of the remaining damages by seventy percent in response to the jury’s finding regarding plaintiff’s comparative negligence. Applying the collateral source rule, the court reduced plaintiff’s damages by the amount of social security disability benefits that she had received up to the time of judgment in October 1991. That judgment also awarded defendant actual costs as mediation sanctions under MCR 2.403(0), which the court calculated to be $562,712.40 in March 1992. Both parties had rejected a mediation evaluation of $1.5 million in November 1990.
n
Plaintiffs present two challenges to the jury’s determination of comparative fault.
A
First, plaintiffs argue that the trial court erred in excluding under MRE 403 evidence of the ftc’s 1981 consent order and agreement with amc. We review the trial court’s evidentiary rulings for abuse of discretion. Davis v Wayne Co Sheriff, 201 Mich App 572, 588; 507 NW2d 751 (1993). Under MRE 403, relevant evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice. "Unfair prejudice” does not mean "damaging”; any relevant evidence will be damaging to some extent. Rather, unfair prejudice exists when marginally relevant evidence might be given undue or preemptive weight by the jury or when it would be inequitable to allow use of such evidence. People v Harvey, 167 Mich App 734, 745-746; 423 NW2d 335 (1988). Assessing probative value against prejudicial effect requires a balancing of several factors, including the time necessary to present the evidence and the potential for delay; whether the evidence is cumulative; how directly the evidence tends to prove the fact in support of which it is offered; how important the fact sought to be proved is; the potential for confusion; and whether the fact can be proved another way with fewer harmful collateral effects. People v Oliphant, 399 Mich 472, 490; 250 NW2d 443 (1976).
Plaintiffs sought to introduce the ftc agreement as evidence that defendant was negligent in warning about the handling characteristics of Jeeps. However, the probative value of the agreement was marginal because there was no evidence that defendant actually breached the agreement and because the agreement merely showed why defendant sent warnings, not whether defendant did so negligently. The danger of prejudice was high because the jury could have mistaken the agreement as a government finding that the Jeeps were defective. The trial court did not abuse its discretion in deeming the probative value of the evi dence substantially outweighed by the danger of prejudice. Although plaintiffs claim that exclusion of the agreement created a danger of prejudice to them because the jury could believe that the warnings were sent voluntarily, and not under government coercion, any such prejudice was cured by the trial court’s cautionary instruction that the jury was not to speculate regarding the reason why defendant sent the warnings. Further, exclusion of the agreement did not deprive the plaintiffs of proving inadequate warning by other means. In fact, plaintiffs presented extensive expert testimony that the exterior of the envelopes containing the warnings was insufficient to reflect the seriousness of their contents.
B
Second, plaintiffs argue that the trial court erred in excusing a juror for health reasons midway through trial without first consulting with counsel and making a record of the conversation between the trial judge and the juror. However, plaintiffs failed to make a timely and specific objection or to move for a mistrial. When the topic of excusing jurors arose later in the trial, counsel’s only concern was the possibility that other jurors might claim to fall ill. This issue is therefore not preserved for appellate review. Wicklund v Draper, 167 Mich App 623, 627-628; 423 NW2d 294 (1988). Furthermore, plaintiffs have failed to demonstrate prejudice. Under MCL 600.1354; MSA 27A.1354, failure to comply with chapter 13 of the Revised Judicature Act, concerning jurors, does not affect the validity of the jury verdict unless a party makes a timely objection, demonstrates actual prejudice, and shows that noncompliance was substantial.
hi
Defendant claims that, regárdless of plaintiffs comparative fault, any jury verdict was inappropriate because plaintiffs did not establish a prima facie case in support of their crashworthiness design claim. Specifically, defendant claims that the trial court erred in denying its motion for a directed verdict. In deciding this issue, we review all the evidence presented up to the time of the motion in a light most favorable to plaintiffs and determine whether there was a material issue of fact. See Stoken v J E T Electronics & Technology, Inc, 174 Mich App 457, 463; 436 NW2d 389 (1988). Here, a material issue of fact existed regarding defendant’s negligence in designing the Jeep CJ vehicles for crashworthiness.
An automobile manufacturer has a duty to design its product so as to eliminate any unreasonable risk of foreseeable injury to its occupants as a result of a collision. Rutherford v Chrysler Motors Corp, 60 Mich App 392, 400; 231 NW2d 413 (1975). See also Shipman v Fontaine Truck Equipment Co, 184 Mich App 706, 711; 459 NW2d 30 (1990). In determining whether a defect exists, the trier of fact must balance the risk of harm occasioned by the design against the design’s utility. Prentis v Yale Mfg Co, 421 Mich 670, 688-689; 365 NW2d 176 (1984). A plaintiff has the burden of producing evidence of the magnitude of the risk posed by the design, alternatives to the design, or other factors concerning the unreasonableness of a design’s risk. Owens v Allis-Chalmers Corp, 414 Mich 413, 429-432; 326 NW2d 372 (1982). Implicit in Owens is the requirement that such information be contemporaneous with the design.
Defendant claims there was no evidence that it knew about the risks of Jeep rollovers in the early 1970s, when it designed the vehicle. We disagree. Plaintiffs presented expert testimony regarding studies conducted before 1972 regarding the crash-worthiness of soft-top vehicles. These studies showed that occupants were ejected far more often from such vehicles than from hard-top vehicles and that the consequences could be catastrophic. Expert testimony also revealed that the lap belts on Jeeps were not easily accessible and that, during the time plaintiffs vehicle was built, most other manufacturers of similar vehicles employed holsters or stalks on seat belts to make them accessible. Although an intracompany memorandum proposing safety changes to the Jeeps was dated 1983, plaintiffs’ expert testified that the feasibility of such changes was known in 1973. Plaintiffs also presented the testimony of an automobile dealer who stated that he had installed two hundred roll cages on Jeep CJ vehicles in 1974 in addition to several seat belt holsters and many three-, four-, and five-point seat belt systems. Viewing the evidence in a light most favorable to plaintiffs, the trial court properly denied a directed verdict regarding plaintiffs’ crashworthiness design claim.
iv
Defendant also argues that the trial court erred in admitting certain evidence.
A
First, defendant challenges the admission of a report obtained from an attorney organization in Alabama. Defendant claims that this document was the work product of engineers Roy Rice and William Milliken, whom defendant had retained to investigate Jeep rollover and handling characteristics for litigation purposes, and that the report was therefore not discoverable. See MCR 2.302(B)(4)(b). However, the issue is the admissibility of such evidence, not its discoverability. Plaintiffs did not seek to discover the Milliken-Rice report; rather, they obtained it on their own from an independent source. According to defendant, "it is clear that, if the proposed evidence is not discoverable, it cannot be admissible.” It is not so clear to us, especially because the report obviously fell into the hands of nonprivileged parties, and defendant fails to provide any authority or argument in support of its bald assertion. We therefore find no reason to overrule the decision of the trial court.
B
Second, defendant challenges the admission of an allegedly unauthenticated envelope that was mailed with the FTC-ordered warnings to Jeep owners. A condition precedent to admission of an item into evidence is authentication "by evidence sufficient to support a finding that the matter in question is what its proponent claims.” MRE 901(a). Whether a document has been properly authenticated is a matter within the trial court’s discretion. Champion v Champion, 368 Mich 84, 87-88; 117 NW2d 107 (1962).
At trial, plaintiffs sought to authenticate the envelope under MRE 901(b)(4), noting several aspects of its appearance, contents, substance, internal patterns, and other distinctive characteristics. Plaintiffs noted (1) that the ftc consent order required that the mailing be done by first-class mail, and the envelope was posted as first-class mail; (2) the office that conducted the mailing for defendant was located in Taylor, Michigan, and the envelope bore a Taylor postmark; (3) the mailing company used a postage permit like that on the envelope; (4) the name and address on the envelope was that of American Motors Sales Corporation, as was the heading of the warning letter inside the envelope; and (5) a former Jeep dealer would testify that the envelope looked like all the other correspondence that he had received from defendant over the years. Under these circumstances, the trial court did not abuse its discretion in deeming the envelope authenticated.
c
Third, defendant challenges the admission of certain statistical studies that were used to show that defendant had notice of the Jeep’s propensity to roll over more easily than other vehicles. We find no error. Plaintiffs’ expert witness, who had a limited knowledge of statistics, testified to the best of his ability with respect to the studies’ methodology, and defendant has failed to show how the studies were flawed. The trial court correctly noted that the accuracy was of limited importance where the evidence was offered only to show that defendant had notice of the Jeep’s defect. The trial court gave a limiting instruction to the effect that the studies were to be considered as evidence of notice and not as evidence of a defect.
Defendant also contends that the studies should have been excluded under MRE 403 because a sophisticated entity such as defendant would have known that the studies were flawed, which would negate an inference that the studies put defendant on notice. This argument was not made below and is therefore not preserved for appellate review. Booth Newspapers, Inc v Univ of Mich Bd of Regents, 444 Mich 211, 234; 507 NW2d 422 (1993).
D
Finally, defendant challenges references made by plaintiffs’ expert witness regarding Jeep rollover tests. Specifically, defendant contends that the conditions of the tests were not substantially similar to the conditions under which plaintiffs accident occurred. However, while defendant raised this argument with respect to a film of the tests, it did not raise such an objection to the expert’s testimony. The trial court never addressed the "substantial similarity” argument with respect to the challenged testimony. The issue is therefore not preserved for appellate review. MRE 103(a)(1); Thorin v Bloomfield Hills Bd of Ed, 203 Mich App 692, 703-704; 513 NW2d 230 (1994). Moreover, any lack of substantial similarity did not prevent the evidence from being admitted for the limited purpose of demonstrating general principles of skidding, speed, and rates of turn. See Kirk v Ford Motor Co, 147 Mich App 337, 344; 383 NW2d 193 (1985); Gorelick v Dep’t of State Hwys, 127 Mich App 324, 336; 339 NW2d 635 (1983).
v
Defendant also argues that certain evidence was erroneously excluded.
A
First, defendant challenges the exclusion of police reports of other Jeep rollover accidents occurring in the vicinity of plaintiffs accident site. We agree with the trial court’s conclusion that defendant did not lay a foundation for the admission of the reports. If defendant intended to use them as evidence of what took place during plaintiffs accident, then it failed to show any similarity between plaintiffs accident and the accidents in the reports. If defendant intended to use the reports in order to impeach plaintiffs’ expert witness, then it failed to show that the expert had investigated the accidents in the reports or had testified previously with regard to the reports. The probative value of the reports was minimal at best and substantially outweighed by the needless delay that would have occurred if the details of the accidents in the report had been explored. MRE 403.
B
Second, defendant argues that its videotape of "dynamic vehicle characteristics” should have been admitted if plaintiffs succeed in convincing this Court that their videotape should have been admitted. However, this issue is moot because plaintiffs do not seek admission of their videotape.
VI
Next, defendant argues that the trial court erred in allowing plaintiffs’ counsel to exercise peremptory challenges against white jurors without first requiring counsel to proffer a nondiscriminatory basis for the challenges. However, defendant has failed to show that the totality of the circumstances gave rise to an inference of race-based discrimination. Without such a prima facie showing of discrimination, defendant’s argument must fail. See Edmonson v Leesville Concrete Co, Inc, 500 US 614, 631; 111 S Ct 2077; 114 L Ed 2d 660 (1991); Batson v Kentucky, 476 US 79, 96-97; 106 S Ct 1712; 90 L Ed 2d 69 (1986).
VII
Having found no error in the trial court’s evi dentiary rulings and in the jury’s finding of liability regarding plaintiffs’ crashworthiness design claim, we need not address defendant’s argument that it was entitled to a directed verdict on plaintiffs’ remaining claims, which did not form the basis of the jury verdict. Instead, we turn our attention to the amount of the judgment, which defendant challenges on three grounds.
A
First, defendant argues that the trial court miscalculated the amount of prejudgment interest. Specifically, defendant claims that its April 25, 1991, bona fide written settlement offer of $1,000,000 tolled the accrual date of the interest.
Defendant presented its offer between jury selections. A jury was selected on April 10, 1991, but was not sworn in. The following day, plaintiffs’ counsel fell ill and the trial was postponed. Apparently, the jury was dismissed. Selection of a new jury began on April 29, 1991, four days after defendant’s written settlement offer. This jury was sworn in on April 30, 1991. A verdict was reached on June 13, 1991. On August 6, 1991, defendant filed its April 25 written offer of settlement and plaintiffs’ rejection of that offer. Judgment was entered on October 16, 1991.
The prejudgment interest statute in effect at the time of the judgment provided in relevant part:
(7) If a bona fide, reasonable written offer of settlement in a civil action based on tort is made by the party against whom the judgment is subsequently rendered, the court shall order that interest shall not be allowed beyond the date the written offer of settlement which is made and rejected by the plaintiff, and is filed with the court.
(8) Except as otherwise provided in subsection (1), if a bona fide, reasonable written offer of settlement in a civil action based on tort is not made by the party against whom the judgment is subsequently rendered, or is made and that offer is not filed with the court, the court shall order that interest be calculated from the date of filing the complaint to the date of satisfaction of the judgment.
(10) An offer made pursuant to this section which is not accepted within 21 days after the offer is made shall be considered rejected. A rejection, under this subsection or otherwise, does not preclude a later offer by either party.
(11) As used in this section:
(a) "Bona fide, reasonable written offer of settlement” means:
(i) With respect to an offer of settlement made by a defendant against whom judgment is subsequently rendered, an offer of settlement that is not less than 90% of the amount actually received by the plaintiff in the action through judgment. [MCL 600.6013; MSA 27A.6013.]
The trial court held that subsection 7 required defendant to file the settlement offer with the court at the time it was made. Otherwise, the court reasoned, the situation addressed in subsection 8.would never arise. Because defendant delayed in filing its offer with the court, the trial court deemed the tolling provision for prejudgment interest inapplicable.
We review the trial court’s interpretation of the prejudgment interest statute de novo as a question of law. Smeets v Genesee Co Clerk, 193 Mich App 628, 633; 484 NW2d 770 (1992). The primary goal of statutory interpretation is to ascertain and give effect to the intent of the Legislature. Farrington v Total Petroleum, Inc, 442 Mich 201, 212; 501 NW2d 76 (1993). Statutory language should be construed reasonably, keeping in mind the purpose of the act. Dep’t of Social Services v Brewer, 180 Mich App 82, 84; 446 NW2d 593 (1989). As far as possible, effect should be given to every phrase, clause, and word. Gebhardt v O’Rourke, 444 Mich 535, 542; 510 NW2d 900 (1994).
We disagree with the trial court’s interpretation of the tolling provision of the prejudgment interest statute. While subsection 7 concerns offers made by a party against whom judgment is "subsequently rendered,” implying that an offer must be made before a verdict, the same wording is not employed in the portions of those subsections following subsection 7 that govern at what point interest is tolled. Nothing in subsection 7 implies that an offer of settlement made before the verdict may not be ñled after the verdict. The relevant portion of subsection 7 provides that "interest shall not be allowed beyond the date the written offer of settlement which is made and rejected by the plaintiff, and is ñled with the court.” (Emphasis added.)
Giving effect to subsection 8 does not require us to overlook the reference to filing dates in subsection 7. Subsection 8 governs situations where no offer is made at all, or where an offer is made but never filed. This is not the situation here or under subsection 7. Similarly, in arguing that interest should have been calculated from the time plaintiffs rejected its offer, sometime in April or May 1991, defendant ignores the reference to filing dates in subsection 7 and renders it meaningless.
One problem with subsection 7 is that it is ungrammatical. Defendant would have this Court insert the word "of’ between the words "date” and "written.” This undoubtedly would clarify the statute in favor of defendant’s position. However, it would also make the reference to the filing dates completely superfluous. We believe the grammar problem is better corrected by removing the word "which” between the words "settlement” and "is made.” In fact, this is precisely what the Legislature did when it clarified subsection 7 in 1993 PA 78. Subsection 7 now reads:
If a bona fide, reasonable written offer of settlement in a civil action based on tort is made by the party against whom the judgment is subsequently rendered and is rejected by the plaintiff, the court shall order that interest not be allowed beyond the date the bona ñde, reasonable written offer of settlement is Sled with the court. [Emphasis added.]
Because subsection 7 requires tolling of prejudgment interest between the date defendant filed the offer, August 6, 1991, and the date judgment was entered, October 16, 1991, we remand for recalculation of the prejudgment interest accordingly.
Plaintiffs also interpret the prejudgment interest statute. Plaintiffs first claim that, because subsection 10 requires an offer of settlement to be accepted or rejected within twenty-one days, any offer must be made at least twenty-one days before trial. Plaintiffs’ interpretation of subsection 10 is not persuasive, and we reject it.
Plaintiffs also claim that defendant’s April 25, 1991, offer of settlement was not a bona fide offer under subsection 11 because the offer of $1 million was less than ninety percent of the judgment award of $1,119,646. However, the latter figure includes prejudgment interest. Because the prejudgment interest statute addresses the circumstances under which such interest may be imposed, its starting point is necessarily the amount of the judgment before the addition of such interest. Plaintiffs cite no authority to the contrary. Before prejudgment interest was added, the total award was $861,477.60. Defendant’s offer is not less than ninety percent of this amount.
B
Second, defendant argues that the trial court failed to reduce the judgment by the full amount of plaintiff’s future disability benefits under social security and under a combined life and disability insurance policy. Defendant relies on the collateral source rule, which prevents a plaintiff from recovering the same expenses from both a defendant and a collateral source. Warden v Fenton Lanes, Inc, 197 Mich App 618, 623; 495 NW2d 849 (1992). The specific provisions of the collateral source rule are found in MCL 600.6303; MSA 27A.6303. According to subsection 1, the statute applies to damages for past and future economic loss. According to subsection 2, before judgment is entered, the trial court must determine what expenses have been paid or will be paid by a collateral source. These collateral payments are then applied to reduce the verdict’s economic damage component under the rules set forth in MCL 600.6306; MSA 27A.6306.
Plaintiff’s social security benefits fall within the type of payments that should be used to reduce the verdict within the meaning of subsection 1. According to the specific language of subsection 4, "social security benefits” are a "collateral source.”
Nevertheless, the trial court deemed plaintiff’s social security benefits to be exceptions to the collateral source rule under subsection 5 because a possibility existed that they would be reduced or eliminated when plaintiff resumed work or when the federal government opted to reduce or end such benefits altogether. Subsection 5 provides that collateral source benefits shall not be considered "payable or receivable” unless there is a previously existing contractual or statutory obligation to pay the benefits.
We find the trial court’s application of subsection 5 inconsistent with its terms. In order for the collateral source rule to apply, subsection 5 only requires collateral source benefits to be based on a "previously existing contractual or statutory obligation” to pay. It does not require a previously existing and perpetual obligation to pay. At the time of the collateral source hearing, plaintiff had been certified by the Social Security Administration as disabled and was therefore entitled under 42 USC 423 to receive benefits. This is a previously existing statutory obligation.
We also reject the trial court’s interpretation of the collateral source rule as applied to plaintiff’s life insurance benefits. The trial court again invoked subsection 5, deeming the benefits not "payable or receivable” because plaintiff might return to work and cease receiving disability benefits. Because any disabled person might conceivably return to work, the trial court’s interpretation would render the collateral source rule meaningless, particularly the provision in subsection 4 explicitly deeming insurance benefits to be a collateral source. Plaintiff’s insurance benefits are fixed by a previously existing contract and are paid as compensation for economic loss. They therefore qualify as a collateral source.
However, to the extent that plaintiff’s insurance benefits constitute life insurance coverage, as opposed to disability coverage, they are not a collateral source. Subsection 4 explicitly exempts life insurance benefits from the definition of "collateral source.” Here, plaintiff’s first round of disability payments, totaling $42,920, are a direct, dollar-for-dollar drawdown from plaintiff’s life insurance benefit. Although no death has occurred, this drawdown prejudices plaintiff with respect to her life insurance and should be considered "life insurance benefits” under subsection 4. Moreover, the amount of premiums paid by plaintiff for the policy’s disability insurance component should be deducted from the remaining disability benefits before reduction of the verdict. See MCL 600.6303(2); MSA 27A.6303(2).
Because of the trial court’s errors with respect to the collateral source rule, we remand for recalculation in accordance with this opinion.
c
Finally, defendant argues that the trial court erred in deducting any collateral source benefits from the amount of the verdict before reducing the verdict to account for plaintiff’s comparative negligence. Defendant claims that the parties stipulated otherwise. However, the application of the collateral source rule is dictated by MCL 600.6306; MSA 27A.6306, and a court is not bound by the parties’ stipulation of law. In re Finlay Estate, 430 Mich 590, 595; 424 NW2d 272 (1988). Defendant presents no authority to the contrary. Nor does defendant argue that the trial court’s understanding of MCL 600.6306; MSA 27A.6306 was erroneous.
VIII
Having resolved the issues related to the trial and judgment, we now turn to the posttrial award of mediation sanctions under MCR 2.403(0).
A
Plaintiffs first argue that MCR 2.403(0) does not apply because defendánt’s March 5, 1991, offer to settle was an offer of judgment under MCR 2.405. Under MCR 2.405(E), where there has been both a rejection of a mediation evaluation and a rejection of an offer of judgment, the rule governing costs for the later occurring type of rejection controls except that if costs may be awarded to the same party under both rules, that party is entitled to costs from the date of the earlier rejection. Here, defendant’s March 1991 offer to settle postdated the parties’ rejection of the mediation evaluation in November 1990.
An offer of judgment is not the same as an offer to settle. An agreement to settle does not necessarily result in a judgment. Although it usually results in a stipulated order of dismissal with prejudice, such an order does not constitute an adjudication on the merits. It merely "signifies the final ending of a suit, not a final judgment on the controversy, but an end of that proceeding.” 9A Michigan Law & Practice, Dismissal & Nonsuit, § 2, p 137. The plain language of MCR 2.405(A)(1) clearly requires an offer of judgment, not just an offer to settle.
The parties do not dispute that there was written notification of the offer to plaintiffs as an adverse party and that rejection of the offer occurred after the parties rejected the mediation evaluation. However, they do dispute whether defendant’s March 1991 offer to settle constitutes an offer for purposes of MCR 2.405(A)(1). We hold that it does not. The offer, which was presented in a letter by defense counsel, contained the following key language:
My client has authorized me to extend a new settlement offer in the above-entitled case, in the amount of $500,000.00. This amount can be put into a structure if so desired. Of course, confidentiality is a condition of the settlement.
I am sure you have made your own evaluation of the liability aspects of the case, and would probably agree that the roadway, off-road roll over and failure to use seat belts, among other things, make this a very defensible case. As a result, this offer of settlement is made in good faith and, I think, presents a more than fair resolution of the issues from your client’s perspective.
While defendant expressed a willingness to settle and to bring an end to the case, it plainly did not express a willingness "to stipulate to the entry of a judgment in a sum certain.” MCR 2.405(A)(1). The trial court did not err in applying MCR 2.403(0) instead of MCR 2.405.
B
Plaintiffs also argue that, under MCR 2.403(0) (1), they are liable only for an award of "costs,” not "actual costs.” Plaintiffs’ argument was rejected by this Court in Zalut v Andersen & Associates, Inc, 186 Mich App 229; 463 NW2d 236 (1990). There, the omission of the word "actual” from the second sentence of MCR 2.403(O)(l) was deemed to be inadvertent, and the meaning of the term "costs” was deemed to be the same as "actual costs.” Zalut at 232-234.
c
Plaintiffs next argue that the trial court erred in determining the amount of attorney fees awarded under MCR 2.403(0) and in failing to hold an evidentiary hearing regarding which costs were "necessitated” by plaintiffs’ rejection of the mediation evaluation. The trial court’s award of attorney fees is reversible only for abuse of discretion. Jernigan v General Motors Corp, 180 Mich App 575, 587; 447 NW2d 822 (1989).
Defendant’s original request for $962,166.20 in attorney fees was accompanied with billing statements from all four law firms hired by defendant. We agree with the trial court’s decision to award less than half of that amount and find no error in its detailed analysis of the billing statements for duplicative work. Although the result was the byproduct of two different methods, the analysis was reasonable and adhered closely to the information provided in the billing statements and to the court’s observations of the proceedings. The trial court considered all the factors set forth in Wood v DAIIE, 413 Mich 573, 588; 321 NW2d 653 (1982). We find no abuse of discretion in the court’s award of attorney fees.
The trial court was also justified in awarding defendant expert witness fees. See Giannetti Bros Construction Co v Pontiac, 175 Mich App 442, 449; 438 NW2d 313 (1989). The trial court’s assessment of these fees was not an abuse of discretion. Plaintiffs have failed to convince this Court with sufficient proof that the amount of these fees was falsified or excessive or that the experts’ testimony was unrelated to the research they performed and for which they billed the defendant.
Plaintiffs also assert that none of defendant’s post-mediation fees were "necessitated” by plaintiffs rejection because plaintiffs offered to settle the case on several occasions before trial for the amount of the mediation evaluation. According to plaintiffs, "it was the defendant’s refusal to settle this case and the defendant’s rejection of the mediation evaluation which compelled the trial of this case.”
Essentially, plaintiffs claim that their initial rejection of the mediation evaluation was not the "but for” cause of the fees incurred by defendant, citing Maple Hill Apartment Co v Stine, 131 Mich App 371; 346 NW2d 555 (1984). However, Maple Hill was vacated and remanded to the Court of Appeals by the Supreme Court and has no precedential value. 422 Mich 863 (1985). On remand, the Maple Hill Court considered only the former Oakland County Circuit Court Rule 18.12, which did not contain the requirement that postmediation fees be "necessitated by the rejection.” 147 Mich App 687, 690-692; 382 NW2d 849 (1985). Therefore, any discussion of the meaning of this requirement by the Maple Hill Court on remand is dicta. Since Maple Hill, the "but for” test has been rejected by this Court. See, e.g., Michigan Basic Property Ins Ass’n v Hackert Furniture Distributing Co, 194 Mich App 230, 235-236; 486 NW2d 68 (1992).
D
Plaintiffs also argue that the enforcement of mediation sanctions in this particular case is unconstitutional. Although plaintiffs mention in passing that due process was violated, the thrust of their argument is that they have been denied equal protection of the laws. The test to determine whether legislation and court rules comport with due process and equal protection is essentially the same. Shavers v Attorney General, 402 Mich 554, 612-613; 267 NW2d 72 (1978). Where no suspect classification is involved, legislation must be sustained if it is rationally related to a legitimate government purpose. Id. at 613. Here, no suspect classification is involved, a legitimate government purpose exists (expediting litigation), and the court rule is rationally related to that purpose. The court rule placed both plaintiffs and defendant at risk when they rejected the mediation evaluation.
E
Finally, plaintiffs argue that the trial court erred in refusing to grant their request for relief from the award of mediation sanctions. Specifically, plaintiffs claim that, when deciding whether to reject the mediation evaluation and defendant’s subsequent March 5, 1991, offer to settle, they misunderstood the meaning of "costs” versus "actual costs” in MCR 2.403(O)(l) and the meaning of an offer of judgment under MCR 2.405. This misunderstanding, plaintiffs claim, constituted excusable neglect under MCR 2.612(C)(1). A trial court’s decision on a motion under this rule is reviewed for abuse of discretion. Mikedis v Perfection Heat Treating Co, 180 Mich App 189, 203; 446 NW2d 648 (1989).
Unlike the cases in which this Court has relieved parties of the consequences of rejecting a mediation evaluation, see, e.g., Great American Ins Co v Old Republic Ins Co, 180 Mich App 508; 448 NW2d 493 (1989); Muntean v Detroit, 143 Mich App 500; 372 NW2d 348 (1985), there were no procedural errors with respect to mediation in this case. Plaintiffs clearly intended to reject both the mediation evaluation and defendant’s offer to settle. Plaintiffs’ error was in assessing the consequences of their choice. This type of mistake is insufficient to furnish a basis for relief under MCR 2.612(C)(1). See 3 Martin, Dean & Webster, Michigan Court Rules Practice, p 537.
In Docket No. 148831, we affirm in part, reverse in part, and remand for proceedings consistent with this opinion. In Docket No. 151110, we affirm the order of mediation sanctions.
Throughout this opinion, the use of "plaintiff’ in the singular will refer to plaintiff Caryl Haberkorn.
Although this evidence appears irrelevant to the theory on which plaintiffs recovered — i.e., negligent design — plaintiffs contend that it would have affected the jury’s finding of comparative fault because whether plaintiff was given adequate warning determined the degree to which the jury expected her to exercise care in handling the Jeep.
Under her life insurance policy, plaintiff is entitled to receive disability benefits of $740 a month for fifty-eight months, which acts as a drawdown on her $60,000 life insurance benefit. These payments reduce her life insurance benefit dollar for dollar until approximately $20,000 remains. At that point, plaintiff is entitled to receive disability benefits of $532 a month for 225 months without further deductions from her remaining life insurance benefit.
MCL 600.6303; MSA 27A.6303 provides in relevant part:
(1) In a personal injury action in which the plaintiff seeks to recover for the expense of medical care, rehabilitation services, loss of earnings, loss of earning capacity, or other economic loss, evidence to establish that the expense or loss was paid or is payable, in whole or in part, by a collateral source shall be admissible to the court in which the action was brought after a verdict for the plaintiff and before a judgment is entered on the verdict. Subject to subsection (5), if the court determines that all or part of the plaintiff’s expense or loss has been paid or is payable by a collateral source, the court shall reduce that portion of the judgment which represents damages paid or payable by a collateral source by an amount equal to the sum determined pursuant to subsection (2). This reduction shall not exceed the amount of the judgment for economic loss or that portion of the verdict which represents damages paid or payable by a collateral source.
(2) The court shall determine the amount of the plaintiff’s expense or loss which has been paid or is payable by a collateral source. Except for premiums on insurance which is required by law, that amount shall then be reduced by a sum equal to the premiums, or that portion of the premiums paid for the particular benefit by the plaintiff or the plaintiff’s family or incurred by the plaintiff’s employer on behalf of the plaintiff in securing the benefits received or receivable from the collateral source.
(4) As used in this section, "collateral source” means benefits received or receivable from an insurance policy; benefits payable pursuant to a contract with a health care corporation, dental care corporation, or health maintenance organization; employee benefits; social security benefits; worker’s compensation benefits; or medicare benefits. Collateral source does not include life insurance benefits or benefits paid by a person, partnership, association, corporation, or other legal entity entitled by law to a lien against the proceeds of a recovery by a plaintiff in a civil action for damages. . . .
(5) For purposes of this section, benefits from a collateral source shall not be considered payable or receivable unless the court makes a determination that there is a previously existing contractual or statutory obligation on the part of the collateral source to pay the benefits.
See n 3, supra.
See US Const, Am XIV; Const 1963, art 1, §§ 2, 17. | [
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Per Curiam.
Petitioner James C. Tardiff appeals as of right from the probate court’s denial of his petition to adopt April Rae Munson, an adult and the biological daughter of his ex-wife. We reverse.
April Rae Munson’s biological mother, Judy Anne Tardiff, divorced respondent, Douglas T. Munson, who is April’s biological father, when April was three. Judy Tardiff then married petitioner. Apparently, petitioner never attempted to adopt April during his marriage to Judy Tardiff. April lived with petitioner and Judy during their fifteen-year marriage. After the divorce, April continued to reside with petitioner. Neither petitioner nor Judy Tardiff remarried.
Petitioner subsequently filed his petition to adopt April, who was then nineteen years old, and to terminate respondent’s parental rights. April consented to the adoption. The probate court personnel advised petitioner, however, that Judy Tar-diff had to be a party to the adoption petition because she was April’s biological mother, so petitioner filed an amended petition listing himself and Judy Tardiff as the adopting father and mother.
Believing this Court’s decision in In re Adams, 189 Mich App 540; 473 NW2d 712 (1991), to be controlling, the probate court denied, albeit reluctantly, the petition for adoption because the Adoption Code, MCL 710.21 et seq.; MSA 27.3178(555.21) et seq., did not permit, two unmarried people to adopt an individual jointly. The court relied on § 24(1) of the Adoption Code, MCL 710.24(1); MSA 27.3178(555.24)(1), which provides:
If a person desires to adopt a child or an adult and to bestow upon the adoptee his family name, or to adopt a child or an adult without a change of name, with the intent to make the adoptee his heir, that person, together with his wife or her husband, if married, shall file a petition with the probate court of the county in which the petitioner resides or where the adoptee is found. [Emphasis added.]
The probate court opined that Judy TardifFs joinder in the adoption petition was necessary to prevent the termination of Judy TardifFs parental rights as a result of petitioner’s adoption request. Because of her joinder, however, the court was faced with two single- persons petitioning to adopt the same child. On the basis of the reasoning set forth in Adams, supra at 544-547, the court found that allowing two unmarried persons to adopt April jointly would be inconsistent with the scope and purpose of the Adoption Code. For this reason, the probate court denied petitioner’s adoption request. Petitioner appeals from this denial.
Without question, the probate court was acting in good faith when it attempted to apply and reconcile both the holding in Adams and the applicable sections of the Adoption Code to this unusual fact situation. However, we believe the probate court interpreted the code and Adams too expansively in finding that TardiiF was a necessary party to these proceedings and in determining that Adams is controlling here or conflicts with petitioner’s request. See In re Kyung Won Kim, 72 Mich App 85, 88; 249 NW2d 305 (1976).
Specifically, we find nothing in the Adoption Code that requires Judy TardiiF to join the petition for adoption. Section 24 of the Adoption Code does not mandate joinder of the adoptee’s natural mother in this case because Judy TardiiF is no longer married to petitioner and was not petitioner’s spouse at the time he filed the adoption petition. MCL 710.24(1); MSA 27.3178(555.24)(1). Similarly, MCR 5.753 and MCL 710.24a; MSA 27.3178(555.24a) do not include the noncustodial biological parent of an adult adoptee within the definition of an "interested party” for purposes of filing an adoption petition. Moreover, nothing in the code indicates that petitioner’s adoption of an adult adoptee would automatically terminate the parental rights of the adult adoptee’s biological mother. Indeed, petitioner requested only that the parental rights of respondent, April’s biological father, be terminated as a prerequisite to petitioner’s adoption of April.
We also disagree that Judy TardifF had to be joined in the adoption petition in order to give her consent to the adoption. Because of April’s status as an adult adoptee, Judy TardifF was not required to consent to the adoption. Adams at 546; MCL 710.43(3); MSA 27.3178(555.43)(3). The Adoption Code only requires the consent of the parent whose parental rights must be terminated in order to grant the adoption. MCL 710.24a(l)(c)(v); MSA 27.3178(555.24a)(l)(c)(v); MCL 710.22(g); MSA 27.3178(555.22)(g). Because neither Judy TardifFs joinder nor her consent to the adoption was required by the Adoption Code, we find that the probate court erred in requiring petitioner to include the adult adoptee’s biological mother as a party to his adoption petition.
Finally, because petitioner is a single person and the Adoption Code permits single persons to adopt, the probate court erred in applying this Court’s decision in Adams, supra, to the case at bar. Adams only addressed situations where more than one person joins in the adoption petition, i.e., where two single people or two married people who are not married to each other attempt to adopt jointly. Id. at 543-544, 546-547. Adams did, however, affirm that the statutory language of § 24 unambiguously limits the "group of persons eligible to adopt to single persons and married persons jointly with their spouses.” Id. at 547 (emphasis added). Here, petitioner alone is asking the probate court to recognize him as April’s legal father. Because Adams does not address the instant question whether a single man may adopt an adult adoptee after he divorces the adoptee’s biological mother, we hold that the probate court erred in denying petitioner’s adoption request on the basis of the holding in Adams. Instead, we find that as a single person, petitioner is entitled to petition for April’s adoption under the Adoption Code, thereby becoming April’s legal father and terminating the parental rights of respondent, her biological father.
Accordingly, we hold that in misinterpreting the breadth of this Court’s holding in Adams, the probate court abused its discretion when it denied petitioner’s adoption request. See Kyung Won Kim, supra.
Reversed. | [
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Markman, J.
This is a declaratory judgment action. Defendants appeal by leave granted from an order denying their motion for summary disposition pursuant to MCR 2.116(C)(10). We reverse.
On April 9, 1991, plaintiff met with defendant Yost, an insurance agent for defendant Allstate, and submitted an application for no-fault automobile insurance with Allstate on his motorcycle. In connection with the application, Yost asked plaintiff whether he had any traffic citations within the last three years, to which he responded "no.” Plaintiff paid the premium, and Yost issued a temporary certificate of insurance. The next day Yost received a copy of plaintiff’s driving record, which reflected that, on May 1, 1988, he had been issued a citation for operating a motor vehicle while impaired. Yost contacted plaintiff the following day to inform him that the citation was still on his record. Yost asked plaintiff to discuss the matter with her in person as soon as possible. Plaintiff and Yost met on April 15, 1991, at which time Yost told plaintiff that he was ineligible for insurance with Allstate. She informed him that the Allstate policy could be canceled that day or that he could leave it up to Allstate to reject the application. Plaintiff told Yost that he had made a mistake about the date of his citation and that he honestly believed that the citation was issued before April 9, 1988. Although Yost gave plaintiff an insurance quote with the Michigan Automobile Insurance Placement Facility, plaintiff declined this insurance. Plaintiff signed a document stating that his application for insurance was "void effective April 15, 1991 9:20 am per insureds request” and Yost immediately returned plaintiff’s premium. Ten days later, plaintiff was involved in an accident with his motorcycle and sought benefits through Allstate. When Allstate refused to pay no-fault benefits, plaintiff filed this suit, alleging breach of contract by Allstate and negligence by Yost.
Allstate moved for summary disposition, arguing that there was no insurance coverage in effect at the time of the accident. Allstate contended that plaintiffs application for insurance coverage had been voided and rescinded effective April 15, 1991. Plaintiff argued that the policy was not rescinded and that his and Yost’s actions were an attempt at cancellation of the policy. He contended that the cancellation was ineffective, however, because he had not been given twenty days’ notice of cancellation in accordance with MCL 500.3224; MSA 24.13224. The trial court denied Allstate’s motion, ruling that there was a question of material fact whether Allstate had rescinded the policy or canceled it. Although Yost had also moved for summary disposition of the negligence count, the trial court did not rule on that motion.
A motion for summary disposition under MCR 2.116(0(10) tests the factual support for a claim. The court must consider the pleadings, affidavits, depositions, and other documentary evidence available to it and grant summary disposition if there is no genuine issue regarding any material fact and the moving party is entitled to judgment as a matter of law. A party opposing a motion brought under MCR 2.116(0(10) may not rest upon the mere allegations or denials in that party’s pleadings, but must by affidavit, deposition, admission, or other documentary evidence set forth specific facts showing that there is a genuine issue for trial. McCormic v Auto Club Ins Ass’n, 202 Mich App 233, 237; 507 NW2d 741 (1993). This Court is liberal in finding a genuine issue of material fact. Nonetheless, where the opposing party fails to come forward with evidence, beyond allegations or denials in the pleadings, to establish the existence of a material factual dispute, the motion is properly granted. Id.
Having reviewed the record, we conclude that there is no issue of material fact and that Allstate is entitled to judgment as a matter of law. We first note that plaintiffs reliance on MCL 500.3224; MSA 24.13224 is misplaced. Assuming that a cancellation of the no-fault automobile policy is involved, MCL 500.3020; MSA 24.13020, rather than MCL 500.3224; MSA 24.13224, governs. Section 3020 provides for a ten-day, not a twenty-day, notice of cancellation. American States Ins Co v Auto Club Ins Ass’n, 193 Mich App 248, 251-252; 484 NW2d 1 (1992). Further, under § 3020, an insurer need not give the ten days’ written notice of cancellation where the insured consents to the cancellation. Blekkenk v Allstate Ins Co, 152 Mich App 65, 71; 393 NW2d 883 (1986). In this case, the form plaintiff signed clearly indicates that he requested the policy be "void.” There is nothing to suggest that plaintiff was coerced into signing the statement. Because plaintiff intended to cancel and Allstate accepted that cancellation, the cancellation was effective.
Moreover, the contract at issue was rescinded, and for this reason also the trial court should have granted summary disposition. This Court has outlined the nature of rescission:
To rescind a contract is not merely to terminate it, but to abrogate and undo it from the beginning; that is, not merely to release the parties from further obligation to each other in respect to the subject of the contract, but to annul the contract and restore the parties to the relative positions which they would have occupied if no such contract had ever been made. Rescission necessarily involves a repudiation of the contract and a refusal of the moving party to be further bound by it. But this by itself would constitute no more than a breach of the contract or a refusal of performance, while the idea of rescission involves the additional and distinguishing element of a restoration of the status quo.
Cunningham v Citizens Ins Co of America, 133 Mich App 471, 479; 350 NW2d 283 (1984). It is well-settled that a material misrepresentation made in an application for no-fault insurance entitles the insurer to rescind the policy. Auto-Owners Ins Co v Johnson, 209 Mich App 61; 530 NW2d 485 (1995); Farmers Ins Exchange v Anderson, 206 Mich App 214, 218; 520 NW2d 686 (1994); Katinski v Auto Club Ins Ass’n, 201 Mich App 167, 170; 505 NW2d 895 (1993); Auto-Owners Ins Co v Comm’r of Ins, 141 Mich App 776, 779-780; 369 NW2d 896 (1985). Plaintiff, pointing to dicta in Cunningham, supra, argues that this rule only applies when the insured makes an intentional misrepresentation in the application for insurance. In Cunningham, we noted the distinction between situations involving intentional misrepresentations and other "mistakes or ministerial errors” but specifically declined to address whether the general rule would apply to situations of innocent misrepresentations. Cunningham, supra at 476, n 1, 477. We now hold that rescission was appropriate under the facts of this case.
Rescission is justified in cases of innocent misrepresentation if a party relies upon the misstatement, because otherwise the party responsible for the misstatement would be unjustly enriched if he were not held accountable for his misrepresentation. Britton v Parkin, 176 Mich App 395, 398-399; 438 NW2d 919 (1989). This is true, even as in this case, if it was a mutual mistake of fact. Id. In this case, the belief that plaintiff had no traffic citations related to a basic assumption of the parties upon which the contract was made and materially affected the parties’ performances. Allstate would not have issued the policy had it known about plaintiff’s citation because plaintiff would have been ineligible under its guidelines. Plaintiff should not be unjustly enriched at Allstate’s expense because of his misrepresentation, even accepting that it was innocent. Id., Accordingly, rescission was appropriate and the trial court erred in denying Allstate’s motion for summary disposition.
Although Yost also moved for summary disposition of plaintiffs negligence claim, the trial court failed to specifically rule on the motion. Therefore, this issue is not properly before this Court and should be considered by the trial court on remand. Smit v State Farm Mutual Automobile Ins Co, 207 Mich App 674, 685; 525 NW2d 528 (1994).
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Allen, J.
In this appeal as of right brought by the Michigan Department of Treasury, we are asked to decide whether an inheritance tax may be imposed on property acquired in exchange for a waiver of all claims against an estate, where the settlement arises out of an action to construe a will as opposed to a "will contest.” We answer this question in the negative and affirm.
On February 25, 1976, decedent Lenna M. Keith executed a will in which she devised the residuary of her estate to "United Church Manors, also known as Burcham Hills Retirement Center.” United Church Manors was a nonprofit corporation and a wholly-owned subsidiary of the Michigan Conference of the United Church of Christ, a Michigan ecclesiastical corporation. Following United Church Manors’ dissolution in bankruptcy on or about September 8, 1979, Burcham Hills was ultimately sold to the American Retirement Corporation, a for-profit corporation and the current owner, operator, and licensee of the facility.
Lenna M. Keith’s will was admitted to probate on December 7, 1982, following her death on October 30, 1982. On February 22, 1983, Michigan National Bank, as personal representative of the estate, filed a petition for judicial construction of the will’s residuary clause. The bank sought to determine to whom it should distribute the residuary estate, given that the named devisee was now defunct as a result of bankruptcy. Three parties responded to this petition: (1) Burcham Hills, through its present owner, American Retirement Corporation; (2) the Charitable Trust Division of the Michigan Attorney General’s office; and (3) Helen Lowell, a stranger to the will who claimed to be Keith’s sole heir-at-law.
Burcham Hills argued that the cy pres doctrine should be applied to save the residuary devise, maintaining that a charitable trust should be established since the residuary clause evinced a general charitable intent. Alternatively, it argued that the purpose of the devise was to benefit Burcham Hills’ residents, and that naming an alternative trustee would constitute only a minor deviation in the administration of the will. The Attorney General advanced these same arguments. However, Lowell maintained that the cy pres doctrine was inapplicable to Keith’s will, and that substituting another trustee would not be a minor deviation. Lowell’s arguments were premised on the assertion that the residuary devise was intended to benefit a specific nonprofit corporation with a specific religious affiliation. Lowell contended that the charitable devise lapsed, and that, as a result, she was entitled to the residuary estate pursuant to the laws of intestate succession.
The parties settled. They stipulated that Keith had a general charitable intent to benefit Burcham Hills’ residents. Consistent with this intent, the parties agreed that the cy pres doctrine would be applied to the residuary clause so as to prevent the charitable devise from lapsing. The Lenna M. Keith Charitable Trust would be established to effectuate this intent and, pursuant to stipulation, the residuary of the principal corpus of the trust would be distributed to its trustee. Further, the parties agreed that the trustee of the subject trust would pay Lowell fifty percent of the full market value of the assets in the trustee’s possession. This settlement was effectuated on July 3, 1984, by the entry of two orders encompassing the parties’ agreement.
On December 26, 1984, the probate court entered an order allowing the final account by the personal representative. The order also created the Lenna M. Keith Charitable Trust, and provided for the transfer of all remaining assets of the estate to the trustee. Thirty days after the final tax determination, the trustee was to pay Lowell her portion of the settlement, less $75,000 previously received on January 6, 1984.
On January 23, 1985, the probate court entered a final inheritance tax order, assessing the taxable estate at a clear market value of $196,173.09. Lowell and the Lenna M. Keith Charitable Trust were each determined to have net distributions of $134,861.55. The amount transferred to the charitable trust was tax exempt. However, the inheritance tax assessed against the transfer to Lowell was $17,881.
On February 12, 1985, Lowell petitioned for a redetermination of the inheritance tax assessment. She alleged that her settlement distribution was a direct expense of the charitable trust and was therefore exempt from the inheritance tax. Further, she acknowledged that the settlement had been structured to avoid the inheritance tax, and that this was a primary inducement to settle. The Department of Treasury opposed the subject motion, but the probate court granted a redetermination and amended the final inheritance tax order. The court cancelled the assessment against the transfer to Lowell, finding that there was no statutory authority to tax her distribution. It is from this action of the probate court that the Department of Treasury takes the current appeal.
We find that the resolution of the question presented depends on which of two rules applies to the Lowell transfer, the rule established in In re Cress Estate, 335 Mich 551; 56 NW2d 380 (1953), or the rule codified by MCL 700.191(2); MSA 27.5191(2). In Cress, the Supreme Court held that a compromise agreement, entered into between parties to a will contest or threatened will contest, would not alter the inheritance tax consequences that resulted from the distribution provided for in a decedent’s last will and testament. The Court reasoned that the inheritance tax attached at the instant of transfer, which was the time of death. Since the tax attached at the time of death or transfer, the Court concluded that the tax would have to be computed in accord with the distribution provided for in the will, regardless of the actual distribution made pursuant to settlement.
Lowell was not named in Keith’s will. Consequently, she received no distribution by its terms. Thus, if the Cress rule applies to her distribution, no inheritance tax may be imposed on the transfer of property to Lowell from the charitable trust, regardless of the actual distribution provided for in the parties’ settlement agreement.
The Cress rule was altered to a large extent by MCL 700.191(2), which provides:
The transfer of an asset to a person in settlement of a will contest, whether the settlement is effected under this article or any other provision of law, shall be treated for inheritance tax purposes as a transfer to the person receiving the asset and not as a transfer to the person named in the will in all cases where the settlement agreement was in writing and made a part of the record of the estate before distribution of the asset. [Emphasis added.][ ]
The probate court found that § 191(2) had no application to the facts of the instant case, since the action initiated by the personal representative of Keith’s estate was an action to construe her will after it had been admitted to probate. At no time did any party "contest” or threaten to "contest” Keith’s will. Rather, the transfer to Lowell resulted from settlement of an action to construe the will, as opposed to being "in settlement of a will contest.” Accordingly, the probate judge concluded that the Cress rule governed this case and that no inheritance tax could be imposed on the Lowell transfer.
The Treasury Department points out that the Legislature enacted the Dodge act, MCL 702.45 et seq.; MSA 27.3178(115) et seq., repealed by 1978 PA 642, § 993, which, in pertinent part, provided that settlements relating to any will dispute would be encouraged and enforced. In Cress, the Supreme Court expressly stated that the Dodge act did not modify or alter the inheritance tax laws. Hence, the Dodge act had no bearing on the fact that inheritance taxes attached at the time of death, regardless of a subsequent settlement. Following Cress, the Legislature repealed the Dodge act, but retained its substance by simultaneously enacting subsection (1) of MCL 700.191, which provides in pertinent part:
Subject to the rights of creditors and taxing authorities, competent interested parties may agree among themselves to alter the interest, shares, or amounts to which they are entitled under the will of the decedent or under the laws of intestacy, in any way that they provide in a written agreement executed by all who are affected by its provisions. [Emphasis added.]
This provision appears to encompass both "will contests” and the action herein to construe Keith’s will. Moreover, it is immediately followed by § 191(2), quoted previously, which alters the Cress rule for transfers made "in settlement of a will contest.”
The Department of Treasury argues that it would be illogical to hold that § 191(2) did not apply to all will disputes described in § 191(1). Apparently, it sees no reason for according various settlements distinct tax treatment based only on the nature of the dispute. Therefore, it urges this Court to apply the rule of statutory construction which dictates that legislative intent be determined by considering a statute as a whole, giving effect to each of its provisions. See Oxford Twp v Dep’t of Social Services, 120 Mich App 103, 108; 326 NW2d 409 (1982). The Treasury Department maintains that when this rule of construction is applied, it follows that the Legislature intended that "will contests” be construed to mean all will disputes.
To accept the Treasury Department’s argument would be to ignore a threshold rule of statutory construction. For, we are called upon to discern legislative intent only when a statute is ambiguous. In construing a statute which is unambiguous on its face, interpretation and construction of its terms is unnecessary. Sneath v Popiolek, 135 Mich App 17; 352 NW2d 331 (1984).
We believe that the language "in settlement of a will contest” is clear and unambiguous. The phrase "will contest” has evolved as a term of art. As employed by lawyers, the expression "contest or attempt to contest” has usually referred to the action of an actual litigant who, having received notice of a probate court or equitable proceeding, attempts to nullify or defeat what the testator had declared to be his will. Saier v Saier, 366 Mich 515; 115 NW2d 279 (1962). Grounds for will contests have historically included challenges to proper execution, claims of undue influence, and claims that the will was forged or was executed by an incompetent testator. Moreover, actions involving will contests have typically been asserted before a will is admitted to probate. See MCL 702.24; MSA 27.3178, repealed by 1978 PA 642, §993; MCL 700.148; MSA 27.5148.
In contrast, the construction of a will’s provisions is a matter which is considered after the will has been admitted to probate. See In re Clayton Estate, 320 Mich 152, 155; 30 NW2d 816 (1948). Moreover, when a will is subject to a "construction of a will” action, the litigant is not seeking to invalidate the will as in a "will contest.” Rather, he acknowledges the will’s validity, and seeks instead to discern the testator’s intent through rules of construction, see MCL 700.130 et seq.; MSA 27.5130 et seq., and to give effect to that intent. See In re Bair Estate, 128 Mich App 713; 341 NW2d 188 (1983).
Based on this long standing distinction between will contests and actions to construe wills, we do not find it within our authority to decide that the Legislature meant something broader than "will contest” when it employed this language in § 191(2). Rather, we find that the use of language describing a variety of will disputes in § 191(1), followed by use of the much narrower term "will contest” in § 191(2), suggests that the Legislature meant only to alter the inheritance tax consequences for settlements involving traditional will contests. Moreover, contrary to the Treasury Department’s position on this issue, we do not believe that the Legislature’s distinction is devoid of reason or wholly arbitrary. For, when one is contesting a will, he or she is attempting to nullify the will’s validity. If successful and the will is presumed never to have been valid, it would seem illogical to look to the will’s distribution scheme for purposes of assessing inheritance taxes. Indeed, it is difficult to conceive of the inheritance tax as "attaching” in accord with the distribution scheme of an invalid will. Thus, it appears reasonable that the Legislature altered the operation of this legal fiction by looking to some other scheme, such as actual distribution, for situations where an action involving a will contest is settled.
In contrast, if one seeks to construe the provisions of a will, the fundamental assumption is that the will is valid. Consistent with this assumption, it is logical to view the property as being "transferred” at death pursuant to the will’s distribution scheme. Thus, it is logical to conceive of the inheritance tax as "attaching at death.” If one brings an action to construe the will, he or she is not seeking to alter the distribution contemplated by the testator, but to discover what distribution the testator intended. Thus, if settled, the taxation of inheritances will at least reflect a distribution scheme acknowledged to be valid.
In the present case, Lowell received her distribution pursuant to settlement of an action to construe Keith’s will. Since she did not receive her portion of the estate "in settlement of a will contest,” § 191(2) did not operate to alter the will’s distribution scheme for inheritance tax purposes. Rather, pursuant to Cress, supra, the inheritance tax had to be assessed in accord with the distribution provided for in the will. Since the will made no provision for Lowell, the probate court properly cancelled the inheritance tax on her actual distribution.
Affirmed.
For elucidation on the cy pres doctrine, see Kostarides v Central Trust Co, 370 Mich 690; 122 NW2d 729 (1963), and In re Rood Estate, 41 Mich App 405; 200 NW2d 728 (1972), lv den 388 Mich 766 (1972).
We note that Lowell received $75,000 of her distribution on January 6, 1984, before the settlement agreement was put into writing or made a part of the record. Thus, regardless of the interpretation given the phrase “in settlement of a will contest,” this payment cannot be treated as a transfer to Lowell for inheritance tax purposes.
The department maintains that § 191(2) was broadly construed in In re Wentworth Estate, 127 Mich App 308, 311; 338 NW2d 396 (1983), as applying to "any agreement designed to resolve a potential or actual will dispute.” However, when this language is read in the context of the entire opinion, it is obvious that the Court was referring to the narrow dispute involved in that case. The Wentworth Court was required to determine whether "in settlement of a will contest” would include an agreement to avoid a will contest. In holding that it did, the Court accorded "will contest” the broadest construction that it had yet received from this Court. However, we do not view Wentworth as persuasive authority for the proposition that "will contest” should be deemed to include actions to construe a will. | [
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Bird, J.
This equity suit involves dealings between Wellington R. Burt of Saginaw and his son, George R. Burt. Wellington R. Burt passed away in March, 1919. By will he appointed defendant as trustee of his estate. He also designated William T. Otis, many years his private secretary, to assist the trustee. In the year 1903 Wellington R. Burt purchased land in the vicinity of Bellevue, suitable for the manufacture of cement, and in 1904 he commenced the construction of a cement manufacturing plant. Early in 1906 he had it in operation. He gave the management of it to his son George. He told members of his family he was building the cement plant for George. George continued to manage the plant, and in February, 1911, Mr. Burt executed a deed to him of all the real estate owned by him in connection with the cement plant for a consideration of $200,000, and other considerations, and gave it to his secretary, Mr. Otis, and he placed it among the title papers of the cement plant in Mr. Burt’s vault, where it-remained until some time in 1914.
On March 20, 1914, Mr. Burt executed a bill of sale to George of all the personal property belonging to the cement plant, for a stated consideration of $93,150. On that date Mr. Burt’s books showed his investment in the cement plant to be $1,093,150. The bill of sale provided that the $93,150 should be paid “out of the personal property sold from the premises.” On the bill of sale appears the following indorsement signed by Mr. Burt:
“November 27, 1914.
“Amount due on the within bill of sale $4,000— “Balance paid in full.
“W. R. Burt.”
Also, the following indorsement:
“Paid in full.
“December 2, 1915.
“W. R. Burt.”
After the execution of the bill of sale Mr. Burt delivered it to Otis, his secretary, and he placed it with the deed and title papers of the cement plant in Mr. Burt’s vault. The papers remained there until the foregoing indorsements were made thereon on December 2, 1915, when Otis placed the deed and bill of sale in a tin box 'belonging to himself and George jointly, and in which they both had some bonds. The box was kept locked, Otis had one key and George had the other. Mr. Burt had no key to the box, but he knew of it.
On December 31, 1914, the following entry was made upon Mr. Burt’s books:
“The amount charged against the plant as cost now totaling over one million dollars charged against profit and loss, to an amount of one million dollars per order of W. R. Burt. Property has already been deeded to G. R. Burt. Balance of account is charged to G. R. Burt’s account.”
On the same date this entry was made upon his books G. R. Burt was debited $4,000, and the Burt Portland Cement Company credited $4,000, with this memoranda in connection:
“Balance Cement Company account as ordered by W. R. Burt, account of personal property.”
On this date, namely, the 31st day of December, 1914, Mr. Burt’s books showed his investment in the plant to be $1,004,000. These entries closed the cement company’s account, and the unpaid balance of $4,000 on the $93,150 was charged to George’s personal account.
The plant was located in a small village where the banking facilities were very limited. So, from the beginning, George Used his father as his banker. When he received remittances for his product he mailed them to his father, and when he needed cash he would draw on him. This practice'continued up to the time of Mr. Burt’s death.
It is George’s claim that the title to the plant passed to him on December 31, 1914. His claim is that his father intended to make him a present of an investment of $1,000,000; that when his investment got to that point the title should pass to him. On that date he owed his father a balance of $4,000, which had been credited to the cement plant and charged to him personally.
On August 14, 1915, his father’s books showed that he had paid this balance. After. this date he deposited with his father $125,000 more than he withdrew, and his claim is that the estate should now reimburse him in that amount.
The defendant insists that the title did not pass to George until January 9, 1918, when Mr. Burt wrote George as follows:
“I am inclosing you deed for all the land at Bellevue, including the plant, which I wish you would put on record at once. I have concluded this is the best way, and then for you to make the income tax return for the present year as to you and so report it. Instead of reporting the employees at the plant who have received $800 or more (as required by the law) by him, you will report them direct. I want to see this report before you send it in.”
That inasmuch as George did not get title to* the plant until January 9, 1918, all the remittances that went forward to the father prior to that date belonged to his father and not to him.
1. In most cases involving the question of gifts, the crucial question is, “Was there a legal gift?” That question is not involved here. The question here is, “When was the gift made ?” It seems to be conceded that Wellington R. Burt built the plant for his son George. He so advised members of his family, and stated to them that when his investment in the cement plant was reduced to a million dollars he was going to give it to George. It is conceded that he did give it to George, but just when is the main question discussed. Plaintiff claims title passed to him on December 31, 1914, when the consideration of the bill of sale was paid. Defendant claims it did not pass until January 9, 1918. If this were an action at law, and the question was to be disposed of on purely legal grounds, it is quite possible we might not agree with either of the contentions. This, however, is an equitable proceeding, and we think we should try to ascertain, if possible, the time when the donor intended the title to pass, and then carry it out as he intended it.
That Wellington R. Burt built the plant for George and intended to pass title to him when his investment reached the point of a million dollars appears to admit of no doubt. He took the first step towards transferring it in 1911. He executed a deed of the plant and filed it away among the title papers of the cement plant. Early in 1914 his investment had. been reduced to $1,093,150. He then made a bill of sale of the personalty connected with the plant, for a consideration of $93,150, and filed it away with the deed. On December 31, 1914, the $93,150 had been reduced to $4,000. When the balance had reached this point Mr. Burt was evidently anxious to close the matter up because his books show that on that day he credited the cement plant with the $4,000 that was due on the bill of sale, and charged it to George personally. . On the same day he charged off to profit and loss one million dollars, and caused the following entries to be made on his books:
“Dec. 31, 1914, W. R. Burt, Stock a/c Amount charged against plant as cost now totaling over one million dollars charged Profit & Loss to the amount of $1,000,000.00 per order W. R. Burt. Property has already been deeded to G. R. Burt. The balance of the a/c is charged to G. R. Burt’s a/c 4,000.
“G. R. Burt. To balancé Cement Co. a/c as ordered by W. R. Burt a/c personal property 4,000.
“Burt Portland Cement Co. 1,004,000.
“Dec. 31, Burt Portland Cement Co. given G. R. Burt, $1,000,000.”
December 31, 1914, appears to us as the date Mr. Burt intended the title to pass, or not later than August 13, 1915, when the balance of the $4,000 was paid by George in full. Some of the items of proof which have influenced us to this conclusion are:
(a) The entry on Mr. Burt’s books under date of December 31, 1914, that the property had been deeded to George.
(b) On December 31, 1914, Mr. Burt’s investment in the plant was reduced to a million dollars.
(c) On August 26, 1915, two weeks after George had paid the $4,000, he and his wife visited Mr. Burt on the event of his birthday. Mr. Burt greeted Nellie (George’s wife) as follows:
“Well, Nell, I suppose you are feeling pretty rich now that your husband owns the cement plant?”
(d) Mrs. Marion Burt Beck, a daughter of Wellington R. Burt, visited him the latter part of 1915, or early in 1916, and she testified that:
“He told me — lie told me a great many times that he intended to give it to my brother, and later told me that he had done so.”
(ej His niece, Mrs. Martha Colby, testified that while visiting at his home Mr. Burt said, in speaking of the cement plant:
“ ‘It has cost me a million dollars to make it a paying proposition, and I have given it to George. He realized responsibility — business responsibility. It is for him to manage, and I am most happy to say’ — and he certainly expressed it very feelingly, ‘that George is making a perfect success of it, a fine business man.’ It was a great joy to him.” (This conversation occurred in July, 1915.)
(/) Mrs. Martha Colby Day, a daughter of the last witness, testified about having a conversation with Mr. Burt in July, 1915:
“He was speaking of the farm and the developments there, and said: ‘Of course, I gave the plant to George,’ and he said, T am pleased with the way he is running it, and with the success he is making.’ ”
(g) In 1917 additional land adjoining the cement plant was purchased, and Mr. Burt advised George to take the title in his own name.
(h) George paid the Federal income tax on the plant for the year 1917.
(i) After December 81, 1914, Mr. Burt spoke of the plant as “your plant” and the moneys deposited as “your moneys” to George and his wife.
These items, taken in connection with the entries on Mr. Burt’s books, are persuasive that he intended the title should pass to George on December 31, 1914, at the time his investment had been reduced to a million dollars.
Our attention is called to several- items of proof which are inconsistent with this theory. This is equally true of the date suggested by defendant. And if the dealings had taken place between strangers they would be very persuasive. Mr. Burt, however, in dealing with a favored son, to whom he was giving a million dollar plant, was giving no particular thought to a legal delivery. He had made the deed and bill of sale of the plant to George, and, doubtless, he considered that a sufficient transfer when his investment was reduced to a million dollars. Mr. Burt was a very wealthy man and a very keen business man. He was very fond of his son George. He desired to get him established in business before he passed away. He created this plant, and kept a guiding hand on it as long as he lived, although he relaxed it some in his final days. He continued to give the plant the benefit of his financial prestige and business acumen after the title passed as well as before. He was anxious, as all fathers are, to see his son succeed, and he steadied George’s hand to the last. If these things be kept in mind less trouble will be encountered in understanding the inconsistent things offered to this theory. The important conversations, events, and book entries point unmistakably to December 31, 1914, as the date upon which Mr. Burt considered the title had passed, and we hold that it did pass on that date. If the title passed to George on that date, it follows that whatever deposits were made after that date would belong to him less what sums he had withdrawn.
It must not be overlooked that George, the donee, had possession of the intended gift. Under such circumstances, to‘show delivery, it is only necessary to show that the donor relinquished dominion over the' thing given, and recognized the possession of the donee as being in his own right. Miller v. McMeehen, 6 L. R. A. 515; Tenbrook v. Brown, 17 Ind. 410; Wing v. Merchant, 57 Me. 383; Gill v. Strozier, 32 Ga. 688; 20 Cyc. p. 1197; 28 C. J. p. 638.
In the last citation the rule is stated:
“Where property is at the time of the gift in the possession of the donee, as agent for the donor or other-' wise, it is not necessary that the donee should surrender to the donor his actual possession in order that the latter may redeliver it to him in execution of the. gift, but a relinquishment by the donor of all dominion over the property, and recognition of the possession of the donor as being in his own right, is sufficient to perfect the gift.”
“Surrender does not necessarily and always mean the actual, physical giving up. of possession of the instrument ; hence it is not always the case that a deed retained in the grantor’s hands is invalid for'want of delivery. There may be such attendant circumstances as, for example, relationship of grantor to grantee, or other acts of the grantor besides the mere signing and sealing of the deed, as to show that the title is beyond his control, though the deed is retained in his possession.” Brewster on Conveyancing, § 298.
2. Defendant questions the jurisdiction of the equity court to entertain this proceeding. It insists if plaintiff has a valid claim for money deposited with his father he should have presented it to the commissioners (3 Comp. Laws 1915, § 13875). Not having done so it is barred by the nonclaim statute (§ 13877). Plaintiff answers this by saying he intended to present his claim to the commissioners on his father’s estate, and should have done so except for the following circumstances : When ready to present his claim he had an interview with William T. Otis, his father’s former secretary, and informed! him that he intended to file a claim against the estate, and from him he learned that he did not place the deed and bill of sale to the plant in the tin box owned by himself and plaintiff on December 2, 1915. Without this proof plaintiff could not support his claim, and was obliged to abandon it. Some time later plaintiff discovered an affidavit the said Otis had made and filed with the Federal government to affect the question of income taxes, in which he stated that he did place said deed and bill of sale in said tin box belonging to affiant and plaintiff on December 2, 1915. By this time the estate was closed, so he began this action in equity for relief, claiming he had been prevented from filing his claim by the fraudulent representation of one representing the estate.
Mr. Otis was appointed by the will to assist the trustee, and he was enjoined by the express terms of the will to give plaintiff information with reference to the estate. The fifth paragraph of the will reads as follows:
“I hereby appoint my private secretary, William T. Otis, who is familiar with the details of my estate, to assist the trustee and executor in the protection of the estate and the carrying out of the provisions herein contained. It is to be understood that the said William T. Otis shall not be required to devote his entire time to this matter, but only so much as the trustee and executor shall deem necessary, or for detailed information required- by G.eorge R. Burt, my son. So long as said Otis shall consent to assist the trustee and executor he shall receive as compensation for his services the sum of four thousand dollars per annum, to be paid to him by the trustee and executor from the funds of the estate. Said Otis to have free access to all books, documents and records of the estate at any and all times.”
This appointment placed upon Mr. Otis the duty of furnishing George, the plaintiff, with information concerning the estate, and its records, but instead of doing so he misrepresented the true facts to him. If Otis had made the same representation to George that he did in the affidavit the claim would have been presented to the commissioners. Plaintiff could make his claim in no other way, and was obliged to abandon it by reason of this fraudulent concealment upon the part of Mr. Otis, who represented the estate in giving this information to plaintiff. This was clearly a fraud upon the rights of plaintiff, and justifies the equity court in entertaining jurisdiction. Second Nat. Bank of Saginaw v. Gamble, 227 Mich. 31.
Plaintiff will recover whatever sums he sent .his father after December 31, 1914, less what he may have withdrawn during the time. The decree of the trial court may be modified in keeping with this opinion and affirmed. Plaintiff will recover his costs of both courts.
Fellows, Wiest, Clark, McDonald, and Sharpe, JJ., concurred.
The late Justice Snow and Justice Steere took no part in this decision. | [
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Clark, J.
Plaintiff filed this bill to compel specific performance of an alleged oral agreement to give her a house and a lot in the village of Birmingham. Specific performance was refused. The decree provides for Compensation to plaintiff by defendant for certain alleged betterments to the property made by plaintiff during her occupancy, of which defendant does not complain. Contending that the alleged oral agreement has been established clearly by the evidence, and by performance within the exception of the statute of frauds (3 Comp. Laws 1915, § 11979), plaintiff has appealed.
The parties are sisters. Plaintiff with, her husband resided in Detroit. They did not own a home. Defendant lived in Birmingham with her husband, a man of rather large means. They owned a home there. He died in September, 1924. Mrs. Hutton then decided to travel and to be absent from her home for considerable time, perhaps a year. She testified, in substance, that she arranged with Mrs. Behn and her husband to take and use her home and its furnishings, during her absence, at least. Plaintiff and her husband took possession. They testified that the agreement was that the home was to be given to plaintiff. Mr. Behn testified that defendant said “I will get the papers executed so that you will have a deed of the property.” Two witnesses testified that defendant said in conversation with them that she had given the home to plaintiff. Two witnesses testified for de fendant of statements made in plaintiff’s presence which she did not dispute, to the effect that plaintiff wás occupying the home merely during her sister’s absence. Plaintiff was given notice to vacate in September, 1925. Defendant, by her representative, paid the taxes for 1924 and 1925. She also paid the interest on the mortgage on the place. No deed was made and the failure to make it is not satisfactorily explained.
We find that, within a few weeks after September, 1924, defendant wrote a letter to plaintiff’s husband forbidding him “to put any nails or lumber in my property.” An incident, stressed as important, is that a bill for electric current used in the home was sent to defendant in December, 1924, of which she wrote to plaintiff, “May, why don’t you run your house under your own name?” This item was not like a tax on real estaté, it was for a mere household expense and was properly chargeable to plaintiff. People commonly refer to their homes as “our home” or “our house” whether they own them or not. A renter usually says “come over to our house,” not “come over to our rented house.” We think the incident of no importance.
Plaintiff also stressed the giving up of her Detroit home, social relations, etc., as a great sacrifice and inconvenience. ■ After reading the record, we, like the trial judge, are not so impressed. We need not go into greater detail of facts. We are constrained to agree with the trial court that a case for specific performance has not been made. As neither party complains of the award made to the plaintiff by the trial court, we need not discuss it.
Decree affirmed, with costs to defendant.
Flannigan, C. J., and Fellows, Wiest, McDonald, Bird, and Sharpe, JJ., concurred.
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McDonald, J.
The appellants who are heirs-at-law of Jacob Rahn, deceased, and residuary legatees in his will, have brought error to review a judgment of the circuit court for the county of Wayne allowing on appeal the final account of Hermann C. Rohns, executor. Jacob Rahn was a resident of the city of Detroit, Michigan. He died on September 29, 1915, possessed of certain real estate which the appraisers inventoried at $2,750. Hermann C. Rohns was named executor in his will with power to sell the real estate. He sold it to his sister-in-law, Mrs. Adele Payette, for $3,550, who subsequently sold it to Clara Rohns, wife of the executor, for the same consideration. Mrs. Rohns sold it on land contract to a man named Farinelli for $6,000. On the 20th of November, 1917, the executor filed his first annual account in which he charged himself with $3,550, as being the amount received from the sale of the real estate. Certain items in this account were objected to but no objection was made to the sale of the real estate or to any charge concerning it. The account was allowed and no appeal was taken therefrom. The next account was the final account filed on the 15th of June, 1925. Objections were made to this account but it was allowed. An appeal was taken to the circuit court, where, upon hearing, the order of the probate court was affirmed. It is this judgment of the circuit court which is before us for review.
The principal objection to the account is that it does not include a charge against the executor for what the estate lost by reason of a fraudulent sale of the real estate for less than its true value. It is charged that the sale to Mrs. Payette for $3,550 was not a good-faith transaction, that the actual purchaser was Clara Rohns, the executor’s wife, and that her sister, Mrs. Payette, was merely the instrument used to carry out the fraudulent scheme of getting the property into the executor’s family for much less than its fair value. The appellants contend that, because of this fraud and its resultant loss to the estate and benefit to the executor, he should be charged in the account in ques tion with the difference between the $6,000 received by his wife for the property and the $3,550 which Mrs. Payette paid for it.
As to this contention, the circuit judge held that such loss could not be charged against an executor in an accounting in the probate court, that the only jurisdiction of that court was to compel the executor to account for the money actually received,' that it could not inquire into the question of bad faith in making the sale and that the appellants’ only remedy was in an action at law or in equity. Taking this view of the powers of the probate court, the trial judge was of the opinion that, though the sale were fraudulent, the circuit court had no jurisdiction to inquire into that matter on the hearing of an appeal from an order allowing the executor’s account.
Assuming the facts to be as the appellants claim, there is no doubt about the executor’s liability for the loss sustained by the estate through the fraudulent sale. The question is whether there is any authority in the probate court to charge him with such loss in the settlement of his accounts. The statute relative to an accounting by executors and administrators (3 Comp. Laws 1915, § 14104), provides:
“Every executor and administrator shall be chargeable in his account with the total of the goods, chattels, rights, and credits of the deceased, which may come into his possession; also with all proceeds of real estate which may be sold for payment of debts and legacies, and all the interest, profit and income which shall in any way come to his hands from the estate of the deceased.”'
Counsel for the executor relies on this statute to support his contention that the executor cannot be compelled to account to the probate court for1 any of the proceeds from the sale of real estate except those which actually come into his hands; that if he has received any secret benefits from the sale or if the estate has suffered a loss because of his neglect or fraud, such matters can only be determined in an action at law or in chancery.
We cannot agree with this contention. In Brooks v. Hargrave, 179 Mich. 136, 144, 146, it is said:
“It is well established in this State that the probate court has exclusive jurisdiction in all matters relative to settlement of estates of deceased persons, except in cases where its remedies are inadequate. * * * A great part of the time of probate courts is given to matters of accounting, and. estates cannot be closed and the executor or administrator discharged until a proper account has been filed and the court satisfied that the disbursements claimed to have been made are proper and legal. A mere complexity of accounts should not, and does not, oust that court of jurisdiction. It is only when other interests than those of the estate and the executor are involved that the chancery court assumes jurisdiction, rather because of the complexity of the parties than because of the complexity of the accounting.”
In the proceeding in the instant case, there are no other interests involved than those of the estate and the executor. There is no “complexity of parties.” It is not a proceeding to set aside the sale. If it were, it would be necessary to bring in other parties and to judicially determine their interests. That could not be done in the probate court. Probate courts are not vested with general chancery powers, but they have jurisdiction over the accounts of executors and administrators; and this case involves merely an accounting by an executor. The appellants are asking for nothing more than that he be compelled to file a proper account, and that he be charged with what the estate has lost by his failure to act honestly and to properly administer his trust. In Re Saier’s Estate, 158 Mich. 170, it appeáred that the administrator neglected to collect rent, to pay taxes, and failed to deposit funds'of the estate where they would draw interest, but mingled them with his own. In that ease, this court sustained the action of the trial court in surcharging the administrator’s account with the uncollected rents, with charges on taxes which he had neglected to pay and with interest lost to the estate because of his failure to deposit money where it would draw interest.
In 4 Schouler on Wills (6th Ed.), § 2951, it is said:
“If in the sale or management of the land, * * * the representative is guilty of culpable negligence or bad faith, resulting in loss to the estate, he may be charged with such loss on his accounting.”
In 24 C. J. p. 176, § 663, it is said:
/‘In a case where the court authorized the executor’s wife to bid at a sale of real estate under testamentary power, it was held that the executor should be surcharged with the difference on the amount received on a sale to his wife and what would have been realized at a fair sale;” citing Dundas’ Appeal, 64 Pa. St. 325.
The circuit judge was wrong in holding that the probate court had no authority to inquire into the bad faith of the executor in making the sale and to surcharge his account with any loss sustained by the estate because thereof.
Complaint is also made by the appellants of the trial court’s ruling that the order allowing the first annual account, which was not appealed from, is res adjudicate of the question here involved. The only item in the first account concerning a sale of the real estate was a credit to the estate for the amount of the purchase price. This item was not challenged and no claim was made that the sale was fraudulent. It is the claim of the appellants that they had no knowledge at that time of the collusive agreement between the purchaser and the executor to transfer the property to his wife. If there was such an agreement,.there was a fraudulent concealment on the part of the executor in his account. His bad faith in making the sale and the loss therefrom to the estate was unknown to the appellants and to the court. In view of these facts, the allowance of the account was not binding and conclusive.
“The allowance of the annual accounts of testamentary trustees on notice is made by statute final and binding upon all parties in interest except for fraudulent concealment or fraudulent misrepresentation (3 Comp. Laws 1915, § 14089).” Raseman v. Raseman, 234 Mich. 237, 244.
The record presents no other questions which require discussion.
The judgment is reversed, with costs.
Sharpe, C. J., and Bird, Flannigan, Fellows, Wiest, and Clark, JJ., concurred.
The late Justice SNOW took no part in this decision. | [
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Wiest, J.
This action was brought on a life insurance policy by the beneficiary. The issue tried in the circuit was whether the premium had been paid for one year or only for three months. Plaintiff had verdict and judgment and defendant reviews by writ of error.
The insured, plaintiff’s husband, on April 23, 1925, made a written application for the insurance in which he elected to pay the premium quarterly. The policy issued and unconditionally delivered to the insured recited:
“This insurance is granted in consideration of the application herefor, and of the premium of fifty-six and 66-100 dollars, receipt of which is hereby acknowledged, which is in whole or in part for term insurance for one year, and of the further payment of a like amount on or before the 30th day Of each April in every year thereafter until 37 full years’ premiums in all have been paid, or until prior death of the insured.”
In February, 1926, or about nine months after delivery of the policy, the insured died. Defendant, under plea of the general issue, gave notice that the policy had lapsed because there had been paid premium for three months only. Plaintiff first learned of the insurance when she found the policy after the death of her husband. At the trial counsel for plaintiff objected to any evidence in support of the alleged defense, and, at the close of the proofs, moved for a directed verdict. The motion was denied. In denying defendant’s motion for a new trial the judge expressed the opinion that the court might well have directed a verdict for plaintiff upon the recital in the policy of receipt of the annual premium. The application, signed by the insured, was a part of the policy and therein the election was made to pay the premium quarterly. Of course, this did not prevent payment of the full annual premium. Plaintiff, of necessity, relied wholly upon the recital of payment in the policy.
Defendant’s, agent, who solicited the insurance, received the application, delivered the policy and received the premium paid, testified that the premium paid was for three months and evidenced by a yellow receipt attached to the policy by a clip when delivered to the insured. The receipt was not produced at the trial.
Many assignments of error are urged, but, if there was no defense, and the court should have directed a verdict in favor' of the plaintiff, we cannot order a new trial. There was no defense alleged or made. We are constrained, by the great weight of authority, to hold defendant estopped by the contract recitals in the policy, unconditionally delivered to the insured, from asserting the falsity thereof in defense of its liability. We expressly reserve from the scope of .this decision cases of conditional deliveries of policies, validity or continuing force of policies dependent upon performance of conditions subsequent, and fraud.
In the case at bar the policy was delivered unconditionally, was valid, and the only defense urged was that the premium had been paid for but three months, and, therefore, at the death of the insured, nine months later, the policy had lapsed, although the policy stated .the premium had been paid for a year. The rule in such case, according to the weight of authority, is that
“Where a life insurance policy is delivered unconditionally, an acknowledgment in the policy of the receipt of the premium estops the insurer in the absence of fraud to contest the validity of the policy on the 'ground of nonpayment of the premium.” Ann. Cas. 1915D, 366, note to Britton v. Insurance Co., 165 N. C. 149 (80 S. E. 1072).
In the Britton Case the facts were quite similar to the case at bar; there the insured elected to pay the premium quarterly, paid only one quarter and the company sent a quarterly receipt, which was not found at the time of the trial, and the policy delivered the insured acknowledged receipt of semi-annual premium. The insurance company contended that the policy lapsed for nonpayment of the premium for the second quarter. The court held:
“The policy sued on acknowledges receipt of premium for six months, and contains a provision that the premium is to be paid semi-annually. The law will not permit the defendant to avoid the policy in the face of such recital.”
The following are a few of the many authorities supporting the mentioned rule: Mutual Life Ins. Co. of New York v. Vaughan, 125 Miss. 369 (88 South. 11); Basch v. Insurance Co., 35 N. J. Law, 429; Dobyns v. Beneficiary Ass’n, 144 Mo. 95 (45 S. W. 1107); Provident Life Ins. Co. v. Fennell, 49 Ill. 180; 32 C. J. p. 1204.
The policy was for $2,000. The ad damnum clause in the declaration was $2,000. The judgment was for $2,000 and interest amounting to $108. Defendant urges error because the judgment exceeds the ad damnum clause. We held in Patrons’ Mutual Fire Ins. Co. v. Belli, 232 Mich. 446, that interest may be recovered, although it is not claimed or demanded in the declaration, and we hold the allowance of interest was permissible even though it brought the judgment above the ad damnum clause. See Grand Lodge A. O. U. W. v. Bagley, 164 Ill. 340 (45 N. E. 538).
Judgment affirmed, with costs to plaintiff.
North, Fellows, Clark, McDonald, and Sharpe, JJ., concurred.
Chief Justice Flannigan and the late Justice Bird took no part in this decision. | [
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Per Curiam.
After the jury said that it could not reach a unanimous decision in this case, the circuit court declared a mistrial. Later, the court granted the defendant’s motion for a directed verdict of acquittal. The issue is whether double jeopardy principles pre elude another trial. We hold that the defendant may be retried because the actual basis of the directed verdict was not insufficient evidence as required by MCR 6.419(A), and the defendant thus was not “acquitted.”
i
The defendant was charged with two counts of first-degree criminal sexual conduct. At trial, after the prosecution rested its case, he moved for a directed verdict of acquittal. The motion was denied by the visiting judge who was presiding at trial, and the defense rested without presenting evidence.
The jury deliberated about five hours, and then announced that it was deadlocked. The visiting judge declared a mistrial on the basis of manifest necessity, and the defendant immediately renewed his request for a directed verdict. The visiting judge declined to decide the motion, however, on the ground that it should be presented to the judge assigned to preside at the retrial.
Several weeks later, the defendant moved for a directed verdict before the newly assigned judge. This judge ruled that the motion should be heard by the visiting judge who had presided at trial.
A couple of months later, the visiting judge held a hearing and “conditionally” denied the motion. However, he said that the issue could be raised anew at the pretrial conference before the newly assigned judge, if the defendant were to locate authority for his position.
The defendant followed this suggestion, but the assigned judge once again sent the matter back to the visiting judge. This time, the visiting judge ruled that the defendant was entitled to a directed verdict of acquittal. The court reasoned that the prosecution had not presented proof beyond a reasonable doubt of the elements of either crime charged in the information.
The prosecutor appealed. The Court of Appeals agreed that the trial judge had erred in granting a directed verdict, but ruled two to one to dismiss the appeal. The majority said that the defendant could not be tried again, regardless of the erroneous ruling, because double jeopardy principles preclude a retrial after a directed verdict of acquittal.
The prosecutor has asked this Court to intervene.
n
A person may not be twice placed in jeopardy for a single offense. US Const, Am V; Const 1963, art 1, § 15. When a defendant exercises the right to trial by jury, jeopardy generally attaches at the time the jury is selected and sworn. People v Dawson, 431 Mich 234, 251; 427 NW2d 886 (1988). If the trial is concluded prematurely, a retrial for that offense is prohibited unless the defendant consented to the interruption or a mistrial was declared because of a manifest necessity. Id., pp 251-253.
One circumstance that constitutes a manifest necessity is the jury’s failure to reach a unanimous verdict. When this occurs, and the trial court declares a mistrial, a retrial is not precluded because the original jeopardy has not been terminated, i.e., there has not been an assessment of the sufficiency of the prosecution’s proofs. People v Thompson, 424 Mich 118; 379 NW2d 49 (1985), and Richardson v United States, 468 US 317; 104 S Ct 3081; 82 L Ed 2d 242 (1984).
Were that all that had occurred here, the prosecution properly could have tried the defendant again, despite the jury deadlock and the declaration of mistrial. But there is more: The visiting judge also granted the defendant’s motion for a directed verdict of acquittal.
A defendant may not be retried after an acquittal that is granted on the basis of insufficient evidence. People v Anderson, 409 Mich 474, 492; 295 NW2d 482 (1980). However, the trial court’s characterization of its ruling is not dispositive, and what constitutes an “acquittal” is not controlled by the form of the action. Id., pp 486-487.
As explained by the dissenting judge in the Court of Appeals, even an order that is not termed an acquittal may, in fact, rest upon a finding of insufficient evidence. In such a circumstance, the defendant could not be retried. Conversely, an action that is labeled an acquittal may, in truth, be premised on a different ground than insufficient evidence. In that situation, it would not violate principles of double jeopardy to retry the defendant.
Thus, a reviewing court must look to the substance of the decision to “determine whether the ruling of the judge, whatever its label, actually represents a resolution, correct or not, of some or all of the factual elements of the offense charged . . . .” Id., p 486, quoting United States v Martin Linen Supply Co, 430 US 564, 571; 97 S Ct 1349; 51 L Ed 2d 642 (1977). Retrial is not permitted if the trial court evaluated the evidence and determined that it was legally insufficient to sustain a conviction. Id.
m
In granting the motion for a directed verdict of acquittal in the instant case, the visiting judge said that the basis of his ruling was the absence of proof beyond a reasonable doubt of the elements of first-degree criminal sexual conduct, particularly the element of intent. In explaining the ruling, the court focused almost exclusively on the complainant’s testimony, and on its conclusion that her testimony was not credible.
However, it is not permissible for a trial court to determine the credibility of witnesses in deciding a motion for a directed verdict of acquittal, no matter how inconsistent or vague that testimony might be. People v Herbert, 444 Mich 466, 473-474; 511 NW2d 654 (1993).
A directed verdict of acquittal is appropriate only if, considering all the evidence in the light most favorable to the prosecution, no rational trier of fact could find that the essential elements of the crime charged were proven beyond a reasonable doubt. People v Wolfe, 440 Mich 508, 515; 489 NW2d 748 (1992).
In ruling on the defendant’s motion in the instant case, there is no indication that the visiting judge considered “all” the evidence in a light most favorable to the prosecution. Indeed, by concentrating on the complainant, and disregarding her testimony as unbeliev able, the visiting judge failed altogether to rule on the sufficiency of the prosecution’s proofs. Thus, there was no acquittal, regardless of how the trial court characterized its decision, and a retrial is not precluded under the Double Jeopardy Clauses of the federal and state constitutions.
IV
For the reasons stated, we reverse the judgments of the Court of Appeals and the circuit court, and we remand this matter to the circuit court for further proceedings consistent with this opinion. MCR 7.302(F)(1).
Mat,t.ett, C.J., and Brickley, Boyle, Riley, and Weaver, JJ., concurred.
Cavanagh, J., concurred only in the result.
Kelly, J., took no part in the decision of this case.
MCL 750.520b(1)(f); MSA 28.788(2)(l)(f).
MCR 7.203(E), and MCL 770.12; MSA 28.1109.
213 Mich App 353; 539 NW2d 593 (1995).
The dissenting judge in the Court of Appeals recounted the testimony of witnesses other than the complainant to demonstrate that the visiting judge’s ruling pertained to the weight of the evidence, not to its sufficiency. However, it was not necessary to analyze the other testimony to discern that the trial court erred in considering the complainant’s credibility, and never ruled on the sufficiency of the prosecution’s proofs. | [
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Wiest, J.
This is certiorari to review the decision of the corporation tax appeal board in the matter of the privilege tax to be paid the State for the year 1926 by Dodge Brothers, Inc., a foreign corporation, duly admitted to do business here and having its place of business at the city of Hamtramck, this State. Dodge Brothers, Inc., herein styled plaintiff, is a corporation organized under the laws of the State of Maryland, with its home office in the city of Baltimore. May 1, 1925, it was admitted to do business in this State and thereby subjected itself to the privilege tax imposed by Act No. 85, Pub. Acts 1921- (Comp. Laws Supp. 1922, § 11361 [1] et seq.), as amended by Act No. 233, Pub. Acts 1923. The obligation to pay the annual privilege tax is not contested, but the basis for its computation is the question of law we are asked to determine.
Plaintiff, at the time of its annual report, had $1,393,993.32 on general deposit in banks located in the State of Michigan; had $36,280.17, cash on hand, in this State; had due it $939,990.13 on land contracts covering property sold by it in this State, and had due it on accounts receivable $6,719,402.57. In computing the annual privilege fee plaintiff excluded from consideration all of the above items, on the ground that situs thereof was the domicile of the corporation in the State of Maryland, and tendered the secretary of State (the privilege tax collector) the sum of $46,667.66, inclusive of $2 filing fee. The secretary of State, in computing the privilege tax, included the above-mentioned items and exacted the maximum tax of $50,000. Plaintiff took an appeal to the corporation tax appeal board, and that board affirmed the action of the secretary of State and plaintiff reviews by certiorari.
In this jurisdiction the court has adhered to the common-law rule of situs of domicile.
In Saginaw Manufacturing Co. v. Secretary of State, 226 Mich. 1, bonds bought outside of the State, and kept outside by a domestic corporation, were held to have situs at domicile of the owner and to be subject to the privilege tax.
In White Brothers Lumber Co. v. Tax Appeal Board, 222 Mich. 274, capital stock of a foreign corporation, owned by a domestic corporation, was held to have situs at the domicile of the owner and to be subject to the privilege tax.
In Re Pantlind Hotel Co., 232 Mich. 330 (49 A. L. R. 1291), capital stock of a domestic corporation, owned by a foreign corporation, was held to' have situs at the domicile of the owner and was not subject to the privilege tax in this State.
Tax exactions, property or excise, must rest upon legislative enactment, and collecting officers can only act within express authority conferred by law. Tax collectors must be' able to point to such express authority so that it may be read when it is questioned in court. The scope of tax laws may not be extended by implication or forced construction. Such laws may be made plain, and the language thereof, if dubious, is not resolved against the taxpayer. Credits, by way of deposits in banks, upon accounts receivable, and payments to be received on land contracts, are all intangible assets and situs thereof is the domicile of the owner, unless fixed elsewhere by some positive tax law. Situs of domicile, with reference to intangibles, is not at all affected by the mere place of business, for the law, short of statute to a different end, does not admit of a so-called business situs changing or interfering with the situs of domicile. In re Pantlind Hotel Co., supra. This is but saying that common-law situs governs unless modified or abrogated by statute.
The case before us does not involve a property'tax or rights of interstate commerce, but only the question of situs of intangible property, under our law, to be considered factors in computing the corporation privilege tax. Does the corporation privilege tax statute modify or abrogate the common-law rule of situs? Such common-law rule of situs may be changed by statute and a situs established for the purposes of a corporation privilege tax apart from that of domicile without offending the fundamental law or judicial pronouncements. Plaintiff, with the privilege of carrying on its business in this State, must comply with the corporation privilege tax law, so far as the express provisions thereof are within the powers of the State. If the statute is inclusive of the mentioned intangible property, as" factors in computing the tax, then plaintiff must abide its provisions.
We now turn to the statute. The privilege tax is upon “each dollar of its paid-up capital and surplus.” Section 4, Act No. 233, Pub. Acts 1923. The statute defines the meaning of surplus:
“The term ‘surplus,’ as used in this act, shall be taken and deemed to mean the net value of the corporation’s property, less its outstanding indebtedness and paid-up capital.” Section 5, Act No. 85, Pub. Acts 1921 (Comp. Laws Supp. 1922, § 11361 [7]).
The same section also provides:
“In the case of computing the privilege fees * * * as to foreign corporations, such computation shall be made upon the proportion of the corporation’s property owned and used in Michigan in the ratio that such property bears to the entire property of the corporation, and such ratio shall be applied by the secretary of State to determine the amount of the authorized capital stock of such corporation owned and used in Michigan, and to determine what portion of the corporation’s paid-up capital and surplus, severally, are owned and used in Michigan.”
If the statute had stopped at this point the question would be more difficult but the same section, after defining the term “surplus,” as before mentioned, provides :
_ “None of the property or capital, of any corporation subject to paying the privilege fee prescribed in section four which is located without the State of Michigan, * * * shall in any case enter into the computation of the net amount of the authorized capital, or the capital and surplus, as the case may be, upon' which the computation of the privilege fees shall be made.”
It will be noted that the “ratio” provision relates to foreign corporations only, while the situs provision relates "to all corporations. To determine whether property “is located without the State of Michigan,” requires application of the rule of situs, otherwise the decision in Saginaw Manufacturing Co. v. Secretary of State, supra, was wrong, for there the bonds were in another State, but, under the common-law rule of situs of domicile of the owner, were held subject to the privilege tax here. If the legislature intended the term “located without the State of Michigan” in a sense different than that of situs the act should have so stated. In Re Pantlind Hotel Co., supra, we had this same section of the statute before us and held that the common-law rule of situs governed under its provisions.
In 2 Cooley, Taxation (4th Ed.), § 455, it is stated:
“In considering the situs for taxation of intangible personal property, it is first necessary to determine what is ‘intangible’ personalty. As to this there is little dispute except perhaps as to money itself which is sometimes referred to as intangible property and sometimes as tangible property. ‘Intangible’ personalty includes open accounts and bills receivable, credits, whether or not evidenced by a writing, promissory notes, mortgages (considered as personalty), bonds, shares of stock, deposits in banks, judgments, and the like, where the debt or obligation is the real thing. As to all these, the rule is well settled, although the exceptions to the rule, equally well settled, must always be kept in mind. The rule is that the situs of intangible personal property, for the purpose of taxation, is the domicile of the owner, unless the property has acquired a business situs in another State, or it is otherwise provided by statute.” * * *
This statement of the law of situs applies to the case at bar, except as to a “business situs” (In re Pantlind Hotel Co., supra).
Sums to come due plaintiff on land contracts are to be considered personalty (Detroit Trust Co. v. Baker, 230 Mich. 551), for they constitute credits. The privilege tax, under the statute, must be based only on the portion of the corporation’s paid-up capital and surplus owned and used in Michigan, and all intangible personalty located without the State of Michigan, that is having situs at the domicile of the owner outside of Michigan, cannot be considered as any part of the basis upon which the privilege tax is to be computed. Our decisions are so determinative of the questions presented as to render it unnecessary to consider or discuss cases from other jurisdictions. If the legislature desires to fix a “business situs” or make intangible personalty a factor to be considered in computing the privilege tax, regardless of common-law situs at the- domicile of the owner, the way is open to so declare by express provisions to such effect.
The assessment appealed from is set aside and the matter remanded to the secretary of State to reassess the privilege tax in accord with this opinion. Plaintiff will recover costs.
Fellows, Clark, McDonald, and Sharpe, JJ., concurred.
Chief Justice Flannigan and the late Justices Snow and Bird took, no part in this decision. | [
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Sharpe, J.
The parties herein were married in 1895. They have four children. The youngest is now 19 years of age. The defendant left their home in June, 1925, and went to Chicago, but at plaintiff’s request returned and stayed about one month, when she again left, and they have not since lived together. The bill of complaint herein, praying for a divorce, was filed by him on February 15, 1926. She made answer, and in a cross-bill asked that a divorce be granted unto her. Each of them claimed extreme cruelty was practiced on them by the other. The proof to sustain the charges is not very satisfactory. But the trial court saw the parties on the witness stand and heard their testimony as well as that of the witnesses called to support their claims. He concluded an opinion filed by him, in which he reviewed 'the testimony, as follows:
“Plaintiff, I am satisfied, was a kind and indulgent husband. To refuse to speak to him, to ignore him, to prefep Ferlan’s company to his, to keep the boarders contrary to his wishes, to favor the boarders in the matter of board and bedding, to refuse to cohabit with plaintiff, and, without fault on his part or reasonable excuse, to pick up and leave him without a home after he had faithfully worked for and supported her for 30 years amounts to such extreme cruelty as entitles him to a decree of divorce. A decree will be entered accordingly.”
With some reluctance we are persuaded that we should not disturb this finding. The decree awarded defendant $300 as permanent alimony, payable within six months from the date thereof. Defendant insists- that a much larger sum should have been allowed. The only property owned by plaintiff is a small house in the village of Jessieville, worth about $4,-000. While the defendant left her home without sufficient cause, in view of the fact that she helped somewhat to accumulate what they had, we think this amount should be increased, and we fix it at $1,000, payable within three months from the entry of the decree in this court.
In that respect the decree of the court below will be modified, and, as so modified, affirmed. Defendant will have costs of .this court.
North, Fellows, Wiest, Clark, and McDonald, JJ., concurred.
Chief Justice Flannigan and the late Justice Bird took no part in this decision. | [
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Fellows, J.
In this divorce case the parties agreed upon a settlement of their property matters and the decree which was entered on defendant’s cross-bill incorporated such agreement by reference. Certain real estate went to the husband and defendant executed a quitclaim deed of the same to him. Certain other real estate had been sold on contract and as to this property the agreement contained the following provision :
“That the party of the first part, William Rotzell, shall sign and set over to party of the second part, by proper assignment, all his right, title and interest to a certain land contract now owned by the parties and on which there still remains due and owing to said parties the sum of, to wit: $3,300.”
Plaintiff executed an assignment of the contract but it is to be inferred that it was not acknowledged so that it could be recorded. He did not execute a quitclaim deed. Nearly three years after the entry of the decree defendant filed a petition setting forth that plaintiff had agreed to execute a quitclaim deed and that she had just learned that he had not done so, and praying that he be requested, to comply with the decree covering the property involved, or in the alternative that the decree be amended. The trial judge made an amended decree, the amendment dealing solely with the provisions as to alimony and its enforcement. From such action plaintiff appeals.
In the recent case of Kutchai v. Kutchai, 233 Mich. 569, Mr. Justice Clark fully reviewed the authorities dealing with the power of the court to modify or alter the provisions for alimony, including a division of property. It was there pointed out that divorce proceedings are statutory and that final decrees therein fixing alimony and property rights may not be altered or amended. That case did not, nor does this one, involve section 11408 or section 11417, 8 Comp. Laws 1915. Upon the authority of that case and the cases there cited, it must be held that the making and filing of the amended decree was erroneous.
This leaves before us for disposal defendant’s petition and the original decree. In her petition she asked the enforcement of that decree. This1 she was clearly entitled to. The contract which by reference was made a part' of the original decree contemplated that certain real estate should go to plaintiff and certain other real- estate go- to defendant. Defendant executed a quitclaim deed of the property going to plaintiff. He only assigned his interest as- vendor in the contract. Thisr was doubtless -good as between the parties, but it left a record title standing in him. We shall not split hairs over the language of the agreement. It clearly contemplated a transfer of plaintiff’s interest in the lands. A quitclaim deed would be an appropriate instrument to convey such interest and no good reason appears why'it was not long ago executed.
It follows from what has been said that a decree will be here entered setting aside the amended decree, restoring the original decree and providing for its enforcement by the execution of a quitclaim deed or the filing of a certified copy of the decree of this court. No costs will be allowed.
Sharpe, C. J., and Bird, Flannigan, Wiest, Clark, and McDonald, JJ., concurred.
The late Justice Snow took no part in this decision. | [
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McDonald, J.
The plaintiff has brought certiorari to review the action of the Wayne circuit court in denying a writ of mandamus to compel the defendants to approve a plat. The proposed plat, known as Ridgefield subdivision No. 1, contains 80 acres of land, and is bounded on the north by Pembroke avenue and on the east by Livernois avenue. To conform to the general plan for streets adopted by the city of Detroit, Pembroke avenue ought to be 86 feet wide and Livernois avenue 120 feet wide. In respect to the width of these two streets, the plat did not conform to the general plan. It was submitted to the city plan com mission on several occasions, and finally was conditionally approved as follows:
“In order that Mr. Fry may be able to file a plat on the property in question and have his property assessed by lot numbers, the commission agrees to make certain concessions and to approve the plat providing the following changes are made:
“1. A 10 foot building line is to be established on Pembroke avenue to conform with property platted to the west.
“2. Seventeen feet is to be dedicated for Livernois avenue in addition to the regular 33-foot dedication.”
The plaintiff refused to accept the changes, and began this proceeding to compel the approval of the plat as offered.
It is first contended that there is no statute or ordinance authorizing the city plan commission or the city counsel to require the dedication of an additional 17 feet on Livernois avenue and the establishment of a 10 foot building line on Pembroke avenue as conditions precedent to the approval of this plat.
Under authority of Act No. 279, Pub. Acts, 1909, as amended (1 Comp. Laws 1915, § 3304 et seq.), the city of Detroit provided in its charter for the appointment of a city plan commission of nine members with “'power to pass upon the acceptance of all plats of land within and for a distance of three miles beyond the limits of the city.”
The authority of the common council with reference to the approval of plats is derived from Act No. 360, Pub. Acts 1925, the applicable portion of which reads as follows:
“The governing body shall determine as to whether such lands are suitable for platting purposes and shall have the right to require that all streets and private roads shall be graveled or cindered and properly drained, and bridges and culverts installed where necessary, and where lots are platted of a width of 60 feet or less, may require that concrete or gravel walks shall be built and that all highways, streets and alleys conform to the general plan that may have been adopted by the governing body of the municipality for the width and location of highways, streets and alleys; * * * The governing body shall reject said plat if the same does not conform to the provisions of this act.”
It thus appears that the common council, which is the governing body referred to in the statute, has power to adopt a general plan for the width of streets and to refuse to approve any plan which does not conform thereto. It adopted such a plan. This plan called the “master plan” was prepared by the city plan commission and rapid transit commission in collaboration with the road commissions of Wayne, Oakland, and Macomb counties and the authorities of the included municipalities. It was adopted by resolution of the common council of the city of Detroit on April 14, 1925. As to width and location, it classifies streets as super-highways, major highways, and secondary thoroughfares. Super-highways are required to be 204 feet wide, major highways are section line roads 120 feet in width, and secondary thoroughfares are Quarter section lines 86 feet wide. Livernois avenue is a section line road and Pembroke avenue is a quarter section line road. The proposed plat gives these two streets a width of 66 feet each. The plaintiff concedes that in this respect its plat does not conform to the general street plan, but it contends that it does conform to the width of Pembroke and Livernois avenues as dedicated in other plats; that the statute gives the city no power to- require a greater width as a condition to the approval of the plat and that if it can be interpreted as conferring such power, it is an infringement on the constitutional rights of the plaintiff in that it compels the dedication of private property for public use without compensation therefor. There is no merit to this contention. The other plats referred to were approved and recorded before the present general street plan was adopted; so it cannot be said that it was not made applicable alike to all persons. The streets in the city of Detroit, as elsewhere, were originally laid out for the horse and buggy age. They are too. narrow for the present traffic conditions. It has become necessary for the general convenience and the public safety to widen them and to prevent others of the same kind from being established. Because of this necessity, there is nothing unreasonable in the demand of the city that the streets designated in the plaintiff’s plat shall be of such a width as to conform to the general street plan. It has. been determined that streets of a certain width are necessary to accommodate the traffic. They are necessary for the public safety and therefore the right to provide for them is within the police power of the city.
The error in plaintiff’s position is the assumption that in requiring an additional dedication and the establishment of a building line to conform to its general plan, the city is exercising power of eminent domain. Its argument would have merit and the authorities cited would have application if this were a case where the plat had been recorded and the city were undertaking to widen the streets or to establish a building line. But this is not such a case. Here the city is not trying to compel a dedication. It cannot compel the plaintiff to subdivide its property or to dedicate any part of it for streets. It can, however, impose any reasonable condition which must be complied with before the subdivision is accepted for record. In theory, at least, the owner of a subdivision voluntarily dedicates sufficient land for streets in return for the advantage and privilege of having his plat recorded. Unless he does so, the law gives him -no right to have it recorded. In Ross v. Goodfellow, 7 App. Cas. D. C. 1, 10, 11, it is said:
“It must be remembered that each owner has- the undoubted right to lay off his land in any manner that he pleases, or not to subdivide it at all. He cannot be made to dedicate streets and avenues to the public. If public necessity demands parts of his lands for highways, it can be taken only by condemnation and payment of its value. But he has no corresponding right to have his plat of subdivision so made admitted to the records.
“In providing for public record, congress can accompany the privilege with conditions and limitations applicable alike to all persons. In providing for such record in the act of 1888, congress sought to conserve the public interest and convenience by requiring practical conformity in all subdivisions of land into squares, streets and avenues, with the general plan of the city as originally-established, and this, regardless of the fact, that it might, in instances practically coerce the dedication of streets to public use which would otherwise have to be paid for.”
In the instant case, the defendants have imposed two conditions with which the plaintiff is required to comply for the privilege of having its plat recorded. They are reasonable and necessary for the public welfare. In the exercise of its power under the statute and its charter, the city had a right to impose them. They do not constitute the taking of private property for public use, and are not an infringement on plaintiff’s constitutional rights. The circuit judge was right in- holding that the statute conferred power upon the city of Detroit to adopt its present general street plan and to refuse to approve and record all plats that did not conform thereto.
The order is affirmed, with costs to the defendants.
Fellows, Wiest, Clark, Bird, and Sharpe, JJ., concurred. North, J., did not sit.
Chief Justice FLANNIGAN took no part in this decision. | [
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Flannigan, C. J.
Plaintiff, a domestic corporation engaged as an investment banker, is licensed by the Michigan securities commission to deal in securities. Defendant, engaged as a merchant for over 20 years, was not a novice in the purchase and sale of speculative securities. He and.the officers of plaintiff have been familiar from boyhood, and, prior to the transaction here involved, plaintiff acted as his broker in connection with some of his speculative ventures.. About the middle of December, 1925, J. H. Petter, an employee of plaintiff, called on defendant at his meat shop. After some talk relative to the stock market, defendant said “he would like to make some money on the market if something would come along.” Petter replied “if something came along that looked to our approval” they would call him up. No particular security was mentioned by either. Henry Petter, vice president of plaintiff, testified:
“My brother, Jay Petter, had told me about his conversation with Mr. Pollie, and a few days later, oh December 18th, I called Mr. Pollie up one night and suggested the purchase to him of American States Securities rights, and he said, ‘Well, how much should I buy?’ and I said ‘Won’t you buy a couple of hundred?’ He said, ‘Why don’t I buy five hundred?’ I said, ‘All right, if that is what you want to buy we will buy it for you.’ So he authorized me to buy for his account five hundred American States Securities rights.”
On cross-examination he testified in part:
“I suggested the purchase of 200, and he said 500. * * * I told him that I wanted to help him make some money and I thought he ought to buy 200 and he wanted to know why he should not buy 500.”
The day following the telephone conversation related by the vice president, plaintiff bought for, as it claims, or sold to defendant, as he claims, 500 American States Security Corporation rights represented by warrants issued by that company. These so-called rights constituted an option in the holder to continue until January 7, 1926, to subscribe for 500 shares of the stock of the company at prices and on terms set forth in the warrant, which prices and terms are not of present interest. At the time of purchase neither the American States Security Corporation rights, warrants, or stocks had been accepted for filing by the Michigan securities commission, nor had any application for such acceptance been made. The rights were purchased at $6.25: Before they were received by plaintiff the market dropped sharply and defendant refused to accept or pay for them. In making the purchase plaintiff advanced $3,062.50, and, defendant persisting in his refusal to accept, it sold the rights on the open market, realizing $1,212.50. To recover the difference between the sum it advanced plus a commission charge of $62.50 and the amount received on the sale plaintiff brought this suit. The trial judge found plaintiff solicited defendant to make the purchase; that plaintiff acted as defendant’s agent in making the purchase; and that the transaction was “in no way influenced or regulated by the so-called blue sky law.” Judg ment was entered in favor of plaintiff, and the case is here on writ of error sued out by defendant..
The pivotal question is whether on its own showing plaintiff may be held to have solicited defendant to make the purchase. An option privilege to subscribe for stock of the American States Security Corporation, whether called a right, warrant, or otherwise, is a security within the meaning of Act No. 220, Pub. Acts 1923, commonly called the “blue sky law,” and the same not having been approved by the Michigan securities commission, solicitation in Michigan of a sale thereof would be unlawful. Subdivision (d) of section 2 of the act reads:
“The term ‘sale’ or ‘sell’ shall include an agreement to transfer an interest in securities, and an exchange. Any security given or delivered with or as a bonus on account of any purchase of securities, or any other thing, shall be deemed to constitute a part of the subject of such purchase and to have been sold for value. ‘Sale’ or ‘sell’ shall also include an attempt to sell, an option of a sale, a solicitation of a sale, a subscription or an offer to sell, directly or by an agent, or by a circular, letter, advertisement or otherwise: Provided, however, That nothing herein shall limit or diminish the full meaning of the terms ‘sale’ or ‘sell’ as used by or accepted in courts of law or equity.”
We are of the opinion the remarks of the vice president in his telephone conversation with defendant in which he asked and importuned defendant to buy by saying: “Won’t you buy,” and telling him he “thought he ought to buy,” amounted to solicitation within the narrowest definition of the term. And it is immaterial that plaintiff at the time was not employed by the security corporation to solicit sale of its rights.
Granted, as contended by plaintiff’s counsel, that the statute is aimed at the seller and not the purchaser of unapproved securities (Edward v. Ioor, 205 Mich. 617 [15 A. L. R. 256]), and that whatever a person may lawfully do if acting in his own right and on His own behalf he may lawfully delegate to an agent (1 Mechem on Agency [2d Ed.], 48). But to bring the agent within the protection of that rule he must be free to enter into a valid contract of agency. Because of its unauthorized solicitation, plaintiff is. in no position to assert a valid contract of agency. The agency contract in this case was voidable at the option of defendant. To hold a licensed dealer may induce in another a desire to purchase an unapproved security by unlawful solicitation, and escape all consequences of his conduct by accepting employment to purchase the same security for the person solicited, would be largely destructive of the law.
The trial judge found there was no valid rescission. The finding would seem to be contrary to the weight of the evidence. The vice president admitted twice on cross-examination the warrants had been rejected by defendant. But the -conclusion there was a valid rescission may be put on another ground. The rights were purchased December 19, 1925, and resold about J anuary 6, 1926. This suit was commenced February 23, 1926. With his plea defendant gave notice he would defend specially on the ground the transaction was in violation of the blue sky law. In the meantime there had been no change of conditions. Defendant had not received the rights or anything of value from plaintiff. There was nothing to tender back. The notice of special defense was effectual to accomplish rescission.
The judgment below is reversed and a new trial is granted. Defendant will recover costs of this court.
Fellows, Wiest, Clark, McDonald, Bird, and Sharpe, JJ., concurred.
The late Justice Snow took no part in this decision. | [
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Fellows, J.
(after stating the facts). Plaintiff’s counsel do not contend that defendants’ failure to com ply with Act No. 164, Pub. Acts 1913, makes their contract with plaintiff invalid. They concede, and properly so, that the amendment to the act (Act No. 265, Pub. Acts 1919) permits defendants to assert their contract, provided, as was here done, the proper certificate was filed before suit was brought. What they contend is this: That the issuance of a license to them as brokers by the Michigan securities commission acting under Act No. 306, Pub. Acts 1919, without their compliance with another act, the act of 1913, was invalid, hence they have no valid license as brokers and any contract they entered into as such was in the face of a penal statute and void, and that the validity of defendants’ license as brokers is open to assault for this reason in this proceeding. The defendants had been authorized by the Michigan securities commission to act as real estate brokers, and held their licenses as such for all the period during which plaintiff had dealings with them as such. We do not think the propriety of the issuance of such license is open to collateral attack. In the absence of any evidence or claim to the contrary, we must assume that the Michigan securities commission did its duty and acted upon a proper application before it. Upon principle the case of International Harvester Co. v. Eaton Circuit Judge, 163 Mich. 55 (30 L. R. A. [N. S.] 580, Ann. Cas. 1912A, 1022), is analogous. In that case the harvester company, a foreign corporation, had been authorized by the secretary of State to do business in Michigan. It brought suit in the Eaton circuit to recover a balance due it upon business it was authorized by its charter to do. The circuit judge had held that in defense of the suit it might be shown that it was violating another act of the State, i. e., the anti-trust act, and an order had been entered along such lines and was before this court for review. It was held that such defense was not available and it was said:
“If the articles of the relator state a purpose for which the statute authorizes a corporation to be formed, then, if other requirements of the law are complied with, it is not only a corporation de facto, but it is a corporation de jure. In such a case the illegality of its organization cannot be attacked at all, and it can only be shown that the corporation is guilty of a misuser of its corporate franchises by attempting, under the guise of a legal corporate existence, to conduct a business not authorized by its charter, or in a manner contrary to law, or some principle of public policy; and this by a direct proceeding to test its right.”
See, also, Wyandotte Electric-Light Co. v. City of Wyandotte, 124 Mich. 43; Detroit City Ry. v. Mills, 85 Mich. 634; Attorney General v. Bruce, 213 Mich. 532.
The other objection to defendants’ right to a commission is that Panseram made false representations as to his financial ability, and that plaintiff was induced to enter into the contract by his fraud. There is no claim that defendants knew of or had any connection with such fraud; indeed, it was conceded they did not. It will be noted that defendants did not agree to procure a purchaser ready, willing, and able to buy; their services were not as full and complete as those usually performed by brokers; and it should also be noted that plaintiff selected his own “prospects;” the services defendants were to perform under their agreement were to show the farm to such “prospects” as were sent to them by plaintiff and to encourage them to purchase the farm. Plaintiff sent to defendants one Panseram and, after he had looked over the farm, the agreement then in escrow was delivered and became an agreement of sale and purchase between plaintiff and Panseram. Plaintiff accepted Panseram as a purchaser and wired and wrote defendants that the farm was sold to him. When plaintiff himself dealt with Panseram, accepted him as a purchaser and contracted with him for the sale of the farm, and defendants had performed their contract by showing the farm to him and encouraging him in its purchase, they had earned their commission, and their right to it was not defeated by Panseram’s financial Inability to perform, or his fraudulent representations to plaintiff of which defendants had no knowledge and in which they took no part. Fuday v. Gill, 195 Mich. 613; Rice-Wray v. Palma, 216 Mich. 324; Smith-Burns Investment Co. v. Jones, 240 Mich. 89; Francis v. Baker, 45 Minn. 83 (47 N. W. 452).
The judgment will be affirmed.
North, Wiest, Clark, McDonald, and Sharpe, JJ., concurred.
Chief Justice Flannigan and the late Justice Bird took no part in this decision. | [
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McDonald, J.
This suit is based on three promissory notes of $650 each executed by the defendants Harry J. Pelavin and Esther Pelavin and payable to the plaintiff. The notes were given in payment of a heating equipment which the plaintiff sold to defendant Greenberg for use in a building which he was erecting for Mr. and Mrs. Pelavin. They executed the notes and he guaranteed their payment. Defendant Greenberg was not served with process and the suit was discontinued as to him. The plea was the general issue, with notice that the defendant Esther Pelavin would claim, as special defenses, lack of consideration and coverture. Suit was begun on March 31, 1925. On October 30, 1926, the plaintiff moved for a summary judgment under the provisions of sections 12581, 12582, 3 Comp. Laws 1915. The defendants filed an affidavit of merits signed by Harry J. Pelavin. The court ruled that the affidavit was not sufficient to meet the requirements of Circuit Court Rule No. 34, as amended (233 Mich, xxxiii); and entered a judgment for the plaintiff. The defendants have brought error.
The only question involved is whether the affidavit of merits sufficiently complies with Circuit Court Rule No. 34, as amended.
Before the amendment to Rule No. 34, it was not required that the affidavit should recite facts from which the court could determine if the defendant had a meritorious defense to the action. It was sufficient if it recited that he had fully and fairly stated the facts to his counsel and was advised that he. had such a defense. It was intended by the amendment that the facts should be stated with such particularity that the court could determine if there was a good and substantial defense. The applicable portion of the amendment reads as follows:
“The facts so stated shall be the personal knowledge of the affiant, shall be set forth in the affidavit with particularity, and the affidavit shall show affirmatively that the affiant, if sworn as a witness, can testify competently thereto.”
That part of the affidavit in which affiant undertakes to state the- facts upon which the defense is based is as follows:
“Deponent further says that said defense consists in plaintiffs failure to fully execute and perform an agreement made by it simultaneously with the execution of the notes upon which suit was brought; that the said Esther Pelavin has good and sufficient defenses against said action, the said defense consisting of the following:
“(a) No consideration passed to the defendant Esther Pelavin in return for her execution of the notes set forth in the plaintiff’s declaration.
“(b) That said notes are void as against the defendant Esther Pelavin.
“(c) That the defendant Esther Pelavin is a married woman and was a married woman at the time of the giving of said notes, and that the said notes were not given in connection with her sole and separate estate, and she was not therefore bound to pay.”
Examining the recitals of this affidavit in the order stated, it will be observed that the first statement is a mere conclusion that the plaintiff did not fully perform an agreement made simultaneously with the execution of the notes. What constitutes performance of a contract is often difficult to determine. It must be determined from the facts. The affidavit states no facts. It does not show what the agreement was, who were parties to it, who was entitled to demand performance, or what connection it had with the defendants’ promise to pay the notes. In this respect, the affidavit is no stronger than if it had merely stated that the plaintiff failed to fully perform a contract. To comply with the rule, the affidavit must state facts relative to the agreement so that the court can determine whether there is a valid enforceable agreement, the non performance of which would constitute a defense to this action. In respect to this defense, the affidavit does not comply with the rule.
The recital of facts concerning the defense of coverture is also insufficient. A married woman’s common-law disability to enter into certain contracts not connected with her separate estate^and to become jointly liable with her husband thereon has been re moved by statute (Act No. 158, Pub. Acts 1917 [Comp. Laws Supp. 1922, § 11488]). Simply stating, as this affidavit does, that Esther Pelavin was a married woman when she signed the notes and that they were not given in connection with her separate estate, tells the court nothing as to her liability. Coverture is no defense to actions on contracts specified in the statute above quoted. There is nothing in the affidavit to show that this contract does not belong to that class.
It is not necessary to further discuss this affidavit. It is altogether insufficient to justify the court in refusing summary action in this case. It is not in compliance with Circuit Court Rule No. 34, as amended. Prior to the amendment, the trial court was compelled to accept the judgment of the defendant’s counsel as to the merits of the defense. Since the amendment, it is the duty of the court to,determine if there is a real defense to the action. To enable it to do so, the amended rule requires that the relevant facts upon which the defense is based shall be set forth with particularity in the affidavit.
In the instant case, the affidavit of merits does not comply with the requirements of the rule. The court did not err in granting the plaintiff’s request for a summary judgment.
The judgment is affirmed, with costs to the plaintiff.
Sharpe, C. J., and Bird, North, Flannigan, Fellows, Wiest, and Clark, JJ., concurred. | [
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McDonald, J.
In December, 1922, the plaintiff Max McKay was engaged in the practice of optometry in Bay City, Michigan. The defendants owned and occupied Sunrise farm, consisting of 40 acres located near Bay City, in Bay county. The plaintiffs wished to buy such a farm, and the defendants wished to sell. They were brought together by Guy Catto, a real estate broker of Bay City. An agreement was reached by which the plaintiffs were to purchase the farm for $15,500, and to make payment therefor as follows: $5,000 in cash, $6,000 by deed of their residence in Bay City,-and their note for the balance secured by a mortgage on the farm in the sum of $4,500. In accordance with this agreement the sale of the farm was consummated.
After being on the farm for about four months the plaintiffs began this suit for a rescission of the contract, alleging in their bill that they were induced to make purchase of the property through fraud and misrepresentation on the part of the defendants. The alleged fraud consisted of false representations in regard to the drainage of the land, the age and condition of the apple and pear orchards, and the quantity and quality of fruit which they annually produced. The defendants answered denying each and every allegation of fraud. On the hearing the circuit judge found that the defendants had falsely represented that the land was thoroughly underdrained throughout, and he entered a decree for the rescission of the contract. The defendants have appealed.
In such cases the law places upon the plaintiffs the burden of proving the fraud alleged. Fraud cannot be lightly inferred, but especially when urged as a basis for the rescission of an executed contract, it must be shown by the evidence to the satisfaction of the court. The only question in this case is whether the plaintiffs have sustained this burden of proof.
As to the alleged misrepresentations in regard to the orchards, the circuit court was not convinced that the plaintiffs had established the fraud charged. Our examination of the evidence leads us to the same conclusion. The evidence is more convincing that misrepresentations were made in regard to the drainage of the farm, and that they were relied on by the plaintiffs. The plaintiff Max McKay testified that Mr. Smith represented to him that the farm was thoroughly drained and tiled and in excellent working order, that it was the only garden farm in that neighborhood that was drained, that this was the reason he had made such a success of it, that because it was so thoroughly underdrained he could get on his land earlier than his neighbors, which enabled him to put in his crops earlier and get the early market. Don McKay, a brother of the plaintiff, testified that he was present on one occasion during the negotiations and heard Mr. Smith say that the farm was thoroughly underdrained. Mr. Catto, the real estate broker who sold the farm for Smith, testified that Smith represented to McKay that the farm was all underdrained partly with wooden tile and partly with ordinary tile.
The defendant Merton E. Smith made no very positive denial of this testimony. He testified:
“Q. What is the fact as to there being drains on the farm?
“A. Well, it is — not all been underdrained, but all that I told Mr. McKay has been underdrained. There is a piece in the northwest corner of the place that I distinctly told Mr. McKay never had been any draining done. * * *
“Q. What, if anything, was said as to the drainage in the orchard being tile or wood or what?
“A. I told him they were underdrained.
“Q. What was said as to the character of the drains ?
“A. Yes, I said part of it was tile and part box.”
We think it clearly appears from the evidence that Mr. Smith represented to the plaintiffs that he was selling them a drained farm.
The plaintiffs bought the farm in December, 1922. They moved on to it early in April, 1923. It is claimed by them, and not denied by the defendants, that when the time came to put in crops the land was so wet that they could not work it. They complained to Mr. Smith and asked him to show them-where the drains were. He was unable to do so. In his testimony he said, “The drains have not been good for the last few years, the outlets were not in shape to let them work. I think they could be cleaned, but perhaps some of them are decayed and in such shape they couldn’t be good anyway. I don’t know as to that.” This and other testimony which it is not necessary to quote shows that the drains which had been put in many years before were practically useless when the farm came into possession of the plaintiffs.
Plaintiff McKay testified that he relied on these representations:
“Q. Did you buy it entirely on the representation?
“A. As far as drainage was concerned, I did; I could see some of the other things but I couldn’t see the drainage, and wouldn’t know how to judge it if I did.”
The circuit judge made a correct disposition of the issues involved in this case. The evidence shows that the defendant Smith represented to the plaintiffs that the farm was thoroughly underdrained, that the representation was untrue, that it was a material representation, and that the plaintiffs relied on it. In view of this conclusion as to the facts, the plaintiffs are entitled to the relief given them by the decree of the circuit court.
A like decree will be entered in this court. The plaintiffs will have costs.
Bird, C. J., and Sharpe, Snow, Steere, Fellows, Wiest, and Clark, JJ., concurred. | [
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McDonald, J.
The defendants bring certiorari to
review an order of the department of labor and industry denying a petition to discontinue payments under a compensation agreement. In 1923, Nicholas Britz was conducting a lumber business in the vicinity of Turin, Michigan. He let a contract for the cutting of timber to Ralph Thayer, who sublet a part of the work to his brother, George Thayer, the plaintiff, and one Walker Kortes. On March 14, 1923, while engaged in this work, George Thayer was injured. The insurance company entered into a compensation agreement with him by which it was to pay his hospital expenses and doctors’ bills, and compensation at the rate of $14 per week during total disability, and at the proper rate per week during partial disability. Under this agreement compensation was paid to the plaintiff until October 9, 1923. About that time the defendants claim to have learned that he had returned to work. They had him examined by a physician who reported that he had fully recovered. . They then filed a petition to stop payments. Their petition was heard by a deputy commissioner who entered an order finding that the plaintiff was not disabled after October 9, 1923. Upon appeal to the full board this order was reversed and an award entered, the applicable part of which is as follows:
“That applicant has been partially disabled since October 9, 1923, estimated from 30% to 75%, but has done some work, the extent of his diminution in wages not being definitely set forth in the record, and applicant is entitled to receive 60% of the difference between what he was earning at the time of the injury and what he had been able to earn since October 9, 1923, not to exceed $14 per week, up to and including the date of the hearing, June 3, 1924, and shall continue , to receive compensation in accordance with aforesaid findings.”
This so-called award means nothing to any of the parties. It finds that the plaintiff is still partially disabled and is entitled to compensation, but does not fix the amount that he is to receive or that defendants are to pay. It is not enforceable. It is not an award upon which a judgment could be entered in the circuit court. Having found partial disability it was the duty of the board to compute in dollars and cents the proportionate extent of the impairment of his earning capacity in accordance with the provisions of sections 10 and 11, part 2, of the workmen’s compensation law as amended (Comp. Laws Supp. 1922, §§ 5440, 5441). The correct method of doing this is clearly explained in Trask v. Modern Pattern & Machine Co., 222 Mich. 692.
The award is vacated and the cause remanded that the board may definitely determine the questions involved in accordance with the statute and the legal rights of the parties.
Bird, C. J., and Sharpe, Snow, Steere, Fellows, Wiest, and Clark, JJ., concurred. | [
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Davis, J.
Plaintiff/counter-defendant city of Flint (Flint) appeals as of right the trial court’s judgment in favor of defendants/counter-plaintiffs Chrisdom Properties, Ltd, and James Crawley (Chrisdom and Crawley). We affirm.
This case arises out of a downtown housing development in the city of Flint. Trial testimony was lengthy and detailed, but, in a nutshell, Flint and Chrisdom entered into a loan agreement under which Flint extended $1.8 million from the federal Department of Housing and Urban Development to Chrisdom for the purpose of converting two buildings into condominiums. One of those buildings was already owned by Crawley and 100 percent renter-occupied as a high-end apartment building and the other was an immediately adjacent dilapidated structure that Crawley had to purchase.
The loan agreement was poorly structured from the outset. However, Flint — indeed, the same department of the city that had been responsible for the loan — then inexplicably held up the issuance of a building permit to Chrisdom for 13 months after the Building Code Board of Appeals found that Chrisdom was entirely in compliance. Flint offered no justification for this; however, as a result, construction work could not be performed efficiently. Any possibility that the work could be performed within the timetable of the construction loan was abrogated by Flint.
It is worth noting that Crawley testified without contradiction that he had been involved in contracting in Flint for over 40 years and had been issued hundreds of permits. The normal amount of time to obtain a permit never exceeded two weeks. Also, the State Con struction Code requires the issuance of a permit within 15 days after an application. MCL 125.1511. Flint argues that this deadline applies only when the application conforms to the code, but the year-long delay here was after the board of appeals determined that the Manhattan Place project was in compliance.
Additionally, Flint refused to allow any individual condominium units — some of which, having originally been apartments, were ready for sale — to be released from the general mortgage for sale to potential buyers. The construction loan agreement contained no provision governing such releases, but such releases are common in condominium construction projects, and the documents did imply that they should be granted. Further, the contract between the parties provided that Flint was to receive 100 percent of the condominium sale proceeds until such time as the loan made to the contractor was paid in full, which was an unusually good deal for the lender. Moreover, Flint was repeatedly advised that the only way its loan could be repaid was by selling the individual condominium units. Crawley testified that if he could have sold the existing units, he would have paid off the loan and have enough left over to finish the entire project.
Flint did not at any time attempt to provide any sort of justification for withholding the building permit or individual condominium releases short of asserting that it was not technically required to do so. Ultimately, Crawley and Chrisdom ran out of money, by which time Crawley had spent some $200,000 of his own money on the project and had gone without rental income from the now-empty apartment building for several years. Flint agreed to, and did, loan Chrisdom an additional $359,465, but it had still not issued a building permit, and Crawley explained that it would still be insufficient to complete the project unless individual condominium units were released from the general hen, which release was again denied.
Flint commenced the instant suit against defendants on November 3, 2004, generally alleging breach of contract and seeking foreclosure of the mortgage. Defendants counterclaimed on March 8, 2005, alleging breach of contract and slander. Midway through the trial, the trial court permitted defendants to amend their defenses and affirmative defenses to include frustration of purpose and impossibility, noting that the addition of those theories would not be prejudicial to Flint. The trial court ultimately agreed with Chrisdom and Crawley that Flint had frustrated the purpose of the contract and breached the contract. The trial court then released Chrisdom and Crawley from any obligations under the loans or mortgages to Flint and awarded an additional cash amount, albeit with the expectation that it would be used to pay at least two known outstanding subcontractor liens. This appeal followed.
“We review the trial court’s findings of fact in a bench trial for clear error and conduct a review de novo of the court’s conclusions of law.” Chapdelaine v Sochocki, 247 Mich App 167, 169; 635 NW2d 339 (2001). “When reviewing a grant of equitable relief, an appellate court will set aside a trial court’s factual findings only if they are clearly erroneous, but whether equitable relief is proper under those facts is a question of law that an appellate court reviews de novo.” McDonald v Farm Bureau Ins Co, 480 Mich 191, 197; 747 NW2d 811 (2008). This Court reviews de novo as a question of law the proper interpretation of a contract, including a trial court’s determination whether contractual language is ambiguous. Klapp v United Ins Group Agency, Inc, 468 Mich 459, 463; 663 NW2d 447 (2003).
Little published caselaw exists in Michigan on the doctrine of “frustration of purpose.” The parties agree that the only real leading case on point is Liggett Restaurant Group, Inc v City of Pontiac, 260 Mich App 127; 676 NW2d 633 (2003). There, this Court explained that “[illustration of purpose is generally asserted where ‘a change in circumstances makes one party’s performance virtually worthless to the other, frustrating his purpose in making the contract.’ ” Liggett Restaurant Group, supra at 133-134, quoting Restatement Contracts, 2d, § 265, comment a, p 335. Furthermore, “ ‘[t]he frustration must be so severe that it is not fairly to be regarded as within the risks that he assumed under the contract’ ” and “ ‘the non-occurrence of the frustrating event must have been a basic assumption on which the contract was made.’ ” Id. at 135, quoting Restatement, § 265, comment a, p 335. It is undisputed that Flint did two things: (1) delayed the issuance of a building permit by more than a year after the Board of Appeals determined that the buildings were actually in compliance, which prevented Chrisdom from proceeding in a timely fashion to meet the contract’s time requirements; and (2) refused to release individual ready-to-sell condominium units from the general lien despite being repeatedly advised that there was no other way to pay off the mortgage or to complete the project.
Flint primarily argues that Chrisdom assumed the risk that no building permit would be issued because such delays are predictable and Chrisdom represented in the loan agreement that it had already obtained the proper permits. Without considering the unrebutted testimony that such averments are standard boilerplate, we are unimpressed given the actual knowledge by not only Flint, but by the same department, that Chrisdom did not actually have those permits and, moreover, the actual knowledge and explicit agreement in the contract that Chrisdom had not yet actually prepared architectural plans, which the unrebutted evidence explained was a prerequisite to obtaining a building permit. While we agree that there is always some risk of a delay in any permitting process, the unchallenged evidence was that Flint never even conducted an inspection, repeatedly insisted that Chrisdom needed to modify plans that the board of appeals ruled were compliant, and generally gave Chrisdom a runaround for more than a year.
Further, at the same time Flint was inexplicably holding up the necessary building permit, it was paying out construction loan monies to Chrisdom. Indeed, by the time the permit was actually issued, the entire contract amount had been paid out, less sums arbitrarily deducted by the city for interest in advance of loan disbursement and attorney fees, neither of which was provided for in the loan agreement. This dichotomy, by itself, is powerful evidence that while the permit delay was wreaking havoc with Chrisdom’s orderly progression of construction, there was no ultimate intent on the part of Flint to deny a permit if it wanted its money back. In short, the evidence does not show that Chrisdom encountered a known, if perhaps unlikely risk; rather, the evidence suggests that Flint actually interfered with Chrisdom’s acquisition of the building permit, whether through incompetence or through actual malice.
Flint next presents what can best be described as a confused argument to the effect that Chrisdom brought its troubles on itself by performing work out of sequence and inefficiently without the permit. The evidence actually showed that Chrisdom essentially did what it could to keep the project running in the absence of the permit and that its only other alternative would have been to do nothing. The evidence further showed that Chrisdom tried to obtain additional third-party funding, but it could not do so because Flint refused to subordinate its loan position. Interestingly, the type of loan involved here — a HUD “Section 108 loan” — is, according to defendants’ financial underwriter expert, specifically intended to be used to attract additional funding from other lenders and to be subordinated to those lenders. The expert also explained that it appeared to him that at some point, Flint inappropriately started treating the loan as its own money.
Finally, Flint refused to allow individual condominium units to be released from the general lien so that they could be sold. Flint’s project manager testified that she did not recall being asked about individual lien releases; however, numerous other witnesses testified that Crawley did ask for those releases, that the project manager and other officials were indifferent and unresponsive to any attempts at communication, or both. We defer to the superior position of the trial court to evaluate witness credibility. Given the other testimony of incompetence or even active hostility toward the project on the part of Flint and the relevant department, we find overwhelming evidence that Flint intentionally or incompetently prevented its mortgagor from being able to repay the mortgage. The trial court did not commit clear error by ruling that Flint frustrated the purpose of the contract.
We also conclude that the trial court correctly found that Flint breached the contract. Flint raises a number of arguments, none of which we find have any merit. Ultimately, we conclude that Flint breached the contract on the basis of the same evidence that shows Flint frustrated the purpose of the contract: Flint’s unjustified refusal to issue a building permit and unjustified refusal to release completed condominium units from the general lien guaranteed the failure of the project. We have not been presented with any evidence or argument to the contrary.
We agree with the trial court that computing the damages in this case is difficult and not easily subject to fine-tuning. We are persuaded to affirm the trial court’s award for several reasons. First, the trial court clearly wrestled with the issue and it was in a better position to assess the nuances of this case. Second, at no time did Flint challenge Crawley’s testimony on damages or attempt to offer its own proofs on damages. Third, Flint concedes that the total value of the trial court’s award is approximately the same as Crawley’s estimate. Fourth, damages need not be mathematically precise, and after careful consideration, we are of the view that the trial court’s award is as close to precision as possible on these facts.
We briefly address Flint’s assertion that Chrisdom and Crawley have reaped a double windfall as a result of the outcome of this matter. Specifically, Flint points out that the cash award is roughly the amount of profit Crawley expected to make from the project, but in addition, not only has he been discharged from the mortgage, he has also received the Manhattan Place properties in an improved, albeit unfinished, state. This argument is only superficially appealing, however. The cash award was for the counterclaim for breach of contract, and although it amounts to the expected profits had the project gone as it should have, it does not account for Crawley’s personal contributions to the project and must be used to pay off any other liens or to complete the project. The discharge of the mortgage was an independent equitable award, and Flint concedes that discharging all parties’ obligations is proper under the frustration-of-purpose doctrine; moreover, we find no fault in the award given Flint’s inequitable behavior.
For the above reasons, we disagree that the trial court erred by denying Flint’s posttrial motions. We conclude that the trial court did an admirable job handling and resolving a long, difficult case, and we find no fault with its analysis of what transpired or the resultant remedy.
Affirmed.
For purposes of this appeal, Chrisdom is effectively the corporate alter ego of Crawley. We therefore treat them somewhat interchangeably.
Crawley explained that building construction was similar to assembly-line construction of an automobile, in that a great many activities had to be coordinated and performed in a controlled sequence, but the lack of a building permit prevented that process from functioning. Crawley described an ongoing pattern of indifference after Mayor Woodrow Stanley was recalled in 2002, after which a succession of department heads and other officials either did not respond to him or treated the project as irrelevant. Glenda Dunlap, who testified that she “was the staff person assigned to to [sic] the project,” impliedly supported Crawley’s opinion by testifying that, among other things, the “City did not want this project.” Michael Anthony Freeman, a financial underwriter specialist later asked by the Genesee County Land Bank and paid by the Mott Foundation to get the project back online, testified that when he submitted various proposals to Mayor Don Williamson, Mayor Williamson’s response was an explicit directive to “bust his balls,” referring to Crawley.
The apartment building was emptied at Flint’s request; because Flint did not want to pay for relocation expenses, Crawley agreed to stop renewing his tenants’ leases when the loan was originally discussed.
Counsel for Flint argued that amendment was untimely and improper under the court rules, but did not claim that amendment would be prejudicial to Flint.
There was some testimony that an incomplete condominium is worthless. Moreover, Crawley’s construction business and credit were apparently destroyed, making completion of the project significantly more difficult. Finally, a completed luxury condominium in the present housing market will not be worth as much as it could have at the time the project was commenced. | [
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McDonald, J.
(dissenting). This bill was filed for the purpose of enjoining the enforcement of an ordinance of the city of Detroit, known as the jitney-bus ordinance. On the hearing a decree was entered granting the relief prayed for. The defendants have appealed.
Section 4 of the ordinance in question reads as follows:
“Every person, persons, firm or corporation operating any jitney shall supply the police department of the city of Detroit with the name, number .and address of the owner and driver of and route upon which any jitney shall travel, and make a prompt report showing any change regarding same, Provided, however, jitneys are hereby excluded from operating on Fort street, west, Fort street, east, Michigan avenue, Grand River avenue, Woodward avenue, Gratiot avenue, Jefferson avenue, Cass avenue, John R. street and the parks and boulevards described in chapter 65 of the Compiled Ordinances of 1920.”
The plaintiffs attack the validity of the proviso of this section of the ordinance, first, on the ground that it is unreasonable, oppressive, arbitrary and ultra, vires. In respect to this claim the defendants contend that the reasonableness of the ordinance is not a subject for judicial review, because the city has power to absolutely prohibit the use of its, streets to jitney service, and having such power the reasonableness of any restricted use it may grant is exclusively a question for the legislative branch of the city government. Counsel for both sides of this controversy in very able briefs have devoted much space to a discussion of the power of the city to entirely withhold the use of its streets by jitneys. As we view it, that question is not in this case. The ordinance does not prohibit. It grants them the use of the streets. The title reads:
“An ordinance to license and regulate jitneys, so called, and to provide the conditions under which, they may be operated on the streets, avenues and public places of the city of Detroit; providing for the rate of fare that may be charged and providing a penalty for the violation thereof.”
It licenses, regulates, and controls,-and when it does so such regulation and control should be reasonable. Assuming, but not deciding, that the city has power to prohibit, when, as in this case, it does not exercise that power, but permits them to use the streets subject to certain restrictions, the restriction so imposed must be reasonable. Its only right to control is a reasonable control, and this right it derives from the Constitution. In article 8, § 28, it is said:
“The right of all cities, villages and townships to the reasonable control of their streets, alleys and public places is hereby reserved to such cities, villages and townships.”
Referring to this constitutional provision this court said in Melconian v. City of Grand Rapids, 218 Mich. 397:
“The only restriction on the control which the city may exercise over its streets under the constitutional provision is that it must be reasonable.”
The constitutional provision to which we have referred places a definite limitation upon the power of the city council to legislate on the subject of the use and control of the streets. Whether in so legislating the council has regarded or ignored that limitation is a question for judicial review. People v. Gibbs, 186 Mich. 127 (Ann. Cas. 1917B, 830); Attorney General v. Lindsay, 178 Mich. 524; City of Kalamazoo v. Kalamazoo Circuit Judge, 200 Mich. 146.
This brings us to the real question in the case, viz., Is the proviso of section 4 reasonable in excluding jitney service from so many of the most extensively traveled streets? In considering this question, we should have regard to the transportation facilities and traffic conditions at the time of the enactment of the ordinance showing the necessity for it, its effect upon the public welfare, and the object sought to be accomplished by it. The ordinance should bear some reasonable and substantial relation to these conditions. • The streets are for the use of the people,, and the purpose of any restriction placed upon their use should be for the benefit and accommodation or safety of the public. The object of all legislation should be the public welfare. So that in determining the reasonableness of this provision of the ordinance, it is important to consider how it affects the public welfare. The ordinance in question is an amendment of a former ordinance under which jitneys had been operating for some time in the streets of the city of Detroit. They were evidently recognized as a public necessity, or at least as an aid in improving to some extent the wholly inadequate transportation facilities then in use. The situation which existed then, and now exists, is thus expressed by the circuit judge in his opinion:
“This wonder city, doubling its population every decade, has outstripped its transportation facilities and commissioners, committees and individuals, some legally appointed and othersi voluntarily contributing thereto, have investigated and reported and others are now re-investigating this problem. The pulpit, the platform, the press, each has been a forum for traffic solution propaganda.”
In view of these conditions it cannot be said that, in so far as it affected their means of transportation, it was a benefit to the people of Detroit to exclude the jitney service from the streets mentioned in section 4 of the ordinance. They needed more service, not less. Nor do we think it was necessary in the interests of the public safety. Any of the known agencies of public transportation over the streets of large cities is dangerous. Properly safeguarded in its use, the automobile is no more dangerous than the street car or the motor bus. It is true that poor equipment and the handling of such vehicles by inexperienced and reckless drivers is' fraught with danger to the public, but these dangers are sufficiently and properly safeguarded by the ordinance. To entirely exclude them from those streets where the travel was greatest seems not to have been necessary for the public safety. The ease and safety in moving traffic in congested districts does not depend upon the number of vehicles in the street, but upon the methods employed. The safest place on a city street is where the modern traffic rules are enforced, and this regardless of the density of the traffic. Any man who has observed the manner of handling traffic in the downtown sections of large cities will indorse the conclusions of the witness, Mr. Schaab, who testifying in this case said:
“If a man drives safely he is no more in a hazardous position in the downtown district than in any other district where there is less traffic. I would say the greatest number of accidents occur in districts where there is no policeman in charge of traffic. Proper regulations would prevent the number of accidents. In the downtown sections they have a regular stop signal on the towers that is worked automatically all the way up Woodward avenue, at one time. * * * There are three lights on the towers, green to go, yellow to clear, and red to stop."
From this it would appear that there was no necessity in the interests of public safety to exclude jitney automobiles from the streets designated in section 4 of the ordinance. In discussing this phase of the case, we are not considering the motive which brought about the enactment of this ordinance. With that we are not concerned. But the object sought to foe attained and its effect upon the public welfare is a proper subject for inquiry.
This ordinance is unusual in that, presumably to better the public service, it licenses jitneys to operate in the city, and then excludes them from all of the main arteries of travel where there is the greatest public need for them. We quote from the brief of counsel for the plaintiffs:
“It excludes from the operation of the ordinance the privilege of running jitneys upon ‘Fort street, west, Fort street, east, Michigan avenue, Grand River avenue, Woodward avenue, Gratiot avenue, Jefferson avenue, Cass avenue, John R. street and the parks and boulevards described in the Compiled Ordinances of 1920.’ Referring to chapter 65 of the Compiled Ordinances of 1920, we find that the boulevards described therein include: Grand Boulevard, east and west, Lafayette Boulevard, Boston Boulevard, Chicago Boulevard, Arden Park, La Salle Boulevard, Washington Boulevard, Second Boulevard and Dexter Boulevard.”
If the jitneys are expected to render any considerable public service, and that is why they are licensed, it cannot be done if they are not allowed to go upon the excluded streets. It is well known that most of these streets are the main arteries of traffic and radiate from the business center of the city like the spokes of a wheel, and because of this it is impracticable to substitute other routes. One of the witnesses for the city suggested some substitute routes to which counsel for the plaintiffs makes the following objections, in which the situation seems to be correctly stated:
“They are not extended over any main, trunk-line highway or thoroughfare; they intersect ‘through streets’ time and time without number; the Grand River route, so-called, crosses Grand River avenue in a zig-zag course six different times, and at one point along this substitute route a passenger desiring to ‘go out’ Grand River avenue would find himself over two miles from that highway; the streets over which these routes extend are poorly paved, badly lighted and in many instances lined with shade trees which shed their leaves in autumn upon slippery block pavements, never intended for traffic of this character; they are not only inconvenient but dangerous; no one, de siring rapid transit, could be induced to become a passenger over them; they do not run into the center of the city; they twist and turn their way in such a manner that it would require the expert services of a civil engineer to assist a prospective passenger to his destination.”
A reading of this ordinance with reference to the traffic conditions existing in the city of Detroit at the time of its enactment fails to disclose any possible benefit to the public by excluding jitney cars from the streets designated in section 4. The great need of the people was for more transportation facilities instead of less. Th'e jitney service now conducted with the various safeguards provided by the ordinance is a safe, convenient and comparatively rapid method of transporting people from one point to another in the city. The testimony shows that they need the service. The ordinance reduces it. Beyond question, its enforcement will not operate for the public benefit. It will be to the detriment of the people to the extent that it deprives them of transportation which they so much need, and which the city is required to furnish.
In view of the inadequacy of the transportation facilities in the city of Detroit, and considered in its relation to the public welfare, we áre of the opinion that the proviso of section 4 of this ordinance is so unreasonable as to be beyond the police power of the city to enact, and is therefor void. In all other respects it is valid.
No other questions require discussion.
The decree of the circuit court should be affirmed, with costs to the plaintiffs.
Bird, C. J., and Wiest, J., concurred with McDonald, J.
Fellows, J.
I am not persuaded that the ordinance before us is invalid or that plaintiffs’ constitutional rights asserted against it have been invaded by its provisions here assailed. I am, therefore, constrained to dissent from the opinion written by Mr. Justice McDonald. It must be accepted as settled by Melconian v. City of Grand Rapids, 218 Mich. 397, that plaintiffs are common carriers for hire and that cities may prohibit the use of their streets by them for the conduct of a business for gain. It was there said:
“The plaintiffs, however, as common carriers have no right to such use for private gain without the consent _ of the city. Their use is accorded as a mere privilege, and not as a matter of inherent or natural right (citing authorities).
“The distinction between the use by the public in the usual way for pleasure or business and as a place or instrumentality for business for private gain is fundamental. While as to the former the power to regulate must be sparingly exercised and only when necessary in the public interest, as to the latter the right to use may be given or withheld.”
Speaking for myself, I am persuaded that that case settles the questions involved in this case adversely to plaintiffs’ contention. I think if the city has the right to prohibit the use of all its streets by a common carrier, and we so held in that case, it has the right to prohibit the use of a part of them by a common carrier. But the question here before us, i. e., the control of the municipalities over their streets when the use of such streets is demanded by a common carrier, is so far reaching and so important that I purpose to consider it as presented here at some length.
I shall assume for the purpose of this case, and for that purpose only, that where the municipality seeks to regulate the use of its streets by a common carrier instead of exercising the power it possesses of prohibiting such use, its regulations must be reasonable, and that where constitutional rights of the individuals are involved the question of whether such regulation is reasonable presents a judicial question. Michigan Telephone Co. v. City of St. Joseph, 121 Mich. 502 (47 L. R. A. 87, 80 Am. St. Rep. 520); City of Kalamazoo v. Kalamazoo Circuit Judge, 200 Mich. 146; People v. Gibbs, 186 Mich. 127 (Ann. Cas. 1917B, 880). But, in considering this question, we must bear in mind that we are determining a legal question as to whether the regulation is unreasonable as matter of law rather than a question of policy which must rest in the legislative department of the city.
Before taking up the cases from other jurisdictions dealing with the precise questions here involved, the contention of plaintiffs’ counsel that they are inapplicable because the constitutions of other States differ from ours should be noted. It is true that other constitutions differ from ours but that fact does not inure to plaintiffs’ benefit. In most of the States of the Union the municipalities possess only such power as is delegated to them by the legislature and delegated by express terms. This was true here before the Constitution of 1909. But the people by that instrument (art. 8, § 28) took from the legislature certain of its former powers over municipalities and reserved to them reasonable control' over their streets in the following language:
“The right of all cities, villages and townships to the reasonable control of their streets, alleys and public places is hereby reserved to such cities, villages and townships.”
This is an expansion of the powers of municipalities rather than in derogation of them (People v. McGraw, 184 Mich. 233), and renders applicable the decisions of other States where the municipalities possess less power than here.
The leading case of Ex parte Dickey, 76 W. Va. 576 (85 S. E. 781, L. R. A. 1916F, 840, P. U. R. 1915E, 93), cited with approval and quoted from in the Melconian Case, is especially in point here. The court there had before it an ordinance which gave to the commission the power to change the route applied for as well as the hours set forth in the application and to grant the license upon such changed route and hours. I quote further from that case:
“Conveyances on the streets, for the use of the general public, are of the same character, and, in addition to this, cabs, hackney coaches, omnibuses, taxi-cabs and hacks, when unnecessarily numerous, interfere with ordinary traffic and travel and obstruct them. Prescription of routes or places of business for them is a fair, reasonable and efficacious means of preventing such results.”
In Desser v. City of Wichita, 96 Kan. 820 (153 Pac. 1194, L. R. A. 1916D, 246), the ordinance reserved certain streets from use by the jitneys. The validity of the ordinance was sustained and it was: said:
“Modern requirements for municipal transportation render it essential that the power to. regulate by the governing body be broad. * * *
“Whatever natural right a citizen may have to traverse the streets of his city with a motor vehicle for the conveyance of his family or his friends, no inherent right exists to devote his vehicle to the public use of carrying passengers for hire and to appropriate to himself the use of all the streets for purposes of profit.”
Likewise in Fritz v. Presbrey, 44 R. I. 207 (116 Atl. 419), the ordinance excluded the jitneys from the use of the streets in the central part of the city of Providence. The ordinance was sustained and the court said:
“The regulation of vehicular traffic in the crowded streets of the city of Providence for the purpose of promoting the safety and convenience of the people using those streets presents a proper subject for the exercise of the police power. Whether the policy of the city council, embodied in the ordinance, presents the best scheme of regulation is not a judicial question. The complainants should not be granted an injunction, permanent or temporary, until' they have established unmistakably that the ordinance in question is an arbitrary exercise of power or that its provisions have no reasonable relation to the promotion of the safety and convenience of the public, as a whole, in its use of the highways within said prescribed area.”
In the recent case of Schultz v. City of Duluth (Minn.), 203 N. W. 449, the ordinance 'before the court reserved from the use by jitneys the streets of the city having double street car tracks. The ordinance was held to be valid and it was said:
“It is to be noted that appellant may use in his business any of the numerous streets in the city at all times without restriction, save only the streets whereon street cars operate over double tracks. This cannot be held an unreasonable regulation, and the ordinance is not really open to the charge that it is prohibitory. * * * To do business upon public streets is not a matter of right like the right of ordinary travel. Nor is the right to carry on such a business to be placed upon the same basis as that of conducting a lawful occupation upon private property within a municipality. The use of public streets for private enterprise may be for the public good, but, even so, it is a privilege that may be granted, regulated, or withheld.”
In the case of Taylor v. City of Toledo, 15 Ohio App. 475, the court had before it a regulation by the director of public safety prohibiting the use of certain streets in the congested business district of the city by motor busses operated for hire. It is somewhat refreshing to note that the court recognized the rights of pedestrians to use the street. It was there said:
“If the order of the director of public safety was made wholly or in part with the view of furthering the safety _ of pedestrians in crossing the streets, it certainly is commendable. More than twenty-five years ago, in the case of Cincinnati Street R. Co. v. Snell, 54 Ohio St. 197 (43 N. E. 207), the Supreme Court of Ohio, in speaking through Spear, J., of the rights of foot travelers upon the public streets, used the following language at page 204:
“ ‘Ancient rights have not changed because new vehicles of travel have been introduced upon the streets, nor because a portion of the people who ride, being in haste to reach their destination, demand rapid transit. The streets remain for all the people, and he who goes afoot has the right, especially at a crossing, to- walk to his destination; he should! not be compelled to run or to dodge and scramble, to avoid collision with vehicles. * * * Life and limb are of more consequence than quick transit. The vehicle man must not run down the pedestrian.’ ”
I pause long enough to observe that, in this automobile age of haste and speed, we have a possible tendency to forget that pedestrians have the right to use the streets of our cities, and I do not believe it is settled beyond peradventure that their safety would be increased by an increase in the number of automobiles on the street or an increase in their speed. In the early days of the automobile, it was said by the Massachusetts court (Commonwealth v. Kingsbury, 199 Mass. 542 [85 N. E. 848, L. R. A. 1915E, 264, 127 Am. St. Rep. 513]) :
“It seems too plain for discussion that, with a view to the safety of the public, the legislature may pass laws regulating the speed of such machines when running upon highways. The same principle is applicable to a determination by the legislature that there are some streets and ways on which such machines should not be allowed at-all.”
In City of San Antonio v. Fetzer, 241 S. W. (Tex. Civ. App.) 1034, the ordinance limited the jitneys to the use of certain streets. The court said:
“But this inherent right of the citizen to the use of the streets ceases abruptly when he reaches the maximum of such use in the ordinary or normal pur suit of his personal pleasure or private business. Passing that point, he exceeds his natural right, and burdens the streets with an unusual use, thus encroaching upon the paramount rights of the public at large. It is at this juncture that the city commissioners, as substitute trustee for the public, enter with the power to determine whether or not, or to what extent, or upon what streets, this extraordinary use will be permitted.”
In Frick v. City of Gary, 192 Ind. 76 (135 N. E. 346), the ordinance prohibited the use of certain streets by jitneys. The validity of the ordinance was sustained. This is true of Giglio v. Barrett, 207 Ala. 278 (92 South. 668), and Gill v. City of Dallas, (Tex. Civ. App.) 209 S. W. 209. In City of Memphis v. State, ex rel. Ryals, 133 Tenn. 83 (179 S. W. 631, L. R. A. 1916B, 1151, Ann. Cas. 1917C, 1056, P. U. R. 1916A, 825), it was said:
“It is too clear for extended discussion that it was competent for the legislature under the police power to regulate the use of the streets and public places by jitney operators, who, as common carriers, have no vested right to use the same without complying with a requirement as to obtaining a permit or license. The right to make such use is a franchise, to be withheld or granted as the legislature may see fit.”
In Lane v. Whitaker, 275 Fed. 476, it was said:
“The citizen has the right of travel upon the highways, and may transport his property thereon in the ordinary course of life and business; but this is a very different thing than permitting the highway to be used for commercial purposes, as a place of business, for private gain, in running jitney busses. The right, common to all, to the use of highways, is the ordinary use made thereof; but where, for private gain, a jitney owner wants a special and extraordinary benefit from the highway, to use it for such commercial purpose, the legislature may, in the exercise of its police powers, wholly deny such use or it may permit it to some and deny it to others, and this is because of the extraordinary nature of such use.”
A leading case, probably cited as frequently as any other, is Greene v. City of San Antonio, 178 S. W. (Tex. Civ. App.) 6. In that case it was said:
“But it is contended that' the regulation must be reasonable. Let that rule be admitted, and where is the unreasonableness of the ordinance to be found? The drivers of jitney cars have placed in their-charge and keeping the lives and persons' of men, women, and children, and it would not only be unreasonable, but criminal, for the city to turn them loose on the streets unrestrained by any restrictions.”
The California court (In re Cardinal, 170 Cal. 519 [150 Pac. 348, L. R. A. 1915F, 850]) has thus spoken on the subject:
“It is a matter of common knowledge on the part of those familiar with conditions in our large cities that the comparatively recent introduction of this class of vehicle, commonly known as the ‘jitney,’ for the carriage of passengers on the public streets, for a charge closely approximating that made on street cars, in view of the almost phenomenal growth of the institution, has made clearly apparent the necessity of some special regulations in order to reasonably provide for the comfort and safety of the public.”
In the recent case of Packard v. Banton, 264 U. S. 140 (44 Sup. Ct. 257), which cited with approval the Melconian Case, it was said:
“If the State determines that the use of streets for private purposes in the usual and ordinary manner shall be preferred over their use by common carriers for hire, there is nothing in the Fourteenth Amendment to prevent. The streets belong to the public and are primarily for the use of the public in the ordinary way. Their use for the purposes of gain is special and extraordinary and, generally at least, may be prohibited or conditioned as the legislature deems proper.”
These cases are in my judgment in consonance with the overwhelming weight of authority and demonstrate beyond cavil that the municipality has the power to regulate the business of operating jitneys on its streets and that in exercising such power it may designate the streets and the only streets which may be used for such business, and that the designation of streets other than those which are already congested is not unreasonable.
But it is urged that the ordinance is class legislation. It is pointed out that under another ordinance motor busses are permitted to operate on streets where jitneys are prohibited from running, and that the street railway now owned by the city also operates on these streets, and it is insisted that this is an unconstitutional discrimination against plaintiffs for the benefit of the city and the motor busses. There is a marked difference between the street car and the jitney, both in construction and operation, and the record discloses that the motor busses quite closely resemble the street car in their operation. There are two types of them, the double deckers, accommodating from 52 to 60 passengers, are operated as are street cars by a motorman and conductor, and the single deckers accommodating 29 passengers. They operate on fixed schedules and over fixed routes at low rates, give transfers and pay as specific taxes for the use of the street around $50,000 a year to the city. In most of the cases I have called attention to, the same objection to the ordinance was made and overruled and possibly it would be sufficient to only challenge attention to them without further comment. But the objection is pressed with vigor and will receive further consideration.
In Huston v. City of Des Moines, 176 Iowa, 455 (156 N. W. 883), the same claim was made. ' There, as I understand it, the street car system was privately owned. It was there said:
“Lastly, it is insisted that the statute and ordinance in question were passed in the interest of the street car system, and for the benefit of ‘intrenched interests/ with the intent and purpose of driving ‘jitney’ busses from the streets, thus depriving plaintiff of his right to use his property and to make a living. If this were true, the question would be largely a political, and not a judicial one. The remedy would be at the polls, and not in the courts. But it is well settled that the motives of a city council, in passing an ordinance, or of a legislature, in enacting a statute, as a general rule, cannot be inquired into by the courts.”
In Ex parte Dickey, supra, it was said:
“Our conclusion is that the ordinance is free from constitutional and other defects and, therefore, valid. It may be burdensome, and, in the opinion of many people, oppressive and unwise, just as many other valid laws are regarded. But the question submitted here is one of municipal power, not policy. With the latter the courts have nothing to do, nor can they overthrow laws, ordinances or regulations made by competent authority, merely because, in the opinion of the judges, they might or should have been made more liberal or less rigorous.”
And in City of Memphis v. State, ex rel. Ryals, supra, considering the question of classification, it was said:
“However, classification for such purposes is not invalid because not depending on scientific or marked differences in things and persons, or in their relations. It suffices if it is practical, and it is not reviewable unless palpably arbitrary.”
In State v. Seattle Taxicab & Transfer Co., 90 Wash. 416, 430 (156 Pac. 837), it was said:
“It may be true that the act is burdensome, and will prevent many from engaging in this form of traffic who would otherwise engage therein. But this is true of all regulation, and to argue that this act is void for this reason is to argue that any form of regulation is void. These, moreover, are not questions for the consideration of the courts. With the courts the question is one of power, not one of policy. The courts cannot overthrow statutes enacted by competent authority merely because, in the opinion of the judges, they could or should have been made less rigorous.”
And the same court in Allen v. City of Bellingham, 95 Wash. 12 (163 Pac. 18), had before it the claim that the classification between jitneys and taxicabs and livery rigs was class legislation. In denying the claim it was said:
“The jitney bus differs from each of these. It is operated continuously upon the streets, usually in the most congested parts, soliciting and taking up passengers wherever they can be found. It is never for hire at all; all that is offered is a seat and an opportunity to ride to some point within the limit of its operations. Its unrestricted use is fraught with danger, not only to the passenger it carries, but to others using the streets for their own purposes. Being a common carrier, it is a subject of regulation, and we are constrained to believe that its business is such as to make it a subject of separate classification. This being true, the city council of a municipality may lawfully exact regulations applicable to its business which it does not make applicable to the business of other common carriers, without violating either of the constitutional provisions before cited. * * *
“Municipal ordinances regulating the jitney traffic as a class apart from other common carriers have been enacted in many of the principal cities of our sister States. These, in so far as we are advised, have been uniformly upheld by the highest courts of such States against attacks on the ground that they violated the equal protection and due process of law clauses in the Federal Constitution, and the provisions directed against class legislation in the constitutions of the individual States.”
In Decker v. City of Wichita, 109 Kan. 796 (202 Pac. 89), it was said:
“It will be observed, however, that under the ordinance the plaintiffs were at liberty to operate in certain sections of the city under regulations which forbade them to select or receive passengers in the central and crowded sections of the city where the lines of the street railroad are laid. In the judgment of the determining authority, the continuance of efficient transportation in the city and the convenience and welfare of the traveling public required such limitations, and it cannot be said that the commission acted unreasonably or that it transcended its authority in the enactment of the ordinance. It may be, as suggested, that the trend of the times indicates that the days of transportation by street cars over fixed tracks in the streets of cities are numbered, and that the system will soon be supplanted by the more mobile one of carrying passengers in motor vehicles. Each system has its advantages; but the power and discretion of determining whether one would be more advantageous to the public than the other, or- whether the public interest warrants the- employment of both kinds of service, each functioning in different districts of the city, belong in the legislative field into which the court may not enter.”
I have considered at length cases which to my mind are persuasive that we should sustain the validity of this ordinance, that sustain the majority rule. There are a few cases, and very few of them, which may be out of line with these holdings. The court in Curry v. Osborne, 76 Fla. 108 (79 South. 293), held an ordinance of the city of Miami regulating jitneys invalid. But it should be noted that while the court there held the ordinance to be unreasonable, it also held that the city had not been delegated the power to enact it. In City of Columbia v. Alexander, 125 S. C. 530 (119 S. E. 241, 32 A. L. R. 746), the court held that an ordinance excluding the jitneys from Main street between the State house and the postoffice was invalid. The holding was by a divided court. In Peace v. McAdoo, 110 N. Y. App. Div. 13 (96 N. Y. Supp. 1039), an order of the police commissioner limiting the movement of teams or vehicles in parts of certain streets was held invalid. There was likewise dissent in this case. Jitney Bus Ass’n v. City of Wilkes-Barre, 256 Pa. 462 (100 Atl. 954), is the only case I have examined which declined to differentiate between the right to use the street for its usual purpose and for commercial gain, but the court did say:
“But, if, from the usual manner of operating certain vehicles, the public safety is endangered, the right and duty of special regulation is clear.”
The trial judge was very liberal in admitting proof and we have before us an ample record of three volumes. The testimony took a wide range and many witnesses expressed their views on the never-ending problem of settling the transportation question of the city of Detroit. Many witnesses thought the jitney necessary to relieve congestion and preferred that service to that afforded by street cars and motor busses. The officers of plaintiff associations by advertisement invited all who> favored the jitneys to voluntarily come and testify and many responded to the call. The testimony discloses that considerable portions of the sidewalks in the congested downtown district are appropriated by the jitney business for “stations” and they there have “starters” to aid in getting the passengers into the proper machine and away on their trip. This is regarded as desirable and highly essential for the profitable conduct of plaintiffs’ business. But this appropriation of the streets for private gain is not authorized in law. Mester v. Morman, 227 Mich. 364. The plaintiffs’ witnesses all thought the jitney service highly desirable. On the other hand, there will be found page after page of the record showing infractions by jitney drivers of speed and other traffic regulations. Indeed, one witness who had formerly been a jitney driver testified that he quit because he had to violate too many ordinances to make a living in the business. No doubt the officers of the associations did everything in their power to prevent such infractions by members and gave time to the investigation of the transportation problem. My Brother quotes from the testimony of one of them. On the other hand, the city was likewise studying the problem. The head of the traffic department of the Detroit metropolitan police department had made a study of traffic conditions. He was in better position to speak on the subject than any other witness called. I quote from his testimony:
“The traffic department has in charge the supervision of the traffic of the entire city, to see that it is regulated for the preservation of public safety. We assign officers to regulate the crossing! at intersections, also officers to check up on the violators of traffic regulations, such as motor cycle officers, parking regulations, etc. The licensing of taxicabs and pleasure vehicles, motor busses, jitneys, and all other vehicles that use the streets for hire come under the license division of the police department — that is a separate department — but the study of the streets, the way accidents occur, and traffic conditions generally are in our department. Previous to May, 1921, I found that over 2,000 jitneys had been licensed to operate in the city streets; all these licenses were in force at one time; and investigations showed that, as a result, there was considerable congestion and delayed traffic on all the routes and main thoroughfares downtown. These investigations _ were made by myself and the men under my supervision. I deemed it advisable, as a representative of the police department, that the routes be changed in order to relieve traffic congestion and reduce accidents for the general public’s safety.”
As a result of this investigation and a report upon it, the ordinance now before us was passed. The legislative department of the city of Detroit has determined that this ordinance is for the public welfare, for the public good. Courts of last resort are daily-enforcing police regulations that no member, of the court would vote for if they were sitting as legislators. But sitting as members of the court they determine not the policy of the regulation but the two questions: (1) Has the municipality the power to enact the regulation? (2) Has such power been so arbitrarily and capriciously exercised as to make the regulation unreasonable and deprive the complaining party of their constitutional rights? With due regard to our function in the case, I think we should declare the ordinance before us valid as against the objections urged.
The -decree is reversed and one here entered dismissing the bill, with costs of both courts.
Sharpe, Snow, Steere, and Clark, JJ., concurred, with Fellows, J. | [
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SNOW, J.
The plaintiff, on April 21, 1925, acquired by warranty deed the legal title to a, 52-apartment building in Detroit, known as Essex Court. At the same time it acquired by assignment the vendor’s interest in a land contract for the sale of the property. The vendee’s interest in this contract has been shifted from one person to another in such rapid succession that it is most difficult to ascertain just where it was when plaintiff acquired the title, or who it was that made the claim to it. April 22, 1924, one Edna A. Clawson had an interest in the property by virtue of articles of agreement with the Michigan Investment Company, the then owner. On said date she entered into a land contract for the sale of the premises in question to Harry and Sarah Gildenhorn. May 16, 1924, the Gildenhorns assigned their interest in the contract to Delia M. Barton, who was made one of the defendants in this case. On or about March 19, 1925, the said Barton sold the premises on a second land contract to George S. Gies, another defendant. On the same day Gies assigned his purchaser’s interest in this land contract to Saul H. Meister, another defendant. In April, 1925, Meister informed Mrs. Barton that he had assigned his interest in the contract to Simon Nadell, still another defendant, but when asked about it by Mrs. Barton, Nadell denied the assignment. Alex Gordon was made a defendant in this suit, but plaintiff charges in its bill of complaint that it did not know the nature of his claim to interest in the property.
The bill of complaint is filed for a foreclosure of the land contract, in which defendant Barton is assignee of the. purchaser, and for an accounting, and the appointment of a receiver to take charge of the premises and operate and manage the same. An order to show cause why a receiver should not be appointed was made, and this together with court process was served upon all of the defendants excepting Alex Gordon. On the day of hearing defendant Delia M. Barton appeared by counsel and consented to the appointment of a receiver. None of the other defendants appeared, but Harold M. Shapero, the present attorney for Gordon, came into court and filed an affidavit of Simon Nadell to the effect that on April 17, 1925, he had leased the apartment house to Alex Gordon for one year, and that afterwards, to wit, April 23, 1925, he had sold his interest to one Harry Pearlman. He also filed his own affidavit stating he had appeared for Gordon in other litigation, and that Gordon was then out of the State and. would return in ten days. He did not, however, appear for said Gordon as his attorney. Upon the hearing the court appointed the Union Trust Company, receiver. This was June 20, 1925.
On the 30th day of June, 1925, Mr. Shapero appeared specially for Alex Gordon as his attorney, and made ■ a motion to set aside the order appointing a receiver, because Gordon had not been served with process or the order to show cause. This motion was denied. Defendant Gordon has never appeared in the case generally, never filed an answer, and never attempted to have the right or necessity of a receiver determined on its merits, although he has now been served with process. He takes the position because he was not served with notice in the first instance that the order appointing a receiver is void. This is his claim here.
The contract sought to be foreclosed contains the usual provision that if the second party shall fail, to make payments or perform the conditions set. forth, that party of the first part shall immediately after such failure have the right to declare the contract void, treat second parties as tenants holding over without permission, and may take immediate possession of the premises, and remove the parties of the second part therefrom. That plaintiff under the circumstances is entitled to a receiver is not seriously questioned by appellant. In fact, counsel in his brief declares:
“The argument in paragraph one in plaintiff’s brief that the plaintiff was entitled to possession thereof is immaterial in our view to the issue presented by this record.”
And again:
“The only issue is whether or not the court had the jurisdiction to appoint the receiver without notice to Alex Gordon, the lessee.”
We have no difficulty in arriving at the conclusion that the facts disclosed by the record are such that the court would be fully justified in appointing a receiver to take charge of this apartment house, collect the rents, and account for its management to those who have any interest in it. We are not impressed with the fact that the many transfers and juggling of the vendees’ interest in this contract, all in the course of a little over a month, were bona fide. It is also very much in doubt what, if any, interest in the premises defendant Gordon ever had. True, Nadell says that on April 17, 1925, he (Nadell) was the owner of the premises and that he gave Gordon a lease of them for one year. But just prior to this he had told Mrs. Barton, in effect, that he was not the owner. He also says that a few days after he leased to Gordon he sold to one Harry Pearlman. Pearlman is not a party to this suit and nothing has been heard from him in connection with it. Nadell does not say where he obtained his title, and the last known assignee of the Barton contract is Saul H. Meister who got his interest from one George S. Gies on the same day that Gies received his contract from Mrs. Barton. Further mystery surrounds the proprietorship of this apartment, in that when Mrs. Barton made inquiry of the janitor as to who was the owner, he told her he didn’t, know, but that defendant Gordon and one Isadore Kowalski were collecting the rents, at one time one of them, and then the other. He also informed her that both Gordon and Kowalski refused to commit themselves’as to the ownership, but did state that they had no relationship with Mrs. Barton.
Under such circumstances, should the order appointing the Union Trust Company as receiver of this apartment house be vacated because the defendant Gordon was beyond the jurisdiction of the court and could not be served with a copy of the order to show cause? As we have intimated, the interest of Gordon in the subject of this suit is questionable. He could not have had any greater interest in it than did Simon Nadell. Nadell does not state the source from which he acquired his interest, and prior to the suit had disclaimed all interest. On the hearing of the order to show cause, Gordon’s counsel, Mr. Shapero, was present and took part in it and filed affidavits concerning his client. He had as' much right to appear generally and protect his client’s interest on this hearing as he had to be there at all. He did not do this, neither did he ask for a continuance, but within ten days thereafter he made a motion to vacate the order appointing a receiver based solely on the ground that Gordon was not served in the first instance. No attempt was made to go into the merits of the case by defendant Gordon, nor to demonstrate to the court what, if any, injustice had been done him by appointing a receiver, and although he has now been served with process in the suit he has not appeared generally. He has had his day in court.
We do not desire to be understood as favoring the appointment of receivers to dispossess persons of property rights, causing them damage and injury without notice and an opportunity of being heard, but under the record in the instant case no such situation is presented. That these various persons who acquired an interest in this apartment house for a few weeks or a few days, without the investment of any money were intent on collecting the monthly rentals as long as possible to the great injury of the owner and those who had their money invested, and then abandoning the premises, is made most apparent. The plaintiff made every one defendant it could learn had ever claimed an interest in the property, and served them with process and notice as rapidly as possible, and the principal parties in interest had notice of the hearing for a receiver. We can imagine no state of facts which would demand a receiver to protect the interests of every one concerned that would be clearer than the demand in the instant case. Appellant still has opportunity of protecting himself on the merits of the case. ■
His appeal is without merit, and the order of the circuit judge in appointing a receiver is affirmed, with costs to the plaintiff.
Bird, C. J., and Sharpe, Steere, Fellows, Wiest, Clark, and McDonald, JJ., concurred. | [
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WIEST, J.
This is a suit for divorce on the grounds of nonsupport and extreme and repeated cruelty. In the circuit decree was granted plaintiff, on both grounds, with an award of $225,000 permanent alimony. Defendant denied the charges, made no counter charges and asked for dismissal of the suit; Defendant appealed.
We hear the case de novo. Outside of the social and financial standing of the parties, the case is the ordinary one for divorce. The parties were married April 25, 1900, and have three children, all of mature years. Plaintiff received voice training, in this country and Paris, fitting her for a public career, but love and marriage intervened to prevent, but never to still the desire to place her vocal talents before the public. Defendant, at the time of the marriage, was a man of means and is now worth upward of half a million dollars.
The specific allegations of extreme cruelty and nonsupport made in the bill are, briefly stated, as follows: That defendant manifested a desire to humiliate her; wounded her feelings; ignored her and her rights and privileges in the rearing of the children; refused to supply necessary funds or permit her -to incur indebtedness for personal requirements; refused to pay bills; ignored her in purchasing a home; excluded her from participation in employing servants; shamed her by not introducing her to the servants; placed the household exchequer under control of the children; educated the children at a cost greatly in excess of the degree in which she was maintained, thereby compelling her to endure the humiliation of not having even necessities, while the children were enjoying a superabundance; unjustly and to humiliate her discriminated against her in favor of the children; refused to pay for tree trimming and many minor items of household and family expense; left her in suspense even when he paid bills;' refused to pay a bill of $20 for monogramming a table cloth and napkins; refused to pay for monogrammed bath towels; paid the servants himself; refused to permit the laundress to continue unless she washed and ironed in one day, resulting in plaintiff doing her personal things and the finer household linens; limited her to one servant, and this compelled her to wash the 'bathroom floors and do other cleaning; assumed a petty attitude towards her war activities; made her a recluse by his criticism and upbraidings and rudeness to friends and guests; so depleted her wardrobe by refusals of maintenance as to make her ashamed to appear in company; refused to accompany her to social functions and at times to talk to her; has, by neglect and refusals, compelled her to have her clothes made over, and to wear clothes of the children; that a coat she purchased on credit in 1919 has not been paid for, has become frayed, but is still worn because she has no funds; that she has had to borrow car fare from friends and the servants. These allegations presented the issues at the hearing, although it was proper to show other like acts of neglect, cruelty and nonsupport to characterize the acts specifically alleged.
Reasonable limit to an opinion forbids an extended discussion of all the evidence and in many instances we will merely state conclusions reached in our consideration of the evidence. Most oí defendant’s wealth is in unimproved and unproductive but valuable real estate, owned by him at the time of the marriage, and his income has largely consisted of his earnings.
Due consideration of this voluminous record fails to satisfy us that defendant has been guilty of nonsupport or extreme cruelty justifying a decree of divorce. In addition to an oral opinion, the circuit judge signed and filed “findings” somewhat like in a suit at law, and, as we are not in accord with his conclusions, we will state the view we take of the evidence in passing upon the issues.
The trouble leading to the filing of the bill was of long standing, and, we are satisfied, arose out of plaintiffs failure to realize the high hopes she entertained of a public career. We have here, evidently, the case of a woman filled with desire to be in the public eye; who felt that in marrying defendant his money would command for her a social position enabling her to give wide range to her vocal talent, but who found that the man’s income would not admit of her ambitious schemes and also found that the bearing of babies, their care and welfare, together with housewife duties and management, prevented realization of the public appearance she desired, and who fretted under the restraint common to marriage and longed for liberty, as she said, “to live the life for which she was fitted.” This is revealed in two letters written by plaintiff in 1907, and they also disclose an attitude manifested from that time and illuminative of subsequent events.
Plaintiff testified about one of the letters as follows:
“That undoubtedly expressed my feeling at that time, and the thoughts I expressed at that time have, along certain lines, been continual thoughts practically from that time to the present.”
The letters follow:
“July 10th, 1907.
“My Dear Charlie: There is much I would say to you in answer to your letter of Sunday and yet I scarcely know where to begin. You accuse me of indifference to your circumstance. Well, perhaps you are right. I am still quite of the opinion that you deceived me utterly in regard to this cottage business. To say that I am angry is putting it mildly. I tell you frankly that if it were not for the babies, that I should never witness another day. A disappointment to you, as you say, a total disappointment to myself in every respect. A square peg in a round hole.
“Your family hate me. My own are as nothing now, hampered in on all sides with limited means to do the things that nature intended, and these beings for Whose future welfare I am sponsor. Oh, God, oh, God, Thy Hand of retribution is heavy on me. He alone knows the outcome, it seems pretty black just now. The future seems an impossibility. I warned you before I left there that if I found an opening to earn my own living that I should embrace it, and I mean it absolutely. You are not inclined to money making; you seem to be satisfied with what you have, whatever that may be. The children’s future, oh, God, to think of sinking down to the level of a plodder, a nonentity, and worse for the children. I think I better not write any more, for I am in such a state I’ll say things I am sorry for. But I mean every word of this. I am discouraged, disheartened and disappointed. The children keep well and happy and seem to enjoy the bathing since they began Saturday. I started in to play tennis with Mrs. Clark today. It is violent exercise, it certainly ought to take flesh off, although I have lost quite a bit since I got down here for some reason or other. Tell Floss not to get discouraged, that I am really going to send her alfaghans along, and that I’ll be able to send her one like I gave Viola (the one we bought at Atlantic City). Mrs. Clark knows how to make it.
“With much love from all,
“Affectionately,
“Juliet.”
“My Dear Charlie: This is not an answer to your letter of Thursday, it is too late for me to write all I would say to you. The Clarks dined here tonight and have only just left and it is almost twelve.
“My dear husband, I did not sit down in cold blood and write that letter to you Tuesday. It was all I could do to write at all, the tears were so blinding. Yes, I am going through a very great conflict. I am very unhappy; you know without my telling you what I want to do. I want so to sing and lead the life I love. It is my temperament and the older I grow the stronger the call is upon me. You don’t understand, because you don’t feel. If you do you hide it absolutely. You probably have thought that with added years and added cares, with the babies, that the desire would diminish, but it is not so. I am ambitious, extremely so. As long as I have not the money to swing a social position, which I think I should enjoy and which I think I could make a success of, I turn to my music which nature fitted me for. You cannot deny that. You should know and understand that I have been very much hedged in and it simply is that the bird cannot stand the cage. It is not, dearie, that I don’t love you and havei faith in you. But, I desire so much for myself I want to accomplish so much and my hands are tied on all sides. Human flesh cannot stand the fetters that bind without crying out some time. Don’t you understand, can’t you feel a little bit 'how I feel ?
“I want to write you so much tonight, but the pen won’t run, so I’ll write you tomorrow, dearie.
“Affectionately,
“Julie.”
The expenses of his family, as hereinafter shown, reached a point where some retrenchment was essential, and reasonably could have been had without hardship to any one, and in this stress he was entitled to have the hearty co-operation of his wife. This he did not have and he was forced to adopt measures and means to bring the family expenses within reason and take precautions to keep control thereof. In the summer of 1920, conditions with respect to finances became acute by reason of his knowledge that he was going to lose the salary of $26,000 a year paid him by the Hammond-Standish Company, and, being aware that the family expenses had been $42,000 the year before, held a family council with his' wife and daughters, told them he was in a precarious condition, financially, and it was absolutely necessary to curtail the family expenses. He called their attention to the amount of money he had paid out for living expenses the year previous, and proposed that he pay $400 per week from then on for bills and expenses, and stated that whatever was left might be divided between his wife and daughters. Plaintiff paid little attention to the proposition beyond asking who would handle the check book, and, upon being informed that the daughter Juliet would draw the checks and keep the accounts, she left the room with the announcement that she would have nothing to do with the running of the house and would not accede to the plan. She did not carry out the threat to take no part in family management, but about that time became interested in outside activities, starting with the Gordon-Crimi concert which proved unsuccessful, then the Detroit Concert Bureau, also unsuccessful, then the bringing of grand opera to Detroit, in which effort she received $1,450 salary, but, upon the failure of the affair, she asked defendant to reimburse this amount and he did so. ■ She also claims he agreed to pay all her other bills at that time and she turned them over to him and has suffered from the suspense of not knowing whether they have yet been paid. We feel that the expense so placed upon him offset any suspense she experienced. We do not think she suffered much about this but rather washed her hands of the whole matter when he assumed the burden of taking care of the bills.
Defendant is charged with cruelty in placing power to draw checks for family expenses first with the daughter Juliet, and, when she married, with the daughter Ethel. This it is claimed was a humiliation of plaintiff and destroyed her right to manage the home and participate in the manner a wife should in the domestic affairs. Two reasons appear for this action, (1) a wilful disregard of repeated entreaties to keep expenses within reason and income, (2) a desire to have his systematic method of keeping account of expenses continued. There was also the lesser reason of educating the daughters to keep accounts, but this has little appeal. This record establishes complete justification for the restraint applied.
It is claimed that defendant’s stinginess made living with him a succession of humiliating incidents by way of continual repression of reasonable expenditures essential to domestic happiness. Considering the advantages and pleasures accorded the family and expenditures made in their behalf, it is difficult to reconcile the claims of plaintiff with defendant’s liberality plainly demonstrated and clearly established by the proofs. Inasmuch as plaintiff claims that nonsupport ran practically the course of their married life, we may well notice the following expensive summer outings. The summer of 1906, the family, with a nursemaid, occupied a cottage at Bass Rocks, Massachusetts, taking their meals at the Hotel Moorlands. The summer of 1907, the family, with a cook, a maid, and. a governess, were at Magnolia, Massachusetts. That, year a chauffeur was engaged and with an automobile; owned by defendant was at the service of plaintiff.. In 1908, the family, including defendant, together with a governess and the chauffeur, went abroad and toured England and France for about two months. In 1909, the family had a house at Grosse Pointe for the summer. The summer of 1910 was partly spent at the Old Club and in the fall the whole family went to Colorado Springs and were at the Antlers Hotel for about two weeks; then the daughters and defendant came home and plaintiff and the son had a cottage at Broadmoor, a suburb of Colorado Springs, where they remained, on account of the health of the son, until December. In 1911, the family spent part of the summer at Virginia Hot Springs and Atlantic City. In 1912, plaintiff was ill and spent most of' the summer in a sanitarium at Watkins Glen, New York, and the children, with a cook and maid, were at Bass Rocks. During the summer defendant motored to Watkins Glen and with plaintiff joined the children at Bass Rocks for about ten days. In 1918, the childrén were in summer camps in New Hampshire and plaintiff was at Whitefield, a summer resort in the White Mountains, visiting defendant’s sister but spending some time at the Mountain View House. In 1914, the family again spent the summer at Atlantic City and Virginia Hot Springs, the children being in camps part of the time. In 1915, the family, accompanied by defendant, made a trip through the Canadian Rockies to Vancouver, and along the coast to San Francisco and San Diego, taking five or six weeks. In 1916, the entire family made a trip through the Glacier National Park, then to Vancouver and returned by way of the Canadian Rockies. In 1917, the son was in camp in northern Michigan and the rest of the family, including defendant, made an automobile trip to Alexandrine, then by boat down the St. Lawrence to Quebec and Saguenay, returned :to Alexandrine, and by way of Lake Champlain rmotored to New York and home. His means barely Justified the early summer outings, and in 1913 his finances did not justify the expense, and he was much worried over the subject and requested plaintiff to co-operate in reduction of expenses by remaining home with him. This she did not do.
We now state defendant’s gross income and expenditures by years commencing in 1906: 1906, income about $15,000, expenditures about $18,000; 1907, income $25,000, expenses $17,000; 1908, income $29,000, expenses $27,000; 1909, income $30,000, expenses $22,000; 1910, income $32,000, expenses $23,500; 1911, income $21,353, expenses $28,200; 1912, income $21,086, expenses $22,839; 1913, income $14,652, expenses $23,094; 1914, income $18,502, expenses $24,376.
Net income over and above taxes, interest and business expenses: 1915, $21,961, family expenses $24,721; 1916, $41,444, family expenses $25,074; 1917, $36,807, family expenses $24,707; ■ 1918, $59,275, family expenses $34,017; 1919, $57,799, family expenses, $42,029; 1920, $22,974, family expenses $31,461; 1921, $14,756, family expenses $21,768; 1922, $6,159, family expenses $22,259; 1923, $14,432, family expenses $21,509.
Before his marriage, and since, defendant has kept an itemized account of his income and expenditures, and he was able.to give definite information therefrom of his family expenses during all the years. This habit of his seems to have been unknown to plaintiff, and she apparently thinks now that it is an evidence of penuriousness on his part, and our attention is called to the fact he made record of so small an item as the purchase of a few postage stamps, and kept track of sums paid the help and others. He does not seem to have been more meticulous than George Washington in the matter of accounts. His records of family expenses stand him in good stead and if he saw fit to keep an account of small sums we do not feel called upon to take it as an evidence of petty meanness. The daughter Juliet had studied typewriting, shorthand, and bookkeeping. When defendant was about to go to Europe on a business trip in the spring of 1919, he asked the daughter Juliet to act as secretary while he was away, told her he had placed sufficient money in the bank to meet expenses, and said he would like to have the expenses kept within $1,700 a month, and to furnish her mother with such funds as she should request. He also gave plaintiff two checks for $500 each, one of which he post dated. The family traveled to New York, and when he sailed went to Atlantic City for a week, stopping at the Marlborough-Blenheim Hotel. From there plaintiff went to Washington with the son for a few days, then returned and for a week or ten days stopped at the Biltmore. Defendant was away about four months, and upon his return found the family ex penses during that period had exceeded $1,700 a month by about $3,000. This shows to some extent what defendant had to contend with even while his daughter handled the check book.
There is such a thing as the right of the husband to honestly endeavor to keep expenses of the family within reason. In this respect he never had the cooperation of plaintiff. While the parties were living in a rented house on Parker avenue, plaintiff expressed a liking for a neighboring house. In the summer of 1914, while the family was away, the furniture was stored, and defendant purchased the house plaintiff had admired, and, intending to give her a pleasant surprise, engaged help, took the furniture out of storage and furnished the new home. Defendant then invited plaintiff and his sister, with whom plaintiff was then staying at Pontiac, to come and see the new home. Plaintiff claims it was cruel to go ahead without consulting her and to engage the help, and that defendant introduced his sister to the help but ignored plaintiff. The purchase and fitting of the new home was a surprise to plaintiff but not of the nature intended by defendant. Just why he overlooked introducing his wife to the help we do not know, but we do know it was an oversight easily remedied by just a little time, for it would not take the help but a few minutes to sense who was mistress of the home. We would pass this matter without comment, if it were not for the fact that there seems to be an impression among some people that trifles out of court take new color when solemnly paraded in court. Resentment over not being consulted about the purchase of the home, and humiliation at not being introduced to the servants, was evidently of short duration, for, the old furniture being inadequate for the new home, she went with defendant to New York, Philadelphia, Richmond, and Grand Rapids and selected rugs, draperies and furnishings costing nearly $10,000. He did object to the expense of monogramming bath towels and' wash cloths and thought it quite useless even for table cloths. He might well have acceded to plaintiff’s wish in this trifling matter, but we cannot raise his refusal to the dignity of extreme cruelty. It was one of the petty differences quite likely to arise and usually composed by the exercise of a little common sense, or acquiescence of the husband. He also objected to the amount of a bill rendered by a doctor, and wanted her to see if it could not be reduced. It does not appear that she even attempted to carry out his wish, and it does appear that he paid the bill. This was not cruel. It would be strange indeed if a husband’s prerogative to demur to bills when he thinks them too high is cruel even when he goes and makes payment. The breadwinner of the family may, if he feel justified, speak in defense of his pocketbook.
Plaintiff engaged a man to care for four trees at the home at an expense of $30 a year and defendant said the trees were not worth such expensive care and stopped it. Most wives would either leave such a matter to the husband, or at least consult with the husband about it. Defendant had a right to stop the care of the trees and plaintiff should have had sense enough to forget the matter, instead of treasuring the memory and bringing the petty subject to court in aid of a severance of bonds of matrimony. It would be ridiculous to say that this trivial matter was so cruel as to render the continuance of the marriage relation intolerable. Of course, we understand that this was but one incident, but what we have in mind is that it is too small to even be weighed in the balance.
Plaintiff claims that while she was at Colorado Springs, in the fall of 1910, defendant did not furnish, sufficient funds although she entertained but little. We notice that while she was there, for the month ending November 15th, she ran a bill for “drinkables” at a clu'b, amounting to $53.35, and tabulated in the now obsolete terms of 7 rye, 2 gin, 2 Scotch, 8 vermouth, 4 champagne, 1 sherry and 2 claret. The record does not disclose more clearly the indicated quantities, but it being in pre-Volstead days we may assume, for instance, that 7 rye at $1.75 per, was some quantity more generous than 7 drinks.
At the hearing defendant was called as the first witness for cross-examination, and 339 pages of the record are taken up with such examination. It would seem that in a suit for divorce the plaintiff ought to be able to present her case without starting out with'a long inquiry into the finances and business dealings of defendant covering nearly a quarter of a century. The statute, however, permits the calling of the opposite party for cross-examination, but its permission should be exercised sparingly and to reach relevant facts difficult or incapable of proof otherwise. It was important to show that defendant was possessed of means with which to have supported plaintiff, and the amount and nature of such means in case of divorce with alimony, but we cannot but feel that the examination went far beyond such purposes. We have small interest in old-time history of defendant’s business connections beyond knowing what income reached him. In the course of such examination defendant stated he had a reason for not recording the deed to the home he purchased. Being asked to give the reason, he stated:
“I would prefer not to state in open court. I would be pleased to tell the judge the circumstances.”
Counsel for plaintiff said:
“Well, I insist that you tell in open court what was the circumstance that you claim made it desirable on your part to keep this property from getting in your name on the record.”
Defendant still demurring, counsel appealed to the court to compel him to answer, and the court ruled that counsel was entitled to an answer. Thereupon defendant testified:
“Mrs. Hammond confessed to me that she had been unfaithful and had interests in other directions; she could not continue any longer to live with me.”
The circuit judge in his “findings” stated:
“That the testimony of the defendant to the effect that plaintiff confessed to him misconduct on her part is not corroborated by any testimony and I believe it is untrue. There is no testimony that plaintiff has been guilty of any misconduct.”
Defendant had made no such charge in any pleading, raised no such issue, and tried his best to be excused from stating it iti open court, and his counsel let the matter end with the examination of counsel for plaintiff.
In his brief counsel for plaintiff says:
“The charge in this case was broadcasted direct to the public. The chancellor expressly found defendant’s testimony untrue. The charge had all the cruelty in it that human ingenuity could employ. That he charged plaintiff with being a self-confessed adulteress illustrates this'. Not a scintilla of proof, circumstantial or otherwise, was offered in support of his testimony. This was the ‘packer’s brand!’ It confirms the existence of the intense cruelty manifested for years.”
The publicity complained of came at the insistence of counsel for plaintiff and over the protest of defendant that he ought not to be made to answer in open court. It was not an issue under the pleadings, no such charge had been previously made by defendant, it was not volunteered at the hearing and was not a subject involved in the circuit calling for decision, and we decline to pass on the truth or falsity thereof, and much less to hold it was untrue and upon such premise consider it confirmatory of the existence of long-time extreme cruelty. Plaintiff denied being unfaithful and denied the claimed confession. We have mentioned this matter somewhat at length because counsel for plaintiff stresses it in his brief and the circuit judge thought it an issue calling for his finding thereon. It was not an issue, defendant had no right to offer supporting proof, if he had any, and it is too serious a matter to be decided at all without giving the parties an opportunity to try out such an issue. We decline also to characterize it as the “packer’s brand,” whatever that may be. It was a most unfortunate happening, but we assume counsel for plaintiff was wholly unaware of What the answer might be.
Plaintiff says defendant insisted she remain more at home and if she needed exercise to take it in the garden. This request, if made, was not productive of results. Mrs. Hammond was active in civic, musical, art, and war matters. At the outbreak of the war she entered the National League for Women’s Service. Prior to that she had been connected with a great many matters of civic interest, principally in executive capacities. She was a Colonial Dame and historian thereof. She assisted the Young Women’s Christian Association in putting on a pageant under the backing of the Grace Whitney Hoff Federation of Clubs. In this she acted as general chairman, and had to supervise many of the 640 costumes. She was an executive assisting in the arrangement and detail of putting on a play for the benefit of the Chinese Famine Fund. She was appointed chairman of a committee intent on cleaning up the alleys and streets of Detroit. She was active in various benefits put on by the Theatre Arts Club. She had to do with the benefits for the purposes of scholarships for the College Clu'b. She sang in many churches. She was appointed commandant of the commissary department of the National League for Women’s Service, and was active in feeding soldiers. She made a wide investigation with reference to malnourished children. We have mentioned some of h$r activities. It does not appear that she was restrained from taking part in public activities. In justice to her, it should be said that in some of her activities she rendered splendid public service.
We note in the opinion of the circuit judge severe criticism of the conduct of the daughter Ethel, falling within his observation in the court room. Ethel was not a witness, and of course her conduct mentioned does not appear in the record. We only notice this because the circuit judge thought it important enough to comment upon it. The circuit judge did not rest decision upon Ethel’s conduct, and could not, and we pass it as of no moment in the case.
We have gained an opinion from the record directly opposite to the view of the circuit judge that defendant was not open and fair in giving testimony. We are impressed that he was eminently fair and was admirably patient under a searching examination of all his pecuniary and business dealings for many years. Defendant is not free from censure. It was petty meanness to send back a hat she had purchased. He should have known how dear a hat is to a woman and 'have grinned and made the best of it, as husbands are wont to do.
When word came that the daughter Ethel was sick and plaintiff wanted to go east to render .her care and attention, defendant insisted that he go and she remain home, and he went, and two days later plaintiff followed. No excuse appears for this unkindly postponement of the mother’s desire to reach the sick bed of the daughter. No serious consequences were occasioned by the delay, and as it happened many years ago we cannot feel that the incident warrants dissolution of the bonds of matrimony.
Plaintiff is not free from fault for the unseemly incident attending her effort to start for New York with Ethel without letting him know anything about it, and his going to the depot and upon her refusal to return home taking Ethel with him. He had good reason to suspicion that the secrecy with which she departed from the home portended something more than going on a visit, and in the stress of the moment, and in the light of subsequent events, he did a foolish thing. Both were at fault in this matter and plaintiff is in no position to make capital out of the affair.
Cash given plaintiff after the family conference was somewhat meager, but we do not overlook her asserted independence and engagements in various semi-public enterprises, and feel that such account in a large degree for the falling off. When her undertakings proved disastrous he was saddled with the bills and accounts she had run. We notice in the business ventures she borrowed $5,000 one place and $1,000 another. While these borrowings had nothing to do with her support, because used in the ventures, she undoubtedly expected she would be successful to the point of being independent of her husband, and we are not inclined to accept her failure as a reason for visiting him with the same blame as though she had not made the ventures. Defendant did not pay the $6,000 borrowed for the enterprises, but did pay back the $1,450 she had received as salary and assumed and paid bills she had run. We are disposed to let the plaintiff abide the self-imposed meagerness of cash contributions after the family council.
The case has received careful consideration, we have had the benefit of able arguments and helpful briefs, and we find no sufficient cause for divorce.
The decree in the circuit is reversed, and a decree will be entered here dismissing the bill, without costs to either party.
Bird, C. J., and Sharpe, Snow, Steere, Fellows, Clark, and McDonald, JJ., concurred. | [
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Shapiro, J.
These consolidated appeals involve defendants who pleaded guilty of crimes after the United States Supreme Court issued Halbert v Michigan, 545 US 605; 125 S Ct 2582; 162 L Ed 2d 552 (2005), which declared MCL 770.3a unconstitutional. In both cases, the trial court elicited an acknowledgement from defendants that they understood they were waiving their right to appellate counsel appointed at taxpayers’ expense as a condition of their plea. Both defendants filed pro per and delayed applications for leave to appeal. This Court remanded both cases to the trial court for appointment of counsel and directed appellate counsel to address whether a defendant can waive the right to appointed appellate counsel as a plea condition imposed by the trial court, which right otherwise attaches pursuant to Halbert. We hold that a trial court may not impose waiver of appointed appellate counsel as a plea condition. With respect to defendants’ other issues, we affirm both convictions and sentences.
I. FACTUAL BACKGROUND
Defendants Karen Billings and Gordon Shively, sister and brother, were initially charged in a multicount information alleging participation in a criminal enterprise, MCL 750.159j(l), forgery, MCL 750.248, and uttering and publishing a forged financial instrument, MCL 750.249. Each defendant agreed to enter a guilty plea to the criminal enterprise count in exchange for dismissal of the remaining counts. At their separate plea hearings, the trial court informed each of them that in addition to the trial rights they were giving up by entering the guilty plea, they were also “giving up any right you may have to have an attorney appointed at public expense to assist you in filing an application for leave to appeal, or any other post-conviction remedies.” Each defendant indicated his or her acknowledgement.
II. WAIVER OF APPELLATE COUNSEL
Defendants argue that the trial court violated their Sixth Amendment right to appellate counsel pursuant to Halbert by requiring them to waive their right to appointed appellate counsel in order to plead guilty. We review de novo issues involving questions of constitutional law. People v Scott, 275 Mich App 521, 526; 739 NW2d 702 (2007).
A. MOOTNESS
The prosecution argues that this Court should not address this issue because it is moot, as defendants have been provided with appellate counsel. As an initial matter, we fail see how this issue is moot, as we specifically ordered appellate counsel to raise it when we remanded for the appointment of counsel. Moreover, even if we were inclined to agree that the issue is moot, we conclude that the issue should still be addressed “because it is one that pertains to similarly situated defendants, and is capable of repetition, yet may evade judicial review.” People v James, 272 Mich App 182, 184; 725 NW2d 71 (2006), citing Federated Publications Inc v City of Lansing, 467 Mich 98, 112; 649 NW2d 383 (2002).
B. CASELAW
1. HALBERT v MICHIGAN
Following a voter-approved constitutional amendment in 1994 that limited appeals by those who plead guilty or nolo contendere to appeals by leave granted by the court, Const 1963, art 1, § 20, our Legislature enacted MCL 770.3a, which prohibited a court “from appointing appellate counsel for a defendant who pleaded guilty, guilty but mentally ill, or nolo contendere, except under limited, specified circumstances.” James, supra at 187. Under MCL 770.3a(4), a trial court was required to advise the defendant that, except under certain circumstances, if the guilty plea was accepted by the court, the defendant waived the right to an attorney appointed at public expense to file an application for leave to appeal or assist the defendant in other postconviction matters.
In 2005, the United States Supreme Court issued Halbert, holding that an application for leave to appeal in this Court was a first-tier review such that an indigent defendant had a constitutional right under the due process and equal protection clauses of the Fourteenth Amendment to the appointment of appellate counsel. Id. at 610. It further concluded that Halbert had not waived his right to appellate counsel because
[a]t the time he entered his plea, Halhert, in common with other defendants convicted on their pleas, had no recognized right to appointed appellate counsel he could elect to forego. Moreover, as earlier observed, the trial court did not tell Halbert, simply and directly, that in his case, there would be no access to appointed counsel. [Id. at 623-624.]
2. PEOPLE v JAMES
This Court first addressed Halbert’& implications in James, supra at 184, in which the lower court had denied appellate counsel on the basis of MCL 770.3a before the Halbert decision. James, supra at 184. After Halbert was issued, the defendant in James requested reconsideration of the denial of appellate counsel. Id. at 185. The trial court again denied the defendant’s request for counsel, concluding that Halbert did not require the appointment of appellate counsel for indigent defendants convicted by plea before Halbert was decided. Id. The trial court also reasoned that even if Halbert applied, the defendant had waived his right to appointed appellate counsel and concluded that the language in Halbert regarding waiver was “merely dictum.” Id. at 193. This Court disagreed, stating that the waiver issue was necessary to the disposition of Halbert because there would have been no reason to remand for the appointment of counsel if he had waived the right. Id. at 194. “The [Supreme] Court’s analysis and conclusion logically reasoned that if no right exists, it follows that one cannot knowingly and intelligently elect to forgo that right.” Id. This Court concluded that the defendant’s situation was identical to that in Halbert, and determined that there was no waiver because “there was no recognized right that he could elect to forgo.” Id. at 195.
3. PEOPLE v MIMS
Although Halbert was issued on June 23, 2005, the repeal of MCL 770.3a was not effective until January 9, 2007. This led to the confusing result that “despite Halbert, a Michigan statute still stated that indigent defendants for the most part had no right to appointed counsel to challenge guilty pleas, at least until the repeal of MCL 770.3a became effective on January 9, 2007.” People v Mims, unpublished memorandum opinion of the Court of Appeals, issued June 12, 2008 (Docket No. 276601), at 1. In Mims, a panel of this Court determined that under these circumstances,
notwithstanding that the pronouncement in Halbert afforded defendant the right to appointed appellate counsel, defendant’s presumptive knowledge of that right would at best have been ambiguous when she entered her plea in March 2006. If defendant could not have clearly understood that she had the right to appointed counsel, she obviously could not have executed a knowing and intelligent waiver of this right, [lid. at 1-2.]
However, because this opinion was unpublished, it provided no authority for similarly situated defendants.
C. APPLICATION TO DEFENDANTS BILLINGS AND SHIVELY
Here, defendants are differently situated from the defendants in Halbert and James. Defendant Billings’s plea was taken on November 6, 2006, after Halbert but before the repeal of MCL 770.3a, placing her in the same position as the defendant in Mims. Defendant Shively’s plea was tendered on August 21, 2007, after the repeal was effective, at a time when he clearly had the right to the appointment of appellate counsel.
Looking first at defendant Billings, we are persuaded by the reasoning in Mims and conclude that for those indigent defendants whose pleas were taken after Halbert was issued, but before the repeal of MCL 770.3a, there can be no finding of waiver. Because indigent defendants whose pleas were taken after June 23, 2005, but before January 9, 2007, could not have clearly understood that they had the right to appointed counsel, they could not have executed a knowing and intelligent waiver of this right.
Regarding defendant Shively, this Court has not yet addressed the situation in which a trial court imposed a waiver of the unambiguous right to appointed appellate counsel as a condition of a defendant’s plea. Given the date of Shively’s plea, this issue is now squarely before us. We need not look very far for our answer, however. In Halbert, the Supreme Court noted:
We are unpersuaded by the suggestion that, because a defendant may be able to waive his right to appeal entirely, Michigan can consequently exact from him a waiver of the right to government-funded appellate counsel. ... Many legal rights are “presumptively waivable,” ... and if Michigan were to require defendants to waive all forms of appeal as a condition of entering a plea, that condition would operate against moneyed and impoverished defendants alike. A required waiver of the right to appointed counsel’s assistance when applying for leave to appeal to the Michigan Court of Appeals, however, would accomplish the very result worked by Mich Comp Laws Ann § 770.3a (West 2000): It would leave indigents without access to counsel in that narrow range of circumstances in which, our decisions hold, the State must affirmatively ensure that poor defendants receive the legal assistance necessary to provide meaningful access to the judicial system. [Halbert, supra at 624 n 8 (citations omitted).]
This language unambiguously indicates that the United States Supreme Court would hold unconstitutional the practice of imposing a waiver of appointed appellate counsel as a plea condition.
Our own analysis results in the same conclusion. MCR 6.302 outlines the procedure for taking a guilty plea. Pleas must be “understanding, voluntary, and accurate.” MCR 6.302(A). In order to ensure this standard is met, the court must advise the defendant that he or she is giving up the right to a trial and all the rights associated with it, including the rights to a jury trial, to the presumption of innocence, to proof of guilt beyond a reasonable doubt, to confront and question the witnesses against the defendant, to call witnesses on the defendant’s behalf, to remain silent and not have the silence used against the defendant, and to testify at trial. MCR 6.302(B)(3). A defendant must also give up the right to challenge the plea with a claim of coercion or undisclosed threats or promises and the right to an appeal as of right. MCR 6.302(B)(4) and (5). Each of these rights attaches equally to both moneyed and indigent defendants. The same is not true of appointed appellate counsel. Indigent defendants, by definition, cannot afford appellate counsel. Accordingly, moneyed defendants tendering guilty pleas would have greater access to first-tier appellate review than indigent defendants solely on the basis of the moneyed defendants’ financial status. This is the very essence of an equal protection violation: “The equal protection concern relates to the legitimacy of fencing out would-be appellants based solely on their inability to pay core costs . ...” Halbert, supra at 610-611 (quotation marks and citations omitted).
The imposed waiver also violates the Due Process Clause. The United States Supreme Court held MCL 770.3a unconstitutional because it recognized that “indigent defendants pursuing first-tier review in the Court of Appeals are generally ill equipped to represent themselves.” Id. at 617. The Supreme Court noted that attorneys review the record, research issues, and prepare a brief reflecting their analysis — tasks that would be onerous and intimidating for many indigent defendants. Id. at 619-621. “Navigating the appellate process without a lawyer’s assistance is a perilous endeavor for a layperson, and well beyond the competence of individuals ... who have little education, learning disabilities, and mental impairments.” Id. at 621. It also noted that appeals from guilty pleas are not necessarily routine and can involve complex issues and constitutional claims. Id. at 621-622. It concluded that even the procedures for seeking leave to appeal in Michigan would be intimidating to those without counsel. Id. at 622.
Remarkably, the waiver imposed by the trial court as a condition of defendants’ pleas was even broader than the one required by MCL 770.3a. Here, the trial court extracted an absolute waiver of appointed counsel, whereas under MCL 770.3a, there were some exceptions. We fail to understand how imposing a waiver even broader than the one declared unconstitutional in Halbert could somehow render it constitutional. We hold that a trial court may not impose a waiver of appointed appellate counsel from a defendant before accepting a guilty plea and that doing so is unconstitutional.
III. DEFENDANT BILLINGS’S REMAINING CLAIM
Defendant Billings’s remaining claim on appeal is that the trial court erred in scoring offense variable (OV) 12, MCL 777.42.
Billings was initially sentenced on December 4, 2006. Her trial counsel objected to the scoring of OV 13, MCL 777.43, on the basis of the age and nature of her prior convictions, and the trial court agreed to deduct the 10 points that had been assessed. No objections were made to the other scores, including the 25 points scored under OV 12. Given the OV 13 scoring change, defendant’s minimum sentence fell within the D-III range of 57 to 142 months of imprisonment. The trial court sentenced defendant within the guidelines to a minimum sentence of 72 months.
Defendant argued on appeal that OV 12 was improperly scored at 25 points because there was no evidence that defendant ever committed a felonious criminal act against a person, let alone a contemporaneous act within 24 hours of the subject crime. She argued that a score of 5 or 10 points would place her minimum sentence in the D-II range of 51 to 127 months and a score of 1 point would place her minimum sentence in the D-I range of 36 to 90 months. Because both of those ranges were below the erroneous D-III range, she argued she was entitled to resentencing.
However, while this appeal was pending, her appellate counsel moved in the trial court for resentencing, arguing the same improper scoring of OV 12 that she raised in this appeal. The trial court granted the motion. At the resentencing hearing, defendant was scored 10 points for OV 12 and was resentenced within the recalculated D-II guideline range to a prison term of 51 months to 40 years. Because defendant has already received the relief that she requested, this issue is moot. See Michigan Nat’l Bank v St Paul Fire & Marine Ins Co, 223 Mich App 19, 21; 566 NW2d 7 (1997) (“An issue is moot if an event has occurred that renders it impossible for the court, if it should decide in favor of the party, to grant relief.”).
IV DEFENDANT SHIVELY’S REMAINING CLAIMS
Defendant Shively offers two additional claims on appeal. We note that Shively did not raise these issues in his in pro per application for leave. We are also aware that this Court’s order indicated that leave to appeal was granted with respect to the issue raised in the application. However, in light of the conclusion that Shively was entitled to appellate counsel, we see no reason to limit his appeal to the singular issue of the waiver of appellate counsel raised in his in pro per brief, rather than letting appellate counsel review the record for any potential issues. Moreover, this is precisely what a different panel of this Court permitted for Billings. Rather than grant leave on her pro per brief, the case was remanded for the appointment of counsel such that appointed counsel could file an application for leave to pursue whatever issues it found. Billings, supra. In light of our power to consider issues not raised on appeal, Tingley v Kortz, 262 Mich App 583, 588; 688 NW2d 291 (2004), we choose to address Shively’s other issues.
The first is that there was an insufficient factual basis for his plea. Shively filed a motion to withdraw his plea after sentencing, pursuant to MCR 6.310(B), which the trial court denied. We review a trial court’s decision on a motion to withdraw a plea for an abuse of discretion. People v Wilhite, 240 Mich App 587, 594; 618 NW2d 386 (2000).
The trial court held:
Defendant argues that the taking of his guilty plea ... was not accurate. A guilty plea is “accurate” if the evidence supports a finding that the defendant is guilty of the offense charged. MCR 6.302(D)(1). Having reviewed the record, the Court determines, as it did at the time it accepted the plea, that the evidence offered supports the finding that Defendant is guilty of the offenses to which he pled and was later sentenced. Therefore, the Court finds that no error occurred in the plea-taking which warrants withdrawal of the Defendant’s guilty plea.
After reviewing the record, we find no abuse of discretion. A conviction for conducting a criminal enterprise pursuant to MCL 750.159j(l) and MCL 750.159i(l) requires, among other things, “a pattern of racketeering activity.” MCL 750.159g defines “racketeering” to include committing “an offense for financial gain” that involves one of a number of different statutes. Shively argues that none of those statutes involves uttering and publishing. We disagree.
MCL 750.159jj refers to “[a]n offense committed within this state or another state that constitutes racketeering activity as defined in section 1961(1) of title 18 of the United States Code, 18 U.S.C. 1961.” 18 USC 1961(1) defines “racketeering activity” to include offenses under 18 USC 1344 (bank fraud), which proscribes defrauding a financial institution and obtaining “any of the moneys, funds, credits, assets, securities, or other property owned by, or under the custody or control of, a financial institution, by means of false or fraudulent pretenses, representations, or promises.” This would necessarily include uttering and publishing. Accordingly, there was an adequate factual basis for Shively’s plea to the charge of conducting a criminal enterprise.
Shively’s remaining claim on appeal is that he is entitled to resentencing on the basis of the erroneous scoring of the guidelines. Shively was sentenced pursuant to a Cobbs agreement to a prison term of 78 months to 20 years. He argues that even though he was given the sentence he agreed to at his Cobbs hearing, he is entitled to resentencing because there were sentencing errors. Generally, a defendant who voluntarily and understanding^ entered into a plea agreement that included a specific sentence waives appellate review of that sentence. People v Wiley, 472 Mich 153, 154; 693 NW2d 800 (2005). However, at least one panel of this Court has held that the rule precluding appellate review of a specific sentence imposed pursuant to a plea agreement “does not apply where the specific sentence was based on an improper scoring of the guidelines.” People v Fix, unpublished opinion per curiam of the Court of Appeals, issued October 25, 2007 (Docket No. 273448), at 1. We conclude that defendant is not entitled to any relief, because even with our corrections to the guidelines scoring, defendant received a sentence that was below the guidelines range.
Shively first argues that prior record variable (PRV) 4, MCL 777.54, was improperly scored at 10 points for adjudications in 1975 and 1978. He concludes that because the date of the offense was May 23, 2006, and the sentencing date was December 3, 2007, a period of more than 10 years had passed such that the convictions could not be used. We disagree. MCL 777.50 provides in relevant part:
(1) In scoring prior record variables 1 to 5, do not use any conviction or juvenile adjudication that precedes a period of 10 or more years between the discharge date from a conviction or juvenile adjudication and the defendant’s commission of the next offense resulting in a conviction or juvenile adjudication.
(2) Apply subsection (1) by determining the time between the discharge date for the prior conviction or juvenile adjudication most recently preceding the commission date of the sentencing offense. If it is 10 or more years, do not use that prior conviction or juvenile adjudication and any earlier conviction or juvenile adjudication in scoring prior record variables. If it is less than 10 years, use that prior conviction or juvenile adjudication in scoring prior record variables and determine the time between the commission date of that prior conviction and the discharge date of the next prior earlier conviction or juvenile adjudication. If that period is 10 or more years, do not use that prior conviction or juvenile adjudication in scoring prior record variables. If it is less than 10 years, use that prior conviction or juvenile adjudication in scoring prior record variables and repeat this determination for each remaining prior conviction or juvenile adjudication until a period of 10 or more years is found or no prior convictions or juvenile adjudications remain.
Accordingly, the issue is not whether 10 years had passed between the discharge from his 1975 juvenile adjudication and the present offense, but whether, starting with the present offense, there was ever a gap of 10 or more years between a discharge date and a subsequent commission date that would cut off the remainder of his prior convictions or juvenile adjudications. Our review of the record indicates that no such 10-year period exists. Shively’s greatest gap between one discharge and subsequent commission was a discharge in 1997 with a subsequent commission in 2005. Because no gap of 10 or more years ever cut off the progression, all of Shively’s juvenile convictions were properly included under the rule.
Shively next argues that PRV 6, MCL 777.56, was improperly scored at 10 points because there was no evidence in the record that he was on parole, probation, or awaiting sentence at the time of the offense. Again, we disagree. MCL 777.56(c) provides for the scoring of 10 points if the defendant is, among other things, “on bond awaiting adjudication or sentencing for a felony,” and the presentence investigation report indicates that Shively was on bond for a November 25,2005, offense at the time he committed the first of these offenses.
We agree with Shively that OV 9, MCL 777.39, was improperly scored. Although OV 9 now includes loss of property, that amendment did not take effect until March 30, 2007. At the time Shively committed the instant offense, OV 9 only applied to placing people in danger of physical injury. People v Melton, 271 Mich App 590, 592; 722 NW2d 698 (2006). Accordingly, Shively should have received 0 points for OV 9, not 10.
Shively next challenges his scores for OV 12. He was scored 10 points for three or more contemporaneous felonious criminal acts involving other crimes. Shively argues that because he pleaded guilty to a single count of criminal enterprise and the other charges of uttering and publishing were dismissed, the requirement of 24 hours or separate convictions was not met. We disagree. Given that the other charges of uttering and publishing were dismissed, they meet the requirement that those acts “ha[ve] not and will not result in a separate conviction.” MCL 777.42(2)(a)(ii). Additionally, the complaint indicates that Shively forged two separate checks and uttered and published them, all on September 28, 2006, the date for which the criminal enterprise was being conducted. Thus, there were four offenses contemporaneous to the criminal enterprise charge.
Finally, Shively argues that OV 14, MCL 777.44, was improperly scored at 10 points because there was no indication that his role was that of a leader. We need not make a determination on this issue, because even if we agree with him and omitted these 10 points, Shively’s computed sentencing guidelines range would not change. Removing the 10 points for OV 9 and another 10 points for OV 14, Shively’s minimum sentence range, including his status as a fourth-offense habitual offender is E-TV( or 84 to 240 months — the precise guidelines range scored at sentencing. Given that Shively’s Cobbs agreement provided him a sentence below the guidelines range, he is not entitled to any relief.
v CONCLUSION
We affirm both defendants’ convictions and sentences. We also hold that trial courts may not impose a waiver of appointed appellate counsel as a plea condition.
Affirmed.
People v Shively, unpublished order of the Court of Appeals, entered September 4, 2008 (Docket No. 284474); People v Billings, unpublished order of the Court of Appeals, entered June 27, 2007 (Docket No. 277269).
People v Cobbs, 443 Mich 276; 505 NW2d 208 (1993).
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Wilder, P.J.
In this property dispute, defendant Lima Township (defendant or the township) appeals by right the trial court’s order granting plaintiffs’ motion for summary disposition. We affirm.
i
A
In 1835, a plat was made for Harford Village and recorded. The plat established 68 lots in six blocks. Jackson Road, adjacent to the village, is a state public road, and West Street, shown on the plat, is a county public road. The other roads shown on the plat (North, South, East, and Cross streets) were not developed or used as roads.
The northern boundary of plaintiffs’ property, known as the Beach farm, is interstate highway 94. The Beach farm includes lots 1 through 14 of block II of the plat (together these lots are known as parcel 1) and lots 1 through 6 of block III of the plat (together these lots are known as parcel 2).
The first recorded conveyance was a deed to William Beach in 1854. William Beach was Florence Beach’s great-great-grandfather. Florence Beach’s father, Dwight Beach, was born in the farmhouse located on the Beach farm. But the Beach family left the farm in 1922. From 1922 to sometime between 1967 and 1969, none of the Beach family lived or worked on the farm. Instead, a tenant farmer lived and worked there.
In 1954, the township received a conveyance of lots 4 and 11 of block I. The deed was by reference to the recorded plat. This property was and continues to be used for a township hall. In 1967 or 1969, Dwight Beach retired from the service and returned to the farm with Florence Beach, who was 14 years old. They erected fences on the property, extending them into areas designated on the plat as roads.
In 2004, the township acquired lots 5, 6, 7,12,13, and 14 of block I by a deed that referred to “the south 25 feet of Lots 12, 13, and 14 deeded for highway purposes.” The township’s four northerly lots (lots 4, 5, 6, and 7) are bounded by platted but undeveloped roads only, with no direct access to a developed road except through the township’s southerly lots (lots 11,12,13, and 14) to Jackson Road. The township plans to construct a fire station on its northerly lots and to use North and Cross streets within the plat for ingress and egress.
In August 2004, according to plaintiffs’ complaint, the township breached plaintiffs’ boundary fence on the north side of lots 4, 5, 6, and 7 of block I. The township took that action under a claim of right to open the streets, as dedicated in the plat. Plaintiffs responded by claiming that the Beach farm includes the platted streets because such streets were never used, opened, or accepted by the public or by any lot owner. Plaintiffs argued that the platted streets did not exist and that title to the platted but unused streets had merged into the title of the Beach farm by adverse possession and abandonment. The township responded that the dedicated streets on the plat had not been vacated and that, if and when they were vacated, title would have vested in the owners of the lots abutting the vacated streets.
B
Florence Beach brought this action to quiet title to the streets at issue, based on adverse possession claims, and the other plaintiffs were joined later. The township filed a counterclaim to quiet title to the streets. Defendant filed a motion for summary disposition under MCR 2.116(C)(8) and (10), claiming that plaintiffs had failed to state a claim because an action to vacate streets created by a plat had to be brought under the Land Division Act (LDA), specifically under MCL 560.221 through 560.229, the provisions concerning plats. Plaintiffs filed a countermotion for summary disposition under subrules C(8), (9), and (10).
The trial court denied defendant’s motion, holding that the LDA did not apply. It took plaintiffs’ motion under advisement. Defendant filed a motion for recon sideration, arguing that the trial court lacked jurisdiction to alter or revise a plat under a quiet title action and that such revision could only occur under an LDA action. The trial court again denied relief and proceeded to hold an evidentiary hearing on the adverse possession question. Following the hearing, the trial court issued an opinion and order granting plaintiffs’ motion for summary disposition.
II
The township first argues that the trial court erred by not dismissing plaintiffs’ action because plaintiffs’ claim was not brought under the LDA. We disagree.
A
We review de novo summary dispositions. Willett v Waterford Charter Twp, 271 Mich App 38, 45; 718 NW2d 386 (2006). Statutory interpretation, including interpretation of the LDA, is a question of law reviewed de novo. Martin v Beldean, 469 Mich 541, 546; 677 NW2d 312 (2004). A claim for adverse possession is equitable in nature. See Mulcahy v Verhines, 276 Mich App 693, 698; 742 NW2d 393 (2007). And decisions regarding equitable claims, defenses, doctrines, and issues are reviewed de novo. Dyball v Lennox, 260 Mich App 698, 703; 680 NW2d 522 (2004). Whether the trial court erred by trying this matter as a quiet title action rather than requiring an action to vacate a road under the LDA is a question of law reviewed de novo. Hall v Hanson, 255 Mich App 271, 276; 664 NW2d 796 (2003).
B
This appeal hinges on the interpretation of Martin and its companion case, Little v Hirschman, 469 Mich 553; 677 NW2d 319 (2004). Also implicated is the Supreme Court’s recent decision in Tomecek v Bavas, 482 Mich 484; 759 NW2d 178 (2008). Plaintiffs argue that Martin is inapplicable because it applies to private dedications filed on or after January 1, 1968, and rely instead on Little, which holds that “dedications of land for private use in plats before 1967 PA 288 took effect convey at least an irrevocable easement in the dedicated land.” Little, 469 Mich at 564. We agree with plaintiffs that Little is applicable because the plat dedication at issue here occurred before 1967 PA 288 took effect.
Since Little is applicable here, we consider whether the second holding oí Martin, “that the exclusive means available when seeking to vacate, correct, or revise a dedication in a recorded plat is a lawsuit filed pursuant to MCL 560.221 through 560.229,” is also circumscribed by the January 1, 1968, date. Martin, 469 Mich at 542-543. We are persuaded that Martin and the LDA are not applicable to the present case because plaintiffs did not seek in this action “to vacate, correct, or revise a dedication in a recorded plat.” Therefore, the trial court did not err by allowing plaintiffs’ quiet title claim to proceed.
Given that the trial court properly allowed plaintiffs’ quiet title claim to proceed, we next consider whether private easements dedicated in plats can be adversely possessed. We hold that they can.
The parties are in agreement that the 1835 recording of the plat constituted a private dedication that encompassed, in part, North and Cross streets, which, although platted, were never developed as streets. The township planned to use that section of North Street located north of an area referred to as block I and that section of Cross Street located east of block I for ingress to and egress from a fire station to be constructed on adjacent lots within block I. The trial court found that plaintiffs had established ownership of the relevant portions of the streets in dispute, under the doctrine of adverse possession.
Reading together the opinions in Martin and Little, we conclude that private dedications in plats filed on or after January 1, 1968, are expressly recognized and permitted under Michigan law, MCL 560.253(1) (enacted as part of 1967 PA 288), and that private dedications in plats registered before January 1,1968, such as the dedication here, are likewise legally sound. There is a distinction between pre-1968 private dedications and ones contained in plats filed thereafter, which is that “a private dedication made before 1967 PA 288 took effect conveyed an irrevocable easement, whereas MCL 560.253(1) now indicates that a private dedication conveys a fee interest.. . .” Martin, 469 Mich at 548 n 18. But even though a fee simple interest is conveyed, lot owners in the subdivision cannot use the dedicated land for any purpose they desire. Rather, use must be compatible and consistent with the dedicatory language. Id. at 549 n 19.
Here, given the plat and dedication date of 1835, an irrevocable easement, as opposed to a fee simple interest, was created in favor of the lot owners. The private dedication became irrevocable on the sale of the lots. Little, 469 Mich at 558-559. “[A] private dedication is effective upon the sale of a lot because it is reasonably assumed that the value of that lot, as enhanced by the dedication, is reflected in the sale price. That is, purchasers relied upon the dedications that made the property more desirable.” Id. at 559. A landowner is considered to have accepted “any private dedication in a plat when property is purchased pursuant to a deed that references the plat.” Martin, 469 Mich at 549 n 19.
Stated otherwise, “purchasers of parcels of property conveyed with reference to a recorded plat have the right to rely on the plat reference and are presumed to ‘accept’ the benefits and any liabilities that may be associated with the private dedication.” Id. Quoting Minnis v Jyleen, 333 Mich 447, 454; 53 NW2d 328 (1952), Little stated that the “ ‘rights granted under the dedicatory clauses in the plat to the owners of lots in the subdivision may not be infringed by one lot owner for his own convenience to the detriment of his fellow lot owners.’ ” Little, 469 Mich at 560.
An easement created by a private dedication cannot be revoked and binds the original owner-plattor and successors. But these principles do not preclude adverse possession of such an easement.
The heart of an adverse possession claim is that a party is effectively and unlawfully intruding on a real property interest lawfully held by another. In other words, the adverse possessor is doing something that the law prohibits and for which the owner has an action. Michigan courts long ago adopted a common-law theory of adverse possession, see, e.g., Sanscrainte v Torongo, 87 Mich 69; 49 NW 497 (1891), under which a claim of adverse possession was a positive claim, by the possessor, to actual ownership of disputed property, rather than a statute-of-limitations defense to a real property action by the putative titleholder. In this manner, after a period of open, notorious, and hostile possession, title passes from the putative titled owner to the person who has actually been in possession of the land.
MCL 600.5801 extends, in the statutory context, this longstanding common-law recognition of the doctrine of adverse possession and provides, in pertinent part:
No person may bring or maintain any action for the recovery or possession of any lands or make any entry upon any lands unless, after the claim or right to make the entry first accrued to himself or to someone through whom he claims, he commences the action or makes the entry within the periods of time prescribed by this section.
(4) In all other cases under this section [subsections 1 through 3 are not applicable here], the period of limitation is 15 years.
To establish adverse possession, the person claiming it (e.g., the person opposing the real property action by the existing owner, by asserting the limitations-period defense) must show that his or her possession was actual, visible, open, notorious, exclusive, hostile, under cover of a claim of right, continuous, and uninterrupted for the statutory period of 15 years. Wengel v Wengel, 270 Mich App 86, 92; 714 NW2d 371 (2006). The elements of adverse possession are not arbitrary requirements; rather, they reflect the logical consequence of a party claiming ownership by adverse possession having the burden to prove that the period of limitations has expired. Id. Wengel, quoting Kipka v Fountain, 198 Mich App 435, 439; 499 NW2d 363 (1993), further observed:
“To claim by adverse possession, one must show that the property owner of record has had a cause of action for recovery of the land for more than the statutory period. A cause of action does not accrue until the property owner of record has been disseised of the land. MCL 600.5829. Disseisen occurs when the true owner is deprived of possession or displaced by someone exercising the powers and privileges of ownership.” [Wengel, 270 Mich App at 92.]
We cannot bar an adverse possession claim on the grounds that it would result in an invasion of a legally protected property interest, i.e., an irrevocable easement created by a private dedication, because it is the case with all adverse possession claims that recognition of such a claim would result in an invasion of a legally protected property interest. Adverse possession succeeds when the interest of the owner of record, once afforded protection, is no longer legally shielded because the record owner failed to commence an action within the limitations period in MCL 600.5801(4).
For example, if plaintiffs had actually constructed a house on the disputed area that stood for more than 15 years and blocked entirely any use of the easement, and had the township filed a suit for removal of the house on the basis that it sat within the area of the easement created by the private dedication, then MCL 600.5801(4), which makes no exception for dedicated property, would absolutely bar the action because the 15-year period to maintain an action for recovery or possession would have expired. Indeed, the township and other lot owners would no longer be free to “make any entry upon [the] lands .. ..” MCL 600.5801. Under such circumstances, there would be no legal mechanism to prevent plaintiffs’ continuing use of the property, which explains why the law of acquiring title by adverse possession arose: an adverse possessor can no longer be removed from the property, nor can the record owner lawfully intrude on the land, so therefore the law will recognize legal title in favor of the adverse possessor. This underlying premise cannot be discarded merely because, under the instant circumstances, the alleged acts of adverse possession did not entail construction of a home or because it was plaintiffs, not the township, who brought suit first. Any easement rights in North Street and Cross Street held by the township and the other lot owners had to be invoked within 15 years of disseisen, either by timely pursuit of an action, or as a defense or counterclaim, raised within the limitations period. Otherwise, those rights were subject to being lost, given the statutory mandate that a property owner cannot sit on his or her rights indefinitely. Failing to permit a standalone adverse possession claim would render MCL 600.5801 superfluous and would amount to a judicial end-run around a statute and a doctrine of common law accepted for generations in this state.
The fact that an easement interest is at stake does somewhat alter the evidentiary burden in relation to the adverse possession analysis. “[A]n easement may be enforced at any time up to its extinguishment by adverse possession^]” Terlecki v Stewart, 278 Mich App 644, 663; 754 NW2d 899 (2008), citing Longton v Stedman, 196 Mich 543, 545; 162 NW 947 (1917). “In Michigan[,] use of an easement by the owner of the servient estate will not ripen into adverse possession unless such use is inconsistent with the easement.” Nicholls v Healy, 37 Mich App 348, 349; 194 NW2d 727 (1971). The Nicholls Court noted the need for the application of a heightened level of scrutiny in regard to adverse possession of an easement, stating:
The record reveals extensive use of the easement by-defendants and their predecessors in title. Two rows of trees were planted along the length of the easement, a privy was erected on the easement, for a period of time a bathhouse stood on the strip, and prior to the time the land was sold to defendants’ predecessor in title a fence was constructed along one end of the strip. A careful review of the testimony, however, indicates that none of these uses interfered with plaintiffs’ rights of passage. None of the uses seriously blocked passage on the strip. A gate had been put in the fence and was eventually removed. Even if not removed, maintenance of a gate across the right of way if it permitted use of the way “would not constitute an obstruction to the way or result in the loss of the way by ouster or adverse possession.” Greve v. Caron, [233 Mich 261, 266; 206 NW 334 (1925)].
Strictly construing the evidence supporting the claim of adverse possession, as we must..., we find that the record here fails to establish acts evidencing hostile prevention of the plaintiffs’ rights of passage. [Id. at 350.]
In addition, our Supreme Court has indicated that adverse possession of an easement can be established if there is sufficient evidence showing hostile prevention of the use of the easement or use that is wholly inconsistent with the easement. Harr v Coolbaugh, 337 Mich 158, 165-166; 59 NW2d 132 (1953); Greve, 233 Mich at 266-267. “An easement may terminate by adverse possession, but such termination is difficult to establish.” 1 Cameron, Michigan Real Property Law (3d ed), § 6.30, p 241.
Having concluded that a party is lawfully entitled to maintain an adverse possession claim with respect to property subject to an irrevocable easement created by a private dedication in a recorded plat, we further conclude that while there is no requirement to do so, an adverse possession claim may be brought under the LDA.
The LDA provides that a circuit court may “vacate, correct, or revise all or a part of a recorded plat.” MCL 560.221. In general, an LDA complaint must be filed “by the owner of a lot in the subdivision, a person of record claiming under the owner, or the governing body of the municipality in which the subdivision covered by the plat is located.” MCL 560.222. The complaint must identify the land at issue within the plat and state the “plaintiffs reasons for seeking the vacation, correction, or revision.” MCL 560.223(a) and (b). MCL 560.224a identifies all the individuals and entities that a plaintiff must join as party defendants in an LDA action. With some enumerated exceptions, “[u]pon trial and hearing of the action, the court may order a recorded plat or any part of it to be vacated, corrected, or revised[.]” MCL 560.226(1).
In Martin, 469 Mich at 550, the Court ruled that the plaintiffs’ efforts to have a plat dedication of an outlot declared “null and void” required the filing of an LDA action under MCL 560.221 et seq. The plaintiffs’ lawsuit had sought removal of plat language reserving an outlot for the use of lot owners. Id. at 545. The Court concluded that “because plaintiffs were attempting to vacate, correct, or revise the plat, we find that the trial court erred when it allowed this case to proceed as a quiet title cause of action.” Id. at 551. Martin reasoned that requiring an LDA lawsuit ensured that filed plats remained accurate. Id. at 551 n 24. The Court specifically held “that the exclusive means available when seeking to vacate, correct, or revise a dedication in a recorded plat is a lawsuit filed pursuant to MCL 560.221 through 560.229.” Id. at 542-543 (emphasis added).
Correctly understanding the full ramifications of Martin can only be accomplished by viewing it in conjunction with Tomecek. The lead opinion in Tomecek defined the parameters of an action under the LDA, stating:
The LDA provides a process for surveying and marking subdivided property. Property information is compiled on a plat that is then recorded with the local municipality. The LDA allows a circuit court to vacate, correct, or revise a recorded plat. Defendants argue that the LDA permits a court to alter a plat map only to properly reflect existing property rights; it cannot affect the substantive rights of the underlying property owners.
When construing the LDA, we are mindful that our primary goal is to ascertain and give effect to the Legislature’s intent. When determining intent, we consider first the language of a statute. The LDA allows a court to “order a recorded plat or any part of it to be vacated, corrected, or revised ....” “Plat” is defined in the act as “a map or chart of a subdivision of land.”
The LDA defines a plat as a map. A plat is a description of the physical property interests on a particular area of land. A map, by itself, is not a determination of substantive property interests. If one “revises” a map of the United States to show Michigan encompassing half of the country, it does not make it so. The LDA was never intended to enable a court to establish an otherwise nonexistent property right. Rather, the act allows a court to alter a plat to reflect property rights already in existence.
In this case, the LDA did not create new substantive property rights when the circuit court altered the plat to reflect that the central easement encompasses utility access. This right existed with respect to the central easement since its inception, when the original grantors recorded the central easement intending it to include utilities. The trial court merely used the LDA as the tool to validate property rights that already existed. [Tomecek, 482 Mich at 495-495 (opinion by Kelly, J.) (citations omitted.]
This is the full extent of the Court’s discussion of the LDA, and five justices were in agreement with respect to the principles quoted. See id. at 505 (opinion by Young, j.).
In our opinion, the following principles can be gleaned from Tomecek and Martin: (1) the LDA itself does not provide an avenue for the circuit court to alter substantive property rights or to establish such rights if they are not already in existence; (2) the alteration of a plat in a judgment entered by a circuit court pursuant to the LDA does not effectuate a change in substantive property interests and rights; (3) rather, the alteration of the plat in an LDA judgment is ordered so that the plat accurately reflects and conforms to property interests and rights already in existence; (4) the filing of an action under the LDA is the exclusive means available when seeking to vacate, correct, or revise dedication language in a recorded plat in order to achieve consistency between the plat and existing substantive property rights; (5) an LDA action will generally require the court to identify the nature, character, and scope of existing property rights and, at times, to resolve any underlying disputes on such issues so that the plat map can be properly revised if necessary; and (6) akin to quieting title, resolution of underlying disputes regarding the nature, character, and scope of existing property rights that could potentially lead to plat revisions may be undertaken in the context of an LDA action, but it is not mandatory.
In light of Tomecek, we conclude that while the LDA cannot be used as a vehicle to alter or create substantive property interests, an LDA action can be used to obtain legal recognition of an alteration of such property interests, accomplished, for example, by way of adverse possession, resulting in a need to alter the plat map. The LDA requires a plaintiff to allege in the complaint the reason a plat alteration is being sought, MCL 560.223(b), which reason could certainly be that application of the doctrine of adverse possession resulted in a change in existing substantive property interests. In Gorte v Dep’t of Transportation, 202 Mich App 161, 168-169; 507 NW2d 797 (1993), this Court explained:
Generally, the expiration of a period of limitation vests the rights of the claimant. It is further the general view with respect to adverse possession that, upon the expiration of the period of limitation, the party claiming adverse possession is vested with title to the land, and this title is good against the former owner and against third parties. Defendant argues the contrary view, that plaintiffs’ possession of the property merely gave plaintiffs the ability ... to raise the expiration of the period of limitation as a defense to defendant’s assertion of title. Contrary to defendant’s arguments, however, Michigan courts have followed the general rule that the expiration of the period of limitation terminates the title of those who slept on their rights and vests title in the party claiming adverse possession. Thus, assuming all other elements have been established, one gains title by adverse possession when the period of limitation expires, not when an action regarding the title to the property is brought. [Citations omitted.]
Thus, resolution of an adverse possession claim within an LDA action would not entail the circuit court altering existing substantive property interests through use of authority granted in the LDA, which is prohibited. Rather, resolution of an adverse possession claim would simply involve the court determining the nature, character, and scope of existing property rights, which may have been previously altered by operation of law under MCL 600.5801(4) and its associated doctrine of adverse possession.
Tomecek does not preclude a circuit court, within the context of an LDA action, from identifying the particular property interests actually held by the parties and from resolving any disputes on the matter. Indeed, in Tomecek, the chief question was whether the scope of a driveway easement described in a plat encompassed a right to run a sewer line through the grounds of the easement. By declaring that the easement could be so utilized, the Court was not altering or creating substantive property rights by way of any LDA provision, but was instead merely formally recognizing or validating existing property rights. In reaching its conclusion, Tomecek had to resolve the parties’ dispute regarding the scope of the easement, which required an examination of the intent of the original grantors, the plat map labeling of the easement, past use of the easement, the effect of a restrictive covenant on the easement, and other circumstances. Tomecek, 482 Mich at 490-496 (opinion by Kelly, J). Accordingly, Tomecek allows for a bifurcated approach, involving, first, a determination regarding the nature, character, and scope of the existing property interests being disputed by the parties and, second, an alteration of the plat map, if necessary, so that it is consistent with the property interests as determined by the court.
The fact that an adverse possession claim regarding property subject to an easement, held by subdivision lot owners and created by a private dedication in a recorded plat, may be part of an LDA action, however, does not require it to be so. One of the foci in Martin was whether a private dedication in a plat filed in 1968 or thereafter was legally valid. The LDA issue was of secondary consideration. The plaintiffs in Martin expressly requested the court to remove, and to declare null and void, plat language regarding the outlot at issue. Martin, 469 Mich at 545. In other words, the plaintiffs specifically asked the court to “vacate, correct, or revise... part of a recorded plat.” MCL 560.221; Martin, 469 Mich at 542-543. We conclude that Martin did not intend anything more to be read into its decision regarding the LDA than the unremarkable proposition that the filing of an LDA suit is necessary when expressly seeking to alter the language in a recorded plat. Here, plaintiffs did not expressly seek to alter a recorded plat.
hi
Defendant also contends that the trial court clearly erred by finding that plaintiffs established adverse possession. We disagree. We review de novo summary dispositions. Willett, 271 Mich App at 45. Decisions regarding equitable claims are reviewed de novo, while the trial court’s findings of fact are reviewed for clear error. See Dyball, 260 Mich App at 703.
A
Defendant first contends that its status as a municipal corporation renders it immune, by statute, from an adverse possession claim to a public street, citing MCL 600.5821(2), which provides: “Actions brought by any municipal corporation for the recovery of the possession of any public highway, street, alley, or any other public ground are not subject to the periods of limitations.” Under this theory, defendant claims that because it is not subject to the limitations period on which adverse possession claims are based, it is not subject to adverse possession claims for public roads, streets, or areas. We disagree.
The Revised Judicature Act, of which MCL 600.5821(2) is a part, does not define “public streets.” Thus, this is an issue of statutory construction, and we repair to well-established principles of statutory construction. We begin our analysis by consulting the specific statutory language at issue. Provider Creditors Comm v United American Health Care Corp, 275 Mich App 90, 95; 738 NW2d 770 (2007). This Court gives effect to the Legislature’s intent, as expressed in the statute’s terms, giving the words of the statute their plain and ordinary meaning. McManamon v Redford Charter Twp, 273 Mich App 131, 135; 730 NW2d 757 (2006). “When the language poses no ambiguity, this Court need not look beyond the statute or construe the statute, but need only enforce the statute as written.” Id. at 136. “This Court does not interpret a statute in a way that renders any statutory language surplus-age . . ..” Id., citing Pohutski v City of Allen Park, 465 Mich 675, 684; 641 NW2d 219 (2002).
Under the unambiguous language of the statute, defendant’s argument lacks merit. Defendant has argued that its rights to Cross Street and North Street arise from the private dedication in the plat and that its rights derive from its status as an owner of lots within the subdivision. Accordingly, by defendant’s own admission, these are not public streets, and the statute does not apply to them.
The caselaw interpreting and applying MCL 600.5821(2) does not compel a contrary conclusion. Mason v City of Menominee, 282 Mich App 525, 527; 766 NW2d 888 (2009), involved the application of MCL 600.5821(2) to a dispute involving property owned by a city, but not by virtue of ownership of lots in a subdivision with privately dedicated streets. The opinion does not state how the city came to own the property, but describes the land as a public park. Presumably, therefore, the city owned the park land in fee simple, as public land.
Similarly, Adams Outdoor Advertising, Inc v Canton Charter Twp, 269 Mich App 365; 711 NW2d 391 (2006), does not compel a contrary result. In that case, the panel considered MCL 600.5821(2) within the context of an action to quiet title. Billboards were erected on the north side of Michigan Avenue, 500 feet east of Canton Center Road. The panel held that the trial court correctly granted the township summary disposition under MCL 600.5821(2). The panel relied on the “public ground” provision in that subsection. Finding that phrase ambiguous, the panel used doctrines for construction of statutes and dictionary definitions, broadly construing the phrase “public ground” to mean publicly owned property open to the public for common use. Id. at 370-371, 375. The panel held that plaintiffs could not bring an adverse possession claim to the public grounds at issue. Id. at 375.
Adams Outdoor Advertising is distinguishable. The case at bar involves privately dedicated streets “owned” by the township by virtue of its ownership of lots in the subdivision. There is no evidence that these streets were ever open to the public. There are no “public grounds” at issue here, and Adams Outdoor Advertising does not compel the conclusion that MCL 600.5821(2) bars plaintiffs’ adverse possession claims. For the foregoing reasons, MCL 600.5821(2) does not bar plaintiffs’ adverse possession claims against privately dedicated streets owned by defendant only by virtue of its ownership of lots in the subdivision.
B
Defendant next argues that plaintiffs failed to prove the elements of adverse possession sufficiently for summary disposition. Again, we disagree. To establish adverse possession, the claimant must show that his or her possession was actual, visible, open, notorious, exclusive, hostile, under cover of a claim of right, continuous, and uninterrupted for the statutory period of 15 years. Wengel, 270 Mich App at 92.
As we recognized earlier, the fact that an easement interest is at stake does raise somewhat the evidentiary burden in relation to the adverse possession analysis. “In Michigan[,] use of an easement by the owner of the servient estate will not ripen into adverse possession unless such use is inconsistent with the easement,” thus leading to application of a heightened level of scrutiny in regard to a claim of adverse possession of an easement. Nicholls, 37 Mich App at 349.
The evidence indicated that improvements were made to the areas in question. These longstanding improvements would give a titleholder notice that one or more lot owners were adversely possessing the area. For example, plaintiffs’ barn partially blocked the area known as North Street. Plaintiffs maintained crops and private trails in the areas in question, planted trees, and maintained fencing along North and Cross streets. These activities and structures were further evidence of acts or uses inconsistent with any right to use the disputed property as a road. In light of the strong evidence of plaintiffs’ uses inconsistent with the use of the areas as roads, we conclude that the trial court did not clearly err by finding that plaintiffs established clear and cogent proofs of possession that was actual, visible, open, notorious, exclusive, continuous and uninterrupted for the statutory 15-year period, hostile, and under cover of claims of right, and judgment in favor of plaintiffs was properly granted.
rv
The trial court did not err as a matter of law by concluding that plaintiffs were not required to bring their adverse possession claims under the LDA. Adverse possession applies against easements created by private dedications in a plat, even if the plat was recorded before January 1, 1968. MCL 600.5821(2) does not preclude plaintiffs’ adverse possession claims against privately dedicated subdivision streets in which the township has interests solely by virtue of its ownership of lots within the subdivision. Finally, the trial court did not err by concluding that plaintiffs demonstrated sufficient proofs to satisfy all the elements of adverse possession.
Affirmed. Plaintiff Florence Beach, being the prevailing party, may tax costs pursuant to MCR 7.219.
1967 PA 288 was originally titled the Subdivision Control Act, but is now titled the Land Division Act. 1967 PA 288 took effect on January 1, 1968.
We note that plaintiffs’ claim was not one seeking revocation of the easement, but one seeking recognition of termination, or extinguishment, of the easement by adverse possession.
Even though the LDA instructs that a court may “vacate, correct, or revise all or a part of a recorded plat,” MCL 560.221, this specific authority does not give a court the power to alter or create substantive property interests. Therefore, a party cannot properly file an LDA action demanding, for example, that he or she be given exclusive rights to a privately dedicated subdivision park simply on the basis that MCL 560.221 allows a court to alter a recorded plat. If the party could provide an independent, underlying legal basis establishing the right to exclusive use, the party could use the LDA to have the plat altered to reflect the property interest.
Even if it can be said that the court is altering substantive property interests by finding in favor of an adverse possessor, as opposed to merely determining existing property interests that were previously altered by operation of MCL 600.5801(4), the alteration would still be proper within an LDA lawsuit as long as it was based solely on adverse possession principles and not the LDA’s provision allowing the court to vacate, correct, or revise a plat, MCL 560.221.
“We must determine if the central easement running from Lake Shore Road to Lot 2 includes utility access, or if its use is strictly limited to ingress and egress.” Tomecek, 482 Mich at 490 (opinion by Kelly, J).
Whether such action may he required following the issuance of this opinion is not expressly before us at this time.
We note that, while the trial court held its evidentiary hearing under MCR 2.116(1) and then granted summary disposition in favor of plaintiffs pursuant to MCR 2.116(C)(10), MCR 2.116(I)(3) permits an immediate trial to resolve any disputed issue of fact only when the grounds asserted in support of summary disposition are based on subrules C(l) through (7). Nevertheless, because the parties have not challenged this procedure used by the trial court, which got right to the heart of the issue in dispute and expedited the resolution of the case, we simply point out the oddity of reviewing an order granting summary disposition under subrule C(10) that was entered only after the trial court made findings of fact integral to its order granting summary disposition. To this end, while our review of equitable claims, such as a claim for adverse possession, is de novo, Dyball, 260 Mich App at 703, we will review for clear error the factual findings made by the trial court in regard to the claim of adverse possession, Grand Rapids v Green, 187 Mich App 131, 135-136; 466 NW2d 388 (1991). | [
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Nelson Sharpe, C. J.
The bill of complaint herein was filed to enjoin the defendant city and its officials from entering into a contract for the sale of self-liquidating bonds to be used in the construction of a sewage disposal plant under the provisions of Act No. 94, Pub. Acts 1933. The trial court held the act to be unconstitutional and granted the relief prayed for, from which the defendants have appealed.
In Young v. City of Ann Arbor, ante, 241, in which a similar question was presented, this act was held to be constitutional and the right to enter into such a contract sustained. Decision in this case is controlled thereby.
The decree appealed from is reversed, and one may be here entered dismissing the bill. No costs will be allowed.
Potter, Fead, Wiest, Butzel, Bushnell and Edward M. Sharpe, JJ., concurred. North, J., did not sit. | [
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Butzel, J.
Defendant issued a health and accident insurance policy to Ollie Hasson in 1928. On July 25, 1939, while the policy was still in force, plaintiff met with an accident, was totally incapacitated and unable to do any work until January 2, 1940. He, however, did work after the latter date. Plaintiff’s attorney claims that from January until September, of 1940, Hasson worked only intermittently. Although it would require a rather strained interpretation of plaintiff’s testimony to construe it this way, it would make no difference in our legal conclusion. Plaintiff did use a cane and wore, a special shoe on his left foot which was injured at the time of the accident. He claims compensation for 28% months from and after September 19,1940.
Plaintiff is a Kurd, unable to read or write English. On January 6, 1940, he executed a full release of all claims. It appears that he had the assistance of a friend and the latter’s attorney in making out the necessary papers. Whether or not the plaintiff signed the release blindly or ignorantly is immaterial since our decision is based upon the construction of the policy, part of which under the heading “Accident Indemnities” provides:
“If such injuries as described in the insurance clause shall wholly and continuously disable the insured for one day or more.”
The court in directing a verdict stated that:
“I do not see how anyone can seriously contend that this plaintiff was continuously disabled within the meaning of this policy. It is just a plain matter of fact that he was not, under his own testimony. It has been testified to here by this plaintiff that hewent back to work about Christmas time of 1939, and it has been stipulated by counsel on the record, both of them, that he worked until September Í7, 1940, approximately nine months, he went back to work, and he did work, and he so testified himself, for nine months.
“Now this court is asked to do violence to the plain langu'age of this policy and say that, instead of that, he was continuously disabled.
££No; that is not common sense. It abrogates this contract. It makes an entirely different contract. And I know of no law or no theory of. law under which the court can change the contract, even though made by an insurance company, and having fully in mind and being fully aware of the rule that where there is a doubt, where there is ambiguity or uncertainty, the contract shall be construed against the insurer; but there is no ambiguity here, there is no room for construction of the contract. ’ ’
The question was before us in Letherer v. United States Health & Accident Insurance Co., 145 Mich. 310, and Brod v. Detroit Life Insurance Co., 253 Mich. 545. In the latter case, the policy provided that there must be proof that the plaintiff had become totally and permanently disabled. We held that there was no ambiguity in the policy, that it was not a straight disability contract, and that the disability, to be compensable, must be total and permanent. In the instant case, the language is still stronger for it provides that the injuries shall wholly and continuously disable the injured. The element of time must be marked by continuity. The continuity ceased when the injured went back to work for nine months.
Defendant’s answer relied entirely on the release signed by plaintiff. The trial in the circuit court resolved itself largely upon the fact that plaintiff 'did not show that he was continuously disabled. No question was raised in regard to the pleadings and it may not be raised for the first time in an appellate court.
A similar situation arose in Dolsen v. Phoenix Preferred Accident Insurance Company, 151 Mich. 228. The suit involved a policy of life insurance which contained a time limit for bringing suit. Although the period of time in which to bring suit had expired, this defense had been waived. The waiver was not set up in the pleadings blit' evidence proving that it had been given was admitted without objection. The court held that, although plaintiff was limited in his proof to his pleadings, the evidence in question was not objected to and no error could be assigned on appeal. In the instant case, defendant never pleaded breach of condition, but there was no objection to its evidence proving it or to its raising the issue, and even if we were willing to consider the objection now for the first time, it still remained incumbent upon plaintiff to show that he was entitled to the amount claimed under the policy. In his testimony it appeared that he was not wholly and continuously disabled in accordance with the terms of the policy. It did appear , that through a miscalculation, plaintiff was entitled to approximately $50 more than he had received in consideration for the release which amount was tendered to him at the trial. In affirming the judgment for defendant, it is without prejudice to plaintiff’s recovering the amount so tendered.
Judgment affirmed1, with costs to defendant.
North, C. J., and Starr, Wiest, Bushnell, Sharpe, Boyles, and Reid, JJ., concurred. | [
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Sharpe, J.
This is an appeal by Dora Finkelstein, doing business as Pure Food Dairy,' from a judgment of the court of claims of no cause of action for the recovery of certain sales tax moneys paid by her under protest.
Plaintiff, Dora Finkelstein, conducted a wholesale and retail grocery business in the city of Hamtramck. Under date of July 1, 1942, the department of revenue issued its notice of intention to make an assessment against plaintiff as provided in the general sales tax act, Act No. 167, § 22, Pub. Acts 1933 (Comp. Laws Supp. 1940, §3663-22, Stat. Ann. §7.543). On July 16, 1942, plaintiff filed a protest and demanded a hearing. On August 5, 1942, the department of revenue set August 25,1942, for such hearing. On August 19,1942, plaintiff requested an adjournment of the hearing which was granted and the time fixed as September 11, 1942. At the hearing, plaintiff contended that the department of revenue was without legal authority to issue an assessment by reason of the provisions of section 9 of the above act, as amended by Act No. 313, Pub. Acts 1939 (Comp. Laws Supp. 1940, §3663-9, Stat. Ann. 1944 Cum. Supp. §7.530). On January 25, 1943, the department of revenue notified plaintiff that it had1 determined that she was indebted to the department in the sum of $3,374.89 for deficiency sales tax covering a period from, on and after July 1, 1938, to and including June 30, 1939, together with interest, making a total indebtedness of $4,601.27.
On August 14, 1944, plaintiff filed a petition with the court of claims, by virtue of Act No. 122, § 9, Pub. Acts 1941 (Comp. Laws Supp. 1943, §3695-9, Stat. Ann. 1944 Cum. Supp. §7.657 [9]), wherein she states that the department of revenue levied an assessment against her in the total sum of $4,601.27; that, subsequently, an appeal was taken to the State board of tax appeals which affirmed the assessment; and that on July 28,1944, she paid the amount found due by the State board of tax appeals under protest. She alleges that the department of revenue was without authority to levy and collect such assessment ; that the amount of money so paid was not due and owing to the State of Michigan and could not have been legally collected by the department of revenue; that the department of revenue is not entitled to retain such money; and that she is entitled to recover said amount of money.
The circuit judge sitting as judge of the court of claims held that “notice of intent to make an assessment” is a conditional assessment and entered judgment in favor of defendant.
The principal question involved in this case is the right of defendant to levy the assessment on January 25,1943. In coming to our conclusions we shall assume that the taxpayer made an annual return as is provided for in the act.
It is urged by the defendant that the assessment of a deficiency in the sales tax account of the taxpayer was actually made on July 1, 1942, when the department gave the taxpayer notice of its intention to levy such deficiency; that the word “assessed” in section 9 of the general sales tax act, as amended by Act No. 313, Pub. Acts 1939, should be construed with all other sections of the act; that the word “assessed” in section 9 refers to the initial administrative determination or finding of the amount of a sales tax deficiency made by the department upon examination of a taxpayer’s returns; and that it is the legislative intent that the three-year prescriptive period in section 9 be tolled when the department first determines that a sales tax deficiency exists in the account of the taxpayer.
Section 9 of the general sales tax act, as amended,, provides in part as follows:
“No deficiency, interest or penalty shall be assessed for any year after the expiration of 3 years from the date set for filing of the annual return for such year.”
The time for filing the annual return as provided in section 7 of the act is “on or before thirty days after the end of the tax year.”
Under the above act the taxpayer must make a monthly return on or before the 15th of the month succeeding the month in which the tax accrued, showing the amount of the tax for which he is liable (section 6, as amended by Act No. 313, Pub. Acts 1939 [Comp. Laws Supp. 1940, §3663-6, Stat. Ann. 1944 Cum. Supp. § 7.527]); and make an annual return 30 days after the end of the tax year and1 pay such balance, if any, as may be due (section 7 [Comp. Laws Supp. 1940, § 3663-7, Stat. Ann. §7.528]).
Section 22 of the act providés that if the board after examining the return of the .taxpayer determines that he is indebted to the State by reason of deficiency of the remittance it shall give the taxpayer notice of the intention to levy such deficiency; however, the taxpayer under this section has a right to a hearing and may contest the claimed deficiency. Section 9 of the act provides that an assessment shall not be made after the expiration of three years from the date set for the filing of the annual return.
"We note that the quoted portion of section 9 is a statute of limitations.
In Bigelow v. Otis, 267 Mich. 409, we said:
“The applicable rule is that, as the cause of action is created by statute, the' statutory conditions, including the period of limitations, must be complied with. The limitation of time is a limitation on the right to recover.”
See, also, Summar v. Besser Manufacturing Co., 310 Mich. 347, and Metzen v. Department of Revenue, 310 Mich. 622.
In Sweetser v. Fox, 43 Utah, 40, 48 (134 Pac. 599, 47 L. R. A. [N. S.] 145, Ann. Cas. 1916 C, 620), the court said:
“It is a rule of universal application that a cause or right of action arises the moment an action may be maintained to enforce it and that the statute of limitations is then set in motion.”
In the case at bar, the taxpayer became liable for any delinquent tax as of July 30, 1939, but before she could be assessed for such tax all requirements of section 22 must be complied with. Under the act the defendant had three years in which to make an assessment for deficiency, interest or penalty. The assessment was not made within this three-year period. '
It is further urged that because the taxpayer demanded a hearing and later requested an adjournment, the running of the statute of limitations was lolled. We note that a notice of claim for deficiency and intention to levy an assessment was not sent to the taxpayer until July 1, 1942; that the taxpayer demanded a hearing on July 16, 1942, which was her privilege under section 22, and requested an adjournment of the hearing set for August 25,1942, on August 19, 1942. In our opinion, such demand for a hearing and request for an adjournment did not toll the limitation provisions of section 9. See Dahrooge v. Rochester German Insurance Co., 177 Mich. 442 (48 L. R. A. [N. S.] 506).
We conclude that under section 9 of the act, the department of revenue was barred from making the assessment subsequent to July 30, 1942. The judgment is reversed and the cause remanded to the court of claims for entry of judgment in favor of plaintiff in the sum of $4,601.27 and interest from July 28, 1944. Plaintiff may recover costs.
Starr, 0. J., and North, Butzel, Bushnell, Boyles, and Reid, JJ., concurred. The late Justice Wiest took no part in the decision of this case. | [
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Boyles, J.
The principal question here involved is whether plaintiffs are liable for a use tax under Act No. 94, Pub. Acts 1937 (Comp. Laws Supp. 1940, § 3663-41 et seq., Stat. Ann. 1944 Cum. Supp. § 7.555 [1] et seq.). A second issue questions the right of the State to claim a penalty for nonpayment. The facts are not in dispute.
Plaintiff Western Electric Company, Inc., is a New York corporation organized and existing under the laws of that State, continuously authorized to do business in Michigan beginning in June, 1916. It is licensed under the Michigan sales tax act and registered under the use tax act. Its manufacturing operations are conducted in Illinois, New Jersey, and Maryland, and it has warehouses located in several States including Michigan. Its principal place of business in Michigan is in Detroit. Plaintiff Michigan Bell Telephone Company is a Michigan corporation organized and existing under Act No. 129, Pub. Acts 1883, of this State. It was so organized in 1904 by original articles of association under the name Michigan State Telephone Company, and has ever since continued as such corporation, its name having been changed by amendment to Michigan Bell Telephone Company.
Defendant Louis M. Nims, State commissioner of revenue, on March 18, 1942, un'der the authority of the use tax act, supra, levied a use tax against plaintiff Western Electric Company in respect of tangible personal property coming into this State from time to time from August 1, 1938, to June 30, 1941, in interstate commerce, for plaintiff Michigan Bell Telephone Company as the user or consumer. Western Electric Company appealed from said levy to the State board of tax appeals constituted under Act No. 122, Pub. Acts 1941 (Comp. Laws Supp. 1942, §§ 3695-1 — 3695-19, Stat. Anm 1942 Cum. Supp. §§7.657 [1] — 7.657 [19]), which board heard the appeal and upheld the levy. Within the time for payment provided by law plaintiff Western Electric Company paid to the State under protest $557,975.58 as determined by said board, of which $446,402.55 was tax and $111,573.03 was penalty, and then filed the instant claim in the court of claims to recover the sums so paid. The attorney general, appearing for the defendants, moved to dismiss the case and the Michigan Bell Telephone Company petitioned the- court of claims for leave to intervene as a party plaintiff, on the ground that the liability, if any, imposed by the use tax act was against it as the consumer and that the Western Electric Company was made liable under the act only as the collecting agent ydth ultimate liability, if any, against the consumer Michigan Bell Telephone Company. The court denied the attorney general’s motion to dismiss and granted the telephone company leave to intervene. It is conceded that if the telephone company is not liable for the tax, then the Western Electric Company would not be liable and would be entitled to recover the tax paid under protest. In the case before us no issue is presented as between the two plaintiffs as to which one may be held liable if the tax is upheld. Likewise there is no issue as to the amount of the levy or of the penalty.
Judge Charles LI. Hayden of the Ingham circuit court, presiding in the court of claims, held that plaintiffs were liable for the tax but not for the penalty and entered judgment accordingly. Plaintiffs appeal from that part of the judgment denying recovery, of the principal tax paid under protest, and defendants cross-appeal from that part of the judgment allowing recovery by plaintiffs of the amount of the penalty paid.
"While stated by counsel in more extended language, the first question for.decision is whether the Michigan Bell Telephone Company is liable for a use tax. This involves the construction of article 10, § 1, of the Michigan Constitution (1908), and its application to the Michigan Bell Telephone Company. Said section states:
“All subjects of taxation now contributing to the primary school interest fund under, present laws shall continue to contribute to that fund, and all taxes from such subjects shall be first applied in paying the interest upon the primary school, university and other educational funds in the order herein named, after which the surplus of such moneys shall be added to and become a part of the primary school interest fund.”
Major emphasis is placed by plaintiffs on the following italicized words:
“All subjects of taxation now contributing to the primary school interest fund under present laws shall continue to contribute to that fund, and all taxes from such subjects shall be first applied in paying the interest upon the primary school * * * funds.”
Plaintiffs claim that the telephone company was a “subject of taxation” contributing to the primary school interest fund when the 1908 Constitution' was adopted, that the use tax is in the same category as the taxes it was then paying, and that the telephone company cannot be compelled to pay the use tax inasmuch as the use tax act' puts this tax money into the State general fund instead of into the pri mary school -interest fund. The attorney general meets the issue squarely by insisting that “subjects taxation” means the underlying principle on which the tax is levied, not merely the corporation taxpayer who is subjected to the tax; and that use tax is not the same “subject of taxation” the one on which the telephone company was paying a tax when the 1908 Constitution was adopted. The attorney general particularly emphasizes that section 1 of article 10 definitely refers to subjects of taxation now contributing to the primary school interest fund “under present laws” — i.e., at the time the Constitution was adopted, or at least at the time when it became effective January 1, 1909; and on that point claims that the Michigan Bell Telephone Company was not contributing to the primary school interest fund “under present laws”- as they stood when the Constitution of 1908 was adopted or came into effect. As will be pointed out later, counsel for plaintiffs seem to agree with the attorney general that taxes from any new or different “subject of taxation” legislated into effect since 1908 could be put to other uses than the primary school interest fund — e.g., the State general fund, without clashing instanter with article 10, § 1.
At the outset, we are of the opinion that “subjects of taxation” as used in section 1 of article 10 of the 1908 Constitution means something more than the corporation, public utility or individual taxpayer who may be made liable by legislative enactment for a tax. It connotes a deeper significance, the underlying principle on which the tax is designed and imposed.
This brings us to a consideration of the first essential question which must be settled, namely, what were the taxes which were then being contributed to the primary school interest fund by the telephone company.
When the Constitution of 1908 came into effect the Bell Telephone Company was paying a specific tax on its property and business under the provisions of Act No. 179, Pub. Acts 1899, computed upon the gross receipts derived from its business within this State. While this act did not expressly provide for payment of such taxes into the primary school interest fund, this act was in effect in 1900 when the amendment to section 10 of article 14 of the Constitution of 1850 was adopted (see p. 404, Pub. Acts 1901). This amendment provided that all taxes thereafter levied on the property of such classes of corporations as were then paying specific taxes under laws then in force should be applied to the primary school interest fund and the State debt until extinguished. This amendment to the Constitution being self-executing, thereafter the taxes paid by the telephone company were necessarily put into the primary school interest fund. This amendment further states that the legislature might provide for the assessment of the property of corporations its true cash value by a State board of assessors, well as to provide for the collection of specific taxes from corporations; and that all such taxes were to go into the primary school interest fund. However, no such legislation was enacted imposing ad valorem tax on telephone companies {i.e., the Michigan Bell Telephone Company) until after the Constitution of 1908 was adopted, and Act No. 179, Pub. Acts 1899, continued to govern the imposition specific taxes on telephone companies at the time Constitution of 1908 became effective. It is significant that article 10, § 5, of the Michigan Constitution (1908) expressly authorizes the legislature to provide for the assessment of the property of telephone companies (among other corporations) at its true cash value; and article 10, §4, expressly authorizes the legislature to impose specific taxes; but neither section 4 nor section 5 expressly provides that the proceeds of such taxes, whether specific or property taxes, shall be placed in the primary school interest fund. We find such requirement only in article 10, § 1, and particularly note it provides that “all subjects of taxation now contributing to the. primary school interest fund under present laws shall continue to contribute to that fund.” It was not until some months after the Constitution of 1908 became effective that the legislature enacted a law to include telephone companies among those corporations subject to assessment of property on an ad valorem basis (Act No. 49, Pub. Acts 1909, amending Act No. 282, Pub. Acts 1905). Beginning with Act No. 49, Pub. Acts 1909, effective in September, 1909', and continuously since that time, the Michigan Bell Telephone Company has been subject to an ad valorem tax and has been taxed under the provisions of that act. Beginning in September, 1909, section 14 of said act (1 Comp. Laws 1929, § 3565 [Stat. Ann. § 7.264]) became applicable to the Michigan Bell Telephone Company and still does so apply. It was not applicable to the Michigan Bell Telephone Company in 1908 when the Constitution of 1908 was adopted.
Thus, beginning in 1909 after the Michigan Constitution of 1908 became effective, the telephone' company has been assessed by the State board of assessors, and has continuously paid a tax on an ad valorem basis, under Act No. 282, Pub. Acts 1905, as amended by Act No. 49', Pub. Acts 1909. Under section 17 of Act No. 282, Pub. Acts 1905 (1 Comp. Laws 1929, § 3568 [Stat. Ann. §7.267]), to which tlie 1909 act was amendatory (said section 17 remaining unchanged by the 1909 act), this tax shall be applied to the primary school interest fund. Admittedly the Michigan Bell Telephone Company has been paying taxes under this act since 1909 and these taxes have been applied to the primary school interest fund.
Section 14 of Act No. 282, Pub. Acts 1905, as amended by Act No. 49, Pub. Acts 1909, provides that this (ad valorem) tax “shall be in lieu of all taxes for State and local purposes.” Section 21 of the use tax act provides that “all moneys # # * collected under * * * this act shall be deposited * * * in the State treasury to the credit of the general fund.” Plaintiffs at first claimed that the telephone company could not be legally subjected to any tax levied for the purposes of the general fund of the State. It is true that Act No. 282, § 14, Pub. Acts 1905, as amended by Act No. 49, Pub. Acts 1909, provides that the taxes levied thereunder “shall be in lieu of all taxes for State and local purposes.” It is also true that the use tax act provides that all moneys collected under the provisions of the act shall be deposited in the State treasury to the credit of the general fund. Act No. 94, § 21, Pub. Acts 1937 (Comp. Laws Supp. 1940, § 3663-61, Stat. Ann. 1944 Cum. Supp. § 7.555 [21]). Obviously the use tax is thus made available “for State and local purposes.” However, counsel for plaintiffs recognize and apparently concede that the use tax act is later in point of time than Act No. 49, Pub. Acts 1909', the legislature in enacting later use tax act could provide for an additional tax, by subsequent enactment, to be used for State and local purposes. Counsel for plaintiffs do not now rely on this question and further concede that Federal question is presented under the Consti tution or statutes of the United States, and that no question of double taxation is involved in the case1.
Under Act No. 179, Pub. Acts 1899, the tax which the telephone company was paying into the primary school interest fund when article 10, § 1, of the Constitution (1908) became effective, was computed (according’ to the act) upon the basis of gross receipts, but the tax was declared by the statute to be a tax upon the property and business. Obviously this was a “subject of taxation contributing to the primary school interest fund,” under article 10, § 1, of the 1908 Constitution. Since article 10, § 1, came into effect, the telephone company still contributes to the primary school interest fund by virtue of Act No. 282, Pub. Act's 1905, and the amendment of that act by Act No. 49, Pub. Acts 1909, placing telephone companies under that act. These two acts provide for assessment of the property of telephone companies on an ad valorem basis and provide that all taxes collected shall be applied to paying the interest on educational funds, payment of the State debt, and the primary school interest fund. As hereinbefore stated, on January 1, 1909, the telephone company was still contributing to the primary school interest fund under and by virtue of Act No. 179,'Pub. Acts 1899. Act No. 282, Pub. Acts 1905, provided for the taxing of the property of certain corporations on an ad valorem basis, but telephone companies were not included in its application. The first time that the property of telephone companies was taxed on an ad valorem basis was, as hereinbefore stated, in 1909, under Act No. 49, Pub. Acts 1909, subsequent to the effective date of the 1908 Constitution. It is essential that this be pointed out, to emphasize the conclusion that 'the Michigan Bell Telephone Company was not taxed on an ad valorem property basis when the 1908 Constitution came into effect. "We agree with, counsel that the question here presented is governed by the provisions of Act No. 179', Pub. Acts 1899, the provisions of the use tax act (Act No. 94, Pub. Acts 1937, supra), and the application of section 1 of article 10 of the 1908 Constitution when considered in connection with those two acts. Subsequent changes after the 1908 Constitution came into effect do not control the question before us.
Thus the narrow question is whether the use tax is one of the same “subjects of taxation” that were contributing to the primary school interest fund pursuant to Act No. 179, Pub. Acts 1899, when the Constitution of 1908 became effective. That act plainly purports to provide for the assessment and levy of taxes upon the property 'and business of express companies, telephone companies and telegraph companies, and no others. Under its provisions telephone companies were required to furnish the auditor general an annual statement under oath, showing among other things the number of miles owned, operated or leased;’ total number of telephone stations and telephone instruments used therein; average number of telephone poles per mile; the number of poles and miles of wire used for each telephone exchange or line; and the amount of the gross receipts for the current year. Section 5 of the act requires every telephone company owning, operating or transacting a telephone business in this State to “pay to the State treasurer on the statement of the auditor general a specific tax upon the property and business of such * * * telephone company, * * * which tax shall be equal to an amount to be computed in the following manner; * * * upon the gross receipts of such telephone company derived from business within this State for the year included in the report provided for in section two of this act, three per cent, of such gross receipts.”
We are impelled to the conclusion that this was a tax on property, although it was not an ad valorem tax hut was computed on the gross receipts, taking into consideration the value and extent of both the property and the business of the telephone company.
To determine whether the foregoing tax was in the same category as the use tax, within the meaning of article 10, § 1, of the 1908 Constitution, requires an analysis of the use tax act and a comparison of the two “subjects of taxation.” The use tax act (Act No. 94, § 3, Pub. Acts 1937 [Comp. Laws Supp. 1940, § 3663 — 43, Stat. Ann. 1944 Cum. Supp. § 7.555 (3)]) provides:
“There is hereby levied upon and there shall be collected from every person in this State a specific tax for the privilege of using, storing or consuming tangible personal property in this State after June thirty, nineteen hundred thirty-seven, which tax shall be equal to three per cent, of the price of such property. For the purpose of the proper administration of this act and to prevent the evasion of the tax hereby levied, it shall be presumed that tangible personal property purchased on or after June thirty, nineteen hundred thirty-seven by any person for delivery in this State is purchased for storage, use or other consumption in this State. ’ ’
Counsel for plaintiffs argue that the tax paid by the telephone company and the use tax provided for in the above act are the same “subjects of taxátion” —-that if the one is a property tax, the other is likewise. The law has been definitely settled in this State that the so-called use tax under Act No. 94, Pub. Acts 1937, is not a property tax. It is an ex cise or privilege tax. Banner Laundering Co. v. State Board of Tax Administration, 297 Mich. 419. That being the settled law of this State, is this use tax, which is imposed “for the privilege of using, storing or consuming tangible personal property in this State,” one of the “subjects of taxation” which was contributing to the primary school interest fund when article 10, § 1, of the Michigan Constitution (1908) became effective on January 1, 1909?
The essential elements of the use tax and the underlying principles of taxation on which it is based distinguish it from the tax imposed by Act No. 179, Pub. Acts 1899. The use tax was enacted for the purpose of levying and collecting a specific tax for the privilege of using, storing or consuming tangible personal property. Goebel Brewing Co. v. State Board of Tax Administration, 306 Mich. 222. It is complementary to the sales tax (Act No. 167, Pub. Acts 1933, as amended [Comp. Laws Supp. 1940, § 3663-1 et seq., Stat. Ann. §7.521 et seg.]). Property, the sale of which is subjected to the sales tax, is exempted from payment of the use tax (Act No. 94, § 4, Pub. Acts 1937 [Comp. Laws Supp. 1940, § 3663-44, Stat. Ann. 1944 Cum. Supp. § 7.555 (4)]). This act is designed to impose an excise tax on the use, storage or consumption of tangible personal property brought into the State in interstate commerce, after it has come to rest in this State. Banner Laundering Co. v. State Board of Tax Administration, supra.
The tax here paid under protest which plaintiffs seek to recover was not imposed on the sales of tangible personal property made by Western Electric Company to Michigan Bell Telephone Company; if it were, plaintiffs would have been liable for the sales tax and this case would not have arisen. Neither was it imposed on the property and business of the telephone company, as was the situation under Act No. 179, Pub. Acts 1899. From an analysis of the distinction between the two acts under consideration, i. e., Act No. 179, Pub. Acts 1899, which imposes a tax on the- “property and business” of the telephone company, and the use tax act which imposes a tax on the privilege of using, storing or consuming tangible personal property coming into this State, after it comes to rest, we conclude that the taxes imposed by these two acts are not on the same “subjects of taxation” referred to in article 10, § 1, of the State Constitution of 1908.
We refer briefly to cases relied on by counsel for plaintiffs. Article 10, § 1, of the 1908 Constitution was considered by the court in Jasnowski v. Board of Assessors of the City of Detroit, 191 Mich. 287. The 1915 legislature, in enacting the motor vehicle law (Act No. 302, Pub. Acts 1915) required all owners of motor vehicles to register the same .annually and pay a tax based on the horsepower of the vehicle. It was provided (section 7) that such taxes ‘ ‘ shall be all the lawful tax collectible on such motor vehicle and shall exempt such motor vehicle from all other forms of taxation.” Vehicles owned by corporations which were contributing to the primary school interest fund were not expressly exempted from the provisions of the act. The prosecuting attorney of Wayne county sought mandamus to compel the board of assessors of Wayne county to assess an ad valorem personal property tax on motor vehicles in the city of Detroit, claiming that the motor vehicle act ivas unconstitutional for vari oils reasons, among them because it provided that the money should be devoted to highway purposes, whereas certain corporations which were contributing to the primary school interest fund when this constitutional provision became effective in 1909 were then owners of motor vehicles that were taken into consideration by the assessors in determining the value of the corporate property for the purpose of taxation, and hence contributed to the said fund. Jasnowski v. Board of Assessors of the City of Detroit, supra. The court held the act to be constitutional as against all objections, and by way of dictum said that such motor vehicles were not subject to the act. Parties essential to such a determination were not before the court and the case was mainly decided on other grounds. In the case before us, plaintiffs concede that taxes from any new or different subject of taxation may by legislation be put to uses other than the primary school interest fund. The Jasnowski Case does not control the issue now before us.
Both plaintiffs and defendants rely on Union Steam Pump Sales Co. v. Secretary of State, 216 Mich. 261. In that case Act No. 85, Pub. Acts 1921 (2 Comp. Laws 1929, § 10136 et seq. [Stat. Ann. §21.201 et seq.]), imposed an annual franchise fee upon corporations. The question of the validity of this provision of the statute came before this court in the above case and the same arguments were used against the validity of that tax that are here used by the plaintiffs. In that case the court construed the provisions of the Constitution here in question, and held that the annual franchise fee imposed by the corporation act of 1921 is a tax which the legislature could impose and require to be credited to the general fund.
Plaintiffs concede that:
“The use tax could course purposes of th.e primary school fund if the legisthought it expedient. * * * Plaintiffs endeavored to be both explicit and emphatic no exemption from taxation is claimed or involved. Plaintiff telephone company is subject to kind of tax the legislature may see fit to pro-The only limitation is article 10, § 1, of the Constitution that any tax whatsoever the kind and manner of levy must be levied for the primary school interest fund and for no other purpose.”
It is difficult to follow plaintiffs’ logic that the State could constitutionally exact the tax if it were to be put into the primary school interest fund but could not legally put the use tax, and when collected, into the general State fund.' Plaintiffs argue:
“The people having by the Constitution impounded the telephone company’s tax-paying ability for that sole purpose — education being one the highest functions of government.”
Such an argument must be based on the assumption that “subjects of taxation” in article 10, §1, means the taxpayer who is made the subject of the tax, which theory we reject. Nor do we subscribe to the theory that any major importance can now be attached to the claim that the primary school interest fund may be seriously affected by placing the telephone company’s use tax into the general fund of the State instead of into the primary school interest fund. We take judicial notice of the acts of recent legislatures appropriating substantial sums of money out of the State general fund to supple ment the sums contributed to education by the primary school interest fund.
In so far as objections have been raised by plaintiffs we conclude that the Michigan Bell Telephone Company, and therefore the Western Electric Company, were legally liable to the State for the use tax assessed by the department of revenue. The judgment of the court of claims of no canse for action denying plaintiffs the recovery of the tax is affirmed. We have yet to consider plaintiffs’ claim for a return of the penalty.
Defendants cross-appeal from that part of the judgment which allows Western Electric Company to recover the money paid by it for penalty, $111,573.03. The statute (Act No. 94, §11, Pub. Acts 1937 [Comp. Laws Supp. 1940, § 3663-51, Stat. Ann. 1944 Cum. Supp. §7.555 (11)]) under which the department of revenue assessed this penalty is as follows:
“Any amount assessed by the board under the provisions of either of the two preceding sections, together with a penalty of twenty-five per cent, thereof, shall be due and payable from the person against whom the assessment has been made to the board fifteen days after the service upon such person of notice of such assessment. Unless the person to whom such notice of assessment is directed shall within fifteen days after service thereof file a petition in writing, verified under oath by said person, or his duly authorized agent, having knowledge of the facts, setting forth with definiteness and particularity the items of said assessment objected to, together with the reason for such objections, said assessment shall become and be deemed conclusive and the amount thereof shall be due and payable from the person so assessed to the board. In every case where a petition for reassessment as above described shall be filed, tbe board shall assign a time and place for the hearing thereof and shall notify the petitioner thereof by registered mail, but the board shall have the power to continue the hearing from time to time as may be necessary. ’ ’
The “two preceding sections” above referred to make the seller who fails to collect the tax personally liable therefor (section 9); and also make any person who neglects or refuses to make a return liable for an assessment (section 10). The only reference in the act to the assessment of a penalty for nonpayment of the tax is in the above-quoted section 11.
The language of section 11 is plain and capable of only one construction. It expressly declares that both the amount of the assessment, and a penalty of 25 per cent, thereof, shall be due and payable to the board 15 days after service of notice of the assessment. However, the fact that both the assessment and the penalty are “due and payable” does not close the door against a subsequent inquiry into the right to assess, the amount of the assessment, or the amount of the penalty (which obviously depends on the amount of the assessment). The second sentence of section 11 provides that unless the person assessed files a petition for reassessment within 15 days after receiving notice of the assessment, with reasons for objection, such assessment shall be deemed conclusive. We do not read into section 11 any legislative intent to exclude any other appropriate remedy by means of which the validity of an assessment (and a fortiori the penalty) may be challenged by one who has been declared liable for the assessment and penalty by the department of revenue. In the case at bar, plaintiff Western Electric Company paid both the assessment and the penalty under protest and filed a petition in tlie conrt of claims to recover both, denying liability m toto. The attorney general does not here question the jurisdiction of the court of claims to hear and decide the issue, and the statute so provides.
"We agree that if the assessment is held invalid, or to the extent that it may be held invalid, the validity or the amount of the penalty will depend upon the ultimate fate of the assessment itself.- As stated in plaintiffs’ brief:
“If on review the assessment of the tax is held not good then the penalty falls with the assessment. ’ ’
However, as we interpret section 11, it does not follow that the taxpayer in this case — "Western Electric Company — is denied due process of law and equal protection guaranteed by the Constitution, when required to pay the tax (under protest) before it may file claim for recovery thereof in the conrt of claims (see Act No. 122, § 9, Pnb. Acts 1941 [Comp. Laws Snpp. 1943, § 3695-9, Stat. Ann. 1944 Cnm. Snpp. § 7.657 (91)]). Plaintiffs’ day in conrt is still .available on this appeal which is to settle the question of the validity of the tax, and of plaintiffs’ right to a return of the tax and the penalty.
Nor do we agree that the relative size of the penalty (25. per cent, of the assessment) renders it objectionable on constitutional grounds, in view of other provisions of the act, the nature of the tax, and the difficulties attendant on its levy and collection. ■
Apparently counsel for both parties on this appeal agree that the assessment of the tax and the imposition of the penalty are not final until there has been a judicial determination. In addition to the remedy provided by section 11 of the use tax act, supra, for a review of the assessment, the taxpayer “may pnrsne any appropriate procedure provided by law for the judicial review of the issues involved,” or have an appeal to the State board of tax appeals (Act No. 122, § 7, Pub. Acts 1941 [Comp. Laws Supp. 1943, § 3695-7, Stat. Ann. 1944 Cum. Supp. § 7.657 (7)]); the taxpayer may pay the tax under protest and file claim for recovery in the State court of claims (Act No. 122, § 9, Pub. Acts 1941 [Comp. Laws Supp. 1943, § 3695-9, Stat. Ann. 1944 Cum. Supp. §7.657 (9)]) as was done in the case at bar; or the taxpayer may file a hill in chancery for a declaratory decree as to its rights (Banner Laundering Co. v. State Board of Tax Administration, supra; R. C. Mahon Co. v. Department of Revenue, 306 Mich. 660).
At least on this point counsel for both parties agree in their respective briefs, that in any event “if the use tax be pronounced invalid when applied to the plaintiffs, the telephone company will recapture the penalty as well as the principal amount of tax paid.”
We conclude that the converse is equally true— having held that the assessment is valid, we find no adequate ground for a contrary view as to the penalty.
The judgment of the court of claims is set aside in so far as it allows plaintiffs a recovery of the penalty paid by Western Electric Company, and the case remanded to the court of claims for entry of judgment of no cause for action. In view of the public character of the issues involved, no costs shall he taxed.
Starr, C. J., and North, Butzel, Bushnell, and Sharpe, JJ., concurred with Boyles, J.
See I Comp. Laws 1929, § 3552 et seq. (Stat. Ann. § 7.251 et seq.).—Bepoeteb,
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Murray, P.J.
Defendant appeals as of right the trial court’s judgment of divorce entered after a partial settlement and subsequent arbitration award on the division of marital property. On appeal, defendant challenges the trial court’s denial of her motion to set aside, vacate, or modify the arbitration ruling as being inconsistent with Michigan law. For the following reasons, we affirm.
I. FACTS AND PROCEEDINGS
On August 18, 2004, and after a marriage of approximately 14 years, plaintiff filed a complaint to obtain a divorce from defendant. Less than four months later, the parties reached a partial settlement through mediation. The settlement resolved issues of custody, parenting time, spousal support, and the sale of the marital home. According to the written settlement agreement, plaintiff was ordered to pay defendant $33,500 a year, for four years, in non-modifiable spousal support. Further, the parties agreed to joint custody over the children, with plaintiff paying $2,897 a month in child support.
At the same time, the parties entered into an arbitration agreement to resolve the division of property, debts, and any unresolved issues flowing from the settlement agreement. The parties selected the arbitrator and eventually proceeded to an arbitration hearing. On December 19, 2006, the arbitrator submitted his arbitration ruling. The arbitrator determined that the fair market value of plaintiffs dental practice was $165,000. He also determined that because plaintiff would be paying spousal and child support out of the earnings that made up a portion of the fair market value of the business, dividing the business at full value would constitute “double-dipping” into plaintiffs future earnings. As a result, the arbitrator valued the practice, for the purposes of the division of property, at $99,000 and awarded the practice to plaintiff.
Next, the arbitrator determined that the property on which the practice was located should also be valued using a fair market value approach, a fact agreed to by both real estate experts. After a discussion of a separate offer to purchase the building and the complicating consequences from the offer, the arbitrator valued the property at $123,000 (the fair market value offered by defendant’s expert), minus the $47,000 outstanding mortgage balance, and awarded it to plaintiff.
The arbitrator also awarded defendant one car worth $14,000 and plaintiff two cars worth $31,000 and $12,000, respectively. The amount receivable from plaintiffs loan to his sister was awarded to plaintiff. The economic damages ($50,000) flowing from defendant’s personal injury settlement were considered marital property subject to division, while the noneconomic damages ($212,500) were considered defendant’s separate property. Further, a play structure and furniture for the children, worth $13,600, were awarded to defendant. All other bank accounts were divided evenly. Plaintiff retained $18,000 in credit card debt and defendant retained $61,000 in credit card debt.
The arbitrator stated that the total value of assets awarded to defendant was $177,428 less than that awarded to plaintiff, but that this division of property was equitable for two reasons. First, he determined that $80,555 of the home improvement expenses made by defendant using the home equity line of credit was “less than necessary and beyond that which the parties could afford.” As such, he concluded that these expenses were defendant’s “separate responsibility” and that the remainder of the expenses were “joint in nature.” Second, he concluded that, with respect to defendant’s personal injury settlement “a portion of [defendant’s] separate property shall be taken into consideration in the overall award.” The arbitrator opined that, taking these issues into consideration, the division of property was equitable, even if it was not equal.
Defendant then filed with the trial court a motion to set aside, vacate, or modify the arbitration award. Defendant argued that the arbitrator exceeded his powers and showed partiality against her and that the award was issued beyond the time limits afforded by statute. After a hearing, the court ruled that there was no basis under MCL 600.5081 to set aside the award, and it denied the motion. The trial court therefore entered a judgment of divorce that included the division of property determined by arbitration.
II. ANALYSIS
This Court reviews de novo a trial court’s ruling on a motion to vacate or modify an arbitration award. Tokar v Albery, 258 Mich App 350, 352; 671 NW2d 139 (2003). This means that we review the legal issues presented without extending any deference to the trial court. In re Contempt of Auto Club Ins Ass’n, 243 Mich App 697, 714 n 33; 624 NW2d 443 (2000).
Judicial review of arbitration awards is usually extremely limited, Konal v Forlini, 235 Mich App 69, 74; 596 NW2d 630 (1999), and that certainly is the case with respect to domestic relations arbitration awards. Through MCL 600.5081(2), the Michigan Legislature has provided four very limited circumstances under which a reviewing court may vacate a domestic relations arbitration award:
(a) The award was procured by corruption, fraud, or other undue means.
(b) There was evident partiality by an arbitrator appointed as a neutral, corruption of an arbitrator, or misconduct prejudicing a party’s rights.
(c) The arbitrator exceeded his or her powers.
(d) The arbitrator refused to postpone the hearing on a showing of sufficient cause, refused to hear evidence ma terial to the controversy, or otherwise conducted the hearing to prejudice substantially a party’s rights.
MCL 600.5081(2)(c), “the arbitrator exceeded his or her powers” provision, is the codification of a phrase used for many years in common-law and statutory arbitrations. Indeed, our Court has repeatedly stated that “arbitrators have exceeded their powers whenever they act beyond the material terms of the contract from which they primarily draw their authority, or in contravention of controlling principles of law.” Dohanyos v Detrex Corp (After Remand), 217 Mich App 171, 176; 550 NW2d 608 (1996); see also Miller v Miller, 474 Mich 27, 30; 707 NW2d 341 (2005), and Krist v Krist, 246 Mich App 59, 62; 631 NW2d 53 (2001). Pursuant to MCL 600.5081(2)(c), then, a party seeking to prove that a domestic relations arbitrator exceeded his or her authority must show that the arbitrator either (1) acted beyond the material terms of the arbitration agreement or (2) acted contrary to controlling law.
Whether an arbitrator exceeded his or her authority is also reviewed de novo. Miller, supra at 30. A reviewing court may not review the arbitrator’s findings of fact, Detroit Automobile Inter-Ins Exch v Gavin, 416 Mich 407, 429; 331 NW2d 418 (1982); Krist, supra at 67, and any error of law must be discernible on the face of the award itself, Gavin, supra at 428-429. By “on its face” we mean that only a legal error “that is evident without scrutiny of intermediate mental indicia,” id. at 429, will suffice to overturn an arbitration award. Courts will not engage in a review of an “arbitrator’s ‘mental path leading to [the] award.’ ” Krist, supra at 67, quoting Gavin, supra at 429. Finally, in order to vacate an arbitration award, any error of law must be “so substantial that, but for the error, the award would have been substantially different.” Collins v Blue Cross Blue Shield of Michigan, 228 Mich App 560, 567; 579 NW2d 435 (1998), citing Gordon Sel-Way v Spence Bros, Inc, 438 Mich 488, 497; 475 NW2d 704 (1991).
Defendant’s primary argument is that the arbitration award was facially inequitable — and therefore contrary to Michigan law and the arbitration agreement — because she received one-quarter of the marital assets and three-quarters of the marital debts. Whether this division of property is in contravention of Michigan divorce law requires us to review the controlling principles governing property distribution upon divorce. The goal behind dividing marital property is to reach an equitable distribution in light of all the circumstances. Berger v Berger, 277 Mich App 700, 716-717; 747 NW2d 336 (2008). However, an equitable distribution need not be an equal distribution, as long as there is an adequate explanation for the chosen distribution. Id. at 717, citing McNamara v Horner, 249 Mich App 177, 188; 642 NW2d 385 (2002), and Gates v Gates, 256 Mich App 420, 423; 664 NW2d 231 (2003). See also Ackerman v Ackerman, 163 Mich App 796, 807; 414 NW2d 919 (1987) (A property award “need not be equal, it need only be equitable.”). As a result, an unequal division in the range of 70 percent to 30 percent is not contrary to Michigan law as long as it is based on appropriate criteria. Berger, supra at 718-722. And, as a corollary to that, there is no Michigan statute or caselaw that precludes outright a substantial deviation from numerical equality in a property distribution award.
Assuming defendant’s arithmetic is correct, there is no basis on the face of the award to conclude that the arbitrator’s award was in contravention of controlling law. The arbitrator recognized the foregoing principles of Michigan divorce law and applied that law to the facts as he found them. Once we are satisfied that the arbitrator applied the controlling law, our review is complete absent some error appearing on the face of the award. But here no such error exists. Indeed, the opinion and award reveals that the arbitrator addressed the unequal award by stating that “[defendant] dissipated assets both through credit card spending and the use of the home equity, at an unreasonable rate, and well beyond that at which [plaintiff] dissipated assets.” He concluded that it was difficult to determine the exact amount of defendant’s unreasonable spending, but that it was “well in excess of $100,000” and that the award, therefore, was equitable. Again, whether that factual conclusion was correct is outside our review. But, because Michigan law permits deviations beyond a purely even distribution, the arbitrator did not exceed his authority. Gavin, supra at 429; Krist, supra at 67. Additionally, once we have recognized that the arbitrator utilized controlling law, we cannot review the legal soundness of the arbitrator’s application of Michigan law. Krist, supra at 67.
Thus, although defendant argues that the arbitrator erred by considering in the division of marital property part of the noneconomic damages obtained from her personal injury settlement received during the pendency of the divorce, we are only concerned with whether the arbitrator recognized the controlling law. Here, while noneconomic damages are ordinarily considered separate property, they are available for distribution as a marital asset in order to ensure an equitable distribution of property. Stoudemire v Stoudemire, 248 Mich App 325, 339; 639 NW2d 274 (2001).
In conclusion, there is nothing on the face of the arbitrator’s award that evinces an error of law. The arbitrator explicitly considered the parties’ arguments and evidence, and based his decision on the controlling legal factors pertaining to the equitable division of property. Because a reviewing court is limited to examining the face of an arbitration ruling, there is no basis for concluding that the arbitrator exceeded his authority in issuing this particular award. Gavin, supra at 429; Krist, supra at 67.
Defendant also argues that the arbitrator erred in his valuations of most of the parties’ assets. While defendant argues that the arbitrator’s mistakes render the award facially inequitable, we are mindful that
an allegation that the arbitrators have exceeded their powers must be carefully evaluated in order to assure that this claim is not used as a ruse to induce the court to review the merits of the arbitrator’s decision. Stated otherwise, courts may not substitute their judgment for that of the arbitrators and hence are reluctant to vacate or modify an award .... [Gordon Sel-Way, supra at 497.]
The trial court was not required or authorized to review the arbitrator’s findings of fact, and neither is this Court. It is simply outside the province of the courts to engage in a fact-intensive review of how an arbitrator calculated values, and whether the evidence he relied on was the most reliable or credible evidence presented. Krist, supra at 67-68.
In the same vein, defendant argues that the arbitrator misapplied the factor of fault in the property award. For example, defendant argues that the arbitrator put too much weight on her own conduct and not enough on plaintiffs conduct. Although the arbitrator concluded that defendant’s reckless spending justified in part an unequal property division, fault is clearly a proper factor to consider in the division of marital property. McDougal v McDougal, 451 Mich 80, 89; 545 NW2d 357 (1996); Berger, supra at 717. This is particularly true in a case like this where, unlike in Berger, the fault was directly related to the parties’ assets and debts. In making this argument, defendant also resorts to rearguing the substantive factual questions already put before and decided by the arbitrator, and a court is the wrong forum for that. Hence, because of the limited standard of review, we reject defendant’s numerous attacks on the arbitrator’s valuations, calculations, and similar factual findings.
Plaintiff may tax costs as prevailing party. MCR 7.219(A).
Affirmed.
Our recitation of the facts is more detailed than necessary to resolve the issues presented. Nonetheless, we have provided this detail to give context to the case and our decision.
The parties also simultaneously signed an “Acknowledgment of Domestic Relations Arbitration Information,” seeking to comply with MCL 600.5072(1).
The arbitrator had previously submitted a ruling on personal property issues, and that ruling is not a subject of this appeal.
Indeed, as the United States Court of Appeals for the Sixth Circuit declared, “[a] court’s review of an arbitration award ‘is one of the narrowest standards of judicial review in all of American jurisprudence.’ ” Way Bakery v Truck Drivers Local No 164, 363 F3d 590, 593 (CA 6, 2004), quoting Tennessee Valley Auth v Tennessee Valley Trades & Labor Council, 184 F3d 510, 514 (CA 6, 1999).
The arbitration agreement states that the “parties agree to be guided by the laws of the state of Michigan during the arbitration process and also agree that the Rules of Evidence may be applied or relaxed at the discretion of the Arbitrator.”
Defendant also argues that the arbitrator violated MCL 600.5078(1) by not issuing his ruling within 60 days after the arbitration hearing. Defendant has not, however, alleged on appeal what substantial difference would have resulted from a timely arbitration ruling. Collins, supra at 567. Further, there is nothing in the record to indicate that the arbitrator’s delay had any effect on the property division in the arbitration ruling. Thus, the trial court did not err by denying defendant’s motion on this ground. | [
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Boyles, J.
This is an appeal from a judgment entered in the circuit court for Wayne county, on trial without a jury, finding the defendant guilty of unlawfully withholding possession of certain premises from the plaintiff and granting the plaintiff a writ of restitution therefor. The defendant claims that the plaintiff has no standing in court, not having complied with Federal rent regulations promulgated by the office of price administration (OPA). Plaintiff admits noncompliance and counters with the claim that under the facts adduced he is exempt from compliance by certain provisions of the regulations. •
The record before us includes about 40 pages of colloquy between the court and counsel without pleadings or proofs from which we glean the facts. This method of trial seems to have been satisfactory to the court and counsel and we will not now consider objections here raised for the first time that the decision was not based on testimony received in open court.
Plaintiff owns the property in question and in June, 1940, leased the same to the defendant for four years by a written lease. The property consists of four separate residence buildings located on one parcel of land, under one management and having one janitor, but having separate public services such as sewers, garbage, storage and heating apparatus. The four buildings are used as rooming houses, none of which was occupied by the defendant. The number of rooms and tenants in each of the four buildings is as follows;
34Q9 Second1 boulevard 32 rooms 14 tenants
3421 Second boulevard 9 rooms 6 tenants
3429 Second boulevárd 10 rooms 7 tenants
3435 Second boulevard 10 rooms 8 tenants
Total ...... 61 rooms 35 tenants
Section 1 (b) (4) of tbe regulations promulgated by the rent control division of the office of price administration, under which plaintiff claims these premises are exempt from the regulations, is as follows:
“Provided that this regulation does apply to entire structures or premises wherein twenty-five or less rooms are rented or offered for rent by any lessee, sublessee or other tenant of such entire structure or premises, whether or not used by the lessee, sublessee or other tenant as a hotel or rooming house.”
Decision hinges on the interpretation of the aforesaid regulation promulgated by the rent control division. Plaintiff claims that in any event the building at 3409 Second boulevard is exempt, because it has more than 25 rooms rented or offered for rent; and that all four buildings or structures constitute the same “premises” and that therefore all are exempt. Counsel for defendant says that “rooms” means ‘ ‘ rental units, ’ ’ and that plaintiff, not having originally registered under the OPA regulations, cannot claim any benefit from later changes in the regulations. Defendant also relies on instructions printed in certain departmental forms for use by landlords but the record fails to show that these “instructions” rise to the dignity of regulations adopted by authority of the act of Congress.
In substance, the price control act (56 Stat. at L. 23, as amended [50 USCA, Appendix, § 901 et se<p]) provides that every landlord of housing accommo dations rented or offered for rent is required to. file certain information with the office of the administrator of the act, and give notice to the agency before evicting a tenant. About two months before the instant proceeding was started before a circuit court commissioner to recover possession of these premises, counsel for plaintiff • wrote the office of price administration, rent control division, in Detroit, giving a statement of the facts and circumstances and requesting a ruling as to whether’all of the four buildings or structures here under consideration were exempt from the rental regulations. The ruling of the rent control division was received in writing, in reply, and was admitted in evidence in this proceeding without objection. It follows:
“OFFICE OF PRICE ADMINISTRATION
“Detroit Area Rent Office
“600 Griswold Street
“Detroit 26, Michigan
“May 24,1944
“Lucking, Van Auken, Schumann & Greiner
“Attorneys at Law
“1603 Ford Building
“Detroit 26, Michigan
“Attention: Mr. Fred J. ‘Schumann
11 Bear Sirs:
“Re: 3409-3421-3429-3435 Second Blvd., Detroit
“This will acknowledge receipt of your letter of the 21st inst., wherein you request us for advice as to the application of the regulations to the following facts:
“Helen 0. Hubbert is the lessor and John T. Haag is the lessee of the above described housing accommodations. The lease is dated June 13, 1940, and expires on June 13, 1944. The property was leased for rooming-house purposes and consists of four separate houses. The number of rooms in each of said houses is as follows:
3409 Second boulevard 32 rooms
3421 Second boulevard 9 rooms
3429 Second boulevard 10 rooms
3435 Second boulevard . 10 rooms
“Of tbe rooms at 3409 Second boulevard one is used by tbe caretaker, one by tbe janitor and tbe remaining 30 are rented or offered for rent by the lessee.
“For many years last past the property has been rented and operated as one unit with common management and common service. The four houses have one caretaker and one janitor; garbage and rubbish receptacles are located in one portion of the premises for all of the houses.
“You have referred our attention to section 1 (b) (4) of the regulations which inter alia provides that the rent regulation does not apply to the following:
“ ‘Entire structures or premises wherein more than 25 rooms are rented or offered for rent by any lessee, sublessee or other tenant of such entire structure or premises:’
“You have requested us for advice as to whether the exemption, applicable to the structure at 3409 Second boulevard, would extend to the houses situated at 3421-3429 and 3435 Second boulevard, in view of the landlord’s rental practice of leasing the four houses as a single rental unit, common management, et cetera.
“On the basis of the aforesaid it appears that the four buildings are operated as a single enterprise and that they therefore are within the scope of the exemption.provided for by section 1 (b)' (4) of the regulations.
“All of the rooms in all four structures, subrented by the lessee, are within the scope of the regulations.
“Yours very truly,
“Office of Price Administration
“Beymont Paul
“Area Chief Bent Attorney
“BP: jmm
‘ ‘ Copy to John T. Haag. ’ ’
Regulation § 1 (b) (4) is not plain and unambiguous and admittedly it is capable of more than one interpretation. The construction placed on the exemption by the office of price administration, while not controlling here, will be given consideration and full credit in the absence of other clarification. Plaintiff, relying on it, started the instant proceeding without compliance with the regulations. The judgment is affirmed, with costs to appellee.
Starr, C. J., and North, Butzel, Bushnell, Sharpe, and Reid, JJ., concurred. The late Justice Wiest took no part in the decision of this case. | [
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Bushnell, J.
Plaintiff had a verdict from a jury in the sum of $9,739.95, arising out of an accident occurring on the outskirts of the city of Grand Rapids. Plaintiff, riding his motorcycle about noon on July 31, 1931, was going east on M-21, accompanied by a young woman who was killed in the ensuing collision. Defendant Wurzburg’s automobile, unoccupied except for its driver, defendant Buervenich, was moving in the opposite direction. About 200 feet west of the brow of a hill the road takes a curve towards the south to a point about 800 feet east of the crest. The day was clear and the pavement dry; the highway for some distance each way from the scene of the accident may be described as rolling. Both vehicles were going at a rapid rate and the collision occurred at a point close to the brow of the hill. Each party testified that the other was not visible to him until they were within 40 feet of each other.
Plaintiff claims that defendant’s car was straddling the black center line, indicating that the automobile was partly on the wrong side of the road. Defendant’s casé is largely based on the assertion that his car was at least a foot and a half to the north of the center line of the road and that, just before the collision, plaintiff was driving his motorcycle on the wrong side of the black line. The testimony as to the facts is no less conflicting than the claims of the parties. As a result of the impact, plaintiff’s companion was thrown against or near a mail box on the south side of the road, and plaintiff was found under his motorcycle in th'e middle of the south lane. He suffered a compound fracture of the left leg and a fracture of a small bone of the foot, resulting in a permanent impairment of much of the use of the limb.
Defendant’s car came to a stop in a ditch on the south side of the road after zigzagging for some distance which, according to defendant’s claim, was caused by the bursting of a tire, cut by a projection on the motorcycle. Testimony was submitted showing tire marks beginning 18 inches north of the center line at a point approximately 45 to 75 feet west of the mail box. Plaintiff contends that the defendant was cutting the curve. The front half of the car and motorcycle were not damaged, from which plaintiff argues that defendant must have jerked his car to the right, projecting the back end still further over the center line of the road, thereby either sideswiping the motorcycle or hooking it with some part of the automobile.
The record and briefs are replete with conflicting testimony and claims arising out of the physical facts. Like the usual collision case, the difference between accident and safety was reduced to fractions of space and time, and it is of no great benefit to the public or the profession to encumber opinions with a discussion of highly controverted questions of fact and energetically contested arguments.
Disputed testimony as to the position of moving vehicles at the time of impact and the opportunity afforded drivers to see each other should generally be left to the determination of the jury, but defendants contend that when the physical facts clearly dispute the testimony they must control, citing Brady v. Railway Co., 248 Mich. 406, and Kok v. Lattin, 261 Mich. 362. Here, however, the physical facts are far from clear and deductions may be made therefrom in support of either theory.
Likewise, to hold with the defendant on the issue of contributory negligence would require a substitution of our determination in this case for that of the jury. We are urged by defendant to assume from the photographs introduced in evidence that plaintiff should have seen defendant coming over the hill and avoided the accident. We are unwilling to substitute our conclusions from photographs for the jury’s conclusions after a view of the scene, accompanied only by a deputy sheriff. If we accept photographs shown in either party’s brief at their face value, we would he adopting views the accuracy of which would depend upon conditions of light, angle of vision, and many other conflicting factors, etc., and from the one particular spot selected by the party whose photograph we use, rather than the impressions of a jury which was in a position to view the premises from every conceivable point. We cannot under the record presented hold plaintiff guilty of contributory negligence.
Appellants include in their brief some 24 pages of quotations from the record in support of their contention that plaintiff’s counsel consistently attempted to prejudice the defendants in the minds of the jury. We do not approve of quibbling and discourtesy in the trial of cases, but such action on the part of counsel or litigants usually produces its logical result. Neither juries nor judges are impressed or influenced by such conduct. Both parties were provided with unusually competent and aggressive lawyers. In several particulars their zeal almost resulted in a substitution of parties. The record, however, justifies the conclusion that the trial judge succeeded in keeping the proceedings on a fairly even keel.
We have had occasion to pass upon this class of misconduct in too many cases. Since the question is raised here we might suggest that warmth of zeal is commendatory but the canons of professional ethics condemn excesses of this sort just as strongly as they do those matters considered by some to he more serious. We have carefully examined the examples of misconduct so classified and suggest that some, at least, cannot be considered because of counsel’s failure either to give reasons for his objections or to request instructions from the court that the remarks be disregarded. Kirchner v. Railway Co., 91 Mich. 400 (4 Am. Neg. Cas. 131); Mahiat v. Codde, 106 Mich. 387; Walz v. Peninsular Fire Ins. Co., 221 Mich. 326; Genack v. Gorman, 224 Mich. 79. Such matters, unless so prejudicial that justice is impeded, must be left to the trial judge, who can take care of them much more satisfactorily and effectively than we. Rutter v. Collins, 103 Mich. 143.
See also, Thompson v. Railway Co., 91 Mich. 255; Thomas v. Township of Byron, 168 Mich. 593 (38 L. R. A. [N. S.] 1186, Ann. Cas. 1913 C, 686); Nosa v. Railway Co., 196 Mich. 104; Grubaugh v. Simon J. Murphy Co., 209 Mich. 551.
■The general charge, to which was added the caution of the court during the trial, was sufficient to apprise the jury as to who were the real litigants, and we find no necessity from this part of the record for ordering a new trial.
The charge was comprehensive and clear, so much so that defendants only raise two objections, which we will now discuss.' Error is claimed in that the jury was charged that it might consider the question of damages for future pain and suffering, since it is contended that there is no evidence whatever that the plaintiff will undergo pain and suffering in the future and that suitable allegations' to this effect were not made in the declaration. Plaintiff says that such assignment of error cannot be considered as no exception was taken to the charge. No exception need be taken. 3 Comp. Laws 1929, § 14311. See Rohmer v. Labo, 191 Mich. 55, and the cases there collected.
The declaration included an allegation as to the permanency of the injuries which was supported by the testimony, although it did not allege future pain and suffering. The reasonable effect of a permanent injury such as the one suffered in the instant case is future pain, and there is allegation and proof made that plaintiff was still suffering discomfort at the time of trial. We held in Leedy v. Hoover, 160 Mich. 449, that damages could be assessed for the continuance of ill effects from injuries from which there had not been complete recovery at the time of filing, even though the declaration did not allege permanent injury but merely averred that plaintiff had not wholly recovered, and Justice Fead said in Milks v. Tritten, 258 Mich. 236, that it was not error to permit the jury to consider compensation for future pain and suffering. Pain from broken bones does not cease in an instant.
Error is claimed in that the jury was instructed that recovery must be limited to $25,000, and it is intimated that it encouraged the rendition of a large verdict. The charge conforms to that approved by Sherwood v. Railway Co., 82 Mich. 374, 383.
Other errors alleged are of no great merit, dealing principally with excessiveness of the verdict, failure to grant a new trial, claimed improper restrictions imposed on cross-examinations, leading questions, and other related matters, including the usual statement that the verdict was against the great weight of the evidence.
The case was vigorously tried, the jury was in possession of the facts, and we find no error sufficiently serious to justify disturbing the judgment.
The judgment is affirmed, with costs to appellee.
Nelson Sharpe, C. J., and Potter, North, Fead, Wiest, Butzel, and Edward M. Sharpe, JJ., concurred. | [
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Wiest, J.
Defendant was convicted of operating a motor truck on a public highway without license plates. He owned a “service truck,” with a special platform, upon which was mounted and fastened a well-drilling machine. The truck was equipped for and devoted to such special service. When used it conveyed the well-drilling machine to the place of intended use and there the truck was jacked up to make the machine firm for work in drilling. The truck and machine were taxed as personal property.
Defendant contends that no license was necessary. The motor vehicle law (1 Comp. Laws 1929, § 4632) applies to “all vehicles impelled on the public highways of this State, by mechanical power except traction engines, road rollers, such vehicles as run only on rails or tracks, fire trucks and apparatus owned by any person, firm or private corporation and used for fire protection,” and tractors, unless used exclusively in agriculture. This section clearly included defendant’s motor vehicle.
But defendant claims that the next section of the statute, relative to application for registration, and defining a commercial vehicle, excludes his truck, by reason of noninclusion. The part of the statute invoked reads:
“Every owner desiring to operate a motor vehicle upon the public highways of this State, except as otherwise provided, shall file an application with the secretary of State stating the owner’s name. * * * Each application for a commercial vehicle shall also have attached thereto scale weight receipt of said motor vehicle fully equipped as of the time the application is made. * * * The term ‘commercial vehicle’ as used in this act shall mean and include all motor vehicles used for the transportation of passengers for hire and those constructed or used for transportation of goods, wares or merchandise” (1 Comp. Laws 1929, § 4633).
Here exists no exclusion by way of noninclusion. The statute clearly covers all motor vehicles operating upon the public highways, excepting only such as are expressly excepted in the first mentioned section.
The conviction is affirmed.
Nelson Sharpe, C. J., and North, Fead, Butzel, Bushnell, and Edward M. Sharpe, JJ., concurred. Potter, J., did not sit. | [
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North, J.
In 1920 and 1921 plaintiff was engaged as a contractor in paving State trunk line highway 27-3 in St. Clair county. The paving operation extended through defendant municipality, a fourth-class city. A written contract was entered into between plaintiff and defendant incident to paving in the streets of defendant city. The central portion of this pavement, a strip 20 feet in width, was constructed under a separate contract with State and county highway authorities. The contract between the parties to this suit provided for paving additional widths, gutters, curbs, etc., in the streets of defendant city. Incident to the city’s paving 1,070.6 feet of valley gutter was constructed 30 inches in width instead of 18 inches as provided in the written contract. This resulted in a charge for extra work and material totaling $877.89. While defendant paid in full the balance claimed by plaintiff, it declined to pay this item and suit was brought-to recover therefor. The defense urged was that this extra work was not ordered by the defendant city or by any person authorized to do so in its behalf. On trial before jury plaintiff had verdict and judgment for the above amount and accrued interest. Defendant has appealed.
Appellant urges as the two reasons in support of its appeal the following:
1. The trial court erred in submitting as an issue of fact to the jury the question as to whether defendant city authorized the engineer who supervised this highway construction to employ the defendant to perform the extra work for which recovery is sought. and to bind defendant to make payment therefor.
2. The trial court also erred in instructing the jury that this engineer was the man directly in charge of this work on the ground for the St. Clair county road commission, the State highway department and the city of Marine City.
As to the first of these alleged errors appellant claims there was no testimony tending to sustain an affirmative finding and the court should have held as a matter of law that the engineer was not so authorized. As to the second alleged error appellant also claims there was no testimony tending to show that the engineer was in charge for the city of Marine City, or at least there was a conflict of testimony which presented an issue of fact for the jury on this phase of the case.
The questions presented on appeal necessitate liberal quotation from the testimony. Mr. A. J. Smith, president of the plaintiff company, testified on cross-examination by defendant’s counsel in part as follows:
“Q. When there was some addition to be made to the original contract, the original specifications, who did I understand you to say made this agreement1?
“A. Most all of the contracts on this particular job was made with Mr. Parker; his order was given to our superintendent.
“Q. Mr. Parker, the engineer for the county and the state highway department?
“A. Engineer — representative of Marine City also. * * *
“Q. Well, you do not know that he represented Marine City?
“A. They paid for everything under his orders; catch basins and everything else that was changed on the order they paid for on Mr. Parker’s orders. * # * I am familiar with the original specifications and the terms of the contract. On this change in valley gutter from 18-inch width to 30-inch width we had no written order from the commissioner as provided by the contract that I know of. We very seldom had a written order for any of those things. It was verbal. * * * I think your father (Thomas E. De-Gurse, then the mayor, who, together with the city clerk, executed the paving contract) was the first man to give me those instructions (that Mr. Parker was representing the city of Marine City). * * * I am quite sure your father was the first man who told me Mr. Parker was going to be in charge of all the work. * * * Mr. Parker contracted for several things the year before and they always paid them all. We never had any question about it.”
Mr. William W. Cox, engineer manager of St. Clair county road commission, testified:
“The supervision of this work through the city of Marine City was handled directly on the job by Ben Parker who was in the employ of the county and in turn an employee of the State through the county to look after the State work. * * * I know that, generally speaking, they would outline the type of work they wanted done and we would pass that work on to the engineer, Mr. Parker, who would carry it out. # * Oh, - there were changes made. * * * Well, if any changes were made, they would come first to the attention of Mr. Parker and lie would, make a recommendation to me and if I approved of the recommendation, why, lie would go ahead and do the work. * * *
“Q. Did you, in making any changes in the specifications, at any time issue any orders in writing?
“A. Not to my knowledge, no. * * * I know of my own knowledge there was additional extra work that was put in at that time that was paid for by the city of Marine City. * * # They probably had some voice in it (the extra cost), and usually it was discussed, as I said, first with our engineer, Mr. Parker, and then it came to me in the form of a recommendation and if I approved the work was proceeded with. * * * Mr. Parker was in the employ of the county road commission and was placed under my supervision and as the State was paying for the 20-foot central portion of the pavement he also represented the State. I would think it was thoroughly ' understood between all three parties with the city and county and State that Mr. Parker was supervising the work that was done under that contract and included in the changes, of course. * * * I think it was generally understood between all three parties, that is, the city, the county and State, that Mr. Parker would supervise the work that was done under that contract. * * * I know Mr. Parker represented the city so far as supervising the city’s portion of the work is concerned. Marine City did not pay Mr. Parker. These services were gratis so far as the State and county were concerned to the city of Marine City.”
The engineer in immediate charge of this work, Benjamin L. Parker, testified that besides the change in the contract work which gave rise to this suit there were other changes and other extra work; that with the approval of his superior, Mr. Cox, he recommended such changes. Upon being asked whether he obtained approval of the city council he testified that lie attended several of the sessions, practically all of them, and had numerous matters up with the council but that he could not say whether this particular change in the work was discussed with the council. He further testified that so far as he knew the city at no time made complaint concerning extras which he authorized. On- cross-examination he testified:
“I was never engaged by Marine City to represent it as its engineer on this particular project. # # I was to direct that project in its entirety; some of its parts were to be paid for by Marine City.”
Considering all the testimony only one interpretation can be given to Mr. -Parker’s statement that he “was never engaged by Marine City.” Beyond cavil he meant he was not emplo'yed under pay by the city, a circumstance which in no way impaired his right to represent and bind the city if. otherwise so empowered. ■ There is no dispute in the testimony as to the extra work for which this suit is brought having been ordered by Mr. Parker, nor is there any dispute in the testimony that he was supervising this work in behalf of the city as well as of the State and county. There was no error on the part of the trial court in so charging the jury. '
In determining whether there is testimony from which the jury could find that the defendant could be and was bound to pay for extras ordered by Mr. Parker it is of importance to bear in mind that this work for the city was in progress during a portion of two years and that the work was carried on in the manner indicated by the above testimony until finally completed. It is almost a necessary conclusion that defendant was fully advised of the manner in which Mr. Parker was operating in its behalf and that it approved of his so acting. On numerous occasions, without complaint so far as the testimony-shows, he ordered extras which were paid for hy defendant. It is also important to bear in mind that the validity of this contract or the authority of the common council to enter into it is not questioned. The defense of ultra vires is in no way involved. The question presented is whether in the absence of a showing of authority expressly given to Mr. Parker by the defendant to deviate somewhat from the written contract and hind the defendant by resulting obligations, that power may be fairly inferred from the circumstances disclosed hy the testimony in this case. We think it may he and that the jury was justified in so determining. Safeguarding the interests and rights of a municipality incident to such construction almost necessarily involves delegation of power of this character to some representative. And where the exercise of such delegated power is approved by the municipality over a long period of time, it is only just to hold that the municipal corporation is estopped from denying the power of its agent, the same as would be held in case' of a private corporation or an individual. Nor can it be urged successfully as a defense herein that the defendant municipality is not obligated because the extra work and material were not ordered in writing, as provided in the principal contract. Commercial State Bank of Shepherd v. School District No. 3 of Coe Township, Isabella County, 225 Mich. 656; Park v. City of Milwaukee, 180 Wis. 278 (192 N. W. 1012). The municipality has received and retained that for which compensation is sought and is unable to make restitution or place plaintiff in statu quo. Both morally and legally defendant is obligated and should pay.
Appellant cites and in part relies upon Stratton v. City of Detroit, 246 Mich. 139, and Salzer v. City of East Lansing, 263 Mich. 626. These cases are not in point for the reason that they adjudicated attempts to enforce alleged contracts that were ultra vires and by which the defendant municipal corporations were not bound. In the instant case the asserted obligation is intra vires and decision is controlled by such adjudications as Carey v. City of East Saginaw, 79 Mich. 73, 76, where it is said of city officials:
“They receive it (sewer pipe), and place it in the sewer, they are estopped from setting up a defense that they themselves have neglected to procure a written contract, drawn by the city attorney, in accordance with the bid and award.”
“In an action on a contract which is not ultra vires, a municipal corporation may not shield itself behind a defense based on the manner in which the contract was made, and retain the benefits of the contract, without tendering at least a reasonable compensation for the benefits received.” Webb v. Township of Wakefield (syllabus), 239 Mich. 521.
See, also, Coit v. City of Grand Rapids, 115 Mich. 493, and L. W. Kinnear, Inc., v. City of Lincoln Park, 260 Mich. 250.
Plaintiff made a case for the jury and the circuit judge ruled correctly in denying defendant’s motion for a directed verdict at the close of plaintiff’s proofs. The record discloses no reason for disturbing the judgment entered. It is affirmed, with costs to appellee.
Nelson Sharpe, C. J., and Potter, Fead, Wiest, Butzel, Bushnell, and Edward M. Sharpe, JJ., concurred. | [
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iWiest, J.
Plaintiff claims that a lost or destroyed unrecorded deed to himself and his wife, as tenants by the entirety, of certain premises in the city of Detroit, upon his wife subsequently obtaining a decree of divorce in the State of Texas without disposition of property rights thereunder, constituted him a tenant in common in ownership of the property under 3 Comp. Laws 1929, § 12767 (Stat. Ann. § 25.132). At the time of the Texas divorce the plaintiff’s sister, Bose Szucs, was of record the sole owner of the premises here involved, and defendants Falklam claim title thereto by way of purchase under title of record.
By the bill filed by plaintiff he seeks adjudication establishing execution and delivery of the claimed deed to himself and wife, and that he be held thereunder an owner as tenant in common with defendants Falklam.
The burden was on plaintiff to establish execution of the claimed unrecorded deed. The trial court held the evidence failed to establish such claimed fact and dismissed the bill. °
Defendants Falklam, March 4, 1941, by warranty deed, acquired the premises from Elsie Balogh. Defendant Mary Pavela acquired the premises by warranty deed from Rose Szucs, September 13,1940, but did not record the deed until February 25,1941. Before the deed was recorded Mary Pavela conveyed the premises to Elsie Balogh. by quitclaim deed, dated September 13, 1940, and recorded October 9, 1940. January 23, 1941, before the deed from Szucs to Pavela was recorded, Rose Szucs, by warranty deed, conveyed the premises to “Michael Pavela, an unmarried man, and Mary Pavela, an unmarried woman.” This deed was recorded January 29,1941. That deed was executed at the demand of plaintiff who knew of the previous deed from Rose Szucs to defendant Pavela and evidently knowing it was not recorded solicited and obtained the deed last mentioned.
The circuit judge found that deed a cloud upon the title and by decree ordered its vacation. The record manifests the purpose of plaintiff in obtaining that deed. It was not obtained in good faith but simply as a trouble maker. The circuit judge was right in removing it as a cloud upon the title.
The record has been read with care, and we agree with the finding of the circuit judge and have no occasion to lumber this -opinion with a recital of the testimony.
The decree of the circuit court is affirmed, with costs to defendants.
North, C. J., and Stare, Butzel, Bushnell, Sharpe, Boyles, and Reid, JJ., concurred. | [
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Wiest, J.
This action in assumpsit was brought against defendants' and trial was had before the court without a jury. The court refused judgment against defendant Ross H. Lamb and, plaintiff not having appealed therefrom, Mr. Lamb is out of the case. Defendant Edith Hatosky Sellars appealed from a judgment against her upon her note, executed in 1937, claiming the judgment is against the preponderance of the evidence.
• When suit was brought the note was set up in one count of the declaration and defendant Sellars, under oath, denied its execution but at the trial she. admitted her signature and claimed the obligation had been adjusted in an accounting between Lamb and plaintiff. This placed the burden of showing such claimed satisfaction on defendant Sellars. Defendant Sellars for some time was secretary in the office of Mr. Lamb, who appears to have been quite a borrower of money, not only from plaintiff but also from and through activities of defendant.
The testimony has been read and recital thereof here would not be of benefit to the profession. The plaintiff denied the alleged assumption of the obligation, of the note by Mr. Lamb. Mr. Lamb was not a witness.
It was for the trial judge to consider the testimony of appellant for what he considered it worth, having in mind her denial of the existence of the note and then her claimed memory of the method of its satisfaction. The printed record does not disclose the demeanor of the witnesses, visible to and of proper cognizance by tbe trial judge. Defendant having admitted execution of the note, that fact placed upon defendant the affirmative defense of satisfaction of the obligation. The judgment is not against the preponderance of the evidence.
Judgment is affirmed, with costs to plaintiff against defendant Sellars.
Starr, C. J., and North, Bittzel, Btjshnell, Sharpe, Boyles, and Reid, JJ., concurred. | [
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Reid, J.
This is an appeal in the nature of certiorari from an order of the Michigan public service commission dismissing appellant’s petition in which he prayed that the commission require the Pere Marquette Railway Company, defendant appellee, to furnish uniforms for plaintiff and for certain railway employees, under 2 Comp. Laws 1929, §11186 (Stat. Ann. §22.277). This appeal involves a determination of the constitutionality of that section, and whether the Michigan public service commission has power and authority to enforce the provisions of that section and to grant the relief sought.
The commission found that,
“Harry J. Woodward now is, and for a number of years lias been, a conductor in freight service for the Pere Marquette Eailway Company. In 1925, 1926 and part of 1927, he was a conductor in passenger service for the railway company. During this time the railway company supplied him with a badge, buttons and service insignia, and he, at his own expense, supplied the uniform.”
The Pere Marquette Eailway Company has never furnished uniforms to any of its passenger conductors.
On May 10, 1943, and again on December 3, 1943, petitioner was notified that he could qualify as passenger conductor. By another communication on April 22, 1944, he was required to “protect” (conduct) passenger train No. 6, but he said he had no uniform and did not intend to get one, and for failure and refusal to obtain his own uniform he was put back in service as a freight train conductor. On July 5, 1944, he filed a complaint with the Michigan public service commission based upon 2 Comp. Laws 1929, § 11186, in which complaint he recited among other things the refusal of the company to provide him with a uniform, and he requested the public service commission to entertain jurisdiction of his complaint and to require the defendant Pere Marquette Eailway Company to provide him with a uniform, as required by 2 Comp. Laws 1929, § 11186, and1 further petitioned that the defendant be required by the order of the commission to furnish uniforms to all its employees whose duties relate to the immediate transportation of passengers or their baggage and further, if the defendant refused or failed to comply with such order of the commission, that proceedings be instituted to enforce the forfeiture as provided for in this section. Plaintiff, as ground for his claim that the commission has the authority he requests it to exercise, cites 2 Comp. Laws 1929, §11057 (Stat. Ann. §22.59), which is as follows:
“This commission shall inquire into any neglect or violation of the laws of this State by any such common carrier hereinbefore defined doing business therein, or by its officers, agents or employees thereof, and shall have the power and it shall be its duty to enforce the provisions of this act as well as all other laws relating to common carriers and report all violations thereof to the attorney general. ’ ’
The commission by its opinion and order, July 5, 1944, dismissed plaintiff’s complaint on the grounds that the contentions raised were judicial questions properly answerable- only by the courts, that the commission was of the opinion that it was without power or authority to_ make the orders requested and further, that if the commission lacked power and1 authority to make the orders requested, it was also without power lawfully, to institute proceedings to enforce such orders. The commission further found it was without power or authority to grant any of the relief sought by the petition.
Since the enactment of 2 Comp. Laws 1929, § 11186, much doubt has existed among that portion of the public who would be most directly interested in the subject matter of uniforms, et cetera, to be worn by trainmen, over the interpretation to be given to this act. The attorney general of the State was requested by the Michigan public utilities commission to render an opinion whether railroads are required to provide their employees in passenger train service a uniform and a hat or cap and a distinguishing badge, or only two of the above-named articles. The attorney general on January 6,1938, rendered his opinion in which, among other things, he said that the construction of the entire section would compel the railroad corporation to provide three articles, viz.: (1) a uniform, (2) a hat or cap, and (3) a distinguishing badge. In his opinion he further indicated that the interpretation of the section is not wholly free from doubt, but he did not render an opinion on the validity of the act.
Defendant railway company claims that:
“Since the enactment of the law, the unquestioned practice of railroad corporations has been to require conductors to wear uniform suits of clothes, the company providing the means of obtaining them. Buttons, stripes, badges, and other distinguishing insignia were, and are, furnished at company expense.”
Defendant claims that its action in that regard constitutes a compliance with all that the law can be said to require of it, and further asserts that it is doubtful what is meant by the forfeiture of $100 for each week such neglect shall continue and asks, what would constitute a week’s neglect on the part of the corporation? Further doubt as to the construction is pointed out by defendant pertaining to the words, “to be worn by all its employees,” and defendant says that the legislature evidently did not have in mind that all the employees should wear a single uniform or a single hat or a single cap or a single badge, and evidently infers that a doubt exists as to furnishing new uniforms in place of uniforms partly worn, yet a penalty is provided for a violation of the duty stated, which duty defendant claims is not clearly defined. Besides the vagueness, uncertainty and ambiguity of this statute, 2 Comp. Laws 1929, § 11186, as above indicated, defendant further claims that the statute is void because it is class legislation in that the statute would require the defendant to furnish uniforms, et cetera, for certain employees while competing public carriers, streetcar companies, boat lines, airways, bus lines, taxicab owners and telegraph companies, are not so required by any statute, and that therefore defendant is denied the equal protection of the law. Defendant further claims that the statute would deprive defendant of its property and of its liberty to contract with its employees without due process of law and, further, that the statute places an unreasonable burden upon interstate commerce.
The effect of Federal laws and regulations affecting common carriers, enacted or promulgated since the enactment of the section in question, is a matter not fully presented before the commission, nor fully discussed in the briefs on this appeal. We do not consider it necessary to consider the effect of such laws and regulations on the statute in question, in view of the decision which we make, on other grounds.
We consider this section class legislation. Davidow v. Wadsworth Manufacturing Co., 211 Mich. 90 (12 A. L. R. 605). Hanley v. Moody, 39 Fed. (2d) 198, 200.
The section in question, Act No. 198, art. 4, § 18, Pub. Acts 1873, as amended by Act No. 207, Pub. Acts 1879 (2 Comp. Laws 1929, § 11186 [Stat. Ann. § 22.277]),'is found and declared to be invalid and unconstitutional for the reason that it is class legislation.
The commission therefore had no authority to grant the relief prayed for in the petition.
The order of the commission appealed from is affirmed. No costs.
North, Wiest, and Sharpe, JJ., concurred with Reid, J. Butzel, Bushnell, and Boyles, JJ., concurred in the result. Starr, C. J., did not sit.
The powers and duties of the Michigan public utilities commission were transferred to the Michigan public service commission and the former commission abolished by Act No. 3, Pub. Acts 1939 (Comp. Laws Supp. 1940, § 11017-1 et seq., Stat. Ann. 1944 Cum. Supp. §22.13 [1] et seq.).—Reporter.
Opinions of tlie Attorney General, 1937-1938, p. 387.—Reporter. | [
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Sharpe, J.
Plaintiffs filed their bill of complaint against defendants to enjoin an action at law by defendant Contract Purchase Corporation against plaintiff D. F. Broderick, Inc.; for a determination of rights and liabilities of the respective parties under two automobile insurance policies; for an accounting for premiums due under said policies from April 14, 1939, to January 31, 1941; and a refund on return premiums and allowances under said policies. The trial court entered a decree dismissing the bill, from which plaintiffs have taken this appeal.
Plaintiff D. F. Broderick, Inc., operated as general agent of several insurance companies and is an associate agent of the Home Insurance Company. Defendant Continental Credit Corporation -financed the purchase of automobiles by dealers at wholesale, and by individuals at retail, at their different offices throughout the State, and prior to July 23, 1937, said defendant and its subsidiary sought a market for insurance on automobiles so financed by it. Plaintiff D. P. Broderick, Inc., procured a market for such insurance between the Home Insurance Company and said defendant, which company negotiated two so-called “master policies”—a “wholesale” policy which covered automobiles held in inventory by dealers and mortgaged by them to secure loans made to the dealers by the Continental Credit Corporation, and a “retail” policy which covered motor vehicles purchased by customers on deferred payment plans. Plaintiffs and defendant Continental Credit Corporation operated under said policies from the effective date thereof—July 23, 1937—until April 14, 1939, during which time the premiums paid to plaintiffs by said defendant averaged about $10,000 per month.
On April 14, 1939, an “agreement for merger” between defendants Continental Credit Corporation and Contract Purchase Corporation, with the Contract Purchase Corporation as the resulting corporation, was entered into, which merger provided, among other things, as follows:
“Contract Purchase Corporation shall, upon the execution, approval and filing of this agreement as provided by law, be possessed of all rights, privileges, powers, franchises, property, real, personal and mixed, debts, stock subscriptions, things in action, and all and every other interest of every kind and nature and shall be subject to all debts, liabilities, duties and obligations of whatsoever kind or nature, whether secured or unsecured, of Continental Credit Corporation, as provided by the statutes of the State of Michigan relating to merger of corporations, except as to subordinated obligations of Continental Credit Corporation, which are assumed in their subordinated position,”
Prior to said merger defendant Contract Purchase Corporation conducted the business of financing the purchase of automobiles, with offices in Detroit. Subsequent to the merger it operated through its home office in Detroit and in the several offices taken over in the merger, with the exception of the Cleveland, Jackson and Flint offices which were sold shortly after the merger to other finance companies operating in those locations, and were doing business with the same dealers as defendant Continental Credit Corporation formerly did.
Plaintiffs claim that subsequent to the merger defendant Contract Purchase Corporation continued to operate the business formerly operated by defendant Continental Credit Corporation but failed to place insurance upon such business in accordance with the policies; refused to account to plaintiffs in relation to the number of motor vehicles financed by it in the course of operating the business formerly operated by Continental Credit Corporation subsequent to the merger of defendants, and since April 20, 1939, refused to make monthly reports to plaintiff as provided in the-“wholesale” policy, and refused to make the daily reports to plaintiffs as provided in the “retail” policy, and that the Home Insurance Company has. lost the benefit of the premiums, and D. F. Broderick, Inc., has lost the benefits of the commissions which would have been otherwise payable to them. Both policies were cancelled by plaintiffs in accordance with their terms, the effective date of termination being January 31, 1941.
Defendant Contract Purchase Corporation was not paid the moneys due it for refunds of premiums under the “retail” policy for the months of October and-November, 1939, and on December 16, 1939, instituted suit in assumpsit in the common pleas court for the city of Detroit against plaintiff Broderick, whereupon plaintiffs filed the bill of complaint in this cause and tendered the amount of the unpaid accruals for return premiums into court, to be held by the clerk of the court as a partial set-off against the amount due plaintiffs under an accounting as prayed for in the bill.
Defendant Contract Purchase Corporation claimed in its answer that both policies were terminated to all intents and purposes the day after the merger because of the fact that there were no placements of insurance for either of such contracts to become operative upon.
The trial court held that the master policies created no legally binding obligation on the part of defendants to place all their insurance business on automobiles financed by defendants with plaintiff Home Insurance Company, through plaintiff D. F. Broderick, Inc., and a decree was entered dismissing the bill and making such disposition of the moneys on deposit with the clerk of the court as was consistent with the court’s opinion.
The principal question presented for review is the liability, if any, of defendant Contract Purchase Corporation to plaintiffs for premiums accruing under said policies from the effective date of the merger to the effective date of the termination of the policies by plaintiffs.
It is undisputed that if the policies issued by plaintiff to the Continental Credit Corporation created a legally binding obligation on the part of the Continental Credit Corporation that obligation followed the merger of the Continental Credit Corporation and the Contract Purchase Corporation and became an obligation of the resulting corporation. It thus becomes necessary to examine the two policies hereinbefore referred to.
Plaintiffs rely upon the following paragraphs of the wholesale policy in support of their claim of total insurance:
“1. Whereas the ‘corporation’ may or does finance on its wholesale plans the delivery of motor vehicles to ‘dealers,’ and the ‘corporation’ acquires an interest in such motor vehicles under the terms of trust receipts, storage warehouse consignment receipts, notes, accepted time drafts, chattel mortgages, conditional sales contracts and leases (hereinafter termed ‘notes’) and the ‘corporation’ desires to have all such motor vehicles in which it may have an interest insured (when said motor vehicles are not otherwise insured by the ‘dealer’ for the benefit of the ‘corporation’ and the ‘dealer’) against certain hazards, and; * * *
“5. As respects each motor vehicle financed on the ‘corporation’s’ wholesale plans eligible for coverage and insured hereunder, the policy shall cover from the time of the preparation or execution of the ‘notes’ by the ‘corporation’ or the ‘dealer’ and shall cover continuously thereafter until the interest of all assureds in such ‘notes’ has been satisfied, or until the motor vehicles shall have been sold and delivered; (in such latter case, however, the interests of the ‘assured’ other than the ‘dealer’ shall be covered) or until this policy shall have been cancelled, as elsewhere provided herein. In the event of any ‘note’ being rejected by the ‘corporation’ when offered, this insurance, will continue for a period of 30 days and no more, in so far as the interests of the ‘dealer’ are concerned (but as to the other assureds until their interests have been fully satisfied and .liquidated) from the date the ‘corporation’ mails the notice of such rejection to the indorsers, drawers, makers and/or acceptors.
“6. It is intended that this policy will protect against the perils of fire, transportation, theft, rob bery and pilferage, as herein defined, any motor vehicle, including commercial and pleasure cars, trucks, tractors, trailers, buses, ambulances, funeral cars, hearses, taxicabs, and motorcycles or any part thereof or attached thereto financed on the wholesale floor plans of the ‘corporation,’ eligible for coverage and insured hereunder, and for which ‘dealers’ have executed ‘notes’ which are held or have been assigned to the ‘corporation’ while within the limits of the United States of America and Canada and while on the floor of the ‘dealer’ or any other place of storage, except as specifically excluded or limited by this policy, and including delivery by conveyance of any kind by land or water, or under their own power to warehouse or other place of storage, except as specifically excluded or limited by this policy, or to ‘dealer’ or ‘bailee’ from ‘factory’, ‘warehouse’ or ‘railroad station’ or other point of delivery and including also delivery by any form of conveyance by land or water or under their own power to a ‘bailee’ from the ‘dealer’, or other ‘bailee’. * * *
“11. While this policy does not contemplate that the ‘dealer’ shall effect specific insurance on any of the motor vehicles covered hereunder at any location, it is expressly understood and agreed that the placing by the ‘dealer’ of such specific insurance at any location,'without knowledge or consent of the ‘corporation’ or through inadvertence or misunderstanding, shall not invalidate the rights of the ‘corporation’ hereunder. It is understood and agreed that this insurance shall be considered as excess insurance when any other insurance exists in the name of the ‘assured’ on any of the property insured, or where other insurance has been taken out in the name of others for the benefit of the ‘assured,’ and this insurance shall not apply or contribute to the payment of any loss until all such other insurance shall have been exhausted, but this provision does not affect the right of the ‘corporation’ to recover hereunder to the extent of its interest, if such other insurance shall have been placed without their knowledge or consent, and the ‘company’ through the ‘general agent’ shall make payment promptly upon receipt of proof of loss, it being understood, however, that in every case where the existence of other insurance comes to the attention of the ‘corporation’ at its home office, at Jackson, Michigan, notice of the existence of this insurance will be given promptly to the ‘company’ through the ‘general agent,’ and the ‘company’ will be subrogated to all rights of the other ‘assured’ in any recovery collected by virtue of the existence of other insurance, to the extent of the net loss paid by the ‘company.’ # # #
“15. The omission or unintentional error on the part of the ‘corporation’ in the preparation of statement will be subject to rectification, provided same is communicated to the ‘company’ through the ‘general agent’ as soon as discovered and provided further that the omission or failure on the part of the ‘corporation’ to omit any transaction from statement sent to the ‘company’ coverable hereunder will not relieve the ‘company’ from its obligations hereunder, if it shall appear that the ‘corporation’ bona fide intended to bring such transaction under the operation of this policy and the ‘assured’ shall be liable for all agreed premiums thereon, it being agreed that this policy will, in accordance with its conditions, cover every motor vehicle which the books of the ‘corporation’ show to have been financed by it on its wholesale plans, and which motor vehicles are eligible for coverage and insured hereunder. All records, books, reports, statements of the ‘corporation’ relating to the transactions covered by this policy shall be open to inspection by the ‘company’ and/or the ‘general agent’ at any reasonable time.”
Defendants urge that paragraphs 5, 6 and 15 are the only paragraphs in the policy which state what cars are to be insured, and all paragraphs state that these are motor vehicles “eligible for coverage and insured hereunder.” It is to be-noted that the essential part of paragraph 6 reads as follows:
“It is intended that this policy will protect # * # any motor vehicle # * # financed on the wholesale floor plans of the ‘corporation,’ eligible for coverage and insured' hereunder, and for which ‘dealers’ have executed ‘notes’ * * * except as specifically excluded or limited by this policy.” ■
It is also to be noted that the following paragraph, in providing for an accounting, only requires the corporation to keep a record showing the amount of wholesale cost of the motor vehicle “eligible for coverage and insured hereunder ’ ’:
“14. The ‘corporation’ agrees to keep an accurate record showing the amount of the wholesale cost to ‘dealers’ of the motor vehicles eligible for coverage and insured hereunder and to furnish the ‘company’ through the ‘general agent’ at the close of each month with a correct statement of average daily wholesale outstanding receivables covering motor vehicles (adjusted to the wholesale laid-down cost at the ‘dealer’s’ place of business), outstanding during the preceding months. A rate of four and one-half cents per month shall be applied to each $100 of the average mean balance developed as per formulae attached hereto as exhibit ‘A,’ and the amount so obtained shall be the monthly premium for coverage provided under this policy which shall thereupon become due and payable to the ‘company’ through the ‘general agent.’ ”
In our opinion the policy does not provide for total insurance. If it was intended that every motor vehicle financed by the corporation must be insured, it would have required an accounting on all vehicles 'financed. Moreover, it is to be noted that this wholesale policy is ambiguous in its terms. Obviously, it is a contract prepared by the insurer, or its general agent, and therefore must be construed against the insurer. See In re Petition of Hume, 260 Mich. 555. Being so construed, it must be held that it does not provide for total insurance.
The retail policy covers retail sales of motor vehicles on the deferred payment plan. It covers such risks as fire, theft, transportation, robbery and pilferage. In order to ascertain what cars are covered by the policy it is necessary to refer to paragraph 17, which reads as follows:
“17. Application for acceptance and evidence of coverage. The ‘named assured’ shall send to the ‘company’ through the ‘general agent’ at thn close of business each day an application in the* form agreed setting forth each transaction to be covered hereunder and the standard information required by the ‘company’ in regard thereto and coverage shall not attach on any motor vehicle not so applied for. The acceptance of each risk and the particulars of coverage thereon, including the perils insured against, and the premium paid thereon, shall be evidenced by a subordinate policy, notice or certificate of participation issued hereunder and forming a part hereof by the ‘company’ through the ‘general agent’ hereunder and each subordinate policy, notice or certificate of participation is hereby made a part of this policy subject to its terms and to any special conditions indorsed on such individual subordinate policy, notice or certificate of participation which the ‘general agent’ will mail or cause to be mailed to the ‘purchaser/assured.’ ”
Under the preceding paragraph it is provided that coverage shall not attach to any vehicle not applied for. Such provision indicates that the Continental Credit Corporation would have some discretion in determining whether it would finance a vehicle “with insurance ” or “ without. ’ ’ Under the foregoing par-' agraph there need not be coverage unless the company finances on the ‘ ‘ with insurance ’ ’ plan. Under the “retail policy” the Continental Credit Corporation has the discretion of not insuring vehicles.
In view of the fact that the interested parties have stipulated that the only question is the liability of the defendants under the policies, we are not concerned with the paid or unpaid premiums, and are in accord with the finding of the trial judge,—“certainly, there is no provision in the policies which definitely, specifically and unequivocally imposes on the defendants the legal duty to place all their business with the plaintiffs.”
The decree of the trial court is affirmed, with costs to defendants.
North, C. J., and Starr, Wiest, Butzel, Bushnell, Boyles, and Reid, JJ., concurred. | [
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Fead, J.
The action is to recover benefits under a total disability clause of a life insurance policy:
“Whenever the company receives due proof * * # that the insured * * * has become wholly disabled by bodily injury or disease so that he is and will be presumably thereby permanently and continuously prevented from engaging in any occupation whatsoever for remuneration or profit,” etc.
Plaintiff is 40 years old, a tailor, without experience in other occupations, and is unable to read or write English. In July, 1928, he became afflicted with phlebitis, inflamation of a vein, and thrombosis, a blood or pus clot in the vein, high in the right leg or thigh. Phlebitis is a stubborn disease. The inflamation may be reduced but exertion of the leg or even general exercise may cause a recurrence of an acute painful condition. Thrombosis involves the danger of the clot breaking into particles which, carried in the blood stream to the brain or heart, may cause death.
It is unnecessary to determine whether “any occupation” means the ordinary vocation of the insured or includes any kind of work within the range of his capacity and condition. See 79 A. L. R. 857, note and prior notes; Metropolitan Life Ins. Co. v. Foster (C. C. A.), 67 Fed. (2d) 264; Brod v. Detroit Life Ins. Co., 253 Mich. 545. The medical testimony is that plaintiff could not pursue any suggested vocation with a reasonable degree of regularity or length of time and without hazard of relapse. The doctors opined that plaintiff is not able to engage in any occupation for gain except under circumstances so favorable and fortuitous as to be without the range of probabilities. They also testified that plaintiff’s disability is probably permanent. The showing of total permanent disability was ample.
Defendant’s principal contention is that “due proof” of total disability was not submitted to defendant. It is argued that it is not the fact of disability but the showing to the company which brings the clause into operation.
Of course the policy cannot fairly be construed to constitute defendant the sole judge of disability nor to mean that the fact of permanent disability is foreclosed in favor of or against either party by the proof made to the company by the insured. Actionable disability ultimately is a question of fact for trial. “Due proof ’ ’ can mean no more than that reasonable evidence of disability within the terms of the policy shall be submitted to the company. Where such evidence is submitted in a good faith attempt to comply with the provisions of the policy the company should point out particularly any defects therein if it intends to rely upon them. Fagerlie v. New York Life Ins. Co., 129 Ore. 485 (278 Pac. 104).
Aside from his own application, filed with the company December 27, 1928, plaintiff submitted the reports of four attending physicians covering treatments from July 26, 1928, to June, 1930, showing the character of his ailment and that he had been totally disabled continuously during that time. The doctors who early treated him made prognosis that his disability would extend into the future but did not express an opinion that it would be permanent. However, they progressively were doubtful of his recovery as time passed and the condition did not yield to treatment and the doctor who attended him in 1930 stated:
“It is my opinion that as much collateral circulation has been established in the right leg as is possible and that condition now is one of total and permanent disability as far as pursuing occupation is concerned. ’ ’
Defendant’s medical examiner examined plaintiff and reported that he found no reason for disability in the physical examination and thought plaintiff would eventually recover. Upon this showing defendant, on September 12, 1930, advised plaintiff that, from the information it had received, it did not appear that he would be permanently, continuously and wholly prevented from pursuing some gainful occupation. It did not ask for further evidence or point out insufficiency of the showing made.
Having before it proof of the nature of the disease, of the results of treatment for two years, of the fact of past and present total disability, and medical opinion that it would be permanent, defendant had such reasonable showing of total disability as constituted “due proof” and required it to pay the benefits or to be prepared to defend upon the fact of disability.
Judgment affirmed, with costs.
Nelson Sharpe, C. J., and Potter, North, Wiest, Bixtzel, and Edward M. Sharpe, JJ., concurred. Btjshnbll, J., did not sit. | [
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Butzel, J.
Petitioner Edward Grzyeskowiak has sued out a writ of habeas corpus accompaniéd by the ancillary writ of certiorari to secure his release from the custody of the sheriff of Wayne county, Michigan, by whom he is being held under an order of the circuit judge. On January 6, 1934, in the city of Hamtramck, Wayne county, Michigan, one Anthony Gossman was murdered by Prank Zajkowski, alias Prank Reed. The homicide occurred in a cafe operated by Thomas Bradley, its owner and proprietor, and was witnessed by petitioner, who worked there as an assistant bartender. The crime was not discovered, nor the body found, until January 21, 1934. Upon recommendation of the prosecuting attorney for Wayne county, a formal written and sworn complaint, charging the said Prank Zajkowski, alias Prank Reed, with the murder, was presented to Honorable Charles Rubiner, judge of the common pleas court of the city of Detroit. On January 27, 1934, the latter, acting under his statutory authority as a magistrate, issued a warrant for the arrest and apprehension of the murderer. The warrant was in good faith placed in the hands of a competent officer, and bona fide efforts have been made to serve it. However, the murderer has not been apprehended up to the present time, but is still, a fugitive from justice.
Contemporaneously with the issuance of the warrant, and while the proceedings were pending in the common pleas court for the city of Detroit, several affidavits were presented to Honorable Arthur Webster, circuit judge, requiring petitioner and other witnesses to enter into recognizances for their appearance upon the preliminary examination of the defendant in the common pleas court, and, if bound over, at his trial in the circuit court. This proceeding was held in accordance with 3 Comp. Laws 1929, § 17249, the same being chapter 7, § 35, of the Michigan code of criminal procedure, which provides as follows:
"Sec. 35. Whenever it shall appear to any court of record that'any person is a material witness in any criminal case pending in any court in the county and that there is danger of the loss of testimony of such witness unless he be required to furnish bail or be committed in the event that he fails to furnish such bail, said court, or a circuit court commissioner in the absence of a judge of any court of record, shall require such witness to be brought before him and after giving him an opportunity to be heard, if it shall appear that such witness is a material witness and that there is danger of the loss of his testimony unless he furnish bail or be committed, said court may require such witness to enter into a recognizance with such sureties in such amount as the court may determine for his appearance at any examination or trial of said cause. All witnesses who fail to so recognize, shall be committed to jail by said court, there to remain until they comply with such order or are discharged by future order of said court. ’ ’
From the affidavits on record it appears that petitioner acknowledged that he was an eyewitness of the murder; that he remained in hiding for a period of about 15 days after the murder, living in a hotel under an assumed name and in company with a woman with whom he maintained an illicit relationship ; that until the night of the shooting, petitioner had been employed as a bartender in the cafe where the murder took place; that in conjunction with the cabaret a disorderly house was conducted in the rear of the adjoining lot. It also appears that immediately after the murder the body of the slain man was transported out of the county and thrown into a field in Macomb county. The prosecutor claims that it may reasonably be inferred that petitioner helped to move the body, but there is no testimony to that effect.
When petitioner was brought before the court, his bail was fixed at $10,000, and, in default of furnishing such bond, he was remanded to - the custody of the sheriff. In the meantime, unsuccessful efforts were being made to apprehend the murderer. After petitioner had been in jail 10 weeks, his application for release on bail was again presented to the trial judge. A hearing was held in open court, and petitioner was given an opportunity to be heard as to why he should not be detained. However, despite the court’s offer, petitioner’s attorney declined to call upon him to testify or to show cause why he should not be required to give recognizance. The attorney claimed that petitioner should be released on Ms own recognizance or on a dollar bond, contending that the proceedings might otherwise amount to life imprisonment without due process of law in the event that the murderer were never apprehended. When the court inquired: “If you want the court to fix some particular time when he will be brought before the court again, I will fix it,” counsel replied: “No, I want the court to fix a bond. Are you going to discharge him or fix a bond ? ’ ’
The court thereupon fixed the bond at $5,000, and, in default of the furnishing of such bond, petitioner was again remanded to the sheriff’s custody.
In opposition to petitioner’s motion for a writ of habeas corpus, the prosecutor insists that if petitioner is released, it is not unreasonable to expect., in view of his antecedents and character, that he will disappear and thus frustrate any attempt to convict the murderer, should the latter be subsequently apprehended. It is further claimed that the entire attitude of the petitioner has been such as to make it appear that he was trying to defeat justice. The court had good reason to characterize petitioner’s conduct as flippant.
Although the murderer had not yet been apprehended at the time of the original proceedings against petitioner, the issuance of the warrant in good faith, and its delivery to an officer to execute, constituted a commencement of the prosecution. People v. Clark, 33 Mich. 112; People v. Clement, 72 Mich. 116. There was, therefore, a criminal case pending in a court in the county, at that time, within the meaning of the above statute. Consequently, since the affidavits clearly show that petitioner was a material witness in such case, and that there was danger of the loss of his testimony unless he were required to furnish bail or be committed, the trial court acted within its rights under the statute in remanding petitioner to the custody of the sheriff when he failed to furnish the bond fixed by the court.
However, we do not believe that the court may, under the statute, hold such a witness for more than a reasonable length of time. As the trial court correctly stated at the hearing, “what that reasonable time is will of necessity depend upon circumstances.” In the instant case petitioner has now been in the custody of the sheriff for approximately four months, and the murderer has not yet been apprehended. Under these circumstances, it would be unreasonable to hold the witness any longer and he should be released on his personal recognizance to appear as a witness at the trial. While we appreciate the difficulties encountered by the police in the detection of crime, the apprehension of criminals, and the securing of attendance of material witnesses, it is nevertheless the duty of all courts to prevent good or bad citizens from being unlawfully and unreasonably molested. In the Matter of Sarah Way, 41 Mich. 299.
The writ is granted upon condition that petitioner enter into a personal recognizance to appear as a witness at the trial.
Nelson Sharpe, C. J., and Potter, North, Fead, Wiest, Bitshnell, and Edward M. Sharpe, JJ., concurred. | [
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Fead, J.
This is mandamus to compel the controller of the city of Detroit to execute certain refunding bonds, in the amount of about $360,000,000. He claims (a) want of proper execution by other officers and (b) want of legal authority to issue the bonds.
Section 3, chapter 5, title 6 of the charter of the city of Detroit reads:
“All bonds issued by the municipality shall be issued in the name of the city of Detroit, a municipal corporation organized and existing under the laws of the State of Michigan, and shall be exempt from all city taxation. Such bonds shall be issued under the seal of the city, regularly dated and numbered and signed by the mayor, countersigned by the controller, and attested by the city clerk.”
Section 12 provides that when the council shall have authorized the sale of bonds, the controller shall prepare them, and shall cause to be written or printed on the outside fold of each bond, the following words “to be signed by the city treasurer:”
“This bond has been made and issued in compliance with law; has been duly registered in the books of this office; and the proceeds of the same, together with all the premiums on sale and interest accruing’ before delivery, have been paid into this office.”
After causing tbe bonds to be duly executed and recorded in his office, the controller shall transmit them to the city treasurer, take his receipt and report to the common council.
Section 13 provides that the city treasurer shall record the bonds, deliver them and report to the common council. “He shall sign the blank prepared by the controller, and no bonds shall be valid without his signature.”
May 8,1934, the common council adopted a resolution for the issuance of refunding bonds, under authority of Act No. 143, Pub. Acts 1933, as supplemented by Act No. 31, Pub. Acts 1934 (Ex. Sess.). The resolution provides:
“Article 11, § TO. All bonds issued under the provisions of this resolution may be signed by the facsimile signatures of the mayor, city clerk and city treasurer in lieu of the manual execution of same by said officers, and facsimiles of said signatures printed, lithographed or engraved on said bonds, shall be due execution of said bonds for all purposes, and such bonds when so executed shall be valid and binding obligations of the city of Detroit. The city controller is hereby directed to sign said bonds by manual signature.”
The next day the mayor, city clerk and city treasurer addressed a communication to the common council notifying it that they would “execute all refunding bonds issued under said resolution with a printed, lithographed, or engraved facsimile signature, which facsimile signatures are hereby adopted by the undersigned as their official signatures for the due execution of said bonds.”
On the same day, the controller notified the common council that he would not sign the bonds by manual signature because there is no authority in law for the execution by the other officers except by manual signature and because he was informed that Act No. 31, 1934 (Ex. Sess.), upon which the city relies for authority to issue the bonds, is unconstitutional.
In actions to enforce public bonds or obligations for which the public body has received consideration, substitute signatures by lithographed facsimile, or name written by another, or printed, have been held valid. Pennington v. Baehr, 48 Cal. 565; Town of Lexington v. Union National Bank, 75 Miss. 1 (22 South. 291); Town of Weyauwega v. Ayling, 99 U. S. 112; Hewel v. Hogin, 3 Cal. App. 248 (84 Pac. 1002); Montgomery v. Township of St. Mary’s, 43 Fed. 362; Toon v. Wapinitia Irrigation Co., 117 Ore. 374 (243 Pac. 554); Just v. Township of Wise, 42 Mich. 573. In those cases elements of estoppel abided because the public had received consideration ; in some, estoppel was emphasized and in some the practice of substitute signature was condemned.
Enforcement of issued obligations is not before us. The precise situation at present is that the mayor, city clerk and city treasurer propose to delegate to a print shop the duty of signing their names to the bonds. Until the bonds are actually printed and approved by the officers, the adoption of signatures could not be completed. The resolution of the common council authorizing facsimile signatures has no effect to legalize the signatures. At most, it provides record evidence for future estoppel. We could hardly declare the signatures sufficient at this time. However, it is the ultimate proposition in which the parties are interested and we pass to it.
We need spend no time on general definitions of the charter words “signed,” “countersigned” and “attested.” Naturally they take some of their force from context and purpose, although “countersign” and “attest” inherently betoken solemn personal acts of authentication of genuineness. 6 C. J. p. 551; 15 C. J. p. 378. The precise, specific and cautious provisions of the charter surrounding the issuance of bonds, obviously designed to provide checks against issuance of spurious securities and to afford evidence of genuineness for ready marketing, put it beyond doubt that the people intended official action of the four officers to be proved by their own handwriting. If any of them may adopt a facsimile signature, all of them may and the safeguards imposed by the charter would be impaired.
The reason given for substitute signatures is to save time of officers and expense to the city. As a matter of moving the discretion of the court, the reason would not overbalance the disadvantage to a bondholder, on enforcement of the obligation, of being required to present affirmative proof of the adoption of the signatures by the officers and discover evidence of estoppel. In any event, no considerations of inconvenience would justify the court in approving, in advance of the issuance of the bonds, violation of the plain mandate of the charter.
The writ of mandamus will be denied, without costs.
The point is also presented whether Act No. 31, 1934 (Ex. Sess.), was adopted in violation of the Constitution, article 5, § 22:
“No bill shall be passed at a special session of the legislature on any subjects than those expressly stated in the governor’s proclamation or submitted by special message. ”
'It is said the city relies on Act No. 31 in its refunding operation. Counsel have ably and exhaustively briefed the general proposition of laws adopted at special sessions of the legislature. But the record does not set up the classes or character of the bonds to be refunded. Counsel do not attempt an analysis of the act nor indicate in what manner it is involved in the refunding project. Aside from the fact that the present controversy is disposed of on the question of signatures and the rule that constitutionality of an act will not be passed upon where a case may be otherwise decided, the effect of a ruling on validity has such far-reaching possibilities that we think it should not be made except upon full presentation of facts and law.
Writ denied, without costs.
Nelson Sharpe, C. J., and Potter, North, Wiest, Butzel, Bushnell, and Edward M. Sharpe, JJ., concurred. | [
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Gleicher, J.
This appeal focuses on the validity of a warrantless administrative search of a business owned by defendant Adnan Eddi Beydoun. After the administrative search and a subsequent seizure of tobacco products, a district court bound defendant over for trial on two charges of violating the Tobacco Products Tax Act (TPTA), specifically MCL 205.428(3) (possessing, acquiring, transporting, or offering for sale in violation of the act 3,000 or more tobacco products with an aggregate wholesale price of $250 or more). Defendant moved to suppress evidence of the seized tobacco and dismiss the charges, arguing that the warrantless searches violated his Fourth Amendment rights. The circuit court granted defendant’s motions, and the prosecution now appeals as of right. We reverse and remand.
i
At defendant’s preliminary examination, state police detective Michael Foley testified that in 2005 he was working as a specialist with the state police’s tobacco tax team. Foley described the tax team’s responsibilities as including the performance of administrative inspections to ascertain whether establishments possessed state-mandated licenses to sell tobacco, pre-licensing activities, and “checking] on.. . counterfeit tobacco products and tobacco products brought into the state legally and illegally.” Foley further explained that “we would check for tobacco tax stamps [on cigarettes or] an OTP Stamp, which is other tobacco products stamp on cases,” as mandated by Michigan’s tobacco tax statutes.
Foley recounted that on September 23, 2005, he went to defendant’s Dearborn Heights business, the Arabian Market at 26018 Ford Road, intending to conduct an administrative inspection after having received an anonymous tip concerning the presence of illegal tobacco products at the market. When Foley entered the market, defendant identified himself as the store owner, prompting Foley to “explain[] to him who I was and who I was with that we were there to conduct [an] administrative inspection.” Foley requested “to see four months [sic] worth of invoices for all tobacco products on the premise[s]. . ., the tax ID of the store and any other licenses that he possessed.” According to Foley, defendant gave him invoices for the tobacco in the market and “a sales tax license for the store” and told him that he possessed a federal tobacco-related license. But Foley recalled that with respect to a Michigan tobacco tax license necessary for possessing or selling tobacco in Michigan, defendant denied having one, although he averred that “he had recently applied for one.”
Foley recalled that he reviewed the invoices defendant presented, intending to compare the listed tobacco products with those inside the Arabian Market. At least one invoice identified the purchaser of some tobacco “from the Middle East” as Starco Import & Export, L.L.C., which defendant explained was “a business that he owns ... that... runs out of the same building that we were at.” Foley related that he contacted the Department of Treasury and learned that the Arabian Market, Starco, and defendant did not hold Michigan tobacco tax licenses. When Foley inquired concerning the whereabouts of more than “two thousand cases of Molasses Tobacco that had been shipped to the United States” according to one invoice, defendant took Foley to a storeroom that contained more than 300 cases of molasses tobacco, which is considered “OTP” tobacco. Foley recounted defendant’s explanation that he had sold some of the tobacco shown on the invoice. None of the cases of tobacco stored at the Arabian Market bore Michigan tobacco tax stamps.
Foley testified that he and other agents seized the 300 plus cases of tobacco, valued at $84 a case, because defendant unlawfully possessed the tobacco without a Michigan tobacco tax license and the required state tobacco tax stamps. Foley averred that he gave defendant “a notice of seizure and an inventory of everything that was seized,” then placed the tobacco in police storage. Foley added that on October 20, 2005, a civil hearing occurred to examine the lawfulness of the Arabian Market tobacco seizure, that defendant disclosed at the hearing that the remaining number of about 2000 cases of tobacco listed on the molasses tobacco invoice “were at... a building that he owns” next door to the Arabian Market, and that defendant and his counsel “agreed to turn it over to us at that time.” Around noon on October 21, 2005, after defendant’s counsel apprised Foley that the remaining tobacco was located at defendant’s Dearborn Heights residence, Foley went there to retrieve the remaining cases of tobacco. Foley recounted that defendant “invited us in,.. . took us to his basement and showed us where the remainder of the product was,” and “also showed us around the whole house to show that there was no other product anywhere else in the garage or any other bedrooms” and that the police “took out one thousand seven hundred and seventeen cases of Molasses Tobacco from his residence,” also worth $84 a case. The district court bound defendant over on the two charged counts, reasoning that “[MCL] 205.428 seems pretty clear, he’s got to have a license.”
In the circuit court, defendant moved to quash the charges. Defendant additionally moved for an evidentiary hearing on the constitutionality of the September 23, 2005, warrantless seizure of tobacco from the Arabian Market. Defendant argued that “the search of [his] premises was not for administrative purposes but actually was intended for criminal purposes and the administrative subterfuge used by the Michigan State Police was a violation of the Fourth Amendment.” The prosecution responded that (1) “the TPTA and the product it seeks to regulate are part of a pervasively regulated industry,” rendering valid the warrantless “administra tive search of the Arabian Market,” (2) the state police had probable cause supporting the search of the Arabian Market in light of the anonymous tip they received about a large quantity of “illegal contraband OTF¡” together with defendant’s admissions at the market that strengthened the reliability of the anonymous tip, and (3) the state police lawfully seized the tobacco products from defendant’s house on October 21, 2005, because (a) they had probable cause to believe they would find the tobacco products there after defendant admitted possessing additional cartons and (b) defendant consented to the police search of his home and the seizure of the additional “unstamped OTP cartons.”
At a hearing in July 2007, Detective Foley and Sergeant Angela Fleming, another trooper who participated in the inspection of the Arabian Market on September 23, 2005, offered testimony largely mirroring Foley’s description of events at defendant’s preliminary examination while clarifying several points: no one obtained an administrative warrant or a search warrant supporting the administrative search, which occurred during the store’s business hours, despite the lack of exigent circumstances; no one explained to defendant before questioning him at the Arabian Market the criminal consequences that potentially could arise from the search; and the troopers did not place defendant in custody but permitted him to conduct store business during the inspection, which took about three hours. Foley and Fleming did not believe that they needed any kind of warrant to conduct the inspection.
The circuit court issued a bench ruling, explaining that it would grant defendant’s motions to suppress all the seized tobacco:
Now, in these situations with an anonymous tip — I mean, [defense counsel] has indicated that this appears to be a pretext. And I think that when you look at all the facts and circumstances here, the administrative inspection was clearly a pretext for a criminal case. There was an anonymous tip. This gave rise to probable cause for a warrant. No warrant was issued. Quite a few people arrived. They arrived after their usual business hours but during the business hours of the store. Again, that’s part of the pretext. They began the search before all of the invoices were provided and all of the investigation was conducted in terms of questions of Mr. Beydoun.
Mr. Beydoun was never advised that there could be any criminal consequences here. And, clearly, from the licenses that he held and had applied for, Mr. Beydoun obviously had an intent to comply with the law, and may have made a mistake, and the price of that mistake has been that civil forfeiture.
At the very minimum, an administrative warrant could have been received based upon reasonable cause based upon the anonymous tip. But we cannot bootstrap the requirement under the Fourth Amendment for a search warrant based upon the consent to the civil inspection, or the hearing; nor can we bootstrap the requirements for a search warrant or an administrative warrant based upon Mr. Beydoun’s compliance with the so-called administrative inspection which took place.
But I think that when you look at all of the facts and circumstances here — and I’m not by any means suggesting that the officers here had any kind of malicious intent. They may be mistaken. But the role of government is to remember, in part, that defendants are also people of the State of Michigan, and we all are entitled to the protections. At a very minimum, Mr. Beydoun should have been advised that there could be criminal consequences to this inspection. But the inspection, even in the testimony today, the officers were assuming, in their minds, that they were just doing civil inspections. And I frankly don’t think they thought there would ever be criminal charges here. But now that there are, we have to look back on what they did, what they knew, and what they should have done.
They knew, because of the anonymous tip, that they had enough for a warrant. And they certainly knew when they got there and did their quote, administrative inspection, that the product was there, and could have gotten a warrant at that point. There was absolutely no risk of flight, no risk of destruction of product. They had the ability to guard it and to get it. And they didn’t. So the motion is granted.
In each circuit court file, the circuit court that same day entered form orders granting defendant’s motion for “suppression of evidence” and separate orders dismissing the charges against him.
ii
A. STANDARD OP REVIEW
The prosecution maintains that the circuit court erred by granting defendant’s motions to suppress the seized tobacco and dismiss the charges against him because the searches that occurred had justification in exceptions to the general search warrant requirement. When reviewing a bindover decision, the following standards apply:
A magistrate’s ruling that alleged conduct falls within the scope of a criminal statute is a question of law reviewed [de novo] for error, and a decision to bind over a defendant is reviewed for abuse of discretion. In reviewing the district court’s decision to bind over a defendant for trial, a circuit court must consider the entire record of the preliminary examination, and it may not substitute its judgment for that of the magistrate. Reversal is appropriate only if it appears on the record that the district court abused its discretion. . . . Similarly, this Court reviews the circuit court’s decision de novo to determine whether the district court abused its discretion. [People v Orzame, 224 Mich App 551, 557; 570 NW2d 118 (1997) (citations omitted).]
This Court also considers de novo questions of constitutional law. People v Aceval, 282 Mich App 379, 389; 764 NW2d 285 (2009).
B. GOVERNING LEGAL PRINCIPLES
“It is well settled that both the United States Constitution and the Michigan Constitution ‘guarantee the right of persons to be secure against unreasonable searches and seizures.’ ” People v Hellstrom, 264 Mich App 187, 192; 690 NW2d 293 (2004) (citation omitted). “A search without a warrant is unreasonable per se and violates both the Michigan Constitution and the United States Constitution unless the search is shown to be within an exception to the general rule.” People v Barnes, 146 Mich App 37, 40-41; 379 NW2d 464 (1985). “While it is well established that the Fourth Amendment’s prohibition of unreasonable searches and seizures applies to administrative inspections of private commercial property, an exemption from the search warrant requirement exists for administrative inspections of closely regulated industries.” Gora v City of Ferndale, 456 Mich 704, 715; 576 NW2d 141 (1998). Whether the exemption applies is primarily determined by the pervasiveness and regularity of the regulation and the effect of such regulation upon an owner’s expectation of privacy. Id. at 715-716.
Our Supreme Court delineated the contours of the “pervasively regulated industry” doctrine in Michigan in Tallman v Dep’t of Natural Resources, 421 Mich 585; 365 NW2d 724 (1984). After carefully surveying federal and sister state caselaw analyzing the pervasively regulated industry doctrine elsewhere, which our Supreme Court viewed as “persuasive,” the Court summarized as follows the features of Michigan’s pervasively regulated industry doctrine:
We conclude that conflicts arising under art 1, § 11 of the Michigan Constitution between the enforcement needs of governmental agencies and the privacy interests of regulated commercial actors should be resolved by balancing the following factors:
(1) the existence of express statutory authorization for search or seizure;
(2) the importance of the governmental interest at stake;
(3) the pervasiveness and longevity of industry regulation;
(4) the inclusion of reasonable limitations on searches in statutes and regulations;
(5) the government’s need for flexibility in the time, scope, and frequency of inspections in order to achieve reasonable levels of compliance;
(6) the degree of intrusion occasioned by a particular regulatory search; and
(7) the degree to which a business person may be said to have impliedly consented to warrantless searches as a condition of doing business, so that the search does not infringe upon reasonable expectations of privacy. [Id. at 617-618.]
The Supreme Court described the seven-factor balancing test as “a rational approach” in attempting to address the “meaningful distinction between regulatory or administrative searches and those conducted for the purpose of discovering the fruits or instrumentalities of crime.” Id. at 618. The Supreme Court then summarized some of the meaningful distinctions:
The administrative inspector must be equipped with investigatory techniques which differ from those available to peace officers because regulatory misconduct differs from criminal misconduct. Most administrative code violations occur in areas not readily subject to public oversight, and hence go unreported and must be sought out. Criminal acts, on the other hand, are often committed in public places or directly involve a victim with a high incentive to report a loss or injury. Code enforcement generally involves repeated detections of numerous minor violations; enforcement of criminal statutes often requires extensive investigation of a single flagrantly illegal act. [Id. at 618-619.]
C. ANALYSIS OF SEARCH AND SEIZURE AT ARABIAN MARKET
1. FACTOR ONE
Applying the seven Tallman factors to the tobacco tax team’s search and seizure at the Arabian Market on September 23,2005, we observe with respect to the first factor that the TPTA contains several provisions expressly authorizing both the search and the seizure. In MCL 205.426, the Legislature imposed voluminous recordkeeping requirements on multiple tobacco-related actors and included the following provision authorizing inspection of records:
(5) All statements and other records required by this section shall be in a form prescribed by the department and shall be preserved for a period of 4 years and offered for inspection at any time upon oral or written demand by the department or its authorized agent by every wholesaler, secondary wholesaler, vending machine operator, unclassified acquirer, and retailer.
The TPTA section governing tobacco tax stamps and stamping requirements, MCL 205.426a, contains several relevant legislative grants of authority to the department or its agents:
(5) The department or its authorized agents may inspect or conduct an inventory of a wholesaler’s or unclassified acquirer’s stock of cigarettes, tobacco products other than cigarettes, and stamps during regular business hours and inspect the related statements and other records required in [MCL 205.426],
(6) The department or its authorized agents may inspect the operations of a secondary wholesaler, vending machine operator, or retailer, or the contents of a specific vending machine, during regular business hours. This inspection shall include inspection of all statements and other records required by [MCL 205.426], of packages of cigarettes and tobacco products other than cigarettes, and of the contents of cartons and shipping or storage containers to ascertain that all individual packages of cigarettes have an affixed stamp of proper denomination as required by this act. This inspection may also verify that all the stamps were produced under the authority of the department.
(7) A person shall not prevent or hinder the department or its authorized agents from making a full inspection of any place or vending machine where cigarettes or tobacco products other than cigarettes subject to the tax under this act are sold or stored, or prevent or hinder the full inspection of invoices, books, records, or other papers required to be kept by this act.
The TPTA additionally contemplates seizure, in relevant part in MCL 205.429(1):
A tobacco product held, owned, possessed, transported, or in control of a person in violation of this act, and a vending machine, vehicle, and other tangible personal property containing a tobacco product in violation of this act and any related books and records are contraband and may be seized and confiscated by the department as provided in this section.
These provisions expressly and plainly show the Legislature’s intent to invest the department and its agents, including state and local police, with search and seizure authority under the TPTA.
2. FACTOR TWO
With respect to the second Tollman factor, “the importance of the governmental interest at stake,” Tollman, 421 Mich at 617, this Court has observed that the TPTA “is at its heart a revenue statute, designed to assure that tobacco taxes levied in support of Michigan schools are not evaded.” People v Nasir, 255 Mich App 38, 42; 662 NW2d 29 (2003). Michigan courts have long and consistently recognized the strong or significant governmental interest in revenue collection. The Michigan Supreme Court restated the important nature of revenue collection in Wikman v City of Novi, 413 Mich 617; 322 NW2d 103 (1982), explaining that the
“object of that law, as it is of this, is to enable the government to collect its revenues without delay. The obligations of the government must be met promptly, and it is better that the citizen should resort to his common-law remedies to secure his rights, so far as a mere payment of what he claims may he an illegal tax is concerned, than the government should he embarrassed in the collection of revenues necessary to defray its expenditures.
“ ‘Courts have frequently remarked upon the impossibility of the government calculating with any certainty upon its revenues, if the collection of taxes was subject to be arrested in every instance in which a tax-payer or tax collector could make out prima facie a technical case for arresting such collection, and it is justly said to be much better to let the individual pay to the government the demands it makes upon him, and, if he considers them in whole or in part illegal, apply for the refunding of the money, with interest afterwards.’ Cooley, Taxation (2d ed), p 762.”
The significant public interest underlying the collection of revenues by the government resulted in limitations upon a taxpayer’s ability to contest tax assessments and obtain refunds of generad revenue taxes. [Id. at 626-627, quoting Eddy v Lee Twp, 73 Mich 123, 129-130; 40 NW 792 (1888).]
See also Detroit v Nat’l Exposition Co, 142 Mich App 539, 547; 370 NW2d 397 (1985) (holding that MCL 213.291 serves the “important governmental interest of revenue collection at a fairly insignificant risk to the private property owner”). The state thus undisputedly has a substantial and important interest in collecting the tax revenues generated under the TPTA.
3. FACTOR THREE
Regarding Tollman factor three, “the pervasiveness and longevity of industry regulation,” Tallman, 421 Mich at 617, the TPTA can aptly be described as a pervasive group of tobacco product regulations. The TPTA, which is codified at MCL 205.421 through MCL 205.436, contains detailed definitions, licensing and stamping requirements, recordkeeping and document maintenance obligations, schedules of tax rates, civil and criminal penalties for violations of the TPTA, procedures governing seized property, and a delineation of tobacco tax disbursements for various purposes. Several administrative rules further govern tobacco products. Mich Admin Code, R 205.451 et seq. And statutory tobacco product regulation and taxation in Michigan constitutes a tradition extending back more than half a century. In 1947, our Legislature enacted a comprehensive and detailed act imposing regulations and levying taxes on cigarettes, 1947 PA 265, which became 1948 CL 205.501 et seq. Similar detailed cigarette tax acts remained in effect through subsequent compilations, 1970 CL 205.501 et seq. and 1979 CL 205.501 et seq., until the Legislature repealed the cigarette tax act in favor of the TPTA. 1993 PA 327, effective March 15, 1994. In summary, detailed and pervasive tobacco regulation and taxation have had a long history in our state.
4. FACTORS FOUR AND SIX
Considering Tallman factor four, “the inclusion of reasonable limitations on searches in statutes and regulations,” Tallman, 421 Mich at 618, we note that the TPTA contains several relevant sections addressing the department’s and its agents’ authority to inspect and search. Pursuant to MCL 205.426(5),
[a]ll statements and other records required by this section shall be in a form prescribed by the department and shall be preserved for a period of 4 years and offered for inspection at any time upon oral or written demand by the department or its authorized agent by every wholesaler, secondary wholesaler, vending machine operator, unclassified acquirer, and retailer. [Emphasis added.]
Although this subsection contemplates that various participants in cigarette distribution in Michigan must supply records “for inspection at any time upon oral or written demand by the department or its authorized agent,” the records subject to inspection are limited to the records required under MCL 205.426.
The provisions that the prosecution relies on for justifying the search of the Arabian Market in this case include the following relevant subsections of MCL 205.426a:
(5) The department or its authorized agents may inspect or conduct an inventory of a wholesaler’s or unclassified acquirer’s stock of cigarettes, tobacco products other than cigarettes, and stamps during regular business hours and inspect the related statements and other records required in [MCL 205.4261
(6) The department or its authorized agents may inspect the operations of a secondary wholesaler, vending machine operator, or retailer, or the contents of a specific vending machine, during regular business hours. This inspection shall include inspection of all statements and other records required by [MCL 205.426], of packages of cigarettes and tobacco products other than cigarettes, and of the contents of cartons and shipping or storage containers to ascertain that all individual packages of cigarettes have an affixed stamp of proper denomination as required by this act. This inspection may also verify that all the stamps were produced under the authority of the department. [Emphasis added.]
As reflected in the clear and unambiguous language of MCL 205.426a(5) and (6), the Legislature inserted the significant limitation that searches of the various named tobacco dealers may occur only in the course of regular business hours. And MCL 205.426a(5) and (6) further limit potential inspections to the records mandated under MCL 205.426, cigarettes and other tobacco products, and tobacco stamps and, under subsection 6, inspections to determine whether “all individual packages of cigarettes have an affixed stamp of proper denomination as required by this act.”
One more noteworthy section of the TPTA concerning searches and seizure is MCL 205.429(2):
If an authorized inspector of the department or a police officer has reasonable cause to believe and does believe that a tobacco product is being acquired, possessed, transported, kept, sold, or offered for sale in violation of this act for which the penalty is a felony, the inspector or police officer may investigate or search the vehicle of transportation in which the tobacco product is believed to be located. If a tobacco product is found in a vehicle searched under this subsection or in a place of business inspected under this act, the tobacco product, vending machine, vehicle, other than a vehicle owned or operated by a transportation company otherwise transporting tobacco products in com pliance with this act, or other tangible personal property-containing those tobacco products and any books and records in possession of the person in control or possession of the tobacco product may be seized by the inspector or police officer and are subject to forfeiture as contraband as provided in this section. [Emphasis added.]
MCL 205.429(2) conditions a search on reasonable cause that a felony violation of the TPTA has occurred.
In summary, the TPTA imposes substantial limitations on searches performed by the department and its agents, primarily that the searches take place in the course of normal business hours and that the searches remain focused on TPTA-mandated records and various tobacco products to ascertain whether they comply with the TPTA.
Regarding related Tallman factor six, the available evidence in this case reflects that “the degree of intrusion occasioned by [the] particular regulatory search” did not qualify as excessive or unnecessary. Tallman, 421 Mich at 618. Several tax team members accompanied Detective Foley to the Arabian Market in the midafternoon of September 23, 2005, during the market’s regular business hours. Shortly thereafter, defendant supplied Foley with his identification, tobacco license information, and other tobacco-related documentation, including invoices. Foley ascertained from the state of the documentation that neither defendant nor his corporate entity that purchased some molasses tobacco possessed a Michigan tobacco license, which he then confirmed by calling the Department of Treasury. He also confirmed that the company that sold Starco the tobacco did not have a Michigan tobacco license. With defendant’s guidance, Foley and other agents entered a storeroom and observed that multiple cartons of molasses tobacco did not bear the Michigan tobacco tax stamp mandated by the TPTA, prompting them to seize approximately 300 cartons of tobacco. Foley estimated that the search and seizure took approximately three hours, during which defendant and an assistant continued operating the market. No indication exists that the September 23, 2005, inspection or search exceeded the reasonably circumscribed search authority granted the tax team members by the TPTA.
5. FACTOR FIVE
Turning to Tallman factor five, “the government’s need for flexibility in the time, scope, and frequency of inspections in order to achieve reasonable compliance,” Tallman, 421 Mich at 618, we note that two prior decisions of this Court offer helpful guidance. In Barnes, this Court considered the propriety of a warrantless search and seizure that took place at the defendant’s automobile salvage yard, which was subject to statutory regulation. Barnes, 146 Mich App at 39-40. The Court carefully applied the Tallman factors to reach its determination concerning the validity of the search, noting with regard to factor five that the
government’s need for flexibility in conducting searches without warrants is apparent. A person who knowingly buys or sells stolen automobile parts is not likely to complain to the police. A person who innocently buys stolen automobile parts would have no occasion to do so. Trafficking in stolen automobile parts is, to that extent, a victimless crime, the only victim being the owner of the property that was originally stolen. Stolen automobile parts are much less readily identifiable than the stolen automobiles themselves. . .. Further, we suspect that even the vast majority of automobile parts dealers who are not knowingly dealing in stolen parts might nevertheless become somewhat casual in their record keeping and purchasing practices if they are not exposed to the potential of a search without a warrant. [Id. at 46-47.]
This Court more recently discussed Tollman factor five in the context of the former Michigan Liquor Control Act, MCL 436.1 et seq.:
The next factor is focused on the government’s need for flexibility in the time, scope, and frequency of the inspections. This factor is necessarily related to the nature of the industry and the extent to which the industry is pervasively regulated. In the case of the liquor industry, the potential for violation is. extremely high and the danger occasioned by certain violations may be severe. In order to offer incentive to licensed business owners to comply with the provisions of the Liquor Control Act, it is somewhat necessary to enforce the provisions under the fear of an unannounced search of the premises. Moreover, the nature of the violation in the case at hand is such that an announced search would arguably lead to destruction of the evidence and thereby frustrate the purpose of the regulatory scheme. [People v Thomas, 201 Mich App 111, 119-120; 505 NW2d 873 (1993).]
With this guidance in mind, we observe that the incentive for a violator of the TPTA, or the beneficiary of a TPTA violation, to report those violations appears de minimis at best, especially because only the state falls victim to the lost tobacco tax revenue that TPTA compliance would have generated. The easy transferability or disposability of cigarettes and other tobacco products also gives rise to the concern noted in Thomas “that an announced search would arguably lead to destruction of the evidence and thereby frustrate the purpose of the regulatory scheme.” Id. at 120. And as this Court has also deemed relevant, the potential for an unannounced search or inspection conceivably would foster greater compliance with the TPTA’s regulations by those engaged in the tobacco business. Id.; Barnes, 146 Mich App at 47. In conclusion, we find that the state has a legitimate and strong need for flexibility in the time, scope, and frequency of inspections in order to achieve reasonable compliance with the TPTA.
6. FACTOR SEVEN
We lastly must address Tollman factor seven, “the degree to which a business person may be said to have impliedly consented to warrantless searches as a condition of doing business, so that the search does not infringe upon reasonable expectations of privacy.” Tallman, 421 Mich at 618. Several details of this case lead us to conclude that defendant impliedly acceded to warrantless searches as a condition of participating in the tobacco business. As we observed earlier, comprehensive and pervasive tobacco regulation and taxation have a long statutoiy histoiy in Michigan, which would tend to undercut the reasonableness of any notion that defendant should not have anticipated warrantless inspections of his business premises under the plain language of the TPTA authorizing such searches. Barnes, 146 Mich App at 47 (emphasizing that “[g]iven the long duration of comprehensive Michigan regulation of [the automobile salvage yard] business, defendant cannot claim any reasonable expectation of privacy regarding the search involved here”); see also Thomas, 201 Mich App at 121 (observing that “[g]iven the extensive regulation of the liquor industry and the decreased expectation of privacy in certain commercial property, we believe that defendants should have reasonably expected a search without a warrant to occur on the premises”) (citation omitted). The TPTA additionally sets forth expressly that persons who purchase, possess, acquire for resale, or sell tobacco in Michigan must have a Michigan tobacco license, MCL 205.423(1). People v Motor City Hosp & Surgical Supply, Inc, 227 Mich App 209, 215; 575 NW2d 95 (1997) (noting “the deeply rooted rule that ignorance of the law or a mistake of law is no defense to a criminal prosecution”). Furthermore, at the time of the warrantless search on September 23, 2005, defendant (1) had engaged in the sale of tobacco and possessed large quantities of molasses tobacco, (2) had founded Starco to import and export tobacco products, (3) held a federal license authorizing him to import tobacco, and (4) had submitted an application for a Michigan tobacco tax license. We conclude that defendant impliedly consented to warrantless searches as a condition of his participation in the tobacco business because Michigan has comprehensively regulated tobacco for decades, defendant had substantial familiarity with the tobacco licensing process and other tobacco regulations, and the plain and unambiguous language of the TPTA authorized the department and its agents to review tobacco-related documentation and inspect tobacco products.
7. CONCLUSION CONCERNING CONSTITUTIONAL VALIDITY OF ARABIAN MARKET SEARCH
Our examination of the Tollman factors, all of which weigh in favor of the state’s need to enforce the TPTA, leads us to conclude that the state’s interest in performing warrantless inspections and searches in the limited manners set forth in the TPTA outweighs the privacy expectations of those who engage in tobacco transactions in Michigan and that Michigan’s tobacco businesses thus “fall[] within the parameters of the pervasively regulated industry exception to the warrant requirement.” Tallman, 421 Mich at 630-631. Consequently, Detective Foley and his colleagues need not have secured any form of warrant before inspecting the Arabian Market on September 23, 2005, and seizing the unstamped tobacco found there in violation of the TPTA. The search and seizure at the Arabian Market thus did not violate either the Fourth Amendment or Const 1963, art 1, § 11. The circuit court incorrectly applied the law in finding the search invalid.
Defendant offers no authority specifically supporting his assertion “that the search of the premises was not for administrative purposes but actually was intended for criminal purposes and the administrative subterfuge used by the Michigan State Police [thus] was a violation of the Fourth Amendment.” Furthermore, defendant either miscomprehends or misrepresents the nature of the appeals in Barnes and Thomas. In both Barnes and Thomas, just as in this case, the defendants faced felony charges stemming from warrantless searches of places of business. Barnes, 146 Mich App at 39-40 (three counts of receiving and concealing stolen property worth more than $100, former MCL 750.535, which carried possible sentences of up to five years’ imprisonment and a $2,500 fine); Thomas, 201 Mich App at 114-115 (counts of possessing 50 grams or more but less than 225 grams of cocaine with intent to deliver it, MCL 333.7401(2)(a)(iii), which at that time required imprisonment of 10 to 20 years). This Court in both Barnes and Thomas held the warrantless searches constitutionally valid under the principles set forth in Tollman and upheld or reinstated the felony charges against the defendants. Barnes, 146 Mich App at 40-47; Thomas, 201 Mich App at 117-122. With respect to defendant’s related suggestion that the administrative inspection was invalid because it amounted to a pretext for finding a criminal violation, we observe that the record contains no evidence giving rise to a reasonable inference that Foley and his colleagues searched the Arabian Market while in reality entertaining the subjec tive intent to establish defendant’s commission of a felony. The record simply reveals nothing to support that Foley and the other search participants arrived to inspect the Arabian Market with the “primary purpose... to detect evidence of ordinary criminal wrongdoing.” Indianapolis v Edmond, 531 US 32, 38; 121 S Ct 447; 148 L Ed 2d 333 (2000).
In summary, the circuit court misapplied the law in reversing the district court’s bindover determinations.
III. VALIDITY OF LATER SEARCH OF DEFENDANT’S RESIDENCE
The subsequent warrantless search of defendant’s home and the seizure of tobacco from the home were valid because defendant gave his consent. “A consent to search permits a search and seizure without a warrant when the consent is unequivocal, specific, and freely and intelligently given.” People v Galloway, 259 Mich App 634, 648; 675 NW2d 883 (2003). At the civil administrative hearing, defendant, who was represented by counsel, revealed that he had possession of many additional cases of molasses tobacco. Defendant and his counsel agreed to turn the tobacco over to the department and made arrangements for the pickup of the tobacco to take place at defendant’s home on October 21, 2005. No evidence suggests that the department or its agents coerced defendant at his home to admit having additional tobacco, to allow officers to search his home for the tobacco, or to surrender the tobacco. To the contrary, the available record establishes that defendant fully cooperated with Detective Foley and his colleagues when they arrived at his house, freely showed them around, and voluntarily gave them the nearly 2,000 cases of tobacco he had placed in his basement. We conclude that defendant freely, intelligently, unequivocally, and specifically consented to the search and seizure that occurred at his home, which therefore did not violate either his Fourth Amendment rights or his rights under Const 1963, art 1, § 11.
Reversed and remanded for reinstatement of the charges and further proceedings consistent with this opinion. We do not retain jurisdiction.
Foley’s subsequent investigation revealed that Starco held a current federal license permitting it “to import tobacco.” Starco had also filed an application, signed by defendant on September 6, 2005, with the Michigan Department of Treasury to obtain “a Tobacco Products Tax License.”
In this motion, defendant theorized that because he undisputedly possessed a federal license authorizing him to import and export tobacco products, and because Michigan’s tobacco licensing statutes directly conflicted with the federal licensing scheme, “pursuant to the Supremacy Clause of the United States Constitution the Federal Licensing statute should apply based on the Interstate Commerce Clause which grants Congress exclusive power to regulate the channels of interstate commerce.” Defendant has not raised this issue on appeal.
Pursuant to MCL 205.428(9), “[a]t the request of the department or its duly authorized agent, the state police and all local police authorities shall enforce the provisions of this act.”
These charges constituted felonies under MCL 750.535(1) before the Legislature’s 1998 amendment of MCL 750.535 by 1998 PA 311. | [
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Fellows, J.
Defendant here reviews on exceptions before sentence his conviction of assault with intent to commit the crime of rape. Without detailing it, the testimony of the prosecutrix, who was above the age of consent, established, if believed, an assault by defendant upon her with such intent, and her successful resistance of the same. Defendant gave testimony in his own behalf, which, if believed, established that he had on previous occasions had illicit relations with prosecutrix and that on the occasion in question he went no further than to solicit a repetition of such relations with no intent to commit rape. The prosecutrix denied any prior acts of intercourse.
The first question which we should consider grows out of information as filed and an amendment made to it on the trial. The complaint filed with the magistrate, and upon which an examination was had, charged that:
“Heretofore, to wit, on the 24th day of June, A. D. 1925, at the township of Jamestown in the county aforesaid, one Frank Petty did then and there wilfully, unlawfully and feloniously make an assault upon her, the said Ada Hoeve, a female person being then and there over the age of sixteen years, to wit: the age of twenty-two years, by force and against' her will, with intent to commit the crime of rape.”
The information as originally filed did not contain the words “by force and against her will,” but did allege the assault “with intent to commit upon the person of said Ada Hoeve the crime of rape.” After the jury had been sworn, defendant’s counsel filed a motion to quash the information, claiming that it was insufficient because of the omission of the words “by force and against her will.” The trial judge, doubtless acting under section 15747, 3 Comp. Laws 1915, permitted an amendment to the information by adding these words, and the case proceeded over defendant’s objection.
We pass without comment the fact that the motion was not made at the time pointed out by the statute, that under the complaint the prosecuting attorney was authorized in the first instance to file an information containing the words in question and that we have liberal statutes of amendments, and take up at once the question of the sufficiency of the information as originally filed. The crime with which defendant was charged, and of which he stands convicted, is a statutory one, the statute being section 15212, 3 Comp. Laws 1915, which reads as follows:
“If any person shall assault any female with intent to commit the crime of rape, he shall be deemed a leionious assaulter, and shall be punished by imprisonment in the State prison not more than ten years, or by fine not exceeding one thousand dollars.”
The original information charges defendant in the language of the statute with an assault “with intent to commit * * * the crime of rape.” We need consider but one case to establish the sufficiency of the information. In Rice v. People, 15 Mich. 9, the information charged an assault with intent to murder; it did not charge the offense to have been committed “feloniously, wilfully and of malice aforethought,” and it was insisted that this omission rendered it defective. Mr. Justice Cooley, considering this objection, said:
“The information charges the defendants with an assault with intent to murder. Murder is an offense which the law defines; one of the essential ingredients of which is malice aforethought. To charge an intent to kill and murder, is to charge an intent to kill under circumstances which would make the killing amount to murder; that is, with premeditated malice.' No further words are necessary to inform the accused of the nature of the charge against him; and if more are essential for any purpose, it can only be for technical reasons.”
So we say, as applied to the case before us, where the female is above the age of consent, rape is the carnal knowledge of the female by force and against her will, and the charge of an assault with intent to commit rape is a charge of an assault with intent to carnally know the female under such circumstances as to amount to rape. The recent case of People v. Donovan, 228 Mich. 149, is clearly distinguishable. In that case it did not appear that there had been an examination or what the complaint contained, the information did not follow the statute, charged no statutory crime or any crime known to the law. It, therefore, could not be amended. There was nothing to amend by.
Objection is made to the extent to which the court permitted cross-examination of defendant. Some of the earlier decisions of this court give color to de fendant’s contention, but in People v. Cutler, 197 Mich. 6, this court reviewed the cases and held (we quote from the syllabus):
“It is permissible, within the discretion of the court, to discredit a witness, upon cross-examination, by showing the witness’ want of chastity.”
This court has since that case consistently followed this rule. See Hendrickson v. Harry, 200 Mich. 41; People v. Frontera, 223 Mich. 258. We are not persuaded the trial judge abused his discretion in permitting the cross-examination. Defendant’s own testimony invited it. Not only was it his claim that he, a married man, had had intercourse with prosecutrix on other occasions, but he quite broadly intimated that he had sustained the same relations with her 17-year-old sister. The cross-examination definitely fixed such claim. Defendant offered himself as a witness and was subject to cross-examination the same as other witnesses. The cross-examination went no further than to enlighten the jury as to the manner of man they were called upon to believe.
Considerable space is taken in the brief of defendant in the discussion of the question of resistance of the prosecutrix. It must be borne in mind that the charge is not rape, and, from what has already been said, the prosecutrix successfully foiled defendant’s assaults upon her. That she did not tear his clothes, scratch his face, pull his hair or break any furniture in so doing, as defendant insists she should have done, appears to us not controlling. She testifies:
“I tried to kick him and push him with my hands. I told him all the time to quit, told him I would get him arrested if he didn’t quit, but he didn’t say anything and he didn’t quit either. * * * He put me on the couch. He tried to get on me but I tried to get off. I fought with him and prayed to God to help me. I struck him in the face and pushed him on his shoulders.”
There is other testimony showing that from first to last she resisted his attempts and prevented the accomplishment of his purpose. Her resistance was adequate to the occasion. The portion of the charge most vigorously assailed is as follows:
“The resistance that a woman is required to make in a case like this is such resistance that either prevents the respondent from accomplishing his intent, or resistance to the limit of her ability, so that if you find from the evidence in this case, and beyond a reasonable doubt, that Ada Hoeve resisted the respondent sufficiently to prevent his successfully accomplishing the crime of rape upon her, that is the only resistance that she was required to make.”
This instruction was not erroneous. It was clearly justified by the holding of this court in People v. Marrs, 125 Mich. 376. The gist of the offense was intent. The instruction quoted went fully as far as defendant was entitled to, and in other portions of the charge, not necessary to quote, defendant’s rights were abundantly protected.
Error is assigned on the refusal to give some of defendant’s requests, to the modification of others, and to the charge as given. Defendant’s requests were in the main highly argumentative; those so tainted were properly modified. We find none refused which should have been given. The charge given sua sponte was eminently fair to defendant, and several of his requests which were given were much more favorable than he was entitled to. The case was carefully tried and we discover no reversible error upon the trial.
A motion for a new trial was made which included the ground that the verdict was against the weight of the evidence. This was denied. We find no reason to disagree with the conclusion of the trial judge. The testimony of the two principals to the transaction was in direct conflict. The trial judge saw the witnesses, heard their testimony, and con- eluded that there was no reason to disturb the verdict. A careful reading of this record leads us to the same conclusion. Defendant has had a fair trial.
The exceptions are overruled and the case remanded for judgment.
Bird, C. J., and Sharpe, Snow, Steeke, Wiest, Clark, and McDonald, JJ., concurred. | [
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Bird, C. J.
On the 19th day of August, 1922, plaintiffs gave defendant Hall a written option to purchase their farm of 82 acres, in the township of Brownstown, Wayne county. The material part of the option is as follows:
“That the said parties of the first part, in consideration of the sum of fifty dollars to them in hand paid by the said second party, do hereby agree that they shall and will at any time ninety days from the date hereof, at the written request of the said party of the second part, execute and deliver to her, or to any person or persons as she, the said party of the second part, shall direct in writing, a good and sufficient warranty deed of the following described land, situated in the township of Brownstown, county of Wayne, State of Michigan, to-wit: The so-called Andrew Ludwig farm being the northerly part of the northeast quarter of section 14 and containing eighty-two acres more or less of land, for the sum of twenty-five thousand ($25,000) dollars, payable as follows:
“Five thousand dollars cash down, five thousand dollars in six months thereafter and the remainder in two years with interest at the rate of 6 per cent, per annum payable semi-annually. An abstract to be furnished showing a marketable title and a mortgage to be given when the first five thousand dollars is paid.”
Before the option expired, and on November 8th, defendant served plaintiffs with the following acceptance of the option:
“November 8, 1922.
“Mr. Andrew and Augusta Ludwig,
“Brownstown Township, Wayne County, Mich.
“Dear Friends: The order for the abstract of your farm, being the northeasterly eighty-two (82) acres of the northeast quarter of section 14, town 5 south range 10 east, township of Brownstown, Wayne county, Michigan, has this day been placed with the Burton Abstract Company of this city as per your request and as soon as it is made up, I will notify you, and if agreeable to you, I will deliver it to my attorney for examination as to the title being marketable and when everything is found all right, I will take title_ to the land according to the terms of the option Which you have given me of the said land.
“Edna M. Hall.”
There was delay about getting the abstract. Some misunderstanding ensued as to who was to order the abstract, but it was never delivered to defendants within' the 90 days, nor afterwards. Subsequently, Edna Hall quitclaimed her interest to her father, Alexander J. Stuart, and Stuart placed the deed of record. Plaintiffs filed this bill to remove the cloud from their title, charging that defendants were in default with reference to their option. Defendants answered, denying that they were in default in their contract, and asked for affirmative relief by way of specific performance of the contract. The court gave plaintiffs relief on the theory, evidently, that the defendants were in default in making the down payment of $5,000.
It is not denied that plaintiffs gave defendant a written option to purchase the farm within 90 days from its date. It is conceded that this option was accepted in writing before the option expired. When the option was accepted it became an executory land contract. Goldberg v. Drake, 145 Mich. 50.
The provision of the contract with reference to an abstract showing a merchantable title, fairly construed in the light of the context, was that plaintiffs should furnish such an abstract, and that defendants should have a reasonablé time thereafter to have it examined by someone skilled in the business before defendants were obliged to pay the $5,000. It was a condition precedent. 39 Cyc. p. 1516. This plaintiffs did not do. There was some effort made by defendants to assist in ordering thé abstract, presumably because defendants lived in the city and the plaintiffs in the country. The fact remains, however, that the abstract was never tendered to defendants. Along in November the plaintiffs received the abstract, but refused to show it to the defendants, claiming at the same time that the option had expired. Until the abstract was tendered defendants were not in default. Suppose on this state of facts plaintiffs had attempted to enforce specific performance? Could they have succeeded in a court of equity unless they showed that they had tendered the abstract in accordance with the contract? Defendants were not bound to pay the $5,000 until plaintiffs tendered the abstract. The fact that the 90 days had expired did not relieve plaintiffs from that duty. Standard Oil Co. v. Murray, 214 Mich. 299. See, also, Frazer v. Hovey, 195 Mich. 160. We do not think plaintiffs are in a position to ask relief of a court of equity.
The decree will be reversed. Plaintiffs’ bill is dismissed. Defendants will be given a decree for specific performance on their cross-bill. Defendants will recover their costs in both courts.
Sharpe, Snow, Steere, Fellows, Wiest, Clark, and McDonald, JJ., concurred. | [
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Butzel, J.
In 1887 Robert P. Warmbread, who subsequently changed his surname to Craig, moved from Sturgis, Michigan, to the State of Washington. In 1891 he visited Michigan and asked his sister Eose Milton, plaintiff, to save her money and let him invest it. From 1891 to 1904, plaintiff sent him various sums, aggregating between $1,000 and $1,070. Craig dealt in real estate and timber lands. He credited plaintiff with additional sums and interest so that on November 1, 1910, there was due her $2,440. He also wrote her of another deal in which her share was $1,145.47. In 1916 he wrote that the amount due her was $5,046.08. In 1935, just before he was-to undergo a serious operation, he sent her his note for $8,102.80, dated August 1, 1935. During the year 1924, Craig sent his sister $561.20. He continued to send her a like amount each year up to 1936. She received from him a total of $6,734.40. He sent her no money after 1936. Plaintiff did not know just what investments her brother made for her except that while she was visiting in Washington in 1906, a transaction was discussed with a Mr. Swope at the dinner table in the presence of plaintiff and Dora Craig, defendant, the widow of Eobert P. Craig. When plaintiff’s brother asked plaintiff if that was satisfactory, she stated that anything he did was satisfactory. Evidently the entire family was uncommunicative as financial dealings between plaintiff and her brother were not mentioned to defendant by either plaintiff or Eobert Craig. Plaintiff visited her brother in Seattle in 1906 and 1920 but business matters except in the single instance mentioned were not discussed in defendant’s presence. Defendant did not have what plaintiff called “a business head” and she did not care to hear her husband discuss business.
Some time after 1936, Craig became ill and plaintiff did not hear from him. Plaintiff testified that she did not write because she felt “delicate” about doing it. She further stated that she did not intend to press him for any payment, that she would not have sued her brother; that she was satisfied with the original investment, having received a return of over $6,000; that if her brother had never sent her any more money, she never would have said anything. He died on March 29, 1941. The daughter of defendant sent plaintiff a telegram advising her of the death of defendant’s husband, and on April 16, 1941, defendant sent a copy of the obituary published in a Seattle paper. Craig left a will dated April 4, 1938, in which he left the entire estate to his wife, the defendant. She placed the handling of the estate in the hands of an attorney, a personal friend of Mr. Craig. Later another attorney acted in the probate proceedings. Petition for appointment of executor was filed in the superior court of the State of Washington, King county, and defendant was appointed executrix April 7, 1941. The notice to creditors was first published April 12, 1941, and continued to be published for three weeks, the last publication being on April 26, 1941. It is conceded by all the parties that the law of Washington provides that creditors’ claims must be presented and filed within six months from the date of the first publication. Rem. Wash. Rev. Stat. § 1477. The time for serving and filing claims in the Craig estate expired at midnight on October, 11,1941. The final account of the executrix was noticed for January 29, 1942, and date of hearing thereof was continued until February 11, 1942, when an order approving the final account of the executrix and a decree of distribution were made. The value of the estate is $20,065.94. After planp tiff received the letter sent her by defendant under date of April 16, 1941, no further correspondence passed between the parties until August 20, 1941, when plaintiff sent a letter to defendant in which she thanked her for sending the obituary on April 16, 1941, over four months before. In one paragraph of the letter she referred to the fact that she had sent her brother moneys to invest for her old age; that when he first came back 50 years ago, she had learned a trade and gave him $150; that she had sent moneys at various times; that later on, defendant was present when Craig closed a deal with a third party and plaintiff did not get any money but received a note much later; that defendant had access to his papers and must have found some record of it. She further stated in the letter.that Craig had not told her all the deals he was interested in and she had not cared to know; that she trusted him and asked no questions, but now that defendant’s husband was gone defendant’s financial burden was greatly lightened and she ought to be able to pay plaintiff some of the overdue interest; that she had not received interest for years, and as it was intended for her “old age,” the time had come when she should have it; that she was having difficulty on account of the rise in prices. Plaintiff again wrote defendant on November 12, 1941, stating that she had received no reply to her previous letter and referred to the work she had to do to send the money, and she had denied herself clothes and pleasures in order to send it; also how hard up Craig had been and how the money had relieved him. She further stated that she did not want all of the money back at that time but all she' expected was to get some back interest; that she was badly in need of funds on account of the sickness of her husband. Defendant did not reply to this letter. Plaintiff again waited until the latter part of December, 1941, when she wrote to a party she knew who had moved to Seattle and he referred her to another party, who, in turn, advised plaintiff to communicate with Mr. Lytel, an attorney in Seattle. He replied that the defendant’s estate was being probated bnt had not been closed. The hearing on the final account had been set for February 11, 1942. She thereupon went to see her present attorney in Sturgis, Michigan, and he immediately wrote to Mr. Lytel who checked the probate records and found the time for filing of claims had expired. Mr. Lytel made no formal appearance in the probate proceedings. He concluded that an appearance would serve no purpose whatsoever because the time had expired for filing claims.
Defendant testified that she had1 met plaintiff in 1906 and in 1920 when the latter visited in Seattle and in 1909 when defendant visited Michigan. She never read any letters between plaintiff and Mr. Craig; the latter never confided in her; that she knew very little about business and nothing about the laws of the State of Washington concerning the probate proceedings. She did not know about the requirement for notice to creditors and the six months’ limitation for filing claims. When she received a letter from plaintiff, she did not think then that plaintiff had any money coming to her and later when she was shown the photostatic copy of the note, she went through her husband’s papers quite carefully.and could find no record of any such note.
Defendant and her husband owned a 120-acre farm in St. Joseph county, Michigan, as tenants by the entireties. Upon his death she became sole owner. Plaintiff sued out a writ of attachment and a writ was levied on the property. Thereupon defendant entered her appearance in the circuit court for St. Joseph county, Michigan.
Bnt very few letters were exchanged between the parties and particularly not during the last 10 years of Craig’s lifetime. Plaintiff substantially agrees with the foregoing statement of facts except that she calls attention to a few more letters written between the years 1928 and 1940. The letters have no bearing on the case.
Plaintiff claims that defendant as executrix and sole beneficiary under the will is guilty of fraud and deceit in not filing or presenting plaintiff’s claim against the estate, and that such failure resulted in an unjust enrichment to herself; that defendant “by her deliberate silence knowingly and intentionally induced plaintiff to forego any further action which she otherwise could have fulfilled. ’ ’
The judge, who heard the case without a jury, based a judgment for plaintiff on the fact that there was a family relationship and that there was a further trust, that defendant owed a duty to inform her of the probating of the estate and the appointment of commissioners inasmuch as she had notice of the indebtedness, that defendant having failed in the execution of her trust became liable to plaintiff. Plaintiff in her declaration expressly waived “said wrongs of said defendant entitling her to an action on the case for fraud and deceit,” and elected to recover in assumpsit.
Inasmuch as the alleged fraud and deceit, if any, and the action itself arose in the State of Washington, we also look to the law of that State. Notwithstanding the fact that the attorney for plaintiff claims that the injustice in the Washington cases is shocking, the statute in regard to the timely filing of claims has been rigidly construed and the provisions of the probate law of Washington relative thereto must be complied with in the strictest sense. In re Krueger’s Estate, 11 Wash. (2d) 329 (119 Pac. [2d] 312). See, also, notes in 11 A. L. R. 246 and 66 A. L. R. 1415. The State of Washington has no procedure by which an estate can be reopened in order to present claims. A deposition of an attorney in Seattle was taken and lie stated that under the laws of that State, the executrix owed no duty to the creditors. The attorney for plaintiff in Washington testified that under the laws of that State, the executrix is the representative of the deceased. Plaintiff herself stated in her testimony that she did not believe that defendant intentionally defrauded her; she never had made any such claim, and that the allegation in the declaration that defendant intended to defeat and defraud her was not made by her; that she thought that failure to notify her was because of lack of business knowledge on defendant’s part.
The Supreme Court of Washington stated in Parchen v. Hauschild, 159 Wash. 49, 55 (292 Pac. 116), referring to the necessity of strict compliance with the statute in question stated: '
“Hardship is bound to result in some instances, whichever rule is followed, but in the long run it would seem that a strict compliance with the statute with no estoppel against its use as a’bar is the more safe and sensible rule.”
To like effect see In re Krueger’s Estate, supra, where many other Washington cases holding to this rule are cited. Both parties refer to the case of Kennedy v. Burr, 101 Wash. 61 (171 Pac. 1022), but that was a case in which plaintiff held a note which was to be presented as a claim against the estate. The court refused to instruct the jury that it was defendant’s duty to notify plaintiff to file a sworn claim against the estate, but that this could be taken into consideration with the fact that defendant was negotiating with plaintiff for the payment of the note; that the negotiations having been begun had gone to the extent of holding out defendant’s own promise to pay although it might not be binding in law. The testimony further shows that defendant while executrix paid on the note held by plaintiff and asked plaintiff to wait for the principal as an accommodation. Defendant further stated that she was almost a pauper, asked plaintiff if she would accept $25 a month. At the time that the filing of claims had expired, defendant refused to communicate with plaintiff. The estate had substantial assets. However, in the instant case, there was no act of fraud or promise to pay on the part of defendant who was also executrix. Had there been any act of fraud on the part of defendant, we would be confronted with a different situation. As it is, we find none. Mere silence, possibly due to ignorance, is not fraud under the facts. The law of Washington was plainly set forth on the statute books. The probate proceedings were public. Plaintiff cannot recover. While the law in regard to unjust enrichment has gone far, it never has relieved people from the consequences of a statute of limitations of any kind where there has been no active fraud that lulled the claimant into inaction.
We are constrained to reverse the judgment of the lower court, without a new trial. Costs to defendant.
Starr,, C. J., and North, Bushnell, Sharpe, Boyles, and Reid, JJ., concurred. The late Justice Wiest took no part in the decision of this case. | [
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Potter, J.
Plaintiff sued defendant in assumpsit to recover the amount due on a land contract by which plaintiff sold defendant, August 2, 1928, a farm in Lapeer county for $9,800, $2,400 of which was paid down and $7,400 of which was deferred. August 18, 1929, defendant assigned the contract to Carlton M. Higbie who assumed and agreed to pay the balance due thereon. Shortly after the assignment of the contract, Higbie, by his attorneys, wrote plaintiff:
“Future payments upon this contract will be made to you by Mr. Higbie.
“Will you please acknowledge receipt of the copy of the assignment and if you have no objection thereto, indicate in your letter that you approve the assignment. ’ ’
To which plaintiff replied:
“This is satisfactory with me so long as the terms of the contract are made promptly.”
December 18, 1931, Higbie, by his agent, wrote plaintiff:
“He asks that principal payments be postponed for a period of two years and that he be permitted to make interest payments on the unpaid balance at the rate of six per cent, during that time as conditions and Ms circumstances will permit. He would arrange to keep the taxes paid, thereby protecting your interest in the property to that extent.”
To which plaintiff, by her agent, replied:
“Mrs. Bigelow agrees to accept your proposition regarding payments, principal payments to be postponed for two years, interest to be paid and taxes kept up.”
Higbie defaulted on the payments due on the contract. Plaintiff then brought suit. The defense is based upon novation, tbe principles governing which have frequently received consideration by this court. Piehl v. Piehl, 138 Mich. 515; Gillett v. Ivory, 173 Mich. 444; Ceabuske v. Smolarz, 229 Mich. 100; Epworth Assembly v. Railway Co., 236 Mich. 565; Fender v. Feighner, 265 Mich. 536. There was no privity of contract between plaintiff and Higbie. She could not maintain an action against him though he had agreed with MacCrone to assume and pay the balance due upon the contract. Tapert v. Schultz, 252 Mich. 39; Kirker v. Larson, 252 Mich. 136.
“The fact that the vendors accepted payments from the assignee of the vendee did not bring about privity of contract between plaintiffs and defendant.” Tapert v. Schultz, supra.
That plaintiff consented to receive payments from Higbie in performance of the contract is not sufficient to constitute novation. Fender v. Feighner, supra. There was no agreement had whereby plaintiff agreed with defendant to relieve him from liability; no consideration moved from defendant to plaintiff for such release; there was no agreement with defendant, plaintiff was to rely solely upon the assignee of the contract for the payments due thereon, and snch an agreement will not be. implied. Epworth Assembly v. Railway Co., supra; Fender v. Feighner, supra. There was no novation. Plaintiff is entitled to recover.
Judgment affirmed, with costs.
Nelson Sharpe, C. J., and North, Fead, Wiest, Butzel, Bttshnell, and Edward M. Sharpe, JJ., concurred. | [
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BIRD, C. J.
Wilbert C. Chappie, the plaintiff, is a banker at Greenville. Defendants Wilmarth and Noorthoek reside in the city of Grand Rapids, and defendants Jacobson and Moone are residents of the city of Detroit. All of the defendants were directors of the National Hardwood Company, a company formed by Hoffman, Day, and defendant Jacobson, to carry on lumbering operations in the State of Oklahoma. The company issued $1,250,000 of eight per cent, bonds. Plaintiff purchased at different times about $40,000 par value of them. After operating two years the company went into the hands of a receiver. Plaintiff claims that he was defrauded in the purchase of the bonds by reason of certain false statements made by defendants, also by certain of their official acts. This suit was begun to recover the damage which he suffered. After a very extended hearing the trial court directed a verdict for the Grand Rapids defendants, Wilmarth and Noorthoek, and by reason of the failure of plaintiff to make a case against them he directed a verdict for the Detroit defendants, Jacobson and Moone, on the theory that the jurisdiction of the court over the Detroit defendants depended upon the success of the case against the Grand Rapids defendants. The case is here for our consideration upon two questions:
(1) Was the trial court right in directing a verdict for defendants Wilmarth and Noorthoek?
(2) If the trial court were right in directing a verdict for them was he right in discharging the defendants Jacobson and Moone?
In order to determine the first question, we must review somewhat the history of the National Hardwood Company. In April, 1921, Hoffman, a Kansas City man, Day, a Wall street man, and Jacobson, a Detroit broker, organized the National Hardwood Company, with capital stock fixed at 100,000 shares of no par value. They organized under the Delaware law. They were authorized to issue $1,250,000 of eight per cent, bonds. Hoffman and Day, who controlled the timber lands to be purchased, were to receive $385,000'' in par value of the bonds and all of the 100,000 shares of capital stock, in consideration for the transfer to the company of 10,000’ acres of timber lands in fee and the timber rights on 60,000 acres situate in northeastern Oklahoma. This left the company $865,000 in bonds which it sold for 85 cents on the dollar. With this the company erected a saw mill, constructed 15 miles of railway, bought camp equipment, erected houses for the officers, purchased a locomotive and cars and other equipment, and commenced operating the plant in July, 1922. In September, 1923, a cash dividend of 25 cents was declared on the shares of the company. At this time the company was getting ready to place on the market 16,500 shares of the capital stock which had been recently donated to the company by Hoffman, Day, and Jacobson.
In January, 1924, plaintiff purchased $20,000 of the par value of the bonds, and afterwards, and before its failure, he purchased as many more. In May, 1924, the company defaulted on their interest payments on their bonds, and on the 17th day of July went into the hands of a receiver by order of court.
It is the claim of the plaintiff that he was deceived in the financial condition of the company by reason of the declaration of the dividend. He also. claims that he was deceived by certain statements made by Wilmarth and Noorthoek, and that the dividend was not declared out of surplus, but that the company was insolvent at the time of the declaration of the dividend, it appearing now from the books of the company that it made a loss in 1922 of $55,583.55, and in 1923 a loss of $221,616.23.
Plaintiff offered testimony tending to show the following facts: That both Wilmarth and Noorthoek were directors of the company when the dividend was declared; that Noorthoek was present and voted for the dividend, and that while Wilmarth was ill and not present he subsequently approved of the dividend by accepting his dividend check and signing the minutes of the meeting; that the dividend could not have been ordered had not Noorthoek voted for it, because without him there was no quorum; that the company was insolvent at the time, and that the dividend was not paid out of earnings or surplus; that directors Wilmarth and Noorthoek were indifferent to their duty as directors, and were not as diligent to learn the financial condition of the company as the law requires of directors, managing an industrial corporation; that plaintiff relied upon the fact that the dividend was declared and was thereby influenced to purchase the securities of the company. There were other facts shown along the same line, but these were the principal items shown on the dividend question.
Some of the testimony tending to show these facts was in conflict with defendants’ testimony, especially as to the directors’ diligence to ascertain the financial condition of the company and as to the solvency of the company. Therefore, it became a question of fact for the jury to determine, under all the circum stances, whether directors Wilmarth and Noorthoek were as diligent to learn the true financial condition as the law requires before they sanctioned a dividend, and also whether plaintiff purchased the bonds in reliance on the declaration of the dividend.
It is the habit in these days for certain well-to-do men with influence in their respective communities to accept positions on boards of directors of corporations as honorary positions, and they never render any service except to sign on the dotted line, vote as requested by the one in charge, and afterwards to cash their director’s check for attending the meeting. They give no thought to the affairs of the company, exercise no judgment upon questions of business policy, and make no investigation of the real financial condition of the company. It is this kind of service by directors that helps to extract such a tremendous annual toll out of the public who happen to own industrial securities. The law requires a different kind of service of them.
Mr. Justice Cooley, in speaking of this worse than recreancy on the part of directors, said:
“The declaration of a dividend is a most emphatic assertion that-the corporation is in condition to make a division of profits, and is consequently enjoying some degree of prosperity. So generally is this understood that the making of a dividend when the capital must be encroached upon for the purpose is looked upon as highly discreditable, if not absolutely dishonest and fraudulent, as involving an assertion of prosperity which, under such circumstances, would be deceptive, and tending to give to the corporation a credit to which it is not entitled. The corporation which should make such a dividend would, when the facts became known, be condemned by the public sentiment, and the officers who should participate would be looked upon as wanting in that business integrity which is essential to entitle them to public confidence.” Lockhart v. VanAlstyne, 31 Mich. 76, 80 (18 Am. Rep. 156).
The case of Smalley v. McGraw, 148 Mich. 384, was one for fraud and deceit against the directors of a national bank for making false reports, by reason of which plaintiff was deceived in the purchase of stock. Mr. Justice Blair, in speaking for the court, said, in part:
“Directors of a bank are bound to exercise that degree of care in the business affairs of the bank that ordinarily prudent and careful men would exercise in affairs of like importance (citing Commercial Bank of Bay City v. Chatfield, 121 Mich. 641, and other cases). The liability of the directors in a case like this is independent of the national banking act, and is derived from the principles of the common law (citing cases). If the directors signing the report knew, or by the exercise of ordinary diligence in the discharge of their duties would have known, prior to signing such report, that the item ‘Loans and Discounts’ contained paper worth much less than its face value, which would materially affect the value of its stock, they would be individually liable to a purchaser of the stock who relied in good faith upon such report as stating the true financial condition of the bank. Prewitt v. Trimble, 92 Ky. 176 (17 S. W. 356, 36 Am. St. Rep. 586); Heard v. Pictorial Press, 182 Mass. 530 (65 N. E. 901); Hubbard v. Weare, 79 Iowa, 678 (44 N. W. 915).”
This question is considered in Childs v. White, 158 N. Y. App. Div. 1 (142 N. Y. Supp. 732). One who purchased stock in reliance upon a declaration of unearned dividends brought suit against the directors to recover his damage. Touching the duties of directors, the court said, in part:
“That directors of corporations owe a certain measure of duty not only to existing stockholders but as well to those from whom the corporation may solicit subscriptions for its stock or securities and that they are in that behalf bound to use some degree of both diligence and care in the performance of such duties as properly pertain to their office, and are liable for negligence in failing so to do, is a proposition too well established to be now open to dispute. What is due diligence and care varies with the circumstances of each case, and it is impossible to formulate precisely general rules which will cover all states of fact. But that directors are bound to use a reasonable degree of care in the performance of those acts, which, under the circumstances, prudence would fairly seem to require them to perform is, in the light of the authorities, a lenient statement of the rule of law affecting this subject. See Campbell v. Watson, 62 N. J. Eq. 396, 426 (50 Atl. 120). The classes of actions in which the duties of directors have been defined have commonly been those based upon deceit or breach of trust. Some have arisen upon rights of action originally accruing to the corporation, but which have been prosecuted in its behalf by stockholders or by receivers; others have been actions brought by stockholders or creditors directly to their own use. But the circumstances under which the action must be pursued in the right of the corporation and those under which it may be brought for the use of the individual plaintiff (see Niles v. Railroad Co., 176 N. Y. 119, 123, 124 [68 N. E. 142]), suggest no distinction so far as the duties of a director are concerned.”
In Ottinger v. Bennett, 203 N. Y. 554 (96 N. E. 1123), another case where one had bought stock under similar circumstances, the court, by adopting the dissenting. opinion of Justice Miller in the appellate division (144 N. Y. App. Div. 525, 533 [129 N. Y. Supp. 825]), said:
“A declaration of a dividend by a going concern implies earnings from which to pay it, and the publication of the fact of such declaration is certainly calculated to induce the public to believe that the dividend has been earned and that the corporation is prosperous. If, intending the public to act thereon, the defendants had made and published a report expressly stating that the dividend declared had been earned, there would be no doubt of their liability to a person thereby deceived to his injury. * * * Why distinguish between a false affirmation and an act calculated to have the same effect. Certainly the law makes no such distinction. We have had many illustrations in cases before us of the devices to deceive the public employed by managing directors who misuse their positions to promote stock speculation, and payment of dividends out of capital is a familiar one. When that is done to induce the public to purchase shares of the company and thereby create a fictitious value, upon which the wrongdoers may trade, they should be-held accountable precisely as though the like deception had been practiced by actual misstatements.”
Similar holdings on this question are: Cornell v. Seddinger, 237 Pa. 389 (85 Atl. 446); Houston v. Thornton, 122 N. C. 365 (29 S. E. 827, 65 Am. St. Rep. 699). See, also, note to Marshall v. Savings Bank, 17 Am. St. Rep. 100.
The case made against Jacobson and Moone was not disposed of on the merits, but they were released on a question of practice, which, in view of our holding, becomes immaterial and renders it unnecessary to consider question 2.
Much of the record and briefs is given over to discussion as to the value of the tangible property of the corporation and statements made by directors Wil-marth and Noorthoek. We have not considered the questions arising on the admission and rejection of proofs on those questions, preferring to consider them, if necessary, after a retrial.
The judgment of the trial court is reversed, and a new trial granted, with costs of this court to plaintiff.
Sharpe, Snow, Fellows, Wiest, and Clark, JJ., concurred with Bird, C. J. Steere, J., did not sit. | [
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SNOW, J.
The defendant was convicted of manufacturing and having in his possession intoxicating liquors. He had rented a farm from one Max Kuharick, and claims that he sublet the house thereon to two Polish men whose names he did not know, but who told him they were trappers from White river near Manistee, and that they bought furs and hunted, and wanted the house to stay in while they were in that vicinity. However, instead of trapping, they engaged in the manufacture of liquor there, which fact became known to Kuharick, the owner, who did not report it to the authorities. Later two deputy sheriffs visited the farm and saw the defendant go to the house with a pail and then return. They also saw whisky mash there, whereupon one of the officers made affidavit before a justice of the peace that the premises were occupied by Kuharick as a place of public resort, and that liquor was being manufactured there. A search warrant was obtained, the premises searched, and three complete stills, 700 gallons of whisky mash, and other articles used in its manufacture were seized, Kuharick was arrested, and the search warrant filed and returned in his case.
Later the defendant was informed against in a separate information, and upon the trial the prosecution offered in evidence the stills, coils, jugs and contents secured by them on search of the dwelling by virtue of the search warrant issued in the case against Kuharick. To this offer defendant’s counsel objected,, and an effort was made by him to question the sufficiency of the affidavit for this search warrant. This right was denied him and the exhibits were admitted in evidence.
Defendant insists that he had the right to question the validity of the affidavit for the search warrant, even upon the trial, and to have all evidence obtained by virtue thereof suppressed. He contends he could not have made the motion to suppress before the trial began, as there was no search warrant in his case and he had no way of knowing there had been one in the Kuharick case until the offer was made.
It must be remembered that the dwelling searched was not the dwelling of the defendant. He did not live there, and he had no interest in or possession of the house on the Kuharick farm, he having sublet it to others. Whether the search warrant used to search this house belonging to Kuharick, and occupied by him and others, was good or bad, was no concern of the defendant. No right, constitutional or otherwise, of his had been invaded, even though the Kuharick house had been unlawfully searched, and while Kuharick could have had the evidence suppressed in his case if the search warrant proceedings were faulty, it is difficult to see how this defendant could complain of an act unlawfully committed in the search of another’s home. If otherwise competent, the evidence, then, was admissible, and it becomes unnecessary for this court to determine the validity of the affidavit or the search warrant, and the seizures made by virtue of the same.
Counsel for defendant further urges that the court should 'have granted his motion to direct a verdict for the reason there was no evidence against defendant, excepting his own admissions of guilt, which were not sufficient to establish the corpus delicti. Max Kuharick, owner of the farm, a witness for the prosecution, testified that he had rented the farm and house to the defendant in September, 1924, for a period of one year for a rental of $50, and that for a period of time before his arrest defendant came to the farm practically every day, although he lived about two miles away on a poor road. On the day the search was made he testified he went to the defendant’s home and said to him:
“Tom, what did you do ? It is not allowed, and you can put me in trouble and yourself.”
He said:
“Don’t worry about nothing; if it comes trouble about this I am responsible for everything.”
Charles Walker, a witness for the prosecution, testified that he saw the defendant on the premises on the 13th day of July, the day before the search, about 8 o’clock in the evening; that he waited until defendant went away and then went to the premises and got the smell of mash and saw the still and stoves through the window in the basement of the house; that he afterwards talked with defendant about the manufacture of liquor, and defendant said he only made a little bit of whisky and wanted to know what was to be done about it; that he hadn’t been making it very long and that he was going up and plead guilty.
Tony Joslyn, still another witness called by the prosecution, testified that he saw defendant on the Kuharick place the day before the search, and that he saw him take something into the house. Later defendant told him he hadn’t been making moonshine as long as they credited him with it. He said he would plead guilty. He didn’t say he was renting the place or running it. He said he was making moonshine there.
The theory of the prosecution was that the defendant was engaged with the others in the manufacture of liquor in this house; that he lived elsewhere, but frequently visited the premises and knew of, and was a party to, what was being done there. The court properly submitted it to the jury in the following language:
“I charge you also that if the house on the Kuharick place was rented to Anscomb, and while his lease had not expired he allowed other parties to go on the place for the purpose of manufacturing liquor, and such liquor was actually manufactured there with his knowledge, that is with Anscomb’s knowledge or consent, or in which manufacture he, Anscomb, had a joint interest with others, then he was as much engaged in the manufacture of intoxicating liquor as if he actually with his own hands engaged in the manufacture of it, and in that event if you so find, he is guilty of manufacturing liquor.”
This portion of the court’s charge is excepted to by defendant, but it is a correct statement of the law, and there was sufficient evidence, aside from defendant’s admissions, for the consideration of the jury. The charge as a whole in this respect properly safeguarded the rights of the defendant, and we find no error in it that could be regarded as prejudicial.
Further complaint is made that the court charged the jury that it might consider testimony in regard to the defendant having been previously arrested for drunk and disorderly conduct, when there was no testimony in the case. Defendant himself testified:
“I was arrested once before in Newaygo county. I never was arrested for stealing cattle. I don’t know what they claim I was arrested for then. * * * ‘Get up here,’ and the first thing I know he helped me up and then he held out his arm, and I throwed up a lot, a lot. I wanted to lay down and he said, T will give you a place to lay down,’ and he took me in a car and took me up to the city hall.
“Q. That is what they arrested you for that time?
“A. Yes.”
The symptoms at the time of his arrest might lead one to well suspect that he had imbibed too freely, and that what he was arrested for was being intoxicated. The court’s instruction was based upon the testimony, and clearly proper.
We find no reversible error, and the conviction is affirmed.
Bird, C. J., and Sharpe, Steere,- Fellows, Wiest, Clark, and McDonald, JJ., concurred. | [
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Bushnell, J.
These are actions in assumpsit. The plaintiff in the case of Roger W. Angstman v. Liggett Spring & Axle Company declared upon the common counts, and especially upon a 'written contract dated January 1,1923. The case of The Roger Angstman Company v. Liggett Spring & Axle Company was also based upon the common counts, and especially upon a written memorandum in the form of a letter dated October 21, 1927, addressed to plaintiff, The Roger Angstman Company, and signed by defendant, by its general manager. By stipulation of counsel, the proofs taken in both cases, which were tried and submitted together, a jury having been waived, were taken as the proofs in each. Judgments were entered against defendant as follows : In favor of The Roger Angstman Company, a corporation, in the amount of $4,919.90 for unpaid royalties and commissions, and in favor of R'og'er W. Angstman, personally, in the amount of $12,256.51, for salary accruing from date of breach to date of expiration of the contract, plus one per cent, on gross sales.
A rather extended statement of the facts seems necessary. Roger W. Angstman, describing himself as an automotive sales engineer, has maintained an office in Detroit since 1927. The defendant company has its office and principal place of business at Monongahela, Pennsylvania, where it operates a factory in which are made springs, trailer axles, trailer springs and similar products. All of its stock, excepting 10 lost shares, belonged to the estate of W. Gr. Park, which estate, including the defendant company, has been for years administered by the Farmer’s Loan & Trust Company of New York City, through a board of five directors. John S. Skelly, a director of defendant company since 1907, its vice-president since 1917 and its president since 1928, acted as a general advisory representative of the trust company. The bulk of Skelly’s time, however, was spent as president and general manager of the Coshocton Iron Company, located adjacent to defendant’s plant.
Prior to 1926, J. H. Neuhart was defendant’s sec-' retary-treasurer and general manager, and it was he who signed the 1923 contract. In 1927, the company advertised in the Detroit papers for a factory executive, and E. E. Ackerman, now deceased, replied and was later made general manager by Skelly, on the suggestion and advice of Angstman, so it is claimed. It was Ackerman who signed the written memorandum of 1927. Ackerman was made a director on January 10, 1928, but was discharged a few months later.
In 1922, the defendant company, desirous of increasing its automotive spring leaf business, employed Angstman and, at his suggestion, began the manufacture of bumper parts for automobiles. The Angstman company’s claimed interest in a contract executed in 1927 for the sale of these parts to the Olds Motor Works led to the present litigation.
The contract given Angstman in 1923 designated him as sales manager for a period of three years; it was renewed in 1926 for three additional years and terminated on a month’s notice given on February 2, 1928. Plaintiff Angstman was authorized to handle sales and quote prices, under the direction of the company, and to solicit business in its name. His compensation was fixed at $500 per month and one per cent, on the invoice amount of all business done by the company, except that known as “vehicle” and vehicle “export.” Angstman handled this and other business from an office located in Detroit. It was mutually agreed “that all agreements for the sale of the product herein mentioned are subject to the company’s approval and must be signed by an officer of the company before being valid.”
In 1925, Angstman formed a Michigan corporation known as the Roger Angstman Company, to engage in sales engineering. He owned or controlled all the capital stock. The 1927 agreement is with this company.
Angstman had met an inventor, by the name of Duffy who had developed an automobile bumper with two new features. This device was eventually named the “Liberty Bumper,” After spending some money and considerable time on Duffy’s idea, Angstman secured an exclusive license for its use on November 2, 1927, paying Duffy a considerable sum as an advance on royalties. Angstman testified that he thought Duffy had filed a patent application. This license was assigned to the Angstman company. Then followed the so-called 1927 bumper contract, which we quote:
“Liggett Spring & Axle Company
“Monongahela, Pa.
“October 21, 1927.
‘ ‘ The Roger Angstman Company,
“Detroit,, Michigan.
“Be: Liberty Bumpers
“Gentlemen:
“Referring to conversation between Roger Angst-man and the writer, it is mutually understood and agreed that on all orders executed by us for Liberty Bumpers, whether for fabricated parts or completed assemblies, we are' to invoice the buyer at prices which you supply us as being the agreed price of the buyer as shown by our interchange of correspondence with you or our Mr. Angstman, such prices being in excess of our prices for such material. In the event that we elect to change our prices on Liberty Bumper materials, we agree to maintain your present margin, or such margins as you direct, between our present prices and the present prices billed to the buyer.
“It is our understanding that you must pay a royalty, which is represented by the difference between our prices on the foregoing materials and the price at which the same materials were sold. This difference we shall remit to you two days following its receipt from the buyer.
“It is mutually understood and agreed that all billing for materials shall be made by us to the buyer unless you elect to have us bill you for such materials shipped and you in turn bill the buyer, remitting to us two days following receipt of such funds from the buyer our share of such remittances. We would at your option, bill the materials to the buyer on your bill heads at such prices as were agreed upon by the buyer.
‘ ‘ This arrangement is to continue as long as we manufacture Liberty Bumper parts or Liberty Bumpers complete, or both.
“The term ‘bumpers’ used above includes bumpers or bumperettes or fender guards and their component parts.-
“This agreement is to be in full force and effect as of October 21, 1927.
“Tours very truly,
“Liggett Spring and Axle Company,
“E. E. Ackerman (Signed)
“General Manager.
“The Roger Angstman Company
“Roger W. Angstman (Signed)
“President
“Witness
Defendant claims that Skelly, while countersigning checks, discovered what he considered to be an unauthorized and fraudulent agreement between it and the Angstman company, that it immediately discharged Ackerman and gave Angstman notice of the termination of his contract and that of the Angst-man company. It therefore contends (1).that Ackerman had neither express nor implied authority to enter into the “bumper” contract; (2) that there was collusion between Angstman and Ackerman in the execution of the contract; (3) that it was Voidable because not entered into in good faith and with a full disclosure by the agent Angstman to his principal, the defendant; (4) that for the purposes of the suits, Angstman, the sales manager, and the Angst-man company must be regarded as one and the same entity; (5) that the trial court should have held that the plaintiff company was subjected to the same rulés and close scrutiny as to good faith, full disclosure, etc., as was Angstman himself; and (6) that the burden of proving such good faith should have been placed on both plaintiffs.
Plaintiffs agree with the statement of the questions involved, except they claim that appellant’s fourth question was not raised by the pleadings, and ask whether there was such a showing of bad faith, etc., as to amount to collusion and fraud justifying defendant in voiding the contract.
The record, containing some 39 exhibits and the testimony of all the available parties, has been carefully examined. It would be of no help to give the facts in further detail. A typical case of absentee ownership is disclosed, with a considerable difference of opinion as to the authority of the employee intrusted with the management. There was received in evidence a letter indicating Ackerman’s authority. It is dated several months prior to the execution of the “bumper contract,” vis., April 30, 1927, written on the letterhead of the Coshocton Iron Company, J. S. Skelly, president, addressed “to whom it may concern,” and signed “J. S. Skelly, vice-president Liggett Spring & Axle Co.” It reads:
“This is to certify that Mr. E. E. Ackerman, beginning as on this date, is appointed general manager of the Liggett Spring & Axle Company, in full charge and authority in all matters.”
Skelly’s explanation is that it was given as proof of Ackerman’s authority over employees and was made necessary by the fact that Neuhart, the former general manager, was still associated with the company. In reply to the question, “Well, did he have the authority to execute contracts for the company?” Skelly stated: “He had the authority with the limitation that I placed on his authority in the conversation at the time that I gave him -the written authority which was to be used for a specific-purpose.” He later testified:
“I did not state that Mr. Ackerman had no authority to sign contracts. He had the authority of a general manager, subject to conferring with me on important matters.”
While Angstman’s authority as sales manager was limited, the testimony shows that Ackerman’s was general.
The parties waived a jury and the court, who heard and saw the witnesses, held that the claim of fraud was not sustained by the proofs and that there was nothing on which to predicate a finding of collusion between Ackerman and the plaintiffs. Under Court Rule No. 64 (1933), in an action at law, tried without a jury, we may affirm or reverse the judgment, remand the cause with directions or order a new trial, but where no error is assigned that the judgment is against the preponderance of the evi dence, we will not weigh the evidence, in the absence of a motion for new trial, bnt will only determine if there is any evidence to support the judgment. Delta Asbestos Co., Inc., v. Sanders, 259 Mich. 317. Our examination of the testimony convinces us not only that there is such evidence, but that the conclusions of the trial court are warranted by the testimony.
Corporations are bound by the acts of their agents to the same extent and under the same circumstances as natural persons (Delta Lumber Co. v. Williams, 73 Mich. 86), and we held in Hirschmann v. Railroad Co., 97 Mich. 384, that a chief engineer of a railroad had authority to bind his company on his contracts for supplies furnished to construction contractors. Ackerman’s authority was the same as that of Neuhart. Neuhart’s authority to execute the contract by which Angstman was made sales manager is not questioned. Any limitation of Ackerman’s authority was not binding on.others unless communicated to them. Allis v. Voigt, 90 Mich. 125; Hage v. E. L. Wellman Co., 217 Mich. 537; and Bay State Milling Co. v. Saginaw Baking Co., 225 Mich. 557. There is no proof of such communication.
The judgments are affirmed, with costs to appellees.
Nelson Sharpe, C. J., and Potter, North, Fead, Wiest, Btitzel, and Edward M. Sharpe, JJ., concurred. | [
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Starr, J.
Plaintiff began the present suit to recover damages for personal injuries sustained when she fell while alighting from a street car owned and operated by defendant city. She alleged, in substance, that the city was negligent in that said street car was stopped at a place where it was unsafe for her to alight; that defendant brewery company was negligent in parking its truck so close to the street car tracks as to endanger her safety, and was also .negligent in parking its truck in violation of a city ordinance. At the conclusion of plaintiff’s proofs, each defendant moved for a directed verdict on the ground that she had failed to establish negligence on their part and that she was guilty of contributory negligence as a matter of law. The trial court granted such motions, and plaintiff appeals from the judgment entered on directed verdict for defendants.
' It appears that about noon on February 19, 1941, plaintiff, a “stout and heavy” woman 56 years old, was a passenger on a street car operated by defendant city on Sherman street. She wished to get off at the corner of Chene and Sherman, at which corner there was no established safety zone. She rang the signal bell, the car stopped, the conductor opened the side-exit door, and she started to alight. While she had one foot on the car step and one on the ground, she first saw defendant brewery company’s truck, which was parked close beside the street-car exit. She became frightened, and while attempting to get back on the street car, fell to the pavement, sustaining the injuries for which she seeks to recover:
It was stipulated by counsel that Sherman street, at the place of the accident, was 26 feet wide; that the distance from the car track to the curb was 10 feet 7 inches'; and that the brewery company’s truck was 23 feet long, 9 feet high, and 7 feet 9 inches wide. There was testimony indicating that the truck was parked about a foot from the curb and that there' was a distance of about 2 feet between the street car and the side of the truck. Plaintiff testified regarding her accident in part as follows:
“I was not the first passenger to get off. * * * The man in front of me got off first. * * * I couldn’t see in front of this man. * * * I followed right close behind him. * * #
“When I got off I put this foot down on the ground, and the other foot up here (on the step). I was still holding to the rod. Tlie truck .was too close to me and it frightened me. * * *
“The Court: The street car didn’t move?
“A. No.
“ The Cotiri: The truck did not move ?
“A. No, neither one moved.
“I still had one foot on the step of the street car. I didn’t get off and turn around and get on the right side because I didn’t have room to turn around. That’s why I was trying to reach behind me and catch the rod but I couldn’t find it. * * # After I got frightened I tried to get back in the street car. * * * I knew that if the street car moved there would be trouble with me. I lifted my foot to get back in the street car. I fell on my back just by reaching back-. * * *
“I saw the truck when I put my foot down on the street. * * *
‘ ‘ The center of the truck was even with the street car door where I was getting off. * * *
“I wasn’t able to see the truck because I wasn’t looking for nothing like that. * * * I just been' getting off there so much I wasn’t thinking about no truck. * * *
“Q. Now, did you have both of your feet off the street car before you fell?
“A. No. # * * I was right up.against the truck and then I tried to reach back, catch hold of that rod. I couldn’t catch hold of the rod. I lost my balance and fell. * * *
“I had my head down looking down there at the step below. I did not look out of the door. I never looked up until after I put my left foot on the ground. * * *
“When I did look up, the truck was standing there. I said that the truck was only one foot or perhaps two feet from the street car. * * * It was pretty close. * * *
“I never slipped, I just lost my balance, tried to reach back * * * to get the rod. ’ ’
It was incumbent on plaintiff to establish that the negligence of one or both of defendants was the proximate cause of her injuries, and also that she was free from contributory negligence. The mere fact that an accident happened does not establish negligence on the part of defendants, as the doctrine of res ipsa loquitur is not followed in this State. School District of the City of Ionia, for use and benefit of Employers’ Liability Assurance Co., v. Dadd, 308 Mich. 220. In the case of Whitmore v. Detroit United Railway, 185 Mich. 46, we quoted with approval the following rule, which is applicable to the situation in the present case:
“But where a passenger in alighting from a car has as good an opportunity as the company or its servants to observe the conditions which confront him, and to know as well.as they'whether such conditions are dangerous to him in an attempt to alight, he is held to be guilty of contributory negligence precluding a recovery in case he is injured. If the street at the place of discharging a passenger presents a dangerous' condition to one alighting there, and such danger is obvious to the passenger, the carrier is not liable to him for injuries received from such defects.” 1 Nellis on Street Railways (2d Ed.), p. 619, §308.
Assuming for the purpose of this opinion that defendants were negligent, we are convinced, nevertheless, that viewing the testimony in -the light most favorable to plaintiff, she was guilty of contributory negligence as a matter of law. Her testimony indicates that she failed1 to observe the brewery truck, which was clearly visible, until she had reached a position where she had one foot on the car step and the other on the ground. Neither the truck nor the street car moved, and there was no showing that she could not safely have alighted from the car and passed between it and the truck. She lost her balance and fell to the pavement because she became frightened and confused while attempting to get back on the street car. It is clear that by the exercise of reasonable care and' caution she could have avoided the accident.
The trial court did not err in granting defendants ’ motions for a directed verdict. The factual situations involved in the several cases cited by plaintiff distinguish them from the present case.
The judgment for defendants is affirmed, with costs.
North, C. J., and Wiest, Butzel, Bushnell, Sharpe, Boyles, and Reid, JJ., concurred. | [
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Wiest, J.
The bill herein was filed to set aside a deed. By will of their mother, duly admitted to probate, plaintiffs and defendant, Clementine S. Withey, were devised land in Emmet county having a considerable frontage on Walloon Lake. The will nominated plaintiff Frances S. Smith executrix, but she did not qualify. Sometime later defendant Clementine S. Withey, verbally, asked the probate judge to appoint her administratrix of the estate and she was appointed, without notice to any one interested, and gave bond. The estate was devised to the three children mentioned, share and share alike. After her appointment, Clementine S. Withey petitioned the probate court for leave to sell the premises at private sale and leave was granted.
Mrs. Withey deliberately planned a scheme by means of which the interests of the other devisees should inure to her benefit.
At the private sale Emma McWilliams of Chicago was selected as a dummy purchaser under an ar rangement by which she should bid $1,000 for the premises, the money to be paid by the defendant Grant R. Withey, husband of the administratrix, and Miss McWilliams should deed the property to defendants. The scheme was carried out and the administratrix gave Miss McWilliams a deed and Miss McWilliams deeded to the administratrix and her husband to hold by the entireties. The sale was reported to the probate court but nothing said about the transfer from Miss McWilliams to defendants. The sale, as reported, was confirmed by the court. Subsequently, defendants conveyed a small part of the lake frontage to another person and also a large part of the lake frontage to another purchaser, receiving about $100 for the small frontage and $2,500 for the large frontage. The sale so made by the administratrix, whether she was properly appointed or not, was void.
Act No. 288, chap. 9, § 27, Pub. Acts 1939 (Comp. Laws Supp. 1940, § 16289-9 [27], Stat. Ann; 1943-Rev. § 27.3178 [487]), relating to sales by administrators, provides:
“The fiduciary making the sale shall not directly or indirectly purchase, or be interested in the purchase of, any part of the property so sold, and all sales made contrary to the provisions of this section shall be void; but this section shall not prohibit any such purchase by a guardian for the benefit of his ward.”
We do not deem it necessary to consider the question of whether the appointment of the administratrix was valid or not, for, if valid, the statute rendered the deed in this instance void.
The circuit judge who heard the proofs found defendants Withey guilty of fraud in carrying out the scheme to obtain the property and set the deed aside. The deeds from the Witheys to subsequent purchasers conveyed, at least, the rights of Clementine S. Withey as a devisee of an undivided one-third of the premises. The circuit judge also found, and his finding is fully supported by the evidence, that the premises solcl by the administratrix were worth, at the time of the sale, $5,000. The decree provided, in substance, that the subsequent purchasers be protected upon payment to plaintiffs of sufficient money to satisfy the value of their two-thirds interest in the premises and thereby have their deeds validated. The subsequent purchasers have not appealed.
In behalf of defendants Withey it is contended that this court, in at least three instances, has refused to void a sale by a fiduciary for his own benefit, but it is well stated that each case must stand upon its own facts. We let this case stand upon its facts and it clearly appears that the scheme of the administratrix, aided by her husband, was so clearly intended to deprive the plaintiffs of any right in the property that, as said by the chancellor in Harrington’s Chancery Reports, in the case of Beaubien v. Poupard, Harr. Ch. (Mich.) 206, 218:
‘ ‘ It makes no difference by what means an administrator secures the benefit óf a purchase at a sale, made by himself; the rule is imperative that he cannot become a purchaser at all. Swayze’s Lessee v. Burke, 12 Pet. (37 U. S.) 11, 25 (9 L. Ed. 980); Bart v. Ten Eyck, 2 Johns. Ch. (N. Y.) 62.”
The court found the claims filed and allowed against the estate in the probate court amounted to $765; that defendants paid the same, and decreed that the interests of plaintiffs in said premises be charged with $510, two-thirds of said debts, in favor of defendants Withey, Plaintiffs appeal from that part of the decree, conteiiding that plaintiffs should not be required to pay any part of the debts mentioned. It was no more than fair in awarding plaintiffs two-third's of the estate to require them to pay two-thirds of the debts and we approve of the adjudication made by the circuit judge.
The fraud accomplished cannot be countenanced1 by the court and the decree in the circuit court is affirmed, with costs against defendants Withey.
North, C. J., and Starr, Bittzel, Bttshnell, Sharpe, and Reid, jj., concurred with Wiest, J. Boyles, J., concurred in the result. | [
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Black, J.
Counsel for plaintiff-appellants have correctly stated the controlling question:
“Is a plaintiff, mentally and physically incapacitated as a result of injuries sustained because of a defective sidewalk, excused from giving written notice to' the defendant city 'in the form and within fh'é time specified in section 8 of chapter 22 of the general highway statute (CL 1948, § 242.8 [Stat Ann 1958 Rev § 9.598]) ?”
,Our. answer is “No.”
The- statute under which this suit was brought (CL 1948, §§ 242.1-242.8, amended by PA 1951, No 19 [Stat Ann 1958 Rev §§ 9.591-9.598] ) includes no clause exempting, or words importing legislative intent to exempt, persons under legal disability from performance of the requirement of timely statutory notice to the township, village, or city snch persons would sue for bodily injuries sustained on public ways.
To what was written in Boike v. City of Flint, 374 Mich 462, we add direct reference to section' 5 of the statute (CL 1948, §242.5 [Stat Ann 1958 Bev § 9.595J). That section pointedly declares that “No township, village or city in this state shall be liable in damages, or otherwise,” to any person or persons for bodily injury sustained upon any of the ways of such township, village or city “except under and according to the provisions of this act.” Such legislative declaration is clear. The courts may not fashion or manufacture ways or words to get around it without offense to that exalted principle of constitutional law which separates the judicial power from the legislative power.
In Davidson v. City of Muskegon, 111 Mich 454, we held that a charter provision corresponding to the notice provisions of the statute could not be avoided even where the rights of an infant were involved. That principle must be applied here.
Affirmed, without an award of costs.
Dethmers and Kelly, JJ., concurred with Black, J.
Supplemental Opinion of Justice Black: This case, previously assigned to the writer, was submitted on briefs and arguments November 4, 1965. Pursuant to that assignment the above opinion for affirmance was submitted to the other Justices January 8, 1966. Since then Justice Souris’ opinion for reversal, this supplemental opinion and Justice O’Hara’s separate opinion for affirmance have been written and delivered to the other Justices.
Our delay of disposition is reflected causally by the following internal record of study and restudy, and submission of additional opinions, since the foregoing initial opinion was turned in:
February 8 — Case held for study or writing by Justice Souris.
February 23 — Opinion of Justice Souris for reversal submitted.
March 8 — Case held for study or writing by Chief Justice T. M. Kavanagh.
April 5 — Case held for study or writing by Justice O’Hara.
April 25 — Memorandum of Chief Justice withdrawing his “hold” of case.
May 9 — Supplemental opinion of Justice Black submitted.
May 10 — Opinion of Justice O’Hara for affirmance submitted.
May 10 — Case held for further study or writing by Justice Souris.
Ordinarily, in a situation of unresolvable discord like this, the dissident opinions go the blind round of our conference table. “That’s the way it is.” Here, however, it is imperative that something not visible in that opinion for reversal be brought to the fore, that is to-say, reversal of the circuit court’s judgment for the reasons proposed will amend retroactively much more of the statutory law than that which has been encompassed by the act under which this plaintiff sues.
' By our votes for and against reversal of the circuit court’s judgment we are due to amend retroactively, or refuse to amend at all, two statutes rather than the one upon which plaintiff has planted her suit. Her cause allegedly arose in 1962, under a venerable statute as it stood that year (CLS 1961, § 242.1 [Stat Ann 1958 Rev § 9.591]). Since then, by PA 1964, No 170, effective July 1, 1965, the legislature has expressly repealed that statute and has superseded it with another the entitled design of which is “to make uniform the liability of municipal corporations, political subdivisions, and the State, its agencies and departments,” et cetera..
The inevitable impact of a decision to reverse the ■ circuit court’s judgment for the reasons now pro-' posed, especially upon sections 4 and 7 of the super-, seding statute, will be manifest to all who keep tab ■ on the headlong trend of recent opinions handed • down for cases wherein damages for personal injuries or death' are sought. In furtherance of that trend a dual holding — unannounced—is actually proposed; that the legislative assembly of 1964 as well as the assembly of 1915 did not mean what was writ-. ten into both statutes; that each assembly really meant to exempt claimants under legal disability, from the condition of giving the timely written notice which section 8 of chapter 22 of the repealed statute required and section 4 of the new statute now requires.
Assuming that the Court is going to proceed judicially, let it be noted that no one thus far (plain-, tiff’s counsel and Justice Souris included) has alleged that there are words or phrases, .or doubtful, meanings of words and phrases, in any one of the 8■ sections of the act under which plaintiff has sued,' which might he regarded as hinting that a person under legal disability is exempt from the aforesaid requirement of timely written notice. This time, for certain, the legislative message as written provides no peg of ambiguity for the beret of anyone who bleeds freely for plaintiffs in civil cases and defendants in criminal cases. So for the first time in our books the profession is about to find written, not an affirmative finding of legislative purpose drawn from dubious meaning of statutory words and phrases but rather a negative dixit of personal judicial belief, made up more than a half century after the fact, that the assembly of 1915 really “didn’t mean it”; also that such negative belief leaves the judicial branch free to write into the act affirmative words of exemption which the 1915 legislature chose not to insert or include. I for one will have no part in any such crude appropriation of legislative power, this being one sure instance where self-discipline as well as self-restraint is due judicial process.
True enough, the act as written was harsh and remained so in its application to claimants under legal disability while the 60-day period proceeded to its end. It may even be decried as “barbarous,” that being the currently supplied reason for judicial amendment of those statutes which claimants of damages for personal injuries and death sue under and yet would avoid as to the restrictive parts thereof. Accepting all that, it is nonetheless true that the judicial branch is bound to apply plainly written statutes as they read, no constitutional question having been raised below. And if by judicial edict that is no longer to be so, let tbe Court openly say-so, and why. ' •
All that is offered in support of this latest motion to arhend a statute by judicial procéss is the mentioned ' statement of personal belief, spiced only by decisions picked and chosen from some other jurisdictions. To all this, hard fact that it may be for a possibly hard case, the legislature has responded-in simple English:
“Sec. 5. No township, village or city in this state shall be liable in damages, or otherwise, to any person or persons-for bodily injury, or for injury to any property sustained upon any of the public highways, streets, bridges-, sidewalks, crosswalks or culverts, in such townships, villages or cities, except under and according to the provisions of this act, and the common law liability of townships, villages and cities of this State, for or on account of bodily injuries sustained by any person by reason of neglect to keep .in repair public highways, streets, bridges,.sidewalks, crosswalks or culverts, is hereby abrogated.” (CL'1948, § 242.5 (Stat Ann 1958 Rev § 9.595).
And said section 8 concludes:
■ “.The intent and purpose of the provisions of this: chapter are to make the law of liability on the [Dart of townships, villages and cities for injuries sustained by persons because of the defective condition of the highways and the procedure in giving notice thereof, uniform throughout the State, and to repeal all laws or acts of the legislature be the same general, local or. special which are inconsistent with or contravening the provisions herein. All actions in court under this act must be brought within 2 years from the time said injury was sustained.” CL 1948, § 242.8 (Stat Ann 1958 Rev § 9.598).
The emphasis is that of the present writer.
I No lawyer, conscious of and respeetful for the constitutional inhibition (Const 1963, art 3, §2) and the applicable rule of construction (found with copious citation in City of Lansing v. Township of Lansing, 356 Mich 641 at 648-650), could read this statute without concluding that it is the present duty of the Court, again as in the law case of Mercy Hospital v. Crippled Children’s Comm., 340 Mich 404 at 408, to apply it as it reads “without reference to equitable considerations.” As was written for the Court by then Associate Justice T. M. Kavanagh in the City of Lansing Case (at pp 649, 650):
“No intent may be imputed to the legislature in the enactment of a law other than such is supported by the face of the law itself. The courts may not speculate as to the probable intent of the legislature beyond the words employed in the act.”
Surely, by this time, jurisprudential Michigan has seen enough of this business of research-travel beyond her borders to locate and cite court decisions which
(a) No one pretends appeared in the reports of a State from which Michigan subsequently took and enacted the statute in scrutiny, and
(b) No one claims have construed and applied enactments which at the time of decision corresponded precisely with such statute.
Arid nothing in the law and nothing thus far written into our hooks sustains the empirical notion that newcomer judges seated here may second-guess a legislative assembly which met and adjourned a half century ago after having decided to amend the statute as it stood before the assembly at the time (see CL 1915, § 4584 et seq., re-enacting CL 1897, § 3441 et seq.). In and with that assembly was vested, exclusively by the Constitution, the power to determine and enact into law the policy of Michigan as regards the right of action created by section 1 of chapter 22 of the act. In and with that assembly the Constitution vested, just as exclusively, the right to choose to exempt, or not exempt, persons under legal disability from the requirements of said section 8. The assembly chose not to so exempt for a special reason oft written into law. That reason was to guard the treasures of local units of government from the possibility, if not probability, of spurious claims against which no defense could be made for want of timely notice and opportunity of timely investigation. True, the assembly could have chosen the more liberal type of statute. But it did not, and it beseems no member of this Court to repudiate the choice thus made.
Now if this Court is to respect the constitutional position of the third branch vis-a-vis the legislative branch, if its members are to heed the rules we ourselves have set up for employment where statutes are involved, we must accord to the assembly of 1915 due knowledge that it had a right to enact— or refuse to enact — an exemption of the kind considered,* for example as shown in Nash v. Inhabitants of South Hadley, 145 Mass 105, 106 (13 NE 376, 377), and Hooge v. City of Milnor, 56 ND 285, 290 (217 NW 163, 164).
In the Nash Case the statute .requiring notice, within 30 days after the injury “to. .the town claimed to be responsible therefor,” ended up with this proviso:
“hut if, from physical or mental incapacity, it' is impossible for the person injured to giye the notice within the time provided in said section, he may give the same within 10- days after-such-incapacity is removed, and in case of his death without having given the notice, and without having been, for 10 days at any time after the injury, of sufficient capacity to give the' notice, his executor or administrator may give such notice within 30 days after his appointment.”
In the Hooge Case the statute similarly^ required notice “within '30 days from the happening of"'such injury.” It then went on to provide:
“In- case it appears by the affidavit of a reputable physician which shall be-prima facie evidence of. the fact that the. person injured was, by.the injury complained of, rendered mentally .incapable of making such statement during the time herein provided, such statement may be' made within 30 days after such complainant becomes competent to make the same, but such affidavit may be controverted on the trial of an action > for such- damages, and in case of the death of the person injured prior to his becoming competent to make such statement, the same may be made within 30 days after his death, by any person having knowledge of the facts, and.the person making such statement shall set forth therein specifically the facts relating to such injury as aforesaid, of which he has personal knowledge, and shall positively verify such statement and shall verify the facts therein stated of which he has no personal knowledge, to the best of his knowledge, information and belief.”
Since we are debating an alleged “hard” case, let it be said that the “hard” fact here is that our legislature, in 1915 and again in 1964, decided not to exempt any claimant from the requirement of timely written notice. That leaves judicial legislation the only way — the unconstitutional way — by which plaintiff in this action may be “excused” from that which section 8 of the statute required as a condition of the coming into being, in her favor, of the right she has alleged under section 1 of the same statute.
CONCLUSION.
.First: We are not dealing with a common-law right. Neither are we dealing with any species of common-law action. If we were most certainly some of us, the writer included, would give due thought to our continuing tenet that the common law is exclusively in the hands of the judicial branch and, when not impeded or restricted by statute or constitutional provision, that it is due at least for partly prospective growth or adjustment, in and by the third branch, according to the facts as well as the hardships of cases that are brought before that branch for scrutiny. Here though the Court is called upon to appraise the pleading of a right of action which, if it exists at all, came into existence by the effect of a statute. That statute provided the right of action upon conditions imposed therein. The judicial branch has no right, except by the unconstitutional exercise of raw power, to amend it in favor of any person or class of persons. The statute as it stands bars this action, there being no allegation of performance of the condition said section 8 of chapter 22 imposes and no allegation of a constitutional question.
Second: It does not matter that some here “cannot attribute to the legislature an intent” to do what that body by its written word actually did. Such personal testimony has always been regarded as both inadmissible and weightless. And if testimony of that kind, no matter by whom given in derogation of the wording of a statute, is now to be made admissible generally, it should be barred in today’s instance as being matter within the better knowledge of all knowledgeable and now deceased persons, referring to the Michigan legislators of 1915. It is their view of need and purpose, not that of any member of this Court not “there” at the time, which is supposed to count when we are called upon to apply a venerable enactment (Husted v. Consumers Power Co., 376 Mich 41, 54). That body of legislators had before it this Court’s decision in the Davidson Case, a decision which by its succinct final paragraph stood forth as authorizing a statutory provision requiring timely written notice by or on behalf of all persons alleged as having rights under the act then to be amended. Too, that body presumably had before it, for acceptance or rejection, the kind of exemptive statute disclosed by the cited Massachusetts and North Dakota cases. It chose not to exempt. The choice thus made should be sustained as against this appeal for judicial insertion, in the 1915 amendment, of a retroactively effective “excuse.”
My vote to affirm is reiterated.
Repealed and superseded by PA 1964, No 170 (CL 1948, § 691-1401 et seq. [Stat Ann 1965 Cum Supp § 3.996(101) et seg.]).
See Const 1908, art 4; Const 1963, art 3, § 2.—Reporter.
Followed in Bankers Trust Co. of Detroit v. Tatti, 258 Mich 357, 359.
Revised June 2 only with regard for Justice Souris’ footnote added by him June 1.
For a description of the infantile poker game the Court insists on playing each opinion day, see Keenan v. County of Midland, 377 Mich at 66.
Here there is no obnoxious interpretation of the aet under which plaintiff has sued which, for any desired result, might be seized upon for overruling. There is just a minutely worded statute the sections of which have stood understood .by everyone since seven of us either were in grade school or not yet around to testify about the intention of the 1915 legislative assembly. More of this later, . ■-
It is true here, just as was noted by footnote in the Boike Case (Boike v. City of Flint), 374 Mich 462 at 464, that:
“The constitutionality of section 8, insofar as it applies to infants pr others under legal disability, has not as yet been put to test.”
This may or may not be a “hard” case. It is here on grant of summary motion. Plaintiff did not establish under Rule 116 any of the facts crucial to her eomplaint. In a word, the defendant, municipality has not as yet been convicted of having been negligent, or of having .seen “to it that [its] negligence [was] sufficiently gross tb insure the complete physical and mental disability of the vietim.”’ (The quoted bombast appears in the submitted opinion for reversal,, post at p 101.) ■ '
At p 650 Justice T. M. Kavanagh wrote further that “An argument that a statute as construed may, in certain instances, work ■ great hardship is one that should be addressed to the legislature rather than the court,”
These eases are not offered as citations supporting the views expressed by the writer. No outside ease means anything, our statute and the Davidson Case (Davidson v. City of Muskegon, 111 Mich 454). considered. The two cases are mentioned solely for the purpose of exhibiting the kind of exemption Michigan has not enacted;' the" kind of exemption other legislatures had enacted 'and. placed in effect." prior to 1915; the kind the Brethren standing for reversal might properly write if, in addition to judicial power, they were possessed of legislative authority. ' ' ...
The expression “partly prospective” is studiously advertent. See T. M. Kavanagh, J., writing for the Court in Parker v. Port Huron Hospital, 361 Mich 1 at 26-28, and O’Haka, J., writing for himself and T. M. Kavanagh, C. J., .in Myers v. Genesee County Auditor, 375 Mich 1 at 11. | [
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Reid, J.
The principal objective of this appeal is to set aside a sale of lands on foreclosure in chancery. The appeal is from an order entered November 17, 1941, denying defendants’ motions to set aside the sale. The bill was filed October 16, 1931. All of the lands are situated in Genesee county. There are several descriptions of land, some being store property in the city of Flint; one is a residence, the homestead of one of the defendants; and one parcel is acreage outside of the. city of Flint. In November, 1931, all of the defendants except Morris Chimovitz appeared. On June 14, 1932, the third alias summons was returned served on Morris Chimovitz, the affidavit of service being sworn to by H. M. Koffman. On July 20, 1932, affidavit of nonappearance, affidavit of regularity and order pro confes so as to defendant Morris Chimovitz were filed.
Defendants complain of irregularity of proceedings because no answer had been filed. The six active defendants were in court August 5, 1932, represented by attorney Dean, also by Neithercut & Neithercut, and agreed in open court that the hearing of the case should proceed as to the foreclosure, participated in the hearing and examined witnesses on that day and on August 11, 1932. It would seem that plaintiff had received from defendants their answer which incorporated a prayer for affirmative relief. Plaintiff’s reply to such answer by defendants is on file and appears in the record. The decree and1 the amended decree both recite that the hearing was on bill, answer and ámended answer. Defendant’s answer was before the court but it is not now found in the file and there is no calendar entry of it. The case will now be disposed of in the same manner as though an answer had been filed denying the equities of the bill or leaving plaintiff to his proofs.
On December 19, 1932, a decree of foreclosure sale was filed. On December 30,1932, a preliminary notice of appeal to this Court from the order of foreclosure sale was filed in a paper in which the title of the court and1 cause was recited as well as that the appeal was taken on behalf of “the appellants above named.” Affidavit of service of notice of appeal was filed January 4, 1933, and on the same day an amended decree by Judge Parker of foreclosure sale was filed which recited:
“It having been consented to in open court by the attorneys for the plaintiff and the defendants, except Morris Chimovitz, that this court acquire jurisdiction of the rights of the defendant, city of Flint, a municipal corporation, to have this' court determine the necessity of it acquiring certain portions of the mortgaged premises * * * to be used for public purposes. ’ ’
The decree determined that a fair and reasonable value of the premises described in it, which were to be acquired by the city of Flint, was $1,500, one half of which was to be paid to plaintiff and one half to defendants other than Morris Chimovitz, and recited that the city of Flint was entitled to condemn descriptions 1 and 2 set forth in said amended decree of January 4, 1933. It further recited that the total amount due plaintiff on the mortgage principal and interest was $122,011.99, found defendants Louis and Nathan Chimovitz personally liable for the payment of it, ordered payment to be made by December 19, 1932, and provided for sale by the circuit court commissioner of the other property described, in the mortgage. This decree apparently was intended to amend nunc pro. tunc clerical errors in dates in the former decree for foreclosure sale. The defendants should have urged at that time, if not before, their claims as to usury and shown the true balance due on the mortgage.
On January 23, 1933, appearance of plaintiff on appeal was filed. On February 8, 1933, the commissioner’s report of sale was filed and order nisi con firming it was filed February 10, 1933. On February 17,1933, the two defendants Teitelbaum and the four defendants Chimovitz, except Morris, by Oscar Dean, their attorney, filed with the circuit court their objections to confirmation of such report. They alleged, among other things, a sale in one parcel and not in separate parcels, and the inclusion of a homestead, but did not mention in their objections the fact of an appeal, claim of usury, or that the amount found due in the foreclosure decree was excessive. They claimed that, contrary to the recital in the report, the sale was in fact in two parcels. Apparently these six defendants' had abandoned their appeal and were making themselves heard in the circuit court as though no appeal were pending. Supplemental notice of appeal was filed June 29, 1933, by Oscar Dean, attorney for defendants (apparently the same six defendants for whom he had formerly appeared). On January 3, 1934, the answer of plaintiff to the defendants’ objections to the report was filed. On January 11, 1934, the testimony was offered before the circuit court, and the circuit court commissioner was sworn as a witness. His testimony showed that the individual pieces of property were offered first, separately, and, on his receiving no bids, were sold as one parcel for $120,000. Louis Chimovitz, apparently sworn on his own behalf, also testified as to the procedure at the sale. The two parcels which the city was accorded the privilege of condemning were disposed of in the meantime by the city’s payment of $1,500 and the city received conveyance.
A chancery sale in one parcel is permissible when no offers are received for any separate parcel. Walsh v. Colby, 153 Mich. 602 (126 Am. St. Rep. 546).
On January 16, 1934, the circuit judge’s unconditional order confirming the sale was filed. Petitions in the circuit court for moratorium were filed by defendants February 28,1935 and March 1, 1937. The moratorium file was offered in evidence on a hearing in the circuit court but the contents thereof are not set forth in the record before this Court. "When the first petition for a moratorium was filed, more than 18 months had elapsed after both the preliminary notice of appeal (December 30, 1932) and the supplemental notice of appeal (June 29, 1933) had .been filed. Appellants elected to use a “bill of exceptions” which was never prepared (3 Comp. Laws 1929, § 15514 [Stat. Ann. 1943 Rev. § 27.2614]). But see Court Rule Ño. 56, § 1 (1931). Time to settle the “bill of exceptions” was never extended in circuit court or this Court.
On November 17,1942, the circuit court denied defendants’ motions to set aside the sale after finding that they had waived any irregularities in the foreclosure by their proceedings in this matter.
The defendants must be considered by this Court to have abandoned their appeal as the record does not disclose what actually became of it. On both sides the original attorneys acted as though by stipulation the appeal had been dismissed or had otherwise been abandoned. An examination of the records and files of this Court discloses no entry concerning said appeal.
On October 22, 1938, by their present attorneys, the four Chimovitzes, not including Morris, filed a petition to set aside the sale for the following reasons:
“ (a) because the said1 case was not at issue at the time of the filing of the decree.
“(b) because defendants were ordered and directed to pay sums decreed to be due on the day * * * the first decree was filed.
“(c) because the sale by the first decree was ordered before the decree was signed and filed.
“(d) because any sale under the first decree was void.'
“ (e) because the second and amended decree was filed which superseded the former decree and, any sale made, must be under the amended decree.
“(f) because not sufficient time was allowed for the notice of sale after the amended decree was filed, and sale was therefore, void.
“(g) because the amended decree orders the defendants to pay the amount found to be due, 14 days before the decree was filed, and therefore the sale could not be held thereunder.
“(h) because the properties consist of several separate pieces and they were sold as a whole, thereby preventing the defendants from redeeming any separate piece or parcel.
“ (i) because the orders of the circuit court were made after the claim of appeal was filed, and therefore without the jurisdiction of the court.”
The order now appealed from denied this petition. On the same day, October 22, 1938, Morris Chimovitz filed his petition by the same attorneys who then appeared for the other defendants to set aside the decree and sale. The petition was supported by his own affidavit • and that of his daughter, Pearl Tarnopol. By these affidavits it would appear that he was not served with process but that instead his son-in-law 'Tarnopol was served. Morris Chimovi'tz resided with his said daughter and her husband. The trial judge was correct in his conclusion that Morris Chimovitz, the owner of a second mortgage on these premises, had been informed that the first mortgage had been foreclosed and the premises sold and that a moratorium had been obtained by his own sons, defendants. Under all the circumstances, we conclude to let the return hy Koffman stand as setting forth the actual fact in the case.
Morris Ghimovitz further claimed that the issuance of the so-called third alias summons that was served upon him was void and without jurisdiction of the court to issue it. Defendants’ claim as to irregularity is that the summons was filed with a return showing service upon all parties except Morris Ghimovitz and no statement that he could not be found after diligent search; that an alias summons was issued without being based upon any return and that the first alias summons was filed five days after the return date without any return attached; the second alias summons was issued March 11, 1932, returnable April 11, 1932, and was filed May 20,1932, without any return and the third alias summons was issued May 20, 1932, returnable June 20, 1932, and was filed June 19, 1932, with the return by H. M. Koffman, which was the disputed return.
Defendants cite the case of Rood v. McDonald, 303 Mich. 634, the factual background of which case renders that decision inapplicable to the instant case. The real substance of our decision in the Rood Case, supra, is that under the circumstances of that case there was no abuse of discretion in the trial court’s denial of plaintiff’s application to amend the return on the original summons and on alias summonses issued prior to the alias which was finally served on defendant. It does not fully appear from our opinion that in so ruling the trial court was motivated by the involvement of the statute of limitations, which is not involved in the instant case. In the Rood opinion we said, p. 636:
“At the hearing (of defendant’s motion to quash service) defendant made the further claim that plaintiff’s claims were barred by the statute of limitations. There was no prior notice of the defense of the statute of limitations given but both in the arguments and the briefs filed respective counsel argued the applicability of the statute.”
Because the trial court in the Rood Case upon the hearing of defendant’s motion to quash service found as a fact that prior to the service of the alias summons upon defendant, plaintiff’s cause of action was barred by the statute of limitations, the trial court granted the motion to quash, and that holding was affirmed by this Court. In the respect just above noted as to the statute of limitations, the Rood Case must be distinguished from the instant case.
In the case of Westlawn Cemetery Ass’n v. Wayne Circuit Judge, 238 Mich. 119, 123, we said:
“It is next urged1 that the alias writ was not issued in accordance with Circuit Court Rule No. 18. But it should be noted that Rule 18 deals with writs on the law side and Rule 19 deals with chancery summons, section 1 of which rule provides in part: # # *
“ ‘And if process is not executed on or before the return day, further process may be taken out of-course, as often as may be necessary.’
“But if the writ was not good as an alias■, it was good as an original summons, the statute of limitations not having run. Frantz v. Railway, 147 Mich. 199; Axtell v. Gibbs, 52 Mich. 639; Gunn v. Gunn, 205 Mich. 198.”
The necessity of complying with rule requirements in taking out alias or pluries summons in order to preserve continuity of action and thereby avoid1 the bar of the statute of limitations was fully, considered in Home Savings Bank v. Young, 295 Mich. 725. We therein held plaintiffs’ suit was barred because of failure to preserve continuity of action, but we said: “If the statute of limitations had not run against plaintiffs ’ suit, a different conclusion might be necessitated.” And in this connection we quoted the syllabus in Gunn v. Gunn, 205 Mich. 198, as follows:
“ ‘Where a writ purporting to be an alias summons has no proper basis as an alias, the previous writ not having been seasonably returned, the second writ is not for that reason void, but, the statute of limitations not having run against the suit, it should, in case the first suit goes down, be treated as a new writ for a new suit and sustained accordingly.’ ”
There is no claim in the instant case that plaintiff’s cause of action was barred by the statute of limitations at the time Morris Cbimovitz'was served with an alias summons, and therefore tbe irregularity in tbe issuance of such alias did not render its service ineffective.
Morris Cbimovitz without appearing in the case made part release of tbe premises covered by tbe mortgage being foreclosed in this proceeding, subsequent to tbe order authorizing tbe city to take over tbe property thus released from tbe mortgage. Tbe release wás witnessed by Dean, attorney for all tbe other defendants in tbe case except tbe city. Tbe plaintiff mortgagee, interested in tbe transaction for tbe part release, and bis attorney, Stockton, both doubtless bad knowledge of Morris Cbimovitz’s acts respecting tbe conveyance. It is fairly to be considered that Morris Cbimovitz by indirectly taking bis part of tbe consideration paid by tbe city knowingly benefited by the order of the court to the extent of his receipt of párt payment.
Morris Chimovitz was properly treated by the trial court as subject to the jurisdiction of the court and is bound1 by the proceedings in this case. In any event under and because of the facts herein noted relative to Morris Chimovitz, we hold that in asking the affirmative relief-presently sought he is not before the equity court with clean hands, and, further, is guilty of laches in consequence of which the relief sought by him must be denied.
The bill was filed in the first instance by George W. Hubbard, who died March 6, 1937, and by order in open court on January 16, 1939, the above named coexecutors were substituted as plaintiffs.
Notwithstanding many irregularities about the proceedings to foreclose this mortgage, the fact still remains that the final amendatory decree had been made by Judge Parker in January, 1933, after hearing objections raised by defendants. Before the motions filed October 22, 1938, by -defendants, the circuit judge before whom the foreclosure proceedings occurred, Mr. Hubbard, original plaintiff, Mr. Stockton, plaintiff’s attorney, and Mr. H. M. ICoffman, who made the affidavit of service, had died. As before noted, appellants are guilty of laches. They have no right to have their matter again litigated.
The order appealed from is affirmed, with costs of both courts to plaintiffs.
North, C. J., and Starr, Butzel, Bushnell, Sharpe, and Boyles, JJ., concurred. Wiest, J., did not sit.
See 3 Comp. Laws 1929, § 14377 (Stat. Ann. § 27.1145).—Be-PORTER.
See 3 Comp. Laws 1929, § 13976, as amended by Act No. 193, Pub. Acts 1937 (Comp. Laws Supp>. 1940, § 13976, Stat. Ann. 1940 Cum. Supp. §27.605).—Reporter. | [
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Nelson Sharpe, C. J.
Plaintiffs filed separate bills of complaint to foreclose two land contracts. They wTere submitted at the same hearing. Plaintiffs insisted upon their right to decrees for any deficiencies arising upon the sales of the properties. No proofs were submitted as to the fair market value of the properties at that time. The trial court was of the opinion that the lots in question should not be sold for less than the amounts found to be due on the contracts, and so decreed. Plaintiffs have appealed.
Act No. 229, Pub. Acts 1933 (amending 3 Comp. Laws 1929, § 14366), had been passed by the legis lature and approved by tbe governor at the time the decrees were entered. It provides, in part:
“In any forfeiture, foreclosure or specific performance case in chancery based upon a mortgage or land contract the court may fix and determine the minimum price at which the real property covered by such mortgage or land contract may be sold at the sale under such forfeiture, foreclosure or specific performance proceedings.”
In Michigan Trust Co. v. Dutmers, 265 Mich. 651, this court held that this statute did not justify the fixing of the amount due as the minimum bid; that it should be fixed “at a sum no higher than the fair market value of the security.” This case was decided after these decrees were entered. In the absence of proof of “fair market value,” the court can but assume that the properties will sell for at least the amount due and, if they do not, the plaintiffs are entitled to decrees for deficiencies.
Under the circumstances, it seems that the equitable thing to do is to set aside the decrees and remand the causes to the circuit court, with directions to entertain such proofs of fair market value as the parties may desire to submit and then enter decrees conformable to the holding in Michigan Trust Co. v. Dutmers, supra.
Decrees will be here entered so providing.
We think the court properly disposed of defendant’s claim of fraud and misrepresentation as set up in her cross-bill, and her cross-appeal is dismissed.
No costs will be allowed.
Potter, North, Fead, Wiest, Butzel, Bushnehl, and Edward M. Sharpe, JJ., concurred. | [
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Fead, J.
Plaintiffs review decree dismissing their bill of complaint for multifariousness and want of equity. In substance the bill alleges:
In 1922, defendant DeVos acquired real estate in Detroit and erected on it four cross-shaped eight-story apartment buildings, containing 352 apartments and a large underground garage, the whole paid for from the proceeds of a $2,000,000 mortgage. In 1923 he organized Alden Park Manor, Inc. (the holding company), as a Michigan profit corporation, and conveyed the premises to it. In 1927 the mortgage was refinanced and discharged through a new trust mortgage to Union Trust Company, trustee (now Union Guardian Trust Company), for $1,875,000. DeVos is controlling stockholder and manager of the holding company and conducts it for his personal benefit.
The project was not financially successful and, in 1927, DeVos decided to make sale of individual apartments to individual purchasers. To induce plaintiffs and the public to buy, he made many promises and representations, particularly that a corporation, Eighty-One Hundred Jefferson Avenue East Corporation (cooperative association), would be organized, with a capital of $2,050,000, to own and operate the property, the project was sound financially and the interest of a purchaser would be represented by a 30-year lease,, renewable for like periods, and. certificate of stock in the cooperative association, which would constitute an ownership in the land and buildings. Afterwards he made other representations to similar effect. Prospective purchasers were given full notice of the mortgage.
In 1927 DeVos organized the cooperative association as a nonprofit corporation under the laws of this State to acquire and own the real estate, manage and lease the laud and buildings, “to be held by the stockholders as tenants on the cooperative basis.” By-laws were adopted providing for leasing apartments to the stockholders. DeVos caused the holding ■ company to convey the premises to the cooperative association subject to the mortgage, the association assuming and agreeing to pay it. And, in consideration, the association transferred to the holding company all of its capital stock.
In reliance upon the promises and representations made by DeVos and on the articles and by-laws of the association the plaintiffs purchased apartments at prices ranging from about $5,000 to $35,000. The instruments in connection with a purchase were:
1. Application for purchase, to the holding company.
2. A “receipt of your application for the purchase of your apartment,” from the holding company.
3. Promissory note from purchaser, payable to himself and indorsed in blank for unpaid balance, when purchase price was not paid in full, delivered to the holding company.
4. Stock certificate of association for a designated number of shares, running to the purchaser, on assignment from holding company.
5. Stockholders’ lease from the association as landlord and to the purchaser as tenant.
The application gave notice of the mortgage, its assumption by the association, and provided that the note for the unpaid balance should be secured by a pledge of the stock and lease and that the stockholder should vote for the approval of the issuance of all leases to persons approved by the holding company.
The note included the pledge of stock and lease with right of holder to sell on default and to reenter the premises and repossess the apartment by any appropriate action.
The stockholders’ lease described the purpose for which the association was incorporated and provided terms in detail; that the lease was for the life of the corporation; the lessee should pay as rent an annual assessment made by the board of directors of a proportionate part of the carrying charges of the association, including operating expenses and principal and interest on the mortgage debt; “that this lease and the term hereby created” should cease at the option of the association on certain contingencies, as if the lessee cease to be a stockholder, or be declared bankrupt, or make a general assignment for creditors, or a receiver for his property be appointed, or his stock be levied on or sold as pledged security, or the lessor, by a two-thirds vote, in amount of capital stock, desire to sell the property, or, by a three-fourths vote, the association determine the tenancy of the lessee be undesirable because of objectionable conduct on his part or that of his visitors; and other terms.
Upon the facts stated, plaintiffs claim to be the owners of their respective apartments and their interests are real estate which cannot be terminated by sale of their stock or through summary proceedings.
Plaintiffs are informed and believe that a large number of the promise’s and representations made by DeVos were untrue, he knew it, made them with intent to induce plaintiffs to part from their money, and plaintiffs did not discover their falsity until recently, particularly the representations regarding the financial soundness of the project were false, DeVos and the two corporations did not pay nor intend to pay the rental charges against them but misappropriated to themselves large sums in violation of the articles of association instead of making payment on the mortgage; wherefore, plaintiffs charge that a fraud has been perpetrated on them by DeVos, the holding company and the association and they should account for the damages and plaintiffs have a lien on the premises.
The promissory notes given to the holding company have been transferred to defendant Union Guardian Trust Company, which claims to be the owner but is not a bona fide purchaser; plaintiffs have no liability thereon and the company should be restrained from commencing any action for recovery thereof.
On November 24, 1931, the Union Guardian Trust Company, as trustee, filed bill for foreclosure of the trust mortgage against both the holding company and-the association and the trust company was appointed receiver to take possession of the property and collect rents. The default was on August 20, 1931. It was caused by the wilful neglect and refusal of DeVos, the holding company and the association to pay rentals for the apartments they own ; they refused, to pay in order to induce foreclosure and, through it, to eliminate plaintiffs’ interest in the properly and acquire it for themselves. Their conduct made tbe foreclosure fraudulent and they should account to plaintiffs by reason thereof.
Plaintiffs claim they are necessary parties to the foreclosure proceedings, the proceedings are void and further prosecution should be enjoined; the order appointing the receiver was void and should be vacated because plaintiffs had no notice of the application for it; the order should be vacated because the receiver has permitted the same persons who formerly controlled it to manage the property ; the receivership is detrimental to plaintiffs and the bondholders in causing great expense; the trust company is not a proper receiver because it is insolvent and in charge of a conservator who is subject to the jurisdiction of the executive branch of the government, not of the court.
Plaintiffs are informed and believe that the foreclosure suit was engineered by DeVos, the holding company and the association; that the receiver is a friendly one and:
“ Plaintiffs are informed and believe and so charge the fact to be that said suit was instituted for the sole purpose of freezing out these plaintiffs of their investment and interest in said Alden Park Manor Apartments, said defendant and said Union Guardian Trust Company having conspired and confederated to cause said property to be sold under foreclosure decree of this court, and thus to enable DeVos and his promoted companies to acquire said properties for themselves. Plaintiffs therefore submit that said foreclosure proceedings are fraudulent, null and void, and that the same.should be enjoined.”
In furtherance of their scheme to defraud plaintiffs, DeVos, the holding company and the trust company have effected a reorganization of the bond issue, to provide for final decree and sale of the property, to be purchased by the bondholders ’ committee; formation of a new corporation in which the bondholders take 70/85ths and the association 15/85ths of the stock; present leases to be canceled and new ones offered to present occupants. The plan is detrimental to plaintiffs and other stockholders and should be enjoined.
If the foreclosure proceedings are valid, plaintiffs ask delay under the mortgage moratorium act (Act No. 98, Pub. Acts 1933).
Plaintiffs pray:
(a) That they be decreed to be owners in fee of their apartments.
(b) That DeVos, the holding company and the association account to plaintiffs for their damages caused by their fraud and plaintiffs have a lien on the property therefor.
(c) That the foreclosure suit be dismissed and the receiver account for all fees and expenses.
(d) That injunction issue to:
1. Restrain dispossession of plaintiffs now in possession and to restore those already dispossessed.
2. Restrain enforcement of notes given by plaintiffs.
3. Restrain the trustee from further prosecution of foreclosure proceedings.
4. Restrain collection of rents or budget payments from plaintiffs.
5. Restrain defendants from withdrawing any moneys from rents or income of the association.
6. Restrain the reorganization proceedings.
(e) Benefit of the moratorium act.
The bill was afterwards amended by adding other parties plaintiffs and alleging that, acting as receiver, the trust company has permitted DeVos and the holding company to misappropriate moneys of the association and to be in default in their budget payments; the records in the office of the register of deeds do not show notice of default, under Act No. 228, Pub. Acts 1925 (3 Comp. Laws 1929, §§ 13498, 13499), and no notice was served on plaintiffs ; plaintiffs are tenants in common of the property; and they pray accounting of moneys misappropriated and ask lien for the peculations, alleging willingness to pay what they owe if DeVos and the corporations will pay their debts to the association.
Plaintiffs’ foundation contention is that all stockholders of the association are joint adventurers, as such are equitable owners in common of the real estate and. therefore, are necessary parties to the foreclosure proceedings. Alternatively, they con tend that the association holds the legal title merely in trust for the stockholders.
Sometimes, when joint adventurers use the corporate form for convenience in carrying out their project, their mutual rights and liabilities will be determined in furtherance of and in harmony with their joint purpose rather than with the form of their operation and the corporate entity will be recognized or ignored accordingly. Latimer v. Piper, 261 Mich. 123; Lane v. Wood, 259 Mich. 266. But no cases have been cited nor principles suggested which would enable them to don or doff the corporate garb at their pleasure, for their own benefit, or to the detriment of third parties. 33 C. J. p. 845. If they could do so, corporation law would become “confusion worse confounded” because elements of joint adventure appear in most small corporate undertakings.
In working out the cooperative apartment ownership idea, the parties have a choice o.f methods. They may adopt the plan of individual ownership and operation, or they-may take title-in a trustee, or form a corporation. Obviously they must submit to the burdens as well as enjoy the benefits which inhere in the plan they adopt.
Without deciding whether the cooperative apartment plan is a “single business enterprise for profit,” Keiswetter v. Rubenstein, 235 Mich. 36, 45 (48 A L. R. 1049), or a “special venture” for profit, 33 C. J. p. 841, and, therefore, the subject of joint enterprise, it is plain that the project at bar, as affecting the title to the real estate, is a far cry from joint adventure or trust ownership. There was no community of purpose or trust relationship by plaintiffs and others at its inception. It was instituted as a stock-selling scheme for the individual profit of the holding company and DeVos. In becoming parties to it, plaintiffs accepted the corporate form of ownership and operation because it already had been formulated. The seller designated the interest in the premises the purchaser should acquire, prepared and executed the muniments of such interest and the purchaser accepted them. The articles of association and the papers specifically constituted the purchaser a lessee of the association and neither purported to, nor did, convey any title to the real estate. Representations by DeVos that the stock and lease constituted an ownership in the premises, if of effect under the circumstances, could bind only DeVos and the holding company. The situation, unequivocally created by the instruments and accepted by the purchasers, is that the association owns the property and plaintiffs are lessees with no more legal or equitable title than have the stockholders in the other corporation. Plaintiffs, as subsequent lessees, are not necessary parties to the foreclosure suit. Dolese v. Bellows-Claude Neon Co., 261 Mich. 57.
Plaintiffs claim a lien on the premises for fraud (a) because DeVos misrepresented the value of the association’s equity, the lien to be in the amount of the overvaluation, and (b) in the amount of damages for the other frauds.
DeVos and the holding company have no title to the real estate and no lien can attach to it through their fraud.
No fraud is charged against the cooperative association in connection with the original purchase by plaintiffs. Misappropriation of corporate funds by officers is a wrong against the association and all its stockholders, not a wrong for which the corporation itself is liable in damages to its stockholders. The bill does not allege that the association fraudulently received money of plaintiffs which went into the real estate or is so connected therewith as to support a lien. 37 C. J. p. 320.
As plaintiffs do not ask rescission, their remedy for fraud is an action for damages. Nor, indeed, would a lien imposed after commencement of the foreclosure proceeding make them necessary parties to it. Union Trust Co. v. C. H. Miles Adams Avenue Corp., 247 Mich. 340.
The charge of conspiracy to “freeze out” plaintiffs by foreclosure is not supported by averments of fact, except the general allegation that the trustee permitted DeVos and the holding company to misappropriate moneys of the association instead of paying them on the mortgage and the outline of the plan of reorganization. Plaintiffs contend the trustee owed them a duty of diligence in attempting to collect the mortgage debt and, because it failed in such duty and'permitted misappropriation of association funds, they are entitled to have further foreclosure enjoined. They cite no authority for the position and we apprehend it would surprise the profession if a rule were declared that a mortgagee owes to persons interested in the premises a duty of collection on peril of losing his lien or impairing its enforcement.
If the foreclosure was the result of a conspiracy to defraud plaintiffs, they may have an action for damages. 41 C. J. p. 894. Perhaps equity also could grant relief in a proper case. But the bill does not set up facts showing such conspiracy, contains no offer to pay the defaulted instalments and reinstate the mortgage, nor does it point out a fund of the association, DeVos or the holding company which the court may take into its possession and apply on the debt. The bondholders are entitled to payment or foreclosure and no rule of equity would permit enjoining their action until someone voluntarily pays the default. The reorganization plan is sub ject to separate attack and does not evidence conspiracy in the foreclosure.
"We think the bill fails to state a case entitling plaintiffs to enjoin the foreclosure proceedings.
Charges of misappropriation of association funds in conduct of the receivership, demands for accounting therefor, and use of the moratorium statute are under control of the.court in the foreclosure suit.
We also think the bill is multifarious, 3 Comp. Laws 1929, § 13962
1. In joining separate actions by plaintiffs for fraud in their purchases. Although thp representations may have been general and identical to each plaintiff, they were personal to each because made at different times and necessarily individually relied upon. Relief would need to take the form of separate judgments in varying amounts. No plaintiff (except as to husband and wife) has any interest in the cause of action of any other plaintiff. Runciman v. Brown, 223 Mich. 298.
2. Relief granted for misappropriation of association funds would be in the nature of decree on stockholders’ bill, wholly different from the personal judgments for fraud.
3. Relief in the above respects would give the plaintiffs no standing to attack the foreclosure proceedings.
4. The actions for fraud, misappropriation and injunction against foreclosure cannot be joined. Gardella v. Babigian, 263 Mich. 514.
Decree affirmed, with costs and, under 3 Comp. Laws 1929, § 15508, cause remanded with leave to plaintiffs to amend their bill of complaint within 15 days.
Nelson Sharpe, C. J., and Potter, North, Wiest, Btttzel, and Edward M. Sharpe, JJ., concurred. Bushnell, J., did not sit. | [
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Carr, C. J.
This is an action for an accounting and for injunctive relief. Plaintiff corporation was organized in 1942,. for the purpose of manufacturing light grinding machines. The sole stockholder was, and is, George Bradley, who is the son of the defendant Leonard G. Bradley. Said defendant was at the time operating a business under the name of Bradley Machinery Company at 211 Joseph Campau avenue in the city of Detroit. Plaintiff rented from defendant Bradley a portion of the space at said address for the purpose of conducting its business. It was also agreed that defendant Bradley should have the exclusive right of selling the grinding machines manufactured.
Plaintiff’s business was at least reasonably successful, a number of machines being assembled and sold. Deféndant Rankin was hired as fiscal manager for plaintiff, and acted as treasurer, his salary being fixed at $5,000 per year. Defendant Reid was hired as an- accountant and to supervise the corporation. books. It was agreed that he was to receive $100 a month for his services. It is conceded that neither Rankin nor Reid has been paid in full in accordance with the contracts of employment.
Plaintiff in its bill of complaint alleged that the three defendants conspired to injure plaintiff; that various items of expense that should have been charged to defendant Bradley had in fact been paid by the corporation; and that the other defendants were not entitled to collect the compensation claimed by them for work done because of failure to perform their respective duties in a proper manner, and for the further reason that they had, by their conduct, caused injury to the plaintiff. Defendants Bradle3 and Bankin answered the bill of complaint, denying its material allegations, aiad filed cross bills setting forth affirmative claims. In his cross bill, defendant Bradley alleged that he had expended money on behalf of plaintiff, particularly in taking care of its payroll from time to time. Defendant Bankin, denying the charges made against him, asked that the court enter a decree in his favor for the amount of his unpaid salary. Defendant. Beid did not appear in the case.
Following the trial in the circuit court an opinion was filed in which the judge who heard the case carefully analyzed the proofs presented to him, disallowed certain items of plaintiff’s claim against defendant Bradley, and allowed other items of such claim in the aggregate amount of $1,302.58. It was further held that defendant Bradley was entitled under his cross bill to an allowance in the sum of $7,148.23, of which amount it appears $7,052.22 was for moneys advanced by him to meet plaintiff’s payroll. The items rejected in plaintiff’s, and in defendant Bradley’s, claims were found to be without supporting proof.
The trial court further found that defendant Bankin was entitled to recover against plaintiff the sum of $3,333.33 for unpaid salary, and that plaintiff was not entitled to any off-set against such amount on the ground that said defendant’s services were not satisfactory. A like conclusion was -reached with, reference to defendant Reid. A decree was entered in accordance with, the determination of the trial court as to the rights of the parties to the action. From such decree plaintiff has appealed.
The case involves the determination of factual issues. Plaintiff failed to establish its claim of a conspiracy between defendants, as alleged in the bill of complaint, and also failed to show fraudulent conduct on the part of defendants, or any of them. In consequence, the case resolves itself into an accounting proceeding.
A recital of the testimony relating to the various items of plaintiff’s claim against defendant Bradley, and of the latter’s counterclaim, would serve no useful purpose. The trial judge had the advantage of seeing the parties to the controversy and hearing their testimony. He was in position to pass on their credibility. The opinion filed by the trial court indicates clearly that careful consideration was given to the claims of the respective- parties. The decree should not be reversed or altered unless it appears that it is not in accordance with the rights of the parties. Langdell v. Langdell, 285 Mich. 268; Clement v. Smith, 293 Mich. 393. See, also, Wolff v. Taylor, 127 Mich. 143; Hillier v. Carpenter, 215 Mich. 259.’
Based on a careful consideration of the record we think that the trial court correctly decided the matters in controversy. Defendant Bradley was clearly entitled to the allowance of the various sums advanced by him from time to time to meet plaintiff’s payroll, and also to the other items found to be due and owing to him. Defendant Rankin rendered the services on which his claim for compensation was based, and the actual facts established by the proofs in the case are not such as to bar his recovery. It is a fair conclusion that he rendered the services he was hired to perforin. • For like reasons plaintiff was not entitled to relief as against defendant Reid.
The decree of the trial court is affirmed, with costs to appellees,
Btitzel, Bushnell, Sharpe, Boyles, Reid, North, and Dethmers, JJ., concurred. | [
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Bushnelu, J.
Plaintiffs Benjamin J. Sipes, Anna C. Sipes, and others own and occupy property located in Seebaldt’s subdivision and Brooks and Kingon’s subdivision on Seebaldt avenue, between Firwood and Beechwood avenues, in the city of Detroit.
Defendants Orsel McGhee and Minnie S. McGhee, his wife, own and occupy property located on the same street in Seebaldt’s subdivision. All of the properties occupied by the parties hereto are encumbered by the following recorded covenant:
“This property shall not be used or occupied by any person or persons except those of the Caucasian race.”
Defendants seek reversal of a decree upholding and enforcing this restriction. In order to obtain that result, this Court is asked to overrule its holding in Parmalee v. Morris, 218 Mich. 625, (38 A. L. R. p. 1180) where a restriction was upheld, which read:
“Said lot shall not be occupied by a colored per-' son, nor for the purposes of doing a liquor business thereon.”
The questions involved in defendants ’ appeal concern the execution of ' recorded. instruments relied upon by plaintiffs, the proof of racial identity of the defendants, and the uncertainty of the language of the covenant and its validity.
Originally there were no racial restrictions affecting the property in question. Subsequently, certain property owners, in the block in which defendants’ home is located, entered into mutual agreements imposing the above-quoted restriction. These various agreements were recorded in the office of the register of deeds of Wayne county on September 7, 1935. The agreements provide that the restriction in question should not be effective unless at least 80 per cent, of the property fronting on both sides of the street in the block is subjected, “to this or a similar restriction.” The deed running to defendants, which is dated November 30, 194.4, and recorded on December 1, 1944, is “subject to existing restrictions as of record.”
The testimony taken was not extensive and decision turns here, as it did in the circuit court, principally on legal questions. The main factual issue was with respect to the racial identity of the defendants. Sipes testified, over objections as to his qualifications as an expert, that defendants and their two sons are colored people. On cross-examination, he testified:
“I have seen Mr. McGhee, and he appears to have colored features. They are more darker than mine. I haven’t got near enough to the man to recognize his eyes. I have seen Mrs. McGhee, and she appears to be the mulatto type.”
Defendants did not 'take the witness stand,. and the only testimony prodriced in their behalf was that of Dr. Norman D. Humphrey, an assistant professor of Sociology and Anthropology at Wayne University. He expressed the opinion that there is no simple wmy in which to. determine whether a man is a member of the Mongoloid, Caucasoid, or Negroid race. He explained that such classifications are very difficult and cannot be determined without scientific tests. Melvin Tumin, an instructor in the same department, stated that he agreed with the testimony of Dr. Humphrey.
The trial judge did not mention this subject in the written opinion which he filed, but the circuit court decree contains a finding — “that defendants, Orsel McGhee and Minnie S. McGhee, his wife, are not of the Caucasian race but are of the colored or Negro race.” The testimony of Sipes is sufficient to sustain this finding. See People v. Dean, 14 Mich. 406, 423.
'Appellants claim that the restrictive agreement was not properly executed by at least 80 per cent, of the property owners in the block. The signature of one of the property owners was acknowledged before á notary public in Indiana. There is no certificate of the clerk of a court of record or the secretary of State of Indiana attached showing that the notary public who executed the acknowledgment had authority to do so on the date mentioned. ■
Under the uniform acknowledgment act (3 Comp. Laws 1929, § 13333, Stat. Ann. § 26.604) it was held in Reid v. Rylander, 270 Mich. 263, that such certificate was not necessary, the notary’s seal of office being’ sufficient.
Defendants also question the validity of the group acknowledgments and the authority of certain corporate officers to execute the restrictive agreement. Our de novo examination of the recorded instruments discloses that they were properly executed and acknowledged by the owners of more than 80 per cent, .of the.property covered'by the restriction.
The policy was early established in this State that courts will uphold acknowledgments wherever pos sible and will not suffer conveyances or.proof of them to be defeated by technical or unsubstantial objections. See Morse v. Hewett, 28 Mich. 481; Nelson v. Graff, 44 Mich. 433; King v. Merritt, 67 Mich. 194; and Carpenter v. Dexter, 8 Wall. (75 U. S.) 513 (19 L. Ed. 426).
Appellants argue that the restriction under consideration is void for uncertainty. This argument is based upon the. following quotation from Re Drummond Wren, 1945 O. R. 778, Supreme Court of Ontario, No. 669-45, decided in October, 1945, where that trial court held that the phrase, “Land not to be sold to Jews or persons of objectionable nationality,” was too indefinite to be enforceable. Mr. Justice Mackay said in that case:
“Counsel for the applicant contended before me that the restrictive covenant here in question is void for uncertainty. ' So far as the words ‘persons of objectionable nationality’ are concerned, the contention admits of no contradiction. The conveyancer who used these words surely must have realized, if he had given the matter any thought, that no court could' conceivably find legal meaning in such vagueness. So far as the first branch of the covenant is concerned, that prohibiting the sale of the land to ‘Jews,’ I am bound by the recent decision of the House of Lords in Clayton v. Ramsden, (1943) L. R. A. C. 320 (1 All. E. R. 16), to hold that the covenant is in this respect also void for uncertainty ; and I may add, that I would so hold even if ‘ the matter were res integra. The Law Lords in Clayton v. Ramsden were unanimous in holding that the phrase ‘Jewish parentage’ was uncertain and Lord Romer was of the same opinion in regard to the phrase ‘of Jewish faith.’ I do not see that the bare term ‘Jews’ admits of any more certainty.”
This observation could not be made concerning the language of the restriction now under consideration. It is difficult to see how language could be more certain than that-employed, i. e., “This property shall not be used -or occupied by any person or persons except those of the Caucasian race.”
No one could contend either that persons of the Mongoloid or Negroid races are embraced within the term “Caucasian,” or that this term does not specifically exclude all other races. The covenant in question is not void on the ground that it is uncertain.
The principle that contracts in contravention of public policy are not enforceable should be applied with caution, and only in cases plainly within the reasons on which that doctrine rests. Skutt v. City of Grand Rapids, 275 Mich. 258, 264. In this same case this Court adopted the meaning of public policy from Pittsburgh, C. C. & St. L. R. Co. v. Kinney, 95 Ohio St. 64 (115 N. E. 505, L. R. A. 1917 D, 641, 643, Ann. Cas. 1918 B, 286):
“ ‘What is the meaning of “public policy?” A correct definition, at once concise and comprehensive, of the words “public policy,” has not yet been formulated by our courts. Indeed, the term is as difficult to'define with accuracy as the word “fraud” or the term “public welfare.” In substance, it may be said to be the community common sense and common conscience, extended and applied throughout the State to matters of public morals, public health, public safety, public welfare, and the like. It is that general and well-settled public opinion relating to man’s plain, palpable duty to his fellow men, having due regard to all the circumstances of each particular relation and situation.
“ ‘Sometimes such public policy is declared by Constitution; sometimes by statute; sometimes by judicial decision. More often, however, it abides only in the customs and conventions of the people, —in their clear consciousness and conviction of what is naturally and inherently just and right between man and man. It regards the primary principles of equity and justice ánd is sometimes expressed under the title of social and industrial justice, as it is conceived by our body politic. When a course of conduct. is cruel or shocking to the average man’s conception of justice, such course of conduct must be held to be obviously contrary to public policy, though such policy has never been so written in the bond, whether it be Constitution, statute or decree of court. It has frequently been said that such public policy is a composite of constitutional provisions, statutes and judicial • decisions, and some courts have gone so far as to hold that it is limited to these. The obvious fallacy of such a conclusion is quite apparent from the most superficial examination. When a contract is contrary to some provision of the Constitution, we say it is prohibited by the Constitution, not by public policy. When a contract is contrary to statute, we say it is prohibited' by a statute, not by a public policy. When a contract is contrary to a settled line of judicial decisions, we say it is prohibited by the law of the land, but we do not say it is contrary to public policy. Public policy is the cornerstone — the foundation — of all constitutions, statutes, and judicial decisions, and its latiftide and longitude, its height and its depth, greater than any or all of them. If this be not true, whence came the first judicial decision on matter of public policy? There was no precedent for it, else it would not have been the first.’ ”
The public policy of this State as to racial discrimination has been expressed in various ways. In chapter 21 of the penal code, the civil rights sections prohibit such discrimination in public educational institutions and places of public accommodation, amusement, and recreation, Act No. 328, §§ 146-148 Pub. Acts 1931, (Comp. Laws Supp. 1940, §§ 17115-146 — 17115-148, Stat. Ann. §§ 28.343-28.345) and Ferguson v. Gies, 82 Mich. 358 (9 L. R. A. 589, 21 Am. St. Rep. 576) and Bolden v. Grand Rapids Operating Corp., 239 Mich. 318 (53 A. L. R. 183).
Discrimination by State mental institutions and in the public schools because of race or color is prohibited by statute. 2 Comp. Laws 1929, § 6922 (Stat. Ann. § 14.845) 2 Comp. Laws 1929, § 7156 (1), (Stat. Arm. §15.76), and 2 Comp. Laws 1929, § 7368 (Stat. Ann. § 15.380).
Life insurance companies doing business in this State are prohibited from making any distinction or discrimination between white and colored persons. 3 Comp. Laws 1929, § 12457 (Stat. Ann. 1943 Rev. § 24,293).
■ It is also the public policy of this State, as expressed in decisions of this Court too numerous to mention, to permit and enforce certain restrictions upon the use and occupancy of real property. See authorities listed in 3 Callaghan’s Michigan Digest, pp. 371-403.
Restrictions of a contractual nature are valuable property rights. They cannot even be taken under the power of eminent domain without compensation. Allen v. City of Detroit, 167 Mich. 464 (36 L. R. A. [N. S.] 890), and Johnstone v. Railway Co., 245 Mich. 65, (67 A. L. R. 373). See, also, 122 A. L. R. 1464. These rules of property, which have existed during most of the life of the State, should not be brushed aside in the absence of strong and cogent reasons.
As indicated in Dolby v. State Highway Commissioner, 283 Mich. 609, 615 (117 A. L. R. 538):
“A recognized rule of property ought not to be overturned without the very best of reasons. Lewis v. Sheldon, 103 Mich. 102; Pleasant Lake Hills Corp. v. Eppinger, 235 Mich. 174.”
In Parmalee v. Morris, supra, it was held that a restrictive covenant similar to the one now under consideration was not void as against public policy.
Restrictions against alienation ar.e quite another matter. This Court pointed out the difference in Porter v. Barrett, 233 Mich. 373 (42 A. L. R. 1267) following’ the rule enunciated in Mandlebaum v. McDonell, 29 Mich. 78 (18 Am. Rep. 61), and held that a restriction prohibiting the sale of certain lands “to a colored person” was void.
The Parmalee and Porter authorities were followed in Schulte v. Starks, 238 Mich. 102. See annotations in 66 A. L. R. at page 531.
Defendants argue that a restriction prohibiting the use of property by others than those of the Caucasian race violates the due process clause of the Constitution of Michigan. (Art. 2, § 16) The applicability of this clause was not discussed in Parmalee v. Morris, supra. While we recognize that the concept of “due process” is incapable of exact definition, yet, ever since Buck v. Sherman, 2 Doug. (Mich.) 176, we have held that this constitutional right means that every person having property'rights affected by litigation is entitled to notice, and a day in court, or a reasonable opportunity to appear and defend his'interest. See Chrysler Corporation v. Unemployment Compensation Commission, 301 Mich. 351, and Dation v. Ford Motor Co., 314 Mich. 152. Such rights were accorded the defendants in the instant case.
It is argued that the restriction in question violates the 14th Amendment to the Constitution of the United States. Appellees say that this argument was answered in Corrigan v. Buckley, 271 U. S. 323 (46 Sup, Ct. 521, 70 L. Ed. 969). We so read the .Corrigan Case, although that decision partly turned on the inapplicability of the equal protection clause .of the 14th Amendment to the District of Columbia, and the appeal was dismissed for want of jurisdiction.
Defendants argue that the language — “No State shall make or enforce any law which shall abridge the privileges> or immunities of citizens of the United States; nor s’hall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws” (U. S. Const, am. 14, § 1), means that the judicial acts of courts of a sovereign State are the acts of that State within the constitutional inhibition. They conclude therefrom that the decree in this cause was unconstitutional State action in that it deprived them of “the equal protection of the laws.” To accept this reasoning would also at the same time deny “the equal protection of the laws” to the plaintiffs-and prevent the enforcement of their private contracts.
"We have never hesitated to set aside a law which was repugnant to the equal protection clause of the amendment but, on the other hand, we have never applied the constitutional prohibition to private relations and private contracts.
We were recently urged to apply a racial restriction to property under a claimed general plan, in Kathan v. Stevenson, 307 Mich. 485. This we declined to do. See, also, Kathan v. Williams, 309 Mich. 219, and Gableman v. Department of Conservation, 309 Mich. 416. We are not aware of any decision of courts of last resort, State or Federal, which have applied this constitutional prohibition to private agreements containing racial restrictive, covenants.
The several amici curiae briefs indulge in considerable amplification and elaboration upon appellants^ arguments on public policy and the constitutional questions involved in this appeal. In addition, these briefs contain valuable material with respect to the related social and economic problems. We are impressed with the fact that the Negro population of Detroit has increased from 40,438 in 1920 to approximately 210,000 in 1944, and that it then was approximately 12 per cent, of the 'population of the city.
. The arguments based on the factual statement pertaining to questions of public health, safety and delinquency are strong and convincing. However, we must confine our decision to the matters within the record submitted to us and the questions raised in the briefs of the parties to the cause.
It is suggested that the intervention of a World War and the declarations of statesmen and international deliberative bodies now makes the devicé of restrictive covenants against minority racial groups a matter of concern and public policy rather than that of private contract, as was assumed by the court in the Parmalee decision in 1922. Some of the briefs go so far as to insist that the declarations of the Atlantic charter and the United Nations’ conference at San Francisco are international treaties and have the effect of law.
We do not understand it to be a principle of law that a treaty between sovereign nations is applicable to the contractual rights between citizens of the United States when a determination of these rights is sought in State courts. So far as the instant case is concerned, these pronouncements are merely indicative of a desirable social trend and an objective devoutly to be desired by all well-thinking peoples. These arguments are predicated upon a plea for justice rather than the application of the settled principles of established law.
We direct attention to the differentiation made by Mr. Justice Roberts, between justice and law, in Duncan v. Magette, 25 Tex. 245, 252, decided in 1860. He said:
“I avail myself of the opportunity afforded by this application, to present my own views upon the foiindation and force of this appeal to the sense of justice of the court, whether used as an influencing consideration, in interpreting’ and enforcing the rules ' of law, or directly urged as the basis of judicial action.' A frequent recurrence to first principles is absolutely necessary in order to keep precedents within the reason of the law.
“Justice is the dictate of right, according to the common consent of mankind generally, or of that portion of mankind who may be associated in one government, or who may be governed by the same principles and morals.
“Law is a system of rules, conformable, as must be supposed, to this standard, and devised upon an enlarged view of the relations of persons and things, as-they practically exist. Justice is a chaotic mass of principles. Law is the same mass of principles, classified, reduced to order, and put in the shape of rules, agreed upon by this ascertained common consent. Justice is the virgin gold of the mines, that passes for 'its intrinsic worth in every ease, but is subject to a varying value, according to the scales through which it passes. Law is the coin from the mint, with its value ascertained and fixed, with the stamp of government upon it which insures and denotes its current value.
“The act of moulding justice into a system of rules detracts from its capacity of abstract adaptation in each particular case; and the rules of law, when applied to each case, are most usually but an approximation to justice. Still, mankind have generally thought it better to have their rights determined by such a system of rules, than by the sense of abstract justice, as determined by any one man, or set of men, whose duty it may have been to adjudge them.
“Whoever undertakes to determine a case solely by his own notions of its abstract justice, breaks down the barriers by which rules of justice are erected into a system, and thereby annihilates law.
“A sense of justice, however, must and should have an important influence upon every well organized mind in the adjudication of’ causes. Its proper province is to superinduce an anxious desire to search out and apply,- in their true spirit, the appropriate rules of law. It cannot be lost sight of. In this, it is like the polar star that guides the voyager, although it may not stand over the port of destination.
‘ ‘ To follow the dictates of justice, when in harmony with the law, must be a pleasure; but to follow the rules of law, in their true spirit, to whatever consequences they may lead, is a duty. This applies as well to rules establishing remedies, as to those , establishing rights. These views will, of course, be understood as relating to my own convictions of duty, and as being- *the basis of my own judicial action. ” . •
In this appeal we are obliged to differentiate between public rights and private or contractual rights. The former is unquestionably the responsibility of the State, but the action of a State court in requiring or refusing enforcement of private contractual rights is, _ in our opinion, not within the prohibitions of the 14th Amendment. To hold other wise would be to nullify many statutory enactments and overrule countless adjudicated cases. The unsettling effect of such a determination by this Court, without prior legislative action or a specific Federal mandate, would be, in our judgment, improper.
It is impossible, within the confines of this opinion, to distinguish and differentiate the numerous authorities cited pro and con in the various briefs. We do, however, direct attention to a most recent annotation of authorities on the subject in 162 A. L. R. 180 et seq., which follows the opinion in Mays v. Burgess, 79 App. D. C. 343, (147 F. [2d] 869), decided January 29, 1945; certiorari denied, 325 U. S. 868 (65 Sup. Ct. 1406, 89 L. Ed. 1987); rehearing denied, 325 U. S. 896 (65 Sup. Ct. 1567, 89 L. Ed. 2006). See, also, 36 Harvard Law Review, December, 1922, p. 220; 12 University of Chicago Law Review, February, 1945, p. 198; 33 California Law Review, March, 1945, p. 5; 30 Minnesota Law Review, March, 1946, p. 219.
What we must determine in this a'ppeal is whether we shall now overrule Parmalee v. Morris, supra:
We are guided in our consideration of this problem by our statements in the recently decided case of Bricker v. Green, 313 Mich. 218 (163 A. L. R. 697).
After a careful study, we are not persuaded that the rule laid down in the Parmalee Case was wrong, or is wrong now. It is controlling with respect to the instant case.
The decree entered by the trial court is affirmed, with costs to appellees.
Care, C. J., and Butzel, Sharpe, Boyles, Beid, North, and Dethmers, JJ., concurred. | [
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