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Starr, C. J.
Plaintiff, as the owner of certain bonds of the Southfield No. 6 storm sewer drain district, began the present mandamus action to compel the treasurer of Oakland county to pay the deficiency on said bonds from the county’s general fund. Having obtained leave, it appeals from an order denying the relief sought. Questions are presented which require us to construe and determine the constitutionality of Act No. 316, chap. 10, § 15, Pub. Acts 1923, as amended by Act No. 331, Pub. Acts 1927, which provides in part:
“In case the amount available in the drain fund shall be insufficient to pay the principal or interest of any such bonds heretofore or hereafter issued when they become due the same shall be advanced and paid by the county out of its general funds and reimbursement to said general fund shall be made out of the drain taxes thereafter collected, provided that such advancement by the county shall not cause the total debt of the county to exceed the constitutional limitation thereof. ’ ’
Substantially all of the material facts involved are stipulated. The drain district comprised 297 platted lots and an unplatted parcel of about 33 acres in Oakland county. On February 1, 1928, the district. issued bonds in the amount of $45,000 to provide funds for the construction of a storm sewer drain. The issue consisted of 45 bonds in the amount of $1,000 each, maturing serially during a period of 10 years, the last maturity being May 1, 1938. They provided for interest at 5% per cent., payable semiannually on May 1st and November 1st of each year. The bonds contained the following provision, which substantially embodied the above-quoted’ portion of the statute:
‘ ‘ The principal and interest of this bond are payable out of the instalments of drain taxes assessed against the lands in said district and against the county of Oakland and the township of Southfield at large, in proportion to their respective taxation for such improvement as follows: lands in district 89 per cent., Oakland county 1 per cent., Southfield township 10 per cent, and are issued for the payment of the cost of construction of the Southfield No. 6 storm sewer drain in the township of Southfield in said Oakland county, * * * and in case the amount available in the drain fund for said drain shall be insufficient to fay the principal or interest of any of such bonds when they become due the same shall be advanced and paid by the county of Oakland out of its general funds and reimbursement to said general fund shall be made out of the drain taxes thereafter collected, provided that such advancement by the county shall not cause the total debt of the county to exceed the constitutional limitation thereof.”
In March, 1928, plaintiff purchased1 $19,000 in amount of said bonds and $16,000 were subsequently purchased by Oakland county. The remaining $10,-000, which matured on and prior to May 1, 1933, were sold and were redeemed at maturity. All bonds owned by plaintiff and Oakland county have matured and remain unpaid. No interest has been paid since May 1, 1931. Subsequently, all the unplatted acreage and 179 of the 297 lots in said district were sold to the State of Michigan for delinquent taxes, leaving only 118 lots which would be subject to a deficiency assessment under our holding in Keefe v. Oakland County Drain Commissioner, 306 Mich. 503. It was agreed that the 118 lots represented 41.175 per cent, of the land on the original assessment roll of the district. The amount of principal and interest (computed to May 1, 1945) remaining due on the district’s outstanding bonds is $61,950. Plaintiff and Oakland county are the only parties interested as creditors of the drain district. The financial status of the district and the probable deficiency in funds required to pay its outstanding-bonds and interest are shown by the following stipulated facts:
“Assuming that an additional deficiency assessment were levied in 1944, the following approximate figures show the amount of the same and the approximate maximum recoveries which could be expected therefrom:
“Principal of bonds................$35,000.00
“Interest to 5/1/45..'.............. 26,950.00
$61,950.00
“Cash in (drainage district) fund.... 17,014.63
“Additional deficiency assessment. .$44,935.37
“Only 41.175 per cent, (of the deficiency assessment) could be collected because of the fact that levies cannot be made against lands which passed to the State, hence the maximum amount which could. be expected from this levy would be $18,502.04. On tbe basis of the amount in the fund, plus estimates of the amounts which may be recovered from an additional levy and from future receipts from the State land office board, the maximum recoveries are as follows:
“Amount in fund..................$17,014.63
“Estimated maximum returns from additional assessment .......... 18,502.04
“Estimated returns from State land office board.................... 1,764,75
$37,281.42”
It was agreed that approximately $5,838.60 of an additional assessment probably could not be collected, which would leave a balance of only $31,442.-82 as the maximum amount available from the drainage district for payment on the bonds in question. There was‘approximately $224,578 in the county’s general fund, and if the deficiency on the drainage district’s outstanding bonds, over and above its estimated available funds, were paid from the general fund, it would necessitate an increase in the county’s general tax budget to replenish the fund.
On September 27, 1943, plaintiff tendered its unpaid bonds and interest coupons to the county treasurer and demanded payment, which was refused. On September 30th it filed petition in circuit court for a writ of mandamus to compel the treasurer to pay the amount due on said bonds and coupons from “either the fund of said drain, or the general fund of said county, or both.” Defendants answered, admitting the issuance of the bonds held by plaintiff and default in the payment of principal and interest. In their answer they conceded plaintiff’s right to a proportionate deficiency assessment as to the lands in the district which had not been acquired by the State. Keefe v. Oakland County Drain Commissioner, supra. However, they denied plaintiff’s right to have the deficiency on its bonds paid out of the county’s general fund, on the ground that the statute quoted above required the county to pay only such amount as it could obtain in reimbursement from the drainage district. They also contended that if said statute was construed to' require the county to pay the full deficiency from its general fund, it would be unconstitutional, as violating Const. 1908, art. 5, § 21, and art. 10, §§ 6, 12, and 14.
The trial judge held that the statute required the county to pay from its general fund only the amount which it could obtain through reimbursement from the drainage district. On the basis of this construction he held it to be constitutional. He further held that if the statute were construed to require the county to pay the full deficiency on the drainage bonds from its general fund, it would be_ unconstitutional. In his opinion he said in part:
“The legislature, when Act No. 331, Pub. Acts 1927, was passed, did not contemplate the widespread tax delinquencies which did follow, and * # #
“Did not intend that the county would be compelled to advance from 40 per cent, to 70 per cent, of the cost of drains, which ran into huge sums of money without the possibility of reimbursement, because if the legislature did so intend ■
“a. The advancement statute (chapter 10, § 15) would result in a general tax on the county at large, which would make the act unconstitutional in its present form, being violative of Const. 1908, art. 10, § 6, and art. 5, § 21.
“b. It would have put the county in the position of being unconstitutionally engaged in works of internal improvement prohibited by Const. 1908, art. 10, § 14.
“c. It would have required the counties to unconstitutionally lend their credit to private or public enterprise, prohibited by Const. 1908, art. 10, §12.
“This court presume such intention and is forced to the conclusion the legislature intended reimbursement to fol-advancement.”
In his- order directing the. issuance of a writ of mandamus to compel a deficiency assessment on lands in the drainage district which had not passed to the State, the trial judge said in part:
“Computing the amounts now in the drain fund, plus future additions thereto as a result of the deficiency assessment and collections from the State land office board, the total amount which can be made distributable to holders of bonds will be the sum of $31,442.91, or $898.,37 per bond. * * .*
as * * (the statute) is subject to the limitation that the county shall not be obliged to advance moneys from its general fund, unless reimbursement thereto can be made from drain taxes thereafter to collected, and inasmuch as the court finds that $898.37 per bond is the maximum amount which can be paid to bondholders, without exceeding such limitation, it is determined that holders of bonds, who surrender them, are entitled to the payment of said sum per bond from moneys in the general fund and the fund of said drain.”
His order directing the drain commissioner to certify a deficiency assessment against lands in the district which had not passed to the State and against the county and township at large, and directing the board of supervisors to spread - the deficiency assessment, also directed the county treasurer as follows:
“To pay to such bondholders as surrender their bonds for cancellation the sum of $898.37 per bond, employing for that purpose moneys in the drain fund, and adding thereto such additional moneys as may be necessary by withdrawal of same from the county’s general fund, or in the alternative, if such bonds are not surrendered for cancellation upon payment of the foregoing sum, to pay to such bondholders from time to time as money is in the drain fund their proportionate share of same.”
Plaintiff appeals from this order. The statute, chapter 10, § 15, quoted above, should be construed so as to give effect to the intent and purpose of the legislature. Laughery v. County of Wayne, 307 Mich. 316; Detroit Board of Education v. Superintendent of Public Instruction, 304 Mich. 206.
cannot agree with the holding of the trial judge that the statute required the county to pay only the amount which it could recover by reimbursement from the drainage district. In plain and mandatory terms the statute provided that the county “shall” pay the deficiency on drain bonds from its general fund, and the only condition is that the payment shall not cause the county debt “to exceed the constitutional limitation thereof.” The ability of the county to obtain full reimbursement from drain taxes thereafter collected was not condition precedent to its obligation to pay the deficiency. The payment of the deficiency on the outstanding bonds in question would not cause the total debt of Oakland county to exceed the constitutional limitation. It is clear that, recognizing the necessity of establishing drains as a measure of public health and welfare, the legislature intended make drain bonds a more attractive and safer investment by requiring a county to pay from its general fund any-deficiency accruing on said bonds. did not intend to limit the county’s obligation on bonds to the amount of drain taxes it might thereafter collect from the district.
A statutory provision identical to that involved in the present case was considered in Regents of University of Michigan v. Pray, 264 Mich. 693. In that case the plaintiff had purchased bonds issued in connection with the construction of a drain in Washtenaw county. The district defaulted in the payment of principal and interest due on certain matured bonds. There was practically no money in the drainage district’s fund, and the general fund of the county was not sufficient for its ordinary operating expenses for the current year. Plaintiff began mandamus proceedings to compel the county to pay the amount due on the matured drain bonds from the county’s general fund. In affirming the granting of mandamus, we said (pp. 701-703):
“There still remains to be considered appellants’ contention that because there was not sufficient money in the general county fund to cover the expenses of the county’s governmental activities for the current year, refusal to pay these drain bonds from such general fund was justified. The opinion of the trial judge disposes of this phase of the case in the following language: * * *
“ ‘That portion of the statute under discussion is mandatory. It expresses the clear legislative intent that when the amount available in the drain fund shall be insufficient to pay the principal or interest of any drainage bonds heretofore or hereafter issued when they become due, the same shall be advanced and paid by the county out of its general funds. * * *
“ ‘It simply states that bondholders shall be paid out of the general fund and that reimbursement shall be made. The wording does not indicate that the. legislature intended th-at the probability or possibility of reimbursement should be determined prior to any payment for the purposes mentioned out of the general fund. * * *
“‘It is my further opinion that, under the case of Moore v. Harrison, 224 Mich. 512, and the later case of Township of Waterford v. Willson, 257 Mich. 619, that the question of the depletion of the county funds does not enter into the discussion, in view of the statute, which is here upheld, and which provides for no exceptions or limitations upon the use of funds to all practical intents and purposes included in the general fund for the purpose stated.’
on date of hearing, there was in the Washtenaw county general fund money greatly in excess of the amount of the payment sought by plaintiff. * * * Plaintiff is clearly entitled to payment, and likewise the duty of respondents as public officers to make such payment out of moneys in the county’s general fund is clearly and specifically imposed by statute
In the case of Graves v. Bliss, 235 Mich. 364, plaintiffs held two drain orders issued for labor in connection with the construction of a drain in Midland county. Certain lands in the drainage district had been sold to the State for delinquent taxes, and the drain fund was exhausted. Plaintiffs’ demands for payment from the county were refused, and they began mandamus proceedings to compel the county treasurer to make payment from the general fund. The statute involved (Act No. 316, chap. 9, § 4, Pub. Acts 1923, as amended by Act No. 365, Pub. Acts 1925) gave the holder of a drain order the right to require payment from the county’s general fund if the drain fund was insufficient “because of delinquency in the payment of drain taxes after the lands on which the said taxes shall have become delinquent have been offered for sale,” and further provided that “all delinquent drain taxes * * * shall be credited to the general fund until the same is reimbursed.” The record showed that if the county paid plaintiffs’ drain orders, it would be impossible for it to obtain reimbursement from tbe drainage district. In affirming tbe trial court’s order granting mandamus to compel payment from tbe general fund, we said:
“The record here shows that reimbursement is impossible. The statute does not make payment of such orders from the general fund depend upon the power to reimburse. It was contemplated that there would be reimbursement either from a. redemption or sale of the delinquent lands, but payments from the general fund were not contingent on the ability of the county to reimburse itself.”
A situation analogous to that in the present case was considered in City of Highland Park v. Dearborn Township, 285 Mich. 440. In that case the plaintiff began suit against the township to recover on certain matured, special-assessment .district bonds issued for the construction of water and sewer improvements. Said bonds were issued in pursuance of 1 Comp. Laws 1929, § 2387, which provided in part:
“If any such special assessment fund is insufficient to pay such bonds and interest thereon when due, the township board shall advance the amount necessary to pay such bonds, and shall be reimbursed from such assessments when collected, or by reassessment of the deficiency if necessary.”
In affirming a decree for plaintiff and holding the act constitutional, we said (pp. 444, 445, 447, 448):
“Appellant’s^ (township’s) contention that the provision above quoted from section 3 of the statute is unconstitutional cannot be sustained. * * *
“By the statute under consideration the legislature has authorized townships to issue special assessment bonds but upon the condition that in case the special assessment fund is insufficient to pay the bonds and interest thereon then the township at large shall be liable for their payment. The quoted statutory provision does not attempt to compel a township, acting through its officers, to authorize the issuance of district special assessment bonds, but if a township elects to do so, the legislature by Act No. 58, Pub. Acts 1927, renders such bonds payable out of the township’s general funds in event the ‘special assessment fund is insufficient.’ Such a statutory provision is not unconstitutional on the ground that it is an unwarranted interference by the legislature in a matter of purely local concern. * * *
Dearborn could not recover any funds which it advanced to pay these bonds by means of a reassessment in the special assessment districts, or through tas sale of such lands.’ Notwithstanding counsel’s stipulation, still the township’s obligation is neither canceled nor modified. * * *
“ ‘The 'statute orders from the general fund depend upon the power to reimburse. * * * Payments from the general fund were not contingent on the ability of the county to reimburse itself.’ Graves v. Bliss, 235 Mich. 364. * # #
“The township authorized issuance of these bonds. It received the money paid for the bonds by the bondholders, and the township used this money in paying for public improvements made in the township. The statute was then in force under which plaintiffs now seek payment of the bonds. The statute plainly provided that in event the special assessment fund proves insufficient to pay matured bonds ‘the township board shall advance the amount necessary to pay such bonds.’ ”
See, also, Township of Royal Oak v. City of Pleasant Ridge, 295 Mich. 284; Whitman v. Township of Royal Oak, 269 Mich. 146; Moore v. Harrison, 224 Mich. 512; State, ex rel. Bowman, v. Allen County Board of Com’rs, 124 Ohio St. 174 (177 N. E. 271); Marks v. City of Mandan, 70 N. D. 474 (296 N. W. 39).
In pursuance of the above-discussed and cited authorities we accordingly construe the statute involved in the present case to mean .that Oakland county is obligated to pay from its general ■ fund any deficiency on the outstanding bonds of, the drainage district and will be entitled to the drain taxes thereafter collected, in full or partial reimbursement.
The statute in question is presumed to be constitutional, and every reasonable presumption or intendment must be indulged in favor of its constitutionality. In Cady v. City of Detroit, 289 Mich. 499, 505, we said:
“A statute will be presumed to be constitutional by the courts unless the contrary clearly appears; and in case of doubt every possible presumption not clearly inconsistent with the language and the subject matter is to be made in favor of the constitutionality of legislation. * * * Every reasonable presumption or intendment must be indulged in favor of the validity of an act,.and it is only when invalidity appears so clearly as to leave no room for reasonable doubt that it violates some provision of the Constitution that a court will refuse to sustain its validity. A statute is presumed to be constitutional and it will not be declared unconstitutional unless clearly so, or so beyond a reasonable doubt. ’ ’
The unforeseen change in economic conditions subsequent to the enactment of the statute, which resulted in abnormal tax delinquency and in' the State’s acquiring title to more than 50 per cent, of the land in the drainage district, cannot be considered either in construing the statute or in determining its constitutionality. ' Furthermore, the fact that the county’s payment from its general fund of the deficiency on the outstanding drain bonds would result in some depletion of that fund and might require an increase in the county’s general tax budget for the ensuing year, is not a sufficient reason for holding the statute in question unconstitutional. Moore v. Harrison, supra.
It is not within our province to consider the wisdom of the statute, but only to ascertain the legislature’s power to enact it. Oakland County Drain Com’r v. City of Royal Oak, 306 Mich. 124. In the proper exercise of its plenary power, the legislature directed one unit of county government to use its funds in the aid of another unit. The statute did not impose, continue or revive a tax in violation of Const. 1908, art. 10, § 6. Moore v. Harrison, supra. It did not operate as a grant of credit in violation of art. 10,, § 12. It did not require the county to engage in a wort of internal improvement in violation of art. 10, § 14. Its title was sufficient and not violative of art. 5, § 21. Regents of University of Michigan v. Pray, supra. Other questions presented do not require consideration.
We conclude that the statute in question, as we have construed it, is constitutional and a proper exercise of legislative authority.' The order of the trial court is vacated and set aside. The case is remanded with direction to issue writ of mandamus, if necessary, to compel the treasurer of Oakland county to pay plaintiff, upon surrender of its bonds and interest coupons, the amount determined to be available in said drainage district fund, and also to pay plaintiff from the general fund of the county the balance or deficiency determined to fie due on said bonds and coupons. Public questions being involved, no costs are allowed.
North, Butzel, Bushnell, Sharpe, Boyles, and Reid, JJ., concurred. The late Justice Wiest took no part in the decision of this case.
Aet No. 316, chap. 10, § 15, Pub. Acts 1923, as amended by Act No. 331, Pub. Acts 1927.
See footnote, ante, 414.
Act No. 116, § 3, Pub. Acts 1923, as amended by Act No. 58, Pub. Acts 1927, is 1 Comp. Laws 1929, § 2387. | [
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Sharpe, J.
This is habeas corpus to inquire into the detention of petitioner in the State prison of southern Michigan at Jackson.
Petitioner was originally sentenced on December 3, 1936, in the circuit court of Hillsdale county-to the State prison of southern Michigan for a term of 1 to 5 years for breaking and entering in the daytime. On October 6, 1937, he was paroled to Berrien county for a period of one year. On December 6, 1937, he was convicted and sentenced for a term of 6 months to 5 years for unlawfully driving away an automobile. On January 19, 1938, the parole board determined that petitioner should serve the maximum of his first sentence before beginning his new sentence. On February 10, 1941, petitioner was discharged from further- serving on his first sentence and began to serve on his second sentence.
On July 3, 1941, petitioner was paroled for a period of 18 months to Livingston county. He made some reports and on December 17, 1941, joined the Royal Canadian Air Force. On May 12, 1942, a warrant was issued for violation of parole. On April 27, 1943, petitioner called at the office of the bureau of pardons and paroles in Lansing. As a result, the warrant for his arrest was revoked and he was reinstated on parole by order which provided that Davis should forfeit time from violation of May 4, 1942, to the date of the order, April 27, 1943. On July 24,1943, he violated the terms of Ms parole. A warrant was.issued August 3, 1943, for violation of the terms of his parole on July 24,1943, and he was returned to prison on August 4,1943.
It is conceded that from May 4, 1942, until April 24,1943, petitioner was a member of the Royal Canadian Air Force. His joining the RCAF was without permission or consent of the parole board. Petitioner urges that he is entitled to credit for the time he was a member of the RCAF, a period of approximately one year, and if given such credit he would'be eligible for discharge on February 8, 1945.
Act No. 255, chap. .3, § 8, Pub. Acts 1937 (Comp. Laws Supp. 1940, § 17543-48, Stat. Ann. 1944 Cum. Supp. § 28.2108), provides in part:
“A prisoner violating the provisions of his parole and for whose return a warrant has been issued by the assistant director of the bureau of pardons and paroles shall, after the issuance of such warrant be treated as an escaped'prisoner owing service to the State, and shall be liable, when arrested, to serve out the unexpired portion of his maximum imprisonment, and the time from the date of his declared delinquency to the date of his arrest shall not be counted as any part or portion of the time to be served. The warrant of the assistant director of the bureau of pardons and paroles shall be a sufficient warrant authorizing all officers named therein to return such paroled prisoner to actual custody in the penal, institution from which he was released. ’ ’
In the case at bar, petitioner violated his parole on May 4,1942, and a warrant was issued for parole violation on May 12, 1942. Petitioner was reinstated on parole April 27, 1943, during which time, with the exception of a few days, he was a member of the.RCAF. Under the above act, petitioner was an. escaped prisoner from May 12, 1942, to April 27, 1943. The time from the date of his declared delinquency, May 4, 1942, to the date of his voluntary surrender, April 27, 1943, is considered “dead time” and should not be credited to the remainder of petitioner’s sentence.
His service in the RCAF, while patriotic and commendable, may not be used to change the plain terms of the statute. In re Holton, 304 Mich. 534, we said: “the period of so-called ‘dead time’ ended when the warrant for parole violation was issued, as at that time the parole hoard had it within its power to place petitioner in actual confinement in the State prison at Jackson.” Under the facts in this case the parole hoard’s first opportunity to place petitioner in actual custody was when petitioner called at the Lansing office following his discharge from the RCAF.
Petitioner was not entitled to release on February 8, 1945. The writ is dismissed.
Stake, C. J., and Nokth, Butzel, Bttshnell, Boyles, and Reid, JJ., concurred. The late Justice "Wibst took no part in the decision of this case. | [
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Sharpe, J.
Defendant was convicted of unlawfully having intoxicating liquor in his possession. Officers of the county, acting under the authority of a search warrant, the regularity of the issuance or service of which is not questioned, found 11 quart bottles of elderberry wine in the basement of his farm home. Some of it contained as high as 10 per cent, by volume of alcohol. The defendant was not at home when the search was made. There was also proof that he left his home on the following day (June 11, 1924), and did not return until about the middle of October of that year, during which time he was at his son’s home in New London, Connecticut. There was proof that the wine was made during defendant’s temporary absence from his home. It was at first placed in a crock in the cellarway, and, a few days later, bottled up and placed on a shelf in the basement, where the canned fruit was kept. The basement was about 18 by '24 feet in size, and in it was a furnace. The apples and potatoes gathered in the fall were stored therein.
Defendant’s wife, called as a witness in his behalf, testified:
“Q. Did you ever tell Mr. Burbank that you had made any of this vinegar before the 10th, ever talk or discuss it with him before the 10th, when the officers came out there?
“A. No, sir, I don’t remember that I did.
“Q. So far as you know, you never had any occasion to talk with him or discuss it with him?
“A. No, sir, I never say much about my cooking.
“Q. You went on and did the cooking and let him eat it?
“A. Yes, sir, let him eat it.
“Q. Did he ever say anything to you about it, ever ask you what you had in the bottles down there?
“A. No, sir.
“Q. Did he ever go down there and look over the canned fruit?
“A. I don’t think he did.
“Q. When you wanted some canned fruit down cellar would you go and get it or send him?
“A. I would go and get it myself.
“Q. So far as you know, he never saw or doesn’t know, didn’t know, that the elderberry juice was down cellar?
“A. No, sir.”
The question presented is whether, under this proof, the defendant was entitled to a directed verdict of acquittal.
A man, living in his home with his wife and family, is in possession of the things contained therein. The defendant had this wine in his possession, but, unless he had knowledge that it was on his premises, his mere possession of it would not render him liable to a prosecution therefor. People v. Sybisloo, 216 Mich. 1 (19 A. L. R. 133); People v. Liebiotka, 216 Mich. 316; People v. Murn, 220 Mich. 555.
Possession having been established, the presumption of knowledge follows as a legal consequence attached to it. Had the officers found a barrel of whisky, or several dozen bottles, it could hardly be claimed that he would not have been chargeable with knowledge that they were there. There is no place to draw the line as to when the presumption exists and when it does not. The presence of a small quantity is more easily explained than if the quantity be large. The proof offered by the prosecution made out a prima facie case of defendant’s guilt.
In People v. McLean, 230 Mich. 423, it was said:
“In the absence of his claim of ignorance of liquor being in his home, the presumption would prevail that he was aware of its being there.”
In State v. Arrigoni, 119 Wash. 358 (205 Pac. 7, 27 A. L. R. 310), it was said:
“The liquor was found in a house in which the appellant had possession and over which he had control, and the presumption naturally and legally arises that he had possession and control of the things contained therein. The presumption is, of course, re-buttable, and undoubtedly was rebutted if the account given of the presence of the liquor in the house is to be taken as true. But, manifestly, it was for the jury, not the court, to say whether or not the account was true.”
In Hawes v. Georgia, 258 U. S. 1 (42 Sup. Ct. 204), the defendant was charged with knowingly permitting certain persons to locate and have on his premises apparatus for distilling and manufacturing prohibited liquors and beverages. The court said:
“The trial court instructed the jury that Hawes was charged with knowing who had the apparatus upon the premises of which he was in possession or who operated it, and that under the act the burden was upon him to show the want of knowledge. And further, that all that the State had to show was that the apparatus was on the premises, and ‘When the State shows that, stopping there, that makes out a prima facie case against defendant and you should find the defendant guilty as charged in the indictment,’ unless he show that the apparatus was there without his consent and knowledge. * * * It may be presumed that one on such a farm or one who occupies it will know what there is upon it. It is not arbitrary for the State to act upon the presumption and erect it into evidence of knowledge; not peremptory, of course, but subject to explanation, and affording the means of explanation. Hawes had such means. An explanatory statement was open to him with a detail of the circumstances of his acquisition of the place,, and he availed himself of it. He could have called others to testify to the circumstances of his acquisition, for the circumstances were not so isolated or secret as not to have been known to others.
“We agree, therefore, with the supreme court of the State that the existence upon land of distilling apparatus, consisting of the still itself, boxes, and barrels, has a natural relation to the fact that the occupant of the land has knowledge of the existence of such objects and their situation.”
The more important question is whether the testimony of defendant’s wife so conclusively rebutted the presumption of knowledge on his part as to entitle him to an acquittal. It must be borne in mind that the proof offered as to defendant’s flight might also be considered by the jury. While not “substantive evidence of guilt,” People v. Cismadija, 167 Mich. 210, 215, or sufficient in itself to warrant a conviction, it was a proper subject for the consideration of the jury in determining whether he had knowledge that the liquor was in his basement. See note in 25 A. L. R. 886. It may be here noted that the jury were very carefully instructed by the court in this respect.
In Gillett v. Traction Co., 205 Mich. 410, Mr. Justice Kuhn, in an exhaustive opinion, considered the weight to be attached to a presumption as evidence. He held that:
“It serves to establish a prima facie case, but if challenged by rebutting evidence, the presumption cannot be weighed against the evidence.”
This holding was approved and followed in Union Trust Co. v. American Commercial Car Co., 219 Mich. 557, and in Depue v. Schwarz, 222 Mich. 308, and must be regarded as the settled law of this State.
The nature of the rebutting evidence must, however, be considered. It was further said in the Gillett Case:
“But while this is true, it does not follow, in the case of the particular presumption here under consideration, that immediately upon the introduction of any evidence Whatsoever tending to show negligence on the part of the deceased the presumption vanishes and that the burden then rests upon the plaintiff of establishing by affirmative evidence that decedent exercised due care in every respect. A distinction has been recognized between direct, positive, and credible rebutting evidence and mere circumstantial evidence having but a slight or inconclusive tendency to rebut the presumption. When direct, positive, and credible rebutting evidence is introduced, the presumption ceases to operate; but when circumstantial evidence of doubtful value is the only rebutting evidence offered, the question should be submitted to the jury, and if they decide that the circumstantial evidence should be disregarded, the presumption is still sufficient to establish plaintiff’s ease as to the exercise of proper care by the deceased.”
While the testimony of defendant’s wife, supported by that of a woman who helped her, establishes the fact that she made the wine and that defendant was not present when it was made, her statement that, so far as she knew, the defendant had no knowledge that the wine was in the basement, is not of such a “direct, positive, and credible” character as in itself to overcome the presumption of knowledge on his part and to warrant the court in acting upon it as a matter of law and directing the defendant’s acquittal. The lack of knowledge on defendant’s part, notwithstanding her testimony, rests on the inference that he did not see the liquor when in the crock in the cellarway, or afterwards, when bottled and standing on the shelves in the basement.
Quoting further from the Gillett Case:
“And while the jury, in weighing the evidence, may not consider the presumption, yet if, uninfluenced by the presumption, they reach the conclusion that the evidence tending to show decedent’s negligence is not entitled to credit and should be disregarded, the presumption may-then be considered as remaining in force so far as may be necessary to establish the fact that the deceased exercised proper care in all respects not expressly established by the evidence. It was not entirely displaced, but remaining in abeyance pending the jury’s reaching this preliminary decision as to the credence to be given the evidence on the particular point in which negligence was claimed.”
It surely cannot be the law that the testimony of a witness as to a fact which, if established, fully rebuts the presumption on which the prima facie case rests, must in all cases be accepted as true, no matter how improbable or unworthy of belief it may seem to be. While the jury may not weigh the presumption against the proof offered to rebut it, it is for them to determine whether such proof, although uncontra-dicted, establishes the fact relied on to rebut the presumption.
A holding that the presumption vanishes when any proof is offered to rebut it would lead to grave re- suits. In certain cases, malice is to be presumed from the act of killing another. Should the defendant testify that his conduct was not actuated by malice, would such testimony, in itself, entitle him to an instruction that the presumption was thereby removed? The possession of stolen goods, soon after they are taken, raises a presumption that the person in whose possession they are found is the thief. Would his denial, unaccompanied by any explanation as to his possession, in itself so rebut the presumption as to take the case from the jury? Considerations of this kind might be multiplied.
The rule is, as I think was clearly stated by Mr. Justice Kuhn, that unless the rebutting evidence be of such a “direct, positive, and credible character” that a jury may not disregard it, and, if they did so, their verdict would be set aside by the court, the question of its sufficiency to establish the fact relied on to rebut the presumption must be submitted to them under proper instructions. It follows that the defendant was not entitled to a directed verdict.
Other errors assigned have been examined, and are found to be without merit.
The conviction is affirmed. The trial court will proceed to judgment.
Bird, C. J., and Steere, Clark, and McDonald, JJ., concurred with Sharpe, J. | [
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Sharpe, J.
On May 1, 1922, plaintiff applied' to a local agent, Anderson A. Miner, the secretary of the Luther Grange, for insurance in the defendant company on the buildings on her farm property in Osceola county in the sum of $3,350 on a blank pro vided by defendant for that purpose. The requisite fees were paid. The application and fees were sent to W. M. Coon at Roscommon, the secretary of the defendant company. A policy was issued by Mr. Coon on May 5th, and mailed to E. B. Follett, the president of the company, at Hale, for his signature thereto. The policy was afterwards received by plaintiff, the signature of the president appearing thereon as follows: “E. B. Follett, President E. F.” A part of the property insured was destroyed by fire on the night of May 21, 1922. Secretary Coon, on being notified, visited the premises, and made some investigation as to the cause thereof. The attention of the State fire marshal’s department was called to the fire, and, after investigation, a complaint was made and warrant issued, charging plaintiff with the burning of the buildings with intent to defraud the insurance company. On trial in the circuit court she was acquitted by the jury by direction of the court. Much of the evidence submitted and the ruling of the court in that case were put in in this case and appear in the record. Proofs of loss were furnished by plaintiff. There were efforts at adjustment and arbitration, pursuant to the terms of the policy, an award made which was set aside in a suit brought for that purpose, and, finally, this action was brought in August, 1924, to recover on the policy. Defendant requested a verdict, which was denied. The plaintiff had verdict and judgment for $3,196.66. Defendant’s motion for a new trial, thereafter made, was overruled, and the case is now before us on writ of error.
On the trial of the criminal case, counsel for the accused insisted that the prosecution had failed to show the issuance of a legal policy of insurance, in that it did not appear that the president of the company had signed the policy. The lack of such proof was one of the reasons stated by the trial court for directing the acquittal of the accused.
It is now urged by defendant, and its request for a directed verdict was based thereon, that plaintiff is estopped by the contention of her counsel and the ruling of the court in the criminal case from claiming that the policy was legally issued and the defendant liable thereon. The criminal trial ended on September 25, 1922. Five days thereafter, Secretary Coon, in answer to a request for payment, wrote plaintiff’s attorney that he was not “able to agree as to what s'he should have from this company on account of the burning of her buildings.” Plaintiff’s counsel thereupon wrote him: “I presume the next step is the appointment of an adjusting board.” The secretary replied, naming the company’s adjuster. An adjustment was had, and an appeal taken to the arbitration board provided for in the policy. As before stated, the award made was set aside. It does not appear that in any of these proceedings any claim was made by the defendant that the policy was not legally issued. They were taken on the assumption that a valid policy had been issued to plaintiff. The only dispute was as to the liability of the defendant thereon. Had the defendant taken the position at the close of the criminal trial that no enforceable policy had been issued by it, a different question would be presented.
This court has many times held, and it must be accepted as the settled law of this State, that, when a loss under an insurance policy has occurred and payment refused for reasons stated good faith requires that the company shall fully apprise the insured of all of the defenses it intends to rely upon, and its failure to do so is, in legal effect, a waiver, and estops if from maintaining any defenses to an action on the policy other than those of which it has thus given notice. Castner v. Insurance Co., 50 Mich. 273; Richards v. Insurance Co., 60 Mich. 420; Towle v. Insurance Co., 91 Mich. 219; Douville v. Insurance Co., 113 Mich. 158; Reimold v. Insurance Co., 162 Mich. 69.
It does not appear that the defendant ever questioned the validity of the policy until it filed its plea and notice in this case. The majority of the adjusting board denied liability for the reason: “The circumstances render the company not liable for loss.” The appeal board concluded that “the preponderance of evidence shows that the said company is not liable on the policy of insurance issued to her (plaintiff) by said company and we hereby so decide and determine.”
In our opinion, the trial court was clearly right in instructing. the jury that the policy constituted “a contract binding upon both parties notwithstanding the action in the criminal case.”
On January 13, 1914, plaintiff and her then husband executed a mortgage on the farm for $800, payable in five years. She sought, unsuccessfully, to obtain a loan in 1921 to pay this mortgage. On April 21, 1922, foreclosure by publication was begun, the notice being published in the Luther Observer. Sale was made to' Esther Weiss, the mortgagee, for the amount then due, and on October 2, 1923, she became the owner of the premises. The court instructed the jury:
“You will disregard the proof of the mortgage foreclosure unless you are satisfied that the plaintiff had knowledge of the fact at the time of the application or issuance of the policy of insurance. * * * If notice or the matter of the foreclosure of this mortgage was not called to the attention of the plaintiff at the time this insurance was taken or at the time the loss occurred then the defendant would be in no position to raise that question now.”
There was a colloquy between the court and counsel during the charge as to the effect of plaintiff’s knowledge that foreclosure had been begun on the validity of the policy, and counsel for defendant then expressed the opinion that the materiality of such proceedings rested on defendant’s claim that, as plaintiff had been deprived of title thereby, and was not the owner of the buildings at the time suit was begun, she could not recover for the loss.
Plaintiff had an insurable interest in the property at the time the policy was issued and the foreclosure proceeding begun. Her right to collect the insurance inured as soon as the fire occurred. The interest of the mortgagee in the policy ceased to exist when the property sold for the amount due her. She was not a party in interest at the time the suit was brought. We discover no error in the charge relative to the mortgage or the foreclosure proceedings thereunder.
The principal defense was that plaintiff, herself, set the fire which burned the buildings. There was no direct evidence that she did so. Defendant called a neighbor, August Leitz, who testified that about 2 o’clock on the night of the fire he was in his pasture field near plaintiff’s land, investigating the cause of some disturbance to his horses, and looking over the fence, he saw plaintiff “about five rods southeast from the house,” and that she was “carrying out stuff there, bed clothing and other clothes.” “There was no moon shining, but it was a bright, nice, light night; there were stars shining but no moon;” that he went home, and about 5 o’clock was awakened by the fire.
In rebuttal, the plaintiff called four witnesses, who were permitted to testify, over defendant’s objections, that they had made observation as to the distance at which a person could be observed and identified in the nighttime. The effect of their testimony was that one might distinguish whether the object seen was a man or a woman at a distance of from 2 to 5 rods, but that a person could not be identified at a greater distance than one rod.
The admissibility of evidence of experiments depends upon whether it “tends to enlighten the jury and enable them more intelligently to consider the issues presented.” 22 C. J. p. 755. Defendant’s witness had testified positively that he saw and recognized plaintiff at her home, and that she was removing property therefrom. Its counsel relied on this and other circumstantial proof to establish the fact that she caused the fire. The ability of the witness to identify the plaintiff from where he stood was an issue that the jury must determine. Their personal experiences might cause them to differ about it. Had another person stood by the witness, or at the same distance from the person at the house, with like opportunity for observation, his testimony as to whether the person could be identified at such a distance would clearly have been admissible. The question to be determined by the court was, Were the conditions under which plaintiff’s witnesses made their observations sufficiently similar to those at the time defendant’s witness saw the person near the house to justify the trial court in admitting their testimony?
Defendant’s witness testified, as before stated: “There was no moon shining, but it was a bright, nice, light night; there were stars shining but no moon.” One of plaintiff’s witnesses testified' that it was a “bright starlight night, when there was no moon shining.” Another said it was “A starlight night. * * * No, the moon wasn’t shining very much, I don’t think. The sky was not cloudy at all.” Another said it was “a fair night, it was a moonlight night,” and the other said it “was a fair night and full moon.” These observations were not made at the same place. Two of the witnesses testified that they made their observations when the chancery case was on trial at Hersey; that they went outside the town and away from its lights. The other two made their observations while the trial of this case was in progress at Mt. Pleasant, and said that they went out in the country, “outside of the lights of the town.”
The possibility of seeing from a certain point is not presented. The question is, Can there be identification of a person at a certain distance on such a night as defendant’s witness made his observation? It may be conceded that the atmospheric conditions' on no two nights are exactly similar. The stars undoubtedly appear to be brighter on some occasions. This is also true as to the daytime. The rays of the sun and the absence of clouds may permit a person to. observe objects or identify individuals at a much greater distance one day than another. In our opinion, there was sufficient similarity in the conditions under which the experimental observations were made to support the discretionary ruling of the trial court in admitting such testimony. We cannot say, as a matter of law, that it would not aid rather than confuse the jury in determining whether the identification of the plaintiff by the witness was possible under the conditions stated by him.. The great weight of authority supports this holding.
“It is not necessary, however, that the conditions should be exactly identical, but a reasonable or substantial similarity is sufficient, and the lack of exact identity affects only the weight and not the competency of the evidence, provided always that there is such a degree of similarity that evidence of the experiments made will accomplish the desideratum of assisting the jury to an intelligent consideration of the issues of fact presented.” 22 C. J. p. 759.
“A frequent use of experiments is for the purpose of ascertaining whether a witness, by reason of darkness, atmospheric conditions, or intervening objects, could have seen from a certain spot an act or occurrence.” 4 Chamberlayne, Evidence, § 3170.
“This similarity need not be precise in every detail. It need include only those circumstances or conditions which might conceivably have some influence in affecting the result in question.” 1 Wigmore on Evidence, § 442.
“The facts need not be exactly or in every particular similar; if they are sufficiently similar to accomplish the purpose of assisting the jury to intelligently consider the issue of fact presented in regard to the special point in controversy, the evidence is admissible.” Atlanta, etc., R. Co. v. Hudson, 2 Ga. App. 352, 354 (58 S. E. 500).
In Johnson v. Railroad Co., 80 Kan. 456, 464 (103 Pac. 90), wherein tests were offered as to the distance at which the smoke and steam from a locomotive could be seen in a cut near a crossing, the court said:
“Atmospheric conditions, the coal used, the time of its application to the fire and other circumstances would affect the weight of such testimony, but would not make it incompetent.”
In 8 A. L. R. 18 there is an exhaustive note under the heading, “Experimental evidence as affected by similarity or dissimilarity of conditions.” The cases in which this subject has been considered by appellate courts are cited and reviewed in it. It is so accessible to the profession that we but refer to it.
“A determination of such a question is not disturb-able on review unless manifestly wrong.” Harper v. Holcomb, 146 Wis. 183 (130 N. W. 1128).
See, also, People v. Auerbach, 176 Mich. 23, 45 (Ann. Cas. 1915B, 557).
The other questions discussed have been carefully considered, but, in our opinion, disclose no reversible error.
The judgment is affirmed.
Bird, C. J., and Steere, Fellows, Clark, and McDonald, JJ., concurred. Wiest, J., concurred in the result. Snow, J., did not sit. | [
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Boyles, J.
This is an appeal by the defendant in the nature of certiorari from a peremptory writ of mandamus granted by the circuit court for Sagi naw county, requiring tire defendant, as supervisor of Carrollton township in said county, to assess upon the taxable property of, the township the amount of certain judgments held against the township by plaintiffs herein. Appellant claims that the county tax allocation board has allocated to the township for township purposes only such percentage of the tax millage as will permit the payment of ordinary operating expenses of the township for governmental purposes, and that obedience to the writ would necessitate the assessment of taxes in excess of the constitutional 15-mill limitation.
It is undisputed that the plaintiffs herein have unsatisfied judgments against the township aggregating about $9,000, that certified copies of said judgments have been served on the supervisor of the township in accordance with 3 Comp. Laws 1929, §14690 (Stat. Ann. §27.1654), and that the supervisor has refused to spread the amounts of said judgments on the tax roll. It is also undisputed that the 15-mill limitation has not been raised by a vote of the electors of said township, and that a division of the taxes under said limitation must be made between two school districts within the township, the township itself, and. the county of Saginaw.
In the tabulation below, reference is made to the assessed valuation of the property in the township. The record does not disclose what action was taken by the county equalization board for any of. the years referred to in the tabulation before us: See 1 Comp. Laws 1929, §3422 (Stat. Ann. §7.52). The assessed valuations, as they appear in the tabulation below for the years 1944-1945 and 1945-1946 are taken from the proposed budgets submitted for those years to the county tax allocation board. We conclude that the “assessed valuations” thus shown are the valuations as equalized by the county equalization board. The term “assessed valuation” as used in tlie 15-mill tax limitation amendment refers to the equalized valuation, -which must. be used as the basis for • determining the amount of taxes which can be levied by the township under the 15-mill limitation. St. Ignace City Treasurer v. Mackinac County Treasurer, 310 Mich. 108; Waterford Township v. Oakland County Tax Allocation Board, ante, 556. The following tabulation taken from the record indicates the assessed valuation of the taxable property in the township for the years 1944-1945, 1945-1946, and a tentative or proposed amount for the assessed valuation for the year 1946-1947; also the amounts of the proposed expenditures by the township for township purposes as shown by the proposed budgets submitted to the county tax allocation board for the years 1944-1945 and 1945-1946, and tentative proposed expenditures for the year 1946-1947; and also the estimated revenue of the township for those years from all sources, including taxation:
Assessed Valuation Proposed Expected Expenditures Income
1944-1945 $1,879,975 $15,898.68 $15,985.85
1945-1946 1,873,800 15,673.86 15,673.39
1946-1947 2,440,775 15,762.62 19,423.78
We conclude from the record that the figures for the year 1946-1947 are tentative, appearing in an exhibit received in evidence, and have not. yet been submitted to the county tax allocation board for the fixing of a tax rate for the year 1946-1947. The figures for these three years were submitted by the township for the purpose of showing ■ that the judgments could not be included in the proposed budgets and assessed on the tax rolls without the taxes exceeding the 15-mill limitation.-
For the first two of the above years, no request was made to the county tax allocation board for millage allowance for tax money to pay on the judgments. For the year 1946-1947 the exhibit received in evidence proposes to request 1.5 mills to pay $3,661.16 on obligations, included among which plaintiffs’ judgments were listed, along with another admitted debt not reduced to judgment. Aside from the proposal in futuro appearing in the tentative 1946-1947 budget, the budget requests submitted by the township to the county tax allocation board (for the first two years) as shown in the above tabulation were for allocation of millage the township for current expenditures for officers’ salaries and fees, office expense, supplies, insurance, poor fund, fire prevention, street lighting, hydrant rental, water and sewer, and cleaning ditches.
For the purposes of this case, the Michigan Constitution (1908), art. 10, §21, being the 15-mill tax limitation amendment adopted in 1932, limits the total amount of taxes which can be assessed against property in Carrollton township for all purposes in any 1 year to 1% per cent, of the equalized valuation of said property. As a result of the adoption of this 15-mill amendment in 1932 it became necessary for the legislature to set up some procedure whereby there might be a division of the rate of taxation between counties, townships, municipal corporations, school districts and other local units of government, in order that they might keep within the tax ceiling imposed by the amendment; otherwise a chaotic tax condition was sure to ensue where taxing units were each levying a maximum of tax under the 15-mill limitation, unless there was some legal authority to settle their respective limits in levying a tax. The legislature promptly recognized tiie necessity for action and by Act No. 62, Pnb. Acts 1933 (Comp. Laws Supp. 1940, §3551-21 et seq., Stat. Ann. § 7.61 et seq.), provided tbe necessary machinery, by creating a tax allocation board in each connty. See Act No. 62, § 5, Pnb. Acts 1933, as last amended by Act No. 150, Pnb. Acts 1941 (Comp. Laws Snpp. 1943, §3551-25, Stat. Ann. 1944 Cnm. Supp. §7.65). Sections 9 and 10 of this act (Comp. Laws Supp. 1940, §§ 3551-29, 3551-30,'Stat. Ann. §§ 7.69, 7.70) require each county, township, village, city,' school district, or other division, district or organization (“local units”) to prepare each year a budget containing an itemized statement of its proposed expenditures and estimated revenues and file the same with the county tax allocation board on or before the second Monday in May o.f each year. Among other things, section 9 (Comp. Laws Supp. 1940, §3551-29, Stat. Ann. §7.69) requires. that items for the payment of interest and principal on obligations incurred prior to December 8, 1932, and those incurred subsequent to that date be listed separately. Plaintiffs’ several judgments were obtained late in 1944, and certified copies of the same were served on the supervisor of Carrollton township not later than January 11, 1945, with demands that the amounts be spread on the tax roll as provided by 3 Comp. Laws 1929, § 14690. The supervisor not only refused to spread such taxes on the assessment roll for 1945, but failed to list these obligations in the proposed budget submitted to the county tax allocation board for the tax year 1945-1946. After plaintiffs’ petition for mandamus was filed in the court below and order to show cause was issued in the instant case, Carroll-ton township on May 9, 1945, apparently prepared a tentative proposed budget for 1946-1947 and .offered the same in evidence, showing the judgment debt obligations hereinbefore request for 1.5 mills to pay $3,661.16 thereon.
The and on that date granted a writ of mandamus commanding the defendant supervisor of Carroll-township to assess plaintiffs’ judgments on the assessment roll. Inasmuch as only 8 days had elapsed between May 9th, the date of the tentative proposed budget in futuro for 1946-1947, and May 18th, the date of the hearing in court and the issuance of the writ of mandamus, it is obvious that the tentative proposed budget for 1946-1947 could not have been filed with and acted upon by the county allocation board at the time the writ of mandamus was issued.
It was the plain statutory of Carrollton township to assess the amount of plaintiffs’ judgments on the assessment roll for the tax year 1945-1946. 3 Comp. Laws 1929, § 14690, provides in part that whenever a judgment shall have been recovered against any township, in a court of record, the clerk of the court shall, on application therefor, deliver to the party in whose favor the judgment was rendered, a certified transcript thereof, which may be filed with the supervisor of the township. The statute then provides that it shall be the duty of the supervisor to assess the amount of the judgment, interest and costs, upon the next tax roll. Having failed to do that, the defendant supervisor as the first step toward compliance with the writ of mandamus granted by the circuit court on May 18th should have submitted to the county tax allocation board the amount of the judgments, as a proposed expenditure for 1945-1946. The county tax allocation board, under the provisions of section 11 of the act governing its powers and duties, as amended by Act No. 40, Pub. Acts 1937 (Comp. Laws Supp. 1940, § 3551-31, Stat. Ann. 1944 Cam. Snpp. § 7.71), then would have had an opportunity to -consider the amounts of these judgments in determining the tax rates to be allocated to the township, the two school districts and the county, after examination of the various budgets of the local units. Section 11 of the tax limitation act, supra, states that no local unit shall be allowed a tax rate in excess of what would be required according to its proposed budget. In other words, Carroll-ton township would not be allowed a tax rate by the county tax allocation board sufficient to pay the judgments in whole or in part as long as the township failed to include such proposed expenditure in its budget along with other proposed expenditures for township purposes. By refusing to include the amount of the judgments in its annual budgets, the township thus might successfully circumvent the statutory mandate which requires the amount of the judgments to be assessed on the next tax roll, the only means whereby judgments against the township can be collected.
The appellant contends that the statutory requirement that taxes to pay judgments must be assessed on the next tax roll has been repealed by the 15-mill amendment and subsequent acts in pursuance thereof. With that contention we do not agree. Admittedly there is some difficulty in reconciling the earlier statute requiring that the amount of a judgment must be assessed on the next tax roll with subsequent legislation enacted as the result of the adoption of the 15-mill tax limitation amendment. However, Act No. 62, Pub. Acts 1933, creating a tax allocation board in each county, supplements 3 Comp. Laws 1929, § 14690, bat does These statutes must be read and construed together. While the earlier act requires the supervisor to spread the amount of the judgments on the next assessment roll, under the later act the county tax allocation board is given the power to decide how much mill age shall be allocated for township purposes within the 15-mill limitation. Subsection (i) of section 11 of the tax allocation act, provides that the county tax allocation board cannot reduce or eliminate specific items in the budget, and then further provides that a local unit may revise its budget, and amend or alter its tax levy.
“The approval by the board of a maximum tax rate for any local unit, which will necessitate a reduction in the total proposed expenditures as listed in the budget of such local unit, shall not be construed as a reduction or elimination of any specific items in such list of proposed expenditures, and' the board shall not have the power to reduce or eliminate any such specific items. Any local unit in the budget of which a reduction in the total proposed expenditures is necessitated by the action of the board, or the State tax commission in case of appeal, shall have power to revise its budget and amend and alter its tax levy to the extent made necessary by such action, any law or charter provisions to the contrary notwithstanding.” Act No. 62, §11 (i), Pub. Acts 1933, as amended by Act No. 40, Pub. Acts 1937 (Comp. Laws Supp. 1940, § 3551-31, Stat. Ann. 1944 Cum. Supp. §7.71).
Under this provision in the later act, the township may alter the tax levy to the extent made necessary by the action of the county tax, allocation board. Conceivably, under this power the township might annually attempt to revise its budget and alter its tax levy to the extent of eliminating the levy of taxes to pay the judgments. However, while this authority is thus given to the township, it must be exercised fairly and not arbitrarily or capriciously for the purpose of preventing payment of judgments. It must be presumed that public officials charged with the responsibility and duty of levying and collecting taxes for essential governmental purposes will not act capriciously and arbitrarily in the performance of such important duties. It must also be presumed that the county tax allocation board will not allocate total tax rates in excess of and contrary to the 15-mill constitutional tax limitation.
The result of upholding the claims of the township in this case would be that the township itself would have the absolute power to decide whether it should ever pay plaintiffs’ judgments. Plaintiffs have property rights in the judgments of which they cannot be deprived by capricious and arbitrary acts of their judgment debtor. The township will not be permitted to continue indefinitely to budget its governmental expenses in such manner as to permanently evade payment of the judgments. The question before us for decision is whether the defendant township may be compelled by mandamus to perform a plain statutory duty. In affirming the granting of the writ we apprehend that no further resort to the courts in this matter will be. necessary.
The order granting the writ is affirmed, with costs.
Stake,, C. J., and Noeth, CaRe, Bittzel, Bttshnell, Shaepe, and Beid, JJ., concurred. - •
Amendment by Act No. 158, Pub. Acts 1945, effective May 16, 1945, has no bearing on the issue. | [
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Fellows, J.
Upon the argument of this case defendant’s counsel insisted that the-word “not” inserted in writing in a portion of the charge contained in the-bill of exceptions and which, of course, entirely changed the instruction, was improperly inserted, and to sustain such contention brought into court the original transcript. On behalf of the people, it was claimed that another portion of the charge upon which error was assigned had been incorrectly transcribed and an affidavit to that effect was filed. Both counsel were advised from the bench that the verity of the bill of exceptions as settled and signed by the circuit judge could not be thus assailed; that only by the granting of a motion to remand for a resettlement of the bill of exceptions by the circuit judge could the record be changed, and 'both sides were given time to make such motion. Both points were vital to the case. Neither side has made a motion to remand or given any attention to the case since, although the time has long since expired in which leave to make such motion was given, and wé have delayed preparation of opinion as long as possible. We must, therefore, dispose of the case as made by the bill of exceptions on file in the clerk’s office in so far as it differs from the printed record and disregard the transcript and affidavit.
Defendant was a farmer living on his farm in North S'hade township, Gratiot county, a few miles from Middleton. His wife was a school teacher and away from home during the week. His hired man was a paroled convict named Murringer who lived with him. On the 18th of February, 1924, one George Springer met his death at defendant’s place. It is quite well established that deceased came to his death from a fracture of the skull and the crucial question in the case was, who was the aggressor in the affray, defendant’s testimony and claim being that what he did was in self-defense, and the testimony of the hired man that defendant was the aggressor. His testimony tended to show that defendant struck Springer repeatedly, knocked him down, and after he was down kicked him repeatedly in the head on both sides; that after Springer died he asked him why he did it and defendant replied:
“This is a grudge that has been hanging on ever since we was in Cincinnati, Ohio, over a hat deal.”
There was other testimony that he referred to an old grudge without specifying what it was about. The testimony of the undertaker and the doctors who performed the post mortem was to the effect that there were many bruises on the body of deceased, and that of the doctors that there was a fracture of the skull with cerebral hemorrhage causing death. We shall not detail the testimony further at this time. Some of it will be referred to further on in the opinion. It will suffice to say that the testimony justified submitting the case to the jury on the charge of murder, and whether the testimony bearing on that charge was much or little was for the jury and not for the court. People v. Toner, 217 Mich. 640 (23 A. L. R. 433).
There were éxhaustive cross-examinations of both Murringer and defendant as to their antecedents. Defendant’s counsel insists that of Murringer was un duly restricted and that of defendant was beyond justification. This court has held time and time again that the extent of such cross-examination rests in the sound discretion of the trial judge and unless such discretion is abused we will not interfere. Among the numerous cases see People v. Bryan, 170 Mich. 683; People v. Kimbrough, 193 Mich. 330; People v. Cutler, 197 Mich. 6; People v. Danenberg, 176 Mich. 337; Cornell v. Fidler, 194 Mich. 509; People v. Murel, 225 Mich. 499. We do not find any abuse of such discretion as to either cross-examination. There is nothing upon the record indicating bad faith on the part of the prosecutor in any of the questions asked by him. The assignments of error on this subject are overruled.
The record shows in the charge of the court the following instruction:
“It is not necessary that the killing should have been considered, brooded over or reflected upon for a week, a day or an hour. It is sufficient if there was a design and a determination to kill distinctly in the respondent’s mind at any minute before or after the time the act was done which caused the death of the deceased.”
This instruction is erroneous. It is in conflict with other portions of the charge and out of line with the general tenor of the instructions. But we have repeatedly held that this court can not say which instruction the jury followed where there are correct and incorrect statements of law in the charge. That it was especially prejudicial to defendant will appear by some of the testimony to which we shall now refer as to what occurred after the affray was over, and before Springer died. Murringer testified that after the affray and while Springer was lying on the floor defendant asked witness to help carry Springer outdoors. It was a cold, stormy night and Murringer protested that he would freeze, that defendant said: “Let the---freeze;” that defendant insisted on getting him out of the house and they carried him out. A few minutes later Murringer suggested that they bring Springer back into the house and received the same reply. That they finally brought him back in the house-and later defendant picked up the stove poker and said: “I have a good notion to fix 'him, now is my chance while he lays there, he will never lay another hand on me,” but that witness dissuaded him from going further. By this testimony as to what occurred after the affray, the prejudicial character of the instruction is made apparent.
The other assignments of error do not require discussion.
For this error appearing on the record, the case must be reversed and defendant given a new trial. He will be remanded to the custody of the sheriff of Gratiot county.
Bird, C. J., and Sharpe, Snow, Steere, Wiest, Clark, and McDonald, JJ., concurred. | [
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WIEST, J.
This is a suit in equity to foreclose a real estate mortgage. Defendant Harry H. Ham mond, a subsequent purchaser under foreclosure of a second mortgage, contests on the grounds of merger, novation, and void assignment to a foreign corporation not authorized to transact business in this State, and appealed from a decree granting foreclosure. Facts sufficient to present the several issues will be stated as we proceed.
Merger. The mortgage was given November 6, 1919, by Benjamin J. Zahn and wife to Austin C. Davis, on a 342-acre farm in Lenawee county, to secure three notes aggregating $17,000; one for $1,000, payable August 17, 1921; one for $1,000, payable August 17, 1922, and one for $15,000, payable August 17, 1924. March 11, 1920, Davis indorsed the notes and assigned the mortgage to the Monroe County Bank of Dundee, to secure two notes of his, held by the bank, amounting to $8,500. October 21, 1920, Zahn and wife deeded the farm to Harry R. Shipman, subject to the mortgage. November 22, 1920, Shipman and wife deeded the farm to Austin C. Davis, subject to the mortgage. At the time of the deed to Davis the bank held the mortgage as security for Davis’s indebtedness to it. This deed to the mortgagee did not extinguish the mortgage in the hands of the bank. Merger is not a rigid rule, unyielding to equities, or declared and enforced regardless of intention or the just rights of third parties.
Tiffany on Real Property (2d Ed.), vol. 3, p. 2606, states:
“Merger can evidently not occur when the land is conveyed to the mortgagee after he has assigned the debt with its lien to another.”
It was held in Campbell v. Vedder, 1 Abb. Dec. (N. Y.) 295, quoting from the syllabus:
“A conveyance of the equity of redemption in land, to the mortgagee thereof, after he 'has transferred the mortgage held by him to a third person, as collateral security for payment of a debt, does not merge the mortgage.”
In Case v. Fant, 53 Fed. 41, it was said:
“The rule is well settled that, where the mortgagee has transferred his mortgage as collateral security for the payment of a debt before his purchase of the equity of redemption, no merger takes place, for the reason that the different estates in such case do not vest in the same person. Kellogg v. Ames, 41 N. Y. 259; 1 Jones, Mortg. § 870. It would operate as a fraud upon the pledgee of the mortgage to hold that a subsequent conveyance of the equity of redemption to the mortgagee extinguished the mortgage.”
See, also, Curtis v. Moore, 152 N. Y. 159 (46 N. E. 168, 57 Am. St. Rep. 506); Lime Rock Nat. Bank v. Mowry, 66 N. H. 598 (22 Atl. 555, 13 L. R. A. 294); International Bank of Chicago v. Wilshire, 108 Ill. 143.
Novation. March 8, 1922, Davis and wife deeded the farm to Richard Powers, subject to the $17,000 mortgage, which Powers assumed and agreed to pay. March 22, 1922, Powers, a widower, deeded to Jerome Probst and wife, subject to an existing indebtedness of $8,000. This was the Davis indebtedness to the bank and for which the bank held the mortgage as security, $500 having been paid. In dealing for the farm Probst obtained from Davis a letter to the Monroe County Bank, dated March 22, 1922, reading:
“You are hereby authorized to satisfy the seventeen thousand ($17,000) mortgage or assign the same to Jerome Probst, as 'he may desire upon payment of the eight thousand ($8,000) loan on which you hold this mortgage for security.”
Probst did not pay the Davis debt to the bank, but, May 26, 1922, executed and delivered to the bank his note for $7,871.56, due on or before six months, with interest at seven per cent, per annum, and received the following writing from the bank:
“In connection with a certain promissory note this day given by Jerome Probst to the Monroe County Bank of Dundee, Michigan, for the sum of seventy-eight hundred and seventy-one and 56/100 dollars payable to the order of said .Monroe County Bank on or before six months after date with interest thereon at the rate of seven per cent, per annum and secured by a certain real estate mortgage and notes for $17,000, made by Benjamin J. Zahn and wife to Austin C. Davis, November 6, 1919, on 342 acres more or less in the township of Raisin, county of Lenawee, and State of Michigan, recorded in the recorder’s office of said Lenawee county in liber 207, page 443, and assigned by said Austin C. Davis and wife to said Monroe County Bank by assignment recorded in said Lenawee county in liber 207, page 556, it is agreed that the unpaid balance on said Zahn mortgage and notes secured thereby is exactly the same as the amount of the said note by said Probst, being the sum of seventy-eight hundred seventy-one and 56/100 dollars and that in case of any default in the payment of said Probst note, that said Zahn mortgage and notes shall be foreclosed for the amount then due and owing on said Probst note and further, that upon payment in full of said Probst note with interest, said Monroe County Bank shall assign and deliver said Zahn mortgage and the three notes secured thereby to the said Jerome Probst or his assignee.”
This agreement made certain the amount due the bank in case of foreclosure, afforded Probst an opportunity to pay that amount and have an assignment of the mortgage, but was not a novation to the release of Davis or the Zahns. Under the authority of the Davis letter Probst was to satisfy the mortgage, as security, in the hands of the bank by paying the Davis notes. Probst has not paid the Davis notes and February 15, 1923, received back from the bank his note of May 26, 1922. It is clear that the bank released no one, but accepted additional security and finally surrendered that. Even had the bank given up to Probst the Davis notes and accepted the Probst note in lieu thereof, the mortgage would not have been released.
“Where the mortgagee gives up the notes secured to a purchaser of the mortgaged premises, and takes from such purchaser his own notes, as evidence of the same continuing debt, this does not release or extinguish the mortgage.” 2 Jones on Mortgages (7th Ed.), § 925.
And,
“So the question whether or not the taking of a new security of equal dignity is to be treated as a novation or substitution for and an extinguishment of a prior indebtedness is a matter of intention to be determined from all- the facts and circumstances of the case. ‘A court of equity will keep an incumbrance alive, or consider it extinguished, as will best serve the purposes of justice, and the actual and just intention of the party.’” 2 Jones on Mortgages (7th Ed.), § 926.
Probst did not undertake to pay the Zahn mortgage; at the most he attempted to arrange for satisfaction of the amount due the bank, by his undertaking to pay the Davis debt to the bank, and obtain an assignment of the mortgage. Probst was never entitled to an assignment of the mortgage and his dealings with the bank in no way substituted him as debtor in place of the mortgagors or affected the mortgage and right to foreclose the same. If Probst had paid the Davis debt to the bank he could have had an assignment of the Zahn mortgage, but he did not pay and the mortgage was properly foreclosed for the amount for which it stood pledged as security. There are no appealing equities in behalf of defendant Hammond. The agreement negatives a novation.
Assignment of the Mortgage to a Foreign Corporation. Is an assignment of a mortgage to a foreign corporation, not admitted to transact business in this State, where the assignment is sent to a bank in an other State and there payment is made and delivery-had, void? March 15, 1928, the Monroe County Bank assigned the mortgage to the Investment Bond & Mortgage Company of Toledo, Ohio. This assignment, together with the mortgage notes, was sent to a bank in Toledo to turn over to the assignee upon payment of the amount due the Monroe County Bank, and this amount was paid in Toledo and the papers there delivered. July 5, 1923, the Investment Bond & Mortgage Company, of Toledo, assigned the mortgage to plaintiff, Daniel Maxwell, a resident of Ohio, who filed the bill herein for foreclosure December 26, 1924.
Counsel for defendant Hammond contends:
“The foreign corporation, not having been domesticated, had no capacity to take title to a mortgage covering Michigan land, and, 'having no title, could convey none to the plaintiff.”
- Defendant invokes provisions of the general corporation act of 1921 (Act No. 84), being section 9053 (164), Comp. Laws Supp. 1922:
“It shall be unlawful for any corporation organized under the laws of any State, district or territory of the United States, except the State of Michigan, or of any foreign country, to carry on its business in this State, until it shall have procured from the secretary of State of this State a certificate of authority for that purpose.”
And section 9053 (166) :
“No foreign corporation shall be capable of making a valid contract in this State until it shall have fully complied with the requirements of the laws of this State with respect thereto, and at the time holds an unrevoked certificate to that effect from the secretary of State.”
It is also said that a corporation not qualified by domestication cannot acquire title to real property in this State, and, therefore, cannot hold by assignment a mortgage upon real estate, situated within this State. The president of the Ohio corporation visited Dundee and made some investigation relative to the mortgage, but the transaction was carried out in Ohio through a bank there. The Ohio corporation was not engaged in purchasing other mortgages in this State. Does this one instance, having in mind all the circumstances, fall within the inhibition of the statute? For the purposes of this case, we will consider the assignment made in pursuance of a Michigan contract. Counsel for defendant cites Wisconsin Trust Co. v. Munday, 168 Wis. 31 (168 N. W. 393, 169 N. W. 612). That decision rests upon a statute prohibiting unlicensed foreign corporations from acquiring, holding, or disposing of property in that State. We have no such statute. Counsel also calls attention to Thompson v. Waters, 25 Mich. 214 (12 Am. Rep. 243), where it was held that, under the rule of comity^ obtaining among the States, a foreign corporation could take title to lands in this State, and contends that the subsequent legislation, before mentioned, prevents resort now to the rule of comity. We do not think so. If a foreign corporation is to carry on its business in this State, a certificate of authority must be procured. Such is the plain mandate of the statute, but this does not prevent a foreign corporation, not carrying on its business in this State, from taking an assignment of one mortgage on land in this State.
The applicability of the statute, requiring a certificate of authority, and rendering foreign corporations incapable of making valid contracts in this State if not operating under certificate of authority, depends entirely upon whether such corporation is carrying on its business in this State. The statute does not say that no business shall be done in this State by a foreign corporation except under certificate of authority, but does say that no foreign corporation shall carry on its business in this State without such certificate.
In C. H. Knight-Thearle Co. v. Hartline, 233 Mich. 53, we again approved of the following quotation from Vaughn Machine Co. v. Lighthouse, 64 N. Y. App. Div. 142 (71 N. Y. Supp. 799):
“The crucial test in doing business within the meaning of this statute is not an isolated transaction within the State, * * * but it is the establishment of an agency or branch office within our State limits.”
This is manifested by the very requirements of the statute. See, also, Rex Beach Pictures Co. v. Garson Productions, 209 Mich. 692; Republic Acceptance Corporation v. Bennett, 220 Mich. 249; 9 Fletcher’s Cyclopedia Corporations, § 5919; Penn Collieries Co. v. McKeever, 183 N. Y. 98 (75 N. E. 935, 2 L. R. A. [N. S.] 127); Ammons v. Brunswick-Balke-Collender Co., 141 Fed. 570; Gilchrist v. Railroad Co., 47 Fed. 593.
In Martin v. Bankers’ Trust Co., 18 Ariz. 55 (156 Pac. 87, Ann. Cas. 1918E, 1240), the suit was to foreclose a deed of trust, held by a foreign corporation without compliance with the statute of Arizona relating to foreign corporations “which shall carry on any business, enterprise or occupation in this State,” and it was said in answer to a contention similar to the one advanced in the case at bar:
“Our statute restricts the disqualification to any foreign corporation which shall carry on any business, enterprise, or occupation in this State, involving the idea of continuation and repetition of the acts, and it is the act of such a corporation only that is within the purview of the law. There is a marked difference in doing an act of business and carrying on or pursuing a business, enterprise, or occupation in this State.”
Citation of authority might be multiplied.
But counsel for defendant thinks there is a difference between isolated commercial transactions and the purchase of a mortgage on land in the State. This attempted distinction is not new and does not bring about any different construction of the statute. We close this subject by quoting from Keene Guaranty Savings Bank v. Lawrence, 32 Wash. 572, 578 (73 Pac. 680):
“The purchase by a foreign corporation of a promissory note or a mortgage in a State, with no purpose of doing any other act there, is not a transaction of business within the meaning of the statute requiring every such corporation, before transacting business in the State, to record a certified copy of its articles of incorporation and appoint an agent within the State upon whom process can be served.”
But one more point need be mentioned. The decree in the circuit was for the amount due on the Davis notes, and the point is made that, inasmuch as plaintiff never had such notes, 'he was not entitled to decree. The foreclosure was upon the Zahn notes and mortgage, and the defendant is in no position to complain of a decree reducing the foreclosure amount to the sum due on the Davis notes. The Davis notes were no part of the mortgage. Plaintiff, not having appealed, must rest content with the decree, and defendant Hammond, having no defense, must abide the decree as entered.
The decree in the circuit is affirmed, with costs to plaintiff against defendant Hammond.
Sharpe, Snow, Steere, Fellows, Clark, and McDonald, JJ., concurred. Bird, C. J., did not sit. | [
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Bird, C. J.
In 1904 the St. Helen Development Company was the owner in fee of all the land bordering on Lake St. Helen, except certain rights which were subsequently acquired. In that year it conveyed the exclusive hunting rights to the plaintiff. The conveyance will be found in the margin. An additional 12% acres of land bordering on the lake have been conveyed to the club. Upon this parcel a club house and cottages have been erected for the convenience of its members, and the club is being maintained and regulated by rules and enjoyed by the members thereof. The defendant Mogle purchased in fee a portion of the land bordering on the lake, subject to the exclusive hunting privileges theretofore granted to the plaintiff. He maintains a summer resort there. Defendant Winters is an employee of Mogle. The plaintiff filed this bill to restrain the defendant Mogle from infringing its hunting rights, it being claimed that defendant Mogle had not only himself infringed its exclusive hunting privilege, but had encouraged and enabled others to do so, by fitting up boats with blinds, and renting them to the public to enable it to enjoy the privileges which the plaintiff claims belong exclusively to the club. The testimony and discussion took a wide range in the trial court. The chancellor concluded that such a lease or conveyance was void on the ground of public policy, and dismissed the bill. Plaintiff appeals.
After a somewhat extended consideration of the case, we are persuaded that there are but- two important questions which need to be discussed and decided, namely:
(1) Whether the exclusive hunting privilege can be separated from the fee and conveyed by grant to another.
(2) Whether such a conveyance is against public policy, and, therefore, void.
It appears that the St. Helen Development Company, prior to the conveyance to plaintiff, was the owner in fee of all the land bordering upon the lake. If plaintiff were such owner we think it follows that it was the owner of the land under the lake. This court has decided that question so many times that we must regard that question as settled. Grand Rapids Ice & Coal Co. v. South Grand Rapids Ice Co., 102 Mich. 227 (25 L. R. A. 815, 47 Am. St. Rep. 516); Johnson v. Burghorn, 212 Mich. 19 (11 A. L. R. 234); Lorman v. Benson, 8 Mich. 18 (77 Am. Dec. 435); Clark v. Campau, 19 Mich. 325; Bay City Gas Light Co. v. Industrial Works, 28 Mich. 182; Fletcher v. Boom Co., 51 Mich. 277; Sterling v. Jackson, 69 Mich. 488 (13 Am. St. Rep. 405); Campau Realty Co. v. City of Detroit, 162 Mich. 243 (139 Am. St. Rep. 555); Fuller v. Bilz, 161 Mich. 589.
If the St. Helen Development Company was the owner of the shore and subaqueous lands, did it have the exclusive right of hunting on the shores and waters? We think this question is equally well settled by our authorities. There could be no other consistent conclusion. If it could not prevent trespasses on the shore in reaching the lake, its title to the land in fee simple would be of little value. But as we have said this court has, on several occasions, held the right of the owner to be exclusive in the hunting privileges. Ainsworth v. Munoskong Hunting & Fishing Club, 159 Mich. 61; Hall v. Alford, 114 Mich. 165 (38 L. R. A. 205); Johnson v. Burghorn, supra; Sewers v. Hacklander, 219 Mich. 143; Sterling v. Jackson, supra; Brown v. Parker, 127 Mich. 390.
If the St. Helen Development Company was the owner of the shore and subaqueous lands and had an exclusive right of hunting thereon, may it separate this right from the fee of the land and convey it by grant to another? The right of hunting on premises is an incorporeal right, growing out of real estate, which, by the common law, was conveyed by grant, inasmuch as livery of seisin could not be made of it. This right has been termed by law writers a grant of a “profit a prendre.” A “profit a prendre” is some right growing out of the soil. It is somewhat difficult to understand how, where one shoots a duck in the air while over the water, he is taking something from the soil, but, undoubtedly, the application of that term was made to this right so that it would become, in tew, an incorporeal hereditament and thereby pass by grant and not become a mere license. But whatever inconsistencies appear, it is settled by all the authorities worth heeding that this right may be segregated from the fee of the land and conveyed in gross to one who has no interest and ownership in the fee, and when, so conveyed in gross it is assignable and inheritable.
The rule laid down by 12 R. C. L. p. 689 is as follows:
“Though one person has no natural right to hunt on the premises of another, it is clear that a right to do so may be acquired by a grant from the owner. Or the owner can convey his premises and reserve to himself the hunting and fowling rights thereon. _ An owner of lands may convey exclusive hunting rights thereon to others so as to bar himself from hunting on his own premises. He may make a lease of the hunting privileges giving the lessee the exclusive right to kill game or water fowl on the premises, and at the same time reserve to himself the pasturage rights on the premises. The right to hunt on another’s premises is not a mere license, but is an interest in the real estate in the nature of an incorporeal hereditament, and as such it is within the statute of frauds and requires a writing for its creation. Nor is the right of one person to hunt or fowl on premises owned and in the possession of another, an easement, for, strictly speaking, an easement implies that the owner thereof shall take no profit from the soil. The right is more properly termed a profit a prendre. Unless the grant otherwise determines the rights of the parties, the owner of the hunting privileges may assign his rights to another, but he cannot give a pass or permit to another so as to allow the latter to exercise hunting privileges on the premises. In the absence of anything to the contrary, in a grant of hunting or fowling privileges, the right to hunt and fowl is limited to the usual and reasonable methods generally used in the vicinity at the time of the execution of the grant, and the grantor is under no obligation to maintain a preserve for the pleasure and sport of the grantee, but the latter must exercise the right in the condition it may be at the time of the grant. Thus, if the owner of land conveys to others the right to hunt water fowl upon the waters thereof, he is not liable for depreciation in the value of such fowling rights from his acts in clearing and draining the land, provided he does so in good faith for the purpose of improving it.”
The rule laid down by Corpus Juris is similar:
“The right of hunting on another’s lands or waters may “be acquired by a grant or lease from the owner, either with or without the soil, and with such restrictions or limitations as the owner may see fit to impose., * * * The grantee of such a right has an interest: in the soil, and, although hq may sell or assign his. right, he cannot issue permits to others to exercise the privilege granted.” 27 C. J. p. 943.
Thompson in his work on Neal Property takes the same view:
“A grant- of a right to take and kill game on lands or waters belonging to the grantor is a grant of an-interest in the land itself within the statute of frauds. It is a grant of a profit a prendre. The property in animals ferse natures while they are on the soil belongs to the owner of the soil and he may grant a right to others to come and take them, by a grant of hunting, shooting, fowling and so forth. That right may be granted by the owner of the fee simple and such a grant is a license of a profit a prendre. A privilege to shoot, take and kill wild fowls on the lakes and waters of the grantor is strictly confined to the lakes and waters and cannot be exercised upon the grantor’s lands. A right to hunt, fish and fowl granted to one, his heirs and assigns, is a profit a prendre in gross, and may be exercised by servants of the grantee. * * * The right so acquired is good against all the world and can be maintained even against the owner of the soil.” 1 Thompson on Real Property, § 234.
“A profit a prendre involves primarily a power to acquire, by severance or removal from another’s land, some thing or things previously constituting a part <of the land, or appertaining thereto, the holder of the ‘profit a prendre having, as an integral part thereof, :rights against the members of the community generally that they shall not interfere with the exercise or enjoyment of the power. As instances of profits a prendre may be mentioned rights to take from another’s land, and so acquire as one’s own, wood, herbage, or coal or other minerals, this latter being at the present day the most important class of such rights. Likewise, one may have the right to kill and take as his own game on another’s land, fish in waters thereon, seaweed cast thereon, or soil, sand and gravel therein. A right to take ice has been regarded as a profit a prendre.” 2 Tiffany, Real Property (2d. Ed.), § 381.
“A profit a prendre in gross is ordinarily regarded as freely transferable and inheritable. A profit a prendre appurtenant passes prima facie upon a transfer of the dominant tenement.” 2 Tiffany, Real Property (2d Ed.), § 382.
The case of Council v. Sanderlin, 183 N. C. 253 (111 S. E. 365, 32 A. L. R. 1527), involves this question, and it was there said:
“The right of hunting or fowling on another’s lands or water may be acquired by grant or lease from the owner, either with or without the soil, and with such restrictions or limitations as the owner may see fit to impose. This right, being a right of profit in the land, passes by grant or lease of the land unless expressly reserved.”
The case of Bingham v. Salene, 15 Or. 208 (14 Pac523, 3 Am. St. Rep. 152), arose under a very similar grant. In discussing what interest passed in the estate, it was said, in part:
“Here there is a grant of a sole and exclusive right and privilege to the plaintiffs, their heirs and assigns, forever, to shoot, take and kill such game on the lakes and waters upon the lands of the grantors, and which right, in Webber v. Lee, L. R. 9 Q. B. Div. 315, was held to be a grant of an interest in land, and within the statute of frauds. This right then to take something out of the soil, or from the land of another, which includes shooting, hunting and fishing, is a profit a prendre, and Mr. Washburn says ‘is so far of the character of an estate or interest in the land itself, that, if granted to one in gross it is treated as an estate and may, therefore, be one for life or for inheritance.’ Washburn on Easements, 9. It is manifest, therefore, that the contention that the deed only created a license revocable at the pleasure of the defendants cannot be sustained.”
Another Oregon case is Isherwood v. Salene, 61 Or. 572 (123 Pac. 49, 40 L. R. A. [N. S.] 299). Appended to this case is an interesting note in Ann. Cas. 1914B, at page 545.
Another case of interest which discusses this question with like result is Smith v. O’Dell, 234 N. Y. 267 (137 N. E. 325).
A case from our own court, wherein the plaintiff in this case was plaintiff, and one Barber was defendant, reported in 150 Mich. 571, will disclose the view of this court.
The cases, both in United States and in England, have recognized the doctrine that a profit in gross may be created in fee without being appurtenant to a dominant estate. Some of the very early cases are 1 And. 307, Godbolt, 17.
Some of the later English cases are Welcome v. Upton, 6 M. & W. 536; Fitzgerald v. Firbank (1897), 2 Ch. 96.
Other cases in United States are Caldwell v. Fulton, 31 Pa. St. 475 (72 Am. Dec. 760); Johnstown Iron Co. v. Cambria Iron Co., 32 Pa. St. 241 (72 Am. Dec. 783); Leyman v. Abeel, 16 Johns. (N. Y.) 30; Saratoga State Waters Corp. v. Pratt, 227 N. Y. 429 (125 N. E. 834); Clement v. Rutland Country Club, 94 Vt. 63 (108 Atl. 843); 3 Leake’s Uses and Profits in Land, 78.
If this were a question of first impression in this court the writer would be in favor of holding that an exclusive hunting privilege could not be segregated from the fee of the land, except by a license revocable at the death of either party, or when the fee of the land was alienated. This rule would keep the exclusive right of hunting and the fee of the land together. We have, however, gone too far the other way to revert to such a holding without a legislative enactment. This holding, undoubtedly, deprives, to some extent, the man of modest means of the pleasure of hunting, which is regarded by some as great sport, but he will suffer no more in this respect than in other respects where he lacks the purchase price.
Is such a conveyance against public policy? It is not the policy of the law to unnecessarily restrict the right of persons to contract. When, however, the tendency of a contract, or a class of contracts, is manifestly injurious'to the public interest, the court will avoid them. In determining what is public policy we must advert to the Constitution, statutes and judicial proceedings. 9 Cyc. p. 482, 13 C. J. p. 426.
In the present case the St. Helen Development Company was the owner in fee of these premises. As such owner it had the exclusive hunting privilege. It segregated therefrom the exclusive hunting rights and conveyed them to plaintiff, and the courts are nearly unanimous in saying that in so doing it simply exercised a legal right. We can see nothing in the act that has a tendency to be inimical to the public interest. While this holding somewhat restricts the hunting range of the average hunter, it simply gives to one the right to control and alienate what he owns. The State permits hunting companies to incorporate and exist under Act No. 171, Pub. Acts 1903 (2 Comp. Laws 1915, § 9054 et seq.). The State has also restricted the rights of such companies to hold more than 15,000 acres of land in one place for game preserves (Act No. 207, Pub. Acts 1923). It has not been brought to our attention that this court has in any way indicated that the tendency of such corporations was injurious to the public interest. This court had an opportunity in the case of St. Helen Shooting Club v. Barber, 150 Mich. 571, to disapprove of such contracts, but it did not do so. Our attention has not been called to any holding of any court elsewhere that such a contract is against public policy. We shall, therefore, have to disagree with the chancellor on this phase of the case.
The further question whether the contract or conveyance is a unilateral one is discussed. The appellee contends that the contract contained covenants for the St. Helen Shooting Club to perform, but that it was not signed by that company. We think it is pretty late in the day to raise that question after the lease has been accepted by plaintiff and the premises occupied and the consideration paid for upwards of 20 years. Bakker v. Fellows, 153 Mich. 428.
There is some discussion in appellee’s brief of the question as to whether this contract is a deed or a lease. We think it is unimportant whether it is a deed or a lease. What we have said here would apply to either. 2 Tiffany, Real Property, § 381.
We conclude that the conveyance in question here is a valid one, and that it is not void on the ground of public policy. For these reasons the decree of the trial court must be reversed and one entered in accordance with this opinion. The plaintiff will recover its costs in both courts.
Sharpe, Steere, Fellows, Wiest, Clark,' and McDonald, JJ., concurred.
Justice Moore took no part in this decision.
This indenture, made this 30th day of March, 1904, between the St. Helen Development Company of St. Helen, Roscommon county, Michigan, a corporation organized under the laws of the State of Michigan, party of the first part, and The St. Helen Shooting Club, a corporation organized under the laws of the State of Michigan, party of the second part.
Witnesseth, For and in consideration of the agreements hereinafter set forth, the said party of the first part does hereby let, lease, grant, demise and convey to the said party of the second part, and its assigns, forever, the'exclusive right of hunting game and wild fowl in and upon the lakes and marsh of and on the following described premises in township No. twenty-three. (23) north of range one (1) west, in the county of Ros- common, Michigan, to-wit: Lots 1, 2, E, 4, 5, 6, 7, 8 and 9 of section 16; lots 1, 2, 3, 4, 5, 6 and 7 of section 19; lots 1, 2, 3, 4, 5, 6 and 7 of section 20; lots 1, 2, and 3 of section 21; lots 1 and 2 of section 15; lots 1, 2, 3 and 4 of section 22; lots 1, 2 and 3 of section 28; lots 1, 2, 3, 4 and 5 of section 29; lots 1, 2, 3, 4, 5, 6 and 7 of section 30.
Also the following described premises in township twenty-three (23) north of range two (2) west in said county; lots 1, 2, 5, 6 and 7 of section 24; hereby intending to include all the water surface and marsh of the three lakes known as St. Helen lake, and the marsh and water of the south branch of the AuSable river from St. Helen lake to the north line of said section 16.' Hirst party warrants that it has good right and title to the said premises and that it -will warrant and defend this conveyance against all lawful claims whatsoever, excepting the undivided one-half of said lot two (2) of section twenty-eight (28); should title to said lot be acquired by or for first party, it shall enure to the benefit of said second party.
This lease includes the right to use the shore of the lakes, river or marsh for landing purposes, and for the purpose of building blinds or hides for hunting purposes, and of maintaining them here.
Except as herein specified, this lease shall not cover or include the uplands of said description, nor any rights to the timber on such lands, nor shall this lease be construed as debarring, second party from making any and all improvements of said land and lake consistent witli its future development or commercial utility.
This lease shall give the second party and its assigns and representatives the full and exclusive right to all of the shooting and hunting privileges on the premises so leased; and said second party, in its own name or in the name of the owner of the fee of said leased premises, at its election, but at its own expense, may protect and police said leased premises, and may bring any action at law or in equity that it may deem necessary to protect the rights herein granted, either against trespassers, intruders or any other persons.
It is further expressly agreed that the first party or its assigns, or representatives, shall not use said leased premises in any way to interfere with the hunting of wild fowl and game thereon during1 the open or bunting season, and that first party shall so regulate its boating and fishing upon said waters so as not to interfere with the privileges herein granted.
The second party shall have the right to fish with hook and line upon said waters, but not an exclusive right; first party shall not at any time take perch, bass, pike or pickerel from said waters by the use of nets of any kind, and shall not set or use nets of any kind during the open hunting season. Said first party shall not plant or permit to be planted or placed in said lakes or river any fish known as carp.
The first party and its assigns shall pay all taxes and assess- meats of any kind or nature that may be levied against and upon said premises, perpetually.
The said second party shall pay to the first party, on November 1st of each year the sum of $200, on the production by the first party of the tax receipt of the preceding year upon the above described premises and shall be under no obligation to pay said sum of $200 until such taxes are paid. In case of the nonpayment of such taxes, the second party have the right to pay the same out of the said $200 or so far -as the same shall apply.
It is expressly agreed that should said premises be offered for sale (for) the delinquent taxes, the second party, after applying the said sum of $200 -as far as the same will go, shall have the same right to bid in said premises at (as) any stranger, and shall have the same right to acquire a tax title thereon as though it was not interested in the premises.
It is further agreed that any member of the second party club shall have a right to acquire such premises for a tax title upon any of said premises the same as a stranger.
In consideration of the agreements aforesaid, also, the said first party does hereby let, lease, remise, grant and convey to the said second party and its assigns, in perpetuity the north twelve and one-half (12%) acres of said lot three (3) of said section twenty-eight (28) above, for the purpose of erecting buildings and boat houses and other conveniences thereon, and building desired landing places and docks for the convenience of the members.
Said premises shall be accessible both by land and water, and shall not be used for any commercial or business purposes, nor for the sale or vending of any intoxicating liquors.
The parties hereto do not consider the premises conveyed as suitable for agricultural purposes, but the intent of this article is that should said premises (consisting of a sand bank and marsh) ever be found suitable for agricultural purposes, then this conveyance, in such case, shall be deemed an absolute conveyance of the fee of said north twelve and one-half (12%) acres of said lot three (3) subject to the limitations as to use as above described.
In Witness Whereof, the said party of the first part had (has) hereunto set its hand and seal the day and year first above written.
The St. Helen Development Co.,
By John Cartee, President,
Franklin G. Clark, Secretary.
Signed, sealed and delivered in the presence of
Wm. Hamilton,
Della J. Clark.
State oe Michigan, j County of Roscommon. ) ss'
On this 30th day of March, 1924, before me appeared John Carter and Franklin G. Clark, to me personally known, who being by me each duly sworn did say that said Carter is the president of the St. Helen Development 'Company and said Clark is the secretary of said company, and that the seal affixed to said instrument is the corporate seal of said corporation and that instrument was signed and sealed in behalf of said corporation by its board of directors, and said John Carter and Franklin G. Clark acknowledged said instrument to be the free act and deed of said corporation.
Sworn to and subscribed before me this ..........day of March, 1904.
Della J. Clark,
Notary Public.
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North, J.
This suit against the village of Clifford was brought for the recovery of a portion of the purchase price of a fire engine. Defendant by cross-action sought recovery of payments it had already made. The case was tried by the court without a jury. Defendant had judgment for $2,003.48, and plaintiff -appealed.
The record of the meeting of the village council held July 18, 1928, in addition to other matters, discloses the following action:
“Moved by Glazier and supported by Fox that village of Clifford accept the agent’s proposal of the American LaFrance fire engine. Motion carried. ’ ’
The village record shows this meeting of the council was attended by the president and four councilmen. There were five members of the council. The fifth councilman testified he was also present and further: “As I remember it we were all in favor of it.” On the contrary there is testimony tending to show that two members of the council spoke against the proposed contract and that neither of them “voted at all.” In accordance with the action taken by the council plaintiff entered into a title-retaining contract with the village in which the village agreed to purchase a fire engine of plaintiff at a price of $3,325. The contract provided for a down payment of $1,000 following delivery and five annual payments of $465 with six per cent, interest, the first payable September 15,1929. A promissory note for each of the annual payments was executed by the president and clerk of the village and delivered to plaintiff. The fire engine was delivered to the village which has ever since continued its possession and use of the same. The down payment and the first two notes, totaling $1,930, were paid by the village. This suit was commenced in January, 1933, to collect the then past due notes of 1931 and 1932, totaling $930 and accrued interest.
The defense urged is that a valid and binding contract was not entered into because the record of the council proceedings as made by the village clerk does not show that the requisite majority of all the councilmen-elect voted in favor of entering into the purchase contract and also because the attempted action of the council was ultra vires in that the amount involved was in excess of that for which the council could obligate the village without a two-thirds vote of the electors. 1 Comp. Laws 1929, § 1656. The purchase price was payable from the general fund. By statute the power of the village council is limited in the following manner:
“But no office shall be created or abolished nor any tax or assessment imposed; * *. # unless by a concurring vote of two-thirds of all the trustees- elect, which vote shall be taken by yeas and nays, and entered upon the Journal; no money shall be appropriated except by ordinance or resolution of the council, nor shall any ordinance be passed, nor any resolution- appropriating money be adopted, except by a concurring yea and nay vote of two-thirds of all the trustees-elect.” 1 Comp. Laws 1929, § 1532.
Under the statute (1 Comp. Laws 1929, § 1635) the maximum amount which the village had power to raise annually by taxation for its “general fund” is limited to one and one-fourth per cent, of the assessed valuation of the taxable property. Because of this statutory limitation the maximum amount that could be raised by the action of the council during the year of the alleged contract was $2,237.81. It is this phase of the record upon which the defense of ultra vires is based.
As against defendant’s contention that the alleged contract was ultra vires, plaintiff asserts that notwithstanding the burden of proving ultra vires is upon the defendant, that defense was not established by the testimony in the case.
“If the condition of the city finances was such that the obligation arising out of the contract would exceed the amount which the common council was authorized to incur an obligation to expend, it was incumbent on the defendant to make that fact affirmatively to appear.” Arbuckle-Ryan Co. v. City of Grand Ledge, 122 Mich. 491.
The defendant in its answer affirmatively set up the defense of ultra vires and obviously correctly assumed that it had the burden of proof. It is therefore important to ascertain whether or not this defense was affirmatively established by defendant’s testimony.
The officers are presumed to have acted legally and not to have transcended their statutory powers. Bishop v. Lambert, 114 Mich. 110. It appears from the testimony herein that individual subscriptions were made to a fund for the purpose of purchasing a fire engine. How much money was thus donated or pledged is not disclosed. Nor is there any testimony tending to disclose how much money was already on hand in the general fund of the village. The council had statutory power to borrow in anticipation of taxes for the current year not to exceed one-fourth of the tax if necessary to defray current expenses. 1 Comp. Laws 1929, § 1655. And further, the electors had the power to authorize borrowing money in an additional amount not to exceed two per cent, of the assessed valuation of the taxable property. 1 Comp. Laws 1929, § 1656. The' testimony discloses nothing as to whether or not such action had been taken either by the village council or by the electors. This record sustains plaintiff’s contention that the defendant failed to establish its defense of ultra vires. As bearing upon the justness of so holding, it. may be noted that the defense of ultra vires urged in the instant case is wholly technical and utterly void of merit when tested by everyday principles of right and wrong.
The defendant village received this fire engine' in accordance with the terms of the contract. No complaint is made of its fitness for the purpose for which it was purchased. It is not claimed that fraud or collusion entered into this transaction in any way. The village has continued to use this fire-fighting apparatus since 1928. It has never taken any official action relative to rescission of its purchase contract. Instead, it made three separate substantial payments on the purchase price after delivery of the engine. Defendant did not at any time prior to the trial tender to plaintiff the return of the purchased property. The equipment purchased of plaintiff was built into or mounted upon an auto truck chassis purchased by defendant from someone other than plaintiff. It is self-evident that both from use and from age this fire engine has materially depreciated. We think the circumstances are such that defendant cannot place plaintiff in statu quo by the return of the purchased equipment. The contract has been fully performed with the exception of the payment of the purchase price by defendant whereupon title to the engine will automatically pass to the village. It may well be said in the instant case as this court has had occasion to say in former decisions:
“The defense of ultra vires in this case is most inequitable and unjust. It should not be sustained unless the rigid rules of law require it. ‘The good faith of government should never be less sacred than that of individuals.’ Where the executed contract is neither malum in se nor malum prohibitum, but can only be avoided because of defects in the manner of its execution, the corporation cannot retain the benefits and deny its authority. Coit v. City of Grand Rapids, 115 Mich. 493.” Webb v. Township of Wakefield, 239 Mich. 521.
As stated above, defendant has failed to establish the defense of ultra vires and therefore the contract must be here considered and disposed of as mira vires.
Defendant’s further claim that the village is not bound by the contract because the action of the council was not evidenced by a yea- and nay vote or recorded as such, is without merit. We think the record fully sustains plaintiff’s contention that the purchase of'this engine was approved by the req uisite vote of the members of the council. A fair inference from the testimony is that the vote was taken by a showing of hands rather than by the verbal expression of yea and nay. Mayor Vanconant testified:
“I asked them all to vote by the usual sign of voting, by raising their right hand. * * * This truck was voted upon one hundred per cent, right there by every councilman, nobody objected.”
Even conceding that the action of the village council was not taken and recorded in strict compliance with the statutory provisions above noted, still the defendant village should not on this technical pretext be permitted to escape payment of its just obligations. It was within the express statutory powers of the village to purchase “suitable fire engines and apparatus for the extinguishment of fires. ’ ’ 1 Comp. Laws 1929, § 1662. This case does not come within and is not controlled by Highway Com’rs of Sault Ste. Marie v. Van Dusan, 40 Mich. 429, and cognate decisions. In the Van Dusan Case it was held:
“According to the hypothesis the case was such that if all the township electors and all the township officers had united or assented in any mode or under any particular formalities the original transaction (construction of a sewer by a township) would have been invalid, and the principle of law is that a corporation cannot ratify an act which it could not have done when it occurred. * * * In order to grasp ungranted power nothing more would be necessary than to act beyond the limits of authority and then assume the act as one of force and binding efficacy.”
As noted above, in the instant case the contract which gave rise to these notes is not shown to have been ultra vires; but instead the transaction was one within the express statutory powers of the village. The following is applicable to such a ease:
‘ ‘ Courts have held that when the power is shown in the municipal corporation to issue the bond, but there were irregularities in its execution, such corporation may be estopped to deny that the power was properly executed. This was the case in Rogers v. Burlington, 3 Wall. (70 U. S.) 654, cited by plaintiff.” Bogart v. Township of Lamotte, 79 Mich. 294.
To the foregoing, the writer of the opinion in the above case very properly added:
“No case has been cited holding that the doctrine of estoppel will apply, where no.power existed to issue the bond. Nor is defendant estopped by subsequent payment of interest. A municipal corporation cannot ratify or be estopped by an act void in its inception, and wholly ultra vires. Highway Com’rs of Sault Ste. Marie v. Van Dusan, 40 Mich. 429.”
But where, as in the instant case so far as disclosed by this record, the undertaking is not ultra vires the municipal corporation may be estopped from asserting as a defense mere irregularity incident to the proceedings authorizing the obligation.
“Where the power exists in a municipal corporation to bind itself, where the contract is intra vires, it will be bound even though it may have proceeded irregularly and in disregard of directory provisions as to the exercise of its power.” Commercial State Bank of Shepherd v. School District No. 3 of Coe Township, Isabella County (syllabus), 225 Mich. 656.
“The city’s contention that it cannot be estopped from disavowing liability on the ground that the contract was not consummated in accordance with the charter provision is without merit. * * * ‘A municipality cannot retain the benefits of a contract which has been fully performed by the other party, and which is neither malum prohibitum nor malum in se, and at the same time deny the validity of 'the contract because of defects in the manner of its execution.’ Coit v. City of Grand Rapids (syllabus), 115 Mich. 493.” L. W. Kinnear, Inc., v. City of Lincoln Park, 260 Mich. 250.
“Stated most strongly for defendant, the situation is this: The result was legal, but the method by which it was reached was illegal. In such case the law does not permit a municipality to retain the fruits of its contract, and deny its validity.” Coit v. City of Grand Rapids, supra.
See, also, Carey v. City of East Saginaw, 79 Mich. 73; East Jordan Lumber Co. v. Village of East Jordan, 100 Mich. 201; Spier v. City of Kalamazoo, 138 Mich. 652; and Webb v. Township of Wakefield, supra.
Herein it has not been established that this contract was ultra vires; and under this record defendant is estopped from asserting as a defense that the contract was not authorized by action of the village council in strict accordance with the requirements of law. It follows that plaintiff is entitled to recover the amount of the two notes on which suit was brought together with accrued interest thereon.
Judgment entered in the circuit court in favor of defendant must be vacated and judgment entered there in accordance herewith. For that purpose the case is remanded to the circuit court. Costs to appellant.
Nelson Sharpe, C. J., and Potter, Fead, "Wiest, Butzel, Bushnell, and Edward M. Sharpe, JJ., concurred. | [
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Boyles, J.
We granted petitioner the writ of habeas corpus together with ancillary writ of certiorari to the circuit court for Macomb county to inquire into the legality of petitioner’s detention in the State prison of southern Michigan. Returns to the writs have been made.
On September 19, 1939, petitioner pleaded guilty in the circuit court for Macomb county to a charge of uttering and publishing a forged order for payment of money. The maximum punishment for such offense is by imprisonment in the State prison for not more than 14 years. Act No. 328, § 249, Pub. Acts 1931 (penal code) (Comp. Laws Supp. 1940, § 17115-249, Stat: Ann. § 28.446). The court accepted the plea and remanded petitioner to jail to await sentence.
On September 23, 1939, a secondary information was filed in said court by the prosecuting attorney charging petitioner with having previously been twice convicted of a felony wherefore petitioner was charged with having committed a third felony, under the provisions of code of criminal procedure, chap. 9, § 11, as amended, being 3 Comp. Laws 1929, § 17339 (Stat. Ann. §28.1083). Petitioner denies that he pleaded guilty to this charge. The record shows that petitioner on said date was sentenced to imprisonment in the State prison for a period not exceeding 28 years and not less than 14 years. The clerk of the court in entering the judgment and sentence of the court recited that petitioner had been convicted upon his plea of guilty “of the crime of uttering and publishing,” although the judgment of sentence was entered “for the minimum term of 14 years and the maximum term of 28 years.” This would be a proper sentence under the third felony provision, supra. Commitment followed.
In January, 1945, petitioner filed in the circuit court for Macomb county a motion to amend sentence, reciting that he had not pleaded guilty as a third offender and that petitioner’s sentence was excessive for the crime of uttering and publishing for which he stood convicted, the maximum legal sentence therefor being 14 years-. On hearing, the court entered a finding and order that petitioner on September 23, 1939, had pleaded guilty to the secondary information filed on that date and that the sentence for a third felony was valid and legal. The motion to amend the sentence was denied. Subsequently the prosecuting attorney petitioned the court for an amendment of the journal entry and that an order be entered nunc pro tunc to correct the same. This petition was granted and an order entered reciting that petitioner had been convicted as a third offender.
Petitioner would not be entitled to release at this time on his petition for the writ of habeas corpus. The maximum term of legal sentence for the offense of uttering and publishing, 14 years, has not expired. Even if the sentence as a third offender were void, this fact would not operate to vacate a proper sentence upon conviction for uttering and publishing. In re Dudney, 303 Mich. 402.
We have examined the record of proceedings certified by the circuit court for Macomb county on return to the writ of certiorari and find that the record fully supports the finding of the sentencing court that petitioner was duly arraigned on September 23, 1939, on the supplemental information and pleaded guilty thereto. The return to the writ conclusively shows that petitioner pleaded guilty to the supplemental information charging conviction of two previous felonies. Petitioner’s motion to amend sentence was properly denied.
The court had jurisdiction, to enter an order nunc pro tunc curing the inadvertent defect in the clerk’s entry in the record.
“If determination of guilty was pronounced at time defendant was sentenced, but clerk through inadvertence omitted to make record thereof, entry of order nunc pro tunc cured defect and validated sentence imposed.” In re Curtis (syllabus), 264 Mich. 431.
“Ministerial errors in court journal and commitment papers which should and could have been corrected by the circuit court had they been seasonably brought to its attention may be corrected pursuant to direction of Supreme Court under its constitutional power and by order nunc pro tunc the record made to speak the judicial determination of the conviction and grounds for sentence imposed.” In re Rogers (syllabus), 308 Mich. 392.
If not already done, a proper commitment may be issued by the circuit court and forwarded to the warden. The writs are dismissed.
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, People of the State of Michigan, filed a bill of complaint against defendants, treasurer of Oakland county, drain commissioner of Oakland county, board of county road commissioners of Oakland county, treasurer of the city of Royal Oak, assessing officer of the city of Royal Oak, and the city of'Royal Oak, seeking a decree declaring the assessments and taxes against certain parcels of land void, and that the same be cancelled and all records of such assessments and taxes vacated and set aside.
The lands involved are those which were acquired by the State for the construction and improvement of State trunk line highway 10, and were generally known as “excess lands” in that they were held by the State after the completion of the highway for disposition by the State highway commissioner, as provided by Act No. 352, Pub. Acts 1925, as amended (1 Comp. Laws 1929, § 3884 et seq. [Comp. Laws Supp. 1940, § 3884 et seq., Stat. Ann. and Stat. Ann. 1937 Cum. Supp. § 8.171 et seq.]). When the lands were first acquired by the State in 1924, 1925 and 1926, title thereto was taken in the names of Thad D. Seeley and Prank P. Rogers, sometimes described as “trustees of the city of Pontiac,” and at other times as “trustees.” Rogers was the State highway commissioner from 1913 to 1929, and Seeley was in charge of acquiring property for the Woodward avenue widening project under his direction.
In 1927 the legislature enacted Act No. 295, which reads as follows:
‘ ‘ Section 1. All contracts, deeds or other instruments conveying to the State, through Prank F. Rogers and Thad D. Seeley, trustees, certain lands for State trunk line highways, are hereby approved and declared to be legal transfers of such lands to the State.
“Sec. 2. Said Prank P. Rogers and Thad D. Seeley, as such trustees, are hereby authorized to sell any of such lands not needed for trunk line highways and execute proper conveyances of title thereto: Provided, That such conveyances shall be made at such time and upon such terms as the State administrative board shall direct.”
This same statute was re-enacted in Act No. 282, Pub. Acts 1929, in the same language. 1 Comp. Laws 1929, §§4464, 4465 (Stat. Ann. §§9.1061, 9.1062).
Some of the lands in question were sold on land contracts to private parties. Believing that “excess lands” were subject to taxation, they were assessed by the city of Royal Oak for taxes for the years 1927 to 1937. This, according to the findings of the trial judge, was done because there was nothing on the face of the deeds, as recorded, to show that the property belonged to the State of Michigan; and although it was more or less generally known to the city assessor that Rogers and Seeley were acting for the highway department, he did not have definite knowledge as to the scope of their authority.
It is alleged in the bill of complaint that the taxes levied were rejected by the auditor general of the State on June 30, 1941, who gave as his reason that the taxes were assessed1 on “State-owned property at time of assessment.” They were, therefore, returned to the county treasurer for return to the city of Royal Oak for reassessment at large. They were, however, again spread on the 1941 tax rolls against the State of Michigan and payment has beén refused by the State on the ground that the assessments and taxes are illegal and invalid.
The treasurer, drain commissioner and the board of county road commissioners of the county of Oakland admitted all of the allegations of the State, except as to the invalidity of the tax. The treasurer, assessor and municipality of Royal Oak took the position that lands standing in the names of Rogers and Seeley were subject to taxation, and make much of the absence of a comma in their characterization as “trustees of the city of Pontiac.” The State insists that this was descriptive only and that they were not trustees for the city but were trustees residing in the city of Pontiac. Defendants, city officers and city of Royal Oak, further insist that the rule that should be applied is not that of ownership, but that of use; and since land contract purchasers have an equitable title, and the legal title of lands sold on land contract is held only in trust by the State for the purchaser, such lands are taxable, because they are not owned by the State.
The trial judge held that as to lands acquired by the State, but not resold, the assessments and taxes were void. The court in its opinion stated the essence of its holdings as to these lands as follows:
“The State of Michigan may not be required to pay taxes for the lands here involved and not sold to third parties on land contract regardless of their use and especially due to the fact that the ownership here was of a temporary nature and had its inception in the acquisition of lands for public use.
“Nor can any of the lands here involved be taxed because it may have been the duty of Messrs. Rogers and Seeley under the first acts of 1923 to take the naked nominal legal title of the land acquired in the name of Oakland county.”
However, as to lands sold on contract the court held:
“That only those taxes assessed for a period or periods during which the lands here involved were sold on land contracts are valid and enforceable.”
The parties hereto are in agreement as to the facts, but differ only as to the applicable law. The respective briefs contain many citations of authorities pro and con. We do not feel it necessary to cite any authorities on the subject because we are of the opinion that the situation is controlled by appropriate legislative enactments which do not distinguish, except as hereinafter noted, between lands owned and lands used by the State.
Section 7 of the general property tax law, Act No. 206, Pub. Acts 1893, as amended (1 Comp. Laws 1929, §3395 [Stat. Ann. §7.7]), provides in subsection 2 that: “All public property belonging to the State of Michigan, except licensed homestead lands, part-paid lands held under certificates, and lands purchased at tax sales and still held by the State,” shall be exempt from taxation.
Section 2 of the general property tax law defines real property as follows:
‘ ‘ For the purpose of taxation, real property shall include all lands within the State, and all buildings and fixtures thereon, and appurtenances thereto, except such as are expressly exempted by law.” 1 Comp. Laws 1929, §3390 (Stat. Ann. §7.2).
The situation presented in the instant case was subsequently met by the legislature by acts amending section 2; i.e., Act No. 235, Pub. Acts 1939, and Act No. 234, Pub. Acts 1941 (Comp. Laws Supp. 1943, §3390, Stat. Ann. 1944 Cum. Supp; §7.2), so that this section now reads:
“For the purpose of taxation, real property shall include all lands within the State, and all buildings and fixtures thereon, and appurtenances thereto, except such as are expressly exempted by law, and shall include all real property owned by the State of Michigan heretofore purchased or condemned for public highway purposes by any board, officer, commission or department thereof and sold on land contract, notwithstanding the fact that the deed has not been executed transferring title.
“The taxable status of persons and real property shall be determined as of the first day of April, which shall be deemed the tax day.”
It will thus be seen that the legislature, understood that lands purchased or taken for public highway purposes and thereafter sold on land1 contracts were exempt from taxation, and it therefore definitely concluded in the acts just cited that such land should thereafter be taxable. This construction by the legislature of the law as it stood before its amendment is entitled to the utmost respect.
The statutory language is clear and unambiguous, and does not require judicial construction. At the time the assessments and taxes in question were levied, all of the lands now under consideration were exempt from taxation by act of the legislature.
The decree entered in the trial court must be vacated in part and one may be entered here sustaining the position of the State, i.e., that those assessments and taxes for the years 1926 to 1937, inclusive, •against lands in the city of Royal Oak which were sold to and held by private parties under land contracts with the State of Michigan are illegal and void.
The decree of the trial court is affirmed, .as to lands not sold by the State, and reversed as to lands that were sold. A public question being involved, no costs will be allowed.
Starr, C. J., and North, Butzel, Sharpe, Boyles, and Reid, JJ., concurred. The late Justice Wiest took no part in the decision of this case. | [
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Fead, J.
In 1932 defendant Kennedy, Nawrot and others organized the Association of Cleaners and Dyers Employees and Retail Tailors in Detroit. The purpose was to raise wages. The first objective was to induce employers to increase their charges to the public.
Alva R. Davis conducts a cleaning establishment. On April 29, 1933, fires began to occur in his plant, in a machine called a tumbler, in which steam was used. May 12th defendant and Nawrot called on Davis and asked him to increase his cleaning prices. He refused to do so. Defendant asked him to consider the matter further. The fires continued, practically nightly, sometimes several in a night. On May 24th defendant and Nawrot again talked with Davis, the fires were mentioned, a quarrel ensued and it is claimed defendant said:
“Well, if you can’t see things the way we do, your place is liable to fall down some of these nights instead of having a few fires.”
Davis called the police, defendant and Nawrot were arrested and later were tried on the charge of maliciously threatening injury to Davis’ property, with intent to compel him to do an act against his will, to-wit, to raise his dry-cleaning prices. Kennedy was convicted and Nawrot acquitted.
Not content to rest upon the ambiguous language of defendant’s statement to Davis, the people developed a setting for it to indicate that it was a malicious threat. They claimed it was made in pursuance of a policy of the association to impose its will on . employers by arson, bombing and other terrorist measures. They presented evidence of investigators who had attended meetings of the association, at which defendant was a leading spirit, and claimed statements to that effect were made by his associates in his presence.
It was the people’s theory that the association sent persons to Davis’ establishment, in the guise of customers, who left clothes for cleaning, in which were hidden chemicals which, united with steam in the tumbler, caused fire. They produced a chemist who, after conducting an experiment with clothes furnished by Davis, said metallic potassium would so operate and would produce a like burn. The experiment was not conducted under “similar conditions” but the court sustained all objections to the testimony properly made.
Clothes brought to the Davis plant by customers were received by girls who, with pen and ink, wrote the names and addresses of the owners on serially numbered tickets and pinned to the garments cloth tags bearing corresponding numbers. Book entries were also made of the transactions. On clothes brought in by collectors the numbers were stenciled.
Over objection, on testimony of Alva Davis, there were received in evidence a dress burned April 29th, when Davis was present, a burned suit found by Davis in the back yard the same night, and a coat and pair of trousers likewise found by him on May 19th. He had no personal knowledge of the burning of the suit, coat and trousers. Through the identification tags and tickets he identified the exhibits as garments received over the counter, The employees who attached the tags and wrote the tickets, although available, were not produced. The chemist made his experiment with cloth from the coat or trousers found on May 19th.
Darrell Davis, son of the proprietor, went to the addresses shown on the tickets to locate the customers and was told by occupants of the houses that they did not live there and were not known. The occupants were not produced. Darrell also testified that no return or value of the burned garments had been claimed.
It is conceded that nearly all of this testimony was hearsay, but a question is raised upon the sufficiency of the identification of the garments through the tags and tickets without production of the employees who made them.
We need not determine how far the rules regarding proof necessary to admit books of account and private records in evidence have been or should be modified, in civil cases, to conform to business practice. No modification is admissible which infringes the constitutional right of an accused to be confronted by the witnesses against him (Const. of 1908, art. 2, § 19). The testimony was incompetent. People v. Dow, 64 Mich. 717 (8 Am. St. Rep. 873); People v. Nutter, 255 Mich. 207. It was prejudicial because it purported to show incendiary character of the fires at the Davis plant and was offered in furtherance of the people’s theory that defendant’s statement to Davis carried a threat of destruction of his property by the association. The testimony went to the heart of the issue and was reversible error.
On his direct examination, defendant denied making the alleged threat and denied that the association had an unlawful purpose or modus opercmdi or that he, or any member or employee of the association, to his knowledge, had destroyed property or threatened to destroy it. Thereupon the prosecution cross-examined him vigorously upon threats by himself and his associates to destroy property of one Eeichel, another cleaning proprietor, and upon fires in Eeichel’s establishment. Defendant denied the. threats and knowledge of the fires. On rebuttal, the people offered Eeichel and his employee, Hanson, to impeach defendant. Their names were not indorsed on the information. The defense objected to the testimony for that reason and because the testimony was part of the people’s main case and, if not, it was not proper rebuttal because directed to a collateral issue, and also asked for a continuance, which was denied.
At the outset, the people tied the general character and conduct of the association and defendant therein to the statement made by defendant to Davis, to prove a malicious threat. By their own theory, the people made all relevant activities of the association, and of defendant in connection therewith, part of their main case. However, the order of proof is not governed by hard and fast rules but lends itself somewhat to the discretion of the court. "While there was little, if any, excuse for departure from the order of proof in this case, we prefer to consider the testimony from a more serious viewpoint, failure to indorse the names on the information.
Failure to perform the mere manual act of writing a name on the information alone does not constitute reversible error where the record affirmatively shows that the testimony is purely rebuttal and discloses reasons which would justify the indorsement. People v. Tamosaitis, 244 Mich. 258. But in that case this court took occasion to emphasize the mandate of the statute that the names of witnesses for the people be indorsed on the information. And in People v. Blue, 255 Mich. 675, the practice and required showing were outlined. Omission to indorse is not lightly to be condoned.
It is apparent the people knew the precise character of the testimony Beichel and Hanson would give, before defendant was sworn. Under their theory, the testimony was part of their affirmative case. They offered no reason for failure to indorse except that they had a right to assume defendant would admit the claimed statements to Beichel and Hanson. The people cannot violate the law requiring indorsement of witnesses as soon as discovered on the hypothesis that a defendant who pleads not guilty and stands trial will admit his guilt on the stand. Although the controversy regarding indorsement was extended and the court expressed the opinion that the testimony would have been competent in chief, the people did not make a showing, nor ask, for indorsement. If such practice is approved, the people could hold for rebuttal, without indorsement, the names of all their witnesses except enough to make a prima facie case and thus defeat the statute (3 Comp. Laws 1929, § 17254). We hold it was reversible error to receive the testimony of Reicliel and Hanson without indorsement of the names and continuance.
Davis was permitted to testify over objection that no fires occurred on his establishment after defendant’s arrest. When defendant was arrested, the offense charged, if any, was completed. The only purpose of such testimony could have been to indicate that defendant was responsible for the former fires, There was no claim that he personally caused any of them. The testimony was purely negative in character and we find no authority for its admission. Testimony of the reverse situation, namely, showing by defendant that fires continued after his arrest, has been held incompetent. State v. Millican, 158 N. C. 617 (74 S. E. 107). The testimony departs from the realm of probative inference and is speculative.
Defendant was not permitted to testify regarding threats against Davis, made to defendant over the' telephone. If he had admitted the claimed statement to Davis and said he was merely relating to him threats which he had heard, the testimony might have been "admissible. But, in view of his denial of the statement, the testimony was self-serving and not competent.
Judgment reversed, and new trial ordered.
Nelson Sharpe, C. J., and Potter, North, Butzel, Bushnell, and Edward M. Sharpe, JJ., concurred. Wiest, J., concurred in the result. | [
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Butzel, J.
Plaintiff Robert Sawyer married defendant . Martha Sawyer February 2, 1931, when 18 years of age and she was a year or two younger. Two children were born, Joan on April 18, 1932, and Mary Jane on May 25, 1931. The parties separated on March 15, 1931. Mary Jane was born after the separation and before the date of filing a bill for divorce on November 20, 1931. About three or four months after their, separation, plaintiff obtained custody of the older child. "When Mary Jane was about five months old, she was left in the home of plaintiff’s mother by defendant and her mother. At the time of the decree of divorce on April 13, 1935, both children were at the home of plaintiff’s parents. Defendant had consulted an attorney but filed no answer to the bill of divorce. An order pro confesso was entered and decree subsequently granted. The court found that defendant was an unsuitable person to have the care and custody of the minor children. The decree provided that the plaintiff’s parents, Floyd and Margaret Sawyer, were to have the care and custody of the children with the right to defendant to see them at limited times. On August 5, 1937, plaintiff Eobert Sawyer married his present wife, Mary Sawyer. When he established a home of his own in the summer of 1939, he took the minor children to his home without any modification of the decree. While the children were living with plaintiff’s parents, defendant visited the home frequently as her home was near by. The visits have become irregular since defendant remarried1 and moved farther away. It was not until January 7, 1943, or almost eight years after the granting of the divorce, that defendant Martha Sawyer asked for an amendment of the decree so as to give her the custody of the children. She claims that since she has remarried, she has a home of her' own where she is able to take good care of the children and that plaintiff is not a proper person. She makes charges that he is addicted to the use of liquor, but a careful review of the testimony shows that there is no basis for this charge. While occasionally he did take a drink of hard liquor and also kept beer in his home, he did not drink to excess. It was further shown that defendant is not strong or well. Defendant relies on 3 Comp. Laws 1929, § 12852 (Stat. Ann. § 25.311), which holds that the mother of minor children shall be entitled to their care and custody until they are 12 years of age and the father shall be entitled to the care arid custody of the children of 12 years or over, but all subject to the discretion of the trial court as to what is best for the children. At the present time the older child is 13 years of age and the younger 11. In the last analysis, the welfare of the minor children is the first consideration where their custody is in issue. Brookhouse v. Brookhouse, 286 Mich. 151.
The children have a good home and are well cared for, and appear to be happy. It would not be to their interest to uproot them from their - present home and force them, to more or less share the unhappiness that has arisen through the fault of the mother, as shown by the decree. We are loath to interfere with the determination of the trial judge who was so familiar with all the conditions and who has given careful attention to what is best for the children. The trial judge made it possible for the mother to have the children on Saturday afternoons at her own home or other approved places and at other times when specially authorized. Undoubtedly if the mother so conducts herself and it is for the good of the children, the judge hereafter upon proper showing may give her permission to see the children for longer periods.
The order appealed from, embodied in an amendment to the original decree, is affirmed, with costs to plaintiff.
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, July 15, 1933, filed a bill in tbe circuit court for tbe county of Oakland, in chancery, against defendant, to restrain it from enforcing the provisions of 2 Comp. Laws 1929, §§ 9766-9768, and from enforcing the provisions of a resolution of the township board passed in pursuance thereof and for other and further relief. Defendant answered. The case was heard, and, September 16, 1933, decree entered dismissing the bill of complaint, from which decree plaintiff appeals.
Plaintiff alleges that 2 Comp. Laws 1929, § 9766, and the resolution of the township board, are unconstitutional, and the circuit court had jurisdiction to restrain the enforcement thereof. Appellee contends the trial-court did not pass upon the question of jurisdiction either in its opinion or the decree entered; and, consequently that question cannot be considered if it were material.
The trial court exercised jurisdiction and heard and disposed of the case by rendering final decree. This was an assertion of jurisdiction which has been frequently recognized. Devereaux v. Township Board of Genesee Township, 211 Mich. 38; Postal v. Village of Grosse Pointe, 239 Mich. 286.
While appellant contends the statute in question and the ordinance passed in pursuance thereof are unconstitutional, he does not call attention to any provision of the Constitution of Michigan or of the United States which is violated by such statute and the resolution passed in pursuance thereof. Under the Constitution of this State, each organized township is a body corporate whose powers and immunities are prescribed by law. Article 8, § 16. By the Constitution, “The legislature may by general law confer upon organized townships such powers of a local, legislative and administrative character, not inconsistent with the provisions of this Constitution, as it may deem proper. ’ ’ Article 8, § 17, Constitution of 1908.
We are not dealing with the exercise of a power by the township, not delegated to it, but with the exercise of a power expressly delegated to the township by the legislature in pursuance of the constitutional provision above quoted. The statute in question, Act No. 12, Pub. Acts 1929; 2 Comp. Laws 1929, §§ 9766-9768, constitutes:
“An act to give power to the township board of any township to license and regulate junk yards and places for the dismantling of automobiles; to prescribe rules, regulations and conditions for the operation of the same; to provide penalties for the operation of the same without a license and for the violation of any rule, regulation or condition.”
This constitutes the title to the act, the body of which provides for the enactment by the township board of the township of a resolution providing for the licensing of junk yards and places for dismantling of automobiles, fixing the license fee which shall not exceed $25 and adopting rules, regulations and conditions for the operation thereof; and specifying the date when such resolutions, rules, regulations and conditions shall taire effect. Subsequent provisions of the statute provide for giving notice of the passage of such resolution and for penalties for violation of the terms of the resolution of the board. We find nothing in the statute which violates any provision of the Constitution, but on the contrary the passage of such an act seems to be expressly authorized by the constitutional provision above quoted.
The question arises as to whether the resolution passed by the township board of the township in question is in accordance with the statute. The dismantling of automobiles is in and of itself a legitimate business, not inherently dangerous to the public health, peace and safety and the same may also be said of the operation of a junk business; but when it is considered that the stealing, dismantling and disposing of the saleable parts of automobiles is a business of extensive proportions participated in by many persons and the place of disposition of automobile parts is quite generally through junk yards and automobile dismantling plants; and the township in question is in that part of the State devoted largely to the manufacture and sale of automobiles, it is not apparent the provisions of the resolution are inherently vicious. On the contrary, they seem to be fully warranted by the power expressly delegated to the local municipality by general legislation.
Considerable stress is placed upon Devereaux v. Township Board of Genesee Township, supra; but we think the resolution of the township board in question is not subject to the criticisms made of the statute involved in the Devereaux Case. On the contrary, its invalidity is not apparent. It is not shown where this resolution in any way violates the Constitution of the State or the Constitution of the United States. Its validity is sustained by the principle of People v. Harley, 230 Mich. 676.
The decree of the trial court is affirmed, but without costs, the matter involving a public question.
Nelson Sharpe, C. J., and North, Fead, Wiest, Butzel, Bushnell, and Edward M. Sharpe, JJ., concurred. | [
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SNOW, J.
Plaintiff was injured while crossing Seneca street just beyond the corporate limits of the city of Grand Rapids by reason of two automobiles driven by the defendants colliding at the corner of said street and Godfrey avenue. Both cars had been going north on Godfrey, the defendant Faber in the lead, and defendant Yarbrough following. As Faber drove into Seneca street where it runs into Godfrey he attempted to turn west, and at the same time Yarbrough attempted to pass 'him on the left, with the-result that the cars came together, and because of the impact plaintiff was struck by Yarbrough’s car. Plaintiff brings this action claiming both drivers are at fault, while each of the two defendants attempts by the evidence to justify his conduct, and lays the blame on the other. No claim is made that the plaintiff was negligent. Defendant Yarbrough had verdict in his favor, while plaintiff recovered against defendant Faber in the sum of $700, from which he appeals.
The questions involved have to do with instructions to the jury, improper remarks and statements of counsel for plaintiff, and the refusal of the court to grant a new trial because the verdict was against the weight of evidence. They will be discussed in the order mentioned.
The court instructed the jury:
“It occurs to me, and I so charge you, that the vital or crucial negligence, if any, involved in this case, relates not so much to the rate of speed at which the cars of the defendants were driven at the time of the accident, although the rate of speed may be incidentally involved, but rather as to whether signals were given by defendant Yarbrough as to his desire to pass the car driven by defendant Faber, and whether defendant Faber heard them or not, and whether he should or would have heard them if he had been exercising his faculties as an ordinarily careful, prudent, and vigilant person would have done under like circumstances. Also whether defendant Faber gave the signals that he claims to have given of his intention to turn to the left at the intersection of Seneca street and Godfrey avenue, and whether those signals were timely and given substantially as the law requires.”
Also:
“As I have indicated to you, the speed law, while I do not think it is of vital importance in this case, may be of more or less incidental importance.” * * *
Appellant complains of these instructions and argues that thereby was “eliminated from the jury the issue as to whether or not the proximate cause of the accident was the speed at which defendant Yarbrough’s car was driven,” which is asserted to be the claim of Faber. The record does not disclose that the speed of either of the defendants’ cars was in dispute or that Yarbrough was driving at an excessive rate. Whether or not proper signals of the intentions of the respective defendants were given, one to make a left turn, and the other to pass him, was the question in dispute between the two defendants in the attempt of each to put the responsibility of the injury upon the other. The jury was not instructed that the rate of speed of the two automobiles should not be considered at all, but immediately following the instruction complained of the court said further:
“I will state to you that the statute makes provision in regard to the rate of speed as follows:
“ ‘No person, shall operate a motor vehicle upon a public highway at a rate of speed greater than is reasonable and proper, having regard to the traffic and use of the highway, or so as to endanger the life or limb of any person or the safety of any property, and shall not in any event while upon any highway run at a higher rate of speed than 35 miles an hour.’ * * * [Oomp. Laws Supp. 1922, § 4817].-
“Now, that is the highest rate of speed at which it is lawful in the State of Michigan to operate a motor vehicle, but it is not in accordance with law to run it at that rate of speed providing life and limb would be endangered by running at that rate. The rate of speed must always be reasonable and proper having due regard to the existing conditions at the time and place, the lives and safety of the public being the test and the criterion.”
The question as to the speed of the cars of both defendants, in so far as the same was inade applicable, was properly submitted.
Appellant further contends that a new trial should be granted because information came to the jury during the trial that he was insured against personal injury. In the examination of a juror on his voir dire the following occurred:
“Q. Do you know Mr. Balgooyen, the attorney from Muskegon who represents the insurance company, as I understand, here?
“A. No.
“0. Do you know Mr. Sherk?
“A. No, sir.
“Mr. Sherk: Just a moment.
“0. Or Mr. Balgooyen, the attorney from Muskegon? ■
“A. No, sir.
“Mr. Smolenski: Is this insurance company of yours mutual ?
“Mr. Sherk: ■ No. Just a moment. I don’t think any reference to an insurance company is proper.
“The Court: I don’t think so.
“Mr. Smolenski: Well, if it is not a mutual company I will not refer to it. I want to know if there are stockholders, if it is a mutual company. I want to ask some questions about who might be stockholders?
“Mr. Sherk: Well, if it is of any importance, it is not a mutual insurance company, but I object to any reference to the insurance company as prejudicial.
“The Court: Well, ordinarily, it would be prejudicial. It has nothing to do with the case and the examination of jurors. If it is a mutual company that would not be a reason for challenge. That is all.
“Mr. Smolenski: It is not a mutual company, as I understand.
“The Court: Don’t make any reference to it.
“Mr. Smolenski: That was the only reference to it.
“The Court: The jury are cautioned that it must not in any way be considered in your verdict in this case nor enter into your deliberations in any way, and you have no right to have it in mind. This suit is between the parties named here in court and not between any others. You may proceed.”
And again while defendant Yarbrough was being examined by plaintiff’s attorney as to a conversation with defendant Faber, the following:
“Q. What else did he say to you there that day? Did he give you any data or name, his number or anything, any numbers?
“A. Yes, he gave me his address and his operator’s license number and all that.
“Q. What else did he give you?
“A. I asked him if he was insured and he said he was.
“Mr. Sherk: Just a moment, I ask that that be stricken out as incompetent, irrelevant and immaterial.
“The Court: That may be stricken out.
“Mr. Smolenski: That will be all.
“The Court: I don’t think any evidence of that kind should be carried out. I think counsel ought to be careful about that. It is very easy to get error into this case by any inquiries of that kind.
“Mr. Smolenski: But I did not expect that answer.
“The Court: That answer is not competent and the jury must remember that when testimony is stricken out they must not consider it at all at any time. It is just as if it never had been given. The object of striking out testimony and getting out anything that is improper is to avoid a reversal of the case in the Supreme Court by getting incompetent, immaterial and prejudicial matters. So I have stricken this out, and it must not be considered at all in your considering your verdict or in your deliberations.”
It cannot be said that plaintiff’s counsel deliberately brought this subject into the case for the purpose of prejudicing the jury against one of the defendants to the benefit of the other, and the trial judge took every precaution to prevent such a prejudice by striking out all reference to it and telling the jury it must not be considered.
There was no such “flagrant violation” here of the rule which excludes from the jury knowledge of the fact that a defendant carries a policy of insurance, as to warrant a setting aside of the judgment. Morris v. Montgomery, 229 Mich. 512.
Was the verdict against the weight of the evidence? Appellant contends it was. Only five witnesses gave testimony as to the happenings at the corner. The testimony of defendants Yarbrough and Faber, as to what signals or warnings each gave, was in direct conflict. Yarbrough’s testimony was supported in the main by two other occupants of his car, while the testimony of defendant Faber that he signaled for a left turn was supported by that of Mr. Sparks who was in the vicinity and saw both cars, although he did not see them when they came together. It cannot be said that the weight of the evidence was so overwhelmingly in favor of appellant that the verdict of the jury should be disturbed.
Judgment affirmed.
Bird, C. J., and Sharpe, Steere, Fellows, Wiest, Clark, and McDonald, JJ., concurred. | [
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Per Curiam.
In this quiet title action, we must determine whether plaintiff-husband and his nonparty, former wife who owned property by the entirety must both have had “hostile” intent for plaintiff to individually adversely possess property abutting the property held by the entirety. Following a bench trial, the trial court determined that plaintiff met all the elements required to sustain a cause of action for adverse possession, but concluded that the nonparty former wife’s lack of hostile intent during the required statutory period destroyed the plaintiffs claim of adverse possession and created a valid defense for defendants. Plaintiff appeals as of right, and we reverse. We hold that an adverse possessor who seeks to append property to property that he or she holds by the entirety with his or her nonparty spouse may adequately satisfy the requirements of adverse possession individually regardless of the intent of the nonparty spouse.
I. BASIC FACTS AND PROCEDURAL HISTORY
This lawsuit arises out of a dispute over a triangular-shaped parcel of property located along the boundary of plaintiffs and defendants’ properties and measuring approximately 0.46 acres. Plaintiff and his now ex-wife, Daryl Snow, had purchased a 10-acre parcel of land in 1976 and held the property as tenants by the entirety. Plaintiff and his wife began living on the property in 1980. Defendant Darlene Lamb purchased the property to the north of plaintiffs property in 1988; Lamb and defendant Roger Cole had initially rented the property from the previous owner and had resided on the property since 1984. In 1993, a warranty deed was issued to both Lamb and Cole. A creek and tree line creates a natural boundary between plaintiffs and defendants’ properties. The disputed property lies on plaintiffs side of the creek but was owned by defendants pursuant to the terms of their deed.
Starting shortly after their purchase of the 10-acre property, plaintiff began “bush-hogging” and mowing the disputed land. Plaintiff cleared and maintained his land, including the disputed parcel, all the way to the creek and the tree line. Plaintiff knew that he was on defendant’s property when maintaining the land all the way to the creek and tree line. Plaintiff nonetheless continued to use the disputed property almost every day or every other day in some way. Plaintiff had a garden on the disputed parcel for about six years, planted some trees there in 1977, had a doghouse on it for several years, burned trash there once or twice a week, and stored various personal property, including vehicles, on the disputed land. In addition, plaintiff created a baseball and soccer field for his children on the disputed area, and his wife used the area to play with the children and tend a strawberry garden.
A fire that occurred on the disputed property in spring 2004 precipitated the current litigation. Plaintiff accidentally set fire to some of the trees he had planted on the disputed property while he was burning leaves, and defendant Cole allegedly came onto the property complaining that plaintiff had burned his trees. Cole threatened to file a complaint, and plaintiff filed this lawsuit seeking to quiet title to the disputed parcel in himself on a theory of adverse possession.
After a lengthy pretrial process, the matter proceeded to a bench trial. Plaintiff testified that he conducted his activities on the property with the intent of claiming the land for his own although he knew he did not own the parcel. Plaintiff also stated that he never saw defendants on the disputed property, they never told him to stop using the disputed property, and they never removed any of his personal property from the area. Plaintiff also never asked for, or received, permission to use the property.
Plaintiffs friend, Richard Nash, corroborated plaintiffs trial testimony that plaintiff used the disputed property as his own. According to Nash, he helped plaintiff plant some large trees in the disputed area, cleared brush with a chain saw from the land, saw vehicles on the disputed area, and noticed that plaintiff maintained his property up to the creek. Plaintiffs wife, Snow, whom he divorced sometime in 2002, also confirmed plaintiffs actions on the disputed land. Snow testified that she quitclaimed her interest in the 10-acre property to plaintiff after the divorce, thereby destroying the tenancy by the entirety. Snow testified that plaintiff was on the disputed property weekly since 1980, until she moved out in 2003, and that they maintained the property all the way to the creek line to make it “look nice.” She stated that it would be open and obvious to a casual observer that she and plaintiff were occupying the property. Snow also testified that it was never the “spirit of [her] heart to ever take any thing that was not [hers]” and that she “never had intentions” to own the disputed property.
Lamb disputed that any vehicles had been parked on the property or that any other personal property had been placed there. Lamb asserted that she used the property on a regular basis and that it was never mowed until 1997. She testified that she and her children would walk through the disputed area on “many” occasions, using it for hunting, snowmobiling, and riding dirt bikes. She also testified that her children played in the riverbed in the summer.
After closing arguments, the trial court quieted title in defendants. The trial court reasoned that although plaintiff had met all the requirements of adverse possession, plaintiffs claim nonetheless failed because Snow did not intend to adversely possess the property. In the trial court’s view, because plaintiff and Snow had owned the 10-acre property as tenants by the entirety, Snow was also required to act with hostile intent in order for plaintiff to prevail on his claim of adverse possession. This appeal followed.
II. STANDARDS OF REVIEW
We review de novo actions that are equitable in nature, such as quiet title actions, but the trial court’s factual findings are reviewed for clear error. Sackett v Atyeo, 217 Mich App 676, 680; 552 NW2d 536 (1996). Conclusions of law are also reviewed de novo. Ambs v Kalamazoo Co Road Comm, 255 Mich App 637, 651; 662 NW2d 424 (2003).
III. QUIET TITLE ACTION
Plaintiff argues that the trial court erred by ruling that both husband and wife must have the same intent to adversely possess a parcel of property adjoined to property they hold by the entirety in order for one spouse individually to lay claim to the disputed property through adverse possession. We agree. Because our determination addresses married individuals’ rights and the purpose of the tenancy by the entirety, as well as the nature of an adverse possession claim, we find it necessary to first discuss these concepts as they have developed in Michigan.
A. MARRIAGE AND INDIVIDUAL SPOUSES’ RIGHTS
It has long been recognized that a married man has the right to hold and manage property held individually, obtained before or after marriage. See Burdeno v Amperse, 14 Mich 91, 92 (1866); Schmoltz v Schmoltz, 116 Mich 692; 75 NW 135 (1898); Trabbic v Trabbic, 142 Mich 387; 105 NW 876 (1905); Le Blanc v Sayers, 202 Mich 565; 168 NW 445 (1918). Married women did not always enjoy these same rights because, at common law, the power and independent authority to act was vested in the husband alone. See Snyder v People, 26 Mich 106, 109 (1872). In other words, once married, a woman ceased to have control or authority over her actions or her property because they became subject to the control of her husband. Burdeno, supra at 92; People v Wallace, 173 Mich App 420, 426; 434 NW2d 422 (1988). A wife could not manage or own her own property, could not enter into contracts, and could not sue in her own name. Burdeno, supra at 92. “In short, she lost entirely all the legal incidents attaching to a person acting in her own right [and the] husband alone remained sui juris, as fully as before marriage.” Id.
Eventually, however, a set of mandates came into being, termed the married women’s property acts, which “gave married women the power to protect, control and dispose of property in their own name, free from their husbands’ interference.” Wallace, supra at 428, citing Snyder, supra at 107, 110. Const 1963, art 10, § 1, abolished what was known in the former common law as “disabilities of coverture,” or a married woman’s incapacity to enter into a binding contract. That provision provides:
The disabilities of coverture as to property are abolished. The real and personal estate of every woman acquired before marriage and all real and personal property to which she may afterwards become entitled shall be and remain the estate and property of such woman, and shall not be liable for the debts, obligations or engagements of her husband, and may be dealt with and disposed of by her as if she were unmarried. Dower may be relinquished or conveyed as provided by law.
Similarly, MCL 557.21(1) provides:
If a woman acquires real or personal property before marriage or becomes entitled to or acquires, after marriage, real or personal property through gift, grant, inheritance, devise, or other manner, that property is and shall remain the property of the woman and be a part of the woman’s estate. She may contract with respect to the property, sell, transfer, mortgage, convey, devise, or bequeath the property in the same manner and with the same effect as if she were unmarried. The property shall not be liable for the debts, obligations, or engagements of any other person, including the woman’s husband, except as provided in this act.
See also Manufacturers Nat’l Bank v Pink, 128 Mich App 696, 699-700; 341 NW2d 181 (1983) (recognizing married women’s independent right to contract).
Consequently, married women’s rights became coterminous with married men’s rights and, today, each spouse has the power and authority to independently exercise his or her rights free of the other spouse’s interference. See MCL 557.21; North Ottawa Community Hosp v Kieft, 457 Mich 394, 406; 578 NW2d 267 (1998). And, although many legal structures remain intact for the purpose of protecting the marital estate, e.g., the tenancy by the entirety discussed below, nothing in the law today functions to prevent one spouse from acquiring property in an individual capacity without the consent of the other.
B. TENANCY BY THE ENTIRETY
With the rights of married spouses in mind, we now turn to the tenancy by the entirety. “A tenancy by the entirety is a type of concurrent ownership in real property, which is unique to married persons.” Tkachik v Mandeville, 282 Mich App 364, 370; 764 NW2d 318 (2009). This type of concurrent ownership, which also derived from English common law, is intended to protect the martial estate. Id. This Court discussed the nature of property held by the entirety in Rogers v Rogers, 136 Mich App 125, 134; 356 NW2d 288 (1984):
The classic basis for the tenancy by the entireties was the concept that “the husband and wife are but one person in the law”. In a true tenancy by the entireties, each spouse is considered to own the whole and, therefore, is entitled to the enjoyment of the entirety and to survivorship. When real property is so held as tenants by the entireties, neither spouse acting alone can alienate or encumber to a third person an interest in the fee of lands so held. Neither the husband nor the wife has an individual, separate interest in entireties property, and neither has an interest in such property which may be conveyed, encumbered or alienated without the consent of the other. [Citations omitted.]
Stated more succinctly, when a husband and wife choose to hold property by the entirety, neither spouse may individually convey, encumber, devise, or alienate that property without the consent of the other spouse. Rather, the property is protected from one spouse acting alone to accomplish these types of transactions.
C. ADVERSE POSSESSION
Whereas the tenancy by the entirety is a type of concurrent ownership, adverse possession is a type of claim. This doctrine was adopted in our legal system from English common law. Sprankling, The antiwilderness bias in American property law, 63 U Chi L R 519, 537-540 (1996). The underlying philosophy of a claim for adverse possession is to encourage land use, as it favors the productive use of land over its disuse. Id. The import of this doctrine, as this Court has recognized, “is against a party who has had rights that have not been asserted for an extended period of time to the detriment of another.” McGee v Eriksen, 51 Mich App 551, 559; 215 NW2d 571 (1974).
Accordingly, Michigan law has sanctioned a claim that permits the otherwise unlawful taking of property initially owned rightfully by another. MCL 600.5801. In order to establish a claim of adverse possession, a plaintiff must provide “clear and cogent proof that possession has been actual, visible, open, notorious, exclusive, continuous, and uninterrupted for the statutory period of fifteen years.” Kipka v Fountain, 198 Mich App 435, 439; 499 NW2d 363 (1993). The 15-year period begins when the rightful owner has been disseised of the land. MCL 600.5829. “Disseisin occurs when the true owner is deprived of possession or displaced by someone exercising the powers and privileges of ownership.” Kipka, supra at 439. In addition, a plaintiff must also show that the plaintiffs actions were “hostile” and “under claim of right,” meaning that the use is “inconsistent with the right of the owner, without permission asked or given, and which use would entitle the owner to a cause of action against the intruder.” Wengel v Wengel, 270 Mich App 86, 92-93; 714 NW2d 371 (2006) (quotation marks and citation omitted).
D. APPLICATION
Turning to the instant case, plaintiff argues that the trial court erred by quieting title in defendants because it found that Snow did not have the hostile intent necessary to adversely possess the disputed property, which, in the trial court’s view, was necessary because plaintiff and Snow owned the adjoining property by the entirety. We agree with plaintiff.
The trial court concluded that plaintiff had met all the requirements, except that his former wife had expressed no hostile intent or claim of title, and therefore plaintiffs claim failed. The trial court reasoned as follows:
The Court is satisfied that based upon the testimony here that anyone driving up the driveway of the Canjar residence ... would make the natural assumption that that parcel of property belongs to the Canjar’s [sic] living at 3203 Muir Road. They mowed it. They took care of it. They did all things necessary to exercise dominion, control and everything else over that particular piece of property. The Court is satisfied that the property was down a hill or slope. There was a tree line. They really didn’t see it. It was difficult for them to see even though they may have driven by on a regular basis because they lived right there. The Court is satisfied that... the Canjars exercised visible open, notorious, exclusive possession of that property.
The issue now becomes was there a claim of right. The Court’s position in this matter is that the property that this .46 acres is to be appended to is property that is owned by the entireties by Mr. and Mrs. Canjar at the time they bought the land,.. . and the case law is ample where under Michigan law both the husband and wife have a single cause of action for damages to entireties property. Neither the husband nor wife, acting alone, may convey or contract to convey to a stranger, property held by both of them as tenants by the entireties.
The reason that’s important is because one of the owners of the 10 acres ..., Miss Daryl Canjar, now known as Daryl Snow, clearly testified that she knew the Coles had superior title, that she only took care of it to make it look nice, to make it look neat, to have someplace for the children to play, even some of the Cole children played on it. She was clear in regard to that. So the owner of the property has to have — the claim has to he hostile in regard to both. And she acknowledged that it wasn’t hostile. She knew they had a claim of right.... So with that said, with her position and based upon the Rogers case, the St[e]rrett[ ] case and all the other things I’ve talked about, there is no 15 years ....
Again, in order to have the entire 15 years of adverse possession tacked, that’s one thing. Now, again, Mr. Canjar, I know your argument is that if the property was located somewhere else and Mr. Cole drove to a cottage — that’s not the issue. The issue is that piece of properly is abutting the property that was held by the entireties. The fact that Mrs. Canjar did not have the same state of mind as being notorious, hostile, claim of right, defeats your client’s 15 years in regard to this matter....
Again, I heard your argument about the husband’s claim and people mowing the grass. I hope you were being facetious, Mr. Canjar, because those aren’t the facts the Court is looking at here. So in regard to those positions the Court is satisfied that the 15 years have not been met because the owners of the entirety did not, together, express notorious, exclusive or hostile or claim of right to said .46 acres.
The trial court erred. The doctrine of adverse possession simply does not require an analysis of how other owners, who own other land in conjunction with a plaintiff and which property abuts the disputed parcel, treated the disputed land. Significantly, the elements of adverse possession are silent with respect to whether the adverse possessor owns other land, adjoining or not, and whether the adverse possessor holds such land jointly, by the entirety, or singly. In our view, it cannot be more plain that the entire focus of a claim for adverse possession is the adverse possessor’s actions on, and intent with respect to, the land he or she seeks to adversely possess during the statutory period, as well as the rightful owner’s actions and uses with respect to the disputed land. See Kipka, supra at 439; Wengel, supra at 92-93. Thus, whether the adverse possessor owns other land to which he seeks to append the disputed property is immaterial and, consequently, irrelevant to an adverse possession analysis. Further, nothing in the doctrine of adverse possession is inconsistent with permitting one spouse individually to adversely possess land abutting land that is owned by the entirety, although the other spouse may not have had the same hostile intent.
Equally significant is that nothing in the character of the tenancy by the entirety justifies the trial court’s conclusion of law. Nothing in the intent and purpose of this type of concurrent ownership permits us to conclude, as the trial court did, that both spouses must meet the requirements of adverse possession in order for one spouse to individually append an adjacent parcel of property to property that is held by the entirety. The nature and purpose of this type of concurrent ownership do not support this proposition. Rather, because the additional property is outside the boundaries of the entirety property, the principles applicable to entirety property requiring that spouses act jointly, see Rogers, supra at 134, simply do not apply and are irrelevant. As such, this type of concurrent ownership provides no restriction on the acquisition of additional property through adverse possession by one spouse, regardless of whether the disputed parcel is attached to the entirety property, or whether the nonparty spouse agrees with the other spouse’s activities in attempting to adversely possess property.
Accordingly, we hold that in order for one spouse to claim adverse possession of property that abuts property owned by the entirety, it is not necessary that both spouses have the same intent to adversely possess the parcel as long as the plaintiff can singly satisfy all the elements of adverse possession. A decision contrary to our holding would imply that married persons cannot acquire property as individuals, which is obviously contrary to established law that each spouse is free to acquire property independently and without the interference of the other spouse. See Const 1963, art 10, § 1; MCL 557.21; North Ottawa Community Hosp, supra at 406. Thus, plaintiff certainly did not need his spouse’s permission, consent, or even complicity to adversely possess the disputed parcel. Plaintiffs actions alone were sufficient. As the trial court found, plaintiff satisfied the hostility requirement, as well as all other elements of adverse possession. The judgment quieting title in defendants was entered in error.
Lastly, we note that the court’s statement that Michigan caselaw provides that “both husband and wife have a single cause of action for damages to entireties property” and that neither may act alone in conveying or contracting to convey entirety property is clearly inapplicable to the present matter. Plaintiffs claim did not involve a claim of damages, or conveyance, or encumbrance with respect to the 10-acre property.
In light of our conclusion, it is unnecessary for us to address plaintiffs remaining claims. However, to the extent that defendants were awarded $517.48 because they were the prevailing parties, we vacate that award because defendants are no longer the prevailing parties.
Reversed. Remanded for entry of an order quieting title to the disputed property in plaintiff. We do not retain jurisdiction.
We note that defendants did not cross-appeal the trial court’s other factual findings and, therefore, we do not address the validity of those findings on appeal.
See Rogers, supra; Estate of Sterrett v Watson, unpublished opinion per curiam of the Court of Appeals, issued January 15, 2004 (Docket No. 241996).
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Butzel,, J.
The question presented in this case is whether plaintiff Oarolin Manufacturing Corporation, a Michigan corporation, did business solely with George S. May Company, an Illinois copartnership, or whether it also did business with George S. May, Inc., an Illinois corporation, it being claimed by plaintiff that the use of the copartnership form of doing business was a subterfuge used to avoid payment of franchise fees in the State of Michigan. It is conceded that George S. May, Inc., was not licensed to do business in the State at the time the contract in question was entered into or executed. The further, question is presented whether, in the event that the business were done by George S. May, Inc., a corporation not licensed to do business in Michigan, plaintiff could recover moneys paid on an executed contract for which plaintiff had received full consideration. May a foreign corporation, not licensed to do business in this State, when sued in this State, defend- on the ground that it had furnished full consideration for moneys it received, in a suit brought for a return of the moneys on the ground that the contract was illegal because the corporation had failed to obtain a certificate to do business in Michigan as required by law? Such other questions as have any merit will be discussed in the opinion.
George S. May, Inc., defendant herein, is an Illinois corporation that formerly was licensed to do business in the State of Michigan. On January 31, 1934, it filed notice of withdrawal and never took out a new license. Both the corporation and its sue cessor, the George S. May Company, a copartnership, were engaged in industrial engineering and assisting manufacturers in their production problems and eliminating waste and loss in their manufacturing methods. The George S. May Company, the copartnership, and its corporate predecessor maintained offices in Chicago and four other large cities in the United States. According to an affidavit filed on behalf of plaintiff by a former engineer and supervisor of defendant, now in plaintiff’s employ, the George S. May Company had over 400 employees, the majority of whom were engineers and supervisors working in all of the States of the Union, and engaged in the installation and supervision of system work. The larger portion of the business was done in States other than Illinois. It made time studies to provide proper accounting methods. It attempted to show where proper savings might be made and losses avoided. It was a personal service business. George S. May Company maintained large offices in a building in Chicago owned by George S. May, Inc.
George S. May and family were the owners of over seven-eighths of the capital stock of George S. May, Inc. In 1934, the corporation entered into a written lease with George S. May, doing business as the George S. May Company. It leased all of the premises in Chicago with office equipment and fixtures, as well as those of the New York office, to George S. May at a rental of $2,200 per month. He agreed to purchase the corporation’s supplies and assume its contracts. He also agreed to pay the corporation the net profits from the business except a small percentage of the total billing which he was to retain as his salary. Were this agreement still in force, we would be presented with a far more serious question. However, on January 2,1942, and prior to any dealings with, the Carolin Manufacturing Corporation, plaintiff herein, George 8. May, Inc., entered into a written lease to rent all of its real and personal property to George S. May Company, a copartnership, for a flat rental of $50,000 per year, George 8. May, Inc., not to participate in or have anything to do with the profits or business. The corporation thus solely remained the owner of certain real estate and personal property which it leased to George S. May Company, a copartnership, for a sum certain.
Carolin Manufacturing Corporation was principally engaged in manufacturing nonferrous quality castings in Detroit, Michigan. It was having difficulties in its screw machine department, a comparatively new branch of its business, when in October, 1942, a representative of George 8. May Company approached it without any previous request. Mr. Carolin, the president of the plaintiff corporation, was shown clippings that indicated large savings thé company had made for others. He was impressed with the representations that the George S. May Company could make corrections in its business and install a system to improve manufacturing methods and bring about more efficiency and save costs, all to be done within a short period of time. Plaintiff entered into an agreement which provided that the George 8. May Company should make a survey at plaintiff’s expense and then furnish plaintiff with a production control plan for its shop. This was to consist of eight items and included careful engineering analysis of methods, motions, speeds, tooling, et cetera, setting up hourly performance standards, incentive plans to insure that standards would be met, orderly inspection of routine and bonus for quality control, proper production plan schedules, orderly functioning of these proce dures, and clear-out shop organization including the proper training of' such organization and bonus system, et cetera. The representative stated that he did not think the cost would exceed a maximum of 300 hours, to be paid for at $10 per hour plus traveling expenses for different men. Plaintiff admits receiving from the representative of George S. May Company a printed form entitled “Method of payment,” providing for a charge of $10 per hour for engineers and for a traveling supervisor for as many hours weekly as would be mutually agreed upon at the rate of $10 per hour plus $25 for each visit to cover traveling expenses and $5 a day for living expenses. It further provided that plaintiff could cancel the services of George S. May Company at any time by notifying the traveling supervisor; that an invoice would be presented each week covering complete charges for that week, and plaintiff thereupon should give a check for the amount due plaintiff. Plaintiff was also to receive a standard installation procedure sheet, periodical reports of the progress of George S. May Company showing its activities as to what had been accomplished and what it proposed to accomplish in the immediate future. Another important provision stated that the May Company would not guarantee any results of this work because it dealt with human beings and could not anticipate the degree of resistance or. cooperation it would receive. Plaintiff thus had a right to terminate at any time it was dissatisfied and avoid liability for further services. The May Company began its work under the agreement on October 26, 1942. Plaintiff terminated the services February 26, 1943.
Several months later plaintiff began suit against George S. May, Inc., an Illinois corporation, claiming that in accordance with the contract, it paid George S. May, Inc., $9,385.50; that George S. May, Inc., was a foreign corporation and not duly authorized to do business in the State of Michigan in accordance with Act No. 327, §93, Pub. Acts 1931; that by virtue of section 95 of the same act the contract was against public policy and void; and that it consequently became defendant’s duty to comply with plaintiff’s demand for the return of $9,385.50. Act No. 327, § 93, Pub. Acts 1931 (Comp. Laws Supp. 1940, §10135-93, Stat. Ann. §21.94), provides that it shall be unlawful for any foreign corporation to carry on its business in this State until it shall have procured from the secretary of State a certificate of authority for that purpose. Section 95 of the same act (Comp. Laws Supp. 1940, §10135-95, Stat. Ann. § 21.96) provides that no such corporation shall be capable of making a valid contract in this State until it has complied with the requirements of the law relative to the obtaining of a certificate. In the second count of the declaration plaintiff alleged that it had entered into a contract with defendant corporation, sometimes operating under the name and style of George S. May Company, which had agreed to establish production control in not over 300 hours of time for which plaintiff was to pay at the rates hereinbefore recited; that on January 22, 1943, plaintiff terminated the contract because of defendant’s failure Jo install a production plan; that plaintiff was, therefore, entitled to the return of $9,385.50 paid. Plaintiff’s declaration did not mention its acquiescence or failure to object when the time devoted by the George S. May Company far exceeded 300 hours, nor did it mention that results were not guaranteed, nor that plaintiff could have terminated the services at any time.
Defendant made a motion to dismiss on the ground that the George S. May, Inc., never had any dealings with plaintiff, that it was an improper party defendant; also that the court never acquired any jurisdiction over 'defendant, because the party served with process was not an officer or agent of the defendant corporation. After numerous affidavits were filed by defendant, the motion to dismiss was denied without prejudice and without costs. This court denied leave to appeal from the denial of the motion in the lower court but without prejudice to the right to raise all questions on the trial. It also set aside a default entered against defendant. Thereafter defendant in its answer in the trial court insisted that it had never had any business relations with plaintiff and further denied all of the allegations in plaintiff’s declaration. The case was tried without a jury. At the close of plaintiff’s proofs, defendant again moved to dismiss and for a directed verdict on the ground that no showing was made that plaintiff ever did business with defendant- corporation or that the latter was doing business in the State when the contract was made or thereafter; that there was no showing that process was duly served on an authorized representative of defendant corporation; and also on the ground1 that plaintiff was not entitled to recover under the proofs even if defendant corporation were doing business in the State of Michigan and the contract had been made with it. The court reserved decision under the ‘ ‘ Empson act ’ ’ until the case was completed. Plaintiff properly contends that the Empson act does not apply to a case without a jury. However, there is no question but that the court withheld its decision until the close of all of the proofs. Testimony was introduced by defendant to show that plaintiff was not entitled to recover. At the close of the case, plaintiff sought to compel defendant to elect to stand either on its answer denying it had done any business with plaintiff or on defendant’s alternative answer to the merits of the case. Plaintiff asked the court that if it should find plaintiff had done business with a foreign corporation not licensed to do business in Michigan, as claimed by plaintiff in the first count of its declaration, then the court should strike all of defendant’s testimony tending to show that there was no failure of actual consideration. Plaintiff first elected to rely upon its argument that the contract was null and void, that the defendant had a duty to return all the amounts paid, but then it insisted also upon showing, that there was a failure of consideration even if the court did not uphold' its first contention. After considerable argument in which plaintiff still persisted in also presenting its claim that there was a failure of consideration, if the contract were not absolutely void, the court stated that if plaintiff was going to argue the merits of its claim, he would permit defendant to argue whether or not there was such failure of consideration, if the contract were not void. The case was thus presented in both of its phases. There was no error in the court holding that, inasmuch as the attorney for plaintiff presented the case upon failure of consideration, assuming the contract were not void, so as to entitle plaintiff to return all its money, defendant would be permitted then to argue its defense on the merits of the case the same as if there were no claim that the contract was void.
The court rendered an opinion stating that from the testimony lie found that defendant corporation did not enter into any contractual relation with plaintiff; that at the time of the contract defendant was not doing business in Michigan; that the party-served with process was not an agent, officer or employee of defendant so as to make defendant amenable to process within the State of Michigan. He further held that even had plaintiff established that defendant was doing business illegally within the State and had been properly served with process and was the real contracting party with plaintiff, the latter nevertheless had failed to establish its case by a preponderance of evidence. He held that defendant entered into a contract with the George S. May Company, a copartnership, and that no representations were made by the George S. May Company that it was a corporation; that no attempt was made by plaintiff to learn with whom it was doing business when it entered into a contract with George S. May Company, and that the fact that there was a George S. May, Inc., an Illinois corporation, was not ascertained by plaintiff until just before the suit was begun; that plaintiff entered into a contract with the copartnership which had merely rented assets from the defendant corporation; that there was no showing that the copartnership was in any way controlled or dominated by the corporation, nor that the profits of the business inured to the benefit of the corporation.
The fact that some of the members of the copartnership were also stockholders in the corporation would not of itself show domination or control of the one by the other. The testimony shows that the corporation was out of active business and simply leased its property. There is no testimony whatsoever that all of the assets used by the co-partnership were leased from the corporation. Defendant corporation ceased to do business in Michigan in 1934 when it finally withdrew from the State. The copartnership and the corporation kept sepa rate books. The corporation had no employees on its payroll, and if defendant is correct, the party upon whom service was made therefore conld not have been an employee or agent of the corporation.
The judge further found that had he come to the conclusion that even if defendant corporation had entered into the contract plaintiff nevertheless failed to establish its case by a preponderance of the evidence. He called attention to the fact that the contract provided that plaintiff had the right to terminate at any time, and that plaintiff knew that the agreement provided that defendant did not guarantee any results because it had to deal with human beings and could not anticipate the degree of resistance or cooperation it would receive, that management authority would have to cooperate with the defendant if the benefit of the work was to be realized. He further called attention to the reports that periodically were made to plaintiff and were signed, examined and approved by Charles A. Carolin, who represented plaintiff. Each invoice rendered by defendant was signed by Mr. Carolin with the words “approved as to hours and service.” At one time when some objection was made to the charge for services of an employee whose work was not satisfactory to plaintiff, defendant made plaintiff an allowance. Plaintiff admitted that shortly after the contract was entered into the George S. May Company removed several of its employees from plaintiff’s factory because plaintiff objected to their services; also, that with the consent of the George S. May Company, when the contract was still being performed, one of its employees was released to plaintiff. Evidently the same employee is still working for plaintiff as he appeared as a witness in its behalf at the trial.
It may also be noted that’the larger part of the bill was incurred for the services of one employee, whom George S. May Company placed in plaintiff’s factory. He was there for several months. Plaintiff claims his services became valueless because the information in the notebook he made was not properly imparted to plaintiff’s employees. Plaintiff concedes that some attempt was made to give some of the information to one of plaintiff’s employees who was related to plaintiff’s president but who was not hired on that account. Whether due to his fault or not, it was claimed that this employee was not able to make proper use of the information. There may be a question whether he was the proper man to receive or obtain this information. Again, the human element enters into the ease as was stated in the contract. Assuming there is merit to plaintiff’s claim, it could have insisted that defendant give information in a form in which it could1 be properly used and in an understandable manner to one capable of using it. The contract, however, was terminated by plaintiff before this was done.
The record also bears out the judge’s conclusions that defendant was not served nor was a proper party defendant. It does not show who the partners were in the George S. May Company, although there is a strong inference that it consisted of George S. May and members of his family. Plaintiff does not base any claim of illegality on the ground that no certificate was filed by George S. May Company, therefore we do not discuss whether it was necessary to file a certificate or not. It does claim that the failure of George S. May Company to file any certificate was evidence of the fraudulent, scheme. The record shows that the George S. May Company and its corporate predecessor were in the business of furnishing personal services. There is no claim that the George S. May Company had any assets in Michigan whatsoever. Plaintiff claims that it is an inescapable conclusion that the cor poration adopted the subterfuge of operating under the name of George S. May Company to avoid payment of the privilege fees in the various States in which it was doing business. As there is no showing or claim that there were assets in this State, the privilege fees would have been comparatively small. We find nothing illegal in transferring a personal service business from a corporation to a partnership, a new and distinct entity. Plaintiff certainly was not defrauded thereby. It is very possible that the organizers of the copartnership in the exercise of prudent business judgment did not incorporate so as to avoid the making out of numerous reports and the incidental details and legal expense of taking out licenses in many, if not all, of the 48 States. There was no legal obligation to do so. There is not an iota of testimony showing that the partnership did1 anything except what it had a legal right to do. Neither the plaintiff nor the State was deceived or defrauded. George S. May as a member of the partnership became legally responsible for all liabilities, whereas as a stockholder in the corporation his liability would have been limited. As the principal stockholder of the corporation, if the stock was of value, his personal net worth and financial responsibility would be enlarged. The partnership was engaged in a legitimate business not forbidden by law. We have had cases where the reverse situation presented itself and where we did not fasten liability upon the one with whom the contract was made. In Finley v. Union Joint Stock Land Bank, 281 Mich. 214, 220, we said:
“The investment company had an independent corporate existence and charter; it filed its annual reports; kept its own minutes of its meetings and from time to time it held meetings of its stockholders and directors. It was organized as a profit-sharing corporation; the profits, if any, were to go to its individual stockholders. The relationship* existing between this corporation and the' land bank was such that when the investment company made a loan on real estate or purchased realty subject to the first mortgage held by the land bank it used its own judgment as to what loans it would make, ’ ’
and also quoted at length'from the syllabus of North v. Higbee Co., 131 Ohio St. 507. (3 N. E. [2d] 391):
“The separate corporate entities of a parent and ■subsidiary corporation will not be disregarded and the parent corporation will not be held liable for the acts and obligations of its subsidiary corporation, notwithstanding the facts that the latter was controlled by the parent through its stock ownership, and that the officers and directors of the parent corporation were likewise officers and directors of the subsidiary, in the .absence of proof that the subsidiary was formed for the purpose'of perpetrating a fraud and that domination by the parent corporation over its subsidiary was exercised in such manner as to defraud complainant.”
In Gledhill v. Fisher & Co., 272 Mich. 353, 363 (102 A. L. R. 1042), we said:
“To permit a creditor who contracted with his eyes open and charged with actual constructive notice of the limitations upon the corporation’s liability to go behind the corporate organization and reach the property of individual stockholders is to overturn the entire historic and legal conception of a private corporation, and its effect to discourage the joint venture of combined capital in industrial enterprises and to discourage ventures in business and commercial enterprises.”
However, even if there were any merit to the claim that plaintiff’s contract was with the corporation, we believe the judge was correct in holding plaintiff did not sustain the burden of showing liability on the part of defendant.
, Plaintiff contends that under the laws of this State the contract was null and void from its inception and even though it had received full consideration for its money, it still had a right to recover all these moneys paid on a contract illegally entered into by a foreign corporation. This may be true in some States. Our attention has been called to few cases on the subject. Plaintiff stresses the case of Automotive Material Co. v. American Standard Metal Products Corp., 232 Ill. App. 532, which contains some statements supporting plaintiff’s contention. The facts were entirely different. The claim was for royalties under a patent and the contract was largely executory. Inasmuch as the case was reversed on other grounds by the supreme court of Illinois in 327 Ill. 367 (158 N. E. 698), the case is of very little assistance. Plaintiff’s claim, in the final analysis, is somewhat analogous to a rescission of a contract because it was illegal not in the sense of malum in se but malum prohibitum. Had this been an executory contract, there would be merit in plaintiff’s contention, but here we have an executed contract where plaintiff cannot return consideration consisting entirely of personal services. We do not believe that plaintiff can keep all of the benefits of a contract and at the same time recover what it had paid for them. Had defendant furnished plaintiff with tangible property of unquestioned value over which there was no dispute, we do not believe that plaintiff could retain the property and bring suit for all moneys paid for it and preclude defendant from defending the suit. This is not a case where a foreign corporation, without qualifying in the State, brings an original action in assumpsit in the courts of this State, although we have held that such a plaintiff may recover its property in a replevin proceeding or bring trover proceedings. Lu-Mi-Nus Signs Co. v. Regent Theatre Co., 250 Mich. 535; Mojonnier Bros. Co. v. Detroit Milling Co., 233 Mich. 312; Mallet & Davis Piano Co. v. Droste, 213 Mich. 381; Rex Beach Pictures Co. v. Marry I. Garson Productions, 209 Mich. 692. Nor is it a case where a foreign corporation similarly situated claims a setoff in excess of the amount demanded by plaintiff.
Plaintiff further claims that inasmuch as defendant did not appeal from the denial of its motion to quash sérvice of process, there is no jurisdictional question before this court. The trial court held in its final opinion that the party served with process was not an agent, officer or employee of de-' fendant so as to make defendant amenable to process within the State of Michigan. Plaintiff further contends that as defendant did not file a cross-appeal from the order denying its motion "to dismiss for the reason, as it claimed, that it did not enter into a contract with plaintiff, and as judgment was entered in favor of defendant on the merits, therefore, there was no adjudication that defendant did not execute the contract. The opinion squarely holds that defendant corporation did not make the contract. The judgment of no cause of action following the opinion was entered in favor of defend■ant against plaintiff. The judgment is all embracing and when taken in connection with the opinion' it did not necessitate a cross appeal by defendant. The technical objections made by plaintiff do not affect the result. We further find that the judgment is not contrary to the preponderance of evidence.
The statute upon which possibly plaintiff relies is 3 Comp. Laws 1929, §14027 (Stat. Ann. §27.671), which, while it forbids such foreign corporation from maintaining any action founded upon an act forbidden by statute in this State, it does not state that it is precluded from defending a claim for liability in a suit brought against it in this State. It is not necessary for us to construe this statute further than to say that it does not prevent a defendant from defending a claim such as presented in this case. In the case of Bishop v. Hannon Real Estate Exchange, 267 Mich. 575, 577-579, involving the right to return moneys paid a foreign corporation which had failed to qualify as a real estate salesman in Wisconsin, we said:
“Plaintiffs claim that the contracts were absolutely void under the Wisconsin statute, that there was, therefore, nothing to rescind, and accordingly no tender was necessary. We do not believe there is any question but that the wording of the Wisconsin statute heretofore quoted makes the contracts merely voidable, and not void. While the statute provides tliat such contracts shall be wholly void as to the offending party, it nevertheless states that they shall be enforceable against such party. There has been considerable confusion in the use of the words ‘void’and ‘voidable,’ and the courts have not hesitated to construe ‘void’ as meaning ‘voidable’ where it is apparent that the latter term expresses the result intended. We shall limit our discussion to a few cases in Wisconsin and Michigan, the courts of both States having uniformly construed ‘void’ as meaning ‘voidable’ under conditions similar to those in the instant case. * * *
“The present suits were in assumpsit for the return of moneys paid under a ‘voidable’ contract. They could, therefore, not be brought until a proper rescission liad taken place, by plaintiffs’ returning or offering to return to defendant that which they had received. ’ ’
Judgment affirmed, with 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.
3 Comp. Laws 1929, §§ 14531-14534, as amended by Act No. 44, Pub. Acts 1939 (Comp. Laws Supp. 1940, g 14531, Stat. Ann. and Stat. Ann. 1944 Cum. Supp. g § 27.1461-27.1464).—Reporter.
Wis. Stat. 1923, §§ 136.01, 226.02.—Reporter. | [
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Potter, J.
Plaintiff sued defendant Charron and the surety on his official bond, alleging defendant Charron was the sheriff of Muskegon county and Michigan Surety Company the surety on his official bond; that plaintiff was falsely imprisoned by the sheriff and is. entitled to maintain an action against the former sheriff and the surety on his bond, for the damages arising from such false imprisonment. From a judgment for defendant, by direction of the' court, plaintiff appeals. Plaintiff was discharged by the sheriff April 11, 1931. Suit was commenced April 12, 1933, two years and one day after plaintiff’s discharge. The court directed a verdict upon the ground plaintiff’s cause of action was barred by the statute of limitations.
Section 13976, 3 Comp. Laws 1929, provides:
“All actions in any of the courts of this State shall be commenced within six years next after the causes of action shall accrue, and not afterward, except as hereinafter specified: Provided, however,
“1. That # * * actions founded upon bonds of public officers * * * may be brought at any time within ten years from # * * the time when the cause of action accrued on such bond. * * *
“3. Actions against sheriffs for the misconduct or neglect of themselves, or their deputies * * * for false imprisonment * * * shall be brought within two years from the time the cause for action accrues, and not afterwards.”
This suit is brought upon the sheriff’s bond, given in pursuance of 1 Comp. Laws 1929, § 1324, conditioned: 1. If the said Adolph Charron shall well and satisfactorily in all things conduct the office of sheriff of the said county of Muskegon during his continuance in office; and 2. Shall pay over all moneys that may come into his hands as such sheriff; — then the above obligation to be void, otherwise to remain in full force.
Plaintiff claims that having brought suit against the surety upon the bond, the form of action, not the cause of action, governs the running of the statute of limitations (3 Comp. Laws 1929, § 13976); that the 10-year limitation, instead of the two-year limitation, applies. He relies upon Christy v. Farlin, 49 Mich. 319; Stewart v. Sprague, 71 Mich. 50; Avery v. Miller, 81 Mich. 85; Stringer v. Stevens’ Estate, 146 Mich. 181 (8 L. R. A. [N. S.] 393, 117 Am. St. Rep. 620, 10 Ann. Cas. 337).
In Christy v. Farlin, supra, plaintiff sued in assumpsit, — not in debt or for breach of covenant, — to recover damages arising from a breach of a covenant in a deed. The court held the statute of limitations applicable to assumpsit, rather than debt or for breach of covenant applied.
In Stewart v. Sprague, supra, plaintiff sued in debt,' — instead of assumpsit, — upon a lease under seal. Verdict was directed for defendant on the ground the action was barred by the six-year statute of limitations applicable to assumpsit, but this judgment was reversed, the court holding the action being on a contract under seal, might be brought within 10 years.
In Avery v. Miller, supra, an action of debt was brought on an administrator’s bond, — instead of assumpsit, — and it was held the 10-year statute applied.
In Stringer v. Stevens’ Estate, supra, a claim was presented against an estate to recover for an annuity made a lien upon land, instead of to enforce the lien against the land. The court held the case analogous to assumpsit on a note secured by a real estate mortgage.
In all these cases it was held it was the form of action and not the cause of action which governed the running of the statute of limitations.
Actions of covenant and debt were long since abolished and assumpsit substituted therefor. 3 Comp. Laws 1929, § 14007. The statutes of limitation in force when these cases were decided have been superseded, so far as applicable here, by 3 Comp. Laws 1929, § 13976. Act No. 314, Pub. Acts 1915, provides all personal actions shall be commenced within six years next after the cause of action shall accrue, except as specified in 3 Comp. Laws 1929, § 13976. The exceptions are consecutively numbered, and
1. Actions founded upon bonds of public officers may be brought within 10 years from the time when the cause of action accrued upon such bonds.
3. Actions against sheriffs for the misconduct of themselves or their deputies or for false imprisonment shall be brought within two years from the time the cause of action accrues and not afterwards.
We are governed by the statute in force, which fixes the running of the statute of limitations from the time the cause of action accrues. The form of action is immaterial. The question is when plaintiff’s cause of action accrued. It accrued April 11, 1931; against the sheriff of the county of Muskegon; by reason of the sheriff’s misconduct in office, — the alleged false imprisonment of plaintiff. In addition to the above cases, plaintiff relies upon People, ex rel. Doran, v. Butler, 74 Mich. 643, and First National Bank of Paw Paw v. Moon, 243 Mich. 124.
In People, ex rel. Doran, v. Butler, supra, action was brought upon the bond of a notary public to recover damages by reason of his having made a false notarial certificate. It was held the action was maintainable against the surety upon his notarial bond without joining the principal. . The question determined was whether the false notarial certificate was or was not the proximate cause of plaintiff’s injury. The statute of limitations was not involved. Plaintiff argues from that case that this, being an action on the sheriff’s official bond, may be commenced at any time within 10 years from the time the cause of action accrued, and in this suit it is not necessary to join the sheriff at all, and hence the 10-year statute of limitations governs. In People, ex rel. Doran, v. Butler, supra, no action for damages was instituted against the principal. The suit was brought against the surety upon the bond to recover damages for the principal’s false certificate. The question was disposed of solely upon the proposition that the notary’s false certificate was the proximate cause of plaintiff’s injury.
In First National Bank v. Moon, supra, suit was brought against defendant drain commissioner and the surety upon his bond, to recover the value of drain orders alleged to have been fraudulently issued by the drain commissioner. The orders involved matured March 15, 1921. It was held the case was governed by the 10-year statute of limitations.
None of the cases relied upon by plaintiff govern this. Clearly, there could be no recovery against the surety on the sheriff’s bond unless the sheriff was liable. The sheriff had a complete defense to liability, — the statute of limitations. Had suit been timely brought against the principal, — the sheriff, ■ — -and his liability established, it is probable suit against the surety on his bond could have been brought within the 10-year period. Joining the surety on the bond could not have the effect of tolling the statute of limitations against the principal. It could not recreate legal liability which had been once discharged by the statute of limitations. Where a surety is joined as defendant with the principal on an official bond, ordinarily any defense available to the principal is available to the surety. These principles, though -elementary, are discussed and the cases cited in 50 C. J. p. 194 where it is said:
“While a surety may ordinarily avail himself of any defense which His principal may have, except those purely personal to the principal, if the principal has waived or precluded himself from making a defense, such defense is not available to the sure ty. Failure of a principal to offer a defense in an action against him to which the surety was not made a party will not prevent the surety, in. a subsequent action against principal and himself, from setting up any defense his principal could have made. Generally, a surety cannot set up the defense that the contract is invalid if the principal could not.”
In Biddle v. Wendell, 37 Mich. 452, where suit was brought against an administrator and the sureties upon his bond, it was said:
“The bond can have no separate and independent force. It belongs to the administration proceedings. Apart from them it cannot supply a cause of action, and if the liability which is made the ground of action upon it was itself barred then the bar must apply to this action on the bond to enforce that liability. ’ ’
“A bond or undertaking of a public officer creates no obligation in itself, but is in the nature of a collateral contract, simply furnishing a security against the neglect of duty or the dishonesty of the officer.” Oregon v. Davis, 42 Ore. 34 (71 Pac. 68).
“The bond does not give the cause of action; the wrongs or delicts do, and the bond simply furnishes security to indemnify the persons who suffered by reason of such wrongs or delicts.” Ryus v. Gruble, 31 Kan. 767 (3 Pac. 518).
In County of Lenawee v. Nutten, 234 Mich. 391, both the majority and the minority opinions hold the two-year statute of limitations governs in actions for misconduct or neglect of a sheriff or his deputy. The same rule applies to actions for alleged false imprisonment.
Judgment affirmed, with costs.
Nelson Sharpe, C. J., and North, Fead, Wiest, Btjtzel, Bushnell, and Edward M. Sharpe, JJ., concurred. | [
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Potter, J.
This is a test case to determine the constitutionality of Act No. 94, Pub. Acts of 1933. In the consideration of that question this court has nothing to do with the wisdom or policy of the law or the motives which actuated the legislature in its enactment. The sole question for our consideration is whether the statute is or is not constitutional. A statute must be violative of the Constitution, the fundamental law, before it may be declared unconstitutional. Statutes are enacted by the legislature, presumably after consideration, and all presumptions are in favor of the constitutionality of the deliberate acts of a co-ordinate department of government. It is only when the rule established and declared in the Constitution by the people conflicts with the rule of a statute enacted by the people’s public servants, the legislature, that the latter must give way.
A different rule of construction applies to the Constitution of the United States than to the Constitution of a State. The Federal government is one of delegated powers, and all powers not delegated are reserved to the States or to the people. When the validity of an act of congress is challenged as unconstitutional, it is necessary to determine whether the power to enact it has been expressly or impliedly delegated to congress. The legislative power, under the Constitution of the State, is as broad, comprehensive, absolute and unlimited as that of the parliament of England, subject only to the Constitution of the United States and the restraints and limitations imposed by the people upon such power by the Constitution of the State itself.
“The purpose and object of a State Constitution are not to make specific grants of legislative power, but to limit that power when it would otherwise be general or unlimited.” Sears v. Cottrell, 5 Mich. 251, 256.
(1) The validity of Act No. 94, Pub. Acts 1933, is challenged upon the grounds, its title is defective; the body of the act covers more than one subject; it violates article 10, § 14 of the Constitution in that it permits the municipal and gwasi-municipal corporations mentioned therein to engage in works of internal improvement; provides for the creation of public utilities other than those designated by the Constitution; provides for the creation of public indebtedness, not authorized by the people; in effect, confers a franchise without a vote of the people, and amends various statutes by implication, without reference thereto.
(2) It is contended the act violates article 5, § 21 of the Constitution, which provides:
“No law shall embrace more than one object which shall be expressed in its title. ’ ’
(a) “A title is but á descriptive caption, directing attention to the subject-matter which follows.” Loomis v. Rogers, 197 Mich. 265.
(b) “If the act centers to one main general object or purpose which the title comprehensively declares, though in general terms, and if provisions in the body of the act not directly mentioned in the title are germane, auxiliary, or incidental to that general purpose, the constitutional requirement is met. ’ ’ Loomis v. Rogers, supra.
The general object of the act in question is to authorize the municipal and ^{así-municipal corporations named therein to make public improve ments and pay therefor by bonds payable from the income to be derived from their operation. All the rest of the statute is germane to this main object.
(c) “An act complete in itself is not within the mischief designed to be remedied by this provision, and cannot be held to be prohibited by it without violating its plain intent.” People v. Mahaney, 13 Mich. 481.
The act in question is complete in'itself, and not unconstitutional, though it may amend other statutes by implication.
(3) Counties, townships and school districts, so far as the questions here involved are concerned, have such powers as may be conferred upon them by law. Article 8, §§ 1, 16 and article 11, § 9 of the Constitution in effect so provide. The constitutional powers of port districts are governed by article 8, § 30 and of metropolitan districts by article 8, § 31. With these we are not concerned. Ann Arbor is a city.
“Any city or village may acquire, own, establish and maintain, either within or without its corporate limits, parks, boulevards, cemeteries, hospitals, alms-houses and all works which involve the public health or safety. ’ ’ Article 8, § 22.
There was much agitation in the constitutional convention for municipal ownership, and article 8, § 23 was embodied in the Constitution, which provides :
“Subject to the provisions of this Constitution, any city or village may acquire, own and operate, either within or without its corporate limits, public utilities for supplying water, light, heat, power and transportation to the municipality and- the inhabitants thereof” etc.
It is contended a sewage disposal plant is a public utility and not included within the provisions of article 8, § 23, and therefore the city has no power or authority to construct it.
In the constitutional convention when article 8, § 22 was under consideration, Mr. Barnett thought the language “public health and safety” too general and indefinite. Mr. Milnes stated that in the committee it was insisted anything which involved the public health or the safety of a city should be included. Mr. Hemans said: “There cannot be any question but that the institutions under public health and safety are of the same character as those already enumerated.” And Mr. Fairlie declared: “The matters dealt with in the section * * * are all matters involving the public health and safety. They do not involve the public utilities.” It was pointed out in the convention that what were strictly public utilities were covered by section 23 and subsequent sections of article 8 of the Constitution. It will be conceded that a sewage disposal plant is a work which involves the public health and safety and a city has express constitutional authority to establish and maintain such plant.
(4) It is urged that Act No. 94, Pub. Acts 1933, violates article 10, § 14 of the Constitution which provides:
“The State shall not be a party to, nor be interested in any work of internal improvement, nor engage in carrying on any such work, except # *
The history of Michigan’s experience with internal improvements has been recited by this court. Attorney General v. Pingree, 120 Mich. 550 (46 L. R. A. 407). In our early national history the Erie Canal was constructed by the State of New York, making available cheap transportation west to Lake Erie and furnishing an outlet for the products of the north central States bordering on the Great Lakes, rich in agriculture, lumbering, and mineral resources. All these were made tributary to the market of New York and probably more than anything else stimulated the growth, wealth and prosperity of that city which became the commercial and financial metropolis of the new world. Michigan sought to emulate New York’s example and the Constitution of 1835 provided the State should encourage internal improvements and provide for the application of funds appropriated for that purpose. Constitution of 1835, art. 12, § 3. By act approved July 25, 1836 (Act No. 35, p. 57, 1st and Ex. Sess. 1835, 1836), the State asked, congress for the appropriation by it of 500,000 acres of land for internal improvements in lieu of the propositions concerning land made by congress to the State. After the admission of Michigan into the Union, the governor urged legislative action looking toward internal improvements, and the legislature passed Act No. 67, Laws of 1837, and Act No. 97, Laws of 1837. The State was authorized to borrow $5,000,000 and to issue its bonds therefor. The system of internal improvements in this State was not successful, possibly because available jobs were distributed as political patronage,.and finally, under Governor Felch, they were sold out to private enterprise. So strong was public sentiment in condemnation of the State engaging in internal improvements that the Constitution of 1850 prohibited the State from being a party to or interested in any work of internal improvement. Article 14, § 9 of 1850. This was continued in the Constitution of 1908 by article 10, § 14 of the Constitution above quoted. Many cases con sidering what is and what is not an internal improvement, are collected in 31 C. J. pp. 262-304. This court sought to establish a line of demarcation between internal improvements and local public improvements in Attorney General, ex rel. Brotherton, v. Detroit Common Council, 148 Mich. 71, but the distinction was not made much clearer by judicial exposition. It will be admitted, if the State cannot engage in the construction and operation of internal improvements, municipalities and q«asi-municipal corporations may not do so. The latter are but instrumentalities of the State for carrying on the scheme of local government, and the State cannot lawfully delegate power to a municipal or quasi-municipal corporation to do what it has no power or authority to do itself. Attorney General, ex rel. Brotherton, v. Detroit Common Council, supra, and cases cited. Whether a sewage disposal plant is or is not an internal improvement does not affect the validity of the statute in question, for- the reason that the Constitution, by article 8, § 22 clearly authorizes the construction of a sewage disposal plant, whether it is an internal improvement or a public utility or not.
(5) It is claimed that Act No. 94, Pub. Acts 1933, is unconstitutional because it violates the debt restrictions imposed by the home rule act (Act No. 279, Pub. Acts 1909, as amended [1 Comp. Laws 1929, § 2228 et seq.]), passed in pursuance of article 8, § § 20, 21 of the Constitution which provides that general laws providing for the incorporation of cities and villages shall limit their rate of taxation for municipal purposes and restrict their powers of borrowing money and contracting debts. We are not informed as to the indebtedness of the city of Aim Arbor. The term “indebtedness” may be said to include obligations of every character whereby a municipality agrees, or is bound, to pay a sum of money to another. Usually one of the incidents of municipal indebtedness is that there is a legal right upon its maturity to coerce payment.
Act No. 94, Pub. Acts 1933, so far as here applicable, provides that cities may borrow money and issue negotiable bonds which may be sold in such manner and upon such terms as the governing body of the city shall deem for the best interest of the borrower, but “in no event shall any of the bonds be sold on a basis to yield more than six per cent, per annum from the date of sale to the date of average maturity of the bonds sold. ’ ’ The principal and interest of the bonds to be payable solely from the revenue derived from the operation of the plant. It is expressly provided that no bond or coupon issued pursuant to this act shall constitute an indebtedness of such borrower within the meaning of any State constitutional provision or statutory limitation. It is further provided:
“It shall be plainly stated on the face of each such' bond and coupon that the same is a self-liquidating revenue bond and has been issued under the provisions of this act, and that it does not constitute an indebtedness of such borrower within any State constitutional provision or statutory limitation and that such bond is not a general obligation of the borrower. ’ ’
The bonds issued in pursuance of this act are to constitute a first lien upon the revenue of the plant, and the resolution passed by the city authorizing their issuance should so declare. The statute provides that in case there is a default in the payment of the interest and principal of such bonds, the holders of bonds or coupons representing in the ag gregate not less than 20 per cent, of the entire issue outstanding, may institute proceedings to compel the performance of all duties by the officials of the borrower, including the fixing of sufficient rates, the collection and segregation of revenues and the proper application thereof; but it is expressly provided that said statutory lien upon said revenue shall not be construed to give any holder or owner of any bond or coupon authority to compel the sale of such system or project or any part thereof.
It is expressly provided that the bonds authorized by and issued under the act shall not be subject to the limitations and provisions provided by the laws of Michigan for the municipal and gM<m-munieipal subdivisions therein mentioned. Subsequent provisions of the statute provide for the deposit of the money derived from the sale of such bonds by the city upon specified security being given and for its expenditure. The act provides that no free service shall be furnished by such system to any person, firm or corporation, or to the borrower itself; for the fixing of rates of service and the revision thereof ; for the collection of revenue to be derived from the operation of the plant and its application. It is specifically provided by section 29: “It shall not be necessary for any borrower operating under the provisions of this act to obtain any franchise or other permit from any State bureau, board, commission or other instrumentality thereof;” and that it shall not be necessary to submit the question of the issuance of these self-liquidating revenue bonds to the electors of the municipal or g«asi-municipal corporations issuing the same. The statute is not unconstitutional because it authorizes the issuance of bonds in excess of the limit of bonded indebtedness fixed by the governing statute of the city.
“In the case of street, sewers, and other local improvements, which are payable from the proceeds of special assessments upon the property benefited thereby, a contract which provides that the contractor shall be paid from snch assessments, that he shall have no right of recourse against the municipality or its property, or its general power of taxation, and that the only duty of the municipality shall be to levy, collect, and pay over the special assessments, does not create any indebtedness on the part of the municipality within the meaning of the constitutional limitation, although the city is a party to the contract; although the money is payable through its general treasury; and although it issues certificates, warrants, or bonds payable out of such special fund for the payment of the cost of the improvement. Under such a contract no judgment in personam against the city for non-payment of the cost is justified, no charge can be enforced against its general assets, nor can a resort be had to general taxation for the purpose of satisfying the claim. When the rights of the contractor are so limited, there is no debt within the debt-limit provision of the Constitution.” Dillon, Municipal Corporations (5th Ed.), § 198.
Substantially the same reasoning is applicable to the self-liquidating revenue bonds in question.
In Winston v. City of Spokane, 12 Wash. 524 (41 Pac. 888), a similar question was before the court. It is said:
“It will be seen that the sole question presented for our consideration is as to whether or not the ordinance in question, the contract to be executed in pursuance thereof, or the obligations provided for in said contract, will create an indebtedness of the city within the meaning of the provisions of the Constitution (article 8, § 6) in relation thereto. Said ordinance and contract, when construed together, provide that the obligations to be issued- in pursuance thereof shall be payable only out of the special fund to be created out of the receipts of the waterworks as above .specified, and that the city shall not be in any manner liable to pay the same except out of moneys in said special fund.
“For the purposes of this case, it must be conceded that said waterworks will, in addition to supplying the money for the creation of such fund as provided for in said ordinance, pay all the expenses incident to their operation, and for that reason the creation of such special fund can occasion no liability upon the part of the city to make any payment out of its general funds. This being so, we are of the opinion that neither the ordinance, the contract, nor the obligations to be issued by the city in pursuance thereof, do or will constitute a debt of the city within the constitutional definition. The only obligation assumed on the part of the city is to pay out of the special fund, and it is in no manner otherwise liable to the beneficiaries under the contract. The general credit of the city is in no manner pledged except for the performance of its duty in the'creation of such special fund. The transaction therefore is no more the incurring of an indebtedness on the part of the city than is the issue of warrants payable out of a special fund created by an assessment upon property to be benefited by a local improvement.5 ’
In Kenyon v. City of Spokane, 17 Wash. 57 (48 Pac. 783), it is said:
“The ordinance under which the prior warrants were issued was before this court for consideration in Winston v. Spokane, 12 Wash. 524 (41 Pac. 888), where the court held that the issuance of such warrants, payable only from a special fund created out of a certain percentage of the revenue derived from the waterworks, was not an incurring of a munici pal indebtedness within the meaning of the constitutional provisions on that subject.”
While in Faulkner v. City of Seattle, 19 Wash. 320 (53 Pac. 365), it was conceded:
“That bonds issued only against a fund to be created from the revenues of the system would not create a debt against the city.”
The principles enunciated by these cases were reviewed and adopted in Brockenbrough v. Board of Water Com’rs of Charlotte, 134 N. C. 1 (46 S. E. 28).
“It has been held that a contract under statutory authority with a person advancing money to complete a system of waterworks by which a special fund is created out of a certain percentage of the receipts of the waterworks, which fund is set apart for the liquidation of the moneys advanced without any obligation being assumed by the city except to make payment out of the special fund as it accrues, does not create indebtedness within the meaning of the constitutional provisions. On the like principle it was held that an issue of bonds for the purpose of purchasing the plant, franchise, etc., of a waterworks system under a statute providing that the bonds should be paid from the income of the waterworks, and that none of the city’s funds raised by taxation should be applied to their payment, is not a contracting of debt by the city within the inhibition of the Constitution.” Dillon, Municipal Corporations (5th Ed.), § 198.
So the issuance of the bonds provided for under Act No. 94, Pub. Acts of 1933, will not increase the bonded indebtedness of the city of Ann Arbor. Such bonds are not payable by the city. It does not assume and agree to pay them. It can levy no tax upon the people for their payment. They are exactly what they purport to be, self-liquidating revenue bonds, and the purchaser thereof can have recourse for their payment only to the revenues to be derived from the operation of the sewage disposal plant. These revenues must be disbursed in accordance with the statute. Of course if the city should misappropriate the funds to be derived from the operation of the plant so they are unlawfully diverted from the purposes for which they are appropriated by the statute, the city may be held liable; npt because of the statute, but because of its violation of a statutory duty. Chaffee v. Granger, 6 Mich. 51; Lansing v. Van Gorder, 24 Mich. 456.
(6) It is claimed Act No. 94, Pub. Acts 1933, is invalid because violative of article 8, § 24 of the Constitution, which provides that a city may issue mortgage bonds beyond the general limit of the bonded indebtedness prescribed by law to be secured only upon the property and revenue of such public utility, including a franchise, stating the terms upon which in case of foreclosure the purchaser may operate the same, etc. The- difficulty with this contention is that the city of Ann Arbor does not propose to issue mortgage bonds; does not propose to place a mortgage upon its sewage disposal plant; the bonds which it issues are not secured by the- property of the sewage disposal plant; there can be no foreclosure under these bonds; the lien granted by the statute is solely upon the revenues to be derived from its operation.
(7) No franchise is required under Act No. 94, Pub. Acts 1933, because there may be no foreclosure, no taking of the property, and no operation thereof by the bondholders; who may not acquire title thereto by foreclosure, and hence no franchise is nec essary to be granted as a part of tbe security of the bondholders.
We find nothing either in the title or the body of the act indicating it is unconstitutional on any of the grounds upon which it is here attacked. The decree of the trial court is affirmed, but without costs.
Nelson Sharpe, C. J., and Fead, Wiest, Butzel, Bushnell, and Edward M. Sharpe, JJ., concurred. North, J., did not sit. | [
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Reid, J.
(dissenting). This suit is brought to recover damages for personal injuries suffered by plaintiff, William Janks, and by Hartford Fire Insurance Company, joined as plaintiff by consent of defendant, for net loss on account of payment of property damage suffered in a collision on March 8, 1938, between his automobile and defendant’s truck unlawfully parked on the highway. Coplaintiff Hartford Fire Insurance Company is bound by the contributory negligence, if any, of Janks. The negligence of defendánt is conceded in defendant’s brief. The jury rendered a verdict for plaintiff Janks for $1,965 and for plaintiff Hartford Fire Insurance Company for $535. Defendant moved the court to direct the jury to return a verdict of no cause of action on the ground that under the undisputed testimony, as a matter of law, plaintiff Janks was guilty of contributory negligence and, secondly, claimed a violation by Janks of 1 Comp. Laws 1929, §4697, subd. (a), as amended by Act No. 119, Pub. Acts 1933 (Comp. Laws Supp. 1935, §4697 [a], Stat. Ann. §9.1565 [a]).
The declaration charged defendant with negligence in parking its truck on highway M-46 just east of an abrupt hill in such a manner as to render it invisible to traffic approaching from the west until the crest of the hill was reached, and blocking and obstructing the'road by electrical wires and equipment so as to render the same impassable to vehicular traffic and failure to give warnings by signals or look-out- to advise other users of the highway of such condition. Defendant’s answer denied negligence and claimed Janks was guilty of contributory negligence. The only error complained1 of is denial of the motion for a directed verdict.
Plaintiff testified that he had always lived in Caro, Michigan, except for intervals; is 34 years of age; has driven a car approximately two or three hundred thousand miles; that- he traveled about the State as a commission salesman, had to report at Bay City quite often for new samples and merchandise but as a rule he “worked out of Caro.” He may be presumed to be familiar with the road at the point in question. He further testified:
“After I left the Heinman store (in Kingston), I proceeded east on M-46. * * * My approximate driving speed would be between 45 and 55. * * * As I approached this hill I was driving on the right-hand side, that is the south side of the highway. * * *' The road surface wasn’t wet. Naturally the road was froze underneath and some loose (stones) on top. * * * As I approached the crest of the hill, there were no warning signs out there, or. any signs of any kind. I did not see any men. * * * Immediately on reaching the crest I noticed the truck. * * * Then I noticed this car approaching right beside the truck. I immediately blew my horn and I could see the driver of the car opposite the truck try to speed up his car' to clear the truck, and my sole hope was to slow down enough so I could avoid the truck and go between the car and the truck. * * * It * * * happened he didn’t clear the end of it so I hit the truck, and there was men running around on both sides of the road, so naturally I couldn’t go to either side of the road.
“Q. Did you have any room to drive on the south side of the truck?
“A. * * * As near as I can remember there was a big sand bank there. * * * I thought he (the driver of the car coming west) would clear. * * * It was a very small space, but it wasn’t big enough. * * * The right-hand side of my car hit the corner of the car, right by the headlight * * * that whole side of the car came right in on me and I hit the windshield, and the steering wheel bent double. * * * I know I was dazed. * * * I remember the horn was still blowing. * # * The blood was in my face and I couldn’t see to get out, and I called for some one to help me. Finally one of the men came over there. I was taken to the doctor’s office in Kingston. * * * It was not possible to' repair my car. They sold it for salvage.”
A witness for plaintiff, John Eichter, testified:
“I was standing in Mr. Congdon’s driveway. * # # The truck of the Ulen Contracting Company * * '* was just about straight across from me # * * on the other side of the road, facing east. * * * There was quite a few * * * men around this location who were working * * * for the Ulen Contracting Company. They were pulling on these wires getting ready to hook onto them. * * * I saw Mr. Janks’ car coming over the hill from the west. The first I knew about it * * * the horn blowing so loud and down the hill, and he run into the corner of the truck and the truck went into the ditch. * * * Another car was coming right along the side of the truck, almost alongside of it. * * * I have driven a car eight years. * * * My view was good, so I could watch the Janks car from the time it broke over the hill until the collision, and I did watch it. * *■ * The speed of that Janks’ car * * * I would say (was) between 50 and 60 miles per hour. * * * Probably slowed dowR to about 30 I would think at the time of the collision. # * * It was slowing down the minute it broke over the hill.”
Homer Hilliker, deputy sheriff, testified that he made measurements of the highway at the point where the accident occurred and that the width of the traveled portion of the highway was 30 feet, 6 inches wide, that just back of the truck where the truck made a hole in the fence there was a fence post and the distance from that post westerly to the top of the hill was 150 feet, and that the tops of the jurors’ hats as they stood at the post were visible at a point 117 feet westerly from the top of the hill.
It seems therefore a fair inference from the testimony that the plaintiff could have seen the top of the parked truck 117 feet before he reached the crest of the hill and at that time probably could not determine that the truck was parked. The truck was parked with the left wheel about 3 feet southerly of the median line of the highway;
While the testimony indicates that immediately upon arrival at the crest of the hill plaintiff began to apply his brakes, and thus get his car under better control, he was laboring under some uncertainty as to whether the car approaching from the east on the northerly side of the road would permit plaintiff to pass around the truck. There is competent testimony to indicate that as soon as he was able to form a judgment in respect to that matter he applied his brakes further. Plaintiff testified that immediately upon arrival at the crest of the hill he applied his brakes and “continued stopping.”
“Q. As you topped the hill it looked to you * * * as though he was parked?
“A. As though he came almost to a complete stop. If he was moving he was barely moving.
“Q. Where was he with reference to the truck at that time?
“A. Right opposite.
“Q. So he didn’t appear to you when you were at the crest of the hill to he moving to any ext,ent at all?
“A. * * * I wouldn’t want to swear to it, hut I thought I saw him shift his speed, the speed of his car to get out of my way. He immediately tried to get out of my way. * * *
“Q. *# * * Isn’t it a fact * * * if you had1 applied your brakes that you could have stopped your Chrysler sedan in the space between the crest of the hill and where this truck was ?
“A. No, sir. If I had I couldn’t have stopped.”
Plaintiff had a right to assume that there was no parked truck or car ahead of him on the highway and that there would be no persons at work around a parked truck in the traveled portion of the highway. He had no right to assume that the northerly half of the highway would be open to him for use in avoiding any obstruction on the southerly half, his half, of the highway. The jury were justified in finding that plaintiff on observing the parked truck did his utmost to avoid the collision.
The statute as to “assured clear distance ahead” does not require the driver to guard against obstructions to his progress unlawfully placed .there by other persons until he can be apprised of their existence. 1 Comp. Laws 1929, § 4697, subd. (a), as amended. In the cited case of Phillips v. Inter-City Trucking Service, Inc., 280 Mich. 30, 32, is the following:
“Plaintiff, when he discovered the object obstructing the highway, had ample time to perform the manual acts necessary to stop but, instead of stopping, he continued to drive * * * at a rate of speed so that when confronted by the oncoming cars he drove into the rear of the trailer which he knew was standing on the highway. This was negligence.”
The fact that the driver in the Phillips Case had time to stop after he discovered the truck was parked differentiates that case from the instant case.
A similar statute in Ohio was under consideration in Hangen v. Hadfield, 135 Ohio St. 281 (20 N. E. [2d] 715), where the court said, at page 286:
“It is of course true that as the plaintiff approached the brow of the hill he knew that his view was obstructed thereby. However, it is likewise true that the plaintiff was-not required to anticipate that the driver of an approaching motor vehicle would violate the law by obstructing the plaintiff’s proper path.”
The court ruled in that case that the claim of negligence of plaintiff was a jury question.
The question of plaintiff’s contributory negligence in the instant case was a proper matter for the jury’s determination. The judgment should be affirmed, with costs to plaintiffs,
Wiest and Bushnell, JJ., concurred with Beid, J.
Sharpe, J.
The material facts in this case are not in dispute. The defendant’s negligence is conceded and' the only question is whether plaintiff is guilty of contributory negligence as a matter of law. The result to be attained will be derived from the following facts: On March 8, 1938, plaintiff, William Janks, a traveling salesman, left the village of Kingston at 10:30 a.m. and traveled east on M-46 at a rate of speed between 45 and 55 miles per hour. As he approached the crest of the hill just east of Kingston he was traveling on the south side of the highway. At this time defendant’s truck was parked on the south side of the highway facing east, and at a distance of 150 feet east of the crest of the hill. The highway at the point where the truck was parked was 30 feet wide.
John Eichter, a witness produced by plaintiff, testified as follows:
“I have driven a car eight years. I’ve driven in that time, oh, 15,000 miles. - My view was good, so I could watch the Janks car from the time it broke over the hill until the collision, and I did watch it. My judgment as to the speed of that Janks’ car as it came along there, I would say between 50 and 60 miles per hour. * * * I would not say it was going between 50 and 60 miles an hour when it struck the truck.
“Q. How fast was it going then?
“A. I wouldn’t know that. I was watching it. Probably slowed down to about 30 I would think at the time of the collision. When I first saw it coming over the hill it was going, in my judgment, between 50 and 60 miles an hour. It was slowing down the minute it broke over the hill. It started to slow down after it got over the top of the hill. And, it was going 30 miles an hour at the time when it struck the truck, in my judgment. It didn’t stop at any time from the time it came over the hill until the collision with the truck. I could tell Mr. Janks applied his brakes in that distance. At what point he started to apply the brakes, I can’t remember any more. When the collision came, this truck was forced ahead to the east on the highway and into a ditch that was there, through the ditch into a fence, which would he at the south side of the highway, and there is a break in the fence there now where that collision happened. In my judgment that truck traveled 20 feet from the time of the collision until it stopped. The Janks car at the time of the collision stopped right there. * * * It stopped it right there, facing.east. It did not leave the highway. The right-hand side of the Janks’ car, the headlight, struck the left rear of the truck, on the left corner. I don’t remember that there were red flags on the truck at the rear of it. This was broad daylight, a bright, clear day.”
In the case at bar plaintiff had a distance of approximately 267 feet to travel from a point where he could see a part of the parked truck, and yet while traveling that distance he slackened the speed of his car only from 50 to 30 miles per hour. He did not observe the “assured clear distance” rule. (1 Comp. Laws 1929, § 4697, as amended by Act No. 119, Pub. Acts 1933 [Comp. Laws Supp. 1935, §4697, Stat. Ann.' §9.1565]).
Under the circumstances of this case plaintiff was guilty of contributory negligence as a matter of law and may not recover. Costs to defendants.
North, C. J., and Starr, Bijtzel, and Boyles, JJ., concurred with Sharpe, J. | [
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Fead, J.
Defendant city appeals from a decree declaring invalid and permanently restraining enforcement of an ordinance of the city of Detroit, imposing a license fee of $5 per year on vendors of cigarettes, on the ground the amount is excessive and unreasonable.
Since 1915 the fee had been $1 per year. In 1932 the common council raised the license fees on several occupations and set the cigarette vendors ’ charge at $10. The mayor vetoed the ordinance and the fee was placed at $5. It is claimed the increase of license fees was for the purpose of raising revenue for the city and not for regulation of the occupations.
Licenses, while controlled by the mayor, are in fact handled by a division of the police department. In each precinct is a patrolman who has special charge of them. He makes investigations for issuance and revocation and such further inspections as appear advisable. With a reasonable degree of ac curacy it was shown that the cost of issuing licenses and the ordinary formal inspection is $1.38. The cost does not cover such incidental expenses as court costs of enforcement, expenses of the mayor’s department, the cost of policing juvenile delinquency, and the like. It was estimated or, more correctly, guessed that such expense would be $1 per license. In 1932 the surplus of the license bureau over cost of issuance was about $26,000. The increased cigarette fee would raise the surplus some $30,000 to $40,000. It is said that the various increases together produce a surplus of nearly $250,000.
Policemen and policewomen testified that there was substantially no effort made to enforce the law governing the sale of cigarettes; that there was practically no inspection of the places of business; that smoking is a cause or phase of juvenile delinquency and that large sums could properly be spent to combat lawlessness among minors.
. The principles governing licensing occupations are well settled. They were succinctly stated by Mr. Justice Potter in Fletcher Oil Co. v. City of Bay City, 247 Mich. 572:
“The imposition of license fees as a condition to issuing a license, when plainly intended as police regulations, will be upheld if the revenue derived therefrom is not disproportionate to the cost of issuing the license and the regulation of the business licensed. Anything in excess of an amount which will defray such necessary expenses cannot be imposed under the police power alone, because it then becomes a revenue measure. What is a reasonable license fee must depend upon the sound discretion of the legislative body imposing it, having reference to the circumstances and necessities of the case. It will be presumed the amount of the fee is reasonable unless it contrarily appears upon the face of the or dinance, by-law, or law itself, or is established by proper evidence. In determining whether a fee required for a license is excessive or not, the expense or amount of regulatory provisions and the nature of the subject of regulation should be considered, and if the amount is wholly out of proportion to the expense involved, it will be declared a tax. If revenue is incidentally derived which is not so disproportionate as to make the fee charged unreasonable, there can be no objection.”
See, also, People v. Kupusinac, 261 Mich. 398.
It is recognized that the vending of cigarettes is a proper subject of police regulation, particularly because of injury to health and otherwise of minors from smoking tobacco. It is idle to deny that the question of juvenile delinquency is involved. The sale of tobacco to minors has long been prohibited by State law. The cigarette is the form of smoking most attractive to youth. As most men remember, the cigarette carries to the boy a keen sense of wicked delight when he obtains it, takes him into concealed places with others in an atmosphere permeated with a prideful feeling of law-breaking, and induces a lawless bravado which often culminates in a raid on a neighboring orchard or garden in the country or a fruit stand or store in the city. No one has suggested that it is salutary or conducive to good conduct of girls. The tendency of juvenile smoking is toward sneaky behavior and juvenile delinquency. That is why most parents combat it, either by direct prohibition or by an attempt to combat the greater evil of surreptitious smoking by means of the lesser evil of inducing open and frank use of tobacco in the home.
It is self-evident that if the city authorities have a decent desire to regulate the cigarette business for the protection of youth,, they can spend much more money legitimately than they have doné in the past. In passing upon the conduct of a public body it must be assumed that the authorities have acted in furtherance of a desire to do their plain duty to enforce the law. If ordinances of this sort are to be tested upon the basis of what has been done, there can be no advance in the performance of public obligations. If it is tested, as it should be, upon the basis of what may properly be done and what ought to be done, we cannot say there is such a disproportion between the fee imposed and the expense of regulation as would justify holding the discretionary action of the council invalid.
Decree reversed and bill dismissed, without costs.
Nelson Sharpe, C. J., and Potter, North, Wiest, Butzel, Bushnell, and Edward M. Sharpe, JJ., concurred. | [
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Boyles, J.
On an original petition for mandamus in this Court plaintiff was granted an order directing the defendant parole board to show cause why it should not be compelled to set aside an order holding plaintiff to be a parole violator owing service to the State under a certain mittimus issued by a judge of the recorder’s court of the city of Detroit on December 20, 1§35. The answer óf the parole board and plaintiff’s reply thereto have been received and filed, and briefs filed. The question involved is whether further jurisdiction of this State over the plaintiff was waived by virtue of the governor having granted the State of Ohio a warrant of rendition for return of plaintiff to that State to answer to a criminal charge, while plaintiff was on parole after a sentence to, and confinement in, the State prison in this State'.
On December 20, 1935, plaintiff, after conviction in Wayne county of the crime of robbery armed, was committed to the State prison to serve 7% to 20 years, by -a judge of the recorder’s court. On Jánuary 28,1941, plaintiff was paroled. One of the conditions of parole was that he remain in Wayne county for-4 years (to January 28, 1945), or until some other action was taken by the parole board. The chronological history of plaintiff’s further involvement thereafter with the criminal laws is as follows:
On July 8, 1942, the parole board declared plaintiff a parole violator for the reason that he had. been arrested by the Detroit police for questioning on a charge preferred by the authorities of Luca-’ county, Ohio, to the effect that plaintiff had committed the crime of robbery armed in that county, on June 5, 1942 (while he was on parole as above stated). On July 23,1942, the governor of the State of Ohio made requisition to the governor of this State for. the extradition of plaintiff to answer to an indictment charging him with’the aforesaid crime in said Lucas county. After a hearing before the governor of this State, on August 5, 1942, the governor granted a warrant of rendition and plaintiff was thereupon taken to Ohio.
After plaintiff was extradited to Ohio, he stood trial in Lucas county for the crime of robbery armed. On October 26, 1942, before plaintiff’s trial in Lucas county, Ohio, the bureau of pardons and paroles issued a. par ole violation warrant on the ground that plaintiff had violated the terms of his parole; plaintiff was declared to be an escaped.prisoner owing service to this State from and after July 8, 1942, and a detainer was placed against plaintiff with the authorities at Toledo, Ohio. On his trial in Lucas county, Ohio, a mistrial was declared, and subsequently an order of nolle prosequi was entered. On January 4, 1943, plaintiff whs released by the Ohio authorities and on January 6, 1943, he returned to Detroit. In his reply to defendant’s answer he claims that he “was ordered to return to Michigan under parole supervision which he did, not of his own free will, but by coercion and compulsion on the part of parole officers who threatened to incarcerate him in Jackson prison. That the order of the parole board, made to plaintiff while he was in jail in Ohio, was unlawful and that the defendants had'no right to exercise any authority over said plaintiff inasmuch as the warrant of rendition was signed by the governor of 'Michigan on August 5, 1942, and that as of that "date the State of Michigan, had forfeited all rights to the plaintiff as far as parole supervision was , concerned. ’ ’ On his return to Detroit on January 6, 1943, plaintiff reported to his parole officer, who recommended that the warrant for parole violation be suspended and that plaintiff be permitted to continue on parole. This suggestion was adopted', and plaintiff continued to work for the Ford company, making reports to his parole officer at the Detroit office each month - thereafter from January, 1943, through November of that year. In November, he committed another crime.
On June 30, 1944, plaintiff, having been convicted by a jury in recorder’s court of the city of Detroit of the crime of larceny in a building committed on November 25, 1943, was sentenced to the State prison of southern Michigan, to serve a sentence of from 3 to 4 years for said offense. On December 21, 1944, plaintiff was heard by the parole board, held to be automatically guilty of violating his parole by virtue of reception of the new sentence (and not by virtue of the former violation on June 5, 1942), and his case was passed indefinitely to the maximum sentence imposed for his first offense committed in 1935. By this action of the parole board he.is required to serve the rest of his 1935 sentence, less allowable credits. The department of corrections gave plaintiff credit for time served on the sentence of December 20, 1935, for the entire period between July 8,1942, and November 25, 1943, when he again offended the law of this State by committing larceny in a building. When plaintiff was charged with the latter offense, November 25, 1943, his parole was suspended and thereafter revoked. He ,is now serving time in State prison for the unserved balance of the 1935 sentence after credits were allowed, at the expiration of which time he will begin to serve the new sentence imposed June 30, 1944, upon his last conviction.
Plaintiff seeks an order of this Court requiring the parole board to cancel and set aside its order holding that plaintiff is still liable to imprisonment as a parole violator and under the sentence imposed in the recorder’s court in 1935. He makes no claim against serving 3 to 4 years in State prison under his sentence in 1944, but objects to completing his term of imprisonment under the 1935 sentence before beginning to serve time under the 1944 sentence, His sole claim is, in effect, that the State lost jurisdiction over him, in so far as the 1935 sentence was involved, when the governor of this State granted a warrant of rendition for his return, to Ohio, on August 5, 1942, to answer to an indictment charging him with having committed a crime in that State (at which time plaintiff was on parole in this State).
The question as to plaintiff’s status while on parole under the 1935 sentence is settled by the statute law of this State. Act No. 255, chap. 3, § 8,' Pub. Acts 1937 (Comp. Laws Supp. 1940, § 17543-48, Stat. Ann. 1946 Cum. Supp. § 28.2108), provides:
“Every prisoner on parole shall remain in the legal custody and under the control of the (corrections) commission. The assistant director of the bureau of pardons and paroles is hereby authorized, at any time in his discretion, and upon a showing of probable violation of parole, to issue a warrant for the return of any paroled prisoner to the penal institution from which he was paroled. * * *
. “A prisoner violating the provisions of his parole and for whose return a warrant has been issued by the assistant director of the bureau of pardons and •paroles shall, after the issuance of such warrant ,be treated as an escaped prisoner owing service to the State, and shall be liable, when arrested, to serve out the unexpirecl portion of his maximum imprisonment. * * *
“Any prisoner committing a crime while at large upon parole and being convicted and sentenced therefor shall serve the second sentence after the first sentence is served or annulled.
“A parole granted a prisoner shall be construed simply as a permit to such prisoner to go without the enclosure of the prison, and not as a release, and while so at large he shall be deemed to be still serving out the sentence imposed upon him by the court.”
The above act has been before this Court- on several occasions. In Re Dawsett, 311 Mich. 588, Dawsett was released from custody, on parole, for return to the State of New York to answer for a crime,committed in that State. He was not extradited, but was returned to New York State under Act No. 89, Pub. Acts 1935 (Comp. Laws Súpp. 1940, § 17509-1 et seq., Stat. Ann. § 28.1361 et seq.), which provides for interstate compacts for enforcement of penal laws. In the State of New York he was later released from custody on a suspended sentence on condition that he meet the requirements of the Michigan parole board. Upon his return to Michigan he was returned to prison for parole violation, and sought release on habeas corpus in this" Court, on the ground that “he should now be released from custody because his original ‘release’ to the State of New York constituted a complete relinquishment of jurisdiction by the State of Michigan. ” '
The writ was denied.
In Re Casella, 313 Mich. 393, an order was entered in the Wayne county circuit court in habeas corpus proceedings, granting Casella release from custody. In this Court the parole board, having been granted leave to .appeal, claimed “that under the statute, Act No. 255, chap. 3, § 8, Pub. Acls 1937 (Comp. Laws Supp. 1940, § 17543-48, Stat. Ann. 1945 Cum. Supp. '§ 28.2108), the granting and revocation of paroles are purely administrative-functions and that the parole board is given exclusive jurisdiction as to such matters.”
The Court said (p. 397):
“In view of the authority expressly granted by Constitution 1908, art. 5, § 28, the right of the legis-* lature to so provide is not open to question.”
In the above case the Court held (syllabi):
“Constitutional authorization to legislature to provide for release of persons imprisoned on indeterminate sentences empowered it to give parole board exclusive jurisdiction as to granting and revocation of paroles (Const. 1908, art. 5, § 28; Act No. 255, chap. 3, §6, Pub. Acts 1937).
“A prisoner who applies for a parole under the statute agrees to its terms and fully understands that for misconduct as set forth in the statute he may be taken back to serve out his term of sentence (Aqt No. 255, Pub. Acts 1937).
“The power of recall of a parolee lodged in administrative- officers is of the very essence of the indeterminate sentence law, provides the incentive to good behavior to the parolee through fear of being again imprisoned, and may be vested in any officer or board without any interference with' judicial or executive constitutional authority (Act No. 255, Pub. Acts 1937).”
In the case now before us no claim is made -that the governor granted plaintiff a commutation of sentence or a pardon, under article 6, § 9, Constitution (1908). Plaintiff was returned to the State of Ohio solely by virtue of a warrant granted by the governor in extradition proceedings held under the provisions of the uniform criminal extradition act (Act No. 144, Pub. Acts 1937, as amended by Act •No. 81, Pub. Acts 1939 [Comp. Laws Supp. 1940, § 17512-1 et seq., Stat. Ann. 1946 Cum. Supp. §§ 28.1285 (1)-28.1285 (31)]). Me are not in accord with plaintiff’s claim that the governor’s warrant granting the request of the governor of Ohio for rendition terminated the jurisdiction of the parole board as to any future custody of the plaintiff, in the event of his return to this State. He still was in the status of an escaped prisoner owing service to the State under his ,1935 sentence. To hold otherwise would give the governor’s extradition warrant the effect of a commutation of sentence, or a pardon. We decline to so hold. .The action of the governor in requiring the delivery of plaintiff to the agent of the State of Ohio for trial on a criminal charge in that State, on an extradition warrant, cannot be construed as an act of executive clemency. On the contrary, such action is quite -the opposite of the principle underlying the right given to the governor by the Constitution to commute a sentence or grant a pardon, which acts .are considered to be the exercise of executive clemency.
Plaintiff relies on citations of authorities from other jurisdictions, some of which seem to uphold plaintiff’s contention, People, ex rel. Barrett, Attorney General, v. Bartley, 383 Ill. 437 (50 N. E. [2d] 517); Ex Parte Guy, 41 Okla. Cr. 1 (269 Pac. 782); State v. Saunders, 288 Mo. 640 (232 S. W. 973); Mattes v. Taylor, 348 Mo, 434 (153 S. W. [2d] 833); Cozart v. Wolf, 185 Ind. 505 (112 N. E. 241); In re Whittington, 34 Cal. App. 344 (167 Pac. 404); Carpenter v. Lord, 88 Ore. 128 (171 Pac. 577, L. R. A. 1918 D, 674); State, ex rel. Falconer, v. Eberstein, 105 Neb. 833 (182 N. W. 500).
Plaintiff relies largely' on the Illinois case of People, ex rel. Barrett, Attorney General, v. Bartley, supra. In that case one McLaughlin had not been actually released from custody, on parole, but was taken from'.the State prison and delivered to the agent of the State of Wisconsin on an extradition warrant granted by the governor of Illinois. In the course of its opinion, the court points out the difference between that case and the case at bar, as follows (p. 442):
“Had McLaughlin been extradited while absent from the prison and while on parole it would have created a different situation.”
In the instant case the plaintiff, at the time the governor issued a' warrant directing that he be turned over to the agent of the State of Ohio, was a parolee who had been permitted under the terms of his parole “to go without the enclosure of the prison,” in accordance with Act No. 255, chap. 3, § 8, Pub. Acts 1937, supra.- He was not in the actual custody of the corrections commission, but was at liberty, subject to .recall. However, the act provides that he was “in the legal custody and under the control of the (corrections) commission.” There may seem to -be an apparent conflict as to the right to control such custody, as between the corrections commission under the above-cited act, and the governor under the provisions of the uniform criminal extradition act, whereby such an issue might arise between the governor and the corrections commission. Such is not the issue in this case, where neither the governor nor the corrections commission has challenged the right of the other, under the applicable statutes. In many of the cases from other jurisdictions on which plaintiff relies, the question as to waiver or relinquishment of jurisdiction was an issue between States, not between an individual and a State. Plaintiff largely relies on the Whittington Case, supra. But in that case the issue was whether the plaintiff was a fugitive from justice from another State.
Further time need not be spent in discussing possible distinctions. The reasoning and conclusions announced by this Court in Re Dawsett, supra, in considering the effect of Act No. 89, Pub. Acts 1935 (Comp. Laws Supp. 1940, § 17509-1 et seq., Stat. Ann. § 28.1361 et seq.), authorizing the governor to enter into compacts with other States for mutual relations concerning persons convicted of crime who are at large on probation or parole, are quite applicable to the instant case. The rule of law is stated in 147 A. L. R. p. 943, as follows: ,
“The decisions seem to warrant the statement, as a general rule, that the surrender of a paroled convict to the authorities of another jurisdiction for trial upon a criminal charge does not as a matter of law constitute a permanent waiver of the right_ to recommit such convict on account of the violation of the terms or conditions of his parole, to serve out the remainder of his term.”
The writ is denied.
Carr, C. J., and Butzel, Bushnell, Sharpe, Reid, and North, JJ., concurred. Dethmers, J., did not sit. | [
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North, C. J.
On November 22,1938, plaintiff entered into a contract with defendant bank to purchase the premises at 3477 Beaubien street in Detroit. On April 15, 1940, plaintiff gave defendant bank notice of rescission and on April 20th brought this action to recover the amounts paid on the purchase price and taxes, claiming fraudulent misrepresentation. Defendant McQueen was the broker through whom the land was purchased. Upon trial fey jury? a verdict of $625.22 was given against the defendant bank but the jury found no cause of action against defendant McQueen. Upon timely motion, the trial court granted the bank’s motion for judgment non obstante veredicto. Plaintiff appeals, claiming that the trial judge was in error in entering such judgment after the issues of fact were sub mitted to and passed upon by the jury. Plaintiff does not attack the verdict of no cause of action as to defendant McQueen. To ascertain the correctness of the trial judge’s action, we view the testimony in the light most favorable to-the plaintiff.
In view of the fact that the jury found no cause of action as to McQueen and in order to support a verdict against the bank, it is necessary to have testimony tending to show that the bank or its agents perpetrated the alleged fraud upon the purchaser. A review of the record does not disclose such testimony.
' Plaintiff had known defendant McQueen for several years and had made previous purchases of real estate through him. Plaintiff advised McQueen that she wished to purchase a certain type of real estate, and accompanied McQueen on inspections of several properties. McQueen checked the assessor’s records and found that the property here involved was owned by defendant bank. He called at the bank to ascertain the price of the property and obtained from the bank its form of preliminary agreement, apparently a type of an offer to purchase. The form was filled out, and McQueen, wás informed by the bank that the property would not be sold unless the form contained an undertaking by the purchaser to make repairs. On October 11,1938, a $50 down payment and a final offer of purchase containing the provision “purchaser agrees to recondition house inside and outside and do all necessary repairs before March 1,1939,” was presented by plaintiff, acting through McQueen, to the bank. The receipt given by the bank to McQueen acknowledged the payment of $50 by him “as agent for B. Osborne Smith. ’ ’
On October 17, 1938, the offer to purchase was approved by the bank and plaintiff so notified. About a month later plaintiff was notified by the bank that her deposit would be forfeited if the transaction was not closed by November 22, 1938. On that date McQueen picked up the copies of the land contract which had been prepared by the bank and took them to the plaintiff for her signature. This contract contained a printed clause that purchaser agreed to accept the premises in their present condition, subject to all defects, known and unknown, and forthwith to make all repairs necessary to put the premises in first-class condition. The contract also included a typewritten provision in which the purchaser agreed on or before March 1, 1939, to recondition the exterior and interior and to do “all necessary repair work to put said building in good, safe, sound, secure and tenantable condition, all in a workmanlike manner and to the satisfaction of the bank.” Plaintiff signed the contract November 22, 1938. McQueen then took the copies to the bank for execution by an officer and later returned plaintiff’s copy to her.
Plaintiff testified that she inspected the property twice from the outside before deciding to buy it, and that each time she remained in a car near the property. Plaintiff’s discussions concerning the property were wholly with 'McQueen. Plaintiff claims that fraud was perpetrated on her because McQueen told her the building was in good condition whereas the property was badly run down and needed very extensive repairs.
The uncontroverted testimony is that McQueen was at all times acting as the agent of the plaintiff and that there was no question of fact concerning this agency to be submitted to the jury. As McQueen was the plaintiff’s agent, the statements made by him to his own principal could not create a liability upon the defendant bank, which neither directly nor indirectly made any false representation. Even though McQueen did ■ make misrepresentations to the plaintiff, which question is not here passed upon, in this case there is no ground upon which the bank could be held liable for those misrepresentations. Nor was there under the facts in this case subsequent ratification by the bank of McQueen’s acts by accepting the benefits of the sale such as would create or imply the relation of agent and principal between the bank and McQueen.
As stated above, the jury found no cause of action against McQueen and the plaintiff failed to show a sufficient relation between McQueen and the bank to support a verdict against the bank. This alone is sufficient to affirm the case without a discussion of other defenses urged. However, in passing, we also note the fact that although the property was purchased November 22, 1938, no action for rescission was started by the plaintiff until April of 1940, which was about a month after the building had been padlocked because of unlawful use. During this period plaintiff or her agents knew of the condition of the building, and the trial judge could well have dismissed the case because of plaintiff’s failure to take timely action. Draft v. Hesselsweet, 194 Mich. 604; Gloeser v. Moore, 284 Mich. 106.
It is also worthy of note that repairs were not made by the plaintiff in accordance with the contract of purchase. And further plaintiff could not pat defendant bank in statu quo because in March, 1940, the building had been padlocked for one year,, and thereby the bank would have been prevented from renting the padlocked portions of the building. Placing in statu quo is requisite to rescission. Gloeser v. Moore, supra.
Affirmed, with costs to appellee.
Starr, Wiest, Butzel, Bushnell, Sharpe, Boyles, and Reid, JJ., concurred. | [
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Souris, J.
Three distinct appellate issues requiring our construction of our workmen’s compensation act are presented by this appeal. First, we must determine whether an employee injured in the course of his employment is entitled to cumulative specific loss awards for loss of a leg and also for loss of the foot of that leg when, in an effort to save as much of the leg as was medically possible, a guillotine amputation of the foot was performed and subsequently a definitive operation above the foot but below the knee was performed. Second, we must determine whether the employee is entitled to a specific loss award for loss of an entire toe from his other foot when the toe’s distal phalange and, in addition, the articular cartilage of the proximal phalange are removed as a result of his injuries. Third, we must determine whether specific loss awards are subject to the maximum and minimum limitations imposed upon benefits awarded claimants for total incapacity, under part 2, § 9 of the act, and to the maximum limitations imposed upon benefits for partial incapacity, under part 2, § 10 of the act, which limitations are determined by the number of claimant’s dependents.
Plaintiff Magreta sustained two injuries while in defendant’s employment on March 13, 1958, when a bundle of steel fell upon him. • Part of his left great toe was severed by the bundle and his right foot was severely crushed. He was.taken to a hospital immediately where the entire distal phalange of the injured left great toe, including some of the articular cartilage of the proximal phalange, was amputated and the crushed right foot was debrided and closed. Two days later gangrene developed in his right foot necessitating a guillotine amputation at a point three inches above the ankle and more than seven inches below the tibial plateau. Three months later, on June 17, 1958, a definitive amputation was performed about five inches below the right knee.
Defendant voluntarily paid weekly compensation to plaintiff from March 14, 1958, to April 26, 1962, the period provided by our statute for compensation for the specific loss of a leg. See part 2, § 10. Plaintiff thereafter filed an application with the workmen’s compensation department for hearing and adjustment of claim for payment of additional benefits for loss of his right foot and for loss of his left great toe. At the hearing before the referee in March of 1963, the parties stipulated that the number of plaintiff’s dependents decreased from four to three on December 8, 1959, and that, as a consequence, the weekly compensation to which plaintiff was entitled thereafter was $51 rather than the $57 defendant voluntarily had paid him. The referee awarded plaintiff benefits for 162 weeks for the specific loss of his right foot and for an additional 215 weeks for the specific loss of his right leg. Notwithstanding the parties’ stipulation, the weekly benefits awarded plaintiff were for $57 for all of both periods. Defendant, of course, was granted credit for compensation previously paid voluntarily. The referee’s decision omitted any reference to plaintiff’s claim for benefits for specific loss of his left great toe.
Defendant appealed the referee’s decision to the appeal board and plaintiff filed a cross-appeal. The appeal board vacated the referee’s award for loss of the right foot; awarded plaintiff benefits for 16-1/2 weeks for the specific loss of one-half of his left great toe, payment thereof commencing as of March 13, 1958; and modified the referee’s award for the specific loss of plaintiff’s right leg to reflect the stipulated decrease in the number of plaintiff’s dependents, payment thereof to commence as of the expiration of the 16-1/2 week period for payment of the toe award. The appeal board, like the referee, ordered that defendant be credited for compensation previously paid voluntarily.
I.
We conclude that, under circumstances such as are disclosed by this record, a claimant whose leg is amputated, as defined by part 2 § 10 of the act, in two stages, first by guillotine amputation of the foot and then by definitive amputation five inches below the knee, has suffered only one specific loss, the loss of a leg, and, therefore is entitled only to specific loss benefits for such loss of a leg. The definition to which reference has been made reads as follows:
“An amputation between the knee and foot 7 or more inches below the tibial table (plateau) shall be considered a foot, above that point a leg.”
Leaving aside semantic difficulties with the statutory language, we must construe the statute tQ avoid absurdity. Williams v. Secretary of State (1953), 338 Mich 202, 208. That end is accomplished best by constant regard for the objective sought by the legislature in providing for specific loss benefits for loss of anatomical members.
Award of specific loss benefits provided by the act is not dependent upon evidentiary proof of incapacity for work, total or partial, resulting from the loss of any of the specified anatomical members. Indeed, such incapacity is presumed conclusively upon suffering any of the specified schedule losses. The legislature has so provided in the following language which introduces the schedule of specific losses appearing in part 2, § 10 of the act:
“In cases included by the following schedule, the disability in each such case shall be deemed to continue for the period specified, and the compensation so paid for such injury shall be as specified therein, to-wit:”
Thus, while maintaining semantic consistency with the act’s general pattern, which makes benefits payable upon a showing of the consequent incapacity for work due to job-related physical injury, the legislature’s purpose in cases of loss of the scheduled anatomical members was to require compensation upon a showing, only, of such job-related physical loss. The question becomes, therefore, what was the anatomical member lost by claimant in this case for which he is entitled to payment of benefits 1
Plaintiff suffered a single injury to his right leg. Two amputations, separated in time by three months, were performed. The first severed plain tiff’s foot and the second severed the leg just below the knee. There was evidence that both amputations were required as a matter of routine surgical practice in the comprehensive treatment of plaintiff’s injury. There was no evidence challenging the reasonableness of suck practice in the medical circumstances of plaintiff’s case. The appeal board’s finding that plaintiff’s loss must be regarded as the loss of a leg only and not the loss, first, of a foot and, then, of the leg is supported amply by the evidentiary record. We do not read the statute to mean that in such circumstances the injured worker is entitled to cumulative specific loss benefits as claimed by plaintiff.
Tbe only pertinent authority relied upon by plaintiff on this issue is Wilson v. McCabe & Dishaw (1936), 274 Mich 74. In Wilson this Court affirmed an award for loss of a hand by amputation, necessitated, the Court said the department was entitled to find from the evidence, by an industrial injury suffered several years earlier. The defendant claimed the award should have been reduced by the amount it voluntarily had paid plaintiff less than two years earlier when one finger of plaintiff’s injured hand was amputated. The Court rejected defendant’s claim and affirmed the department’s award for full benefits for the plaintiff’s specific loss of a hand. While it is possible to read this Court’s opinion in Wilson in support of plaintiff’s claim here, it is quite clear that the Court did not articulate any reasoning by which it reached its result and upon which we now can rely. Furthermore, it only assumed the voluntary payment was for loss of a finger, but the claim made by plaintiff from which the voluntary settlement resulted was planted on three grounds: total disability, loss of use of hand, and loss by amputation of one finger. Finally, the voluntary payment, while made in settlement of a claim filed by the employer with the department, was never approved by the department nor was the settlement agreement ever submitted therefor to the department. We do not regard Wilson as precedent in support of this plaintiff’s claim in this appeal for an additional award for specific loss of his right foot.
II.
The appeal board awarded plaintiff benefits for the specific loss of one-half of the left great toe. There was evidence from which it could have found, as it apparently did, that none of the bone of the proximal phalange was removed during amputation of the entire distal phalange of the toe. In the mistaken belief that unless some part of the bone of a phalange is removed there is no loss of a phalange within the meaning of the act, the appeal board concluded that plaintiff was entitled only to specific loss benefits for loss of the first, the distal, phalange.
However, the statute, part 2, § 10, provides:
“The loss of more than 1 phalange shall be considered as the loss of the entire toe; * * * ”
Dr. Castle, defendant’s witness, testified on cross-examination that the articular cartilage of the proximal phalange was removed when the entire distal phalange was amputated. We read the quoted portion of the statute to require payment for the loss of the entire toe whenever more than one phalange, whether of bone or of cartilage, is lost. The order of the appeal board awarding benefits for the loss of half only of plaintiff’s toe must be reversed for correction in accordance with our decision on this issue upon remand.
III.
Finally, it is claimed that plaintiff’s award of specific loss benefits must be reduced as of December 8, 1959, to reflect a reduction in tbe number of his dependents occurring on tbat date. Tbe parties stipulated before tbe referee tbat sueb reduction in tbe number of dependents then occurred and tbat tbe plaintiff’s weekly benefit rate, as a consequence, thereafter would be $51. On appeal here plaintiff claims tbat no such stipulations were made before tbe appeal board, where tbe matter was beard de novo, and tbat, consequently, be should not be bound thereby. It is plaintiff’s claim, also, tbat tbe statute does not require a reduction in a specific loss benefit upon reduction of tbe number of a claimant’s dependents during the period benefits are payable. Tbe defendant, on tbe other band, claims not only tbat plaintiff’s stipulations before tbe referee bind him now but, also, tbat tbe specific loss provisions of part 2, § 10 of tbe act are subject to tbe provisions of part 2, § 9(d), requiring reduction of weekly benefits upon termination of a dependency during tbe benefit period.
Both parties to this appeal, it should be noted, proceed on tbe assumption tbat tbe specific loss benefits specified in tbe schedule in part 2, § 10 are subject to tbe maximum and minimum benefit limitations, determined by tbe number of claimant’s dependents, imposed upon claimants compensated for injuries resulting in incapacity for work which is total, under part 2, § 9(a), and to tbe identical maximum benefit limitations imposed for such incapacity which is partial, under tbe first paragraph of part 2, § 10. We do not join in tbat assumption for we do not read those limitations into tbe specific loss benefits specified in section 10’s schedule.
The schedule of specific loss benefits does not impose any limitation, maximum or minimum, upon the weekly benefit payable for specific losses. If there be such limitations, they must be found elsewhere than in the schedule. It is suggested that the limitations have been incorporated into the schedule of specific losses by the following language which appears in the first sentence of the last paragraph of part 2, § 10:
“The amounts specified in this cause [clause] are all subject to the same limitations as to maximum and minimum as above stated. * * * ”
While part 2, § 9(a), relating to benefits for total incapacity for work, specifies maximum and minimum limitations upon weekly benefits payable, part 2, § 10, specifies no limitations upon the stated benefit rates except only for maximum limitations upon weekly benefits payable for partial incapacity for work. Thus, absent maximum and minimum limitations in section 10, the language quoted above from the last paragraph of section 10, “limitations as to maximum and minimum as above stated” cannot have reference to anything stated in section 10 above that language. It can, however, refer to the maximum and minimum limitations stated in the preceding section of the act, part 2, § 9, and we so hold.
The question remains, however, what “amounts specified in this cause [clause]” are subject to such maximum and minimum limitations? It could be argued that the limitations thus incorporated into section 10 by reference to the limitations of section 9 apply to all benefits specified in the entire section 10. That section provides benefits for partial incapacity for work and for specific losses. In addition, and immediately preceding the language we here construe, section 10 contains a definition of total and permanent disability, compensation for which is provided in the preceding section, section 9.
We cannot read the language to apply section 9’s limitations to the benefits provided in section 10 for partial incapacity simply because, had that been the legislature’s intent, it could have, and we believe it would have, provided specifically in the first paragraph of section 10, as it did in section 9(a), for minimum limitations as well as for the maximum limitations which expressly appear in that paragraph. We should not attribute to the legislature that ineptitude which would be implicit in our ruling that it intended thus clumsily to incorporate some limitation by reference while simultaneously stating other limitations expressly.
Nor can we read the language to apply to the specific loss schedule of section 10. That schedule does not contain even the maximum limitations specified for partial incapacity claimants in the first paragraph of the section. Indeed the sentence which introduces the schedule of specific loss benefits speaks in terms so positive that it is intrinsically inconsistent with any concept of limitations, maximum or minimum:
“In cases included by the following schedule, the disability in each such case shall be deemed to continue for the period specified, and the compensation so paid for such injury shall be as specified therein, to-wit: * * * .”
There follows the schedule of losses and the compensation specified in the following form:
“For the loss of a * * * , 66-2/3% of the average weekly wages during * * * weeks;
We do read the language incorporating maximum and minimum limitations, which we here construe, to .apply to those disabilities referred to in the im mediately preceding language of section 10, namely, total and permanent disabilities as therein defined and for which compensation is payable as provided in section 9, the very section we hold contains the limitations to which reference is made.
The foregoing construction of the first sentence of the last paragraph of section 10 is entirely consistent with the scheme of compensation designed by the legislature for total incapacity which is not permanent, for total and permanent incapacity, for partial incapacity, and for specific losses of anatomical members. The basic compensation rate for all types of injuries, is 2/3 of the loss of wage-earning capacity. See part 2, §§ 9 and 10. Except for specific loss injuries, for which benefits are paid for loss of the anatomical member as we noted above, maximum limitations determined by the number of claimant’s dependents are expressly imposed upon the weekly benefits payable for incapacity for work, whether partial or total and, as to the latter, whether temporary or permanent. But only in the cases of total incapacity for work, where the injured worker theoretically retains no wage-earning capacity, did the legislature impose a minimum weekly benefit limitation, see part 2, § 9(a), in recognition of the need in such cases to provide at least a minimum subsistence level of benefits for that injured employee whose average weekly wage before injury was small. As for those injured employees whose incapacity for work is partial, or who suffer loss of specific anatomical members, and thus who should be able theoretically to earn some wages after injury, the need for a minimum subsistence level of benefits is less apparent and, so, minimum limitations significantly are omitted from the first paragraph of part 2, § 10, and from its schedule of specific losses. Our construction of the first sentence of the last paragraph of section 10, making it applicable only to the total and permanent disabilities defined in the provisions immediately preceding that sentence, is entirely consistent with the scheme of compensation benefits devised by the legislature, imposing maximum limitations determined by the number of a claimant’s dependents upon all weekly benefits except for specific losses and imposing minimum limitations, similarly determined, only upon weekly benefits for total incapacity.
Accordingly, whatever the number of plaintiff’s dependents at the time of injury and whatever the subsequent change therein, his weekly specific loss benefit rate is 66-2/3% of his average weekly wages before injury, neither diminished nor enlarged because of the number of his dependents. The stipulations of the parties before the referee, reflecting as they do misinterpretation of the applicable law, do not preclude our disposition of this controversy in accordance with the law as we construe it. See State Highway Commissioner v. Simmons (1958), 353 Mich 432, 438; Rousseau v. Brotherhood of American Yeomen (1913), 177 Mich 568, 573; and Detroit v. Beckman (1876), 34 Mich 125, 126 (22 Am Rep 507). Upon remand, the plaintiff’s weekly benefit rate should be recomputed in accordance with the foregoing.
Affirmed in part, reversed in part and remanded for further proceedings. No costs may be taxed, each party having prevailed in part.
Dethmers, C. J., and Kelly, Black, T. M. Kavanagh, O’Hara, and Adams, JJ., concurred.
Brennan, J., took no part in the decision of this case.
PA 1912 (1st Ex Sess), No 10, as amended (CL 1948, §411.1 et seq., as amended [Stat Ann 1960 Rev and Stat Ann 1965 Cum Supp § 17.141 et seq.]).
The Court of Appeals denied plaintiff’s application for leave to appeal from orders of the workmen’s compensation department’s appeal board modifying decisions previously made by a referee. Upon plaintiff's application for leave to appeal here, we granted leave.
CLS 1961, §412.9 (Stat Ann 1960 Rev §17.159).
CLS 1961, §412.10 (Stat Ann 1960 Rev § 17.160).
OL 1948, § 413.7 (Stat Aim 1960 Rev § 17.181).
As quoted, the language is inartful. The statutory context considered, we read the quoted language to mean:
“An amputation between the knee and foot 7 or more inches below the tibial table (plateau) shall * * * [constitute the loss of] a foot, above that point [the loss of] a leg.”
“Q. [Mr. Loria] Now, on March 15, 1958, as I understand it, you performed surgical amputation of his right foot?
“A. [Lr. Castle] Yes. * * *
“Q. About how many inches below the tibial plateau?
“A. Oh gosh, it varies per person. It would be, say, three inches above the ankle. * * *
“Q. That would have been more than seven inches below the tibial plateau?
“A. Yes.
“Q. Now, as I understand it, the reason that you did this amputation was because gangrene had set in in that foot?
“A. Yes.
“Q. I-Iow high was the gangrene?
‘‘A. It was patchy throughout the foot, so it was obvious.
“Q. There was no gangrene indicated at that time above the ankle?
“A. No. That’s right.
“Q. If there had been you would have amputated the leg at that time ?
“A. I would have taken all the gangrenous portions out, that’s right.
“Q. Now, on Mareb 15, 1958, if we can go back to that time and try to get into your mind, it was your intention, was it not, to save as much of the leg as possible?
“A. That is true.
“Q. And it would be possible, for instance, that if infection did not set in above the leg — above the ankle, I’m sorry — if gangrene didn’t set in and infection didn’t set in that it may have been possible to not have to do any further amputations beyond that what you did on March 15, 1958 ?
“A. No, that is a temporary procedure. The guillotine is a temporary operation, it would have to be revised later.
“Q. Now, could it have been revised one inch, or two inches, or three inches higher than the site that you amputated on March 15, 1958? I mean, could there be variations in where the next amputation would be?
‘‘A. At the site of election, which is approximately five to six inches below the tibial plateau; it fits an artificial leg better, and function is better. If you get much below that, for instance in the lower third of the leg, the skin does not hold up and they get sores and ulcers on their artificial limb, so they eleet to do it the place where it works the best, and that’s in that area. So, we would have done it in the same place if we possibly could no matter what the condition of the guillotine.
“Q. Well, can you explain why that would not have been done on March 15, 1958, that is, the amputation ?
“A. I was afraid of infection, and he had blisters throughout the. area, and I didn’t know exactly what was going to happen to this limb; it was only a couple of days old from the injury, and I was afraid some other part might become gangrenous, and this was the safest thing to do.
“Q. Well, let’s take those two or three reasons that you’ve given. If gangrene had extended only, let’s say, in the foot at that point it certainly wouldn’t do any harm to amputate five or six inches below the knee insofar as the gangrene situation? That wouldn’t make it any worse, would it?
“A. No, that’s right.
“Q. So that we can eliminate the possibility of gangrene going further as a reason for delaying the — •
“A. Well, you can’t be sure. That has to be a clinical judgment, or, surgical judgment at the time, but he had big blisters throughout the area on his skin, and I was just afraid if I did the infinitive [sic, definitive?] operation he would get an infection and a week or two later I would be amputating him above the knee, so this was the conservative and safest thing to do. * * *
“Q. In faet, if things had worked out medically so that after your operation of March 15, 1958, Mr. Magreta’s condition was adequately found, that is, he had no infection, no trouble, you had a completely successful operation of the foot, it may have been possible that you would have decided against a further amputation ?
“A. No sir.
“Q. All right. At the point where you did the amputation at the ankle, or, around the ankle joint, is there any — do people have amputation of their limbs at that point, I mean for their whole life?
“A. Almost never. Such an operation at that side does not wear well, it would break down and have to be revised higher. * * *
“Be-direct Bzammation
“By Mr. LeVasseur:
“Q. Doctor, what is the significance of the word guillotine as used in the operation you performed on the man’s foot?
“A. It is used to describe the technique more or less as if it were cut off by the blade of a guillotine.
'“Q. Do you ever do a definitive operation in the same way as a guillotine operation?
“A. No, sir.
“Q. Do you always have to revise a guillotine operation?
“A. Almost always. Now, with one qualification: Occasionally during the war, especially, we found that a few of these would close over at the site of election, and they would go ahead and function with that technique, but it is not considered a definitive type operation, it’? a temporary type operation.”
“Q. [By Mr. LeYasseur'] Doctor, is there a difference between bone and cartilage?
“A. Yes, sir.
“Q. As I understand it, the entire bone of the proximal phalanx remains in this particular ease?
“A. Essentially so. It’s almost impossible, of course, to remove the cartilage without taking a little bit of bone, but essentially so.”
“Q. Was there any portion of the — what phalanx is it after the distal phalanx?
“A. Proximal.
“Q. Proximal phalanx? There are only two phalanges, right?
“A. Yes.
“Q. The proximal phalanx, was there any part of that that was amputated?
"A. Yes, the articular cartilage.
“Q. Some part of the proximal phalange was amputated?
“A. Yes, the cartilage portion, the smoothest portion of the joint.” | [
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Edward M. Sharpe, J.
On May 1, 1925, by land contract, Maurice Dreifuss sold real estate herein involved to Louis T. Applebaum, who in turn assigned his interest to Isaac Applebaum, who assumed the payments on the contract. About this time Dreifuss assigned his interest to plaintiff. The property originally sold for $15,000, and upon the death of Isaac Applebaum' in May, 1928, there was a balance due of about $8,700. The property consists of a one-story store building in Highland Park near the Ford Motor plant.
Upon the failure of the defendant estate to make payments of principal, interest and taxes, the plaintiff started foreclosure proceedings, and on July 8, 1932, a decree was entered in which there was found due the sum of $11,049.67 and ordering that in default of payment thereof within five days the property be sold and plaintiff have judgment for the deficiency. An appeal from this decree was taken to this court and the decree was affirmed in June, 1933, the opinion being reported in 263 Mich. 507.
During the pendency of this appeal, plaintiff proceeded to sell the property at foreclosure sale held September 7, 1932. At this sale plaintiff bid in the property for $1,000. This sale was confirmed by the court by decree nisi and defendant then filed a motion to deny confirmation of the sale on the ground of great inadequacy of the price bid at the sale. January 4, 1933, the lower court denied defendant’s motion to refuse confirmation of sale. Defendant thereupon appealed to the Supreme Court.
On November 18, 1933, pending this appeal, defendant filed a petition for a rehearing of the order of January 4, 1933, confirming sale. The trial court ordered testimony taken, and defendant produced testimony to show that the value of the property was approximately $7,000, while the plaintiff was able to show that owing to the surplus of rentable buildings in that section of the city and the removal of the Ford Motor Company the value of the building* was not more than $1,500. The record discloses that the testimony produced by the defendant was largely based upon the cost of replacing the building, while the plaintiff’s testimony was as to the actual cash market value at the time of the hearing. It was also shown that after plaintiff purchased the property, it expended $500 on repairs and taxes and was renting the property for $25 per month.
On the motion for rehearing, plaintiff objected to a resale, largely because the defendant refused to increase the bid on a resale and also refused plaintiff’s offer of a six-months’ option to purchase the property at the amount of the sale bid, or to take a deed of the property conditioned upon making payment of the unpaid balance.
Although testimony was taken on the merits, the trial court dismissed the motion for rehearing on the ground that it was without jurisdiction by reason of lapse of time in excess of the period allowed for such motions. Defendant thereupon appealed. The appeals from the confirmation of sale and from the order denying rehearing of the confirmation have been consolidated in this court.
The defendant contends that the trial court should reject the confirmation of the foreclosure sale because the price bid is grossly inadequate, and cites Michigan Trust Co. v. Dutmers, 265 Mich. 651, wherein Mr. Justice Wiest, speaking for the court, said in construing Act No. 229, Pub. Acts 1933, permitting the court to fix an upset price at foreclosure sales:
“That act contemplates exercise of reasonable judgment; not arbitrary action. The act gave the court of equity no new power. The court of equity has inherent power to control its process and has ever exercised such power in foreclosure upon reports- of judicial sales. Bids upon foreclosure sales have been rejected as inadequate and resales ordered.”
Plaintiff, on the other hand, contends that the case of Hoock v. Sloman, 155 Mich. 1, controls. The syllabus of that case reads:
“Objections to the confirmation of a foreclosure sale on the ground of inadequacy of price are not sustained where defendant makes no offer to increase the bid if a resale is ordered, and complainant offers to accept the amount due with interest and costs.”
While the court has the power to establish an upset price in the decree, it should be fixed at the fair value of the property. “The upset bid for.the security must bear a reasonable relation to the value of the security at the time of sale.” Michigan Trust Co. v. Dutmers, supra. It was further said by Mr. Justice Butzel in that case:
“Equitable considerations are not as impelling in the case of such vendees (in land contracts) as they may be in the case of mortgagors. The former, even though purchasing for investment, are entitled to all the profits resulting from enhancement in value. Is there any equitable reason why they should not pay the loss, should there be one?”
We think the court exercised proper discretion in refusing to order a resale of the premises, especially in view of the fact that defendant refused to increase the bid in case such a resale was ordered.
From an examination of the record, we are satisfied that the price bid at the foreclosure sale was not so grossly inadequate as to justify a resale. The cost of reproducing a like building is not the sole guide to its actual present value. There may be circumstances, such as a surplus of like buildings, that may materially decrease the cash value of the property. We think the case at bar is such a case.
In view of this disposition on the merits, it will be unnecessary to discuss the jurisdictional question raised in the second appeal.
Order affirmed. Costs to plaintiff.
Nelson Sharpe, C. J., and Potter, North, Fead, Wiest, and Butzel, JJ., concurred. Bushnell, J., did not sit. | [
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North, C. J.
Plaintiffs by tbeir bill of complaint seek to have defendants restrained, among other things, from nsing the corporate name “Dearborn Universal Underwriters Credit Corporation,” and especially from using the word “Universal” as a part of a corporate name. Such relief is prayed on the ground that the quoted corporate name or the use by defendants of the word “Universal” in a corporate name would result in unfair competition by defendants with plaintiff companies. Also that it would be in violation of Act No. 327, § 6, Pub. Acts 1931 (Comp. Laws Supp. 1940, § 10135-6, Stat. Ann. §21.6), which forbids the use of a corporate name so similar to the name of another corporation existing or doing business in Michigan as to be likely to mislead the public or to result in confusion or deception. The suit was brought on for hearing'on the merits, and at the conclusion of plaintiffs’ testimony, the defendants made a motion to dismiss the bill of complaint. This motion was denied. Thereupon defendants rested without offering further proof, and the decree granting plaintiffs relief followed. Defendants have appealed.
Each case of this type must be decided in the light of the pertinent facts disclosed by the proofs in that case. Metal Craft Co. v. Metalcraft Heater Corp., 255 Mich. 642. In the main such facts in the instant case may be outlined as follows.
Plaintiff “Universal Credit Corporation” was organized' in 1928. It is a Delaware corporation authorized to do business in Michigan. It is a holding company and owns all of the stock in plaintiff “Universal Credit Company,” which is also a Delaware corporation authorized to do business in Michigan, and it is qualified to do business in each of the other States of the United States, except Indiana, New York, and California. The holding company also owns all the stock of three separate corporations named “Universal Credit Company,” respectively organized under the laws of Indiana, New York, and California. Further, the holding company owns the stock of the plaintiff “Universal Dealers Company,” a Delaware corporation authorized to do business in Michigan. Plaintiff Commercial Investment Trust Corporation, incorporated in Delaware in 1924, purchased from the Ford Motor Company in 1933 all the stock in the Universal Credit Corporation. The Commercial Investment Trust Corporation for some years carried on an automobile finance business through subsidiary corporations, each incorporated under the name “C. I. T. Corporation.” But prior to this litigation and in September, 1942, these companies by change of corporate name respectively began to operate and continued to operate for some time as “Universal Credit Company.” The corporate charters of these companies are still retained although the business formerly transacted has been transferred to the plaintiff Universal C. I. T. Credit Corporation. Each of the foregoing companies was incorporated and was doing business in Michigan prior to the incorporation of the defendant “Dear-born Universal Underwriters Credit Corporation,” which was incorporated in Michigan in October, 1942.
It is sufficient to note as to the business in which they are engaged that the associated plaintiff corporations obtain and furnish capital to automobile dealers and to purchasers of automobiles, and discount commercial paper incident to such transactions. Their business, which is nation wide, requires on a large scale automobile insurance, both casualty and fire. For many years prior to the commencement of this suit defendant David F. Brod erick had been associated with plaintiffs’ business, and particularly had charge of the insurance phase of their transactions covering loss by fire. For carrying on this business Broderick organized under Delaware law the “D. F. Broderick, Incorporated1.” Under the same name he caused to be organized a corporation in Michigan, one in California, and one in New York. The business of defendant Broderick and of his Michigan corporation was carried on through its central office located in an office building known as the United Artists Building, 154 Bagley avenue, Detroit. This was the same building in which the affiliated plaintiff corporations principally carried on their business. The relationship above noted between defendant Broderick and his corporations with the affiliated plaintiff companies continued from 1933, or earlier, until 1942. ' This relationship fully terminated June 30, 1942, although as to new business it ceased December 31, 1941.
The large volume of business transacted by plaintiff companies prior to the incorporation on' October 13,1942, of the defendant Dearborn Universal Underwriters Credit Corporation may be implied from the following. The aggregate balances to be paid on automobile paper purchased by plaintiff Universal Credit Corporation i-n the year 1941 for the entire United States was $233,000,000, and for the State of Michigan $21,000,000. And for the 5-year period of 1937 to 1941, inclusive, the average amount of such paper so purchased1 annually in the United States was in excess of $180,000,000, and for the State of Michigan in excess of $15,000,000. It is also to be noted that during this period of 1937 to 1941 the group of plaintiff companies which-operated under the name “Universal Credit Company” annually spent approximately $25,000 for advertising. And there is testimony tending to show that from 1936 to 1941, inclusive, plaintiffs expended for advertising of various types nearly half a million dollars. In some of this advertising the abbreviation “U.C.C.” was used to designate Universal Credit Company. The plaintiff companies operating as “Universal Credit Company” in their transactions with automobile dealers furnished forms to be used by purchasers of automobiles for applications for loans and forms for the conditional sales on contracts. Each individual purchaser of an automobile received a true copy of his purchase contract. On each of the forms of application for loans and on each of the conditional sales contracts there was conspicuously printed at the head thereof “Universal Credit Company,” and in the body of each instrument the name “Universal Credit Company” was used. It was even provided that the place of making instalment payments on conditional sales contracts was ‘ ‘ at the office of Universal Credit Company” and further that the “customer acknowledges notice of intended sale of this contract to the Universal Credit Company (hereinafter called holder).”
It is interesting and somewhat important to note the inception of the use of the quite dominating word “Universal” in the corporate names of the associated companies. We quote from appellants’ brief:
“The Universal Credit Corporation, a Delaware corporation, was organized in 1928 as -a wholly-owned subsidiary of Ford Motor Company. The several subsidiary Universal Credit Companies were organized at or subsequent to that time. The name ‘Universal’ was used because in 1928 the’Ford car was known and advertised as the ‘Universal Car.’
“Universal Credit Corporation, a Delaware corporation, was organized by Ford Motor Company to put it in competitive position as to finance plans for dealers and customers with General Motors Corporation, * * * and with Chrysler Corporation (which had like financing facilities), * * * so as to afford'finance plans to their respective dealers and customers.”
In 1933, Ford’s “Universal Credit Corporation,” by purchase of its stock, was taken over by the plaintiff, Commercial Investment Trust Corporation; and thereafter, for quite obvious reasons, the word “Universal” was used as the initial word in the corporate name of each of the associated plaintiff companies, except the Commercial Investment Trust Corporation which had been organized in 1924 under the laws of Delaware. Plaintiff companies annually finance a large number of contract purchases of Ford automobiles.
Prior to the severance of his relations with the business of plaintiff corporations, defendant Broderick had been carrying on his business through corporations in the corporate names of which the word “Universal” was not used. But very shortly after relations were severed with plaintiff companies and on October 13, 1942, defendant Broderick organized under Michigan law the “Dearborn Universal Underwriters Credit Corporation.” The stock in this corporation is held by the defendant D. F. Broderick, Incorporated (a Delaware corporation), of which latter company defendant David F. Broderick is in control and said to be the sole owner. The corporate powers of the defendant Dearborn Universal Underwriters Credit Corporation are amply broad enough to permit it to engage in the automobile finance business in competition with plaintiffs. The corporate name sought to be used by this defendant is the same as one of the plaintiffs with the addition of “Dearborn” and “Underwriters.” This attempted adoption of a similar corporate name, especially using the word “Universal” in connection with “Credit,” is plainly indicative of a studied attempt on the part of defendants to indulge in unfair competition with plaintiffs and to appropriate the good will of their established business. As noted above, the business of defendants is carried on in the same office building in Detroit as that in which plaintiffs for years have had1 local business offices. The business of the defendant corporations is in the same field as that of plaintiff corporations. For years preceding the organization by Broderick of the Dearborn Universal Underwriters Credit Corporation he had been intimately associated with the business of plaintiff corporations in the same field in which Broderick .proposes to carry on. Under the facts hereinbefore noted it is well established that plaintiffs are entitled to have defendants restrained from using the word1 “Universal” as part óf a corporate name, and from using the abbreviation “U.C.C.,” which by use in plaintiffs’ business ha.s come to denote “Universal Credit Company” or “Universal Credit Corporation.” We arrive at this conclusion notwithstanding various reasons urged by appellants in opposition thereto, among which are the following.
Appellants urge that there is no showing of actual confusion or deception. However “Actual confusion need not be shown, but it is sufficient that c'onfusion is probable or .likely to occur. 66 A. L. R. 972.” Metal Craft Co. v. Metalcraft Heater Corp., supra. Further such a showing was quite impossible because defendant Dearborn Universal Underwriters Credit Corporation never commenced doing business. It was not incorporated until October 13, 1942. Plaintiffs promptly protested. The bill of complaint herein was filed less than two' months after the incorporation, and the hearing was con eluded1 February 19, 1043. But we are satisfied from this record that “the probability of confusion is apparent,” as was said in the case last above cited.
Also appellants somewhat stress the fact that the Michigan corporation and securities commission in October, 1942, “accepted, approved and filed” the articles of incorporation of the defendant Dear-born Universal Underwriters Credit Corporation. Such fact or circumstance is a matter for consideration in a case of this character, but it is by no means necessarily controlling. Otherwise judicial review would be barred. Young & Chaffee Furniture Co. v. Chaffee Brothers Furniture Co., 204 Mich. 293.
In support of their claim that none of plaintiffs have proven “a special right in a ‘secondary meaning’ of the word ‘Universal’ ” as part of a corporate name in the business of automobile finance or automobile insurance, appellants further urge that the word “Universal” is merely a “geographical adjective” and not capable of exclusive appropriation as a trade name. We cannot agree that as an established and quite dominant part of a corporate name its possessor is not entitled to enjoin its similar use by another when, as in the instant case, such use will obviously lead to confusion or deception. While not conclusive of plaintiff’s right to injunctive relief in the instant case, it may be here noted that if, as appellants assert, the word “Universal” has no particular significance in the business of automobile financing but instead is only a “geographical adjective,” surely appellants are not materially injured by the decree forbidding such use by appellants.
As against plaintiffs’ claim to injunctive relief, defendants point out that this record discloses there are in at least five other States corporations in the same field of enterprise each of which has the word “Universal” as a part of its corporate name. It is not clear in the record as to whether or not such corporate names were in use by these other companies prior to plaintiffs’ similar use of the word “Universal.” Nor does it appear what the relative legal rights to such use by the various parties would be determined to be if such rights were litigated. There is no claim that any of such other corporations have ever done business in Michigan or that they are licensed to do business in this State. The circumstances just above noted as to corporations in other States using “Universal” as a part of their corporate names is not controlling as to plaintiffs’ right in the instant case to injunctive relief under the law of this State which provides:
“No corporation shall assume any name which is likely to mislead the public, or any name already in use by any other existing corporation of this State, or corporation lawfully carrying on business in this State, or so nearly similar thereto as to lead to confusion or deception.” Act No. 327, §6, Pub. Acts 1931 (Comp. Laws Supp. 1940, § 10135-6, Stat. Ann. §21.6).
Nor are plaintiffs barred of relief under the record in this case by reason of the fact that other companies in Michigan engaged in types of business wholly unlike that of plaintiffs’ use “Universal” as a part of a firm or corporate name.
“Unfair competition is distinguishable from.the infringement of a trade-mark in this: that it does not involve necessarily the question of the exclusive right of another to the use of the name, symbol, or device.” G. W. Cole Co. v. American Cement & Oil Co., 65 C. C. A. 105 (130 Fed. 703).
Under the circumstances of this case, there is no merit to appellants’ contention that D. F. Broderick, Incorporated, is not a necessary or proper party defendant. This company was the corporate incorporator of defendant Dearborn Universal Underwriters Credit Corporation and is its sole stockholder. See Terminal Barber Shops, Inc., v. Zoberg (C. C. A.), 28 Fed. (2d) 807.
Appellants further urge that “the language of the decree in this case (is) so general in nature as to deprive defendants, or some of them, of a judicial determination by trial whether future unspecified acts are in fact likely to unlawfully divest plaintiffs of their alleged but unspecified legal rights.” The portion of the decree which gives rise to this contention reads:
“Defendants * # * are * * * enjoined from using or causing to be used the name ‘Dearborn Universal Underwriters Credit Corporation’ or any counterpart thereof, (and) from using or causing to be used any name, designation, or abbreviation which employs or utilizes the word ‘universal,’ the letters ‘UCC,’ or any part, simulation, or imitation of the corporate names of plaintiffs herein in connection with the automobile finance business or the insurance of automobiles purchased or which have been purchased on the instalment plan.”
Appellants assert the decree is too broad and indefinite in that it enjoins them from using the word “Universal” as a part of the corporate name or in the business of a company engaged in the automobile insurance business, whereas plaintiffs neither alleged nor offered testimony that any of them is engaged in that field of endeavor. We think the decree is not too broad in this respect because this record fairly discloses that insurance of the type involved is almost of necessity a part of each transaction incident to financing automobile conditional sales contracts. Further no good reason appears for defendants ’ attempted use of the word ‘ ‘ Universal, ’ ’ and the record fairly discloses that such use would lead to unlawful appropriation by defendants of good will which has been created by and belongs to the affiliated plaintiff companies.
Nor do we find that a fair reading of the decree enjoins defendants from using the word “Dear-born” in their business as part of a corporate name or otherwise. At the argument in this Court plaintiffs’ counsel stated that no such claim is made by plaintiffs. At the opening of the trial in the circuit court plaintiffs’ counsel stated: “There is quite a little in the answer and return about the name ‘Dearborn.’ We have no point about the name ‘Dearborn.’ ” Under this record it cannot be contended that the decree entered enjoins defendants or any of them from using the word “Dearborn” in connection with their business.
From the foregoing it is apparent that appellants’ motion to dismiss was properly denied by the circuit judge. Other contentions are presented in appellants ’ brief, but after carefully considering them we áre of the opinion that they do not materially bear upon decision herein and are therefore not reviewed in this opinion. The decree entered in the circuit court is affirmed, with costs to appellees.
Starr, Wiest, Butzel, Bushnell, Sharpe, Boyles, and Beid, JJ., concurred.
See Act No. 327, § 5, Pub. Acts 1931 (Comp. Laws Supp. 1940, § 10135-5, Stat. Aun. § 21.5); Act No. 13, Pub. Acts 1935 (Oomp. Laws Supp. 1940, § 9769-1 et seq., Stat. Ann. § 19.781 et segi.).—Reporter. | [
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Shakpe, J.
Petitioner filed a petition in the circuit court of Macomb county for a declaration of rights as to who is entitled to condemnation moneys paid by the Federal government. The facts are not in dispute. The petitioner, Mount Clemens Savings Bank, acquired the lots in question in 1932. Because of unpaid taxes the lots in question were bid to the State of Michigan at the 1939 tax sale, and on November 29, 1940, the property was deeded to the State by the auditor general. The property was due to be put up for sale at public auction by the State land office board under the provisions of Act No. 155, Pub. Acts 1937, as amended1 (Comp. Laws Supp. 1940, § 3723-1 et seq., Stat. Ann. 1940 Cum. Supp. § 7.951 et seq.), at the regular public auction sale conducted by said board which began February 2, 1941. No sale of the lots was conducted on that date owing' to the fact that the United States seized the title of the property by condemnation petition with declaration of taking. The award on condemnation which has been tendered by the United States is approximately $3,000. The amount of delinquent taxes cancelled1 by vesting title in the State was substantially the full amount of the award.
Petitioner, claiming that if the condemnation had not intervened it would have acquired the property at the State land office board sale for $760, and that it had been deprived of that right by the action of the United States in seizing the title before such a sale was made, filed a motion in the United States district court for the eastern district of Michigan asking for a distribution of the award of approximately $3,000 as follows: $760 to the'State land office board, and tbe balance to petitioner, as owner of tbe property prior to vesting of title in the State. The petition in the district court is being held in abeyance until the ownership of this fund is established in the State court. The trial court, after hearing the cause, entered a declaratory judgment in favor of petitioner in which it was determined that the State of Michigan was entitled to $760, and petitioner entitled to the balance, in the distribution of the condemnation award in question. The State land office board appeals and urges that the State, as absolute fee title owner of the lands in question on the date of seizure by the United States, was entitled to the entire award.
Petitioner urges that it had a granted, special right to acquire title to this property at a mandatory public sale; that this right is private property within the meaning of the constitutional provisions, and having been taken for public use must be compensated for to the extent of its value.
In James A. Welch Co., Inc., v. State Land Office Board, 295 Mich. 85, 93, the State land office board, at the request of the city of Flint, withheld from sale certain lands formerly owned by plaintiff. Later, plaintiff filed a petition for a writ of mandamus to require the State land office board to proceed with the sale of said lands. We there said:
“On November 3, 1939, plaintiff ceased to have any more interest in the title to the lands described in its petition than any stranger to that title. The State, however, granted to it a right or privilege for a 30-day period after the sale of the land at the so-called scavenger sale, to acquire title by meeting the highest bid. Act No. 155, § 7, Pub. Acts 1937, as amended. The purchaser at this sale makes his bid subject to the statutory privilege or right of the former party in interest to meet the highest bid. The right of plaintiff to meet the highest bid is not a condition upon which the State acquired title absolute to the lands in question. This privilege could not under any circumstances accrue to plaintiff or become a vested right in it until a sale has been made by the State to the highest bidder. It is only upon the acceptance by the State of the highest bid that the statutory right of the former owner to meet such highest bid becomes operative and permits the former owner to acquire the title in the manner provided by the statute. Until such sale, it is not a present vested right or a present interest; it is a mere contingent right which may or may not happen.”
In Arner v. Riser, 305 Mich. 619, we said:
“The State sold its own property and the only right plaintiff had was to bid at the sale like anyone else and the privilege to match any higher bid within a specified time.”
See, also, National Bank, of Detroit v. State Land Office Board, 300 Mich. 240; Cobleigh v. State Land Office Board, 305 Mich. 434.
Under section 5 of the act parcels of land may be omitted from public sale without giving monetary consideration to the former owner of the land. It must be assumed that the State intended that the privilege of matching the bid applies only to such land as it might have on the date of sale. The owner has no interest in the land. He only has a privilege of matching the bid if and when a sale is made. The trial court was in error in holding that plaintiff was entitled to any part of the award.
The judgment is reversed and a judgment will be entered in favor of defendant. No costs are allowed as a public question is involved.
Nobth, C. J., and Stake, Wiest, Butzel, Bushnell, and Boyles, JJ., concurred. Reid, J., did not sit. | [
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North, C. J.
Plaintiff filed a "bill to foreclose a mortgage against the premises at 5167 Cass avenue, Detroit, Michigan. Prior to March 10, 1939, defendants and cross plaintiffs H. Jay Hayes and his wife lived in New York and owned this property in fee. In 1934, the defendant Moinet, Inc., a family corporation then consisting of H. S. Durand, Sr., H. S. Durand, Jr., and Marion Hanks, leased the property and successive leases were entered into between the parties. In May, 1940, a further agreement hereinafter noted covering rights of the parties was executed. On December 6, 1941, the lease then in effect was terminated by foreclosure of the plaintiff’s mortgage, no redemption having been made. At the time of this termination, the rental was $75 per month. The lease ran until October 31, 1942, and rent was prepaid in the amount of $337.72.
In 1937, Hayes was in financial difficulty; State and county taxes were in arrears, and to redeem the property Hayes borrowed a sum»> of money from Moinet, Inc. This advancement served as a prepayment on rent. City taxes for 1930 to 1939 were unpaid and the city threatened foreclosure. Mr. Durand, Sr., is a practicing attorney in Detroit and undertook to obtain a postponement of foreclosure pending the obtaining of a mortgage on the property. To make possible this mortgage, Moinet, Inc., executed an instrument giving the mortgage priority over its lease but giving- to Moinet, Inc., certain optional rights of redemption in event of default by the mortgagor. The mortgage was obtained from the plaintiff and the borrowed funds were used to pay some tax liens. However, Hayes soon became in default and plaintiff commenced foreclosure a little over four months after execution of the mortgage.
The agreement of May, 1940, between Hayes and Moinet, Inc., provided that in the event of default, Moinet, Inc., could pay such default and to that extent acquire an interest in the premises. Moinet, Inc., was advised of the pending default but decided not to exercise its rights, and so notified both Hayes and the attorney for the mortgagee, whereupon foreclosure was commenced.
Mr. Durand, Sr., acting for Moinet, Inc., filed a cross bill ashing the court to determine damages for the termination of the lease in the event no redemption was made by Hayes, and that the court permit Moinet, Inc., to redeem if it should wish to do so. The foreclosure decree provided that Moinet, Inc., could so redeem; and also that upon application of Moinet, Inc., if there was no redemption, damages would be determined by a supplemental decree as far as Moinet, Inc., was concerned. Considerable negotiation resulted in Mr. Durand, Sr., or Moinet, Inc., refusing to aid in the redemption.
Although Durand, Jr., had been an officer of Moinet, Inc., there is evidence that he ceased its actual management in 1938, moved away from Detroit, and devoted himself entirely to the management of the St. Clair'Inn. In August, 1941, he resigned as president and director of Moinet, Inc. Just prior to the expiration of the period of redemption, Durand, Jr., on December 2, 1941, purchased the mortgagee’s interest in the Detroit property but ■subject to Hayes’ right to redeem. There was no redemption, but Hayes asserts that Durand, Jr.’s, purchase should be held to be a redemption from the foreclosure, instead of vesting absolute title in Du-rand, Jr. On April 8, 1942, after securing leave, Hayes filed a petition for a supplemental decree and at this time Durand, Jr., and wife were made parties defendant. The matter came before a circuit court commissioner to determine whether. Durand, Sr., had practiced fraud on Hayes; whether Durand, Sr., and Hayes stood in the relation of attorney and client; whether there was a legal duty on Durand, Sr., to prevent the acquisition of the property by Durand, Jr.; whether the purchase by Durand, Jr., was a fictitious purchase to circumvent the provisions of the decree and whether or not any future claim of Moinet, Inc., against Hayes should be barred.
The circuit court commissioner found that Du-rand, Sr., was not the attorney for Hayes, there was no fraud practiced by either Durand, Sr., or Durand, Jr., that Durand, Jr., obtained money to make the purchase on his own credit and that no claim for damages from Moinet, Inc., should be barred. Decree accordingly was entered in the circuit court.
The opinion given by the circuit court judge in confirming the commissioner’s report states our own conclusions so well that we quote it in part as follows :
“After a perusal of the same, we conclude that the commissioner’s findings of fact are comprehensive and correct, and they are made, by reference, a part of this opinion. We also approve his recommendations of the law generally, but two issues seem to call for particular comment.
. “Defendants Hayes,’ in their brief, stress a fiduciary relationship between defendant Durand, Sr., and defendants Hayes, on which much of hig legal argument is based. We agree with the commissioner that there is no testimony to support such a contention; in fact, just the opposite. When Du-rand and Hayes assumed the relation of tenant and landlord, Durand performed some legal services in clearing the tax records for their mutual benefit, and for which he properly charged Hayes. From the time the relationship of tenant and landlord began, their interests were generally opposed, and Hayes knew it.
“We conclude that Harvey S. Durand, Sr., who has a long and honorable record at this bar, did no act in violation of any fiduciary relationship. On the contrary, his conduct with the defendants Hayes was not only just, but generous; and it is our duty so to find.
“Defendants Hayes’ other contention is based on the rather unusual paragraph in the original decree, permitting the defendant, Moinet, Inc., to redeem in case the property was foreclosed, to protect its own interests. * * *
“It will be noted that this language is permissive, and not mandatory. Moinet, Inc., was under no obligation to redeem, and did not redeem; and there is no evidence that Hayes expected that the corporation would, or that he relied on such redemption. In fact, under the law, he could have redeemed at any time during the statutory period, and the purchase of the plaintiff Teal’s interests in no way cut him off.
“Defendants Hayes were deprived of no legal rights, and a reading of the record is convincing that the defendants Durand did much to help them preserve their equity.”
We have read the record with care and although only a portion of the facts are- stated herein, it is our conclusion that the record amply supports the confirmation of the commissioner’s report. The record is somewhat voluminous and to review here all of the testimony upon which we rely in arriving at our conclusion would be of no service. The decree entered in the circuit court is affirmed, with costs to appellees.
Starr, Wibst, Btjtzel, Bushnell, Sharpe, Boyles, and Reii>, JJ., concurred. | [
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North, J.
This is an appeal in the nature of mandamus in which appellant seeks an order requiring the circuit judge to grant him a further extension of time within which to settle the record on_ appeal. Since leave to appeal was granted herein, the year within which a circuit judge may extend the time to settle a record on appeal has expired. See Court Rule No. 66 (1933). Therefore mandamus will not be granted. Recital here of the circumstances resulting in a misunderstanding and disagreement between the respective counsel and finally giving rise to this appeal, would be of no service to the profession. We will treat the appeal as an application to this court to grant further time within which appellant may perfect his appeal.
We think the circumstances disclosed by the record justify an extension of time, and accordingly it will be ordered that appellant be granted 40 days from and after the filing of this opinion within which to present to the circuit court for settlement his proposed record on appeal. No costs will be awarded.
Nelson Sharpe, C. J., and Potter, Fead, Wiest, Butzel, Btjshnell, and Edward M. Sharpe, JJ., concurred. | [
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Edward M. Sharpe, J.
This is a suit for conversion of 12,000 rhubarb roots valued at $3,000 seized by the defendants on attachment against plaintiff’s grantor, Joseph Milinkovi, in a suit by Church & Church, Inc.
In May, 1928, Joseph Milinkovi and wife purchased a 40-acre farm in Sterling township, Macomb county, from a Mr. Fischer, giving in return a mortgage on said farm in the sum of $10,500. From 1929 to April, 1931, Joe Milinkovi purchased lumber, etc., from defendant corporation and at the end of April, 1931, owed a balance of $1,300. Nothing has been paid on defendant’s bill since.
December 1, 1931, Joe Milinkovi and Margaret Milinkovi, his wife, gave plaintiff, Margaret’s mother, a quitclaim deed of the 40-acre tract together with all tools, stock, produce and equipment, the alleged consideration being the cancellation of a loan of $1,000 made by plaintiff to Joe Milinkovi in September, 1928, and a further loan of $1,150 in March, 1929. The next day plaintiff moved upon the farm and on the same day recorded the deed as above. Joe Milinkovi and Ms family continued to live on the farm and Joe continued to manage the growing of the rhubarb thereon, claiming to have been hired by plaintiff at $15 a month. The farm was foreclosed and sold December 12, 1931, but the two families continued to live thereon until the equity of redemption expired when plaintiff moved to another farm and Joe took his family to Detroit.
On February 10, 1932, the defendants attached the rhubarb roots included in the above transfer as the goods of Joe Milinkovi, and upon their refusal to release the levy upon plaintiff’s demand, the plaintiff on February 16, 1932, began this suit for conversion. The first trial resulted in a judgment for plaintiff and a new trial was granted. On the second trial, in March, 1933, a judgment was rendered for the defendant from which plaintiff appeals.
Plaintiff alleges that the trial court committed error in the following particulars: (1) in permitting the defendants to call Joe Milinkovi for cross-examination under the statute, since he was not a party to the suit nor in the employ of pla.int.iff on December 1, 1931, when the transfer occurred, or at the time the case was tried; (2) in permitting defendants to impeach the testimony of Joe Milinkovi; (3) in permitting proof of dealings of Joe Milinkovi with other creditors than plaintiff; (4) in permitting impeachment of plaintiff’s title by declarations of her vendors made after sale to her; (5) in permitting proof of lack of record of the transfer of personal property.
Defendants claim that the transfer of the property from Joe Milinkovi and his wife to plaintiff, made while Joe was insolvent, was without consideration and in fraud of creditors.
The statute permitting cross-examination of the opposite party is as follows (3 Comp. Laws 1929, § 14220):
“Hereafter in any suit or proceeding in any court of law or equity in this State, either party, if he shall call as a witness in his behalf, the opposite party, employee or agent of said opposite party, or any person who at the time of the happening of the transaction out of which such suit or proceeding grew, was an employee or agent of the opposite party, shall have the right to cross-examine such witness the same as if he were called by the opposite party; and the answers of such witness shall not interfere with the right of such party to introduce evidence upon any issue involved in such suit or proceeding, and the party so calling and examining-such witness shall not be bound to accept such answers as true.”
The purpose of this statute is to permit the calling as a witness of the opposite party or his agent or employee with the same privileges of cross-examination and contradiction as though such witness had been called by the opposite party. Joe Milinkovi was properly called by the defendants under this statute, since he was, according to plaintiff’s version of the facts, employed by her at the time of the attachment although not at the time of the transfer or trial.
While the statute permits contradiction of a witness called under this statute, it does not enlarge the latitude of cross-examination beyond matters material to the case.
“Whatever latitude is proper in cross-examination to test the veracity, it cannot properly introduce independent issues against the person who is both witness and respondent.” People v. Pinkerton, 79 Mich. 110, 114.
‘‘ In' the investigation of fraud, it is usual to permit a wide range of investigation of matters which will throw light upon the questions at issue; but irrelevant testimony is no more admissible in trying questions of fraud than in any other investigation or trial of civil actions at law.” Wessels v. Beeman, 87 Mich. 481, 485.
Joe Milinkovi was properly cross-examined on matters material to the issues, i.e., the consideration for the transfer to plaintiff and plaintiff’s good faith (where such evidence was not inadmissible by other rules). But to extend the inquiry into transactions such as Joe’s dealings with Fischer, the man from whom he purchased the farm in May, 1928, and matters incidental to the foreclosure of the Fischer mortgage; the dealings that he had with defendants, such as the purpose for which the materials were purchased and the reason why he could not pay for them; his business relations with the DeBeaussaerts to whom he was indebted; and the introduction of testimony by defendants to impeach that given by Joe, largely upon matters immaterial to the issue, was error that, may have affected the jury.
It is also well settled that a vendee is not bound by statements made by his vendor subsequent to the sale without his knowledge or consent. Buckingham v. Tyler, 74 Mich. 101; Jacobs v. Queen Ins. Co. of America, 195 Mich. 18; Reichel v. Schneider & Brown Lumber Co., 226 Mich. 24. Under this rule the conversation between Emma DeBeaussaert and Joe’s wife (one of the vendors) relative to the alleged fraudulent transfer to plaintiff and not made in the presence of plaintiff was not competent testimony and was erroneously admitted.
Counsel for plaintiff complains of a ruling of the trial court in permitting the defense to introduce evidence that a- search of the records of the township clerk failed to produce any record of.the transfer of the personal property to plaintiff. This was error and served no purpose other than to create a doubt in the mind of the jury as to the validity of the transfer. The jury should have been instructed that the recording of any instrument of sale is unnecessary to pass title to personal property.
While the statute prohibits reversals or new trials for improper admission or rejection of evidence unless it shall affirmatively appear that the error complained of has resulted in a miscarriage of justice (3 Comp. Laws 1929, § 15518), it is impossible to determine in this case what effect the erroneously admitted testimony may have had on the verdict of the jury. The record discloses throughout a persistence upon the part of counsel for the defense in asking questions that were irrelevant and immaterial to the issue involved, thus compelling plaintiff’s counsel to make continual objections. The effect of this action may have been to depreciate the plaintiff’s case in the minds of the jury.
.“A verdict based in whole or in part upon such (inadmissible) testimony would be entitled upon the final hearing to no weight or effect whatever.” Collins v. Jackson, 43 Mich. 558, 562.
For the errors pointed out the judgment must be reversed and a new trial ordered. Costs to plaintiff.
Nelson Sharpe, C. J., and Potter, North, Fead, Wiest, Btjtzel, and Btjshnell, JJ., concurred. | [
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Carr, J.
This case arises out of a traffic accident occurring on highway US-12, near Oshtemo, Michigan, about 7 o’clock in the evening of March 4,1945. A tractor, with semitrailer attached, owned by plaintiff Newkirk and operated by his employee, David Holley, was proceeding in a westerly direction on said highway. Plaintiff’s driver undertook to pass a station wagon, traveling in the same direction, belonging to defendant and operated by defendant’s driver, James Wilson. As plaintiff’s equipment was passing the station wagon the-right rear wheel of the trailer came in contact with the left front corner of defendant’s vehicle. The trailer was loaded with rolls of paper, weighing approximately 22,000 pounds. Following the impact, plaintiff’s equipment upset on the shoulder of the road, striking a tree. As a result of the upset the truck, trailer and cargo were damaged. . ■
' Plaintiff Michigan Fire & Marine Insurance Company had previously written an insurance policy to Mr. Newkirk covering the cargo. In accordance with the provisions of the policy it paid to insured the damages sustained by the cargo. The other plaintiff, Casualty Reciprocal Exchange,, had insured the tractor and trailer against collision damage, and it also paid Mr. Newkirk as required by its contract.. Each insurer claimed the right to be subrogated, under its policy, to the rights of Mr. Newkirk to the extent of the payment made by it, and consequently joined with him in the present action.
It was the claim of plaintiffs on the trial that the accident resulted from the negligence of defendant’s driver in undertaking to turn to the left, across the center line of the highway, as plaintiff’s equipment was passing defendant’s vehicle. Testimony was offered tending to show that the station wagon ran into the trailer. It was plaintiffs’ theory of the case that the subsequent upset, and resulting damage to the tractor, trailer and cargo, were the proximate results of the collision. Defendant, denying negligence on its part, insisted that plaintiff’s driver was negligent in undertaking to pass the station wagon under the circumstances indicated by the proofs. It is claimed in this regard that defendant’s driver gave a signal by extending his arm from the window of the station wagon, indicating his intention to turn to the left; that immediately prior to the impact the station wagon had been traveling between 5 and 10 miles per hour with its left wheels across the center line of the pavement, which, at the point of the collision, was 20 feet in width; that plaintiff’s driver should have seen the signal and passed on the fight, if at all; and that plaintiff’s equipment was traveling at a rate of speed in excess of that permitted by the regulations of the Michigan public service commission. It is conceded on the record that, under such regulations, the maximum rate of speed wás 20 miles an hour for plaintiff’s equipment, and that it was, in fact, being driven approximately 35 miles an hour at the time of the accident. Defendant insisted on the trial that its driver wás not guilty of negligence constituting the proximate cause of the accident and, in any event, that plaintiff’s driver was guilty of contributory negligence.
The case was tried before a jury. At the conclusion of plaintiffs’ proofs, counsel for defendant moved for a directed verdict, which motion was renewed at the conclusion of the testimony, and taken under advisement by the court. The jury returned verdicts for plaintiffs in the aggregate- amount of $2,164.90. Thereupon defendant moved for judgment notwithstanding the verdict in accordance with the motion for a directed verdict. This motion was denied, and thereafter defendant moved for a new trial. This motion also was denied. Defendant has appealed, asking that the judgment entered in the circuit court be reversed and the case remanded, with instructions to enter judgment for defendant. In the alternative, defendant seeks a new trial.
The first' question for consideration is whether defendant was entitled to a directed verdict for the reasons assigned by it. The testimony as to the manner in which the impact between the vehicles occurred is in conflict. Likewise, there are contradictions in the testimony as to occurrences immediately following such impact and leading up to the upset of plaintiff’s equipment. It is sufficient to say that on the record the question of defendant’s negligence was for the jury to determine.
In support of its claim that plaintiff’s driver was guilty of contributory negligence as a matter of law, defendant contends that its driver’s signal, indicat ing his intention to turn, should have been observed by plaintiff’s driver. It was, and is plaintiffs’ claim that Mr. Newkirk’s driver was exercising reasonable and proper care in the operation of his equipment and that he did not see any signal by defendant’s driver. In view of the testimony relating to this phase of -the case, we think that the issue was for the jury.
The principal claim advanced by defendant with reference to the matter of contributory negligence is based on the admitted fact that plaintiff’s driver was operating the tractor and trailer at a rate of speed in excess of that permitted by law. In submitting the case to ,the jury the trial court called attention to the violation of 'the regulation of the Michigan public service commission and, in substance, told the jury that such speed was negligence. The jury was further charged that if the negligence of plaintiff’s driver contributed to the accident and injury there could be no recovery of damages. It does not appear that the correctness of the charge of the court on this point is challenged. It is insisted, however, on behalf of defendant, that the court should have held plaintiff’s driver guilty of negligence as a matter of law, and that a verdict for defendant should have been directed on that ground.
It is settled law in this State that negligence ! charged against one seeking to recover damages in a case of this character does not preclude recovery unless it contributed to the accident and injury. In Swift v. Kenbeek, 289 Mich. 391, plaintiff administrator brought suit to recover damages for the death of his intestate, resulting from injuries sustained in a collision between defendant’s automobile and the intestate’s bicycle. On the trial it was claimed that the bicycle was being ridden at a negligent and unlawful rate.of speed. Assuming that such was the fact, it was said:
“For' even if the testimony is to that effect, we still have the factual issue as to whether the pace at which plaintiff’s decedent was riding was a contributing proximate cause of the accident. McConnell v. Elliott, 242 Mich. 145. Suppose plaintiff’s decedent had approached the point of collision at only 20 or 15 miles an hour, would every man acting as a juror,in such a ca&e say that the accident would not have happened? Or might some, say it would have happened and others, having like knowledge, say it would not have happened? The rule is that unless the record in a case of this character is such that men of reasonable minds would not differ a question of fact is presented. Amanta v. Railroad Co., 177 Mich. 280; Helber v. Harkins, 210 Mich. 580.”
Likewise, in Losey v. Wetters, 278 Mich. 422, it was said with reference, to a situation analogous to that involved in the case at bar: .
“If we assume that the Dodge truck was traveling at a rate of speed in excess of 30 miles per hour in contravention of 1 Comp. Laws 1929, § 4766, as amended by Act No. 253, Pub. Acts 1933, then we think it presents a question of fact for a jury’s determination as to whether or not the excessive speed was the proximate cause of the accident. We cannot say as a matter of law that exceeding the statutpry speed in the manner and under the circumstances involved in this case was the proximate cause of the accident.”
See, also, Socony Vacuum Oil Co. v. Marvin, 313 Mich. 528, and cases there cited.
On the motion for a directed verdict it was the duty of the court to construe the testimony offered by plaintiffs as strongly as possible in tbeir favor. Anderson v. Kearly, 312 Mich. 566; Lane v. B. & J. Theatres, Inc., 314 Mich. 666. Based on the evidence in the case we think that the minds of reasonable men might reach different conclusions on the question whether the negligence of plaintiff’s driver, in traveling at an excessive rate of speed, contributed to the accident and the damage sustained by plaintiff’s equipment and the cargo. In consequence, this issue also was for the jury to determine. Nezworski v. Mazanec, 301 Mich. 43. See, also, Werker v. McGrain, 315 Mich. 287, where it was said:
“If there is substantial evidence tending to support the verdict it should not be set aside even though this Court might be in doubt as to the ultimate facts. Pulford v. Mouw, 279 Mich. 376.”
The motion for judgment notwithstanding the verdict was properly denied.
Defendant’s claim that it is entitled to a new trial is based on alleg’ed errors in the charge of the trial court, and on the refusal of the court to charge as requested by defendant. It is contended that plaintiffs ’ claims as to how the accident and damage occurred were improperly and inaccurately submitted to the jury. We have carefully examined the record and think that the charge of the court, read in its entirety, fairly presented to the jury the claims of the respective parties. It does not appear that the jury could have been misled, to defendant’s prejudice.
Among other requests to charge, defendant presented the following:
“I charge you that the defendant would not be liable for the damage done to the plaintiff’s vehicle or for the loss suffered by reason of the damage to the cargo, if you find that the.collision between the defendant’s vehicle and the plaintiff’s vehicle did not cause plaintiff’s vehicle to go onto the grass portion of the highway to the south of the shoulder,, or if yon find that after the collision between the plaintiff’s and defendant’s vehicle, the operator of the plaintiff’s vehicle had an opportunity to have stopped his vehicle before going off from the shoulder of the highway and onto the grass portion thereof. ’ ’
The trial court did not give the request as presented. In denying the motion for a new trial he indicated that said request was covered in the charge as given insofar as proper. He further stated in his opinion, “The last clause placed too great a burden on plaintiff’s driver. The opportunity.must have been a reasonable one.” It will be noted that the request to charge rests on the assumption that the upsetting of plaintiff’s equipment, and its collision with a tree, which caused the damage, took place on the grass portion of the highway. This assumption ■is, we think, unwarranted. The testimony of plaintiff’s driver was, In substance, to the effect that the load shifted somewhat, following the impact, that there was loose gravel on the shoulder causing the equipment to slip, that he undertook to get back on the pavement, and that the upset then occurred. "With reference to the specific point referred to, he said:
“I would not say that what happened was that after this collision my car went off the shoulder and on the grass portion to the south of it, it didn’t. After rolling over my left wheels were in the grass on the edge of the shoulder and after I had stopped my left front wheel of the tractor got into the grass on the south shoulder. When my vehicle first started to tip over wasn’t when it got. into the grass portion south of the south shoulder. As the load shifted it put most of the weight on the left, on the driver’s side of the tractor and trailer. The load shifted as I was leaving the pavement after the collision. ’ ’
In view of this testimony, as well as for the reasons indicated by the circuit judge in his opinion, the refusal to give the charge in the form presented was not error. While there were some inconsistencies and contradictions in the testimony of plaintiff’s driver, it was for the jury to determine which specific answers made by him were correct. In Goonen v. Ann Arbor R. Co., 218 Mich. 502, plaintiff, as a witness in his own behalf, gave testimony inconsistent with any claim of subsequent negligence. Subsequently, he testified in support of' such theory. Commenting on the contradictory testimony, this Court said:
“Upon a motion to direct a verdict for defendant, the evidence must be viewed in the light most favorable to plaintiff and when so viewed the portion of his testimony sustaining the theory of subsequent negligence made an issue of fact for the jury. It was for the jury to say what weight shall be given to his testimony as a whole.”
See Emery v. Ocean Accident & Guarantee Corp., 209 Mich. 295; Smith v. Doughty, 227 Mich. 638; Thrall v. Fere Marquette R. Co., 257 Mich. 269.
It is also claimed that the verdict of the jury was against the great weight of the evidence and should be set aside for that reason. Commenting on a similar claim it was said in McConnell v. Elliott, 242 Mich. 145:
“Clearly plaintiff’s testimony made a case for the jury and defendant was not entitled to a directed verdict. Nor can we say on this record, having due regard for our duties as a reviewing court, that the verdict should be set aside as against the weight of the evidence, We, of course, do not on the law side of the court try cases de novo. The fact that we would reach a different conclusion than did the jury is not controlling. We should set aside a verdict, and only set one aside, when it-is against the overwhelming weight of the evidence. We are not persuaded that this record justifies us in setting aside fte verdict.”
The language quoted may properly be applied in the case at bar. For .the reasons given above in the discussion concerning the principal questions involved, we think the issues in the case were properly submitted to the jury. The verdict finds support in the record, and we agree with the trial court that it should not be set aside. The motion for a new trial was properly denied.
Judgment is affirmed, with costs to appellees.
Butzel, C. J., and Bushnell, Sharpe, Boyles, Reid, North, and Dethmers, JJ., concurred.
See Comp. Laws Supp. 1935, § 4766, Stat. Ann. § 9.1643.— Rep.ortee. | [
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Boyles, J.
On May 26, 1939, plaintiff Leo M. Farrell recovered a judgment against defendant John Paulus for $5,312.50 and costs. His cause of action was based on an oral agreement whereby Paulus had agreed to repurchase certain shares of stock in a brewing company which went bankrupt. In September and again in December, 1937, plaintiff had demanded from Paulus the return of his money, started1 suit in May, 1938, and obtained judgment against Paulus in May, 1939. Paulus did not appeal and plaintiff took out execution which was returned wholly unsatisfied.
In January, 1940, plaintiff filed the instant suit in chancery, a judgment creditor’s bill in aid of execution, to reach certain property held by the other defendants herein. Plaintiff claims that this property was transferred by Paulus to these defendants without compliance with the bulk sales act, 2 Comp. Laws 1929, § 9545 ctseq. (Stat. Ann. § 19.361 et seq.), and also that the transfers are void under the fraudulent conveyance act, 3 Comp. Laws 1929, § 13434 et seq. (Stat. Ann. §26.971 et seq.)..
The lower court referred the case to a circuit court commissioner, and entered a decree confirming the report of the commissioner holding that plaintiff had failed to establish the allegations in his bill of complaint except as to an automobile. Plaintiff appeals.
The property in question consists of an automobile, a parcel of real estate, and Paulus’ interest in a certain copartnership. As to the automobile, the lower court decreed the transfer to be void and defendants have not appealed, or cross-appealed, from the decree. For that reason no issue as to the automobile is involved in this appeal. As to the ‘real estate, it satisfactorily appears from the record that this parcel of real estate had been held by John Paulus and his wife Elizabeth for many years as tenants by the entirety and Paulus merely quit- claimed to his wife whatever interest he had therein. 3 Comp. Laws 1929, § 13069 (Stat. Ann. § 26.201); Ash v. Ash, 280 Mich. 198. The validity of the quitclaim deed is attacked by plaintiff, but if it were set aside the title would again be in the name of Paulus and -wife as tenants by the entirety and plaintiff would not be aided thereby because neither the land nor the rents and profits therefrom would be subject to levy on execution for the sole debt of the husband. American State Trust Co. v. Rosenthal, 255 Mich. 157. A conveyance of real estate is not within the provisions of the bulk sales act which applies to sales of stocks of merchandise, or merchandise and fixtures. Under the circumstances of the case the quitclaim by Paulus to his wife of the lots 1 and 2 hereinafter referred to will not be set aside and it is of importance only as bearing on the entire issue of fact whether Paulus divested himself of all of his property with intent to hinder and defraud plaintiff as a creditor.
The more serious question concerns the transfer by John Paulus of his interest in a copartnership.
In 1929 defendants John Paulus and his wife Elizabeth and John Danielewski and wife Clara formed what they considered as a copartnership to own and operate a bowling-alley business. Apparently it was an indefinite arrangement, no partnership articles being signed. This was before the enactment of the statute permitting husband and wife to become copartners, Act No. 72, § 6, Pub. Acts' 1917, as amended by Act No. 272, Pub. Acts 1941 (Comp. Laws Supp. 1943, § 9846, Stat. Ann. 1943 Cum. Supp. §20.6). They contributed varying amounts, which ultimately seem to have been either confused with or considered as loans to the partnership or to Paulus. The business was established in 1928 or 1929 on four lots at Chene and Trombly streets in Detroit. Title to the two corner lots. 1 and 2 hereinbefore referred to, was in the names of John and Elizabeth Panlus as tenants by the entirety. Title to the adjoining lots, 3 and 4, was taken in the name of Elizabeth Paulus. Mr. Paulus purchased the lots and Mrs. Paulus admits that the money did not come from her, that Mr. Paulus made the payments. The bowling alley building was put up on lots 3 and 4 out of money from the business. A beer garden or tavern was operated by these four defendants on lots 1 and 2. Paulus drew money from the partnership to invest in the brewery company, considered by defendants as a loan. Defendants also claim individual loans were made to Paulus. In 1939, after the brewery enterprise failed, and some time after plaintiff herein had demanded reimbursement from John Paulus, the latter executed the quitclaim deed to his wife of his interest in the tenancy by the entirety hereinbefore referred to. In March, 1939, when plaintiff’s suit against Paulus was about to come up for trial in the circuit court for Wayne county, the defendant Paulus obtained a short adjournment and immediately thereafter Paulus divested himself of further ownership in the partnership. On March 28th Paulus executed an affidavit apparently intended to comply with the bulk sales act, reciting:
“That he is transferring and assigning all his in-, terest in the said copartnership to the partnership and to Elisabeth Paulus as per a separate agreement to be entered into between John Paulus and the remaining partners.”
This affidavit inventoried the partnership assets, and Paulus concluded with the statement :
“Deponent further states that at the present time he has no creditors and no outstanding indebtedness.”
On April 4th an agreement was signed by Paulus and his wife and by Danielewsld and his wife, reciting that they were copartners, and agreeing that “in consideration of the waiver by the said partnership and by Elizabeth Paulus of all claims against him by virtue of the amounts advanced to him, that the said John Paulus herewith quitclaims and releases to the said partnership and to Elisabeth Paulus any and all right, title and interest which he now has in the said partnership, or its assets.”
On this same date, April 4th, these same four individuals (including John Paulus) executed bills of sale of the personal property of the partnership, as inventoried in the Paulus affidavit, to “Club Chene-Trombly, a Michigan corporation.” Again on the same day, the capital stock of the Club Chene-Trombly, Inc., a Michigan corporation, consisting of 2,500 shares, was issued as follows: One fourth to Danielewsld, one fourth to his wife Clara, one fourth to Elizabeth Paulus, and one fourth to Joseph Paulus, the 22-year-old son of John and Elizabeth Paulus, a student at Ann Arbor.
By these transactions, admittedly John Paulus divested himself of all of his property. Defendants Danielewsld and wife continued to own one half of the partnership property through the- medium of stock ownership in the corporation; the one-fourth interest of Elizabeth Paulus (assuming she had such an interest) continued as before, as one fourth of the stock of the corporation; and if we assume that John Paulus also had an equal one-fourth interest, it may be said to have become the property of his son through the same medium of stock ownership, although the son paid no consideration for the same.
These transactions were consummated April 4, 1939, during the adjournment of the suit of plaintiff herein against John Paulus. As hereinbefore stated, on May 26th plaintiff on jury trial recovéred the judgment against John Paulus for $5,312.50 and costs, on which his instant case as a judgment creditor is based.
The record1 is not conclusive as to whether John Paulus was indebted to his wife. Their business transactions were indefinite and inconclusive. She repeatedly testified that she still had her own money, that none of her own money went into the business, and at other times testified that she gave money to her husband. However, there is no such confusion as to the son. There is no claim that either John Paulus or the partnership was indebted to the son. There is also no question but that after these transactions John Paulus was insolvent.
While the affidavit of John Paulus on March 28, 1939, intended to comply with the bulk sales act, stated that he had no creditors, and might have been made in good faith, it cannot be said to be true, as a matter of law. His counsel urges that plaintiff herein was not a creditor of John Paulus at that time, nor until his claim was reduced to judgment, that a suit pending did not mean an indebtedness. That is not the law. The debt existed on, and before, March 28, 1939, although plaintiff did not become . a judgment creditor until May 26th. The status of creditor is determined as of the date when plaintiff’s cause of action arose, not the date when judgment was obtained or entered. Hanna v. Hurley, 162 Mich. 601; Ashbaugh v. Sauer, 268 Mich. 467.
Under the bulk sales act, the transfer of an interest, in whole or in part, in the assets of a co-partnership consisting of a stock of merchandise, or merchandise and fixtures, otherwise than in ordinary course of trade and in the regular prosecution of the business, is void as to creditors unless the purchaser receives a list of creditors of the seller, under oath, and unless the purchaser notifies every creditor stated in the list, or of which he has knowledge, of the proposed sale. Watkins v. Angus, 241 Mich. 690; Kobic v. Reed, 242 Mich. 594. The defendants claim that they had no knowledge that plaintiff herein was a creditor. Elizabeth Paulus testified she had knowledge of plaintiff’s snit at the time it was started. The son, Joseph Panins, also admitted he had knowledge of plaintiff’s snit. The attorney for defendants, who counseled and carried out the transactions for defendants whereby John Panins divested himself of his property, had full knowledge of plaintiff’s snit and his claimed indebtedness against Panins. Knowledge of defendants’ attorney was sufficient notice to defendants of plaintiff’s claim as a creditor. Littauer v. Houck, 92 Mich. 162 (31 Am. St. Rep. 572); Katz v. Kowalsky, 296 Mich. 164 (134 A. L. R. 179). The parties failed to comply with the bulk sales act and plaintiff 'has a right to follow the property in the hands of defendants.
We are convinced by the record that John Panins transferred his interest in the partnership to his wife and “to the said partnership” with intent to hinder, delay and defraud plaintiff herein of his lawful demand and damages arising out of his suit against Panins for recovery of his investment in the brewery company. The time and circumstances of the transfer lead directly to this conclusion.
Every assignment of an interest in goods or things in action made with the intént to hinder, delay or defraud creditors is void as against such creditors. 3 Comp. Laws 1929, §13434 (Stat. Ann. §26.971). In the absence of proof that the indebtedness, if any, of John Panins to his wife or to the partnership was satisfied, cancelled and discharged, and in view of the doubt from the testimony of defendant Elizabeth Paulus as to whether John Panins was actually indebted to her or to the partnership, and, if so, in what amount, plus the conceded fact that Panins became insolvent as a consequence of the transfers, it is a fair inference that this transfer was without a fair consideration, in which event the actual intent of the transferor has no importance. 3' Comp. Laws 1929, § 13395 (Stat. Ann. § 26.884). This court has held:
“In a suit to set aside a conveyance of land alleged to have been made with actual intent to hinder, delay or defraud present or future creditors, the only method of determining actual intent is by a consideration of the circumstances surrounding the transaction (3 Comp. Laws 1929, § 13398 [Stat. Ann. §26.887]).
“Surrounding circumstances which usually accompany an actual intent to hinder, delay or defraud creditors and from which fraud may be inferred are called badges of fraud (3 Comp. Laws 1929, § 13392 et seq. [Stat. Ann. § 26.881 et seq.]).
“When a questioned conveyance renders the grantor insolvent, fraudulent intent may be inferred (3 Comp. Laws 1929, § 13392 et seq.).
“As a general rule transactions between members of a family must be closely scrutinized when the rights of creditors are involved and when such transactions are accompanied by other badges of fraud, a full explanation of the conveyance is required when it is challenged by an unsatisfied creditor (3 Comp. Laws 1929, § 13392 et seq.).” Bentley v. Caille (syllabi), 289 Mich. 74.
In the case at bar, the lower court found that the transfer of the automobile by Paulus to his wife was without consideration. Defendants did not appeal from such holding, and if that finding is correct the same rule should apply to the transfer to his wife of his interest in the partnership. He continues to use the automobile the same as before the transfer. He continues active in the business, where his presence and good will are admitted to be of value. The maneuvers of this debtor on the eve of the trial and judgment obtained against him in plaintiff’s suit, in practical effect resulting in the transfer of all of his property to his wife and his son, are contrary to equity and good conscience.
As stated, the record is confusing as to the extent, if any, of the amount of investment in the copartnership by Elizabeth Paulus. In any event, her investment, if any, therein cannot be considered a loan to John Paulus. Conceding that she could not become a partner with her husband at the time the partnership was carried on, yet as to her separate property she could still become a partner with defendant John Danielewski in the enterprise. Equity does not require that she be divested of rights in the partnership for the benefit of plaintiff herein. The circuit court commissioner found—and it is not disputed—that on April 4, 1939, the value of the assets of the partnership was $25,000. It is fair tó' infer that John Paulus’ one-fourth-interest therein, or the income therefrom, would be sufficient to pay plaintiff’s judgment. The transfer of Paulus’ one-fourth interest in the partnership to his wife and to the partnership, and thence to his son, Joseph Paulus, without any consideration, through the medium of issuing stock in the corporation, is set aside.
The decree is affirmed as to the transfer of the automobile and the conveyance by Paulus of his interest in real estate, and a decree may be entered in this court setting aside and holding for naught the transfer of John Paulus’ one-fourth interest in the partnership. It may be subjected to the payment of plaintiff’s judgment' (2 Comp. Laws 1929, §9868 [Stat. Ann. §20.28]). The decree may provide for remanding the case to the circuit court for such further proceedings as may be necessary for enforcement thereof. Appellant may have costs of this court.
North, C. J., and Starr, Wiest, Butzel, Bushnell, Sharpe, and Reid, JJ., concurred. | [
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Butzel, J.
Under the charter of the city of Jackson, Michigan, the board of review, consisting of three members appointed by the city commission, are to meet at a designated time and place to review, amend and correct the assessments made by the assessor, and for that purpose have the same powers and perform the same duties in all respects as a board of review in townships in reviewing, amending and correcting assessments. Further pertinent provisions of the charter are as follows:
“(155) Seo. 3. The board of review shall have power and it shall be its duty to amend and correct any assessment or valuation and to place upon the assessment roll of the city any taxable property, real or personal, not already assessed, held or owned by any person or persons and to strike from said rolls any property, real or personal, wrongfully thereon. Any person considering himself aggrieved by reason of any assessment, may complain thereof either verbally or in writing before said board, and on cause being shown to the satisfaction of such board, it shall review the assessments complained of, and may alter and correct the same and may increase or diminish any assessment as justice may require. The concurrence of a majority of the board shall be sufficient to decide any question of altering or correcting any assessment complained of.
“(156) Sec. 4. The board shall elect one of its members as chairman. The city clerk shall be the clerk of said board. It shall be the duty of said clerk to keep a record of all the proceedings of 'said board in a book provided for that purpose, to make regular entries of all resolutions and decisions on' all questions, to record the vote of each member on any question submitted to the board, if required by any member present, and to file and preserve all petitions, affidavits : and other written documents presented to the board. No assessment shall be changed, except by a motion or resolution adopted by a majority of the members of said board, which motion or resolution shall state the amount at which the assessment is fixed as reviewed by the board. Each day’s proceedings of said board shall be read, approved and signed by the chairman thereof. The assessor shall attend all meetings of the board of review and shall give such information as shall be required of him, but shall have no vote.
“(157) Sec. 5. At the conclusion of the review of said rolls said board shall attach its certificate signed by a majority of said board to said rolls showing they have been reviewed by said board as required in this charter. No person other than the members of said board shall make any change in or additions or corrections to said rolls. Said board of review shall keep said rolls carefully in its custody during the time it is in session, and at the conclusion thereof deliver said rolls duly certified to the city clerk.
“(158) Sec. 6. The city clerk shall immediately proceed to make therefrom complete copies of such assessment rolls for the use of the city commission, which shall be deemed the city assessment roll for that year. When such copies shall be completed, and within 15 days after receiving such rolls, the city clerk shall redeliver the same to the assessor to be used for State, county and school purposes: Provided, That the city commission may extend the time of redelivering said roll as aforesaid not to exceed 15 days.”
The city assessor, with the assistance of a staff of 10 employees, made up the assessment rolls for the year 1933. They devoted a period of approximately seven months to the reassessment of all the taxable property of the city. All the real estate was assessed in accordance with the “Cleminshaw System of Valuations.” The record does not indicate that any other method than that prescribed by the Constitution and the statutes was used in assessing personal property. The rolls were turned over to the board of review and some 350 descriptions of real estate and personal property were equalized out of 850 brought to the board’s attention by complaints. On June 10, 1933, the last day of their session, after the completion of the review and the correction of assessments on specific parcels of property, as set forth in detail in the record book of their minutes, the. following action also is shown to have taken place:
‘ ‘ Chairman Wright called Mr. Lewis to the chair. Mr. Kavanaugh then moved that this board make a further reduction of 20 per cent, over all reductions and increases already made after having equalized values, such reduction to apply to real and personal valuations but not to exemptions as fixed by this board. Mr. Lewis opposed the adoption of this motion and said he would submit a minority report and that he would ask the court for an injunction against such proposed reduction being made. He requested that the city attorney be present but both Mr. Wright and Mr. Kavanaugh said there was no need for him to be called. Mr. Lewis ■then asked Mr. Wright to take the chair which he did. Chairman Wright then put Mr. Kavanaugh’s motion and it carried by the following vote: Teas— Mr. Kavanaugh and Chairman Wright. Nay — Mr. Lewis. The board then recessed for lunch.
(1:30 p. m.)
“Board of review then called to order by Chairman Wright. Mr. Lewis offers the following motion :
“ ‘I move that this board of review adopt and confirm the valuations on both real and personal property made by the city assessor, except the corrections," alterations and exemptions that have al ready been made by this board and that no general reduction in said values be made; that it is beyond tbe jurisdiction and purpose of this board to do so. ’
“Signed: ‘George E. Lewis.’
“This motion received no support. Mr. Kavanaugh then moved the adoption of the following resolution:
“ 'Resolved, that the figures assessed and extended in the several tax rolls in the city of Jackson, Michigan, be, and the same are, hereby declared to be the figures and valuations fixed by the board of review as the true and lawful valuations for the year 1933.’
“Signed: 'W. W. Weight, Chairman.’
“The vote to adopt the foregoing resolution: Yeas — Mr. Kavanaugh and Chairman Wright. Nay ■ — -Mr. Lewis.
“No further business being presented, on motion of Mr. Kavanaugh, supported by Mr. Lewis, the board adjourned sine die.
Chairman.”
The normal procedure of the board of review was as follows: After considering each assessment complained of, the board made out a slip, marking in the appropriate columns the original valuation placed on the property by the assessor, and the changed valuation fixed by the board. This slip was then filed with the city assessor and a duplicate thereof with the city clerk, who also acted as clerk of the board of review. Upon receipt of the slip, thus filled in, the city assessor’s office made the changes as directed, and they were then checked by the city clerk. In the instant case, the personal property assessment of the Hotel Hayes Company, a Michigan corporation, of which plaintiff Clarence B. Hayes is receiver, was originally fixed at $35,000, but, upon complaint, was reduced by the board of review to $30,000. The board thereupon made out a slip showing the reduction of plaintiff’s assessment from $35,000 to $30,000, and the change was duly made by the assessor. The latter did not, however, reduce the assessment, or any others, a further 20 per cent, in accordance with the resolution adopted by the board of review at its meeting on the morning of June 10, 1933.
On July 20, 1933, plaintiff paid the personal tax for the fiscal year 1933, amounting to $299.46 under protest. After further protecting his-rights, if'any, to a refund of the tax, or a part of it, by having his protest duly noted in the rolls and by filing his claim, he brought suit for a return of the entire amount paid, or as an alternative, should the tax levy not be held void in its entirety, for a return of 20 per cent, of the amount paid, to correspond with the resolution of the board of review reducing all valuations to that extent. The case was heard without a jury by the two judges of the Jackson circuit court, sitting en banc. They rendered a judgment for defendant.
It will be noted that at the morning session of 'the board of review on June 10, 1933, the resolution for the general 20 per cent, reduction was adopted by a vote of two of the three members of the board. The third member opposed it and asked that its consideration be withheld until advice could be secured as to its legality. At the afternoon session, after the dissenting member had unsuccessfully attempted to have a resolution adopted confirming the valuations as fixed by the board without the 20 per cent, reduction, a resolution was adopted by a vote of two to one declaring that the figures assessed and extended on the several tax rolls be the valuations fixed by the board as the true and lawful valuations for the year 1933. It was upon this last resolution that the assessor and city clerk acted. No mention of the 20 per cent, reduction was made in this last resolution. Furthermore, there were no figures indicating such reduction either oii the several tax rolls or on the slips filled out by the board. The assessor set down the valuations at their original amount, with the exception of the changes in the 350 specific cases where reductions or increases had been made by the board of review.
Appellant’s first claim is that the entire assessment is void because the board did not attach to the rolls a certificate signed by a majority thereof, showing a review as required by the charter (section 157). Under the provisions of 1 Comp. Laws 1929, § 3419, it is expressly provided that the omission of such indorsement by the board of review shall not affect the validity of the roll. Inasmuch as the charter makes no provision as to the result of a failure of the board of review to sign the roll, we must look to the general tax law. This court has held that a failure to sign the rolls does not invalidate them. Auditor General v. Sparrow, 116 Mich. 574; City of Yale v. Michigan Farmers’ Mutual Fire Ins. Co. of St. Clair & Sanilac Counties, 179 Mich. 254. The trial judges held that the absence of a signature by the board of review was not fatal, and that the last resolution adopted by the board, confirming the rolls but not mentioning the 20 per cent, reduction, was final. The question raised relative to the exclusion of testimony offered to show the meaning of the final resolution of the board, and what actually took place when it was adopted, and the question as to the power of the board of review to make a change in the assessment without any complaint being filed, need not be discussed in view of our decision as to the real question in the case, upon which the trial judges largely based their conclusions.
The court considered the essential question to be whether the board of review had the power of its own volition to mate a 20 per cent, horizontal reduction of all assessments, both real and personal, after the city's budget had been prepared and the valuation made by the tax assessor. This issue may be still further narrowed to the question whether a 20 per cent, horizontal omnibus reduction can be legally made on all assessments of personal property.
In preparing the assessment rolls submitted to the board of review, the assessor and his assistants had reduced the former valuations by approximately $16,000,000, bringing the total valuation down to $69,000,000. The city manager aqd the commission had agreed upon a budget which required the raising of the sum of $683,988.28. This would necessitate a city tax of almost one per cent, of the total valuation of city property, the maximum rate permitted under the charter. Were- the 20 per cent, reduction attempted by the board on June 10th a proper one, it would have left only taxable property in the value of $54,000,000, with the result that, under the tax limit of one per cent., only $540,000 could have been collected had all taxes been paid. Since the city charter requires that the budget be adopted by the city commission not later than June 15th, this would have necessitated cutting approximately $144,000 out of the budget within a period of a few days. Appellee contends that this is a cogent reason why a horizontal decrease of all valuations could not be made, and that it was not within the power of the board of review to set its judgment against that of the city commission and force a lowering of the budget, since its powers were limited to the equalizing of values upon complaint and cause shown. Our attention is called to the case of City of Lynchburg v. Taylor, Commissioner of the Revenue, 156 Va. 53, 62 (157 S. E. 718), where the board of equalization attempted to make a like reduction of 20 per cent, after having equalized specific items of property brought to its attention. The court held that:
“When a local board of equalization after having proceeded to equalize the several items of a general reassessment, then orders a general reduction of 20 per cent, in all items of the assessment, including those which it has changed to effect an equalization of the assessment, such action can have no relation whatever to the equalization among themselves of the several assessments made by the land assessor. It is, in effect, the making of a new general assessment by the local board of equalization, which is beyond the scope of its jurisdiction.”
To like effect see Avery v. City of East Saginaw, 44 Mich. 587. Counsel for appellant, citing Petoskey & Bay Shore Gas Co. v. City of Petoskey, 162 Mich. 447, however, maintain that the instant case cannot be governed by the decisions in this or other States based on charters and tax laws possibly dissimilar to those here involved.
The question becomes unimportant in the instant case for, even were appellant correct in its contention as to the validity of the horizontal reduction in the values of real estate, the board of review had no right to make any arbitrary reduction in the valuation set upon personal property. By constitutional enactment all tax assessments must be made on property at the true cash value (Constitution of 1908, art. 10, §7). It might be claimed that the horizontal reduction as to real estate was proper, on the ground that the system used by the assessor in determining the value of the real estate resulted in excessive, valuations, or that the assessments did not sufficiently reflect the depreciation in the values of real estate. However, where personal property is assessed, a different problem arises. The taxpayer is required to make a sworn statement of his personal property, and the assessor may make a physical examination thereof, or list any not disclosed by statement. Personal property necessarily is of such varying form that no general rule can be applied either to depreciation or reductions in value. Each species must be separately assessed. Taxable stocks and bonds, staples, etc., have a market, and as a rule, a cash value. Moneys are worth par. Other personal property may have an uncertain value. It is beyond the power of the board of review to ignore the provisions of the Constitution making property taxable at its true cash value, by arbitrarily reducing valuations of personal property 20 per cent. Cash value is not thus determined. The exercise of such arbitrary power might lead to embarrassing and untoward results in municipal government.
In reducing the valuation of plaintiff’s property from $35,000 to $30,000, the board acted within its powers. However, the attempted action to reduce it a further 20 per cent, was void.
The tax as levied without the 20 per cent, reduction was therefore correct, and the judgment for defendant was properly rendered. It is herewith affirmed, but without costs, as the question is a public one.
Nelson Sharpe, C. J., and Potter, North, Fead, Wiest, Bushnell, and Edward M. Sharpe, JJ., concurred. | [
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North, J.
This appeal by defendants is from a decree in the Allegan county circuit court' in chancery by which in effect a discharge of a real estate mortgage was cancelled, the mortgage debt together with accrued interest and costs was decreed to be paid, and in default the mortgage decreed to be foreclosed. Much of the factual background of the instant case appears in Plasger v. Leonard, 312 Mich. 561. Our opinion on rehearing the cited case provides:
“The case is remanded for the purpose of the circuit court passing upon the question whether the discharge of an earlier mortgage given on or about December 1, 1933, by defendants Leonard to plaintiffs should be set aside, and if so set aside whether a decree of foreclosure of said earlier mortgage should be entered as asked for by plaintiffs (cross-defendants) in their reply to defendants’ answer and in their answer to defendants’ (cross-plaintiffs ’) cross bill. Amended pleadings may be filed by tbe parties so as to more definitely present these issues not passed upon by the trial judge or-decided on this appeal.”
Following the remand, amended pleadings were filed and additional proofs taken, resulting in the decision aboye indicated. In brief, plaintiffs’ amended pleadings allege that the discharge dated May 18, 1935, of the $1,Q00 mortgage theretofore given to plaintiffs by the Leonards, was procured by Earl Leonard “without any consideration being given to the plaintiffs for the same.” In defendants’ amended joint answer it is admitted thait no money consideration passed for the execution of the discharge, but the amended answer alleges “that there was a contractual mutuality to both parties” which constituted consideration for the discharge. Earl Leonard testified: “No, I never paid these people (plaintiffs) anything on that $1,000 note.” Our review of the record satisfies us that the trial judge was correct in finding “that the.discharge of the mortgage * * * was, obtained without any consideration and upon the express promise that a new mortgage would be given. ’ ’ Leonard has never given plaintiffs any other mortgage security in lieu of the discharged mortgage.
“The general rule is that the release of a mortgage may be rendered inoperative by a lack of consideration therefor.” 36 Am. Jur. p. 924.
“Equity will, except where the rights of third persons may prevent, cancel or set aside, or simply disregard, a release or satisfaction of a mortgage * * * which was procured from the mortgagee * * * by means of promises which have not been fulfilled.” 41 C. J. p. 822.
* . In accord with the foregoing see Wood v. DePew, 250 Mich. 375. Under the record in this ease, as between defendants Leonard and plaintiffs there can be no question-about the latter’s right to have the discharge of the $1,000 mortgage cancelled and the mortgage reinstated.
The defendants Preston are parties to this litigation because they allege that they are innocent holders for a valuable consideration of the fee title to the farm covered by the $1,000 mortgage given by the Leonards to the plaintiffs, that at the time the Prestons acquired such title the discharge of the $1,000 mortgage was a matter of record and they relied thereon. Thus the question is presented as to whether defendants Preston are innocent bona fide purchasers as alleged, or whether, as plaintiffs claim in their amended pléadings, the Prestons are not good faith purchasers for value but instead the property still belongs to' the Leonards and the Prestons are merely holding the record title in “a further attempt on the part of the defendants to defraud the plaintiffs. ’ ’ In this connection the following appears in plaintiffs’ amended pleadings:
“Plaintiffs allege that at the time, viz., June 20, 1944, that the said Walter W. Preston and Katherine É. Preston claimed to have purchased said property, they had full knowledge of the indebtedness of the said Leonards to the said plaintiffs.”
As bearing upon the good faith and claimed lack of knowledge on the part of defendants Preston, the'following disclosed by the record has a very persuasive bearing. Mrs. Leonard and Mrs. Preston are sisters. The Leonards took title to and occupied the mortgaged property many years ago. For at least upwards of five years prior to the time the Pres-tons took a deed to the farm on June 20, 1944, they lived there with the Leonards. Notwithstanding from February, 1939, to June, 1944, the record title to the Leonard farm was held by George Link and wife, who resided in Chicago, the deed held by them was merely security for a loan to Leonard of $1,800. Subject to this encumbrance the Leonards were in fact the actual owners of the property at the time the Prestons took a deed from Mr. and Mrs. Link. During the years that the Links held their deed they did not live on the farm,' and so far as disclosed by the record they did not operate or control it in any way. Mr. Link visited the place only two or three times while the record title was held by him and his wife. Just why Leonard placed the record title of the property in the Links is problematical. Preston claims that at the time he and his wife took a deed from Mr. and Mrs. Link, he paid from his own funds the $1,800 Link had loaned Leonard.' Preston also claims that a few months after his purchase in June, 1944, he also paid from his own funds a balance of $1,800 on a mortgage held by the Holland State Bank on this same 40-acre farm. Plaintiffs’ claim is that the above were merely transactions in behalf of defendants Leonard and financed by them through Preston.
Just prior to his claim of purchase, June 20, 1944, and on May 1st or 2d, 1944, Preston visited the office of Attorney Cross who representéd plaintiffs in an effort to collect the debt of the Leonards to plaintiffs. In that connection Preston on cross-examination testified:
“Q. When you were in Mr. Cross’ office you had some discussion with him about this thousand dollar mortgage that had been given and discharged, did you not? * * * You knew about it, didn’t you?
“A. I knew from that information, yes. He might have said something about it, but I didn’t see it. * * * I saw the’ $1,200 transfer of- mortgage (given) to the Holland State Bank to Mr. and Mrs. Plasger, that is all I remember.
“Q. Wasn’t it explained to you by Mr. Cross that the mortgage subsequently to the Holland State Bank had been assigned to replace the $1,000 mortgage? * * *
“A. He told me that he transferred that. * * *
“Q. But when you bought this property on June 20th, you had all the knowledge concerning the transactions as' between the Leonards and Mr. Plasger and his wife, did you not?
“A. I heard it here on the stand, yes. * *
“Q. And you knew there was an assignment of the mortgage that had been given to the Holland State Bank, didn’t you, the day you were at Cross’ office ?
“A. Yes, I knew.
“Q. And you knew that $1,000 had never been paid, didn’t you?
“A. Sure, I knew it hadn’t been paid.”
Further, because of the intimate family relation between the Leonards and the Prestons and the participation of WMter Preston in Leonard’s business affairs, it is certainly a very reasonable inference from the record that at the time of the alleged purchase of the farm by the Prestons in June, 1944, Walter Preston knew that the pending' litigation which involved the right of plaintiffs herein to enforce a mortgage lien on the farm had not - been adjudicated. That litigation had been instituted only a few days prior to the claimed purchase by the Prestons; and a lis pendens filed June 17, 1944, incident to the original foreclosure suit was a matter of record at the time of the alleged purchase of the property by the Prestons. Decision in this Court of that controversy was not rendered until October 8, 1945. The record discloses that Preston is not a man inexperienced in business. In fact he is an attorney who has. practiced law in three states, though not licensed in Michigan. As a witness in the former trial of this case, which occurred months after the claimed purchase by the Prestons, Walter Preston testified that he then resided “with the Leonards at their house.” To accept defendants’ claim under the circumstances of this record that the Prestons were innocent purchasers with funds of their own of the Leonard farm,' that they should not be charged with knowledge of plaintiffs’ claim of an unsatisfied mortgage lien against the property, stretches one’s credulity beyond the limit.
Prom the foregoing, and other corroborating circumstances appearing in the record, we conclude that the trial judge was correct in holding that at the time the Prestons took the record title to the Leonard farm they did so “with full knowledge * * that said mortgage (of plaintiffs) was at the time of the conveyance a valid lien against said property, and that said property .was at that time subject to the lien of said mortgage, and that the said Prestons well knew at the time of said conveyance (to them) that the mortgage indebtedness had not been paid and knew that the discharge of the mortgage had no validity and that the said Prestons were not innocent purchasers of the property.”
There is no merit to defendants’ claim that plaintiffs ’ right of action is barred by the statute of limitations. The bill of complaint as originally filed was for the foreclosure of a mortgage, and as modified by the amended pleadings it was still a bill for the foreclosure of a mortgage. ,
“No suit or proceeding shall be maintained to foreclose a mortgage on real estate, either at law or in equity,, unless commenced within fifteen years from and after such mortgage shall become due and -payable, or within fifteen years after the last payment was made on said mortgage.” 3 Comp. Laws 1929, § 13975 (Stat. Ann. § 27.604). '
As to the effect of the above statutory provision see Guardian Depositors Corp. v. Wagner, 287 Mich. 202. The $1,000 mortgage which plaintiffs seek to foreclose by its terms was not due until December 1, 1936. Defendants’ claim of a valid discharge of this mortgage is only incidental to the foreclosure proceedings; and since such discharge is found to be ineffective, plaintiffs’ right to foreclosure is not barred by the statute.
Nor is there any merit, under the circumstances of this case, to defendants’ claim that plaintiffs by reason of laches should be barred from relief. Clearly under the facts in the instant case there is no equity in the defense of laches as to any of the defendants. Neither the Leonards, nor the Prestons who are held not to be innocent purchasers, have been prejudiced by delay in bringing this foreclosure suit. Laches is an affirmative defense; and mere lapse of time, without a showing of prejudice, does not constitute laches. Kelley v. Hoogerhyde, 314 Mich. 37. In the cited case a headnote reads: '
‘■While evidence of lapse of time should be considered with other facts and circumstances of a case in determining laches, laches will not be permitted to defeat recovery in equity if it would be inequitable to do so.”
The decree entered in the circuit court is .affirmed, with costs to appellees.
Butzel, C. J., and Carr, Bushnell, Sharpe, Boyles, Reid, and Dethmers, JJ., concurred. | [
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Nelson Sharpe, C. J.
In the bill of complaint filed herein the plaintiff alleges: That prior to the 7th day of August, 1929, she was the owner of a tract of land, described by metes and bounds, in the city of Battle Creek directly across the street from the land on which the Post Tavern is located, the title to which is in the name of the Post Tavern Company, a Michigan corporation, with 45,740 shares of stock issued and outstanding, of which she is the owner of all except three shares issued to qualify certain persons to act as directors; that the Post Tavern was at that time being operated by the Post Tavern Company; that the representatives of the bank of which the defendant is the successor negotiated with her agent for the purchase of the property first-above mentioned, and were informed that she was unwilling to sell the same if it were to be used for hotel or restaurant purposes, as such use would be detrimental to the operation of the Post Tavern, which had a dining room and a cafeteria, and all the capital stock of which was owned by her except the three qualifying shares; that the negotiations resulted in the execution by her of a written contract, prepared by counsel for the bank, in which, she agreed to sell the property to the bank for a consideration therein named; that said contract contained the following provision: “And on condition that the said premises hereinabove described shall not be used for hotel or restaurant purposes during a period of 15 years after date hereof provided said first party, her heirs or legal representatives are operating the building across Michigan avenue from the above-described lands during such period for hotel purposes;” that on January 8, 1931, she executed a warranty deed, which contained a similar provision; that the bank then knew that the title to the Post Tavern was in the name of the Post Tavern Company; that, when plaintiff learned that the defendant proposed to lease the ground floor of the building erected on the land conveyed to it, to the defendant Owl Drug Company, she objected thereto if that company intended to serve meals therein, but that, as she is informed and believes, such lease was made and meals are now being served therein.
She further alleges that the serving of such meals is a violation of the condition in the contract and deed, and prays that the defendants be restrained from doing so.
The. defendants appeared and filed a motion to dismiss for the reason that the bill of complaint failed to state a cause of action, which motion was granted and the bill dismissed. Plaintiff has appealed.
There are certain cardinal rules of construction with which courts are in agreement.
“Every deed or contract in writing is supposed to express the intention of the parties executing it, and when the object or purpose of such deed or contract is called in question in a court of justice the first inquiry is, what is the intention of the parties, as expressed in the written instrument? ” Bassett v. Budlong, 77 Mich. 338, 346 (18 Am. St. Rep. 404).
To ascertain such intent, it “should be construed in the light of the circumstances existing at the time it was made.” Kellogg v. Kellogg Toasted Corn Flake Co., 212 Mich. 95, 114. In doing so, we “must look to the purpose sought to be accomplished,” Hess v. Haas, 230 Mich. 646, 651, and “uphold, and enforce the rights and duties that spring from the real intention of the parties.” 21 C. J. p. 204. Its “manifest intent must prevail over the literal sense of terms.” Township of Stambaugh v. Iron County Treasurer, 153 Mich. 104, 107.
“And in order that the court may see just how the transaction came about and received the shape it actually bears, a reference is proper to the surrounding facts. * * * There is no requirement to adhere to the literal terms in derogation of the interior sense of the transaction.” Stuart v. Worden, 42 Mich. 154, 160.
Let us apply these rules to the facts presented ás disclosed in the bill of complaint. The bank desired to purchase certain land owned by the plaintiff. It was located directly across the street from the Post Tavern, which was owned and at that time operated by the Post Tavern Company, a corporation, all the stock of which was then owned by the plaintiff except three qualifying shares. She was unwilling to sell this land to the bank unless assured that it would not be used for the service of meals to the detriment of the dining room and cafeteria in the Tavern. There can be no question but that the provision in the contract, and afterwards in the deed, was inserted to accomplish this result. It must be assumed that the attorney for the bank who prepared the contract intended to do so by the language used. He inserted the provision therein that the sale was on condition that the premises should not be used for hotel or restaurant purposes for 15 years if the plaintiff, “her heirs or legal representatives are operating” the Tavern during that time. The use of the word “are” is not only suggestive, but indicates that it was then understood, that the plaintiff was at that time operating the Tavern and that the purpose was to protect her interest therein and that of her heirs or legal representatives. But even if this construction be deemed technical, the circumstances surrounding the transaction clearly show that such was the intent of the parties. To hold otherwise is to attach no meaning whatever to the condition, as the title to the Tavern was not then in the plaintiff personally and this fact was at that time known to the bank.
“But the courts will not defeat a condition by a construction which is strained and unreasonable, and which manifestly was not in the mind of the parties.” Smith v. Barrie, 56 Mich. 314, 318 (56 Am. Rep. 391).
See, also, 15 L. R. A. 145; 35 L. R. A. 392; 55 L. R. A. 861.
Defendants’ counsel insist that if it be found that the restriction was for the benefit of the Post Tavern Company, it may not be enforced as that company was a stranger to the instrument. The provision in the contract and deed is in the nature of a restriction on the use which the grantee might make of the land, and the general rule' is that it may not be made in favor of one not a party to the instrument. 19 C. J. p. 912; 8 R. C. L. p. 1093; 9 R. C. L. p. 752. But such rule should not be here applied. If it were to be so enforced under the circumstances here presented, it would have been necessary, in order to accomplish the desired result, for the plaintiff to have transferred the land to the Post Tavern Company and to have had it execute the contract and deed to the bank, or to have had the title to the hotel property conveyed to her as an individual.
The Post Tavern Company was not “a stranger” to the negotiations which culminated in the making of the contract and deed in the sense in which that term is used in the authorities. While a corporation and its stockholders are different entities in the eye. of the law, “it is plain that the shareholders are the corporation, and that they -are the owners of its property.” Stroh v. City of Detroit, 131 Mich. 109, 114.
“Although stockholders are not partners, nor strictly tenants in common, they are the beneficial joint owners of the corporate property, having an interest and power of legal control in exact proportion to their respective amounts of stock.” Reid on Corporate Finance, § 214, quoted with approval in Turner v. Calumet & Hecla Mining Co., 187 Mich. 238, 243.
“Circumstances of a case may sometimes require a court of equity to ignore the separate entity of a corporation, and to look to the sole owner of its capital stock as the real party in interest.” State Trust & Savings Bank v. Hermosa Land & Cattle Co. (syllabus), 30 N. M. 566 (240 Pac. 469).
“The doctrine, however, that a corporation is a legal entity existing separate and apart from the persons composing it is a mere fiction, introduced for purposes of convenience and to subserve the ends of justice. This fiction cannot be urged to an extent and purpose not within its reason and policy, and it has been held that in an appropriate case, and in furtherance of the ends of justice, a corporation and the individual or individuals owning all its stock and assets will be treated as identical.” 7 R. C. L. p. 27.
The plaintiff sought by the condition imposed to protect her interest in the property, the title to which stood in the name of the company, but of which she was the beneficial owner, and the provision therefor was enforceable under the facts set up in the bill of complaint.
The order dismissing it is reversed and set aside, with costs to the plaintiff, and the cause remanded for further proceedings.
Potter, North, Pead, Wiest, Butzel, Bushnell, and Edward M. Sharpe, JJ., concurred. | [
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Starr, J.
On July 14, 1943, plaintiff began summary proceedings before a circuit court commissioner to recover possession of premises located at 211 West Ann street in the city of Ann Arbor, which defendant claimed to hold under lease from plaintiff’s immediate grantors. 3 Comp. Laws 1929, §14975 (Stat. Ann. §27.1986). The matter was brought on for hearing, testimony was taken, and on August 27,1943, the commissioner entered judgment granting plaintiff possession of said premises. 'Upon appeal and trial de novo the circuit court reversed the commissioner and entered judgment for defendant, which in effect denied plaintiff’s claimed right of possession. Plaintiff appeals from such judgment.
On May 31,1940, plaintiff’s “grantors, W. Howard G-rostie and Rhoda Grostic, his wife, leased said premises to defendant for the term of one year “from and after June 1, 1940,” at a rental of $40 per month payable in advance, and acknowledged receipt of the rent for the month of June. The lease provided that defendant should make certain alterations in the premises and that the lessors would allow the cost of labor and material in making such alterations “as a credit upon the rent * * * to become due and payable. ’ ’ It also provided that the lessors would allow, as a further credit upon said rent, “the proportionate amount of said monthly rental representing the number of days which elapse between the commencement of this lease, June 1, 1940, and the date upon which said alterations are completed. ’ ’ Defendant went into possession about June 1,1940, and the alterations, which cost $66.53, were completed by June 12th. There is no dispute regarding the cost of the alterations or the credit on rental to which defendant was entitled. About July 1st defendant sent lessors the following statement, together with a check for $13.47 to cover the balance due on the rent for a three-months ’ period:
“Rent from June 12 to' July 12 40.00
Rent from July 12 to Aug. 12 40.00
Rent from Aug. 12 to Sept. 12 40.00
120.00
“May 24, 1940, check # 1071 40.00
Warehouse improvements as per attached statements 66.53
July 6, 1940, check # 1373 13.47
120.00”
As hereinbefore mentioned, the. lease was for a term of one year “from and after June 1st,” and defendant was entitled to credit for the amount of rental which accrued during the first 12 days of June while the building alterations were being made. Instead of computing the rental from June 1st and taking credit for such 12-day period, defendant in preparing the above statement computed the rent from June 12th. The Grostics, as lessors, kept their record of rental payments on a monthly basis beginning June 12th, With the apparent approval of the lessors, defendant continued in possession of the premises and paid the monthly rental until it received the following letter and notice from the lessors on June 10,1943:
“Ann Arbor, Michigan, June 9,1943.
“Jack Smith Beverages, Incorporated, * # *
“Dear Sirs:
“Having entered1 into agreement for sale of the premises in Ann Arbor, owned by us, being the cement block structure at number 211 West Ann street, which you occupy as tenant for the storage and distributing purposes, this is to inform you that the tenancy which you hold of said premises will not be renewed. Said tenancy terminates as of June 12, 1943, if construed to have been on the annual basis. Our understanding has been that the rental has been on a month-to-month basis since termination of your original lease.
“However, if your tenancy is construed to be on a month-to-month basis you would be entitled to thirty days notice. We desire to give you all of the notice possible, consistent with the terms of the agreement which we have entered into for sale of the property. We therefore deliver to you the attached regular ‘notice to quit,’ setting the date as late as we can.
“Yours truly,
“W. Howard Grostic
“Rhoda E, Grostic.”
“NOTICE
“To Jack Smith Beverages, Incorporated
“Please take notice that you are hereby required to quit, surrender and deliver up possession to us of the premises hereinafter described, which you now hold of us as our tenant, on or before July 12, 1943, for the reason that we intend to terminate your tenancy, and to repossess ourselves of such premises on the date above mentioned, said premises being described as follows, to-wit: (description of premises).
# •
“Yon are further notified that from and after this date, you will be liable to the owners for double damages, which the owners may suffer by reason of your continued occupancy of said premises, under and by virtue of the provisions of 3 Comp. Laws 1929, § 14986 (Stat. Ann. § 27.1997).
“Dated at Ann Arbor, Washtenaw county, Michigan, June 10, 1943. * * *
“W. Ho WARN GrROSTIC
“Rhoda E. G-rostic.”
On June 12, 1943, defendant sent lessors a check for $40, which they accepted and cashed. Defendant claims that this check was in payment of the rent from June 1st to July 1st, and lessors claim that it was in payment of the rent from June 12th to July 12th. On June 29, 1943, lessors Grrostic and wife conveyed the real estate on which said premises were located to plaintiff Auto Parts, Incorporated, by deed which stated that the property was free from all encumbrances whatever “except as to rights of tenants in possession of any parts of the granted premises.” Defendant continued in possession, and on July 10th sent the lessors check for $40, which they refused and returned. On July 14th plaintiff began the present action before the circuit court commissioner.
Plaintiff first contends that by their method and practice of computing, paying, and recording the monthly rentals, the partie« to the lease established a new rental period beginning June 12, instead of June 1, 1940, as provided in the lease. The record shows that during the time defendant occupied the premises, it paid the monthly rentals on dates varying from the 6th to the 21st of the respective months. and that the lessors apparently accepted such payments without objection. In the absence of an agreement changing the lease period, we are satisfied that such method of computing, paying, and recording the rental did not operate to change the lease, which expressly provided for a term of one year “from and after June 1,1940.”
The president of defendant company testified that prior to the expiration of the one-year lease on June 1,1941, he entered into an oral agreement with lessor ,W. Howard Gnostic that the lease would be continued from year to year, with either party having the right to terminate it by giving the other party notice 60 days prior to the expiration of any year period. Lessor Grostic denied having had any conversation with defendant’s president regarding renewal of the lease and denied making any oral agreement for its renewal or extension. The trial court made no finding of fact on this point, and from our examination of the record we conclude that defendant failed to establish such claimed oral agreement by the necessary preponderance of the evidence.
The one-year term of the written lease ended June 1,1941, and, apparently by mutual consent, the tenancy was continued on a year-to-year basis for a second and a third year term, which defendant contends ended June 1, and which plaintiff contends ended June 12, 1943. On June 10, 1943, defendant received the above-quoted letter of notification that its tenancy would terminate June 12th and also notice to quit the premises on July 12th. From such letter it is apparent that the lessors were uncertain as to whether defendant’s tenancy was on a year-to-year or month-to-month basis. Under their theory that a new lease period had been created, whereby the year term ended June 12th, their letter notified de fendant that his tenancy terminated on that date. On the theory that the tenancy might be construed to be on a month-to-month basis, they notified defendant to quit and vacate the premises on July 12th. As above stated, defendant sent the lessors a check for $40 on June 12th, which under plaintiff’s contention paid the rent to July 12th, and under defendant’s contention paid the rent to July 1st. On July 10th defendant sent the lessors another check for $40, which they refused and returned.
The question presented is whether or not there was a renewal of the tenancy for a one-year period from and after June 1, 1943. Defendant contends that its holding- over after June 1st and the lessors’ acceptance of its check sent June 12th operated as a renewal for a further year period ending- June 1, 1944. Plaintiff contends that the lessors did not consent to or acquiesce in defendant’s holding over after June 1st; that its holding over until June 10th was not for a sufficient period of time to create a legal renewal of the tenancy for the further term of one year; and that their acceptance of the rent for one month, after they had given notice to quit, could not be construed as a consent to such renewal.
Although defendant held over after June 1, 1943, it is clear that the lessors did not consent to or acquiesce in such holding over. On June 10th they indicated their refusal by serving defendant with notices of termination and to quit. The law is established in this State that where a' lessee, under a written lease for a fixed term, holds over after the expiration of the term, the lessor must consent to or acquiesce in such holding over, in order to create a renewal of the tenancy on a year-to-year basis by operation of law. In the case of Faraci v. Fassulo, 212 Mich. 216, 218, we quoted with approval the rule stated in 24 Cyc. pp. 1031-1033, as follows;
“According to the great weight of authority, where a tenant under a demise for a year or more holds over at the end of his term without any new agreement with the landlord, he may be treated as a tenant from year to year. It is held, however, that a tenancy from year to year cannot be inferred from the mere fact of holding over by the tenant; the landlord must in some manner recognise the tenancy. Thus the receipt of rent by the landlord from one so holding over indicates with certainty a design to continue the relation of landlord and tenant, and a tenancy from year to year will arise. Such intention should in each case be found and determined as a question of fact. ”
In Rice v. Atkinson, Deacon, Elliott Co., 215 Mich. 371, 374 (19 A. L. R. 1399), the majority opinion quotes with approval the following statement from 1 Underhill on Landlord and Tenant, p. 157, as follows : '
uThe assent of both parties to the original lease'is necessary to create the new lease from year to year by holding over. This assent on the part of the tenant is usually implied from the fact of his remaining in possession and paying rent after his term has expired. * * * And though by remaining in possession the tenant is presumed to offer to take the premises for another year, the landlord is not bound to accept the offer, and unless he does so by accepting rent ’ or otherwise, the tenancy is terminated and notice to quit is not required to be given by him. ’ ’
In Marks v. Corliss’ Estate, 256 Mich. 460, we said:
“Where one has a lease for years, with annual rent reserved, and holds over after the expiration of the term with the acquiescence of the landlord, the tenancy is from year to year on the conditions of the lease, although, the annual rent is payable in monthly instalments (Laughran v. Smith, 75 N. Y. 205; Faraci v. Fassulo, 212 Mich. 216), but where the rent reserved is monthly, the holding over is from month to month unless the lease otherwise provides (Barlum v. Berger, 125 Mich. 504).”
In the case of Scott v. Beecher, 91 Mich. 590, 592, 593, we said:
“When a tenant under a valid lease for years holds over, the- law implies a contract on his part to renew the tenancy on the same terms for another year; but the landlord may treat him as a trespasser, or as a tenant holding upon the terms of the original lease. * * *
“The holding over is the legal expression of the tenant’s intention, and all that is necessary tó complete the contract (of renewal) is the consent or acquiescence of the landlord.”
In the present case the prior term of tenancy ended June 1, 1943. Defendant held over until June. 10th, when it received notice that its tenancy would terminate June 12th, and also notice to quit the premises on July 12th. As such notices indicated the lessors’ refusal to consent to or acquiesce in such holding over, the law will not imply a renewal of the tenancy for the further term of one year after June 1, 1943.
Under the facts and1 circumstances shown, we conclude that after June 1, 1943, defendant became a tenant at will or by sufferance, and a one-month’s notice was sufficient to terminate such tenancy. 3 Comp. Laws 1929, § 13492, as amended by Act No. 145, Pub. Acts 1935 (Comp. Laws Supp. 1940, § 13492, Stat. Ann. § 26.1104). Even if, under our holding in Marks v. Corliss’ Estate, supra, such tenancy after June 1st were held to be on a month-to-month basis, a one-month’s notice would have been sufficient to terminate it. Defendant was required to vacate the premises July 12th, that being the date specified in the lessors’ notice to quit.
It might be argued under our holdings in Detroit Free Press v. Miller, 217 Mich. 118, and Rice v. Atkinson, Deacon, Elliott Co., supra, that as the original written lease terminated June 1, 1941, no notice was thereafter required to terminate defendant’s tenancy. For other authorities see Bay County v. Northeastern Michigan Fair Assn., 296 Mich. 634; Hoffman v. Willits, 194 Mich. 276; Barlum v. Berger, 125 Mich. 504; Huntington v. Parkhurst, 87 Mich. 38 (24 Am. St. Rep. 146); Schneider v. Lord, 62 Mich. 141; 20 Michigan Law Review, pp. 340-344.
Other questions presented do not require consideration. We hold that defendant’s tenancy was not renewed either by agreement of the parties or by operation of law for the further term of one year after June 1,1943, and that plaintiff was entitled to possession of the premises on July 12, 1943.
The judgment of the trial court is reversed, and the case is remanded with direction to enter a judgment granting plaintiff possession of ,the premises as of July 12,1943. Plaintiff shall recover costs.
North, C. J., and Wiest, Butzel, Bushnell, Sharpe, Boyles, and Reid, JJ., concurred. | [
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O’Harí, J.
This is an appeal on leave granted from a decision of the Court of Appeals (2 Mich App 315), which modified a judgment for plaintiff-appellant entered in the circuit court. The facts and issues are accurately stated by the Court of Appeals. We quote:
“On December 6, 1963, Ernest Manie, the husband of the plaintiff, entered into an agreement with the Matson Oldsmobile-Cadillac Company in Muskegon to purchase a 1960 Cadillac automobile with a 1961 Comet to be traded in on it. The 1961 Comet had a trailer hitch attached, which was to be removed by the Grand Rapids firm which originally installed it, prior to the contemplated exchange. At that time, license plates remained with the same owner and had it not been for the removal of the trailer hitch, the plates would have been switched from the Comet to the Cadillac. However, as an accommodation to. Mr. Manie a salesman for defendant company attached a ‘dealer plate’ to the-Cadillac to be used until the trailer hitch could be removed in Grand Rapids and the .Comet returned.
“The Manies, driving the two cars, went to Grand Rapids, accompanied by Mrs. Manie’s' sister. After the trailer hitch was removed, Mr. Manie drove the Comet back to Muskegon .and Mrs. Mapie, driving the Cadillac, decided to do some Christmas shopping. At about 9:30 p.m., a Wyoming police department cruiser required her to pull over to the side of the road and she was requested to follow the cruiser • to . police headquarters. After Mr. Manie arrived home about 10.:30, he received-a telephone call, that Mrs. Manie was being held in the Wyoming, police station for driving a car with ‘stolen plates.’ Mr. Manie called the defendant company’s salesman who offered to take another dealer plate to the police station for use in returning the Cadillac to Muskegon, but Mr. Manie declined the offer, picked up.the plate'himself and took it to the Wyoming’ police station. By the time Mrs. Manie was able to leave, it was 'approximately 2 a.m. the following day. ....
“Mrs. Manie received a ticket for illegal use of dealer plates. The salesman for defendant company called the Wyoming police station and was informed that the dealer plate he had placed on the Cadillac was registered in the name of the operator of a used car lot and. automobile auction in the Grand Rapids area.. ; The. following day, Mrs; Manie went to defendant’s place of business and discussed the ticket with the salesman who offered to take care of the ticket by wáy of explaining the matter' to the' proper officials. Mrs. Manie declined the offer and retained an attorney to represent her on the ticket. Ultimately, the matter was explained to the- authorities regarding how she happened -to have the plate an<3 this was accepted by the court and the charge dropped.
“Suit against defendant automobile dealer^ was started by Mrs. Manie in August, 1964, containing three counts: one of negligence;, one for breach of contract for failure to furnish a valid plate; and one of misrepresentation based on the innocent, though mistaken, statement to the effect that the Cadillac was in proper condition to be driven on the highway.
' “An answer denying the charges was filed and the case tried before the court without a jury on June 18, 1965, resulting in a judgment of $500 in favor of Mrs. Manie for her expenses and also for humiliation, embarrassment, and nervousness brought on by the previous events and by the harassment and teasing she was subjected to by her coi-employees because of the ticket and subsequent legal proceedings.”
The Court of Appeals held:
“The trial court is affirmed in that portion of its decision holding that plaintiff stated a cause of action in negligence and reversed as to the portion of the award beyond the sums herein set forth.”
. The portion of the award of damages disallowed by the Court of Appeals was for nervousness, humiliation, and emotional distress unaccompanied by physical injury. The disallowance was based on a general rule found in 52 Am Jur, Torts, § 48, pp 392, 393. We do not agree that the cited general rule controls since specific Michigan case precedent is involved.
The Court first considered the question in Nelson v. Crawford (1899), 122 Mich 466 (80 Am St Rep 577), and denominated it “new in this State.” In that case the trial court directed a verdict for defendant, A trickster had frightened a pregnant woman and she alleged a miscarriage resulted. The trial judge relied on the following language in Mitchell v. Railway Co. 151 NY 110 (34 LRA 783, 56 Am St Rep 605):
“ ‘If the right of recovery in this class of cases should be once established, it would naturally result in a flood of litigation in cases where the injury complained of may be easily feigned without detection, and where the damages must rest on mere conjecture or speculation. The difficulty which often exists in cases of alleged physical injuries, in determining whether they exist, * * * would not only be greatly increased, but a wide field would be opened for fictitious or speculative claims. To establish such a doctrine would be contrary to principles of public policy. * * * We think the most reliable and better-considered cases, as well as public policy, fully justify us in holding that the plaintiff cannot recover for injuries occasioned by fright, as there was no immediate personal injury” (Emphasis supplied.) Nelson v. Crawford, supra, p 468.
Thus, as of that time our Court denied recovery for emotional distress unaccompanied by physical injury and established the rule in Michigan. • It should be noted that the Court there dealt with negligence only. It excepted a malicious wrong, where an intent to injure could be shown.
Our Court again addressed itself to this question in Alexander v. Pacholek, 222 Mich 157. In that case the action was based on an alleged trespass in the nature of an unauthorized entry into a private home. At the conclusion of the proofs the trial court refused to direct a verdict and the jury awarded $500 damages. Our Court there unequivocally held (p 163):
“Whatever may be the merits of the respective rules of damage this Court has aligned itself with those courts which hold that no damages can be assessed for fright or mental distress unless accompanied with physical injury. The ease is devoid of any evidence of assault, and, if we apply the rule laid down in Nelson v. Crawford, supra, the defendant was entitled to a directed verdict. The trial court was in error in not granting defendant’s motion.” (Emphasis supplied.)
Appellant claims this rule was modified by Stewart v. Rudner, 349 Mich 459. This was an action ex contractu. A directed verdict was denied and the jury awarded damages. This Court held (pp 475, 476):
“The damages claimed are [in part] for pain and mental suffering. * * * The jury was justified in finding that these resulted directly from defendant’s failure to perform his contractual obligations.” (Emphasis supplied.)
As a modification of the rule applying in negligence cases as claimed by appellant, several infirmities are present. First, only four Justices signed the opinion. Four “concurred in the result.” It is impossible to tell on what basis ■ full concurrence was withheld by those concurring in result only. Secondly, in that case, the action was for breach of contract. ¥e consider here precedent established in actions ex delicto. Only passing reference is made in Stewart to the situation in tort cases. In speaking of the caution courts have employed in not allowing damages for mental suffering, absent physical injury, the Court in that case said (p 467):
■ “These and similar objections to recovery for mental disturbance, applicable equally to tort and contract actions, have been so thoroughly demolished in recent years that we will not take the time for review. See Prosser, Law of Torts (2d ed), § 37, 1 Harper and James, Law of Torts, ch 9, and cases and articles there cited. Although the law in this field is in a state of marked transition and fluidity, it is not too early to state that there is a marked trend towards recovery.” (Emphasis supplied.) - “
On the basis of the foregoing language we cannot say that this Court modified or repudiated the rule in negligence cases in oúr State by its decision in Stewart.
Appellant further contends that modifications of the Nelson-Alexander rule have been made in the field of workmen’s compensation and in actions for loss of consortium. Whether such be correct, we do not and need not here decide. We think appellant correctly states the question we must pass. on in this case:
“This Court is asked, here and now, to lay before the bench and bar of this State & new workable rule in this area of emotional damages, a rule which will set forth whether the reasoning of Nelson and Alexander is still to .be followed.”
We derive little help from decisions from other jurisdictions. The state of the law is accurately characterized in 64 ALR2d 100, at p 103:
“The case law in the field here treated is in an almost unparalleled state of confusion and any attempt at a'consistent exegesis'of the authorities is likely to break down in embarrassed perplexity. Early attempts by the courts to deal with the questions were complicated by the lack of any'adequate body of legal authorities as well as by the inadequacy of the factual or scientific information available.” '
Plaintiff-appellant contends that New York and New Jersey have repudiated'the N els on-Alexander rule. Defendant, contrariwise, asserts the cases that she relies on can be distinguished upon their facts. Whichever is correct, we must speak with finality for this State. We hold that at present in Michigan there is no recovery for mental or emotional distress arising out of simple negligence, absent physical injury.
The fáctual background of this case does not present any persuasive reason for abrogating the rule. The proof of this element of damage relied upon by appellant in her appendix is as follows:
“Q. Mrs. Manie, did this entire incident upset you?
“A. Yes, sir.
“Q. Does it still upset you?
“A. Yes, sir.
“Q. Are you a nervous person?
“A. Well, I guess so. Everybody tells me so.
“Q. Do you take pills, Mrs. Manie?
“A. Yes, I do.
“Q. What kind of pills, if you. know?
“A. Librium.
“Q. Is that to calm your nerves?
“A. Yes, sir.
“Q. Is that by doctor prescription?
“A. Dr. Voikos prescription.
“Q. Did you take pills before this incident?
“A. Not to speak.
“Q. You did take pills though?
A. I have taken pills off and on for years. On Third Street.
“Mr. Street. I didn’t apparently — missed something.
“The Court. What did you miss?
“Mr. Street. Dr. Wickes?
“The Court. Voikos.
“Mr. Street. How does he get into the picture?
“Mr. Kortering. He is the prescribing doctor for the pills..
“Mr. Street. I object.
“Mr. Kortering. I have no objection if you want to strike it.
“The Court. All right.
“Q. After this incident, Mrs. Manie, at your place of employment, were certain conversations made to you by your co-employees with reference to this incident?'
“A. Yes, sir. *
“Q. Did they upset you?
“A. Yes, sir.
“Q. Have they continued?
“A. Yes, sin
“Q. Do they still upset you?
“A. Oh,, yes, sir.
“Q. Are you upset today about being in court?
“A. Yes, sir.”
By reason of the foregoing limited proof of alleged resultant nervous distress and emotional upset, we are not disposed to disturb our settled precedent. The decision of the Court of Appeals is affirmed.
No costs, neither party having prevailed in full.
Dethmers, C. J., and Kelly, J., concurred with O’Hara, J. | [
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Dethmers, J.
Under the will of his father, plaintiff’s decedent, Charles F. Moore, acquired an estate in fee simple in the premises in question, defeasible upon his death without issue, with an expectancy contingent upon the occurring of that event in his nephew, defendant Frank H. Moore. Charles went into possession, neglected to pay the taxes, and tax titles were acquired by Richard and Paul Lewis. Thereupon the Moores mortgaged the premises to secure a loan, the proceeds of which they turned over to an attorney with instructions, as he testified, “to redeem”, “to salvage” the property. The Moores then entered into a written agreement under which Frank was to cut and sell timber from the premises and, from the proceeds, pay the mortgage, taxes and expenses, the excess, if any, to be divided equally between them. Frank proceeded under the contract and ultimately paid the mortgage, partly from such proceeds and partly from his own pocket.
The attorney paid the proceeds of the loan over to an escrow agent and received from it two quitclaim deeds from, and prepared by, the Lewises naming Charles F. Moore and Frank H. Moore grantees, in form as if tenants in common. Shortly thereafter Charles died without issue, never having seen or known the contents of the deeds. The attorney became involved in a controversy with Frank about payment of attorney fees and, in consequence, retained the deeds for years without showing them to Frank or informing him as to their contents. The attorney testified that the Moores had never discussed in his presence how the title was to be held upon its reacquisition from the Lewises and that he knew of no agreement between them on the subject. The record discloses no such agreement.
At Charles’ death Frank took possession of the premises. Some 11 years later the plaintiff, as sole heir and executrix of the estate of Charles F. Moore, deceased, relying on the form of the deeds, filed a bill for an accounting for rentals and profits and praying that she be declared to be the owner of an undivided one-half interest in the premises. > Defendants Frank H. Moore and his wife, Birdie M. Moore, filed a cross bill for reformation and correction of the deeds to show Charles Moore’s interest to be a life estate with remainder in Frank H. Moore. From decree for defendants, reforming the deeds as prayed in .their cross bill, plainliff appeals.
In seeking reformation of the deeds defendants, contend that it was the intent of the parties that the deeds should place them in the status existing prior to the tax sale; that it was through fraud or error that they were drawn to show Charles, and Frank Moore as tenants in common. To this plaintiff replies that there is no proof of either fraud or mutual mistake. Plaintiff insists that the burden of proof is strongly upon the party seeking reformation' and that to warrant it there must be proof of fraud or proof of mutual mistake so clear, satisfactory and convincing as to establish the fact beyond cavil, citing Crane v. Smith, 243 Mich. 447, Lyons v. Chafey, 219 Mich. 493, and other authorities. In the cases where this rule is announced, the parties have negotiated an agreement which is merged into a written instrument. The instrument executed or accepted by the parties is presumed to contain the ultimate agreement of the parties in consummation of their previous negotiations. Miles v. Shreve, 179 Mich. 671. But, do the deeds give rise to any such presumption in a situation, as in the case at bar, where the record discloses no negotiations on the subject between the parties, where the attorney who procured the deeds for them testified that they had never discussed the point in issue in his presence and gave him no instructions thereon other than to redeem or salvage the property for them, where the form and effect of the prospective deeds was apparently taken for granted so as to require no discussion, where the fact that the deeds showed the two grantees to be- tenants in common was due entirely to the actions of a third party in preparing the deeds without instructions to that effect from the grantees, and where the grantees never saw or knew the contents of the deeds so as to be deemed to have acquiesced therein? We think not. The reason for the rule asserted by plaintiff disappears accordingly and with it must go the rule itself insofar as application to this case is concerned.
• This leads us to a consideration of what benefits may accrue to the owner of an intermediate estate by reason of his default and failure to pay the taxes which he is obligated to pay on the premises. In 3 Comp. Laws 1929, § 12952 (Stat. Ann. § 26.32), it is provided that:
“No expectant estate can be defeated or barred by any alienation or other act of the owner of the intermediate or precedent estate, nor by any destruc tion of such precedent estate by disseizin, forfeiture, surrender, merger, or otherwise.”
In the case of McCall v. McCall, 159 Mich. 144, 146, 147, this Court said:
“Mr. McCall, the life tenant, occupied a position of trust towards his children, the remaindermen. It was both his legal and moral duty to pay the taxes and interest upon the mortgage. * * * The law does not permit a life tenant for any reason to neglect to pay the taxes and interest, and obtain title in fee by purchasing the land at tax sale or foreclosure sales. In making such purchases, the life tenant is only paying what the law compels him to pay. He then stands in no other or different relation to the remaindermen than he would if he had paid the taxes and interest in season. ’ ’
And to like effect, in the case of Lowry v. Lyle, 2.26 Mich. 676, 681, 682, Mr. Justice Wiest, speaking for this Court, said:
‘ ‘ The rule preventing a life tenant from changing his estate to one in fee by proceedings growing out of his own default is well settled. The disseizin of the life tenant and the-remaindermen, under the lien foreclosure proceedings, went for naught when the life tenant procured a deed from Thomas for he thereby restored the life estate and the estate in remainder. Bowen v. Brogan, 119 Mich. 218 (75 Am. St. Rep. 387); Lewis v. Wright, 148 Mich. 290; McCall v. McCall, 159 Mich. 144; 21 C. J. p. 942.
“The status quo was restored by the deed from Thomas to George and Sarah A. Lowry, and from that moment George Lowry was again life tenant and no more, and the rights of the remaindermen again were vested.”
Had Charles Moore, as owner of the intermediate estate, paid the Lewises and obtained a deed naming himself as sole grantee, his actions, in contemplation of law, would have amounted to no more than payment of the taxes he was obligated to pay and a consequent restoration of the status quo. When, as here, the holders of the intermediate and the expectant estates join in paying’ off the holders of the tax title and reacquiring title from them, the legal effect should he no different, so long as the record discloses no agreement to the contrary and no presumption of a contrary agreement arises from the language of the deeds because they manifestly read as they do through the inadvertent action of a third party, never disclosed to, nor acquiesced in by, the grantees. The effect of the entire transaction must he held to' have been to restore the respective interests of Charles F. Moore and Prank. H. Moore as they existed prior to the tax sale.
Inasmuch as the result indicated by this opinion is effected by the decree, it is affirmed, with costs to defendants Prank H. Moore and Birdie M. Moore.
Butzel, C. J., and Carr, Bushnell, Sharpe, Boyles, Reid, and North, JJ., concurred. | [
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Butzel, J.
Plaintiff E. P. Brady bases his right to recovery in the instant suit on the claim that on the 3d of July, 1943, he entered into a parol agree mént with defendant Central Excavators, Inc., parts of which agreement were subsequently reduced to writing evidenced By letters dated July 3 .and July 16, 1943, and a purchase order of the latter date. -The letters and purchase order are as follows:
Exhibit A.
‘ ‘ Central Excavators Ypsilanti, Michigan.
Gentlemen:
“The following is confirmation on our verbal conversations street work on the Hunldn-Conkey job.
“We have an Austin Western #99 patrol grader and one Austin Western next size smaller than the #99. The smaller grader could be moved onto the job July 6th and the #99 July 7th. It is also possible that if needed we could furnish one or two more graders.
“The rental rates for these machines $640 per month for the #99, and $500 per month for the smaller machine plus all operating expenses. Wo can supply the operators.
“Before we would care to furnish these machines we will want the purchase order covering the purchase of the gravel work, as we would not want to tie up these machines unless we were going to do the gravel work. '
“On the gravel work it is understood that the grades will be furnished to fine grading. There is to be no end movement of dirt. All grade stakes are to be furnished. . We will do trenching for gravel, furnish, place and compact gravel and trim shoulders as far as possible with motor patrol grader. ' ■
6" Compacted streets at 45^5 per sq. yd.
8" Compacted streets at 58^ per sq. yd.
“We would strongly urge a.top dressing of calcium chloride of 1-1/2f per sq. yd. If this can be sold we would furnish everything and apply for .04/’ per sq.- yd. additional.
“It is also understood that Central Excavators will carry my payroll from payroll information furnished by me, and deduct actual payroll plus payroll insurance from money due under sq. yd. purchase order contract.
“I will guarantee that we can produce at least 1.000 cu. yds. per day, but we will just have to do the best we can so far as the trucks are concerned. Of course the more we can deliver the less our producing cost will be so you may be assured we will do the very best we can.
“Thanking you for the opportunity of working with you on'this work, I am
Tours truly,
(Signed) E. P. Brady.”
Exhibit B.
. “Central Excavators, Inc.
General Contractor Willow Bun Townsite Tpsilanti, Michigan.
Purchase- Order No. 764.
July 16, 1943 Project Mich-20046-5'4 Wayne, Michigan.
“E. P. Brady 825 Dickinson St., Flint, Michigan.
“All necessary work to complete approximately 60.000 sq. yd. of gravel drives 6" compacted thickness, and approximately -100,000 sq. yd. of gravel streets 8" compacted thickness, at the following unit prices:
“Stabilized gravel drives, 6" compacted thickness at .45 per sq. yd.
“Stabilized gravel streets, 8" compacted thickness at .58 per. sq. yd.
“Grade to be furnished to fine grading and all necessary grade stakes and engineering work will be furnished by others.
‘ ‘ There is to be no end movement of dirt.
“Yon are to do trenching for gravel, furnish, •place and compact the gravel and trim the shoulders as far as possible with motor patrol graders, material to be in accordance with gradation requirements of F.P.H.A. specifications.
. “You are to furnish necessary motor patrols and rollers and any other equipment needed for this work, and in the event that we use any of the equipment for construction of subgrade or ditches, you will be reimbursed on O.P.A. ceiling monthly rental basis, for the time such equipment is used.
“We will take over your full payroll on this work, deducting same, plus taxes and insurance, from your periodic invoices.
Central Excavator's, Inc.
By M, I), Obermeyer (Signed)”
Exhibit C.
Central Excavators, Inc.
G-eneral Contractors Willow Run Townsite Ypsilanti, Michigan
July 16, 1943.
“Mr. E. P. Brady, 825 Dickinson St., Flint, Michigan.
Dear Mr. Brady:
“We are attaching hereto, our purchase order number 764 covering the material in place for the required work in connection with the roads on the Wayne housing projects, identified as Mich. 20046 and 20054.
“The purchase order is issued in conformance of the terms of your proposal of July 7, 1943, and in accordance with our previous understanding and agreement, we will place on our payroll all of your employees engaged in the construction of the road surface and pay any necessary expenses incurred at the site, deducting the payroll and expenses from your invoices when submitted.
“Trusting that the above is as agreed and fully satisfactory, we remain,
Yours very truly,
Central Excavators, Inc.
By M. D. Obermeyer (signed) Project Manager.”
This litigation arose out of the construction contracts for the war housing project known as “Norwayne” which is the designation given a particular part of the larger Willow Bun Housing Project. The Federal Public Housing .Authority contracted with the Hunkin-Conkey Construction Company of Cleveland, Ohio, which company is not a party to this action, to undertake the construction of the Norwayne project. The construction company, as prime contractor, entered into a subcontract with the defendant corporation to do certain street construction work in connection with this project. Defendant company sublet a part of its own subcontract to plaintiff. It is the latter subcontract which gives rise to the dispute in this case.
Plaintiff claims that according to the terms of the verbal agreement, defendant promised to furnish, or have furnished
“1. Approximately 60,000 square yards of drives to fine grading for 6" compacted thickness of gravel; and
“2. Approximately 100,000 square yards of streets to fine grading for 8" compacted thickness of gravel, together with all necessary grade stakes and engineering work therefor, all to be so prepared that no hand labor of any kind or description would be required of any by the plaintiff; and
“3. The said streets and drives in sufficient quantity in area per day so as to utilize plaintiff’s promised output of 1,000 cubic yards of gravel per day. ’ ’
to accomplish, or have accomplished, all end movement of dirt; to reimburse plaintiff for any of his equipment used for construction of subgrade or ditches at - a stipulated rate for the time during which such equipment was used; to take over plaintiff’s full payroll for labor; and to pay plaintiff in the manner specified in exhibit B. Plaintiff states that he, in turn, agreed to do the trenching for gravel; furnish, place and compact the gravel, and trim the shoulders of the streets, as far as possible, with motor patrol grader; produce, compact and process 1,000 cubic yards of gravel per day; and furnish the equipment and labor necessary to the completion of the work.
Plaintiff further claims that, in reliance upon defendant’s promises, he secured the facilities and hired the labor necessary-to complete this work in 40 days, the approximate period requiréd at the rate of 1,000 cubic yards per day;. that owing to defendant’s failure to furnish sufficient base-grade upon which to spread and compact 1,000 cubic yards of gravel per day, the soft and unstable condition of the subsoil, the constant cutting up of finished work by utilities contractors laying pipe, sewers, et cetera, and the use of yet unfinished streets by vehicular traffic, plaintiff was put to great expense and suffered a considerable loss which he seeks to recover from defendants. Finally, plaintiff asserts that, as the result of these untoward conditions, he was required to do additional work not contemplated by the agreement, and that he did so under protest and without waiving his right to extra compensation.
In his bill of particulars plaintiff claimed the net amount owing him was $38,487.42. Prior to trial defendant, in accordance with the provisions of 3 Comp. Laws 1929, § 14269 (Stat. Ann. § 27.998) filed an offer of judgment against itself in the amount of $3,953.15, which plaintiff declined to accept. The case was tried without a jury. The trial judge found that a verbal agreement had been entered into by the parties, only parts of which had been reduced to writing, and admitted parol evidence to prove its terms. He specifically found that defendant promised plaintiff that it would make available base grade for streets and driveways in such quantity as to utilize 1,000 cubic yards of gravel per day; that such base grade would have a reasonably firm and stable subsoil; and that no handwork would be required of plaintiff in the performance of this undertaking.
The testimony at- the trial established the fact that this was a “hurry-up job.” The trial judge characterized the project during the period covered by the testimony as being “in a state of complete chaos.” Before plaintiff had completed the laying and compacting of the gravel st-r.eets and driveways, they were being used by the trucks of the various other contractors and suppliers with the result that they were frequently torn up. The government inspector on this particular project testified that he required plaintiff to repair this damage; and the trial judge found that defendant' had also directed plaintiff to repair such damage, without which the work was unacceptable to the government. The testimony further established the fact that the greater part of- the street area was soft and unstable; that rather than lose time by filling in with rock, an expensive process, defendant and the government inspector ordered plaintiff to use additional gravel to fill in the soft spots which entailed the use by plaintiff of more materials, time and labor.
The trial court found that had plaintiff been furnished base grade in the agreed upon quantity, he could have completed the job within 40 days, whereas, under the prevailing working conditions, 155 days were required. Accordingly, the court found that plaintiff had sustained damages arising from the delay caused by defendant’s failure to furnish, as agreed, sufficient base grade to utilize 1,000 cubic yards of gravel per day, damages for additional labor and material required to complete'the streets and drives which were not furnished, as agreed, with á reasonably firm and stable subsoil, and damages for refinishing streets and drives torn up by the vehicles of other contractors on the project. The trial court assessed these damages in accordance with plaintiff’s claims less a-few minor adjustments, and entered judgment for plaintiff in the sum of $33,992.07.
Defendant claims on appeal that the purchase order, exhibit B, represents the entire contract between the parties; that the trial court erred in admitting oral evidence to add to its terms; that plaintiff failed to sustain the burden of proving the extent of his true damages; and that the trial judge should have limited plaintiff’s recovery to the smaller amount still due and unpaid, as admitted by defendant in the pleadings.
As part of an urgent war-time housing project, there can be little question but that time was of the very essence in plaintiff’s work. There was ample testimony establishing the necessity for speed and dispatch in completing the entire project. It was shown that defendant was itself under a contractual obligation to the prime contractor to have the streets ready to turn over to the Federal government by October 30, 1943. And yet, despite the tremendous importance of the time factor in this undertaking, the purchase order is entirely silent on this essential, nor is there any reference to it in any of the other writings.
Plaintiff’s letter of July'3, 1943, exhibit A, contains a guaranty that he would produce 1,000 cubic yards of gravel per day. Manifestly, this was not a gratuitous offering on plaintiff’s part; rather, it is indicative that the subject had been discussed during the “verbal conversations” referred to in this same letter. Defendant’s own project manager, Mr. Obermeyer, testified that he himself had raised the question of plaintiff’s production capacity at their initial meeting. In view of defendant’s own deadline, it was to be expected that defendant would be concerned with plaintiff’s ability to produce a minimum quantity of gravel per day. Here again, however, the purchase order is silent.
It further appears that defendant had specifically agreed with the prime contractor not to sublet any of its otvn work without the latter’s approval in writing. It is argued that this accounts for the lack of a formal contract which would have embraced, the entire agreement.
The lower court was also persuaded by the fact that plaintiff’s letter of July 3, 1943, exhibit A, stated that it was in “confirmation on our verbal conversations” and that defendant’s letter of transmittal of July 16, 1943, exhibit C, stated that “the purchase order is issued in conformance of the terms of your proposal of July 7, 1943” (this was an error, the correct date was July 3), which brought the court back to the “verbalconversations” since the plaintiff’s “proposal” purported to be no more than confirmation of the conversation. Moreover, the trial judge was of the opinion that because of the alleged ambiguity contained in exhibit C, viz., whether the clause “and in accordance with our previous understanding and agreement,” modified the preceding clause with reference to the issuance of the purchase order or the succeeding clause with reference to the payroll arrangements, there was additional basis for the admission of parol evidence.
Plaintiff’s counsel contend that the rule against the admission of parol evidence to add to, or vary, the terms of a written contract are not applicable inasmuch as the writings in question are a mere informal statement of some and not all of the terms of the agreement. Reference is made to Brown v. A. F. Bartlett & Co., 201 Mich. 268, wherein we quoted with approval from Jones on Construction of Commercial & Trade Contracts, § 134, as follows:
“The test of the completeness of the writing proposed as a contract is the writing itself. If this bears evidence of careful preparation, of a deliberate regard for the many questions which would naturally arise out of the subject-matter of the contract, and if it is reasonable to conclude from it that the parties have therein expressed their final intentions in regard to the matters within the scope of the writing, then it will be deemed a complete and unalterable exposition of such intentions. If, on the other hand, the writing- shows its informality on its face, there will be no presumption that it contains all the terms of the contract. In every -case, therefore, the writing must be critically examined in the light of its surrounding circumstances, with a view of determining whether it is a memorial of the transaction.”
Counsel for defendant contend that where a contract is reduced to writing all previous parol agreements relating to the same subject matter are merged therein so that such contract cannot rest partly in writing and partly in parol. Danto v. Charles C. Robbins, Inc., 250 Mich. 419. Plaintiff, however, stresses his claim that the writings are only evidence of portions of the verbal agreement, are not complete in themselves, and specifically re fer to previous conversations and understandings. Reference is made to Stahelin v. Sowle, 87 Mich. 124, 132, wherein we said:
“It is therefore apparent, from the plaintiff’s theory, that the written memorandum or agreement signed by defendant does not contain the whole of the contract between, the parties, and it follows that previous and also contemporaneous agreements and talks may be shown in order to prove what the whole contract was. It is only where the contract is complete in itself, and shows upon its face that it embodies the terms of the agreement, that parol testimony which tends to vary or contradict the writing is excluded, as well as all previous negotiations and understanding. Where, however, a contract which is not required by statute to be in writing to be binding is partly in writing and partly parol, the whole is regarded as a parol agreement, and may be proved by oral testimony, and the jury are to determine from the whole testimony what the terms of the contract are. ’ ’
We are in accord with appellant in his contention that where parties to an agreement have entered into a written contract covering a particular subject matter, all prior negotiations pertaining to that subject are merged in the written contract and parol evidence is inadmissible to show that the contract does not conform with verbal agreements made prior to its execution. Wenzel v. Kieruj, 168 Mich. 92; Quisle v. Brezner, 212 Mich. 254; Hank v. Lamb, 310 Mich. 81. We are further in accord with appellant that when a written contract is silent as to time of performance, a reasonable time is to be presumed without reference to parol evidence. Chicago, K. & S. R. Co. v. Lane, 150 Mich. 162; Stange v. Wilson, 17 Mich. 342; Coon v. Spaulding, 47 Mich. 162; Toledo & A. A. R. R. Co. v. Johnson, 55 Mich. 456; Ferguson v. Arthur, 128 Mich. 297; Sloman v. National Express Co., 134 Mich. 16.
In the instant case, however, there was positive testimony which convinced the trial court that a verbal agreement had been entered into by the parties prior to any exchange of correspondence, and that the letters and purchase order which followed neither altered nor superseded the original verbal agreement, but .were issued in conformance with it, in consequence of which there never was a completely integrated written contract between the parties. This is substantiated by intrinsic evidence contained within the writings. As stated in Cohn v. Dunn, 111 Conn. 342, 346 (149 Atl. 851, 70 A. L. R. 740):
“The fundamental question is one of the intent of the parties. Did they intend to make the writing the repository of their final understanding upon the particular matter of agreement as to which evidence is offered dehors the writing? If so, such evidence must be excluded. If, however, it appears that the jiarties intended to restrict the writing to specific subjects of negotiation, then other subjects may be proven ‘even though they be (as they always are) different from the writing.’ 5 Wigmore on Evidence (2d Ed.), § 243,1. This intent is to be sought in the conduct and language of the parties and the surrounding circumstances.” '
In Danielson v. Bank of Scandinavia, 201 Wis. 392 (230 N. W. 83, 70 A. L. R. 746), Chief Justice Rosenberry, discussing this problem at page 397, stated:
“We are concerned here with the application of the so-called parol evidence rule to the effect that parol evidence is not admissible to vary the terms of a written contract. The real question to be considered in cases of this kind is whether or not the writing in question, was intended by the parties thereto to embody the entire transaction and so to constitute the sole evidence of the agreement entered into by them. * * *
‘ ‘ There is language used in some prior Wisconsin cases which would indicate that whether a writing-amounts to an integration of the entire transaction must be determined solely from the writing itself. (Citing cases.) * * *
“However, a careful analysis of these and other cases indicates that in considering whether or not the writing in question was intended by the parties to be an integration of the entire transaction, the subject matter and surrounding circumstances may and should be Taken into consideration. * * *
“In numerous Wisconsin cases it has been held that, where applied to the subject matter with which the contract deals, or where it appears from the surrounding- facts and circumstances, the writing was not an integration of the entire transaction, and was ■ not intended by the parties to be such, parol evidence may be received to establish that part of the transaction which was permitted by the parties to remain in parol. * *
“Dean Wigmore aptly says: ‘The document alone will not suffice. What it was intended to cover cannot be known until we know what there was to cover. The question being whether certain subjects of negotiation were intended to be covered, we must compare the writing and the negotiations before we can determine whether they were in fact covered.’ ”
Reference is also made to American Bridge Co. v. Crawford (C. C. A.), 31 Fed. (2d) 708 (68 A. L. R. 1246), the first (A. L. R.) syllabus of which reads »as follows:
“Where letters exchanged by parties to an oral agreement do not purport to be the formal agreement itself, but only a confirmation of that previously made, nor to cover the entire agreement, but, on the other hand, refer to the oral agreement, the real contract may be shown by parol evidence, though the effect of such proof is to add material terms and conditions to the contract evidenced by the letters.”
To like effect are Ohio Crane Co. v. Hicks, 110 Ohio St. 168 (143 N. E. 388); Root v. Shadbolt & Middleton, 195 Iowa, 1225 (193 N. W. 634). In the latter case the court held that oral testimony was admissible to prove the agreement as to compensation for gravel hauled, and the hauler’s duty to put and maintain it so that other haulers could get in and out, and to maintain the roads in good condition, despite a writing on the general subject matter. The court said (p. 1232):
“It is apparent from the testimony of both Middleton and Twigg that there were certain matters agreed upon orally between them which were not placed in the letter. It conclusively appears in the record that neither Middleton nor Twigg regarded the letter as the entire contract.”
There is no doubt that plaintiff is entitled to recover for any extra work ordered by defendant and not covered by the purchase order. Assuming that the alleged verbal contract was entered into by the parties, as found by the lower court, and that the writings do not represent a fully integrated written contract, plaintiff is also entitled to recover for all additional expense he was put to on account of the delay. See Beskin v. State, 119 Misc. 209 (Court of Claims) (195 N. Y. Supp. 951) (affirmed without opinion in 206 App. Div. 784 [200 N. Y. Supp. 915]); Indianapolis Northern Traction Co. v. Brennan, 174 Ind. 1, 24 (87 N. E. 215, 90 N. E. 65, 91 N. E. 503, 30 L. R. A. [N. S.] 85), wherein the court stated:
“The contract under which they were obligated required that all of the work which they had con tracted to perform should he completed by August 15, 1903. Certainly, when appellant company obligated these parties to do and finish the work within a fixed period, it was its 'duty to afford them a fair and reasonable opportunity to begin and complete the work; or, in other words, under the mutual contract entered into between it and them, it became its duty to furnish the required material, secure the right of way, and have the road grade in readiness as required by the contract, so that appellees, in the exercise of reasonable diligence, might begin to finish the work within the prescribed period without being subjected to unreasonable cost or expense on account of the default, delays, and hindrance of appellant company. Its default or failure in these respects would subject it to liability for whatever damages appellees might reasonably sustain on that account.”
To like effect see Sartoris v. Utah Construction Co. (C. C. A.), 21 Fed. (2d) 1; Keahon Bros. v. Blank, 161 Misc. 874 (292 N. Y. Supp. 257).
We are not unmindful of the recent decision of the United States Supreme Court in the case of United States v. Howard P. Foley Co., 329 U. S. 64 (67 Sup. Ct. 154, 91 L. Ed. 135) (No. 50, October Term, 1946), handed down on November 25, 1946. In that case, a contracting firm had agreed to complete its part of the construction of an airfield in 120 days but was delayed, an additional 157 days because of the unstable subsoil conditions encountered, and sought to recover damages from the Federal government for the considerable extra cost sustained on the ground that the government had not provided the conditions necessary for the completion' of the work within the period stipulated in the contract. Unlike the case at bar, there was no claim that any other agreement existed other than the written contract under which the work was done. That contract was complete in itself. It did. not specifically require the government to maintain conditions that would enable the contractor to complete its work in 120 days, but on the contrary contained clauses that indicated a delay might be encountered. In the instant case the trial court found that according to the terms of the parol agreement entered into, by the parties, defendant had promised to maintain conditions, including the furnishing of reasonably firm and stable subsoil, so as to enable plaintiff to complete his work in approximately 40 days.
The trial court allowed the sum of $9,750 for excess labor charges. This figure was arrived at by taking 75 per cent: of the total wage figure, on the theory that all labor charges after September 1, 1943, were properly chargeable to defendant. It is a general rule that where damages are susceptible of precise proof, such proof must be made. Liquidating Holding Corp. v. Mortgage & Contract Co., 258 Mich. 476. According to the terms of the agreement, however, defendant was to take over plaintiff’s payroll, cf. exhibits B and C. It is plaintiff’s claim, therefore, that if defendant was not satisfied with the accuracy of the method of approximating total extra labor charges introduced by plaintiff and adopted by the trial court, it should have produced its own books covering these transactions. We do not entirely approve of the approximation method used in making the computation, but believe that defendant cannot complain if it made the payments, kept the books showing them and failed to produce the necessary evidence that it had in its possession. *
The court allowed $8,747.48 as payment for 5,301% cubic yards overrun, the quantity of gravel in excess of what should normally have been required, at $1.70 less certain deductions. The Federal Public' Housing Authority had previously acknowledged an overrun of 3,668 yards. The trial court accepted the higher figure for which there was convincing testimony.
The lower court also allowed plaintiff the sum of $7,546.89 representing production costs of 19,351 cubie yards at 39 cents per cubic yard produced after September 1st. Plaintiff had an agreement with the owners of a gravel pit to divide equally profits from the sale of gravel. The record makes it extremely doubtful whether there was any loss resulting from the transaction. Plaintiff and the owners of the gravel pit were producing gravel for other accounts as well as for defendant. The proof in regard to the amount of the loss is not at all convincing. It is not shown that plaintiff was unable to trench, screen and stockpile gravel for defendant’s account. If this had been done, the alleged excess production costs could have been greatly minimized. We are not at all satisfied from the record that there was sufficient proof to sustain 'the charge of $7,546.89.
Were this an equity case which we would hear de novo, we might have entertained some doubt as to the correctness of the judgment. In a case tried by a judge without a jury, however, the judge is the trier of the facts and may give such weight to the testimony as in his opinion it is entitled to, and the Supreme pourt does not reverse unless the evidence preponderates in the opposite direction. Hazen v. Rockefeller, 303 Mich. 536; In re Karch’s Estate, 311 Mich. 158. Thus we accept the trial court’s finding that a verbal agreement was entered into by the parties, only parts of which are evidenced by exhibits A, B and C. We do not believe, however, that the charge of $7,546.89 for the production costs of gravel after September 1st is proper; and the judg ment should be decreased by that amount. If the plaintiff will consent 'to a remittitur within 30 days of $7,546.89 and file such remittitur in the circuit court to which this case is remanded, the judgment will be affirmed as modified. If, however, he does not file such remittitur within 30 days in the circuit court as ordered, there being very elo.se questions of fact involved in the case, a new trial is ordered. ■Neither party having fully prevailed, no costs will be allowed.
Carr, C. J., and Bushnell, Sharpe, Boyles, Reid, North, and Dethmers, JJ., concurred. | [
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Sharpe, J.
On July 16, 1942, defendant was arrested under a warrant charging him with the crime of rape and assault with intent to commit the crime of rape. He was arraigned and entered ,a plea of guilty. On July 18, 1942, he was given a sentence of life imprisonment.
On November 18, 1942, defendant filed' a motion to set aside and vacate the sentence and for a new trial. This.motion is supported by and based upon two affidavits. The affidavit of defendant alleges that from the time of his arrest until the time of his arraignment he was kept in close confinement and had no opportunity to obtain legal counsel; that he had no knowledge of the legal elements of the crime with which he was charged; and that he understood that the charges were based upon illicit sexual relations. The affidavit of Pauline Vander Roest denies that defendant made an assault upon her. Affidavits in opposition to the motion were filed by the prosecuting attorney. The trial court denied defendant’s motion. Defendant appeals.
The record shows that the information filed against defendant contains two counts. The first count charges that deféndant committed the crime of rape upon Pauline Yander Roest contrary to Act No. 328, §520, Pub. Acts 1931 (Comp. Laws Supp. 1940, §17115-520, Stat. Ann. § 28.788),'while the second count charges defendant with assault with intent to commit the crime of rape contrary to Act No. 328, § 85, Pub. Acts 1931 (Comp. Laws Supp. 1940, §17115-85, Stat. Ann. §28.280). Defendant was arraigned on July 16, 1942, and pleaded guilty to the information.«
Defendant urges that he be allowed to withdraw his plea of guilty to both counts in the information for the reasons stated in the affidavits attached to his motion. The rule as to withdrawal of a plea of guilty is stated in People v. Vasquez, 303 Mich. 340, where we said:
“But we have always adhered to the rule that after sentence has been imposed, the withdrawal of a plea of guilty rests in the sound discretion of the court. ’ ’
The only question involved in this case is whether there was an abuse of discretion upon the part of the trial court in its refusal to allow defendant to withdraw his plea of guilty.
It appears in the record that the State department of corrections, bureau of probation, made an investigation of defendant. When interviewed, the defendant told the investigator:
“I had been keeping company with Pauline for about three months. This night we went for a ride and later parked. We necked’a while and then she let me monkey around. Finally we got to fighting and I hit her on the jaw three times. I did have my privates in her but only part way and only about a minute. She jumped out of-the car and1 ran away.”
We must assume that the trial court made a proper investigation of the nature of the case; and that the plea was freely made with full knowledge of the nature of the accusation and without undue influence as is required by 3 Comp. Laws 1929, §17328 (Stat. Ann. §28.1058).
The validity of a sentence pronounced upon a plea of guilty does not depend upon its appearing of record in what manner the judge may have proceeded to satisfy himself that the person acted freely in pleading guilty. People v. Ferguson, 48 Mich. 41.
Defendant urges as an additional reason for withdrawal of his plea of guilty that the trial court at the time defendant was sentenced stated as follows:
“Mr. Yester, you have pleaded guilty to the offense of rape as stated in Act No. 328, § 85, Pub. Acts 1931,—rather, the offense is charged under that . section of the law. * * *
‘‘ The statute under which you have pleaded guilty carries a penalty of life.”
The section referred to by the trial judge does not refer to the crime of rape, but does refer to the crime of assault with intent to commit the crime of rape. It is to be noted that the above statement made by the trial court was not made at the time defendant pleaded guilty, but was made at the time defendant was sentenced. Having been made subsequent to the acceptance of the plea of guilty, it has no bearing on the question involved in this case.
The trial court stated on the motion to vacate the sentence:
“I am thoroughly convinced that this man knew what he was talking about on the 16th of July when I talked to Mm and I remanded Mm until the next Saturday morning so as not to act too hastily. Leaving this girl there, in the woods in the dark, I commented upon the atrocity of it. I commented upon the perfect lack of motivating loyalty and patriotism when he was going into the army to get away from supporting his father and mother who had protected him and cared for him from Ms infancy, and the dastardliness of the purpose that he had in calling upon this girl that night solely for the purpose of having intercourse with her either with or without her consent. And after talking it over with him I put it over to the next Saturday morning so there wouldn’t be any too hasty actions. And on the next Saturday morning he just as definitely admitted what he said two days before and so he was sentenced. ’ ’
The record satisfactorily shows that defendant’s plea was voluntarily made. There was no abuse of discretion in denying defendant’s motion. The judgment is affirmed'.
North, C. J., and Wiest, and Boyles, JJ., concurred with Sharpe, J. Starr, J.,, concurred in the result. | [
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Per Curiam.
Is it permissible to enhance sentence under the habitual offenders act if the prosecutor has reliable information pertaining to a person’s prior felony record before trial but does not charge the person as an habitual offender until after conviction is entered on the current felony charge?
Alvin Fountain was convicted of carrying a concealed weapon in Recorder’s Court of Detroit on September 23, 1975, and sentenced on September 30, 1975 to three to five years in prison. After Fountain filed a claim of appeal the Wayne County prosecutor filed a supplemental information charging him as a fourth offender. On April 9, 1976 Fountain was convicted as a fourth offender and received an enhanced sentence of 15 to 30 years.
Hank Jones was convicted by a jury of unarmed robbery on April 18, 1974 in Muskegon Circuit Court. The prosecutor charged Jones as a third offender. After conviction, but before sentencing, Jones pled guilty to the third offender charge and was sentenced on May 29, 1974 to 10 to 15 years on the unarmed robbery conviction and 10 to 30 years as an habitual offender, sentences to run concurrently.
Fountain’s and Jones’ prior felony convictions derived from the same jurisdictions as their convictions on the current offenses.
A prosecutor who knows a person has a prior felony record must promptly proceed, if at all, against the person as an habitual offender. People v Hatt, 384 Mich 302; 181 NW2d 912 (1970); People v Stratton, 13 Mich App 350; 164 NW2d 555 (1968). The prosecutor is not foreclosed from proceeding against a person as an habitual offender after conviction on the current offense provided he is unaware of a prior felony record until after the conviction. MCL 769.13; MSA 28.1085. The only recognized exception to this rule is when the delay is due to the need to verify out-of-state felony convictions based on the "rap sheet”. People v Hendrick, 398 Mich 410; 247 NW2d 840 (1976).
Here the prosecutors must be presumed to have known of the defendants’ prior felony records because their respective offices prosecuted the prior felonies. The habitual offender charges should have been filed with the information which charged the last felony to provide fair notice to the accused and avoid an appearance of prosecutorial impropriety.
In lieu of granting leave to appeal, pursuant to GCR 1963, 853.2(4), we reverse the decisions of the Court of Appeals, vacate, the habitual offender sentences, and order that Fountain’s 3- to . 5-year sentence for carrying a concealed weapon be reinstated, and Jones’ 10- to 15-year sentence for unarmed robbery remain intact.
Reversed.
Kavanagh, Williams, Levin, Fitzgerald, and Blair Moody, Jr., JJ., concurred.
See MCL 769.10 et seq.; MSA 28.1082 et seq.
It was improper to sentence Jones on the unarmed robbery conviction and as an habitual offender. MCL 769.13; MSA 28.1085 provides that a defendant may only be sentenced to one term of imprisonment on the underlying felony and the supplemental information. | [
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Per Curiam.
We have reviewed this record and find insufficient evidence to support the defendant’s conviction of manslaughter and, therefore, we reverse.
Milton Perry and Jimmie Folkes were charged with first-degree murder. At trial, the principal evidence against them came from Herbert Oden. He testified that during the early evening hours of November 19, 1974, he was at Kenny’s Pool Hall in Ecorse. Also present was Oden’s friend Charles Moore. The pool hall was occupied by 40 or 50 other persons. Between 7:30 and 8 p.m., Oden stepped outside the front of the pool hall and observed Folkes drive by and park a short distance down the street. Perry, who was a passenger, got out of the car, approached Oden, and asked if Charles Moore was inside. Oden responded that he was, Perry and Oden entered the pool hall, and Oden pointed Moore out to Perry. Perry and Moore had a conversation, overheard by Oden, in which Perry asked Moore, "Have you got that?” Moore then went out the front door with Perry.
A few minutes later, Oden stepped outside to see where Moore went, and he observed Perry and Folkes "body punching” Moore against the car. One of the two, he could not tell which, "seemed like one of them had an object in his hand”. Oden returned to the pool hall, waited two or three minutes, and then, afraid of getting involved in what was happening out front, attempted to leave by going out the back door of the pool hall. As he stepped out the back door, into an alley, he looked to the left and observed Folkes facing Moore while pointing a gun at him, heard a shot fired, and saw Moore fall to the ground. Folkes then turned and fired a shot at Oden, which narrowly missed him. Oden fled by going through the pool hall and out the front door.
As to Milton Perry’s involvement, Oden testified as follows:
"Q. Could you see all around to see whether or not there were other people [besides Folkes and the victim in the back of the pool hall] around the area where these two men were standing?
"A. Yes.
”Q. Now did you see anybody else in the area where those two men were?
"A. No.
”Q. As a matter of fact after you observed the fight out in the front you didn’t see Milton Perry anywhere else at all, did you?
"A. No.
"Q. At no time did you ever see Milton Perry with a weapon in his hand, did you?
"A. No.
"Q. You cannot say that you ever saw Milton Perry with a weapon of any kind or of any sort in his hand, can you?
"A. Right.”
Counsel for Perry moved for a directed verdict at trial on the ground that the evidence was insufficient to show that Perry aided and abetted Folkes. The trial judge denied the motion. The jury found Perry guilty of manslaughter, while convicting Folkes as charged.
Perry has pursued the issue of the sufficiency of the evidence to the Court of Appeals and to this Court. He argues that the only inculpatory evidence was the earlier assault on the victim. That was the basis of the prosecutor’s argument to the jury for conviction.
"Now also you can assume facts of this case and infer, that once they [Folkes and Perry] finished plummeting [sic] or beating up the deceased, Mr. Folkes then took him around the side through an alley and took him in the alley and shot him. At that time I assume Mr. Perry was in the car waiting for Mr. Folkes to come back. This is the theory of the case.”
Defense counsel objected that there were no facts in evidence from which the jury could infer that Perry helped bring the victim around to the alley or that Perry was sitting in the front waiting for Folkes to come back and waiting for Folkes to shoot the deceased.
We find no evidence at all as to what happened to Perry in the minutes between the time the witness saw him in front with Folkes and the victim and then saw Folkes and the victim in back. We note also that the pool room is not on a corner, but rather is in the middle of the block, so it was not merely a matter of Folkes taking the victim around the corner to the alley.
In his rebuttal argument, the prosecutor further tried to bolster the claim that Perry was an aider and abettor.
"Mr. Perry initially went into the pool hall, an aider and abettor. And under the laws of the State of Michigan, as an aider and abettor, you are considered a principal. You are as guilty as the principal in a crime. Mr. Perry went in the pool hall and he got the deceased outside with him. He punched him in the stomach. He punched him in the chest. He certainly contemplated, he must have known when they went to the pool hall what might occur to the deceased and that is exactly what did occur to him. He was murdered. He is guilty as an aider and abettor. Maybe he didn’t pull the trigger, but he is just as guilty as Mr. Folkes, who did pull the trigger.”
We find insufficient evidence to suggest that there was a preconceived intent to kill when Perry went into the pool hall. The brief conversation between Perry and the victim in the pool hall did not appear to the witness to be an argument. Neither can it be said that the fact that Folkes and Perry were hitting the deceased evidenced such an intent or premeditation.
The trial judge thought there was sufficient evidence for the jury to consider the aiding and abetting question. We do not. It does not follow, merely because Perry was involved in a misdemeanor offense against the victim a few minutes earlier, that he had anything to do with the murder. The trial judge should not have allowed the charge against Perry to go to the jury.
In lieu of granting leave to appeal, pursuant to GCR 1963, 853.2(4), we reverse the defendant’s conviction and order the defendant discharged. Burks v United States, 437 US 1; 98 S Ct 2141; 57 L Ed 2d 1 (1978), and Greene v Massey, 437 US 19, 25; 98 S Ct 2151; 57 L Ed 2d 15 (1978).
Coleman, C.J., and Kavanagh, Williams, Levin, Fitzgerald, Ryan, and Blair Moody, Jr., JJ., concurred. | [
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Reid, J.
This case was submitted upon the same testimony taken in the case of Kathan v. Stevenson, 307 Mich. 485. The relief sought is to enforce a claimed reciprocal negative easement respecting property adjoining the property involved in that case, barring use and occupancy by persons of Afri can descent. For reasons similar to those recited in the opinion of Mr. Justice Wiest, the trial judge found that there never had been any restrictions limiting the use and occupancy of these premises to persons of the Caucasian race either placed on record, in any deeds of conveyance, or adopted by general plan by or among the persons interested in properties on Arden Park that were binding upon owners' and future purchasers without notice; and that there was no actual notice to defendants that these parcels could not be used and occupied by them as their residences. In accordance with that finding the trial judge by his decree dismissed the bill.
In Kathan v. Stevenson, supra, at p. 490 this Court said:
“There was no plan or agreement common to all home owners in the subdivision relative to racial use and occupancy of premises.”
The finding by the trial judge is determined to be correct. The decree appealed from is affirmed. The appellees not having filed a brief, no costs are allowed.
North, C. J., and Starr, Wiest, Btjtzel, Sharpe, and Boyles, JJ., concurred. Bushnell, J., did not sit. | [
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Boyles, J.
In August, 1940, Ernest Sachs filed a bill of complaint in the circuit court for Wayne county against Sam Karos and others, doing business as copartners under the name of Karos Tool & Manufacturing Company, seeking, to set aside an agreement for dissolution of the copartnership made without his knowledge, on the ground that it was fraudulent. Sachs asked for an accounting and other relief. In this opinion we refer to the above proceeding in chancery as the “original case,” and for brevity we hereafter refer to the Karos Tool & Manufacturing Company as “the company.” , Various defendants in that case filed cross bills, seeking affirmative relief and asking for the appointment of a receiver. An extended hearing was held in that case before Hon. DeWitt H. Merriam, circuit judge for Wayne county, and on December 1,1942, a decree was entered for the plaintiff, from which the defendants have appealed. That appeal is now pending in this court.
During the progress of the hearing in the original case Judge Merriam appointed the Equitable Trust Company, plaintiff in the instant case, as successor receiver for the company. On July 22, 1941, the first receiver had filed the bill of complaint in the instant case in the circuit court for Wayne county. In it the receiver alleges that there was situated in the shop of the company among other property two machines worth $15,000 and upwards, of great value to the operation of the business, that Sam Karos had filed a petition in the original case asking for permission to enter into a lease or to purchase these two machines, that Judge Merriam had denied this petition after a hearing thereon, that these machines were purchased by the company pursuant to a priority order of the United States based on the fact that the company was engaged in war preparedness work, and that they were paid for with company funds. The bill further alleges that the receiver plaintiff had been served with a notice that the appellant herein, John Silaides, claimed he was cancel-ling a lease to Karos for these two machines, and that he was giving notice of an intention to remove and repossess the same from the company. The bill further alleges that this so-called lease was fraudulent, a mere device to obtain possession of the machines and to defraud the company; that their removal would cause irreparable damage to the business ; and that a determination of the ownership of the machines was necessary before the receiver could carry out orders of the court in the receivership proceedings. Pursuant to the prayer of the bill the court issued a temporary injunction restraining the appellant herein from making any attempt to claim or remove the machines. Silaides moved-to dismiss the bill of complaint and to dissolve the injunction, mainly on the ground that he was thereby prevented from seeking a determination of the ownership of the two machines by a jury trial in a law case. The motion to dismiss the bill of complaint and dissolve the injunction was denied, issue joined, and the instant case heard on pleadings and proofs taken in open court. Decree was entered adjudging that the two machines were the property of the company, that the receiver had, the right to possession, and that the purported lease from Silaides to Karos was a fraud and a nullity. Silaides appeals. During the hearing below the case was dismissed as to defendants Sam Karos and Frank T. Hinks and they are not parties in this appeal.
We find no merit in appellant’s contention that the bill of complaint should have been dismissed on the ground that the court could not determine the ownership of the property as between the receiver and Silaides in this proceeding. The receiver had no adequate remedy at law to set aside the claimed lease from Silaides to Karos on the ground of fraud or to prevent Silaides from taking possession of the machines and thus disrupting the business of the company. As a necessary incident to the accounting of the copartnership, the appointment of a receiver, and the control of the court and the receiver over the property of the company, it became necessary to determine whether the machines belonged to the company. If they were company property the receiver was entitled to possession, and the machines should be included in the assets of the company for accounting. The parties were before the court and the subject matter was within its jurisdiction. Other grounds urged by appellant for dismissing the bill have no merit. Appellant now seeks reversal of the decree, claiming errors in receiving testimony. There was credible testimony from which an inference might properly be drawn of the existence of a conspiracy between Silaides, Karos, and others to defraud the company. Having in mind this is a chancery case heard by the court, which we hear de novo, we find no improper liberality in receiving testimony based on the claim of a fraudulent conspiracy.
_ In our review of the facts we have been greatly aided by the statements of facts by counsel in their briefs. Tbeir respective viewpoints of tbe testimony and inferences to be drawn therefrom have been fairly and comprehensively presented in the briefs. We find it unnecessary to repeat here the full details of this conflicting testimony. The machines in question were originally ordered by the company, and the priority order permitting purchase and delivery of the machines was obtained from the United States government by the company through another concern for which the company was manufacturing war material as a subcontractor. Silaides claims that the company did not have the money to pay for the machines and that it was arranged he was to purchase the machines and lease them to Karos, doing business as the company. He claims that he purchased the machines himself, that he became the owner, and that he had the right to lease them to Karos, doing business under the assumed name of Karos Tool & Manufacturing Company. He admits that Karos petitioned the court in the receivership for permission to lease the machines from him, that the petition was heard on the merits and denied by the court. Silaides admits he did not have the money to pay for the machines and claims to have borrowed it from Karos, Mrs. Karos, and others interested in the company. We need not decide whether the purchase money came from one of the numerous so-called “kitties” organized by Karos out of funds of the company, or of its copartners, to conceal the real financial setup of the company. The manipulations of financing fully justify the finding of the court below that the company, not Silaides, was the real purchaser of the machines in accordance with the priority order permitting delivery. In fact, Silaides executed an assignment of his ostensible interest in the machines without consideration, the name of the assignee being left blank. His ex planation of the entire transaction borders on the improbable. The circuit judge saw the witnesses and heard testimony of all of the people who might throw any light on the matter. The trial court was in a better position to judge the credibility of the witnesses and the weight to be given their testimony. The testimony is unquestionably in direct conflict, and we do not overrule the conclusion of the trial court that the evidence as a whole preponderates in favor of the plaintiff.
While the testimony is conflicting, the essential issue in the instant case is narrow and does not impinge upon the issues to be determined in the original case. The only real issue for determination here is, does the company own these machines as against the defendant Silaides? The financial manipulations and connivances between Karos and Silaides are apparent. The record fully convinces that Silaides had no right whatever to any interest in these machines or to any rental from the so-called lease which was declared a fraud by the court below. Silaides was a willing tool used in an attempt to perpetrate a fraud against the company.
The decree is affirmed, with costs of both courts to appellee.
'North, C. J., and Starr, Wiest, Butzel, Bushnell, Sharpe, and Reid, J.J., concurred. | [
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Sharpe, J.
This is a suit by plaintiff, Andrew J. Price, against Allie I. Nellist, Merle W. Nellist, Betty Nellist. Dagen, Yivian Nellist Kimball, and John Braun, administrator of the estate of Merle F. Nellist, deceased, defendants to enforce an alleged trust in real estate and to obtain incidental relief.
On January 25, 1927, plaintiff, Andrew J. Price, of Roscommon, Michigan, and Merle F. Nellist, an attorney of Grayling, Michigan, entered into a land contract with Charles ~W. Trask, widower, and Hattie E. Trask of Kansas City, Missouri, for the purchase of certain real estate for the sum of $1,000, payable $200 upon the execution of the contract and the balance of $800 to he paid in three equal annual payments with six per cent, interest. On the initial down payment on the contract, each of the vendees 'paid an equal amount. Payments were made on the contract reducing it to $525. In February, 1930, the vendors were demanding payment of the balance due on the contract. At this time neither of the vendees was able to pay the balance. The matter was discussed by Price and Nellist with William Houghton of Roscommon. Price had been engaged in the mercantile business in Roscommon and on February 8, 1929, a fire resulted in the loss of his' buildings, stock and fixtures. He executed a trust mortgage for the benefit of his creditors, which later resulted in a payment to creditors of approximately 43 per cent, of their accounts.
Houghton knew that Price had given a trust mortgage to secure his creditors and, not wanting any trouble with Price’s creditors, it was proposed and. decided that Price would give a quit claim deed to Nellist and then Nellist and wife would give a mortgage to Houghton to secure a loan of $600. On February 24, 1930, Price executed a quit claim deed io Nellist. On the sanie date Nellist and wife executed a mortgage in the sum of $600 to Houghton. On September 15,1930, Houghton sold the mortgage to a partnership consisting of Henry J. DeWaele, Clarence J. Sheppard and Charles H. DeWaele. Payments were made on this mortgage from the sale of gravel and trees from the above property. On February 24, 1942, there was a balance due on the mortgage of $445.37.
On June 15, 1942, Merle F-. Nellist died and John Bruun was appointed administrator of his estate. On November 21, 1942, plaintiff filed a bill of complaint in the circuit court of Crawford county in which it is alleged that Price and Nellist agreed that each would own a one-half interest in the premises; that Nellist would act in the capacity of manager of the property; that each would share equally in the income from said property; that at the time plaintiff deeded his interest in the said property to Nellist, it was agreed that Nellist would hold in trust the one-half interest of plaintiff; that said Nellist sold parcels of the land for which no accounting has been had; and that the administrator of the estate of Nellist has refused to make any settlement with plaintiff.
The defendants filed an answer to the bill of complaint in which it is alleged that if plaintiff ever had any claim against Nellist it is now barred by the statute of limitations; that plaintiff has been guilty of fraudulently concealing assets from his creditors in that he wilfully failed to include his alleged interest in the land involved in a trust mortgage executed by him on February 19,1929, for the benefit of his creditors; and that plaintiff’s claim for the creation of a trust rests upon parol evidence and is void.
. The cause came on for trial and a decree was. entered sustaining the claim that plaintiff and Nellist had entered into a joint venture, ordering an accounting and decreeing plaintiff a one-half interest in the property.
Defendants appeal and urge that in the absence of fraud, mistake or accident, a , grantor in an absolute conveyance, reciting a valuable consideration,' cannot show by parol evidence that the grantee was to hold the lands in -trust or that the grantor retained some interest in the land.
The trial court in an opinion stated:
“Plaintiff and Nellist deceased acquired this property as joint adventurers for resale for profit in smaller tracts. That they consistently followed their adventure as circumstances permitted for upwards of 15 years, and that it was terminated before completion by the sudden death of Nellist.”
A joint venture is an association of two or more persons to carry out a single business enterprise for profit. See Fletcher v. Fletcher, 206 Mich. 153; Hathaway v. Porter Royalty Pool, Inc., 296 Mich. 90 (138 A. L. R. 955).
"We are not in accord with defendants’ claim that parol evidence is not admissible to show that Nellist was to hold a one-half interest in the lands in trust for Price. The general rule is that agreements to share profits and losses arising from the purchase and sale of real .estate are not contracts for the sale or transfer of interests in land and need not be in writing.
In Stewart v. Young, 247 Mich. 451, we said:
“When real estate in which several persons are interested is conveyed to one or more of them upon a parol agreement that it is to be sold by the grantees and the proceeds divided between the parties in accordance with their respective interests therein, such contract after the sale of the property is valid and enforceable, is not within the statute of frauds, and, if the grantees after sale and receipt of the purchase price refuse to account to any and all persons in interest, they may maintain a bill for an accounting.”
See, also, Youngs v. Read, 246 Mich. 219, and Miles v. Fredenhagen, 309 Mich. 674.
• Such contracts not being within- the statute of frauds, parol evidence thereof is admissible.
In our opinion there is substantial evidence in the record to sustain the finding of the trial judge that plaintiff and Nellist were engaged in a joint venture in the purchase, management and sale of the real estate involved in this case. There is evidence in the record that plaintiff and Nellist each paid one half of the down payment on the contract; that in 1927 an oil lease was executed by plaintiff and Neliist; that plaintiff arranged for the loan from William Houghton which saved the land contract from forfeiture; that payments on the mortgage were made from the sale of gravel and trees from the property; that in 1942 plaintiff and Neliist paid George D. Henning for surveying the property in question; and that in 1940 Neliist told a Mrs. Scott that plaintiff had an interest in the property.
It is also urged by defendants that plaintiff does not come into equity with clean hands. The facts in connection with this claim are as follows: In 1929, plaintiff was engaged in the general mercantile business in the village of Boscommon. He suffered a fire loss resulting in a total loss of buildings, stock and fixtures. He executed a trust mortgage to Charles H. DeWaele as trustee to secure all of his creditors. The amount secured by the mortgage was $13,000. Neliist was one of the .creditors and had a claim of $522.38. In 1935, after the payment of dividends, the mortgage was discharged.
The property involved in this Gase was not included in the trust mortgage. At the conclusion of plaintiff’s case, the trial court made the following pronouncement:
“Counsel has pointed out in his answer, and by oral motion emphasized that the plaintiff did not come into a court of equity with clean hands, for the reason that he conveyed his interest in his real estate for the purpose of. defrauding his creditors. The court cannot accept that theory. The record here discloses that he was in financial difficulties following a fire; that he gave a mortgage, [a?] trust mortgage on designated property to secure his creditors, and the record indicates substantial payment; and further shows a discharge, which the court concludes followed. I can find no fraudulent act there, and the court is of the opinion that the transfer was made at that time at the request of the mortgagee, who for his own reasons desired, this security to be in no sense clouded by the financial condition of the defendant, not without finding that they did so give without consideration, and I am not now deciding that, but'So far as that one angle of the ease goes I would hold that there is no taint because of the circumstances of the trust mortgage, there is no concealment of the assets and I will eliminate that from the case.”
We are in accord with the conclusion of the trial judge on this question. Assuming that plaintiff should have included his interest in the property in question in the trust mortgage, defendants were not prejudiced by such nonaction.
In 19 Am. Jur. p. 328, it is stated:
“If the alleged wrongful conduct of the complainant appears not to have injured, damaged, or prejudiced the defendant, the maxim may not be successfully invoked. ’ ’
It is also alleged that plaintiff was guilty of laches. In dismissing this claim the trial court stated:
“Laches cannot be urged. If the record can be accepted and believed, the parties were advancing their enterprise at the time of Nellist’s death.”
The record shows that Merle F. Nellist died suddenly on June 15, 1942, and that from 1930 to 1942 plaintiff had some part in the management of the property and that at the time of the death of Nellist the parties were making plans to subdivide the property.
In Collins v. Lamotte, 244 Mich. 504, we said:
“Time alone does not constitute laches, but there must have been a change of conditions which would render it inequitable to enforce the claim (21 C. J. p. 212 et seq.), or a showing that the defendant was prejudiced by the delay. ’ ’
The doctrine of laches has no application to tie facts involved in this case.
The decree of the trial court is affirmed, with costs to plaintiff.
Carr, C. J., and Butzel, Bushnell, Boyles, Reid, Nortec, and Dethmers, JJ., concurred.
See 3 Comp. Laws 1929, § 13976, as amended by Act No. 72, Pub. Acts 1941 (Comp. Laws Supp. Í945, § 13976, Stat. Ann. 1946 Cum. Supp. § 27.605).—Reporter.
See 3 Comp. Laws 1929, §13411 (Stat. Ann. § 26.906).—Re-porter. | [
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Bitshnekl, J.
Plaintiffs Leon Malee and Katarzyna Malee obtained a judgment in the circuit court of Macomb county against defendants John Oleszko and Stella Oleszko. Subsequently the sheriff levied on lands belonging to the defendants, located in the township of Macomb, county of Macomb, which are described as the “east 60 acres of the west half of the southwest quarter of section 22, ,T. 3 N. R. 13 east.” On March 10, 1943, the property was sold to the judgment creditors, who were the highest bidders at the sheriff’s sale, and a deed was issued to them.
Later, an action was brought by Oleszko and his wife against Malee and his wife in the circuit court of Macomb county to set aside the sale. The court in that suit ordered the sheriff’s deed held for naught for the reason that neither the homestead exemption of the Oleszkos was set aside nor the amount of their exemption, $1,500, paid to them.
Plaintiffs filed a bill of complaint on October 10, 1945, under the provisions of 3 Comp. Laws 1929, § 13903 et seq. (Stat. Ann. § 27.501 et seq.). They asserted that defendants were not entitled to a homestead exemption for the reasons that neither of them presently resided in Macomb county, that the property in question was not being operated or cultivated as a farm, and it had been allowed to deteriorate to such an extent as to jeopardize its value. They further represented that the defendants had failed to make certain mortgage payments and that plaintiffs were required to make such payments in order to protect their interests therein. A decree was sought declaring that defendants were not entitled to any statutory exemption and that plaintiffs be permitted to sell the property free and clear from any homestead claim.
Defendants moved to dismiss plaintiffs’ bill of complaint on tbe ground that the subject-matter of the controversy had been adjudicated and determined in the former chancery action between the same parties and that the plaintiffs were now es-topped from claiming any further relief.
The issues thus raised were determined on the pleadings and the arguments of counsel. The trial judge concluded that plaintiffs’ bill of complaint should be dismissed. Plaintiffs have appealed and claim that the trial court erred in ruling that homestead exemptions are determined at the time of the sheriff’s levy rather than at the time of sale, and in applying the doctrine of res judicata..
Homestead exemptions have always been a part of the settled policy of this State. Constitution, 1908, art. 14, § 2; 3 Comp. Laws 1929, § 14608 et seq. (Stat. Ann. § 27.1572 et seq.).
No levy by execution on real estate is valid against bona fide conveyances made subsequent to such-levy, until a notice thereof is filed in the office of the register of deeds in the county where the premises are situated. 3 Comp. Laws 1929, § 14618 (Stat. Ann. § 27.1582).
The method of selecting a homestead by the debtor is provided in 3 Comp. Laws 1929, § 14610 (Stat. Ann. § 27.1574). There is nothing in the language of the statute that would indicate that such selection may be deferred until the time of sale. The decisions all indicate that the selection of a homestead must be made “at the time of the levy, or at least after it, and before sale.” Herschfeldt v. George, 6 Mich. 456, 468. This rule is expressed in a headnote to Bowles v. Hoard, 71 Mich. 150, as follows:
“Land not occupied as a homestead is prima facie subject to levy and sale on execution, and its exempt character must be determined upon the facts as they existed when such levy was made.”
In Avery v. Stephens, 48 Mich. 246, 249, it was held:
“Where due diligence has been observed by the creditor in the prosecution of his claim, this lien continues until a reasonable time has elapsed for the issuing of an execution and levy thereunder, and there can be no doubt but that the execution levy relates back to the time of the attachment and holds the interest which the debtor then had. ’ ’
See, also, Noble v. McKeith, 127 Mich. 163.
In a case involving the matter of residence upon the property, the Court held that intention with respect thereto must be determined under the circumstances which existed at or prior to the levy. Haight v. Reynolds, 257 Mich. 11. See, also, Fox v. Brannan, 292 Mich. 126 (128 A. L. R. 1424).
Plaintiffs allege that all of the parties now reside in the county of Wayne, and it must be inferred from the references in the bill of complaint to the former chancery action that the defendants in the instant case, who were plaintiffs in that case, resided on the premises and occupied the property as their homestead at the time of the levy.
On a motion to dismiss a bill of complaint, all properly alleged material facts are accepted as true. Mahon v. Sahration, 310 Mich. 563.
Plaintiffs argue that the chancery court in vacating the previous sale only adjudicated the question of homestead exemptions and rights at the time of the entry of that decree, and that the question of whether defendants have homestead rights presently in the property has not yet been determined.
We accept and apply the rule as stated in the headnote in Bowles v. Hoard, supra, and hold that the exempt character of lands sought to be sold in satisfaction of a levy must he determined upon the facts as they existed when such leyy was made. Any other determination would place a premium upon fraud. Furthermore, we are bound, as was the trial judge, by the unappealed adjudication of this question in the former .action between the same parties. W. H. Atkinson Co. v. State Board of Tax Administration, 299 Mich. 315.
The order dismissing plaintiffs’ hill of complaint is affirmed, with costs to appellees.
Butzel, C. J., and Carr,, Sharpe, Boyles, Reid, North, and Dethmers, JJ., concurred. | [
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Dethmers, J.
This is an action at law for damages arising ont of injuries sustained by plaintiff when she was thrown out of the door of defendant’s bus by reason of its negligent operation by defendant’s employee. The case was tried by the court without a jury. From judgment for plaintiff in the amount of $908 and an order denying plaintiff’s motion for a new trial, plaintiff appeals on the grounds that the judgment is grossly inadequate and against the great weight of the evidence.
Plaintiff testified that her injuries consisted of a cut over the left eye, a displaced vertebra, a bruised shoulder,' knee, and other bruises. Her doctor testified that these injuries cleared up within four to six weeks. Her doctor bills totaled $158. In computing damages the trial court allowed for 'loss of earnings at a weekly rate of $53, as fixed by plaintiff’s testimony, for a period of six weeks and found that for these two items, together with damage to clothing and other incidentals and shock, pain and suffering resulting from her injuries, plaintiff was entitled to judgment in the amount of $908.
While plaintiff testified that, apparently as a result of the displaced vertebra, she has continued to suffer pain in her batk when stooping or bending, her doctor testified that she had never complained about it to him after he pushed the vertebra back in place, although he had been treating her for other symptoms at about two week intervals ever since.
Plaintiff stresses the disfigurement occasioned by a one inch scar over her left eye as an element of damages of some magnitude. The trial court in its opinion describes the scar as being threadlike and apparent only upon close examination.
Plaintiff claims that she is still suffering from a serious condition of nervousness and thyroidism which, up to the time of trial, had caused her to lose 252 days’ work. By the testimony of her doctor she attempts to show that the accident and her physical injuries produced shock, which, in turn, set off a thyroid condition with resultant nervousness and attendant disability and loss of earnings. The trial court found that the testimony fails' to establish a causal connection between her accidental injuries and her thyroid condition. Concerning this, the plaintiff’s doctor testified as follows:
“Q. Would you say that the nervous condition of this patient is due to a glandular disturbance, and not as a result of the accident?
“A. It is due' to a glandular disturbance. Whether it was there before the accident, I don’t know. I never saw the patient. * *
“Q. Well, is it possible, doctor, that this thyroid condition or glandular disturbance would have occurred regardless of whether she had an accident ?
“A. That I couldn’t say. * * *
“Q. You don’t say that this accident caused this thyroid condition or nervousness?
“A. That, I don’t know.”
Applicable here is the following language from the case of Schiesel v. Bluesavage, 314 Mich. 415, 417:
“The controlling question presented is that the judgment is against the greát weight and preponderance of the evidence.
“We'have repeatedly stated that we do not reverse a judgment entered upon the determination reached by a trial judge sitting without a jury unless the evidence clearly preponderates in the opposite direction. ’ ’
Affirmed, with costs in this Court to defendant.
Butzel, C. J., and Carr, Bushnell, Sharpe, Boyles, Reid, and North, J.J., concurred. | [
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Sharpe, J.
This is a law action on an account for coal sold and delivered to defendant Andrew H. Levene, doing business as “Ideal Laundry Company.” It appears that prior to 1942 defendant Andrew H. Levene was operating three hotels in Kalamazoo and purchased coal for these hotels from plaintiffs. Separate bills were rendered for each of the hotels and the bills were generally paid monthly as per invoice. One of the hotels was known as the “Midway Hotel.” In May, 1942, defendant Levene opened a laundry in the building in which the Midway Hotel was located. On May 29, 1942, he filed in the office of the clerk of Kalamazoo county an assumed name certificate, to the effect that he was operating the laundry under the name “Ideal Launderers and Cleaners.” The laundry occupied quarters separate and apart from the hotel and had a separate coal bin and coal chute. After the establishment of the laundry defendant purchased coal from plaintiffs for the laundry. Until September 4, 1942, coal furnished the laundry was billed as part of the Midway Hotel account, but after that date plaintiffs kept a separate record of coal delivered to the laundry, which account was kept in the name of “Ideal Laundry Company.”
jOn November 21, 1942, defendant Andrew H. Levene sold and delivered possession of the laundry assets to Royce Y. Pitchuer and James L. Simmons. After that date the laundry was operated by Pitchuer and Simmons until completion of incorporation of a company they had agreed to form. Articles of incorporation were executed on December 10, 1942. The certificate of incorporation was issued on December 14, 1942, and filed in the office of the Kalamazoo county clerk on December 16, 1942. A chattel mortgage from the purchasers to defendant Levene was executed on December 9, 1942. Some time after the laundry had been sold, defendant Levene, by registered mail, notified all of his laundry creditors of the sale, except plaintiffs, and as to plaintiffs the claim is made that one Shaw, plaintiffs ’ manager, was so notified by a personal conversation oyer the telephone.
After November 21, 1942, plaintiffs continued to deliver coal at the laundry premises. Bills for the coal were sent to Ideal Laundry, but none of these bills was paid, and are in issue in the present con troversy. When the corporation was formed, under the name “Ideal Lannderers and Cleaners, Incorporated,” defendant Levene was made vice-president and a member of the board of directors, but took no active part in the management of the corporation’s business. A dissolution notice of doing business under an assumed name was filed December 31,1942, by Ideal Laundry Company. The manager of plaintiffs ’ company stated that he was not informed of the change of ownership until sometime in March, 1943.
Plaintiffs’ declaration states a claim for coal delivered between September 4, 1942, and March 17, 1943, inclusive, in the sum of $624.48. Defendant Levene filed an answer to the declaration, claiming that he paid for all coal furnished between the dates of September 4, 1942, and November 18, 1942, and that after the date of November 18, 1942,’ he did not authorize plaintiffs to sell or deliver coal to the Ideal Laundry Company. The trial court entered a judgment in favor of plaintiffs in the sum of $624.48, and in an opinion stated:
“Defendant’s denial of liability is necessarily based upon an affirmative defense. He caused deliveries of coal to be charged to him personally, doing business under an assumed name. He is liable for all deliveries so made until such time as he established by a preponderance of the evidence that he notified plaintiff not to charge further deliveries to his account.
“I am not satisfied by a preponderance of the evidence that defendant definitely or sufficiently advised plaintiff, or his duly authorized agent, to desist from charging subsequent deliveries of coal to his account so as to relieve him of liability therefor. I realize there is a conflict in the testimony, hut on the whole record it appears that defendant has not met the burden of proof.’’
Defendant Levene appeals and urges that he did in fact notify plaintiffs on or about December 1, 1942, that he had sold the laundry prior to that date; that as a matter of law he was under no duty to notify plaintiffs of the sale of his laundry; and that recovery should-be limited to $10.56, representing the unpaid balance for coal delivered to and including November 18,1942.
It is the claim of plaintiffs that they were entitled to actual notice of the change in ownership at the time said defendant'sold his business, and that plaintiffs had a right to be apprised of the fact that they would have to look to others for payment of coal delivered.
There is no claim made that the filing of the dissolution under the assumed-name statute on December 31, 1942, or the filing of the articles of incorporation on December 16,1942, constituted notice to plaintiffs of a change in ownership. Defendant Levene urges that on or about December 1, 1942, he had a telephone conversation with Donald B. Shaw, manager of plaintiff company, notifying Shaw that he wanted a statement of his account as he had sold the business as of November 21, 1942. Mr. Shaw testified that the first knowledge he had that said defendant was no longer connected with the laundry was sometime in March, 1943. ■
In view of the testimony in this case the matter of oral notice becomes a question of fact. There is competent evidence to sustain the finding of the trial court. In such cases we do not substitute our judgment on questions of fact unless the evidence clearly preponderates in the opposite direction. See Leonard v. Hey, 269 Mich. 491 (37 N. C. C. A. 111). We therefore accept the finding of fact by the trial court upon this issue. -
The remaining question of whether defendant had a duty to notify plaintiffs of the sale of his laundry in order to absolve himself from any liability for coal furnished is a legal question. In partnership cases a retiring partner has an affirmative duty of notifying creditors of his retirement from the partnership.
In Stebbins v. Walker, 46 Mich. 5, plaintiff was a dealer in grain, and defendants were • commission brokers. As such brokers they had bought and sold for plaintiff previous to June 30, 1879. On August 14, 1879, plaintiff made a conditional sale of his business to his brother, Osmyn G. Stebbins. The conditions of this sale were not performed by the brother, and at the end of a week plaintiff resumed his business and took possession of his property. On August 14, 1879, plaintiff, by letter, notified defendant that he was retiring from business, but that the business would be conducted by his brother. From August 14 to November 5,1879, defendant had been dealing with the said Osmyn G. Stebbins in the belief that he was the principal in the business. When Osmyn G. Stebbins left the employment of his brother no notice was given to defendants, and 'to all appearances the business was conducted , as before. On November 26, 1879, defendant learned for the first time that plaintiff had resumed business and that all the wheat dealings previous to November 15th had been conducted by Osmyn G. Stebbins as agent and not as principal. As a resnlt of these dealings Osmyn G. Stebbins became indebted to defendants. Defendants attempted to apply certain credits due plaintiff as part payment on a loan of $700 to Osmyn G-. Stebbins. Tbe trial court applied tbe credits against the loan. On appeal the court said: ' ■
“The same person who had sent wheat to them, and who they supposed and had a right to suppose was the principal, requested of them an advance, and they made it. * * *
“The case in judgment is a plain case of estoppel. There has been negligence from which one of two parties must suffer, and the responsibility for this negligence justly and exclusively lies at the door of the plaintiff. If he were now to collect of defendants the sum they advanced to his brother while he was acting ostensibly as principal, they would be defrauded, and the plaintiff’s negligence would have furnished the opportunity, and the agent. The loss must therefore fall upon the plaintiff, though his intentions may have been entirely honest. * * *
“The defendants were therefore at liberty to stand upon their rights as they existed at the time they first learned that the business carried on with them by Osmyn in the name of O. Gr. Stebbins was really the business of the plaintiff.”
The same principle is involved in Westinghouse Electric & Manfg. Co. v. Hubert, 175 Mich. 568 (Ann. Cas. 1915A, 1099). We there quoted with approval from Neal v. M. E. Smith & Co., 54 C. C. A. 226 (116 Fed. 20):
“When a person retires from a firm with which he has been connected, it is his duty to advise all persons with whom the firm has previously had dealings that he has so withdrawn, if he would absolve himself from liability for credit subsequently extended by such persons to the firm from which he has retired. The law casts this burden on the retiring member; and, where the firm name remains unchanged, it does not compel those who have previously dealt with it to ascertain, each time that credit is extended, whether the membership thereof remains the same as before. In the absence of a notice to the contrary, they may assume that it does. This doctrine is elementary. ’ ’
In 46 Am. Jur. p. 232, it is said:
“A person who permits another, who is in fact the owner and operator of a business, to conduct such business in such a way as to create the appearance of ownership in the first party may be estopped to deny such relationship to or connection with the business as will cause him to be liable for breach of contract to a third party whose dealings with the business were based upon the first party’s apparent ownership thereof. Thus, the owner of a department store has been held liable for the price of goods sold to the lessee or licensee of a department in such store.”
In the Stebbins Case, supra, credit was advanced on the past business relations and under the belief that Osmyn Gr. Stebbins was the principal. In the case at bar plaintiffs advanced credit to the laundry in the belief that defendant Levene was the owner. Plaintiffs relied upon past business relations with said defendant in continuing to give him credit. Said defendant had a duty to notify plaintiffs of any change in the personnel of the ownership of the laundry if he would absolve himself from liability. He is now estopped from denying liability on the credit extended to himself as owner of the laundry.
The judgment of the trial court is affirmed, with costs to plaintiffs.
North, C. J., and Starr, Wiest, Butzel, Bushnell, Boyles, and Beid, JJ., concurred.
2 Comp. Laws 1929, § 9825 et seq., as amended by Acts Nos. 272, 274, Pub. Acts 1931, and Act No. 104, Pub. Acts 1939 (Comp. Laws Supp. 1940, § 9825 et seq., Stat. Ann. and Stat. Ann. 1943 Cum. Supp. § 19.821 et seq.).—Eeforter. | [
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North, C. J.
This is a suit to cancel a public liability insurance policy issued by the plaintiff to the defendant and covering certain premises on Hastings street in Detroit. The reason urged for cancel-, lation is a false statement or declaration in the policy as follows :
‘ ‘ 9. The insured has not had any similar insurance canceled or declined by any insurance company within the last 12 months, except as follows: NO EXCEPTIONS.”
The fact that the defendant had had similar insurance cancelled or declined within 12 months is not disputed. After hearing’, a decree was entered dismissing the bill of complaint. Plaintiff has appealed.
Seymour J. Colin was a duly licensed local agent for the plaintiff company. He was also agent for the New Amsterdam Casualty Company. Mr. Cohn, a witness for the defendant, testified that about two weeks prior to February 11, 1943, he learned that defendant was desirous of purchasing insurance on the Hastings street property, and in a preliminary discussion between defendant and Cohn the latter learned there had been a previous cancellation of insurance by the New Amsterdam Casualty Company. Cohn further testified he called the New Amsterdam Company, found out the reasons for the cancellation, learned that changes in the property previously recommended by the company had been made and requested the New Amsterdam Company to reinstate or rewrite the policy. The New Amsterdam Company said it would do so but only for the original agent (not Cohn). Cohn testified he then called the plaintiff company, explained the entire circumstances and requested a special agent of plaintiff company named Wood to inspect the property and also approve boiler insurance coverage thereon. This boiler insurance was later written but is not here involved.
The policy in suit was written February 19, 1943, as coverage from February 11, 1943. A few days after Cohn mailed the policy to defendant, he asked Cohn if an additional building’ at the rear of the Hastings street property was covered by the policy. Cohn said he called the plaintiff’s Detroit office where the policy was written, found the additional building was not covered, and immediately he requested an indorsement extending the coverage to the additional building. That indorsement was issued as of February 25,1943, and sent to the defendant, On cross-examination Cohn testified the policy was actually written by plaintiff and that his only record was a copy called a “daily,” and although he received his copy shortly after the policy was issued, the first time he examined it was just prior to March 17, 1943. His agency was terminated by plaintiff company April 21, 1943; and he testified such termination “was by reason of the controversy in this- matter. ’ ’
Defendant King’s testimony regarding the purchase of the policy was similar to that of Cohn. In addition he testified that a man by the name of Mr. Wood who represented himself as being from the plaintiff company interviewed him, that Wood inquired as to whether the changes recommended by the New Amsterdam Company had been made and was informed that they had. The record contains no testimony challenging the truth of this latter statement. An accident within the insurance coverage occurred on the insured premises March 17, 1943. King reported the accident to Cohn. Later King received a letter from plaintiff dated April 12, 1943, purporting to cancel the policy. King testified he had never read his policy or the subsequently issued indorsement, although he said “I glanced it (the indorsement) through.” Plaintiff sought to prove that defendant misrepresented a material fact in his oral application for the policy, and asserts that this misrepresentation constituted a fraud entitling plaintiff to cancellation. But defendant contends that no fraud was perpetrated because, while negotiations for the policy were pending, plaintiff through its agent Wood was apprised of the true facts; and although the recital first above quoted from the policy is admittedly untrue, plaintiff, in whose office that recital was written in the policy, by reason of its knowledge of the true facts waived its right to relief and by its possession of full knowledge prior to the issuance of the policy is estopped from being decreed cancellation thereof.
It appears from the record that plaintiff maintained a general office in the city of Detroit through which its policies were issued. Being a'corporation, plaintiff of necessity acts through its agents; and it is bound by the knowledge of such agents who are empowered to generally represent the corporation in the issuance of its policies. We think this record fairly discloses that Mr. Wood, notwithstanding he is referred to as a “special agent,” was in truth a general representative of plaintiff company vested with such authority as makes knowledge possessed by Wood knowledge of the company. His initials appear at the foot of the policy issued in this case, and the record indicates that it was Wood who dictated this policy to the stenographer who prepared the same. Mr. Wood’s initials also appear at the foot of the indorsement which was later issued. The witness Cohn in his testimony referred to Mr. Wood as the “inspector;” and according to undisputed testimony Wood acted in that capacity in the instant case prior to his having dictated and issued the policy. The undisputed testimony is to the effect that at the time Wood was making his inspection he was fully advised of the true facts material to this litigation. Thereafter, upon Cohn’s application to plaintiff’s Detroit office, the policy was issued and through Cohn delivered to plaintiff. Under such circumstances it must be held that plaintiff company is charged with the knowledge possessed by Wood, and having issued the policy with such knowledge plaintiff is estopped from obtaining in a court of equity cancellation after an accrued liability under the policy.
Notwithstanding Wood was present at the trial of this case, he did not take the stand as a witness. The circumstances from which it must be concluded Wood was a general agent of plaintiff company are not in dispute, and likewise the testimony as to Wood’s knowledge is undisputed. The trial judge who saw and heard the witnesses believed their undisputed testimony and reached decision in accord therewith.
Plaintiff-appellant relies upon the clause in the policy which reads:
“Neither notice given to, nor the knowledge of, any agent or any other person, whether received or acquired before or after the date of this policy, shall be held to waive any of the agreements, provisions, or declarations of this policy, or to preclude the company from asserting any defense under said agreements, provisions, or declarations unless set forth in an indorsement added hereto and signed by one of the said officers.”
Notwithstanding the quoted provision of the policy, plaintiff is not entitled to cancellation. A case strikingly similar in both its factual and legal aspects, particularly in that the policy included a clause of like effect to that above quoted, is reported in Hawkeye Casualty Co. v. Holcomb, 302 Mich. 591. We think our decision in that case, denying cancellation, is controlling of the instant case. We therein quoted with approval the following:
‘ ‘ The general rule of agency that the principal is chargeable with, and is bound by, the knowledge of or notice to his agent received while the agent is acting within the scope of his authority, and which is in reference to a matter over which his authority extends, is fully applicable to agents of insurance companies. The general rule of insurance law is that the knowledge of, or notice to, an insurance agent as to a matter within the scope of his authority, and which is acquired while the agent is acting within the scope of his authority, is chargeable to the insurer. Where such knowledge of an insurance agent relates to a material misrepresentation or breach of warranty or condition which would otherwise render the policy unenforceable at its inception, the insurer issuing the policy will not be permitted to take advantage of such breach, or cause of forfeiture. (29 Am. Jur. p. 612, §808). * * *
“Assurer may also be estopped or there may be a waiver by reason of its agent’s knowledge or acts, notwithstanding provisions in the policy as to the only manner in which conditions may be waived by the agent. (3 Joyce on the Law of Insurance [2d Ed.], p. 3243, § 1973.)”
As authorities in the field of the instant case, see Blake v. Farmers’ Mutual Lightning Protected Fire Ins. Co. of Michigan, 194 Mich. 589; Wilds v. Fidelity & Deposit Co., 239 Mich. 396; and Johnston v. Manhattan Fire & Marine Ins. Co., 294 Mich. 550.
The decree entered in the circuit court is affirmed. Costs of this Court to appellee.
Starr, Wiest, Butzel, Bushnell, Sharpe, Boyles, and Reid, JJ., concurred. | [
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Boyles, J.
Plaintiff, an adult person, brought suit to recover damages for personal injuries arising out of an automobile accident. At the close of the proofs before a jury, defendant moved for a directed verdict on the ground that the testimony showed that the driver of the automobile in which plaintiff was a guest passenger was guilty of contributory negligence as a matter of law. The court reserved decision on the motion, submitted the case, and the jury returned a verdict for the plaintiff. Defendant’s motion for judgment non obstante veredicto on the same ground was granted and plaintiff appeals from the judgment entered on the motion. The only question on appeal is whether plaintiff’s driver was guilty of contributory negligence as a matter of law. If so, his negligence would be imputed to plaintiff and bar recovery.
The collision occurred at the intersection of Galbraith Line road and Black River road in Sanilac county, about 10 o’clock in the forenoon of June 18, 1940, on a bright sunshiny day. Galbraith Line road runs east and west and Black River road runs north and south. Both are graveled roads about 20 feet in width on the traveled portion, with about 60 feet between fences on each road. The roads are of equal importance and intersect at right angles. The automobile in which plaintiff was a guest passenger was proceeding west on Galbraith Line road and defendant’s milk truck was traveling south on Black River road. The automobile and the truck collided at about the center of the intersection.
As plaintiff’s driver approached the intersection from the east on Galbraith Line road the road sloped upward to the intersection. Steep banks on both sides of the road prevented a clear view of the Black River road north and south until the driver reached a point opposite a big tree variously estimated at from 10 to 25 feet east of the east line fence on Black River road. At this tree plaintiff’s driver could see to the north on Black River road about 100 feet. He looked north and saw no car approaching. Plaintiff’s driver says that at this tree or between the tree and the intersection he changed into second gear, that he was traveling about 15 miles an hour, and that he» could stop within 20 feet. When he reached the fence line on the east line' of Black River road he was 25 to 30 feet from the center of the intersection. At the fence line he saw defendant’s milk truck approaching rapidly from the north but thought he had time to go through. He “stepped on the gas” and the collision occurred at the center of the intersection.
The plaintiff herself testified:
“Q. About how far to the north could you see when you were in this position opposite this big tree?
“A. We could see 75 or 100 feet. * * *
“Q. Was there any vehicles in sight at this point?
“A. No.
“Q. What did Mr. Martin (the driver) then do?
“A. Mr. Martin went into second gear and proceeded up into the intersection.
“Q. Where were you when you were first able to see the defendant’s truck?
“A. We were just about up to the line of the fence. * * *
“Q. Then you were able to see this truck when it came in sight at the time you were at the fence line and it was up at about the barn?
“A. Yes.
“Q. And then you observed that truck as it came down upon you?
“A. Yes. * * *
“ Q. And state whether or not you were able to decide whether the speed of the truck—speed of the approaching truck?
“A. Well, he was going at least 60 miles an hour. * * *
“Q. How far across the intersection did your car get before it struck?
“A. We were almost through the intersection.
“Q. What part of the Black River road was he traveling on when he hit your car ?
“A. He was coming from the north to the south.
“Q. On the east or west half of the road?
“A. He was on his own side of the road.”
When the automobile in which plaintiff was riding was at the fence, it was at least 25 feet from the center of the intersection. It was proceeding in second gear at not more than 15 miles per hour. The driver testified he could stop in 20 feet, which would be before he reached the center of the intersection. He ‘ ‘ stepped on the gas ’ ’ and the collision occurred at about the center, while his automobile, in part at least, was in the west half of Black River road. Accepting plaintiff’s version as to how the accident occurred, defendant’s negligence was established by the proofs, but the same proofs established that plaintiff’s driver was guilty of contributory negligence as a matter of law. When he was at the fence he observed defendant’s truck 75 to 100 feet north on Black River road ' approaching the intersection at 50 to 60 miles per hour. He had ample time to stop short of the center of the intersection. Had he done so it would have left the defendant’s truck an opportunity to continue on through the intersection on its own side of Black River road without an accident. Instead, plaintiff’s driver thought he could get across and stepped on the gas. As a matter of law, a reasonably prudent driver, exercising the care and caution required under the circumstances, would not ‘ ‘ step on the gas” and try to cross in front of the rapidly approaching truck. If plaintiff’s driver was confronted with a sudden emergency it was of his own making. The truck was approaching the intersection from the right of plaintiff’s driver and the high bank obstructing his view called for more care and caution on his part than would be required if his view were unobstructed.
Plaintiff’s driver was guilty of contributory negligence as a matter of law; his negligence is imputed to plaintiff and bars recovery. See Ehrke v. Danek, 288 Mich. 498.
Judgment affirmed.
North, C. J., and Starr, "Wiest, Bittzbl, Btjshnell, Sharpe, and Reid, JJ., concurred. | [
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Starr, J.
Defendants appeal from a decree granting plaintiff specific performance of a written' contract by which defendants agreed to sell and plaintiff to purchase the apartment-house property located at 2628 Twelfth street in the .city of Detroit, for a price of $8,000. This being a chancery case, we review the same de novo.
On November 12, 1936, the Detroit Fire & Marine Insurance Company executed a land, contract whereby they agreed to sell the property in question to vendees designated as John Galusz (defendant) and Mary Zillis for a price of $8,000, payable $1,600 down and the balance in monthly instalments of $64 including interest. Defendant John Galusz signed the contract as vendee, and defendant Mary Galusz (who at that time was married to one Alec Zelasny) signed both the names “Mary Zillis” and “Mary Zelasny” on the contract. In February, 1937, said Mary Zelasny began divorce proceedings against Alec Zelasny, and in February, 1938, obtained a decree of divorce. A month later, in March, 1938, she married defendant John Galusz. The land contract was continued without change as to the name of Mary Zillis. Defendants John and Mary Galusz occupied one of the apartments, paid the monthly instalments on the contract, paid the premiums on fire insurance policies issued in their joint names, and generally managed the property as owners thereof. The property is located in a-mixed business and residential neighborhood1, and the building, which is 34 years old, is divided into six apartments of five small rooms. The apartments are not modern, as much of the equipment is obsolete and the upper floors are heated with stoves. Testimony was presented by plaintiff indicating that the property was worth about $8,000 and by defendants that it was worth $12,000 to $14,000. After examination of such testimony we are inclined to agree with the trial court who determined that $8,000 was a reasonable price.
For some time prior to their execution of the agreement in question defendants had been endeavoring to sell or trade their equity in the property. Their agent, David Rabinovich, informed plaintiff that the property was for sale, and with defendants’ consent, plaintiff and her husband inspected it. On the evening of August 26, 1942, plaintiff, her husband, and agent Rabinovich went to defendants’ apartment, and they agreed on a price of $8,000, of which amount plaintiff would pay defendants their equity above the balance of about $3,700 due on the original land contract. The same evening, at defendants’ suggestion, they went to the office of Joseph Smolenski, a notary public, and he. prepared the agreement of sale. All parties signed the agreement in Smolenski’s office, and plaintiff gave defendants a check for $100 as a binder payment, which check they cashed the next morning. The agreement, as embodied in plaintiff’s offer and defendants’ acceptance, was in the following form:
“ABSTRACT & TITLE GUARANTY COMPANY “Detroit, Michigan
“Revised form of memorandum of sale
“The undersigned agrees to purchase the premises situated in the city of Detroit, Wayne county, Michigan, viz: as on the land contract made on November 12, 1936, between Detroit Fire & Marine Insurance Company, as sellers and John .Galusz and Mary Zilis as the purchasers, being the premises known as number 2628 on tbe east side of 12th street between Spruce and Henry and pay therefor the sum of $8,000, upon the following conditions.
‘ ‘ The sale to be consummated1 by: * * *
“2. Payment of the purchase money in cash or certified check less the amount owing upon an existing land contract now on the premises with accrued interest to date of consummation held by Detroit Fire & Marine Insurance Company upon which there is unpaid $3,771.06 with interest at 6 per cent, from August 12, 1942, which land contract becomes due on or about November 12, 1946, with an agreement by the grantee to assume and pay such land contract.
“If the seller’s title to said land is evidenced by an existing land contract with unperformed terms and conditions substantially as above set forth and the cash payment to be made by the undersigned on consummation hereof will pay out the equity, an assignment and conveyance of the vendee’s interest in the land and contract with an agreement by the undersigned to assume the balance owing thereon, will be accepted in lieu of the contract proposed in the preceding paragraph. * * *
“There shall be secured and delivered to the undersigned for examination as soon as may be, a complete abstract of title and tax history of said premises issued by the Abstract & Title Guaranty Company of Detroit, certified to a date later than the date of the acceptance hereof, or, if delivered on the day of such acceptance, certified to that date. * * * ■
“If a marketable title can be conveyed in the condition required by this offer, the sale shall be consummated within 30 days after delivery of such abstract or policy of title insurance. * * *
“The purchasers hereby agree to pay Dave Rabinovich sum of $150 for his services in connection of this sale; at the time of closing of this deal.
“It is also agreed upon between the parties hereto that the sellers have the right to occupy their flat free of charge for the period of 30 days after the closing of this deal.
“Authority is given Dave Rabinovich, real estate broker, to make this offer and pay a deposit of $100 on the purchase of said land to John Galusz and Mary Zilis.
“Dated August 26, 1942.
“Hilda Himelson, Purchaser. * *
“Acceptance
“To the above-named purchaser:
“Your offer as stated above is accepted and receipt of the above-mentioned deposit money on account of the purchase price acknowledged and the undersigned agree to sell said lands on the terms stated and on consummation to pay a commission of $50 to Dave Rabinovich, broker.
“John Galus, L. S.
“Mary Galus, L. S.”
(Defendants John and Mary Galusz severally acknowledged their execution of the above agreement before Joseph M. Smolenski, a notary public).
On August 28, 1942, the insurance company, vendor in the land contract, delivered the abstract of title to plaintiff. She testified that on August 29th, three days after the offer and acceptance were executed, defendant Mary Galusz tendered back to her the binder payment of $100 and said that she was not going through with the sale because “her son did not want her to sell.” Mary Galusz claimed she made such tender, which plaintiff refused, on August 27th. About September 19th defendants sent plaintiff a postal money order for $100, which money order she refused to accept and returned.
On September 25th plaintiff tendered defendants a, certified check for $4,360 in payment for their equity in the property, and also tendered, for their execution, a written assignment of their vendees’ interest in the original land contract. Defendants refused to accept the certified check and to execute the assignment.
On September 29th plaintiff filed bill of complaint for specific performance of defendants’ agreement to sell. Defendants answered, alleging that plaintiff fraudulently obtained such agreement by causing them to become so intoxicated that they did not understand what they were doing. ' They also alleged that their agreement to sell was not enforceable because not signed by Mary Zillis who, with defendant John Galusz, was named as a vendee in the original land contract; that said Mary Zillis and defendant John Galusz hold the vendees’ interest in said contract as joint tenants and their interests are not severable. They further alleged that defendant Mary Galusz, who signed the present agreement to sell to plaintiff, has no interest in the property except her dower interest as the wife of defendant John Galusz. They also filed cross bill asking that their agreement to sell to plaintiff be declared void and unenforceable because obtained by fraud. In her reply to defendants’ answer, plaintiff denied the charge of fraud and alleged in substance that the said Mary Zillis, who purported to have signed the original land contract as one of the vendees, was a fictitious person; that defendant Mary Galusz and said Mary Zillis were one and the same person; and that defendants John and Mary Galusz, who executed the agreement to sell to plaintiff, own the vendees’ interest in the property. We note that in some instances the record refers 'to the defendants as “Galusz” and in some instances as “Galus” and as “Gillis”; that the former husband of defendant Mary Galusz is referred to as “Zelasny” and also as “Zelazny”; and1 that the purported vendee in the land contract is sometimes referred to as “Zillis” and again as “Zilis” and “Zillias.”
The trial court determined there was no fraud on the part of plaintiff; that defendant Mary Galusz (formerly Mary Zelasny) signed the original land contract in the fictitious name of Mary Zillis; and that defendants John and Mary Galusz, who were not married at the time they executed said contract, own the vendees ’ interest therein as tenants in common. A decree was entered dismissing defendants’ cross bill and granting plaintiff specific performance. Defendants appeal from such decree.
In support of their contention that plaintiff obtained their agreement to sell by fraud, defendants testified that when their agent Rabinovich, with plaintiff and her husband, came to their apartment in the evening of August 26th, Rabinovich brought a quart of whisky; and that they became so drunk they did not understand what they were doing when they signed the agreement to sell to plaintiff. A daughter, Genevieve Zelasny, testified that her stepfather, defendant John Galusz, was drunk. Plaintiff, her husband, and defendants ’ agent Rabinovich denied that liquor was served in the Galusz apartment, and denied that defendants were drunk. The notary public, Smolenski, also denied that defendants were drunk when they executed the agreement to sell in his office. It would serve no purpose to discuss such conflicting testimony. The trial court, who saw and heard the parties, was best able to judge the credibility of and weight to be given their testimony, and we are not disposed to interfere with his finding that defendants failed to establish fraud on the part of plaintiff.
A more serious question arises regarding Mary Zillis. As hereinbefore explained, the land contract designated the vendees as John Galusz and Mary Zillis. Defendant Mary Galusz (formerly Mary Zelasny) admitted that she signed the names Mary Zillis and Mary Zelasny on the contract. In explaining her signatures, she said that Mary Zillis, who lived in her home, could not read or write English and requested her to sign the contract. She testified that her husband, defendant John Galusz, and said Mary Zillis were cousins; and that each of them paid $800 of the down payment of $1,600 on the land contract. She further said in substance that in 1939 said Mary Zillis stated that she was going to Canada and was leaving her interest in the property in defendants’ care. She also said that she had not seen Mary Zillis since 1939 and did not know her whereabouts.
However, the above testimony of defendant Mary Galusz is somewhat discredited by statements in her sworn answer to a cross bill filed by her former husband, Alec Zelasny, in their divorce proceedings, which cross bill and answer were properly admissible in evidence in the present case. In his cross bill Alec Zelasny alleged in part:
“That during the year of 1936, the plaintiff and cross defendant (Mary Zelasny, now Mary Galusz) took'all the money, and informed the defendant and cross plaintiff (Alec Zelasny) that she was going to purchase a farm; * * * that instead of purchasing a farm, the * * * ■ (plaintiff and cross defendant), with one John Galucz purchased an apartment house at 2628 Twelfth street, Detroit, Michigan, and that your defendant and cross plaintiff was not made a party to the purchase of this property, although most of his earnings were usedo to purchase this property.”
In her sworn answer to such cross bill, said Mary Zelasny (now Mary Galusz) said in part:
“The plaintiff and cross defendant (Mary Zelasny) emphatically denies that the defendant and cross plaintiff (Alec Zelasny) turned over any money to her * * * and * * * -will show that a few months ago she did become a purchaser of the premises (2628 Twelfth street) # * * under land contract, wherein she purports to have an undivided one-half purchaser’s interest, * * * and that the entire investment in and for the purchase thereof was $1,600,‘of which the co-purchaser (defendant John Galusz) invested $800, and loaned to the plaintiff and cross defendant (Mary Zelasny) the sum of $800, so she could invest her share, upon the express understanding that the loan of the $800 was to be repaid upon the resale of said premises.”
Defendant John Galusz also testified that Mary Zillis was his cousin; that she paid half of the down payment on the property; and that he had not seen her for several years and did not know her whereabouts. However, examination of defendant Galusz’ entire testimony creates doubt as to his credibility. Genevieve Zelasny corroborated the testimony of her mother and stepfather as to the existence of Mary Zillis.
There was considerable testimony tending to show that defendants had always treated the apartment property as their own and had made no mention of their present claim that said Mary Zillis had an interest therein. They used the income from the building to pay for repairs and maintenance and to make payments on the land contract, and whatever was left they used for their living expenses.
To quote from or discuss the voluminous and confusing testimony of defendants would not materially help to clarify the issue as to whether said Mary Zillis was a real or fictitious person. Although there may have been a person by the name of Mary Zillis, the testimony is not convincing that she acquired and owns one half the vendees ’ interest under the original land contract. Our study of the record leads us to believe that the name Mary Zillis was used fictitiously by Mary Zelasny (now Mary Galusz) in executing such land contract. It should be noted that she also signed said contract in her own name, Mary Zelasny. The trial court, who saw and heard defendants and other witnesses, was in a better position to judge the credibility of and the weight to be accorded their testimony, and we agree with his finding that “Mary Zillis is purely a fictitious person, so far as the use of that name in the contract of purchase * * * is concerned.”
We conclude that by signing the fictitious name, Mary Zillis, on said land contract, defendant Mary Galusz (formerly Mary Zelasny) obligated herself as a vendee thereon. As defendants John and Mary Galusz were not married at the time they executed such land contract, they became and are the owners of the vendees ’ interest as tenants in common. Price v. National Union Fire Ins. Co., 294 Mich. 289.
Defendants failed to establish fraud on the part of plaintiff in obtaining* their agreement to sell. The agreement was obligatory on both parties and was sufficiently complete, definite, and certain to give mutual rights of specific performance.
The decree of the trial court granting plaintiff specific performance and dismissing defendants’ cross bill is affirmed. Plaintiff shall recover costs of both courts.
North, C. J., and Wiest, Butzel, Bixshnell, Sharpe, Boyles, and Reid, JJ., concurred. | [
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Shahee, J.
Plaintiff appeals from a decree dismissing his bill of complaint in which he sought to recover a commission upon the sale of a 55-acre tract of land. The material facts are not in dispute. Eudolph and Huida Petoskey, the father and mother of August Petoskey, were the owners of the land in question. Eudolph died in 1939, and Huida in 1942. For some years prior to their death August Petoskey, by verbal agreement, managed their property. In October, 1935, August Petoskey entered into a verbal agreement with plaintiff, by virtue of which plaintiff was to receive a commission of $1,500 if he found a purchaser for the 55-acre tract. On May 7, 1936, the property was sold for $20,000, upon which a down payment of $8,000 was made, and the balance to be paid in subsequent instalments. Subsequent to the death of his parents August Petoskey continued to act, without legal authority, as their agent. John D. Pheney was appointed guardian of the persons of Rudolph and Huida Petoskey, and later appointed administrator of their estates. After his appointment as guardian he called upon August Petoskey for an accounting of his transactions in behalf of his- parents. August Petoskey submitted to John D. Pheney, as guardian, an accounting in which he listed as a credit the amount of commission claimed to be due plaintiff. The account in question was listed as follows:
“Services of C. C. Jaynes in securing buyer for 55 acres, $1,500.”
Later, August Petoskey submitted a further accounting and credited himself with the said amount in the following manner:
“May 7, 1936, C. C. Jaynes, Services on sale of 55.acres, $1,500.”
In March, 1942, plaintiff filed a bill of complaint in the chancery court of Wayne county asking for a decree for the sum of $1,500 and certain injunctive relief pending the collection of the above sum.
Each of the defendants filed an answer to the bill of complaint and asked for dismissal of the same, alleging that the so-called agreement is void under the. statute of frauds (3 Comp. Laws 1929, § 13417 [Stat. Ann. §26.922]). The trial court held that there was no personal liability against August Petoskey and that the so-called agreement was void as being contrary to the statute of frauds, and dis^ missed plaintiff’s bill of complaint. Plaintiff appeals.
The principal question in this case relates to the statute of frauds, 3 Comp. Laws 1929, § 13417 (Stat. Ann. § 26.922),'and reads as follows:
“In the following cases specified in this section, every agreement, contract and promise shall be void, unless such agreement, contract or promise, or some note or memorandum thereof be in writing and signed by the party to be charged therewith, or by some person by him thereunto lawfully authorized, that is to say: * * #
“5. Every agreement, promise or contract to pay any commission for or upon the sale of any interest in real estate. ’ ’
The statute provides that the following items must appear in the writing in order that it be valid: (1) a memorandum of an agreement or promise; (2) signature of the party to be charged, or his authorized agent; and, (3) an indication that it relates to payment of a commission for the sale of an interest in real estate.
In Mead v. Rehm, 256 Mich. 488, plaintiff, a real estate broker, brought suit against G-eorge H. Eehm, John Eehm and Grace Eehm for a commission growing out of the following agreement:
“I hereby agree to pay E. T. Mead a commission of five per cent, on the sale price of the Putnam resort property. Signed, George H. Eehm, Putnam, Sand Lake, Michigan.”
John and Grace Eehm did not sign the agreement and denied authorizing George H. Eehm to make the agreement sued upon. We there said:
“While the statute does not expressly state that one assuming to execute the contract for another must have written authority to do so, yet it does state that he must be lawfully authorized to sign the name of another. This agreement was not signed by John and Grace Rehm, neither did George Rehm sign their names thereto. If John Rehm may be held liable under the claimed verbal authority, then the evil the statute was intended to prevent will be present, and one who cannot be held liable on a verbal promise to pay a commission would be worse off than before the statute, for his liability would depend upon the promise of one asserting verbal authorization. A verbal agreement to pay the commission is rendered absolutely void by the statute, and there can be no recovery on quantum meruit, even though the service was rendered and accepted. ’ ’
In Dodge v. Blood, 299 Mich. 364 (138 A. L. R. 322), we held that the agent need not have written authorization in order to bind his principal, and adopted the American Law Institute rule as promulgated in 1 Restatement, Agency (1933), § 153:
“For the purpose of satisfying the provisions of a statute requiring a note or memorandum to be signed by the party to be charged or by his agent, a memorandum signed by a properly authorised agent with or without indication of the existence or identity of the principal is sufficient to charge the principal.”
In the Dodge Case, supra, the' pertinent part of the section reads: “or his agent in that behalf” (2 Comp. Laws 1929, .§9443 [Stat. Ann. § 19.244]), while in the case at bar the pertinent part of the section reads: “or by some person by him thereunto lawfully authorized” (2 Comp. Laws 1929, § 13417. [Stat. Ann. § 26.922]).
The rule adopted in the Dodge Case, supra, relates to a statute different than the statute under consideration in the case at bar and must necessarily be limited to that statute.
The purpose of the statute (3 Comp. Laws 1929, § 13417), is to require an admission in writing that the person signing it, either himself or his lawful attorney or agent, is making a specific promise to pay. In the case at bar the writings are not signed by the estate or its representative. Moreover, there is no written authorization from Eudolph Petoskey and Huida Petoskey conferring upon August Petoskey authority to make the' agreement.
The writings are signed by a party whose interests in this particular instance are adverse to the interests of the estate, and do not show that August Petoskey assumed the liability of the promise.
Plaintiff’s theory that August Petoskey’s personal liability arises from his breach of implied warranty of authority to enter into the agreement would, if recognized, nullify the effect of the ruling in the Mead Case, and the evil which the statute intended to prevent would still be present.
The writings cannot be regarded as a promise to pay the debt or obligation of another, as the two papers taken as a whole sought to charge the estate with the debt, nor is there anything in them to show any promise on the part of August Petoskey to stand as guarantor if the estate did not pay. In our opinion the writings are insufficient to take the case out of the statute of frauds as they fail to show a promise or agreement of the parties to be charged. Our decision in this matter applies to the estate of Eudolph Petoskey and Huida Petoskey as well as to the personal liability of August Petoskey.
The decree of the trial court is affirmed, with costs to defendants.
North, C. J., and Star®, Wiest, Butzel, Bushnell, Boyles, and Eeid, JJ., concurred.. | [
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Reid, J.
(for affirmance). This is an appeal from the order and decree of the chancery court confirming report of receiver Ona Dunlop of sale of assets. in the winding up of the affairs of a partnership which had engaged in manufacture. We quote from the opinion of the trial judge:
1‘ The exact question involved is this: Does the act of congress creating the office of price administration give to that office power to fix maximum or ceiling prices which may be realized upon liquidation sales in State courts which are carried out in every particular lawfully under State laws ?
‘ ‘ The carrying on of a continuing business by a receiver appointed by a State court is not involved here. Nor does this case require the examination of the rules and regulations adopted by the price administrator. Those regulations can rise no higher than their source. The act of congress is that source. Congress may by its acts, within its delegated powers, create administrative bodies. It may delegate the power to those bodies to adopt administrative rules and regulations, but those rules and regulations must be within bounds and rules laid down by congress in its enabling acts. To allow such bureaus and administrative bodies to go beyond the carrying out of the orders of congress would be to permit the-former to legislate and the latter to delegate the power to legislate. * * *
“This court takes judicial notice of acts of congress, treaties, and presidential proclamations. These are the law of the land. It does not take notice of administrative rules and regulations. They are not the law of the land. They are merely administrative acts. The thing to be examined in order to find out the applicability of the price ceilings in question is, therefore, the act of congress. It is to be examined to learn the intention of congress as to what sales it meant to interfere with. Did it mean to hinder State courts in proceedings such as these, where sales are made once only, not in the course of business, in the carrying out of functions of winding up businesses and getting creditors paid? If it did so intend, that meaning must be gotten by construction, because it did not say so directly.
‘ ‘ Title 1, § 2, deals with the powers of the price administrator. The opening sentence of that section is as follows:
“ ‘Seo. 2 (a). Whenever, in the judgment of the price administrator, the price or prices of a com modity or commodities have risen or threaten to rise to any extent or in a manner inconsistent with the purposes of this act, he may, by regulation or order, establish such maximum price or maximum prices as in his judgment will be generally fair and equitable and will effectuate the purposes of this act.’ '
“Section 1 (a) of the act discloses that its purposes are, among other things, to prevent speculative and abnormal increases in prices and rents, Ho eliminate and prevent profiteering, hoarding, manipulation, speculation, and other disruptive practices, resulting from abnormal market conditions or scarcities caused by or contributing to the national emergency;’ to protect persons from undue impairment of their standard of living; to prevent hardships to persons engaged in business, to schools, universities, and other institutions, and to governmental agencies, which would result from abnormal increases in prices; to secure adequate production; to prevent collapse of values; to stabilize agricultural prices; and Ho permit voluntary cooperation between the government and producers, processors, and others to accomplish the aforesaid purposes.’
“This statement of purposes clearly indicates that the act is intended to apply to regularly conducted businesses. * * *
“In section 2 (d) the idea of control over continuing operations is still further emphasized in that the' administrator is given power to regulate or prohibit speculative or manipulative practices or hoarding.”
Section 204 (d) of the emergency price control act of 1942 is as follows:
“The emergency court of appeals, and the supreme court upon review of judgments and orders of the emergency court of appeals, shall have exclusive jurisdiction to determine the validity of any regulation or order issued under section 2, of any price schedule effective in accordance with the provisions of section 206 and of any provision of any such regulation, order, or price schedule. Except as provided1 in this section, no court, Federal, State or Territorial, shall have jurisdiction or power to consider the validity of any such regulation, order, or price schedule, or to stay, restrain, enjoin, or set aside, in whole or in part, any provision of this act authorizing the issuance of such regulations or orders, or making effective any such price schedule, or any provision of any such regulation, order or price schedule, or to restrain or enjoin the enforcement of any such provision. ’ ’
The point involved is simply thus stated: Does the act forbid review by a State court ofy an attempted regulation which is beyond and outside the scope anu'provisions of the act? ,
As indicated by the trial judge in his opinion, the act is very evidently aimed at controlling prices at which goods are as a practice and customarily to be sold to the public in the ordinary course of business. That is the real intent and purpose of the act and it is further a matter of common knowledge that judicial sales are distress sales in which , the price obtained is for the most part fat less than the true value of the property offered1 for sale. It could scarcely be imagined that from these distress sales the market could by any means become inflated. It is a matter of common knowledge and observation that the contrary is the effect and the occasion of any article in a judicial sale selling at a price exceeding the price fixed by the office of price administration would be a rarity. It is inconceivable that congress really intended to take away from the State courts the right to control their own receivers in a field of activity where deflation instead of inflation is practically the universal rule.
It is not to be presumed' that congress intended that each and every official under the guise of the authority of the office of price administration could do as he pleased in the whole field of price fixing and be immune from all accountability save only to one court for the whole United States as a court of review of his actions in the first instance. The very fact that only one court is provided of itself would tend to indicate a contrary intention. The section quoted does not ih any explicit terms so provide. A careful review and1 analysis of section 204 (d) shows that only regulations that are issued under the act are protected against review by any tribunal other than the emergency court of appeals and Federal supreme court on appeal from that tribunal. The words “such regulations” thrice recurring in.the section can only refer to the regulations and orders preceding in the same section and those are under the act. Regulations issued not under the act are not so protected. In other words, an officer or authority who does some act not authorized by the emergency price control act is not protected1 therein. He may not do an unauthorized act and receive immunity. Acts ultra vires are not placed in the jurisdiction of the emergency court of appeals and it is ultra vires for the office of price administration to fix maximum prices at which goods may be sold at judicial sales. ,
It appears from statements contained in the answer of the intervening defendant that of the items shown by the report of sale by the receiver, all but 12 are either exempted from price control or the prices bid were below the applicable ceiling price and that of these 12 items the amount of the excess bid above the regulation is $2,605.25. The parties stipulate the accuracy of these statements contained in the answer of the intervener. The decree ap pealed from approves such, sales at such prices.
The intervening defendant claims that the regulations and orders of the office of price administration were all published in the Federal register and therefore entitled to judicial notice. However, it seems they were admitted in evidence at the hearing on the order to show cause why the sale should not be confirmed. It is unnecessary to rule on the question whether we should take judicial'notice of these regulations. • They are in the record.
For the reasons hereinbefore set forth in this opinion, the decretal order appealed from is affirmed. It is to be expected that the receiver’s expenses incident to this appeal will be an item in his account. No costs are allowed. The price' administrator was an active party defendant and his intervention was caused by public interest.
North, C. J., concurred with Reid, J.
See 56 Stat. at L. 23, as amended by 56 Stat. at L. 767 and 57 Stat. at L. 566 (50 USCA, § 901 et seq.).—Reporter, | [
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Boyles, J.
These cases invólve the question whether the amendment to« the State Constitution designated as section 23 of article 10 was legally submitted to and adopted by the voters at the general election held November 5, 1946; if so, whether, or at least to what extent, the same is self-executing; and also involves certain other questions .regarding construction of the amendment.
It is conceded that the following amendment to the State Constitution was submitted to the voters at said election and adopted by affirmative vote: ■
11 Sec. 23. There shall be returned to local governmental-units and school districts by the method hereinafter set forth, one cent of a State sales tax levy on each dollar of sales of tangible personal property on the present statutory base (not rate). The State tax collecting authority shall divide the entire said sum without deduction and remit fifty per cent, thereof among the school districts on the basis of the school census on which primary school money is distributed for that fiscal year. The balance of fifty per cent, shall be returned to counties as a whole on a population basis and payment shall be made to the county treasurer who shall remit to the respective cities, townships, and villages within the county on a per capita basis. Population computation shall be based on the last State-wide Federal census for purposes of division among counties and upon the» same basis or upon any special Federal county-wide census, whichever is later, for intra-county division purposes. All remittances provided shall be made on a quarterly basis. The legislature' shall hereafter make annual grants to school districts out of general funds, over and above all constitutional allocations heretofore and herein provided, in at least amounts which bear the same ratio to total State sales tax revenues of the preceding year which the legislative grants in the fiscal year 1945-1946 bore to said revenues of the preceding year.”
The said amendment, if legally submitted and adopted, became a part of the fundamental law of the State December 5, 1946. Constitution (1908), art. 17, § 2, as amended in 1941. The direct financial . interest, if any, of plaintiffs herein and other local governmental units and school districts, in sales tax collections, begins as of that date. Thereafter differences of opinion developed as to whether the amendment had been legally submitted and adopted, as to whether it is self-executing, or whether it must be implemented by legislation in order to function. Several municipalities and school districts, claiming that the amendment was self-executing without the •necessity for legislative action, demanded of the commissioner of revenue, the auditor general and the State treasurer as the sales tax collecting authority that they proceed to a distribution of one cent of the sales tax collected on each dollar of sales of tangible personal property in accordance with the amendment. These officials, expressing doubts as to their duties in the matter, refused to comply, until there had been judicial interpretation of the amendment.
Thereupon the city of Jackson and the city of Detroit filed separate petitions in this Court for mandamus to compel said officials, as the State sales tax collecting authority, to proceed to distribute to the county treasurers of the respective counties the 50 per cent, of the one cent of the sales tax levy collected on each dollar of sales of tangible personal property, which the amendment required to be returned to the counties, for payment to said plaintiff cities and other local government units on a per capita basis. The boards of education of the city of Detroit and of school district No. 2, Warren township, Macomb county, also filed separate petitions in this Court seeking to compel the defendants herein to return, to them their proportionate shares of one half of one cent of all such sales tax collected on each dollar of sales of tangible personal property, beginning December 5, 1946, to December 31, 1946; and also to remit to them their proportionate shares thereafter, following the close of each quarter of the State’s fiscal year. The petitions of these school districts further asked that the defendants herein be required to pay from the general funds of the State their proportionate shares of the moneys to be paid to school districts accord ing to the ratio set forth in the concluding séntence of the amendment.
On receiving and filing the foregoing petitions the Court issued orders directing the defendants to show cause why the petitions should not he granted. Separate returns have been made, briefs filed, and these matters consolidated for the purpose of hearing arguments and for decision. The attorney general, on behalf of the defendants, has filed a brief in answer to the claims of the four petitioners, wherein it is insisted that the amendment is a nullity because of fatal defects in the petitions for its submission and in the manner in which the proposal was published and submitted; and that the amendment is not self-executing but requires implementation by legislative action. .
Obviously the claim of the defendants that there were fatal defects in the petitions and manner of submission of the amendment to the voters goes to the merits of the entire matter and applies equally to the demands both of the cities and those of the school districts. This provides a proper occasion for consolidation of these matters and for that purpose the attorney general has filed a consolidated brief in support of the claims thus made by the defendants.
Defendants claim that the petitions for submission of the proposed amendment to the voters were defective in that they did not include the full text thereof, as required by article 17, § 2, of the State Constitution, as amended in 1941. Such claim is not supported by the facts, which are to the contrary. The requirement of article 17, § 2, is that:
“Every such petition shall include the full text of the amendment so proposed.”
The proposed amendment (article 10, § 23) was printed in full on the petitions'. However, the de fendants claim that this does not fully satisfy the constitutional requirement. The attorney general argues that the sales tax act should have been put into the amendment as a part of the “full text,” and should have been included in the petitions and published as a part of the proposed amendment, and relies on Scott v. Secretary of State, 202 Mich. 629. In that case petitions were filed with the secretary of State to amend the Constitution so as to permit the manufacture and sale of wines, cider, beer, et cetera, contrary to the prohibition thereof then in effect. The amendments there proposed, as set up in the petitions, provided, among’ other things, that:
“Act No. 313, Public Acts of 1887, as amended and in force May 1,1916, shall be in force and effect except as herein (article 16) modified.”
Act No. 313, thus referred to, had been repealed in toto. Thus it was sought to reinstate the act, through the medium of the amendments and as a part of the Constitution, without setting out in the petitions the full text thus to be reinstated. Before the proposition was submitted to the voters a petition was filed in this Court to'compel the secretary of State to refrain from publishing the proposed amendments or submitting them to the voters. There was no dispute as to the fact that the petitions and the amendments as set up therein sought to reinstate the former Act No. 313 by reference only, and that it was to be thus included as a part of the amendments. The Court held that the constitutional requirement that the petitions contain the full text of the amendments had not been met, and directed the secretary of State to reject the petitions. The distinction between the Scott Case and the instant situation is plain. We do not here have an attempt to reenact the provisions of the sales tax law and thus to include it in the amend ment here under consideration, and the claim of insufficiency of the petitions on this ground is without merit.
Companion to the above objection raised by the defendants, it is argued by the attorney general that the proposal was not published in full “with any existing provisions of the Constitution which would be altered or abrogated thereby, ’ ’ as required by the State Constitution (1908), art. 17, §3, as amended' in 1941. In that connection the attorney general lists some 14 sections of the Constitution which it is claimed should have been published in full, as follows: Article 4, §1, “the powers of government are divided into three departments: The legislative, executive and judicial;” article 5, §§ 13, 24, referring (1) to meetings and adjournments of the legislature, and (2) to appropriations by the legislature of public money for local or private purposes; article 6, § 2, which vests the chief executive power in the governor; article 8, § 20, whereby the legislature shall provide by general laws for incorporation of cities and villages; six sections of article 10 referring’ to legislative duties to provide taxes for State government, the granting of State credit, internal improvements and payments of money from the State treasury “in pursuance of appropriations made by law; ’ ’ also various sections of article 11 referring to education, maintenance of primary schools, the university, and various colleges and other institutions. None of the above provisions'of the Constitution would be “altered or abrogated” by the amendment here under consideration, as these terms have been construed by the court. This Court has plainly indicated the rule as to the provisions which must be published in full, in School District of City of Pontiac v. City of Pontiac, 262 Mich. 338, 343, 344:
“The exact objection urged is that this amendment alters or abrogates some 16 or 18 other provisions of the Constitution, and that failure to publish the ‘existing provisions of the Constitution which would be altered or abrogated’ nullifies the attempted amendment. Some, of the provisions as to which this argument is urged are: Article 8, §§20, 22-24, 26.; article 10, §§1-3, 5, 10; article 11, §§ 9, 10, 14; article 15, § 2. We think this position is not tenable. The duty of submitting all proposed constitutional amendments initiated by the people is placed by the Constitution upon the secretary of State, article 17, § 2. Any provision as to such duty should, if possible, be so construed as to make the requisite course of conduct entirely clear and plain. Perplexities and uncertainties will be pitfalls for the officer charged with this duty regardless of a zealous and honest effort to fully comply with the law, and the officer’s nonperformance might jeopardize and possibly nullify the effort of electors to amend the Constitution. The instant case affords an apt illustration of such difficulties. Here able counsel disagree which, if any, of the other 16 or 18 constitutional provisions are altered by the amendment. It may almost be said that no two agree that certain of these provisions are altered and others are not. How then could the secretary of State determine or be advised with any degree of certainty which of these other provisions of the Constitution he should publish? As hereinafter noted a more clear and definite meaning than that asserted by appellants must be given to the constitutional provision last above quoted. * * *
“We think the requirement in substance is this: That in case a proposed constitutional provision amends or replaces (‘alters or abrogates’) a specific provision of the Constitution, that such provision should be published along with the proposed amendment ; that other provisions which are still operative, though possibly they may need thereafter to be construed in conjunction with the amending provision, need not necessarily be published.”
In DeMaggio v. Attorney General, 300 Mich. 251, 256, 257, the Court said:
“It is to be noted that the Michigan Constitution, article 17, § 3, requires all proposed amendments to be published in full ‘with any existing provisions of the Constitution which would be altered or abrogated thereby.’ In the case at bar there were no provisions of the Constitution published when the civil service amendment was voted upon. The civil service amendment does not alter or abrogate any specific provision of the Constitution and hence there was none to be published.”
See, also, Civil Service Commission v. Auditor General, 302 Mich. 673.
Defendants claim that the purpose of the proposed amendment as stated on the ballots did not comply, with the requirement in article 17, § 3, of the Constitution, as amended in 1941, which provides :
“The purpose of any such proposed amendment or question shall be designated on the ballots for submission to the electors in not more than 100 words, exclusive of caption. Such designation and caption shall be prepared by the secretary of State or by such other authority as shall be hereafter designated by law within 10 days after the filing of any proposal and shall consist of a true and impartial statement of the purpose of the amendment or question in such language as shall create no prejudice for or against such proposal.”
The- caption and purpose of this proposed amendment were designated on £he ballots as follows:
“No. 2 By initiatory, petition there is submitted a proposed amendment to article 10 of the Constitution by adding’ a new section to be known as number 23 to provide for the return of one cent of the State sales tax to be divided among cities, villages, townships and schools, and to provide for the continuance of annual school grants.
“Shall one cent of a levy on each dollar of sales under a State sales tax on the present base be returned to cities, villages, townships and school districts; half apportioned per capita among cities, villages and townships according to county populations, and half apportioned to school districts on basis of the primary school census; and in addition annual grants be made school districts from general funds in ratio to sales tax revenues of preceding fiscal years but not less than that borne between such grants in fiscal year ending nineteen hundred forty-six and the preceding year’s such revenues?”
Doubtless it can be said that whether the foregoing’ is “a true and impartial statement of the purpose of the amendment or question in such language as shall create no prejudice for or against such proposal” is a matter of opinion. We consider that the purpose of this rather complicated amendment was fairly stated, considering its limitation to 100 words, and we find no omission or defects in the statement of purpose which would be likely to mislead the voter, to such extent that the adoption of the amendment should now be set aside for that reason.
The defendants contend that the amendment here under -consideration is an attempt to initiate legislation under the guise of an amendment to the Con- • stitution. Section 1 of article 17 of the Constitution provides that amendments to the Constitution may be proposed in the senate or house of representatives. Section 2 of article 17, as amended in 1941, provides:
‘ Amendments may also be proposed to. this Constitution by petition of the qualified and registered electors of this State.”
This section, with the succeeding section 3, sets up in considerable detail the requirements for submission of amendments initiated by petition. Nowhere in these provisions or elsewhere in the Constitution do we find any limitation to the effect that what might otherwise be considered as legislation cannot be initiated by petition, under said sections, as an amendment to the Constitution. As applied to this amendment, the line of demarcation between legislation and constitutional .provision is too indefinite to require that an arbitrary decision jnust be made in advance of submitting a proposal to the voters, as to whether the proposal must be initiated as legislation under article 5, § 1, or as an amendment to the Constitution under article 17, § 2, as amended in 1941. In the present situation, the proposal has been adopted by the voters as an amendment to the Constitution. There is no merit in the claim that it must now be set aside on the ground that the proposal should have been initiated as legislation.
“The people have an inherent right to so amend the Constitution as to take away from, or add to, the powers of either department of the government.” People v. Cook (syllabus), 147 Mich. 127.
The defendants contend that, the adoption of this amendment results in impairing the obligation of contracts entered 'into by the State, presumably meaning those contracts for the expenditure of funds appropriated by the legislature relying on continuing sales tax collections. Defendants also claim that the amendment is void because it contains proposals for more than one purpose; and that i't is an ineffectual attempt to revise the Constitution. The, claims are without merit. We-have carefully considered all of the objections raised as to the legality of the petitions and the manner in which this amendment has been submitted to the people. We find no defects in the petitions or in the manner of submitting the proposed amendment,- to such extent that the amendment must now be declared a nullity. In that regard we are not unmindful of the fact that to now declare the amendment a nullity would thwart the expressed will of the voters. We also are conscious of the fact that these objections might have been raised in advance of the submission, as was done in Leininger v. Secretary of State, ante, 644, decided March 3d. In that case we found that the initiative petition was, fatally defective and directed the secretary of State, the State board of canvassers and the attorney general to refrain from submitting the proposal to the voters.
The defendants now argue in the instant case that the board of State canvassers and the attorney general failed to carry out the functions imposed upon them by the Constitution and by Act No. 246, Pub. Acts 1941 (Comp. Laws Supp. 1945, §§ 3285-1 — 3285-14, Stat. Ann. 1946 Cum. Supp. §§ 6.685 [1] -6.685 [14]), and for that reason the amendment must be declared a nullity. In article 17, § 2, as amended, it is provided that:
“Petitions * * * proposing an amendment to this Constitution shall be filed with the secretary of State or such other person or persons hereafter authorized by law to receive same. * * * Upon receipt of said petition the secretary of State or other person or persons hereafter authorized by law shall canvass the same. * * * If the secretary of State or other person or persons hereafter authorized by law to receive and canvass same determines the petition is legal and in proper form, * * the proposed amendment shall be -submitted to the electors. * * * An official declaration of the sufficiency or insufficiency of the petition shall be made by the secretary of State or such other person or persons as shall hereafter be authorized at least two months prior to such election. «= # # secretary of State or such other person or persons as may be hereafter authorized by law shall submit all proposed amendments to the Constitution initiated by the people for adoption or rejection in compliance herewith. The petition shall consist of sheets in such form and having-printed or written at the top thereof such heading as shall be designated or prescribed by the secretary of State, or such other person or persons hereafter authorized by law to receive, canvass and check the same.”
The secretary of State, over his signature as such official, sent to the various boards of county election commissioners a short form official ballot to be used in voting on the proposed constitutional amendment, together with the following notice:
“Inclosed you will find the short form of ballot as prepared by the board of State canvassers and the attorney general, under the provisions of article 17, § 3, of the Constitution, as amended, and of Act No. 246, § 4, Pub. Acts 1941.”
At the same time', the secretary of State sent notices'to- the various county clerks that the proposed amendment would be submitted to the electors at the general election November 5th, and also at the same time officially certified “that the foregoing is a true and compared copy of a petition, except signatures, properly presented, signed and filed in my office, requesting the submission to tbe electors of a proposed amendment to article 10 of tbe Constitution of the State by adding to said article a new section to be known as section 23, and further that I have canvassed and found same sufficient, agreeable to tbe requirements of section 2, article 17, of tbe Constitution of tbe State.”
Tbe attorney general points to Act No. 246, Pub. Acts 1941 (Comp. Laws Supp. 1945, §§ 3285-1— 3285-14, Stat. Ann. 1946 Cum. Supp. §16.685 [1]-6.685 [14]), and claims that tbe amendment was not properly submitted, and therefore a nullity, on 'the ground that said act does not authorize tbe secretary of State to perform tbe acts as authorizéd by sections 2 and 3 of article 17, but that tbe sole ■power to determine the sufficiency of tbe petitions, and to make an official determination, rests with tbe attorney general and a board consisting of tbe State officials who comprise tbe board of State canvassers (secretary of State, State treasurer and superintendent of public instruction [1 Comp. Laws 1929, §3181.(Stat. Ann. § 6.470)]). Tbe attorney general bases this contention on tbe provisions of Act No. 246, Pub. Acts 1941, supra.
This act was passed in 1941 to supplement, or perhaps implement, tbe amendments to sections 2 and 3 of article 17, which were ratified by tbe voters at tbe general election April 7, 1941. Section 4 of this act provides (among other things) that wherever tbe phrase “secretary of State, or such other person or persons as may hereafter be authorized by law” is used in sections 2 and 3 of article 17, it shall be considered to mean and have reference to a board composed of tbe above-named State officers and tbe attorney general, “and such board shall exercise tbe duties prescribed in such constitutional provisions, ’ ’ Obviously this provision in section 4 of said act cannot be given its full and literal meaning, inasmuch as the act itself provides that the petitions shall be filed with the secretary of State, copies of the statement of purpose shall be sent for publication by the secretary of State, the secretary of State shall certify the proposed amendment to the clerk-of each county. The act does not indicate what records, if any, must be kept or maintained by the board which it creates. Apparently the meeting or functioning of said board is informal. In the instant case there is an absence of any satisfactory record before us as to the extent to which the board functioned, if at all, except as referred to in the notice sent by the secretary of State to the various county boards of election commissioners, herein-before quoted. On the other hand the records before us fail to show affirmatively that the provisions of said Act No. 246 were followed. Is it required that the adoption of the amendment here under consideration be vitiated, and the amendment be declared a nullity? The attorney general refers to Leininger v. Secretary of State, supra, and insists that we have answered the above question in the affirmative. But there are several controlling distinctions between the situation here before us, and the circumstances in the Leininger Case. In that case mandamus was sought, before the proposal was' submitted to the voters, to prevent its submission, on the ground that the petitions were fatally defective. The Court so held, and the proposed legislation was not submitted for that reason. ^ In the case at bar, wherein an amendment to the Constitution is under attack after its adoption, we find (as hereinbefore indicated) that there were no fatal defects in the petitions or in the manner of submission. The question in the Leininger Case was, as stated in the opinion, “whether the petition, in form, meets the constitutional requirements so as to qualify it for transmittal to the legislature and submission to the people.” The Court said (pp. 654-656):
“From the language of the Thompson , Scott • and Hamilton Cases the distinction to be made is clear. While the constitutionality of a proposed law is not determined by this Court before enactment, nonetheless, we do determine, in cases properly presented here before submission of the proposed law to the people, whether the constitutional requirements for such submission have been met, and mandamus will issue to prevent such submission when compliance therewith is lacking. * * *
“Defendants insist that no duty reposes upon them to .determine whether the petition meets the constitutional requirements for submission to the people, except as relates to signatures. This contention is answered in the language of the Scott Case, supra. Since the opinion in that case was written, article 5, § 1 of the Constitution has been amended (1941). As will be noted from a reading of the quotation hereinbefore made therefrom, the section now imposes an express duty upon the defendants to determine that the petition is in proper form. Thus the Constitution now makes expre'ss the duty which this Court had theretofore held rested upon the secretary of State. The duty is •still ministerial, involves solely the determination of a question of fact and represents a clear legal duty, obedience to which this Court will compel by mandamus. ’ ’
The distinction is plain. In that case it was held that it was the duty of the secretary of State, the •attorney general, and the board as named in Act No. 246, Pub. Acts 1J41, to determine that the petitions did not meet" the constitutional requirements. Sections 2 and 3 of article 17, as amended in 1941, as well as Act No. 246, impose a duty on all of the above-named officials. Sections 2 and 3 of article 17 were not superseded by Act No. 246, Pub. Acts 1941, nor could they be. The Constitution cannot bo amended or superseded by legislation. We are not here deciding a case where there is a fatal defect in the petitions, as a result of which the proposition should be withheld from submission to the voters. Such were the situations in the Scott and Leininger Cases, supra. Here we have a situation where we find there were no such fatal defects, but are asked to nullify the act of the voters in adopting an amendment. Conceding that we have no showing here to the effect that the board designated in Act No. 246, Pub. Acts 1941, functioned in accordance therewith, it does appear that the secretary of State performed his constitutional duties. Under these circumstances, we are of the opinion that the amendment should not now be vitiated.
In Attorney General, ex rel. Miller, v. Miller, 266 Mich. 127, 133 (106 A. L. R. 387), the Court quoted with approval from 20 C. J. pp. 181, 182, § 223, as follows:
“Statutes giving directions as to the 'mode and manner of conducting elections will be construed by the courts as directory, unless a noncompliance with their terms is expressly declared to be fatal, or will change or render doubtful the result. * * * Before election it is mandatory, if direct proceedings for its enforcement are brought, but after election it should be held directory, in support of the result, unless of a character to effect an obstruction to the free and intelligent casting of the vote, or the ascertainment of the result, or unless the provisions affect an essential element of the election, or it is expressly declared by the statute that the particular act is essential to the validity of the election, or that its omission will render it void.”
The following’ is also pertinent to decision:
“While the procedure prescribed by the Constitution for proposals to amend the Constitution must be duly followed and none of the requisite steps may be omitted, yet unless the courts are satisfied that the Constitution has been violated in the submission of a proposed amendment they should uphold it. People, ex rel. Elder, v. Sours, 31 Col. 369 (74 Pac. 167, 102 Am. St. Rep. 34).
“The substance more than the form is to be regarded in considering whether the complete system prescribed by article 17 of the Constitution for submitting proposals to amend the Constitution has been observed.
“Constitutional provisions derive their force not from the legislature, but from the people in whom, under our theory of government, the power is inherent, and in the exercise, of such power to make changes in the Constitution there are practically no limits except those contained in the Federal Constitution when such proposals are made in the prescribed manner. Even in case some required form of procedure has been omitted by the legislature in submitting a proposal to amend the Constitution, but the same had been advertised or the notices published and the people have approved it at an election the amendment becomes a valid part of the Constitution. See West v. State, 50 Fla. 154 (39 South. 412).
“The difficulties which lie in the way of the people to amend the Constitution seem to emphasize the reasonableness of the rule that too strict a construction of the modes of procedure prescribed by legislative regulations and forms for the exercise of the • power to submit a proposal to amend is not advisable or consistent with our institutions where the Constitution itself has provided a complete system for that purpose: That doctrine may in some measure counteract the extreme view of the older school of statesmen who held that the Constitution was designed to check the propensity of the legislative department to intrude upon the duties and absorb the powers of other departments. The opportunity should be afforded the people, with the least amount of technical departmental obstructions consistent ivith the letter and spirit of the constitutional provisions on the subject, to express their desire as to a supposedly needed change in the Constitution.” Collier v. Secretary of State, 116 Fla. 845, 857-859 (157 South. 40).
“In reaching the decision, the court must necessarily have in mind the universal rule that, whenever a constitutional amendment is attacked as not constitutionally adopted, the question presented is, not whether it is possible to condemn, but whether it is possible to uphold; that every reasonable presumption, both of law and fact, is to be indulged in favor of the legality of the amendment, which will not be overthrown, unless illegality appears beyond a reasonable doubt. People, ex rel. Elder, v. Sours, 31 Col. 369 (74 Pac. 167, 102 Am. St. Rep. 34); People v. Prevost, 55 Col. 199, 134 Pac. 129); Martien v. Porter, 68 Mont. 450 (219 Pac. 817)_ * * *
_ “If the provisions of the Constitution for its own amendment are not literally, but are substantially, complied with in some portion of the procedure, and from which no injury results, the amendment, when ratified by a majority vote of the people is valid.” Board of Liquidation of State Debt of Louisiana v. Whitney-Central Trust & Savings Bank, 168 La. 560, 564 (122 South. 850).
“Courts should, after the amendment has been 'adopted, be slow to declare the amendment unconstitutional on technical grounds unless the substantial requirements of the Constitution have been violated in the submission.” State, ex rel. Lampson, v. Cook, 44 Ohio App. 501 (185 N. E. 212, 213).
Thus far what has been said herein applies equally to the petitions of the school districts as well as the cities. In conclusion on this phase of the case we hold that there were no such defects in the proceedings for submission as to vitiate the amendment. Furthermore, we hold that with the exception of the requirements in the concluding sentence of the amendment, the amendment is self-executing, does not require implementation by legislation, and that mandamus may issue to compel the tax collecting authority to comply therewith.
A further claim is made by the school districts, that the concluding sentence of the amendment, directing the legislature to make annual “grants” {i.e., appropriations) for school districts, is also self-executing. We agree that this provision is mandatory to the extent that it is the duty of the legislature to make, the appropriations referred to. It is the constitutional duty of the legislature to make the annual “grants” in accordance therewith, and to that extent this requirement is mandatory. But the difference between the language in this concluding sentence and the directions preceding it in thé amendment is significant. The “tax collecting authority,” i.e., the defendants in this case, are directed by the amendment Jo “return” ór to “remit” to the county treasurers and the school districts a certain part of the sales tax collections. This is a clear mandatory duty, and it is within the province of this Court to issue the writ directing these State officials to comply with that constitutional mandate. But the plaintiff school districts are not here asking the Court to order the legislature to make the appropriations referred to in the concluding sentence of the amendment. Nor has the legislature yet refused to do so. Presumably, the legislature will obey the mandate, but it is not within the power or the province of the Court to order the legislature to do so. It is also significant that the concluding sentence provides a minimum annual appropriation or grant to be made by the legislature,' but leaves it to the discretion of the' legislature whether it will make an appropriation in excess of the minimum amount. But it cannot lessen the amount set up by the formula in the concluding sentence of the amendment.
It is apparent that the concluding sentence of the amendment is not lacking in ambiguity, and much difficulty seems to have been encountered in determining the meaning of the language used. A like situation arose in this Court when we were called upon to consider and construe the 15-mill amendment (article 10, § 21) to the Constitution. Referring to the difficulty in construing ambiguities, this Court, in School District of City of Pontiac v. City of Pontiac, supra, at page 316, said:
“Because of such ambiguity, it becomes the duty of the court to construe the amendment as worded in the light of established rules for the construction of constitutional provisions. -Much has already been written concerning proper rules for such construction. Extended review of these rules would not be particularly helpful. Fortunately the pertinent fundamental guides for such construction have been clearly and concisely stated in former decisions of this court:
“ It is a maxim that the object of construction, as applied to a written Constitution, is to ultimately ascertain and give effect to the intent of the people in adopting it. * * *
“ ‘In construing constitutional provisions where the meaning may be questioned, the court should have regard to the' circumstances leading to their adoption and the purpose sought to be accomplished.’ Kearney v. Board of State Auditors, 189 Mich. 666, 671, 673.”
In construing* the amendment, we must have in mind the general purpose and consider that, words of like import used in all parts of the amendment are intended to have a similar meaning. For example, the amendment directs the return of one cent of the “sales tax levy.” To construe this literally would result in endless confusion and doubtless an impossible situation. Not all of the sales tax “levy” is collected, and the amount of the “levy” is impossible of accurate ascertainment. We must consider that by “sales tax levy” is meant the sales tax collected. Thus, returning a part o'f the “levy” of the sales tax must be construed to refer to the sales tax money collected, the three cents collected on each dollar of sales of personal property. In determining the “one cent of a State sales tax levy,” there must be excluded from consideration all such items as expenses of collection, refunds, appropriations made therefrom, license fees, and penalties arising from enforcement of the law. At the outset, the amendment declares that the one cent out of each three cents collected, shall be divided “without deduction.”' In other words, under the first part of the amendment, sales tax “levy” means the thre cents collected on each dollar of sales of tangible personal property. But in construing* the meaning of the term “revenues’"’ in the concluding* sentence of the amendment, we must give effect to the difference between the use of the term “total State sales tax revenues” in the concluding sentence, and the use of the term “one cent of a State sales, tax levy on each dollar of sales of tangible personal property” as used earlier in the amendment. We construe the term “total State sales tax revenues” as used in the concluding sentence, to mean all revenues, including license fees, interest and penalties. In this connection, all sales tax revenues and collec tions become State funds under the’ sales tax law. Such moneys continue to be State funds, to be accounted for as such, until paid out by constituted authority according to law. Article 10, §23/does not by-pass- the State treasury. But we conclude that local governmental units and the school districts are entitled to an accounting of their respective shares in the sales tax collections under the first part of the amendment, beginning December 5,1946, and this should be included in the páyments made as of March 31, 1947, the end of the third quarter of the 1946-1947 fiscal year.
Except where, in the concluding sentence, such construction might result in an impossibility, we consider that by the use of the terms “year,” “annual” grants, “fiscal year,” in the amendment is meant, wherever possible, the fiscal year of State government, i.e'., from each July 1st to each'succeeding June 30th, inclusive. Such construction is indicated wherein- the concluding sentence of the amendment refers to the State’s fiscal year “1945-1946,” meaning from July 1, 1945, to June 30, 1946, inclusive. To the same general import, the last sentence of the amendment, in referring to legislative grants, “in” a fiscal year, must be construed to mean “for” the fiscal year, not merely the appropriations actually made in or during such year. Appropriations are frequently made “in” a fiscal year for the ensuing “fiscal” year or for two “fiscal” years, and have been made for even longer periods of time. The fiscal year for which the appropriations were made, and not merely the fiscal year “in” which they may have been made, must control the proper construction of the amendment. The concluding-sentence refers (literally) to legislative grants “in” the fiscal yeár 1945-1946. It has been claimed that this must be construed literally, i.e., only to such legislative appropriations as were granted by legislative enactment between July 1, 1945, and June 30, 1946, inclusive. We do not so construe the intent. We construe the concluding sentence of the amendment to mean:
“The legislature shall hereafter make annual grants (appropriations) to school districts out of general funds, over and above all constitutional allocations heretofore and herein provided, in at least amounts which bear the same ratio to total State sales tax revenues of the preceding year which the legislative grants in (appropriations for) the fiscal year 1945-1946 bore to said revenues of the preceding year.”
The legislative appropriation for each ensuing year should be for each fiscal year, the next appropriation hereafter to be made for the fiscal year beginning July 1, 1947. As to the actual amounts of such legislative appropriations for each fiscal year hereafter, we conclude that the so-called formula is mandatory but not self-executing, calls for legislative action, and we decline to order the defendants herein, namely, the tax collecting authority, to execute the same. In that connection, see School District of City of Pontiac v. City of Pontiac, supra, at page 353.
A writ of mandamus may issue in accordance with and to the extent herein indicated. No costs awarded.
Caer, C. J., and Butzel, Bushnell, Sharps, Reid, and Noeth, JJ., concurred. Dethmees, J., took no part in the decision of this case.
192 Mich. 512.,—Reporter.
202 Mich. 629.—Reporter.
212 Mich. 31.—Reporter.
See Aet No. 167, Pub. Acts 1933, as amended (Comp. Laws Supp. 1940, 1945, § 3663-1 et seq., Stat. Ann. and Stat. Ann. 1946 Cum. Supp. J 7.521 et seq.).—Reporter. | [
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Reid, J.
(dissenting). This is an action in assumpsit. A jury trial in the superior court of Grand Rapids resulted in a verdict for defendant. From the judgment thereon, plaintiff appeals.
The principal question arises over plaintiff’s right to allege and prove inconsistent causes of action, in view of his claims as to the facts. The declaration contained a'special count setting forth an agreement of employment. An amended declaration, containing the common counts in assumpsit in addition to the .special count, was later filed. The court permitted the amendment to the declaration to stand.
Our Court Rule No. 17, § 6 (1933), provides,
“Seo. 6. Inconsistent causes of action or defenses are not objectionable, and when the party is in doubt as to which of two or more statements of fact is true, he may allege them in the alternative.”
I have read the opinion of my brother, Mr. Justice Boyles. I cannot concur in that opinion. The instant case includes with the claim of an express contract, an alternative, inconsistent claim on the part of plaintiff, that there was no express contract. It is almost axiomatic that where a lawful, express contract covers the amount of the compensation, we must look to the express contract rather than to the quantum meruit for the standard for the award of damages.
In the instant case plaintiff while discussing the status of the pleadings, informed the trial judge that he relied on inconsistent causes of action, saying:
“There are common counts in assumpsit in connection with the declaration, and the reason that is put in is for the purpose of permitting recovery even if the jury should think that there wasn’t this percentage arrangement, so we have a right in the progress of this case to put in all evidence that bears upon the quantum meruit proposition as well as the contract. * * * We have a right to set up an alternative and even inconsistent claims.”
Plaintiff also produced testimony in support of each of his two inconsistent claims.
Plaintiff’s opening statement of facts to the jury does not appear in the record nor is. there anywhere in the record any general oral statement of plaintiff’s claim. Defendant did not demand a bill of particulars of plaintiff’s claim under the common counts and none was filed. During the taking of testimony, plaintiff asked questions of his witnesses and brought out testimony inconsistent with his claim of express contract as to the amount of compensation and supporting his alternative theory that there was no agreement as to amount of compensation and that quantum meruit was the measure of damages. Plaintiff’s wife testified:
“Q. Whether or not on numerous occasions your husband in your presence talked with Mr. Scheffler about getting things definitely in shape to find out where they stood between them? (italics supplied)
“A. Well, yes,”
Plaintiff testified: .
“Q. You have said I think you had some talk with Mr. Scheffler about getting a contract and getting this thing on a definite basis. How many times would you say you talked with Mr. Scheffler about that before you were discharged? (italics supplied)
“A. The first year or so probably a dozen times, and from then on probably two or three times a year. * * #
“Q. * * * When had you last spoken to Mr. Scheffler about getting a contract before you were dismissed?
“A. During the summer. * * *
“Q. * * * Now can you think of any other occasions when there were conversations between you and Mr. Scheffler with reference to your status in the business?
“A. Well, it happened very often and I just took him for granted that we had a deal, and that was it. ’ ’
. That and other testimony was offered by plaintiff apparently to show that there was no express contract and plaintiff says that he “had made many offers of proofs to sustain a recovery under the common counts should the proofs fail to sustain an express contract,” and plaintiff further complains of being' limited to recover under an express contract, “when the proofs failed to show a meeting of the minds of the parties upon any express contract.”
Defendant claims that while no compensation was agreed on at the first interview between the parties, that question was to be settled later in the form of weekly salary, and that later the salary was accepted from time to time as full payment.
Plaintiff is a resident of Grand Rapids, is 49 years of age, and has been in the investment business most of his life. He has had extensive selling experience, and considerable experience in organization and reorganization work.
Plaintiff claims that about May 24, 1941, he answered, by letter, defendant’s display advertisement in a Grand Rapids paper. By appointment an interview with defendant was had in which defendant revealed that he was just entering into the business of manufacturing tools and dies. Plaintiff claims that an oral contract of employment was entered into between plaintiff and defendant as follows: That plaintiff would receive a drawing account of $75 per week, but the same would be charged against his commissions; that said commissions would be figured at the rate of five per cent, upon all business received by the company, plaintiff to pay his own necessary traveling expenses and any commissions or salaries to subsalesmen; and that the defendant said that after said business had been thoroughly established he would give plaintiff a one-fourth interest therein. Within a few days plaintiff went to work and remained under defendant in the above employment until his discharge about September 30, 1944, a period of approximately three and one-third years.
Plaintiff claims that his first meeting with defendant occurred in the Kortz shop, which defendant had leased. At that time defendant was employed at the Metalcraft Company’s plant and put in his evenings in getting the project in question started. Plaintiff further claims that witness Elroy Anders, later secretary and treasurer in defendant’s business, was also employed at the Metalcraft; that both defendant and Anders remained at the Metal-craft for several weeks, leaving there about June 23, 1941; that defendant and Anders from time to time Avhile employed at Metalcraft endeavored to get orders, and that the agreement was that during the day plaintiff was to be “the front” of the new concern while the others continued to work at the Metaicraft, and'that plaintiff was also expected to call upon his numerous acquaintances in western Michigan for orders for new business.
Plaintiff claims that pursuant to the agreement he performed services as salesman and assistant in the management and that the business of defendant grew from a mere prospect until it became very successful, doing a total business of $5,000,000 while plaintiff’s services continued, and that he should have a verdict for all sums unpaid under his claim as to the oral contract of employment. Plaintiff’s further claim is that if the jury should fail to find the agreement on the basis of five per cent, commission and interest in the business as above set forth, still plaintiff, relying on statements of defendant indicating that plaintiff’s compensation- would be greater than the weekly payments actually paid, rendered services as an employee of defendant of the general nature above indicated, and that plaintiff should be entitled to recover under the quantum meruit therefor.
Plaintiff asserts that his claim is in part supported by the testimony of defendant as follows: “I am very optimistic about our success and if you can fit into our picture here at some future date we will be glad to fit you in and let you become a prominent part of the organization. ’ ’ And plaintiff claims that he said to defendant: “I will gamble with you.” Plaintiff further claims that defendant made statements indicating that plaintiff was the same as a partner, and ascribing to plaintiff great efficiency In salesmanship and assistance in management far beyond that ordinarily rendered by a mere employee, and that he was one of the members of the organization.
Defendant claims that the contract of employment was of a different purport than that claimed by plaintiff:, that at the meeting in question plaintiff explained his past experience as a stock and bond salesman; that defendant said he didn’t see how he could use the plaintiff; that plaintiff stated that he was in greatly reduced circumstances; that defendant then said that plaintiff could not sell the organization to anyone because he did not talk shop parlance, but if the plaintiff wished to stay he would be compensated for any work he did and also compensated for the use of his car and later, when he got a little experience, defendant would put him on the payroll; that plaintiff accepted the proposition and was paid for the work he did; that four months later, plaintiff was placed on a regular salary basis at the rate of $20 per week, which weekly amount was increased from time to time until in March, 1944, he was raised to $75 a week, and that salary continued until his discharge, September 30, 1944.
Defendant claims that in a case where the parties admit that there was a contract covering the employ-' ment but differ as to the terms, it is for the jury to determine what the terms were and that in such case there can be no recovery on quantum meruit, citing Millar v. Macey Co., 263 Mich. 484 and Clifton v. Village of Constantine, 294 Mich. 304. In the instant case there were conversations between the parties following the original agreement, and the testimony in that regard could support a theory that the amount of compensation, after all, was not precisely agreed upon but the employment was being continued, in which respect the claims of plaintiff in this case differ from the status of the claims of plaintiff in Millar v. Macey Co., supra, and of the plaintiff in Clifton v. Village of Constantine, supra.
The contract of employment was valid though not in writing, and the parties could afterwards alter it verbally. The testimony sets forth several con versations on the subject of compensation which could be considered as varying the terms of the original agreement.
. There was testimony that defendant in conversations subsequent to the original conversation undertook to see to it that plaintiff would never be in want and said that plaintiff was well set for the rest of his life. It could be considered from the testimony in this case that the weekly payments to plaintiff would not fulfill that undertaking, that plaintiff did not accept the payments as payment in full, and that plaintiff and defendant each had.in mind that plaintiff should receive more than the weekly wages or drawing account.
There was testimony that defendant .on several occasions expressed high appreciation for plaintiff’s services and said that defendant could not have succeeded without him. A notice to all employees was caused by defendant to be posted in all his plants sometime between May, 1943 and June; 1944, containing the following:
“I am leaving shortly for an extended business trip, and during my absence Mr. Arthur Greistert will take over management of administrative affairs.
“Any urgent production or administrative problems are to be referred to him for decision. He is to receive production and shipping reports daily, and is to be kept posted on the progress of all jobs now in work in our plants.
“His knowledge and experience along these lines will prevent any holdups during my absence.”
It was testified that after November, 1941, the parties had several interviews for the purpose of getting Greistert’s status as to compensation on a more definite basis and in writing; that defendant told plaintiff not to worry, that he was well taken care of, was well set, had a job for the rest of his life and was mentioned in defendant’s will, but that he should wait until the business made some money, defendant being then in trouble for finances.
Notwithstanding the finding that plaintiff’s claim was incorrect as to commissions and interest in the business, it could have been found from the testimony that plaintiff relied on receiving greater compensation than the weekly payments or drawing account, and that defendant purposely used words causing plaintiff so to rely, and that plaintiff in consequence rendered services of great value to defendant for which plaintiff has not. been paid.'
Attorneys for plaintiff seasonably informed the court of their claim of an implied contract inconsistent with the special count and in support of the quantum meruit. The court refused to admit the testimony offered by plaintiff in that regard and charged the jury that no recovery could be had on the quantum meruit. In this the court was in error. Plaintiff was entitled to go to the jury on both the special count and the alternative claim under the common counts of quantum meruit, so that the jury would find which claim if either was substantiated by the testimony.
In its legal aspect the. instant case falls squarely within our recent decision in Fraser v. Collier Construction Co., 305 Mich. 1. In that case the appellant asserted (p. 5) that the trial judge committed “error in denying defendant’s motion to require plaintiffs to elect whether they relied on express or implied contract.” After reviewing the facts there involved and citing numerous authorities we held (p. 30): “Under the circumstances of this case, the court was not in error in denying defendant’s motion that plaintiffs be required to elect as to whether plaintiffs relied upon an express or an implied contract;” and we affirmed judgment for the plaintiffs.
While in the instant case it is true thát plaintiff in effect relies upon one of two alleged express contracts, it is important to note that in the alternative or secondary contract upon which plaintiff relies there was included in the contract itself an element of quantum meruit. There is testimony from which it may fairly be inferred that defendant agreed with plaintiff as a part of his employment contract that the latter should ultimately be paid something in addition to the amount paid him weekly, but how. much this additional amount should be was never agreed upon between the parties and plaintiff makes no claim that that amount was agreed upon. Thus in the secondary agreement upon which plaintiff relies there was the element of quantum meruit. Not only is there testimony in the record tending to sustain plaintiff’s claim in this particular, but other testimony bearing upon quantum meruit and offered by plaintiff was excluded. The trial court wholly withdrew from the jury the quantum meruit phase of this controversy. This was error since the element of quantum meruit "was a part of plaintiff’s claimed secondary contract.
°An examination of the numerous cases cited in Justice Boyles’ opinion will disclose that there was not embodied in them the quantum meruit element of the contractual relation above noted. Instead, as noted in my Brother’s quotation from Millar v. Macey Co., 269 Mich. 265: “Everyone recognized that quantum meruit was not involved.” Admittedly in that type of case it would be error to receive testimony as to quantum meruit, but cases of that type are not pertinent to decision in the instant case,
The trial court admitted in evidence testimony to the effect that at a conference in the office of defendant’s attorneys, plaintiff made statements inconsistent with his claim, and plaintiff complains of that ruling on the ground that whatever statements were actually made on that occasion were made for the purpose of compromise and settlement. As recited by defendant and his attorney as witnesses, the statements were statements of fact and not merely tendered concessions. Statements of fact were admissible. Sanderson v. Barkman, 272 Mich. 179, 183.
Numerous other errors are claimed by plaintiff which do not require consideration in view of our decision on the quantum meruit.
We should reverse the judgment appealed from. The case should be remanded with instructions that the verdict and judgment thereon be set aside, and a new trial granted. Costs to plaintiff. '
North, J., concurred with Reid, J. | [
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Blair Moody, Jr., J.
On September 13, 1976, a complaint charging the defendant, Anthony Formicola, with obstruction of justice was filed in the United States District Court for the Eastern District of Michigan. This complaint was superseded by a four-count indictment issued on September 23, 1976. A Federal grand jury indicted defendant on two counts of endeavoring to influence, intimidate, and impede witnesses in a pending Federal criminal prosecution, in violation of 18 USC 1503, and two counts of obstruction of criminal investigations, in violation of 18 USC 1510(a). Defendant pled guilty to all four counts, and on February 7, 1977, the Honorable Robert E. DeMascio sentenced him to 10 years in prison at the Federal correctional facility in Leavenworth, Kansas.
Prior to the defendant’s plea of guilty to the Federal charges, the Oakland County Prosecutor issued a complaint and warrant charging the defendant with four counts of inducing another to commit the crime of murder, contrary to MCL 750.157b; MSA 28.354(2). Defendant was bound over to the Oakland Circuit Court on these charged offenses following a preliminary examination in the 43rd District Court.
Defendant brought a motion to dismiss the state charges, contending that they were barred on double jeopardy grounds due to the prior plea-based Federal obstruction of justice convictions. The motion to dismiss was denied by the Oakland Circuit Court on September 6, 1977. The Court of Appeals denied defendant’s application for leave to appeal.
Both the Federal and the state charges arise out of the same factual setting, a meeting with an undercover State Police officer. At this meeting, defendant allegedly arranged to have the under cover State Police officer kill four persons who were witnesses scheduled to testify against the defendant in a pending Federal food-stamp fraud prosecution.
We granted leave to appeal to address two questions. 402 Mich 884 (1978). The first question presented is whether under the guidelines set forth in People v Cooper, 398 Mich 450; 247 NW2d 866 (1976), defendant will be twice placed in jeopardy by the instant state prosecution in light of his prior Federal court convictions arising out of the same criminal act. The second question to be addressed is whether the Legislature intended that the crime of inducing another to commit the crime of murder, prosecuted under MCL 750.157b; MSA 28.354(2), be punishable by mandatory life imprisonment and, if this was the intent, whether such punishment is constitutional.
We find that defendant will not be twice placed in jeopardy by the instant state prosecution, under the guidelines set forth in Cooper, supra. Additionally, we determine that the punishment issue is not properly presented on the present record, and therefore do not reach it.
Accordingly, the order of the Oakland Circuit Court, denying defendant’s motion to dismiss, is affirmed.
I
A single criminal act provides the factual basis for the Federal convictions and the instant state charges. Therefore, defendant claims that the latter state charges are barred, on double jeopardy grounds, by his plea-based convictions.
People v Cooper, 398 Mich 450; 247 NW2d 866 (1976), is the leading Michigan case dealing with the constitutionality of state prosecutions subsequent to Federal prosecutions for offenses arising out of the same act. The Cooper Court noted that the double jeopardy provision of the Fifth Amendment to the United States Constitution, US Const, Am V, does not bar state prosecution after Federal prosecution for offenses arising out of the same criminal act. However, the Court found a prohibition, within the state’s constitutional provision, of most subsequent state prosecutions:
"Const 1963, art 1, § 15 prohibits a second prosecution for an offense arising out of the same criminal act unless it appears from the record that the interests of the State of Michigan and the jurisdiction which initially prosecuted are substantially different.” Cooper, supra, 461.
In determining whether a Federal prosecution satisfies the state’s interest, the following nonexclusive factors may be considered:
1. Whether the maximum penalties of the two jurisdictions’ statutes are greatly disparate;
2. Whether some reason exists why one jurisdiction cannot be entrusted to vindicate fully another jurisdiction’s interest in securing a conviction; and
3. Whether differences in the statutes are substantive, as well as jurisdictional. Cooper, supra, 461.
Examination of the first and third enumerated factors in the context of the instant case leads us to conclude that the interests being protected by the State of Michigan are substantially different from the interests of the Federal government.
First, the maximum penalties of the Federal and state statutes are substantially different. The Federal obstruction of justice statutes, 18 USC 1503 and 18 USC 1510(a), provide maximum penalty provisions of five years imprisonment, a $5,000 fine, or both. These relatively minor Federal penalty provisions are contrasted with the state statute in question which provides a potential maximum penalty of life imprisonment. This great disparity between maximum penalties indicates that the state’s interests in prosecuting defendant were not satisfied by the Federal plea-based obstruction of justice convictions.
Furthermore, the state and Federal statutes contain substantive, and not merely jurisdictional, differences. Defendant pled guilty of violating the following Federal obstruction of justice statutes:
"Whoever corruptly, or by threats or force, or by any threatening letter or communication, endeavors to influence, intimidate, or impede any witness, in any court of the United States or before any United States [magistrate] or other committing magistrate, or any grand or petit juror, or officer in or of any court of the United States, or officer who may be serving at any examination or other proceeding before any the United States [magistrate] or other committing magistrate, in the discharge of his duty, or injures any party or witness in his person or property on account of his attending or having attended such court or examination before such officer, [magistrate], or other committing magistrate, or on account of his testifying or having testified to any matter pending therein, or injures any such grand or petit juror in his person or property on account of any verdict or indictment assented to by him, or on account of his being or having been such juror, or injures any such officer, [magistrate], or other committing magistrate in his person or property on account of the performance of his official duties, or corruptly or by threats or force, or by any threatening letter or communication, influences, obstructs, or impedes, or endeavors to influence, obstruct, or impede, the due administration of justice, shall be fined not more than $5,000 or imprisoned not more than five years, or both.” 18 USC 1503.
"Whoever willfully endeavors by means of bribery, misrepresentation, intimidation, or force or threats thereof to obstruct, delay, or prevent the communication of information relating to a violation of any criminal statute of the United States by any person to a criminal investigator; or
"Whoever injures any person in his person or property on account of the giving by such person or by any other person of any such information to any criminal investigator—
"Shall be fined not more than $5,000, or imprisoned not more than five years, or both.” 18 USC 1510(a).
These Federal statutes are easily differentiated from the state statute under which the defendant is charged. MCL 750.157b; MSA 28.354(2), provides:
"Any person who incites, induces or exhorts any other person to unlawfully burn any property, to murder, to kill, to wound or to commit an aggravated or felonious assault on any person or to do any act which would constitute a felony or circuit court misdemeanor, that may endanger or be likely to endanger the life of any person, or who aids and abets in any such inciting, inducing or exhorting shall be punished in the same manner as if he had committed the offense, incited, induced or exhorted.”
Clearly, the Federal and state statutes differ as to the type of conduct prohibited, as to the interests sought to be protected, and as to the proofs required to establish the prohibited offense. The Federal statutes are designed to prevent acts or attempts intended to impede the Federal judicial system; they are designed to protect a limited group of people, participants in the judicial system such as jurors, witnesses and court officers. The state statute, on the other hand, is designed to prevent individuals from inducing, inciting or ex horting another to commit certain crimes; the statute is intended to protect all citizens, not just those affiliated with the judicial system. Furthermore, as to elements of proof necessary to establish the offense, the Federal statute requires establishing a relationship between the actions of the defendant and a judicial proceeding. The state statute requires only a showing that a defendant sought to induce, incite or exhort to commission of one of the specified offenses.
Accordingly, we conclude that the interests sought to be protected by the Federal obstruction of justice statutes are so substantially different from those sought to be protected by the state solicitation statute as to permit the pending state prosecution.
II
The present case does not properly raise the issue of whether the Legislature intended the crime of inducing another to commit murder be punishable by mandatory life imprisonment and, if so, whether such punishment is constitutional.
In the context of this case, the punishment provision of the statute could only operate to impose a mandatory life sentence if the defendant was convicted of inciting, inducing, or exhorting another to commit statutory first-degree murder. MCL 750.316; MSA 28.548.
This case has reached this Court on the defendant’s pretrial, interlocutory appeal from the trial judge’s denial of defendant’s motion to dismiss. The defendant has not yet been tried, much less convicted and sentenced, on the charge which could ultimately result in the imposition of a mandatory life sentence. Accordingly, the second issue framed in our order granting leave is abstract and hypothetical, and cannot properly be decided by this Court on the present record.
Because the punishment issue is not properly presented by the record now before us, leave was improvidently granted. GCR 1963, 865.1(7).
The order of the Oakland Circuit Court denying defendant’s motion to dismiss is affirmed, and the case is remanded to that court for further proceedings.
Coleman, C.J., and Kavanagh, Williams, Levin, Fitzgerald, and Ryan, JJ., concurred with Blair Moody, Jr., J. | [
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Bushnell, J.
Petitioner Carl Richard Earle seeks a writ of habeas corpus for the purpose of determining the legality of’ his detention while awaiting a new trial on the charge of murder.
During the May, 1945, term of the circuit court for the county of Saginaw, an information was filed against Louis Earle charging him with the murder of Margaret Estella Wittebols. At the September term of court in the same year a separate information was filed charging petitioner Carl Eichard Earle with the murder of the same person. In November the people filed a motion seeking an order requiring Louis Earle and Carl Earle to be tried jointly. This was opposed by Louis and the court directed that they be tried separately.
The trial of Louis was begun on December 6,1945. On January 24, 1946, when the jury was unable to agree upon, a verdict, it was discharged and Louis still awaits another trial. During his first trial, when Louis testified in his own behalf, he implicated his uncle Carl Earle.
The trial of petitioner Carl Earle was begun on March 26th, but a jury was not secured until April 9th. On April 16th, Louis Earle was called as a witness for the people and, after‘stating his name and residence, he refused, to answer any further questions, generally responding with the statement, “I do not care to talk in this case.” Louis was interrogated as to this refusal in open court before the jury in Carl’s case. Counsel for defense suggested that this discussion should be in the absence of the jury, but the trial judge proceeded to inquire why Louis refused to answer questions. After considerable colloquy the jury was excused but not until after the court had made the following statement in its presence:
“Well, I will tell you what we will do, you may go back to the place you come in from this morning and you can stay there until you make up your mind to talk. This court wants the record to show that the witness in this case is also accused of the same offense as the defendant in the case is accused of; that he was tried in a previous term of court and that in that trial he was called as a witness in his own behalf and testified in his own behalf and that he has been properly brought into court this morn ing and has been asked a proper question; he has refused to answer that question of the prosecuting attorney, or made by the prosecuting attorney, and that in response to an order by the court he has refused to give any testimony, and with that, why I think we will excuse the witness from the witness stand, but you will remain in court. ’ ’
Petitioner’s counsel objected to any adjournment and urged that Carl Earle was entitled to a speedy disposition of the cause without undue delay. Further discussion ensued with respect to the testimony which Louis gave at his own trial, hie was thereafter recalled to the stand, questioned further, and then informed that he was guilty of contempt of court in refusing to testify. Louis was remanded to the custody of the sheriff to give him an opportunity to confer -tfith his own attorney, and the Carl Richard Earle case was adjourned until April 30th. In response to counsel’s charge that the matter had already beén adjourned long’er than was necessary the court said:-
“We are now in the eighth day of this trial, that the trial for the rest of the week will go for the 16th, 17th and 18th of the month of April, and possibly the morning of the 19th, which is the morning of Good Friday, that if it was not concluded at that time it would have to be adjourned during the week of April 21st because of the fact that the judge of the court is required to hear matters in another circuit of this State, namely, the circuit of Wayne county, and that this appointment to Wayne county has to do with the hearing of criminal cases there — • motions and criminal cases there for which the defendants therein have been waiting disposition since the second week of January of this year; that when this case was commenced on the 26th day of March it was deemed in the opinion of this court and the presiding judge of the court would be ample time to dispose of the ease, however, we did not look for the interruption which has occurred this morning. I think the witness is entitled to time in which to confer with counsel. It is the understanding of the court that his attorney is now in the hospital, and by his attorney I refer to Mr. Robert J. Curry of this bar. While he might be able to confer with his attorney sometime before this week is over, we cannot continue the trial of this case during the week of April 21st because of the assignment of the judge for Wayne county, and the only thing we could do this morning is to set the continuance of this trial until Tuesday, April 30, 1946.”
On April 30th the case was adjourned to May 14th by consent because of the illness of the defendant’s counsel. On May 14th the cause was again continued for the same reason until June 11th. On June 11th the cause was again continued on defendant’s motion until June 25th.
On June 25th the court made the following stater ment on the record :
“Let the record show that number 9 in the jury box Ilia Bartlett is absent and her absence is due to the fact that since we were here before, one of the members of her family has been taken ill and it was necessary for her to take him to some specialist in another city here in the United States or Canada and she had to accompany him for that reason when she notified Judge Holland, the presiding judge, and we conferred, under the circumstances she was excused from the jury.
“Now then, in view of the fact that we have already spent 7% days in the hearing of this trial and 'because of certain events which have transpired at the hearing when we were here last together and because this matter has been adjourned through no fault of anyone’s excepting that the attorney for the defendant was very seriously ill, it seems to the court that we have, and in view of the fact this juror was excused under those circumstances, it seems to the court there is no further use in proceeding in this trial and consequently, on its own motion of the court feels that there has been a mistrial iñ this case and even though we would proceed to take further testimony in the case that it would be a waste of time because of the error that has already crept into the case and consequently, without doing anything further in the case this morning and in view of all of the circumstances which I have outlined to you here on this record and for the information of the jury, the people and the defendant, for the protection of his rights, and also to eliminate a lot of further expense which will have to be gone all over again, in the opinion of tbe court, we are taking this Step this morning. ’ ’
In response to this statement defendant’s counsel objected to a mistrial. After testimony was taken regarding the several adjournments and an- argument on the legal questions thus raised, the trial judge adhered to his original view and excused the jury from any further consideration of the case.
The record contains an additional statement by the trial judge, from which we quote the following:
“When the record of what transpired in this trial before the jury on April 16, 1946, is considered, together with the long interruption thereafter, there is no doubt but that defendant would have just cause to complain in the event the jury’s verdict found him guilty. While the matter of expense to the county should be borne in mind, the more serious consideration must be given to defendant’s right to a proper trial on the serious charge here made against him. So far as this court is concerned, he is entitled to a proper trial, and when everything which transpired in the instant trial is taken into consideration, there is no doubt but defendant would have plenty of reason to complain in the event of a jury’s verdict of guilty. This court felt compelled to order a mistrial under all of the circumstances.”
The questions presented by petitioner may be summed up as follows: Does the action taken by the trial judge in this cause constitute a bar to further prosecution and entitle the petitioner to an immediate release from custody?
The general rule is stated in People v. Raider, 256 Mich. 131, 134:
“Continuance was within the.sound discretion of the court. The burden is on the party claiming abuse of discretion to show it. Prejudice to defend_ant must be apparent or proved to have been at, least probable. ’ ’
See, also, the following authorities regarding the discretionary right of a trial judge to grant or refuse adjournments: Gold v. Detroit United Railway, 169 Mich. 178; People v. Fenner, 217 Mich. 239; People v. Fitzgerald, 226 Mich. 402; People v. Kotek, 306 Mich. 408; People v. Schneider, 309 Mich. 158.
Counsel for petitioner relies on People v. Jones, 48 Mich. 554; People v. Harding, 53 Mich. 481; People v. Gardner, 62 Mich. 307; People v. Taylor, 117 Mich. 583; In re Ascher, 130 Mich. 540 (57 L. R. A. 806); People v. Parker, 145 Mich. 488; and People v. Schepps, 231 Mich. 260. An examination of these authorities will disclose that the general rule was applied in each instance. This rule is stated as follows in People v. Brosky, 222 Mich. 651:
“ ‘American authorities generally announce the rule that the power to discharge the jury is within the sound discretion of the trial judge, and that his exercise of such discretion will not be reviewed by the appellate courts unless its clear abuse appears. The power ought, of course, to be used with the greatest caution, under urgent circumstances, and for very plain and obvious causes.’ ” 16 R. C. L. p. 321.
The court also observed that circumstances are so varied that it is difficult to lay down any definite rule to be followed, and said:
“While much is necessarily left in such cases to the discretion of the court, we think something should appear upon the record to make it probable that a fair trial cannot be had.”
It does not affirmatively appear from the record in the instant case that the trial judge abused his discretion. See People v. Bigge, 297 Mich. 58, 64. We adhere to the rule quoted in Re Ascher, supra, 549, from United States v. Perez, 9 Wheat. (22 U. S.) 579 (6 L. Ed. 165).
“ ‘We think, that in all cases of this nature, the law has invested courts of justice with the authority to discharge a jury from giving any verdict, whenever, in their opinion, taking all the circumstances into consideration, there is a manifest necessity for the act, or the ends of public justice would otherwise be defeated. .They are to exercise a sound discretion on the subject, and it is impossible to define all the circumstances which would render it proper to interfere.’ ”
The facts in the instant case fall within this rule and there is no showing that the trial judge abused his discretion.
The application for the discharge of the petitioner is denied.
Btttzed, C. J., and Carr, Sharpe, Boyles, Reid, and North, JJ., concurred. Dbthmers, J., did not sit. | [
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Blair Moody, Jr., J.
We granted leave to appeal to consider whether an insurer is liable for prejudgment interest pursuant to the prejudgment interest statute, MCL 600.6013; MSA 27A.6013, on that portion of a judgment representing the policy limits of the insurer. In so doing, we are asked to consider whether an insurer can be obligated by statute to pay as interest sums of money over and above the contractual limitations of an insurance policy. Based upon the intent of the Legislature, interpretation of the insurance policy, the common law, and considerations of public policy, we determine that the prejudgment interest statute is applicable to insurance contracts and, therefore, an insurer may be obligated to pay interest in excess of the contractual limitations of an insurance policy.
Accordingly, we affirm the Court of Appeals.
Facts
On March 30, 1973, plaintiffs were involved in an automobile accident with defendant Thomas Bedford, Jr. Plaintiffs’ vehicle, which was driven by plaintiff Edna Denham, was struck by the vehicle driven by defendant, when defendant veered across the centerline of a street. Immediately prior to the accident, defendant Bedford had been drinking in a bar known as "Bimbo’s on the Hill”, which was operated by R.C.S., Inc.
On April 17, 1974, plaintiffs initiated a negligence action against Bedford and a dramshop complaint against the bar.
A jury trial was commenced on July 19, 1976. On July 30, 1976, the jury returned a verdict of no cause of action against defendant bar. A verdict, however, was entered for plaintiffs against defendant Bedford for $108,025, plus $15,403.18 in prejudgment interest.
Defendant Bedford’s automobile was covered by an insurance policy issued by a subsidiary of the Transamerica Insurance Group. The policy provided $40,000 maximum coverage for multiple claims arising out of one accident.
On September 9, 1976, judgment was entered on the verdict; and, subsequently, Transamerica paid plaintiffs $40,000. Transamerica then filed a motion in the trial court for determination of its responsibility for any prejudgment interest on the $40,000, the policy limits, paid to plaintiffs. Transamerica disclaimed any liability for the $5,695.47 prejudgment interest on the $40,000 portion of the judgment, arguing that any payment of prejudgment interest would exceed its contractual obligation under the policy.
The trial court ruled that Transamerica was not liable for prejudgment interest over and above its policy limits. On appeal, the Court of Appeals reversed. 82 Mich App 107; 266 NW2d 682 (1978).
Discussion
In this factual setting, the issue crystallizes: whether an insurer can be held liable for prejudgment interest in excess of the contractual limitations in its insurance policy.
I
As a prelude to our discussion, it becomes necessary to set forth the specific contractual provisions of the insurance policy and the statutory language which are at the root of the controversy in this case. The pertinent contractual provisions of the insurance policy issued by Transamerica to Thomas Bedford, Jr., read as follows:
"II. Defense, Settlement, Supplementary Payments
"1. As respects such insurance as is afforded by the other terms of this policy under Coverages A and B, the company shall:
"A. Defend in his name and behalf any suit against the insured arising from any alleged claim for bodily injury or property damage, whether such suit is groundless, false, fraudulent, or otherwise, but the company shall have the right to conduct investigations as to any such claim, negotiate for adjustment or settlement thereof, and to enter upon and conduct the defense of the insured against the same as it may deem expedient without waiving any of the provisions of this policy or subjecting the company to any liability beyond the limits provided in this policy, and
"B. (a) Pay all costs lawfully taxed against the insured in any such suit and all expenses pertaining thereto incurred by the company; and
"(b) Pay all interest which shall accrue after the entry of judgment and until the company has paid, tendered, or deposited in court such portion of any judgment not exceeding the limit of the liability of the company.” (Emphasis added.)
In contrast to the insurance policy provisions is the prejudgment interest statute, which provides:
"Sec. 6013. Interest shall be allowed on any money judgment recovered in a civil action, such interest to be calculated from the date of ñling the complaint at the rate of 6% per year unless the judgment is rendered on a written instrument having a higher rate of interest in which case interest shall be computed at the. rate specified in the instrument if such rate was legal at the time the instrument was executed. In no case shall the rate exceed 7% per year after the date judgment is entered. In the discretion of the judge, if a bona fide written offer of settlement in a civil action based on tort is made by the party against whom the judgment is subsequently rendered and the offer of settlement is substantially identical or substantially more favorable to the prevailing party than the judgment, then no interest shall be allowed beyond the date the written offer of settlement is made.” (Emphasis added.) MCL 600.6013; MSA 27A.6013.
II
Defendant Transamerica argues that its liability under the insurance policy for the payment of interest is clearly delineated, i.e., the insurer will "pay all interest which shall accrue after the entry of judgment”. Since Transamerica tendered the entire policy limits immediately after the entry of judgment, it has no liability for interest. Transamerica asserts that the prejudgment interest statute is inapplicable to insurance policies because the statute is a part of the Revised Judicature Act of 1961, MCL 600.101 et seq.; MSA 27A.101 et seq. According to this argument, the Legislature did not intend that the prejudgment interest statute would apply to insurance companies; because if it had, it would have included the statute within either the Insurance Code of 1956, MCL 500.100 et seq.; MSA 24.1100 et seq., or the financial responsibility act, MCL 257.501 et seq.; MSA 9.2201 et seq., which acts govern the activities of insurance companies and dictate what provisions should be placed in insurance policies.
We find defendant’s arguments unpersuasive. While both the Insurance Code and the financial responsibility act do purport to govern the practices of insurance companies, there is no indication that the Legislature intended that the provisions of these acts be all-inclusive. We note that § 120 of the Insurance Code reads as follows:
"No person shall transact an insurance or surety business in Michigan, or relative to a subject resident, located, or to be performed in Michigan, without complying with the applicable provisions of this code.” MCL 500.120; MSA 24.1120.
Although technical compliance with the code is required, it would take an enormous leap of faith to conclude from this language that the code was intended to be exhaustive and, therefore, insurance companies are not subject to other statutory enactments.
In addition, there is another consideration which militates against defendant’s construction of the prejudgment interest statute. To follow the insurer’s logic in this case would have the practical effect of making the prejudgment interest statute a nullity. We do not think that the Legislature acts in a vacuum. The Legislature was obviously aware in enacting the statute that the vast majority of tort judgments are paid by insurance companies. Clearly, then, the Legislature must have intended that the statute have some meaning and, therefore, apply to insurance companies. It would be fundamentally unreasonable to conclude that the Legislature intended that the statute apply to individual and corporate defendants, or the self-insured or the State of Michigan but not to insurance companies.
Transamerica next argues that if the prejudgment interest statute were construed as applying to insurance policies, such construction would be constitutionally defective in violation of Const 1963, art 1, § 10. Under this assertion, an expansive interpretation of the interest statute would require amendment of the insurance contract with a resultant increase in the coverage or risk over and above that to which the insurer had agreed by contract. Such a liberal construction of a statute is justified only when a statute is remedial in nature. We find this argument equally without merit.
To begin with, it is clear that the prejudgment interest statute is a remedial statute entitled to liberal interpretation. As has been noted, the prejudgment interest statute is part of the RJA. Section 102 of the RJA specifically enunciates the construction which should be applied to provisions of that act:
"This act is remedial in character, and shall be liberally construed to effectuate the intents and purposes thereof.” MCL 600.102; MSA 27A.102._
Thus, there can be no question of the remedial nature of the interest statute.
Further, we are satisfied with the interpretation and rejection of defendant’s constitutional contentions by the Court of Appeals in a similar case, Cosby v Pool, 36 Mich App 571; 194 NW2d 142 (1971), lv den 386 Mich 782, 783 (1972). In Cosby, defendant, unlike defendant here, acknowledged that the interest statute was generally applicable to its insurance policies. However, because the insurance policy in question had been issued prior to amendment of the interest statute in 1965, the statute had no force and any retrospective application of the statute would be constitutionally infirm as an infringement on the right of freedom of contract.
In dismissing defendant insurer’s constitutional objections, the Cosby Court noted that the amendment of the prejudgment interest statute related to remedies or modes of procedures. Ballog v Knight Newspapers, Inc, 381 Mich 527; 164 NW2d 19 (1969). Citing precedent of this Court, the Court in Cosby determined that:
"A statute which changes the substance of contracts cannot be made retroactive, but if the statute changes only a remedy, it can be made retroactive.” Cosby, supra, 576.
The Legislature, therefore, may modify the remedy for enforcement of a contract without impairing its obligation. The Cosby Court concluded and held as follows:
"This Court thus finds no merit in the defendant insurance company’s constitutional contention. The amendment to the statute in contention was remedial or procedural. It in no way affects the substantive interests of the two parties. Therefore, the amendment has the effect of becoming a party of the contract and replaces the clause as written.” (Emphasis added.) Cosby, supra, 578.
While the main thrust of the Cosby holding pertains to the retroactive application of the prejudgment interest statute, its rationale is equally pertinent here. Since the interest statute merely modifies a remedy and not a substantive contractual right, there can be no constitutional objection to its application to insurance policies. Thus, the statutory remedy becomes a part of the insurance contract, replacing any contractual provisions that are contrary.
As is readily evident, defendant insurer continually relies on the language of its insurance policy as sacrosanct and in complete opposition to the interest statute. However, there is language in the insurance policy itself which may resolve the seeming conflict and incorporate by direct reference the interest statute into the insurance policy.
In boilerplate language near the end of the insurance contract, the following provision is found:
"Any provision of this policy which is in conflict with the statutes of the state wherein it is issued is hereby amended to conform to such statutes.”
Since there is an obvious conflict between the provisions of this policy which provide for post-judgment interest only and the prejudgment ■ interest statute which provides for interest from the date of filing the complaint, it may be considered that this boilerplate language amends the insurance policy to conform with the mandate of the prejudgment interest statute. This notion gains particular force when viewed in light of the hackneyed but oft-quoted judicial maxim that the language of an insurance policy should be strictly construed against the writer and the policy should be interpreted in favor of the insured. Hilburn v Citizens’ Mutual Automobile Ins Co, 339 Mich 494; 64 NW2d 702 (1954); Pastucha v Roth, 290 Mich 1; 287 NW 355 (1939). The Wisconsin Supreme Court has stated the proposition well:
"[The insurance company] was the drafter of this contract of insurance, the choice of language belonged to it. If an insurance company in drafting its policy fails to write a provision as to indicate with reasonable certainty what it means by the provision, it has no just cause to complain when that provision is given a reasonable construction contrary to its contentions.” (Footnote omitted.) McPhee v American Motorists Ins Co, 57 Wis 2d 669, 682; 205 NW2d 152 (1973).
Ill
Defendant Transamerica’s concern seems to boil down to the following: An insurer limits its risks when it sets a certain policy limit. Any chargeable interest which causes the insurer to pay a sum in excess of this limitation is an intrusion upon the insurer’s right and ability to contract. However, this notion runs contrary to the very concept and purpose of charging interest. Interest has been defined as follows:
"Interest and court costs are added to a judgment to recompense the prevailing party for the delay in payment of the money damages determined and to put back in his pocket some of the expense he incurs in instituting and prosecuting an action.” Waldrop v Rodery, 34 Mich App 1, 4; 190 NW2d 691 (1971).
Furthermore, the notion clearly runs contrary to the Legislature’s intent in enacting the prejudgment interest statute and is without foundation at common law.
The common-law rule regarding the payment of interest in excess of the policy limits in an automobile insurance policy has been enunciated as follows:
"[I]t has been established law for a long period of time that the insurer may be obligated to pay costs or interest on judgment recovered against the insured although these items may bring the total payment beyond the limits set in the policy.” Powell v TA & C Taxi Co, 104 NH 428, 430; 188 A2d 654 (1963).
So deeply rooted is this principle at common law that almost every jurisdiction that has considered the question has followed the rule.
The only issue, tangentially related to the present one, which remains unresolved at common law is not whether an insurer is liable for interest on the policy limits but whether the insurer is liable for interest on the whole judgment. The courts have split on this issue although the majority and modern trend is in favor of holding the insurer liable for interest on the whole judgment. We note, however, that even those jurisdictions which do not follow that majority rule still require the insurer to pay interest on the policy limits, even if the total payment exceeds those limits. Standard Accident Ins Co of Detroit, Mich v Winget, 197 F2d 97 (CA 9, 1952); Crook v State Farm Mutual Automobile Ins Co, 235 SC 452; 112 SE2d 241 (1960).
Although, strangely, the Michigan courts have been almost entirely silent on whether interest can be charged in excess of the policy limits of an insurance policy, there is some authority to support the proposition. In the context of a suit involving a life insurance policy, this Court opined and held as follows:
"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 Helli, 232 Mich 446 [205 NW 169 (1925)], 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.” Hollingsworth v Liberty Life Ins Co of Illinois, 241 Mich 675, 679; 217 NW 908 (1928).
Lastly, although most of the judicial decisions treated in this section of our opinion involved so-called postjudgment interest, we see no reason why the same principle should not apply to prejudgment interest. The Michigan Legislature has dictated that interest should accrue from the date of filing the complaint. If the legislative purpose was to compensate the prevailing party for the delay in payment of money damages and to cover the costs of litigation, then this legislative purpose can only be effectuated by the allowance of pre judgment interest, even if this interest exceeds the policy limits of an insurance contract.
IV
The result we reach today is fully supported by considerations of public policy. If we were to rule in favor of the insurer, the following would take place: the insured, not the insurer, would be responsible for the payment of the prejudgment interest in excess of the policy limits and, presumptively, interest on the entire judgment as well. Such a result would appear unconscionable.
We note that by the very terms of the insurance policy the insurer retained control over any investigation process, settlement or litigation. The insured had no control over the process and if the insured chose to act or attempted to settle of his own volition, he would run the risk of forfeiture of any rights under the policy. Many courts, in similar situations, have held that the insurer should be liable for interest on the policy limits or judgment because of this very element of control which the insurer wields over the settlement and litigation process. United Services Automobile Ass’n v Russom, 241 F2d 296 (CA 5, 1957); Powell, supra; Crook, supra.
As the Court of Appeals below pointed out, no manifest injustice is committed by holding the insurer liable for prejudgment interest. The insurer had complete control over the $40,000 policy limits from April 17, 1974, the date of filing the complaint, until after September 9, 1976 when it tendered the $40,000 without interest. Even assuming that the insurer were required to set the funds aside from its general investment fund because of the pending litigation, the funds did not remain idle. The funds were invested. And, again, even assuming that the funds were invested in conservative short-term enterprises, the insurer certainly would not lose anything by paying the prejudgment interest but would probably retain a profit.
Payment of prejudgment interest not only compensates the prevailing party but also liability for prejudgment interest may act as an incentive to the insurer to promptly settle a meritorious claim. Without such an incentive, the insurer may refuse to settle a meritorious claim in hopes of forcing plaintiff to settle for less than the claim’s true value. The insurer risks nothing. Even if protracted litigation results, the insurer will only be liable for its policy limits — all the while reaping a tidy sum from its investment of the policy limits.
Finally, even the insurance law commentators are highly critical of attempts by insurers to evade their responsibility for prejudgment interest. One such commentator has very forcefully noted:
"Since this part of the insured’s liability is controlled by the time required for litigation, a matter largely under the control of the insurer, which by contract insisted upon this control, the courts as a matter of public policy should strike down any provision barring the insurer from being liable for prejudgment interest. Any other result allows the insurer to engage, with impunity, in delaying tactics at the expense of its insured.” 8 Appleman, Insurance Law and Practice (1979 Supp), § 4899, p 128.
Not only do we think that this comment is generally appropriate as to insurance policies but it even has more validity when a state statute, such as the prejudgment interest statute, mandates the payment of prejudgment interest.
Conclusion
Based upon the intent of the Legislature in enacting the prejudgment interest statute, interpretation of the insurance policy, and common-law and public policy considerations, we hold that an insurer is liable for prejudgment interest on that portion of a judgment representing the policy liability of the insurer.
Affirmed. Costs to appellee.
Coleman, C.J., and Williams and Levin, JJ., concurred with Blair Moody, Jr., J.
There is some factual dispute as to whether Transamerica offered the entire $40,000 policy limit to plaintiffs prior to trial. Even if such an offer were made, plaintiffs may have felt compelled to reject the offer because of the "name and retain” requirement of the dramshop act. The pertinent portion of the dramshop act reads as follows:
"No action against a retailer or wholesaler or anyone covered by this act or his surety, shall be commenced unless the minor or the alleged intoxicated person is a named defendant in the action and is retained in the action until the litigation is concluded by trial or settlement.” MCL 436.22; MSA 18.993.
We note that the Court of Appeals has construed the dramshop act so as not to prevent settlements with the individual defendant. According to that Court, the dramshop act merely meant that the individual defendant must be named and retained in the lawsuit. Buxton v Alexander, 69 Mich App 507; 245 NW2d 111 (1976), Iv den 399 Mich 827 (1977).
Transamerica Insurance Group was not originally a party in the suit brought by plaintiffs. Transamerica was added as a party defendant by stipulation of the parties for the purpose of determining if it owed prejudgment interest.
The prejudgment interest statute has been construed to apply to the Michigan uninsured motorist fund. Douglas v Secretary of State, 32 Mich App 533; 189 NW2d 114 (1971). In Douglas, the Secretary of State argued, much as defendant insurer does here, that there was no statutory authority for awarding interest where the statutory limits of $10,000 under the Motor Vehicle Accident Claims Fund were paid. The Douglas Court rejected this argument, stating:
"It is the holding of this Court that prejudgment and postjudgment interest is recoverable from the Motor Vehicle Accident Claims Fund when the fund intervenes on behalf of an uninsured motorist, but is limited to payment of interest on that portion of a judgment which does not exceed the fund’s statutory obligation.” Douglas, supra, 538.
Const 1963, art 1, § 10 provides: "No bill of attainder, ex post facto law or law impairing the obligation of contract shall be enacted.”
The 1965 amendment to the interest statute changed the date upon which interest would begin to accrue from the date of judgment to the date of filing the complaint. 1965 PA 240.
See Hansen-Snyder Co v General Motors Corp, 371 Mich 480; 124 NW2d 286 (1963); Guardian Depositors Corp v Brown, 290 Mich 433; 287 NW 798 (1939).
We note that our interpretation of this boilerplate language in the insurance policy differs from that of the Sixth Circuit Court of Appeals in Westchester Fire Ins Co v Ring Brothers Heating Co, 491 F2d 711 (CA 6, 1974).
In Westchester, plaintiffs obtained a money judgment in a negligence action. According to the provisions of its insurance policy, defendant’s insurer tendered the policy limits plus all postjudgment interest. Plaintiffs argued that they were entitled to interest from the date of filing the complaint. Plaintiffs’ argument was based upon boilerplate language in the insurance policy, similar to the language in this case, which amended non-conforming policy provisions to the statutes of the state. Thus, the policy would be amended to provide for statutorily mandated prejudgment interest.
The Westchester court rejected plaintiffs’ argument. Although reaching a contrary result, the Westchester court relied on Cosby, supra. The Westchester panel viewed the holding in Cosby as turning on contract interpretation. Since the insurance contract in Cosby called for the payment of interest "accruing on verdict or after judgment”, it was sufficiently different from the Westchester contract which limited interest to that "which accrues after entry of judgment”. The court found the following language in Cosby controlling, for purposes of its holding:
"An insurer can limit the risk it assumes. It follows that the insurer should be liable only for the interest that accrues on the amount of risk it has assumed. Otherwise, it would be paying interest on a risk it did not assume and for which it did not charge premiums.” (Citations omitted.) Cosby, supra, 578-579.
With all due respect to the Westchester court, we view its interpretation as a misreading of Cosby. Cosby was not so much concerned with contract interpretation as it was in indicating that whatever contractual language existed would be amended to conform with the interest statute. This is clear from Judge Fitzgerald’s holding:
"Therefore, the amendment has the effect of becoming a part of the contract and replaces the clause as written.” (Emphasis added.) Cosby, supra, 578.
In addition, the Westchester court’s reliance upon the "limitation of risk” language of Cosby is equally misplaced. The Cosby Court found insurer liable for prejudgment interest on its policy limits. The Court refused, based upon the limitation of risk language, to go one step further and find insurer liable for prejudgment interest on the entire judgment, $200,000, when it had limited its liability by contract to $100,000.
For an exhaustive list of the state and Federal decisions regarding the common-law rule see 8 Appleman, Insurance Law and Practice, § 4899, pp 361-363. Only two states seem to have reached a contrary result. See National & Providence Worsted Mills v Frankfort Marine Accident & Plate Glass Ins Co, 28 RI 126; 66 A 58 (1907); Munro v Maryland Casualty Co, 48 NY Misc. 183; 96 NYS 705 (1905). We note that neither the Rhode Island nor the New York decision involved an automobile insurance policy. Furthermore, there is some question regarding the continuing viability of the Munro decision. In Cleghorn v Ocean Accident & Guarantee Corp, Ltd, of London, 216 AD 342; 215 NYS 127 (1926), mod on other grounds 244 NY 166; 155 NE 87 (1926), a New York court allowed interest in excess of the policy limits of an automobile insurance policy.
For a thorough discussion of this issue, see 76 ALR2d 983. Although there is some Michigan authority to the contrary, see, e.g., Cates v Moyses, 57 Mich App 405; 226 NW2d 106 (1975), mod 394 Mich 762; 228 NW2d 380 (1975); Cosby, supra, this Court has never fully addressed the issue whether an insurer should be held liable for interest on the entire judgment.
We note that several jurisdictions have refused to allow prejudgment interest in excess of the policy limits in situations similar to the one in this case. See, e.g., Factory Mutual Liability Ins Co of America v Cooper, 106 RI 632; 262 A2d 370 (1970); Laplant v Aetna Casualty & Surety Co, 107 NH 183; 219 A2d 283 (1966). The decisions of these courts, however, ignore the long common-law tradition of allowing interest in excess of the policy limits and are at odds with the very purpose of allowing interest, i.e., as a compensation to the prevailing party for the delay in payment. Further, if we were to follow the rationale of these decisions, we would subvert the unequivocal intent of the Legislature in enacting the prejudgment interest statute, to allow interest from the date of filing the complaint. | [
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Griffin, J.
In this malpractice action it is alleged that an examination of plaintiff’s eyes revealed glaucoma symptoms, but the examining optometrist failed to refer plaintiff to an ophthalmologist. When plaintiff returned for his next routine checkup more than two years later, he was referred to a specialist and learned that he had severe glaucoma which should have been treated much earlier.
We must decide whether plaintiff’s malpractice action is barred by the two-year statute of limitations, a question which turns on when his claim accrued. The statute then in effect provided that such a claim accrues when the licensed professional "discontinues treating or otherwise serving the plaintiff ... as to matters out of which the claim for malpractice arose . . . ,”
The Court of Appeals concluded that the claim is barred by the statute of limitations. We reverse.
i
During the period relevant to this lawsuit, plaintiff David Morgan was an employee of D. W. Zimmerman Company, and a member of UAW Local 417. In 1975, the company and the union entered into a contract with defendant Cooperative Optical Services, Inc. (cos), under which each covered employee became entitled to an eye examination every two years. Plaintiff received eye examinations by cos staff optometrists in 1976, 1978, and on March 7, 1981, and August 18, 1983.
The 1981 eye examination, performed by Dr. Marcus Taylor, included a test for glaucoma which revealed intraocular pressure beyond the normal range. Dr. Taylor concedes that it was his practice in such cases to refer the patient to an ophthalmologist or to have the patient return for another glaucoma test; however, plaintiff asserts that he was not referred to a specialist, nor was he advised to return earlier than his next regular checkup.
On August 18, 1983, plaintiff returned to cos for his next routine eye examination. "[B]y this time,” according to his deposition testimony:
I was in school having trouble getting my right eye to focus like to read and they would water and I was having trouble with night driving and I thought maybe I needed my lenses changed._
Plaintiff testified that this was the first time he noticed any problem with his eyes, and that he had received no eye care of any kind between March 7,1981, and August 18, 1983.
The August 1983 examination at cos, which was performed by a different staff optometrist, also revealed intraocular pressure beyond the normal range, and plaintiff was then referred to an ophthalmologist who determined that plaintiff had glaucoma. Thereafter, plaintiff was referred to Dr. Marshall Cyrlin, a glaucoma specialist. According to plaintiff, he learned from Dr. Cyrlin in December 1983 that he had sustained irreversible nerve damage, that he might ultimately lose sight in both eyes, and that he should have been referred to an ophthalmologist much earlier than August 1983.
Plaintiff and his wife, Paulette Morgan, filed two lawsuits, one against cos on January 30, 1985, and the other against Dr. Taylor on August 14, 1985. Each complaint alleged malpractice in connection with the March 7, 1981, examination for failure, inter alia, to diagnose glaucoma and to take appropriate steps to refer plaintiff for treatment. The trial court consolidated the two actions._
Dr. Taylor was dismissed as a party; however, a motion by defendant cos for summary disposition upon the basis of the statute of limitations was denied. Finding that the August 1983 examination amounted to a continuation of treatment or services within the meaning of MCL 600.5838(1); MSA 27A.5838(1), the trial court concluded that the suit against defendant cos was not barred by the statute of limitations because it had been filed within two years of the date when the action accrued.
The Court of Appeals reversed, and we granted leave to appeal. 432 Mich 893 (1989).
ii
The applicable statutes required that a medical malpractice action be brought within two years of the date when the claim accrues, or within six months of the time the plaintiff discovered or should have discovered the existence of the claim, whichever is later. Conceding that he had knowledge of the malpractice claim in December 1983, plaintiff does not rely on the six-month discovery provision.
Defendant argues that the two-year statute of limitation bars plaintiff’s cause of action because it accrued when he was examined on March 7, 1981, and plaintiff’s complaint was not filed until January 30, 1985. On the other hand, plaintiff contends that his action is not barred because it did not accrue, and the two-year limitation period did not begin to run, until the subsequent August 18, 1983, examination when plaintiff was referred to an ophthalmologist. At that time, the malpractice statute of limitations, as amended by 1975 PA 142, provided:
A claim based on the malpractice of a person who is, or holds himself out to be, a . . . licensed health professional,[ ] accrues at the time that person discontinues treating or otherwise serving the plaintiff in a professional or pseudoprofessional capacity as to the matters out of which the claim for malpractice arose, regardless of the time the plaintiff discovers or otherwise has knowledge of the claim.[ ] [Emphasis added.]
We must determine, then, whether plaintiff’s claim accrued in March 1981 or in August 1983. Resolution of that controversy hinges on the meaning of the words "discontinues treating or otherwise serving” as they appeared in MCL 600.5838(1); MSA 27A.5838(1). Of course, it is plaintiff’s position that his last treatment at the hands of defendant as to "matters out of which the claim for malpractice arose” occurred in August 1983. Defendant cos asserts, on the other hand, that each of plaintiff’s visits for an eye examination was an isolated visit, and that the last treatment by defendant with respect to matters arising out of the March 1981 examination occurred on the date of that visit. Defendant relies on a line of Court of Appeals decisions holding that a subsequent visit to a health professional, unrelated to the original treatment of an illness or injury, does not toll the statute of limitations.
Because the statutory language at the heart of this controversy represents a codification of the judge-made "last treatment rule,” we believe a brief review relating to the development of that rule, and the rationale behind it, will prove helpful.
A
In Michigan, the last treatment rule originated in De Haan v Winter, 258 Mich 293, 296-297; 241 NW 923 (1932), when the limitation statute contained no provision fixing the accrual point of a malpractice action. The plaintiff in De Haan was treated for a fractured leg by a physician who aligned the bones and encased the leg in a plaster cast. Until then, the treatment was considered proper, but it was alleged that malpractice followed in not taking x-ray pictures and in failing to provide certain other treatment during the curative process. In determining the date when a malpractice action accrued, this Court stated:
Until treatment of the fracture ceased the relation of patient and physician continued, and the statute of limitations did not run. While decisions are not in accord upon this question, we are satisfied that in such an action as this the statute of limitations does not commence to run while treatment of the fracture continues. Failure to give needed continued care and treatment, under opportunity and obligation to do so, would constitute malpractice. During the course of treatment plaintiff was not put to inquiry relative to the treatment accorded him. [Citation omitted.]
The rationale for the last treatment rule has been explained on grounds that the patient, while the treatment continues, "relies completely on his physician and is under no duty to inquire into the effectiveness of the latter’s measures.” Lillich, The malpractice statute of limitations in New York and other jurisdictions, 47 Cornell LQ 339, 361 (1962) (citing De Haan v Winter).
As the Court of Appeals stated in Heisler v Rogers, 113 Mich App 630, 633; 318 NW2d 503 (1982):
The essence of the last treatment rule is that the cessation of the ongoing patient-physician relationship marks the point where the statute of limitations begins to run.
In Heisler, the defendant physician performed a laminectomy on a patient in September 1972 and left a piece of broken needle in his back. For six years the defendant and patient had no contact, but during that period the patient, on his own initiative, consulted two neurosurgeons and sought treatment for his back from specialists at the Mayo Clinic. Thereafter, in 1978, the patient returned to the defendant for treatment, and then filed suit against him in 1979. Pointing to the plaintiff’s interim reliance on other physicians over a six-year period, the Court concluded that the limitation period had expired, and explained:
[T]he ongoing doctor-patient relationship and its accompanying air of trustfulness in one’s own doctor ended in September of 1972. It is that date which should be used in calculating the statute of limitations .... To allow a single visit after six years to extend or revive the statute of limitations would invite abuse and stale claims. [Id. at 634. Emphasis added.]
B
Since De Haan, this Court has not explored the contours of the last treatment rule. Nor has the Court of Appeals examined the rule in the context of routine visits to a clinic or health professional at intervals determined by the health professional for examination and other services aimed at detecting and preventing illness. Generally speaking, the decisions of the Court of Appeals have applied the rule in the context of a subsequent visit where the patient originally sought treatment for a particular illness or injury. In those cases, it has been held that the limitation period begins to run when there is an "occurrence” between visits which indicates that the original doctor-patient relationship and its "accompanying air of trustfulness” have been terminated.
In Bosel v Babcock, 153 Mich App 592; 396 NW2d 448 (1986), for example, the defendant physician performed surgery twice on the plaintiff’s fractured leg, inserting a nail each time to facilitate healing. When the plaintiff fractured his leg again, the physician advised that he could attempt treatment with a third nail or the plaintiff could be transferred to another hospital for treatment by a different physician. The plaintiff opted for the transfer. More than two years later, the plaintiff filed suit, and argued that the statute of limitations had been tolled by a visit he had made within that period to the defendant’s office to return certain equipment related to the defendant’s earlier treatments. The Court concluded:
Due to the occurrence of the transfer of plaintiff to a different hospital for treatment by a different doctor . . . defendant discontinued treating or serving plaintiff on February 26, 1982. At that point, the parties’ on-going patient-physician relationship ceased, and the limitations period began to run. [Id. at 596. Citation omitted.][ ]
In the present case, there was no "occurrence” between the examination of plaintiff’s eyes in March 1981 and the examination in August 1983 which indicated a termination of the relationship between plaintiff and defendant. Plaintiff received no eye care during the interim, and no event occurred between the two visits which demonstrated any abandonment by plaintiff of his trust in the defendant and its staff.
in
Since the earlier decisions focused on visits for treatment of a particular injury or illness, rather than routine visits for preventative care, the Court of Appeals panel appropriately viewed this as a case of first impression. In its opinion, the panel discussed what it perceived as a dilemma in applying the statute to the routine visit case:
We are not unmindful of the fact that the air of truthfulness and trust may extend beyond the date of a routine visit. It is the doctor’s assurance that a patient is in good health that causes the patient to take no action other than scheduling the next routine visit. However, the two-year statute of limitations period does not begin to run until the air of truthfulness and trust terminates. The problem presented in the routine visit case is, assuming that the air of truthfulness and trust extends beyond a routine visit, at what point does it terminate?
To hold that the air of truthfulness and trust extends from one routine visit to the next would invite stale claims when routine visits are years apart and would effectively eliminate any statute of limitations period in routine visit cases. On the other hand, to hold that the air of truthfulness and trust terminates at the conclusion of each routine visit gives no recognition to the fact that in some cases a patient trusts his or her doctor and relies on the doctor’s advice long after leaving the doctor’s office.
However, instead of construing the language of the statute and applying it to the facts of this case, it appears that the panel proceeded to reverse the decision of the trial court on policy grounds alone, with little more in the way of explanation than its statement that "the problems presented by the routine visit case involving preventative illness treatment need to be addressed by the Legislature.”
We have no quarrel with the panel’s call to the Legislature for the revision of a statute. However, until such a change is effectively made, it is the duty of a court to interpret the statute as the court finds it:
The wisdom of the provision in question in the form in which it was enacted is a matter of legislative responsibility with which the courts may not interfere. Michigan & Vicinity Foundry Workers Union v Enterprise Foundry Co, 321 Mich 265 [32 NW2d 515 (1948)]. As tersely stated by Chief Justice Butzel in Roosevelt Oil Co v Secretary of State, 339 Mich 679, 694 [64 NW2d 582 (1954)], "It is the function of the court to fairly interpret a statute as it then exists; it is not the function of the court to legislate.” [Melia v Employment Security Comm, 346 Mich 544, 561-562; 78 NW2d 273 (1956).]
As part of its rationale, the panel observed that the "six-month discovery rule eliminates some of the harshness that may occur when the two-year limitations period runs out between routine visits.” However, that explanation appears to ignore the fact that the statute then applicable expressly provided that a malpractice claim shall not accrue until the health professional_
discontinues treating or otherwise serving the plaintiff . . . regardless of the time the plaintiff discovers or otherwise has knowledge of the claim. [MCL 600.5838; MSA 27A.5838. Emphasis added.]
In construing the controlling statutory language, we find it significant that the provision makes no exception on the basis of the type of health care provided. Thus, the provision is applicable without regard to whether the treatment or service relates to a particular illness or to preventative care, such as eye examinations.
It is also important for purposes of this case to note that the words "or otherwise serving” were added to the last treatment rule as it was expressed in De Haan, supra. In other words, the Legislature saw fit to expand the rule which it codified as part of the Revised Judicature Act of 1961.
It has been suggested that the words "or otherwise serving” were inserted because the statute is designed to apply to licensed professionals who "serve” but do not "treat” their clients. See Thomas v Golden (Amended Opinion), 51 Mich App 693; 214 NW2d 907 (1974). We find that to be a reasonable explanation, but it provides no basis to preclude application to professionals who "treat” as well as "serve” their clients.
When an optometrist performs an eye examination which includes a glaucoma test, it may not be a "treatment,” but it is a "service” that is critically important to the patient. As plaintiff points out, glaucoma is an insidious disease which often manifests no symptoms to alert the victim. The patient who is told to come in for an eye examination every few years is completely dependent upon the professional to screen for glaucoma and to detect it.
In the instant case defendant argues that the rationale underlying the last treatment rule does not apply in the context of routine, periodic examinations. It is contended that there is no air of truthfulness and trust once the examination is concluded. We disagree. It is the doctor’s assurance upon completion of the periodic examination that the patient is in good health which induces the patient to take no further action other than scheduling the next periodic examination.
Particularly in light of the contractual arrangement which bound defendant and entitled plaintiff to periodic eye examinations, it cannot be said that the relationship between plaintiff and defendant terminated after each visit. The obligation and responsibility of defendant to provide glaucoma testing extended beyond the 1981 examination of plaintiff’s eyes. We conclude that defendant did not discontinue "treating or otherwise serving” plaintiff "as to the matters out of which the claim for malpractice arose” until August 18, 1983. Thus, we hold that the claim of plaintiff is not barred by the statute of limitations.
Since the facts here are unique, and the Legislature has now repealed the last treatment rule as it applied to medical malpractice, we limit our holding to the facts of this case.
The judgment of the Court of Appeals is reversed, and this case is remanded to the circuit court for further proceedings.
Riley, C.J., and Levin, Brickley, Cavanagh, Boyle, and Archer, JJ., concurred with Griffin, J.
MCL 600.5838(1); MSA 27A.5838(1).
Paulette Morgan, wife of David Morgan, is also a plaintiff in this action; however, since her claim for loss of consortium is derivative, for convenience sake, we use the word plaintiff in the singular to refer to David Morgan.
Dr. Taylor was no longer employed by cos on August 18,1983.
Paulette Morgan claims damages for loss of the "use, services, love, affection and companionship” of her husband.
The complaint against cos alleged that it:
a. Failed to keep proper records of the examinations they made of Plaintiff’s eyes;
b. Failed to use diagnostic tools, apparatus, equipment and tests which were known to Defendant and its agents and employees and available to them;
c. Failed to take an adequate and perform a proper eye examination and/or evaluation;
d. Failed to diagnose and/or recognize that Plaintiff was suffering from glaucoma;
e. Failed to inform Plaintiff of test results;
f. Failed to refer Plaintiff to an opthamologist [sic] for proper medical care and treatment.
Initially, a motion by Dr. Taylor for summary disposition was denied; however, upon reconsideration it was granted by the trial court upon grounds not relevant in this appeal. Because this appeal relates only to the claim against cos, we hereafter refer to cos as the defendant.
The unpublished opinion per curiam of the Court of Appeals, decided March 31, 1988 (Docket No. 95032), Gillis, J., concurring only in the result.
A person shall not bring or maintain an action to recover damages for injuries to persons or property unless, after the claim first accrued to the plaintiff or to someone through whom the plaintiff claims, the action is commenced within the periods of time prescribed by this section.
(4) The period of limitations is 2 years for an action charging malpractice. [MCL 600.5805; MSA 27A.5805.]
(2) An action involving a claim based on malpractice may be commenced at any time within the applicable period prescribed in sections 5805 or 5851 to 5856, or within 6 months after the plaintiff discovers or should have discovered the existence of the claim, whichever is later. The burden of proving that the plaintiff, as a result of physical discomfort, appearance, condition or otherwise, neither discovered nor should have discovered the existence of the claim at least 6 months before the expiration of the period otherwise applicable to the claim shall be on the plaintiff. A malpractice action which is not commenced within the time prescribed by this subsection is barred. [MCL 600.5838(2); MSA 27A.5838(2).]
MCL 600.5838(1); MSA 27A.5838(1). 1975 PA 142 amended Section 5838 of 1961 PA 236, the Revised Judicature Act of 1961.
An optometrist must be licensed by the state to practice that profession. See MCL 333.17401 et seq.; MSA 14.15(17401) et seq.
As to causes of action arising after October 1, 1986, this provision was amended by 1986 PA 178 and eliminated the last treatment rule in cases of medical malpractice:
(1) A claim based on the medical malpractice of a person who is, or who holds himself or herself out to be, a licensed health care professional, licensed health facility or agency, employee or agent of a licensed health facility or agency who is engaging in or otherwise assisting in medical care and treatment, or any other health care professional, whether or not licensed by the state, accrues at the time of the act or omission which is the basis for the claim of medical malpractice, regardless of the time the plaintiff discovers or otherwise has knowledge of the claim. [MCL 600.5838a(l); MSA 27A.5838(1)(1).]
Legislative comment which accompanied enactment of MCL 600.5838; MSA 27A.5838 as part of the Revised Judicature Act, 1961 PA 236, indicates that "Section 5838 is based on the rule stated and followed in the Michigan case of De Haan v Winter, 258 Mich 293; 241 NW 923 (1932).” See also Dyke v Richard, 390 Mich 739; 213 NW2d 185 (1973). In De Haan, the Court adopted what is commonly referred to as "the last treatment rule” in determining the time that a malpractice cause of action accrues.
As already noted, the last treatment rule announced in De Haan, supra, was codified in Section 5838 of 1961 PA 236, the Revised Judicature Act of 1961, MCL 600.5838; MSA 27A.5838. The rule was amended by 1975 PA 142, and later repealed by 1986 PA 178 as to medical malpractice actions arising after October 1, 1986. See ns 10 and 12. See also Johnson v Caldwell, 371 Mich 368; 123 NW2d 785 (1963).
See Shane v Mouw, 116 Mich App 737; 323 NW2d 537 (1982) (the Court found no evidence of an occurrence between the last office visit and a telephone conversation one month later which indicated that either party intended to discontinue the doctor-patient relationship); Pendell v Jarka, 156 Mich App 405; 402 NW2d 23 (1986) (noting that an occurrence between office visits may end the doctor-patient relationship). In other cases, the facts indicated an occurrence, such as the plaintiff’s consultation with attorneys concerning a possible malpractice claim or the plaintiff’s decision to no longer treat the defendant, severed the doctor-patient relationship. For example, in Juravle v Ozdagler, 149 Mich App 148; 385 NW2d 627 (1985), the defendant physician performed surgery and provided follow-up care to the plaintiff. Thereafter, the plaintiff consulted another physician, entered a hospital where he was treated by a third physician, and consulted with attorneys concerning a possible malpractice action. The plaintiff returned to the defendant’s office after consulting his attorneys, to pick up his medical records. The plaintiff argued that the visit to pick up his records constituted "treatment.” The Court of Appeals held that the doctor-patient relationship
did not exist when the plaintiff’s only purpose was to obtain his records for another doctor and he had previously consulted with various attorneys to bring a malpractice suit. [Juravle, supra at 155.]
See also Antal v Porretta, 165 Mich App 238; 418 NW2d 395 (1987) (the doctor-patient relationship ended and the cause of action accrued when the plaintiff decided he no longer wanted the defendant to treat him); Stapleton v Wyandotte, 177 Mich App 339; 441 NW2d 90 (1989) (the plaintiff’s discharge from the hospital constituted the last treatment where the plaintiff admitted that she did not wish to see the defendants after discharge).
The Court of Appeals distinguished DeGrazia v Johnson, 105 Mich App 356; 306 NW2d 512 (1981), and Shane v Mouw, n 15 supra, (holding that a phone conversation between the physician and the plaintiff constituted treating or otherwise serving) on grounds that there was no "occurrence” in those cases between the last office visit and a telephone conversation which terminated the relationship. See also Pendell v Jarka, n 15 supra.
Indeed, the Legislature has seen fit to amend the statute and eliminate the last treatment rule with respect to medical malpractice claims. 1986 PA 178. However, as earlier noted, n 12, the amendment applies only to causes of action arising after October 1,1986.
Affirmed 392 Mich 779; 220 NW2d 677 (1974) (the Court declining to adopt the reasoning set forth in the Court of Appeals opinion).
There is no suggestion that this plaintiff returned to cos on August 18, 1983, merely to extend the statutory period of limitations. Our decision might be different if there were evidence that such a visit had been made as a mere artifice to extend the limitations period. | [
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Plaintiff appeals by leave granted an order of the circuit court reversing the district court’s judgment of a land contract forfeiture in favor of the Federal Deposit Insurance Corporation (fdic). The circuit court held as a matter of law that the fdic is subject to the interest forfeiture provision of the Michigan usury statute, MCL 438.32; MSA 19.15(2), and that the fdic. therefore was not entitled to collect back interest on defendant’s land contract. We affirm in part, reverse in part, and remand.
The facts of this case are not in dispute. In 1982, defendant, Eric Bergan, entered into a land contract with the United States Mutual Real Estate Investment Trust (usm reit) for the purchase of a vendee’s interest that the usm reit held under another land contract for the purchase of residential rental property. Defendant’s land contract called for an interest rate of 11.5 percent, a rate that was usurious under Michigan law. MCL 438.31c(6); MSA 19.15(lc)(6). If a lender charges a usurious rate of interest, the borrower is not required to make any interest payments on the loan; all interest payments are credited toward the principal balance. MCL 438.31c(7), 438.32; MSA 19.15(lc)(7), 19.15(2). Accordingly, defendant in formed the usm reit in November 1982 that all past and future payments, excluding tax escrows, would be applied directly toward the principal balance of the land contract. Between 1982 and 1990, defendant paid $74,400 toward the contract, which equaled the principal balance of the loan.
The usm reit was dissolved in 1983, and its assets were transferred to the United States Mutual Financial Corporation, a savings and loan holding company. Through a series of assignments, the usm reit’s interest in defendant’s land contract became an asset of the United States Mutual Savings Bank (usm sb). In 1985, the usm sb was declared insolvent, and the Federal Savings and Loan Insurance Corporation (fslic) was appointed receiver. The fslic arranged a purchase and assumption transaction with the United States Mutual Savings and Loan Association, which changed its name to Regency Savings Bank in 1986. In 1989, Regency was declared insolvent, and the fslic was appointed receiver. At that time, approximately $6,000 was due on the principal balance of defendant’s land contract. Subsequently, the fslic was abolished under § 401(a) of the Financial Institutions Reform, Recovery and Enforcement Act of 1989, Pub L 101-73, tit IV, § 401, 103 Stat 356-357. Many of its duties, including serving as receiver for failed banks such as Regency, were transferred to the fdic.
In March 1990, defendant tendered his final land contract payment to the fdic. That same month, the pdic stopped payments to the vendors in the underlying land contract. The vendors in that contract subsequently brought suit against the pdic for forfeiture of the contract. Defendant was also named as a party in that action because of his derivative interest. The pdic subsequently filed a cross-claim against defendant for forfeiture of his land contract interest. After the pdic and the vendors in the underlying contract agreed to the unpaid balance due on that contract and dismissed that action, defendant moved for summary disposition of the remaining claim against him. Defendant raised the defense of usury, claiming that he had paid the full purchase price of the land contract and that he was not obligated to make any usurious interest payments before he became entitled to the fdic’s interest in the underlying contract. In August 1991, the district court found that the fdic was not subject to the state usury laws and found defendant liable for $71,563.52 in back interest. Defendant was given ninety days to cure his default or face forfeiture of his interest. The circuit' court reversed in April 1992. This Court granted the fdic’s application for leave to appeal in November 1992.
This appeal is limited to the issues raised in the application for leave to appeal. The fdic argues that it is entitled to back interest under the land contract despite the forfeiture provision of the state usury statute, because that provision imposes a penalty to which the fdic should not be subject by virtue of 12 USC 1825(b)(3), sovereign immunity principles, and federal common law. The fdic supports its position with the policy argument that once a bank goes into receivership there is no longer any reason to enforce the forfeiture provision of the usury statute, because enforcement of that provision can no longer serve as a deterrent and would only diminish the value of assets otherwise available to creditors of the failed bank.
12 USC 1825(b) provides in pertinent part:
When acting as a receiver, the following provisions shall apply with respect to the [fdic]:
(3) The [fdic] shall not be liable for any amounts in the nature of penalties or fines, including those arising from the failure of any person to pay any real property, personal property, probate or recording tax or any recording or filing fees when due.
The fdic argues that forfeiture of interest due on defendant’s land contract constitutes a penalty from which the fdic should be immune under § 1825(b)(3). However, that section addresses the fdic’s status only with respect to taxation, providing that "immunity from 'penalties’ attaches solely in the context of taxation.” Morris v Resolution Trust Corp, 622 A2d 708 (Me, 1993). But see Federal Deposit Ins Corp v Southwest Motor Coach Corp, 780 F Supp 421, 423 (ND Tex, 1991). Section 1825(b)(3) does not apply to penalties for usury.
Alternatively, the fdic argues that it is not subject to state usury penalties as a matter of sovereign immunity and federal common law. Under the doctrine of sovereign immunity, the United States and its agencies are immune from suit except to the extent that such immunity has been waived. Loeffler v Frank, 486 US 549, 554; 108 S Ct 1965; 100 L Ed 2d 549 (1988). This immunity extends to the imposition of penalties. Missouri Pacific R Co v Ault, 256 US 554; 41 S Ct 593; 65 L Ed 1087 (1921). The sovereign immunity argument is closely related to the fdic’s argument under § 1825(b)(3). In fact, § 1825(b)(3) has been viewed as simply a reaffirmation by Congress that it does hot intend to waive the fdic’s immunity from penalties. Southwest Motor Coach, supra at 423.
The immunity of the fdic is reinforced by federal common law. In Federal Deposit Ins Corp v Garbutt, 142 Mich App 462, 473; 370 NW2d 387 (1985), this Court relied on federal common law to hold that the fdic is not subject to the defense of usury. The rationale for this holding has been explained in federal cases. In Federal Deposit Ins Corp v Tito Castro Construction, Inc, 548 F Supp 1224, 1226 (D PR, 1982), aff'd 741 F2d 475 (CA 1, 1984), Puerto Rico’s usury statute was held inapplicable to the fdic in its corporate capacity because the usury penalty "clearly frustrate[d] the congressional purpose in creating the Federal Deposit Insurance Corporation: to promote stability of, and confidence in, the nation’s banking system.” Similarly, in Federal Deposit Ins Corp v Claycomb, 945 F2d 853, 861 (CA 5, 1991), a Texas usury statute was held inapplicable to the fdic as receiver because the usury penalty "could have no deterrent effect, and would only serve to punish innocent creditors of the failed institution by di minishing available assets.” In Anderson v Hershey, 127 F2d 884, 887 (CA 6, 1942), the United States Court of Appeals for the Sixth Circuit held that a penalty imposed under a state usury statute should not be applied to bring about the anomalous result that the penalty is paid by the persons for whose benefit the receivership was imposed instead of the persons or institutions against whom the penalty is directed. See also Federal Deposit Ins Corp v Aroneck, 509 F Supp 553, 557 (D SC, 1979), aff'd in pertinent part and vacated in part, 643 F2d 164 (CA 4, 1981).
This rationale applies whether the fdic is acting in a receivership capacity or in its corporate capacity. See Claycomb, supra (fdic as receiver); Campbell Leasing, Inc v Federal Deposit Ins Corp, 901 F2d 1244, 1249 (CA 5, 1990); Professional Asset Management, Inc v Penn Square Bank, NA, 566 F Supp 134, 136 (WD Okla, 1983). It also applies to the fslic. See Federal Deposit Ins Corp v Texas Country Living, Inc, 756 F Supp 984, 987 (ED Tex, 1990); Federal Savings & Loan Ins Corp v TF Stone-Liberty Land Associates, 787 SW2d 475, 492 (Tex App, 1990). Federal law applies in an action involving the fdic or the fslic. Federal Deposit Ins Corp v Stone, 578 F Supp 144, 146 (ED Mich, 1983).
There is no question that the forfeiture provision of Michigan’s usury statute, MCL 438.32; MSA 19.15(2), is generally penal in nature. See Allan v M & S Mortgage Co, 138 Mich App 28, 41; 359 NW2d 238 (1984); Michigan Mobile Homeowners Ass’n v Bank of Commonwealth, 56 Mich App 206, 213; 223 NW2d 725 (1974). The fdic is immune from bearing the brunt of this penalty. See Garbutt, supra at 473.
However, the issue here is whether the fdic is permitted to collect back interest when , the vast majority of the interest due accrued before the fsuc was appointed receiver. This appears to be an issue of first impression.
We do not believe that the forfeiture of prereceivership interest constitutes a penalty against the fdic; rather, it was punishment already visited on Regency. Although the fdic asserts that forfeiture of interest payments would, no longer be of use as punishment for a bank in receivership, see Claycomb, supra at 861, defendant’s nonpayment of interest before receivership did serve to penalize the bank while it was still operating independently and able to sustain the penalty without directly compromising the interests of its creditors, see Aroneck, supra at 557. Further, Regency’s creditors were still in a position of negotiation with the bank. In dealing with Regency, these creditors would not have been justified in expecting the value of the land contract to include usurious- interest that was forfeited and properly withheld under state law.
However, "[t]he world changes when a bank goes into receivership.” Federal Deposit Ins Corp v Shain, Schaffer & Rafanello, 944 F2d 129, 134 (CA 3, 1991). The interests and expectations of creditors change correspondingly. Continuing to impose usury penalties after the date of receivership would compromise directly the position of Regency’s creditors. Further, when the fslic assumed control of Regency’s assets, the value of the land contract was not the full purchase price; a substantial portion of that amount had been paid already. Rather, its value reflected the unpaid portion of the purchase price. The fdic is exempt from usury penalties only with respect to assets available at the time of receivership. Therefore, the fdic may demand payment of interest due under the land contract after the date of receivership. To hold otherwise would create a windfall in the value of Regency’s assets.
Affirmed in part, reversed in part, and remanded to the district court for a calculation of the interest due under the land contract after the date of federal receivership. The district court shall enter an order awarding defendant ownership of the fdic’s interest in the underlying land contract if he pays the calculated amount of interest, plus any applicable judgment and prejudgment interest, within ninety days of the order. If defendant does not pay the back interest on time, the district court shall enforce the forfeiture provision of the land contract.
The fdic’s argument that the usury statute should not apply at all to the land contract here is not an issue properly before this Court. The fdic conceded below that "[i]f Regency . . . had not failed, and was still the institution, the usury would probably be a good argument.” Further, the statement of questions in the fdic’s brief on appeal fails to identify the applicability of the usury statute on its own terms as an issue. The legality of the land contract, under which heading the usury issue appears in the fdic’s brief, is immaterial to the disposition of this case.
For this reason, we decline to address the applicability of the usury defense under the federal holder-in-due-course doctrine. See, e.g., Federal Deposit Ins Corp v Wood, 758 F2d 156, 160-161 (CA 6, 1985). The application for leave to appeal referred only to the fdic’s status as a holder-in-due-course under Michigan law. Further, the fdic expressly represented to the circuit court that it was not relying on holder-in-due-course principles, and its brief on appeal fails to identify the holder-in-due-course issue in the statement of questions. The issue is not material to the legality of the land contract, under which heading the fdic addresses holder-in-due-course principles. Our holding in this case is limited to the application of the usury statute as a penalty; it does not concern the application of the usury statute as a personal defense to payment of a negotiable instrument. In any event, the rationale behind the penalty and holder-in-due-course theories is essentially the same. Compare Wood and Federal Deposit Ins Corp v Claycomb, 945 F2d 853, 861 (CA 5, 1991).
We need not decide whether the fdic as receiver would be required to return usurious interest payments made before receivership if defendant actually had made such payments. It probably would not.
If the usuriousness of the interest rate were still an issue and if the fdic established that the usury statute did not apply, then defendant would have had no right to withhold interest payments and the fdic, as successor to Regency Bank’s interest, could initiate an action to recover such unpaid interest or demand forfeiture. In this case, however, the fdic failed to take issue with the applicability of the usury statute on its own terms. See supra, note 1. | [
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Per Curiam.
Volvo Truck Corporation and Soren Gustov Udd, an employee of Volvo Truck, appeal as of right a judgment of the circuit court awarding Hertz Corporation $1 million as indemnification for expenses incurred as a result of an automobile accident involving a Hertz rental car. We affirm.
Udd and Claes Wadenby were citizens of Sweden and employees of Volvo Truck. In February 1989, the two men attended an automotive-engineering convention in Detroit on behalf of Volvo Truck. All expenses were covered by Volvo Truck. Upon their arrival in Detroit, Udd and Wadenby obtained a rental car from Hertz. Udd signed the rental agreement and drove the vehicle. Shortly thereafter, the car was struck by another vehicle as Udd was making a left turn. The accident caused fatal injury to Wadenby.
In the underlying suit brought against Hertz by the personal representative of Wadenby’s estate, Hertz settled for $2 million, half of which was covered by insurance. Hertz filed a cross-claim against Udd and a third-party complaint against Volvo Truck for the uninsured portion of the settlement, relying on the following indemnification provision in the car rental agreement:
You and all Authorized Operators will indemnify and hold Hertz, its agents and employees harmless from and against any loss, liability and expense in excess of the limits of protection provided for above, arising, from the use of the Car by You or any authorized operators or with your, his or her permission.
In December 1991, the trial court granted Volvo Truck’s motion for summary disposition under MCR 2.116(C)(8) and (10) with respect to Hertz’ express indemnification claim on the ground that Volvo Truck was not a party to the car rental agreement. The court did not address the allegation that Udd was acting as an agent of Volvo Truck. After several postponements of the bench trial date and a series of hearings and orders regarding Hertz’ motion for reconsideration of the motion for summary disposition, the trial court set aside its grant of summary disposition in favor of Volvo Truck and found that Hertz was entitled to indemnification on the basis that Udd’s signature bound Volvo Truck to the rental agreement. The court subsequently entered judgment for Hertz in November 1992. Although the hearing at which the trial court reached this decision was labeled a rehearing of Volvo Truck’s motion for summary disposition, the trial court apparently was assuming the role of factfinder in a bench trial, basing its judgment on stipulated facts, a stipulated record, and trial briefs. We will review its decision accordingly. '
An appellate court reviews a trial court’s findings of fact for clear error. A finding of fact is clearly erroneous only if there is no evidence to support it or if the reviewing court on the entire record is left with a definite and firm conviction that a mistake has been made. Tallman v Cheboygan Area Schools, 183 Mich App 123, 126; 454 NW2d 171 (1990). Any question relating to the existence and scope of an agency relationship is a question of fact. Norcross Co v Turner-Fisher Associates, 165 Mich App 170, 181; 418 NW2d 418 (1987).
Volvo Truck claims that there was insufficient evidence to conclude that Udd was acting as its agent when he signed the rental agreement. We disagree.
Actual authority of an agent may be implied from the circumstances surrounding the transaction at issue. Id. These circumstances must show that the principal actually intended the agent to possess the authority to enter into the transaction on behalf of the principal. 3 Am Jur 2d, Agency, § 75, pp 578-580. Here, Hertz presented evidence from which a reasonable factfinder could infer that Udd signed the rental agreement as an agent of Volvo Truck. The stipulated facts reveal that Udd was on a business trip on behalf of Volvo Truck. The car rental reservation was made by a travel agency hired by Volvo Truck to set up comprehensive travel arrangements for Udd and Wadenby’s trip. Udd displayed a Volvo employee card upon signing for the rental car, and the rental agreement referred to a Volvo corporate identification number. While the employee card and the corporate number did not belong to Volvo Truck, they still evidenced an understanding by all parties that Udd was renting the car as an agent or employee, not on his own behalf. All expenses were to be paid by Volvo Truck. These are facts from which the trier of fact could infer that Udd was authorized to obtain a car to carry out Volvo Truck’s business and that he was to do so as the company’s agent. While the arguments advanced by Volvo Truck indicate that the opposite inference also would have been plausible, they do not establish clear error in the trial court’s findings.
Volvo Truck and Udd also argue that the Worker’s Disability Compensation Act (wdca), MCL 418.131; MSA 17.237(131), bars recovery on Hertz’ indemnification claim or at least mandates a different apportionment of damages under contribution principles. While the wdca bars a claim of contribution against an employer or coemployee for payment of injuries sustained by the employee in the course of employment, Downie v Kent Products, Inc, 420 Mich 197, 219; 362 NW2d 605 (1984); Jones v General Motors Corp, 136 Mich App 251, 257; 355 NW2d 646 (1984), Hertz’ contribution claim under MCL 600.2925a; MSA 27A.2925(1) was not the basis of the trial court’s judgment. Rather, the trial court based liability on indemnification principles. Contribution and indemnification are separate and distinct claims. Because Hertz is entitled to contractual indemnification, contribution principles are inapplicable. See MCL 600.2925a(7); MSA 27A.2925(1)(7). With respect to Hertz’ indemnification claim, the wdca does not bar recovery. Kenyon v Second Precinct Lounge, 177 Mich App 492, 504; 442 NW2d 696 (1989).
Affirmed.
The trial court also addressed Hertz’ contribution claim and certain issues concerning personal jurisdiction.
Apparently, Udd’s employee card and the identification number on the car rental agreement corresponded to Volvo AB, the parent corporation of Volvo Truck. The corporate discount agreement in which this identification number presumably appears was not entered into evidence. Absent such evidence, we agree with Volvo Truck that Hertz’ reliance on the corporate contract is limited. Similarly, its reliance on the long history of car rentals by Volvo AB is also misplaced. However, the use of an employee card and a corporate identification number is relevant to the issue of agency. While it does not expressly tie Volvo Truck to the rental agreement, it does indicate that Udd was not acting in a personal .capacity but rather as an agent for someone else, which the trial court properly inferred was his employer, Volvo Truck. | [
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Per Curiam.
In People v Timothy Moore, 432 Mich 311; 439 NW2d 684 (1989), we were asked whether a 100- to 200-year sentence could be imposed upon a person convicted of second-degree murder. We found that to be an illegal sentence.
This defendant was originally sentenced to terms of nearly the same length, and we remanded the case for resentencing in accordance with Moore. The prosecutor has moved for reconsideration, asking whether and how the legislative principles outlined in Moore are affected by the fact that other sentences, imposed earlier upon this defendant, must be served consecutively with and preceding the sentences to be imposed on remand.
This defendant must be resentenced in accordance with Moore, and we therefore deny the prosecutor’s motion. However, we hold today that the circuit court’s authority to impose sentences is not restricted by the fact that the sentences must be served consecutively.
On remand, the circuit court may impose life terms of imprisonment or terms of years. If the circuit court chooses to sentence the defendant to terms of years, each such term, examined independently, must be an indeterminate sentence less than life.
I
The defendant is one of two inmates who sneaked away from a Department of Corrections farm near the State Prison of Southern Michigan. They entered a nearby farmhouse, robbed a woman who lived there, and then killed her and her spouse. The inmates returned to the farm and went about their business as though nothing had happened.
At the conclusion of a jury trial, the defendant was found guilty of two counts of second-degree murder and one count of armed robbery. Following a separate jury trial on a supplemental information, the defendant was found guilty of being a third offender.
The defendant, who was thought to be thirty-five years of age, was sentenced to three terms of from 90 to 150 years in prison. These terms were to be served concurrently, but consecutively to the terms which the defendant was already serving at the time he committed these offenses.
The Court of Appeals affirmed. 166 Mich App 106; 420 NW2d 136 (1988).
The Court of Appeals also certified to this Court that its decision conflicted with the decision of a different panel in People v Oscar Moore, 164 Mich App 378; 417 NW2d 508 (1987). The certified conflict concerned the legality of exceedingly long sentences of the sort imposed on this defendant.
The defendant applied to this Court for leave to appeal. Noting the Court of Appeals certification of a conflict with Oscar Moore, we held the case in abeyance pending our decision in Timothy Moore, supra.
After we decided Timothy Moore, we remanded the present case to the trial court for resentencing in accordance with Moore. In all other respects, the defendant’s application for leave to appeal was denied. 433 Mich 851 (1989).
The prosecutor has moved for reconsideration, arguing that "Moore does not control the present case.”
n
In Moore, the defendant had been convicted of second-degree murder and possession of a firearm during the commission of that felony. His sentence for murder was a term of from 100 to 200 years in prison. His sentence for felony-firearm was the mandatory two-year consecutive term of imprisonment.
The starting point for our analysis in Moore was the Legislature’s determination that second-degree murder " 'shall be punished by imprisonment in the state prison for life, or any term of years, in the discretion of the court trying the same.’ ” Thus, as we explained in Moore, "there are two types of sentences that a judge may impose upon a person convicted of second-degree murder — a sentence of life in prison, or a sentence of a term of years less than life.” 432 Mich 317, 319. We fur ther observed the Legislature’s command that, if a judge chooses to impose a term of years as the punishment for second-degree murder, it must be an indeterminate term of years. 432 Mich 319-321. And we noted the Legislature’s decision that persons convicted of second-degree murder would eventually be eligible for parole. 432 Mich 321-326.
For those reasons, we concluded that a term of years "must be an indeterminate sentence less than life.” Put another way, a term of years "must be something that is reasonably possible for a defendant actually to serve.” 432 Mich 329.
iii
We have ordered that this defendant be re-sentenced in accordance with Moore, but the prosecutor asks us to reconsider. The prosecutor points out that the defendant’s enhanced sentences for second-degree murder and armed robbery must be consecutive to the sentence that he already was serving when he left the prison facility to commit the crimes. MCL 768.7a(l); MSA 28.1030(1)(1).
As recounted above, Moore explained the Legislature’s determination that a term of years must be an indeterminate sentence less than life — a sentence that is reasonably possible for a defendant actually to serve. Since this defendant first must complete his previous sentence, the prosecutor believes that applying Moore in this case would lead to an absurd result. He suggests that the defendant’s new consecutive sentences for second-degree murder and armed robbery would have to be fairly short in order to allow the defendant’s present sentences and the new consecutive sentences to be completed prior to the end of the defendant’s life.
The prosecutor offers several hypothetical scenarios in which serious criminal behavior might have to be punished with short sentences, in order to permit a series of consecutive sentences to fit within a single lifetime.
IV
In Moore, we applied the principles stated by the Legislature. For the reasons that we found it necessary to order resentencing in Moore, it is also necessary that this defendant be resentenced. The fact that this defendant will be serving consecutive terms does not change the statutory penalties for the offenses of which he has been convicted.
The prosecutor asks how the principles outlined in Moore are to be affected by the statutory requirement that these sentences be consecutive. The answer has been provided by the Legislature, which has specifically authorized consecutive sentencing as enhanced punishment for the purpose of deterring certain criminal behavior. See People v Chambers, 430 Mich 217, 229; 421 NW2d 903 (1988), and People v Henry, 107 Mich App 632, 635; 309 NW2d 922 (1981). Therefore the circuit court’s authority to impose sentences for second-degree murder, for armed robbery, or for being an habitual offender is not restricted by the fact that those sentences must be served consecutively in accordance with MCL 768.7a(l); MSA 28.1030(1) (l).
The essence of consecutive sentencing is that two or more sentences, each not exceeding the maximum punishment allowable by law, are placed end to end. The cumulative length of such sentences can, obviously, exceed the maximum punishment allowable by law for any one of the offenses. Thus a person serving two consecutive terms for assault with a dangerous weapon (punishable by imprisonment for not more than four years ) might be required to stay in prison more than four years. And, because of criminal acts that a defendant has chosen to commit, two or more consecutive sentences, each of which is less than life, may have the cumulative effect of assuring that the remainder of the defendant’s life will be spent in prison. Such an outcome does not conflict with the express will of the Legislature.
This is illustrated in Moore itself, where a two-year term for felony-firearm was to be served consecutively with and preceding the lengthy term for second-degree murder. While the two-year term for felony-firearm did not delay the onset of Mr. Moore’s sentence for second-degree murder to the extent that this defendant’s sentences will be delayed, the same principles nevertheless applied. That is, the defendant in Moore was to be resentenced (if the judge chose to impose a term of years) to a term less than life, not a term less than life minus two years.
v
The prosecutor has moved for reconsideration of the order in which we remanded this case for resentencing in accordance with Moore. For the reasons stated in this opinion, the motion is denied.
On remand, the circuit court may impose life terms of imprisonment or terms of years. If the circuit court chooses to sentence the defendant to terms of years, each such term, examined independently, must be an indeterminate sentence less than life.
Riley, C.J., and Levin, Brickley, Cavanagh, Archer, and Griffin, JJ., concurred.
MCL 750.317; MSA 28.549.
MCL 750.529; MSA 28.797.
MCL 769.11; MSA 28.1083.
The presentence report states that the defendant was thirty-five, and that his birthdate was May 19, 1950. However, the materials forwarded to this Court by the circuit court include a document that appears to be a photocopy of the defendant’s birth certificate. It is dated May 19,1960.
The defendant was serving concurrent terms of from 15 to 30 years, and from 2 to 10 years, for armed robbery.
People v Harden, unpublished Order of the Supreme Court, dated March 29,1988 (Docket No. 82537).
Hereafter, We shall refer to Timothy Moore simply as Moore.
MCL 750.317; MSA 28.549.
MCL 750.227b; MSA 28.424(2).
MCL 769.9(2); MSA 28.1081(2).
In a different form, we had enunciated this same principle about two years earlier in People v Fleming, 428 Mich 408, 427, n 24; 410 NW2d 266 (1987).
Of course, this defendant’s sentences are being imposed under MCL 769.11(l)(b), (2); MSA 28.1083(l)(b), (2). The effect of that language is, for present purposes, the same.
These decisions concern MCL 768.7b; MSA 28.1030(2), but the general comments on the nature and purpose of legislatively mandated consecutive sentencing apply to MCL 768.7a; MSA 28.1030(1) as well.
We also observe that the consecutive-sentencing section applicable to this defendant includes this language in subsection (3):
The powers conferred upon the court by this section are supplementary to any other power conferred by law. [MCL 768.7a(3); MSA 28.1030(1)(3).]
(When these offenses were committed and at the time of the original sentencing, this passage was designated MCL 768.7a(2); MSA 28.1030(1)(2). The change was made in 1988 PA 48, which also effected a stylistic change in the quoted language.)
The Legislature’s statement in MCL 768.7a(3); MSA 28.1030(1)(3) is illustrative of the principles explained in this opinion, but is not the basis of our decision today. Thus, our analysis today would be applicable to consecutive sentences imposed under a statutory provision that lacked language of the sort found in MCL 768.7a(3); MSA 28.1030(1) (3), e.g., MCL 750.193(1), 750.227b, 768.7b; MSA 28.390(1), 28.424(2), 28.1030(2).
MCL 750.82; MSA 28.277.
MCL 750.503; MSA 28.771. | [
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G. N. Bashara, Jr., J.
Defendant was convicted of carrying a concealed weapon, MCL 750.227; MSA 28.424, and of being an habitual offender, fourth offense, MCL 769.12; MSA 28.1084. He was sentenced to four to ten years’ imprisonment and now appeals as of right. We affirm.
Police officers approached a house to arrest the defendant on an outstanding misdemeanor bench warrant. As they arrived, defendant was standing outside in an area of the driveway between the public sidewalk and the public street. One defense witness said the defendant was standing on the curb by the street. As the police stopped, defendant removed a handgun from his belt and threw the gun under a bush as he fled up the driveway and into the backyard.
The property on which defendant was arrested was owned by his mother, although she resided elsewhere. Defendant’s mother testified that the defendant had stayed periodically at the property where he was arrested while he assisted in remodeling that property for rental use. The mother also testified that the defendant generally lived with his grandmother on another street. The parties were prepared to stipulate that the defendant consistently used the grandmother’s address as his official mailing address, but the stipulation was not read to the jury because of the court’s ruling that the defendant was not entitled to the jury instruction he requested.
I. POSSESSORY INTEREST EXCEPTION
Defendant first argues that the jury should have been instructed that a person is entitled to carry a concealed weapon on property in which he has a possessory interest consistent with MCL 750.227(2); MSA 28.424(2). The trial court ruled that an unspecified federal law barred defendant, as a convicted felon, from carrying a firearm of any kind and that the federal law preempted state law.
Defendant argues that even if he were subject to federal prosecution for possessing a weapon, he is exempt from state prosecution because our statute "allow[s] persons to defend those areas in which they have a possessory interest.” People v Clark, 21 Mich App 712, 716; 176 NW2d 427 (1970). Defendant has only addressed the scope of the state exception and has not challenged the trial court’s finding that federal law preempts state law in this regard. The prosecutor’s brief concedes that there appears to be no basis for the court’s ruling on preemption, but urges that the decision should be affirmed on other grounds. We agree. We offer no opinion regarding the precise issue of federal preemption because the specific federal statute* has not been cited in the record. Instead, we reject the position defendant has argued on appeal and hold that the Legislature did not intend that a person such as this defendant be permitted to carry an unlicensed concealed weapon under these circumstances.
The prosecutor presented no proof to counter the defense witnesses’ testimony that the defendant resided in the house while repairing it, and the trial court never reached the issue whether the defendant had a sufficient possessory interest. We need not reach that question (which may properly be a factual issue for the jury), though, because defendant was not entitled to the instruction as a matter of law even if he had a possessory interest in the property.
A. CONVICTED FELON IN POSSESSION
The first circumstance that leads to our conclusion is defendant’s status as a convicted felon (and current parolee). We find no persuasive evidence that the Legislature intended that recently released convicted felons should be able to carry concealed weapons so that they might defend property because Michigan law presumes that parolees and guns are per se a dangerous combination.
At the time of this offense, MCL 28.422; MSA 28.92 provided that "no person shall purchase, carry or transport a pistol without first having obtained a license therefor as prescribed herein.” See 1986 PA 161, § 1. The statute further provided that "in no event shall such a license be issued to a person who has been convicted of a felony or confined therefor in this state or elsewhere during the 8-year period immediately preceding the date of such application [for license].” Id.
When this section is read together with MCL 750.227; MSA 28.424, we believe the Legislature intended MCL 750.227; MSA 28.424 to allow a person to conceal an otherwise lawful firearm to defend his property. MCL 750.227; MSA 28.424, however, does not allow one to carry or possess a prohibited weapon. The statute presumes that the weapon is lawfully owned, and only addresses its concealment. It does not extend a right to conceal an illegally owned weapon, even in one’s own dwelling house or business property.
By analogy, we do not think the Legislature would have intended to allow a shopkeeper to own a machine gun for use in defending the shop (machine guns are prohibited by MCL 750.224; MSA 28.421). The illegal possession is not saved by the fact that the machine gun is kept in the shopkeeper’s store; the Legislature has chosen to prohibit that class of weapons without regard to where they are used. Similarly, the Legislature has chosen to prohibit pistol ownership by a particular class of persons — convicted felons — and the convicted felon’s decision to keep the pistol on his residential or business property should not alter the outcome.
This Court’s decision in People v Gatt, 77 Mich App 310; 258 NW2d 212 (1977), holding that the land need not be possessed for a legal purpose, does not alter our conclusion that the gun still must be legally owned. Here, the defendant presented no evidence that he was capable of lawfully possessing the pistol (and MCL 28.422; MSA 28.92 casts grave doubts on his ability to make such a showing). Therefore the question whether he might lawfully conceal it on land he possessed is never reached, and the instruction was properly declined.
B. SCOPE OF POSSESSORY INTEREST IN PROPERTY
More important to our conclusion is the second circumstance: defendant carried the concealed weapon on the public easement and public side walks. This again involves an issue of first impression in Michigan, but we hold that the Legislature did not intend the exceptions to extend to areas the defendant has no need or right to defend.
Other jurisdictions are split regarding the issue whether a defendant is exempt from prosecution when carrying a weapon on a public road or sidewalk that adjoins or divides his property. See anno: Scope and effect of exception, in statute forbidding carrying of weapons, as to person on his own premises or at his place of business, 57 ALR3d 938, § 5. Some courts have held that such a defendant is not on his own premises so as to be exempt from prosecution. The rationale is that
[t]he easement which the public has in the highway is superior to any rights which the owner of the fee has. He can do nothing, by virtue of his ownership of the fee in the soil, antagonistic to the right of the public to use the highway as such. The public is in possession of the highway and has the right to pass to and fro upon it ad libitum. This right is to be enjoyed by the public without interruption or molestation in any manner from the owner of the freehold.
. . . [T]he pólicy of [the] law is to conserve the public peace. In what more important place can this to be done than upon the public roads and streets which are set apart to the public and must be used by it? [Moss v Arkansas, 65 Ark 368, 369-370; 45 SW 987 (1898).]
See also Facion v State, 290 So 2d 75 (Fla App, 1974) (the defendant had no right to carry concealed pistol on sidewalk outside his apartment); Roy v State, 552 SW2d 827, 829 (Tex Crim App, 1977), quoting Lattimore v Texas, 65 Tex Crim 490; 145 SW 588 (1912) (rejecting claim that person who operates business from a vehicle can carry a weapon while driving because "the public roads, can in no proper sense be termed any man’s place of business, since he has no right to an exclusive appropriation”).
One jurisdiction gave a defendant the benefit of the exemption when he was found carrying a pistol on a road that ran over his father’s land and divided the family property:
The fact that a public road is laid off on a man’s land does not deprive him of the freehold of the land covered by the road. His title continues in the soil, and the public acquire only an easement, that is, the right of passing and repassing along it. [North Carolina v Hewell, 90 NC 705, 706 (1884) (citations omitted).]
A third line of cases from Texas takes a middle approach, and allows a person to carry a weapon on public roadways or easements adjoining the person’s property if the person possesses the weapon for otherwise lawful purposes. See Johnson v State, 269 SW2d 406 (Tex Crim App, 1954) (the defendant had right to carry pistol on public road connecting two parcels of land he owned as long as he did not have unlawful purpose); Deuschle v State, 109 Tex Crim 355; 4 SW2d 559 (1927) (the defendant’s right to carry a pistol on a public road dividing her farm and pasture depended on her purpose for carrying the pistol; absent lawful reason for carrying the pistol, the conviction was upheld). We decline to adopt this rule because it conflicts with the Legislature’s desire to maintain the offense of carrying a con cealed weapon as a general intent offense. See People v Williamson, 200 Mich 342; 166 NW 917 (1918); People v Combs, 160 Mich App 666; 408 NW2d 420 (1987); People v Iacopelli, 30 Mich App 105; 186 NW2d 38 (1971).
The basic legislative intent behind MCL 750.227; MSA 28.424 is that "weapons should not be carried where they might be used to take lives.” People v Bailey, 10 Mich App 636, 639-640; 160 NW2d 380 (1968). Exceptions to the statute were intended "to allow persons to defend those areas in which they have a possessory interest.” Clark, supra at 716.
With these intentions in mind, we believe the better rule is the one we stated first: the public has superior rights over public easements and even the owner of the land beneath that easement can do nothing antagonistic to the public’s right. This rule is more consistent with the public policies underlying MCL 750.227; MSA 28.424 and its exceptions, as well as the public policy surrounding the laws of easements and dedications, see Harvey v Crane, 85 Mich 316, 322; 48 NW 582 (1891). Defendant had no need to defend that which all are free to use. Carrying a concealed weapon on the easement is inconsistent with the public’s general enjoyment of the easement and, no matter what rights the defendant may have on the adjoining property, his use of the easement must be subservient to the public’s use. Id.
Moreover, the exceptions to MCL 750.227; MSA 28.424 traditionally have been interpreted narrowly. For example, in People v Alexander, 82 Mich App 486; 266 NW2d 489 (1978), this Court rejected a state prison inmate’s argument that the prison was his "dwelling house” and that he could therefore lawfully carry a concealed weapon. This Court concluded that a prisoner does not have a possessory interest in any area of the prison that he would have a right to defend with a weapon. Id. at 488. In People v Brooks, 87 Mich App 515; 275 NW2d 26 (1978), this Court held that a produce vendor who worked out of his truck had no right to carry an unlicensed weapon in his vehicle because the "business exception” was intended to apply only to "land” used in the business. Similarly, in People v Wallin, 172 Mich App 748; 432 NW2d 427 (1988), this Court held that a taxi driver also was not allowed to carry an unlicensed weapon in his cab to defend his business. And in Clark, supra, this Court held that a person had no right to carry a concealed pistol at his employer’s place of business.
We conclude that, even if the defendant had a sufficient possessory interest in his mother’s property, any right he may have had to carry an unlicensed concealed weapon to defend that land did not extend to the public easement adjoining that land. The trial court therefore did not err in refusing to read defendant’s requested instruction to the jury.
II. DOUBLE JEOPARDY
Defendant next argues that his conviction violated the Double Jeopardy Clause, US Const, Am V, because he had been found not guilty of parole violation on the same facts. Thus, we must determine whether an adjudication that a parolee has not violated his parole precludes a criminal prosecution for the same underlying facts.
The Double Jeopardy Clause (as applied to the states through the Fourteenth Amendment, Ben ton v Maryland, 395 US 784; 89 S Ct 2056; 23 L Ed 2d 707 [1969]), consists of three separate protections. "It protects against a second prosecution for the same offense after acquittal. It protects against a second prosecution for the same offense after conviction. And it protects against multiple punishments for the same offense.” North Carolina v Pearce, 395 US 711, 717; 89 S Ct 2072; 23 L Ed 2d 656 (1969). Defendant’s claim involves the first protection.
Parole revocation is not part of a criminal prosecution. Morrissey v Brewer, 408 US 471, 480; 92 S Ct 2593; 33 L Ed 2d 484 (1972). Defendant was therefore not subjected to "jeopardy” within the meaning of the constitutional provision. People v Johnson, 191 Mich App 222, 226; 477 NW2d 426 (1991) (acquittal in probation revocation proceedings does not bar criminal trial on underlying offense); People v Bachman, 50 Mich App 682; 213 NW2d 800 (1973) (forfeiture of a prisoner’s "good time” for escape does not bar criminal trial for the escape). Defendant’s subsequent trial for the same conduct therefore did not violate his right against double jeopardy.
III. BAD ACTS EVIDENCE
Defendant argues that the prosecutor denied him a fair trial by improperly injecting "bad acts” evidence. The prosecutor had earlier elicited testimony that the arrest was conducted by members of a narcotics enforcement team, including federal narcotics officers, and that the gun was found when a "drug dog” indicated contraband in the bushes. Although the references initially did not link the defendant to any specific drug activity, later testimony elicited by the defense indicated that the defendant had been smoking a marijuana cigarette shortly before his arrest. The defendant opened the door to the entire line of questioning when he inquired of prospective jurors during voir dire whether they would be affected by testimony that he was smoking marijuana. Reversal is not required. People v Yarger, 193 Mich App 532, 538-539; 485 NW2d 119 (1992).
Defendant has preserved only one additional instance of alleged misconduct by the prosecutor: the prosecutor’s reference during closing argument to the fact that the defendant had requested a jury instruction regarding a lesser included offense. Although that argument is regrettable, it is not of such magnitude that it denied defendant a fair trial. People v Foster, 175 Mich App 311; 437 NW2d 395 (1989).
Affirmed.
The statute states:
A person shall not carry a pistol concealed on or about his person, or, whether concealed or otherwise, in a vehicle operated or occupied by the person, except in his or her dwelling house, place of business, or on other land possessed by the person, without a license to carry the pistol as provided by law and if licensed, shall not carry the pistol in a place or manner inconsistent with any restrictions upon such license. [Emphasis added.]
Defendant sought the following instruction:
This law does not apply to a person who carries a pistol in his home, place of business, or on other land he possesses. The prosecutor has the burden of proving beyond a reasonable doubt that the defendant was carrying the pistol outside of his own home or place of business or off other land he possessed. [CJI2d 11.11.]
The statute likely was 18 USC 922(g)(1), which prohibits any convicted felon from receiving a firearm or ammunition that has been shipped across state lines.
1992 PA 217, § 1, substantially rewrote the section and reduced the waiting period.
The prohibition on purchasing, carrying, or transporting a pistol without a license has been interpreted to include a limitation on the right to "possess” a pistol. Lyons v United States, 794 F Supp 238, 239, n 2 (ED Mich, 1992).
These cases differ from the Texas cases cited supra because these cases involve public roads adjacent to property owned by the defendant. The cases discussed earlier involved claims that drivers could carry weapons in their business vehicles on any public road along their service routes.
The Fifth Amendment provides, in part: "nor shall any person be subject for the same offence to be twice put in jeopardy of life or limb.” | [
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Cynar, P.J.
Plaintiff filed a complaint against the defendant alleging that it was vicariously liable for the actions of certain Detroit police officers who had falsely arrested her for solicitation. Plaintiff sought damages for assault and battery, false arrest, malicious prosecution and the intentional infliction of emotional distress. At the conclusion of the trial, the jury returned a verdict in favor of plaintiff and a judgment of $110,000 was entered against defendant. Defendant filed a motion for new trial, judgment notwithstanding the verdict, or, in the alternative, remittitur on the basis that it was immune from liability. The motion was denied and defendant appeals as of right.
Contradictory testimony was presented at trial regarding the circumstances surrounding plaintiff’s arrest. Plaintiff testified that she went to a Detroit bar to meet her boyfriend. When she was unable to find him, plaintiff decided to leave. As she exited from the bar, a man grabbed her by the arm, showed her his police badge, and forced her to the police car. The officer threatened and handcuffed her.
After the officer transported plaintiff to the police station, she was ticketed for loitering and impeding the flow of traffic, strip searched by a female officer and then placed in a cell with another woman. Approximately one-half hour later, plaintiff was transported to another precinct where she was subjected to a second strip search and eventually permitted to phone her father. After several hours, she was released on bail.
Plaintiff was later arraigned and bound over for trial. However, when plaintiff appeared for the scheduled trial date, the arresting officer failed to appear and the case was dismissed. Plaintiff testified that she was emotionally upset after the incident and has remained afraid of Detroit police officers.
Defendant’s case was based primarily on the testimony of Police Officer Isaac Points. Points testified that on the night of plaintiffs arrest he was working with the vice unit and was monitoring the bar which was the scene of frequent prostitution activity. At approximately 11:30 p.m., he observed plaintiff standing outside the bar. Points watched plaintiff for approximately ten minutes during which time he saw her approach cars, talk to the occupants for several minutes then return to the front of the bar, all the time causing an obstruction of traffic. Eventually, Points walked up to plaintiff, identified himself as a police officer and arrested her for loitering.
Points testified that he did appear for trial on the scheduled date but, apparently because of some administrative error, he was directed to the wrong courtroom.
Defendant argues that the court erred in denying its motion for judgment notwithstanding the verdict because the officer was engaged in a governmental function and under Ross v Consumers Power Co (On Rehearing), 420 Mich 567; 363 NW2d 641 (1984), defendant is immune from liability for the torts committed by its employees while performing a governmental function. Plaintiff argues that intentional torts committed by governmental employees within the scope of their authority are excepted from immunity under Ross, supra. The question which we must determine is whether the city was vicariously liable for the intentional torts committed by its police officer in the performance of his duty.
A judgment notwithstanding the verdict is appropriate only if the evidence is insufficient as a matter of law to support a judgment for the non-moving party. When deciding a motion for judgment notwithstanding the verdict, the court must view the evidence in a light most favorable to the nonmoving party, giving the nonmoving party the benefit of every reasonable inference that could be drawn from the evidence. Napier v Jacobs, 145 Mich App 285, 291; 377 NW2d 879 (1985). If the evidence is such that reasonable persons could differ, the question is one for the jury and judgment notwithstanding the verdict is improper. Id.
Under Ross, supra, 420 Mich 625, a governmental agency can only be held vicariously liable for the torts of its employees if the tortfeasor was acting during the course of employment and within the scope of his authority. Even if these two conditions are met, liability can only be imposed if the tortfeasor was engaged in a nongovernmental or proprietary function or an activity which falls within a statutory exception. "[I]f the activity in which the tortfeasor was engaged at the time the tort was committed constituted the exercise or discharge of a governmental function . . . the agency is immune pursuant to § 7 [MCL 691.1407; MSA 3.996(107)] of the governmental immunity act.” Id. A governmental function is defined as one which is expressly or impliedly mandated or authorized by constitution, statute or other law. Id.
After viewing the evidence according to the appropriate standard, we believe that it is insufficient as a matter of law to support a judgment for the plaintiff. Plaintiff’s claim is premised on the intentional torts of defendant’s police officer. If we accept plaintiff’s testimony as true, then we must conclude that the acts of the arresting officer were ultra vires and therefore, by definition, were outside the scope of the officer’s authority. Ross, supra, p 631. While an officer is authorized to preserve the public peace and arrest offenders, his authority does not extend to gratuitously prosecuting innocent persons. Since this action forms the basis of plaintiff’s complaint, plaintiff’s claims against the city must fail.
Our conclusion is buttressed by two recent decisions of this Court. In Lowery v Dep’t of Corrections, 146 Mich App 342; 380 NW2d 99 (1985), the plaintiff brought an action against the state and the Department of Corrections for personal injuries allegedly inflicted by unknown prison guards. This Court concluded that since the assaults constituted illegal actions the guards could not be viewed as having acted within the scope of their authority when they committed the intentional tort.
In Callahan v State Prison of Southern Michigan, 146 Mich App 235; 380 NW2d 48 (1985), vacated 425 Mich 866 (1986), the intentional tort alleged by the plaintiff was the theft of a gold chain by prison officials. As in Lowery, the Court concluded that the state employees were not acting within the scope of their employment when they allegedly stole the chain and therefore, under Ross, the employer could not be held liable. See also Beasley v East Detroit Police Dep’t, 626 F Supp 1251 (ED Mich, 1986).
We also note that the Supreme Court has indicated its interpretation of the intentional tort question in its order reversing this Court’s decision in Zmija v Baron, 119 Mich App 524; 326 NW2d 908 (1982). Zmija involved tort allegations similar to those in the present case: assault and battery, false arrest, false imprisonment and malicious prosecution. This Court concluded that liability could be imposed on the city defendant for these intentional torts committed by its police officers based on plaintiffs respondeat superior theory of liability. The Supreme Court, in lieu of granting leave to appeal, reversed that portion of the judgment permitting recovery against the city under the doctrine of respondeat superior. Zmija v Baron, 422 Mich 899; 368 NW2d 244 (1985).
Zmija, Lowery and Callahan indicate the course which we should follow. When Officer Points committed the alleged intentional torts, he was not acting within the scope of his authority and the city is not vicariously liable for his illegal actions.
On the other hand, if we were to conclude that the officer was acting within the scope of his authority, we would be constrained to conclude that he was performing a governmental function and therefore the city was immune. As previously stated, a governmental function is one which is expressly or impliedly mandated or authorized by constitution or statute. In determining whether an activity constitutes a governmental function, the focus should be upon the activity being engaged in at the time the tort was committed. Ross, supra, p 625.
Here the activity engaged in was the arrest of plaintiff. Preserving the peace and arresting violators is the essence of police activity and a recognized governmental function. See Sherbutte v Marine City, 374 Mich 48; 130 NW2d 920 (1964), cited in Ross, p 625. Since the officer was engaged in a governmental function, the city is immune from liability.
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Holbrook, Jr., J.
In this wrongful death action, plaintiff appeals as of right from an order granting defendants summary disposition based on the statute of limitations. We affirm.
i
On June 28, 1989, plaintiff’s sister, decedent Althea Irving, who was three months pregnant, was treated for vaginal bleeding at the emergency room of Samaritan Health Center. The treating physicians diagnosed Irving as having an "inevitable abortion” and a suction curettage procedure was performed. Irving was admitted to the hospital but was discharged that evening at approximately 9:00 p.m. According to plaintiff, Irving’s last recorded temperature before discharge was 102.1 degrees. On July 3, 1989, Irving was sitting on her porch at home when she vomited, keeled over, and stopped breathing. She was taken to Samaritan Health Center’s emergency room, where she was pronounced dead on arrival, with acute cardiopulmonary arrest as the cause of death.
On June 4, 1992, plaintiff, acting as personal representative of Irving’s estate, filed this wrongful death action. Plaintiff’s complaint alleged that Irving’s death was proximately caused by defendants’ failure to monitor her medical condition properly, resulting in her being discharged from the hospital despite signs of uterine infection, such as an elevated temperature. Plaintiff stated in the complaint that she had been appointed personal representative of the estate on February 13, 1990, but that her authority was terminated on May 13, 1991, and she was not reappointed until May 7, 1992. Plaintiff alleged that the matter was timely filed within the two-year period provided in MCL 600.5852; MSA 27A.5852, as interpreted in Wright v Estate of Treichel, 36 Mich App 33; 193 NW2d 394 (1971). Plaintiff further alleged that, before February 24, 1992, she had no reasonable cause to believe that Irving’s death was the result of defendants’ malpractice.
In their answer to the complaint, defendants raised the expiration of the statutory limitation period as an affirmative defense, specifically citing MCL 600.5805; MSA 27A.5805 and MCL 600.5838; MSA 27A.5838. On December 18, 1992, defendants filed a motion for summary disposition under MCR 2.116(C)(7) and (C)(10), contending that plaintiff was required to file the action within two years after February 13, 1990, when her letters of authority were first issued authorizing her to act as personal representative of Irving’s estate, and that because she filed this action after February 13, 1992, the lawsuit was time-barred.
Plaintiff responded that the period of limitation had been tolled while her letters of authority were suspended for failing to file an estate accounting. She further alleged that her first attorney had failed to inform her of a viable medical malpractice claim and that she did not discover the existence of the claim until told by her current attorney on April 13, 1992. Plaintiff submitted no documentary evidence to support this allegation.
Following a hearing, the trial court granted summary disposition to defendants, finding that plaintiff’s claim was barred by the statute of limitations. MCR 2.116(C)(7).
ii
A defendant who files a motion for summary disposition under MCR 2.116(C)(7) may (but is not required to) file supportive material such as affidavits, depositions, admissions, or other documentary evidence. MCR 2.116(G)(3); Patterson v Kleiman, 447 Mich 429, 432; 526 NW2d 879 (1994). If such documentation is submitted, the court must consider it. MCR 2.116(G)(5). If no such documentation is submitted, the court must review the plaintiff’s complaint, accepting its well-pleaded allegations as true and construing them in a light most favorable to the plaintiff. This Court reviews a summary disposition determination de novo as a question of law. Borman v State Farm Fire & Casualty Co, 198 Mich App 675, 678; 499 NW2d 419 (1993), aff'd 446 Mich 482; 521 NW2d 266 (1994).
hi
The gravamen of this case is whether the period of limitation in MCL 600.5852; MSA 27A.5852 is tolled while the letters of authority of the personal representative of the decedent’s estate are suspended because of the personal representative’s apparent negligence. We hold that the limitation period is not tolled.
A
In actions brought under the wrongful death statute, MCL 600.2922; MSA 27A.2922, the limitation period is governed by the provision applicable to the liability theory of the underlying wrongful act. Hawkins v Regional Medical Laboratories, PC, 415 Mich 420, 436; 329 NW2d 729 (1982). Where, as here, the underlying theory of liability is medical malpractice, the action must be commenced within two years of the time of the act or omission that is the basis of the claim of malpractice, or within six months after the plaintiff discovers or reasonably should have discovered the existence of the claim, whichever is later. MCL 600.5805(4); MSA 27A.5805(4), MCL 600.5838a(2); MSA 27A.5838(1)(2). Because this is a wrongful death action, the following savings clause applies:
If a person dies before the period of limitations has run or within 30 days after the period of limitations has run, an action which survives by law may be commenced by the personal representative of the deceased person at any time within 2 years after letters of authority are issued although the period of limitations has run. But an action shall not be brought under this provision unless the personal representative commences it within 3 years after the period of limitations has run. [MCL 600.5852; MSA 27A.5852.]
Statutes of limitation are grounded in important public policies such as providing plaintiffs with a reasonable opportunity to bring lawsuits, providing defendants with a fair opportunity to defend against them, preventing the court system from being overburdened with stale claims, and protecting potential defendants from prolonged fear of litigation. Chase v Sabin, 445 Mich 190, 199; 516 NW2d 60 (1994). A tolling provision, as an exception to a statute of limitations, is to be strictly construed. Mair v Consumers Power Co, 419 Mich 74, 80; 348 NW2d 256 (1984).
The tolling of a limitation period implies the existence of an obstacle that is beyond the control of the plaintiff, such as a legal disability or affirmative act on the part of another person that prevents the timely bringing of a claim. See, e.g., Wilson v Knight-Ridder Newspapers, Inc, 190 Mich App 277; 475 NW2d 388 (1991) (imprisonment at the time a claim accrues tolls the period of limitation); Levinson v Sklar, 181 Mich App 693; 449 NW2d 682 (1989) (mental derangement at the time a claim accrues tolls the period of limitation); Thomas v Steuernol, 185 Mich App 148; 460 NW2d 577 (1990) (an affirmative act of fraud or misrepresentation regarding a claim of fraudulent concealment tolls the period of limitation); Seebacher v Fitzgerald, Hodgman, Cawthorne & King, PC, 181 Mich App 642; 449 NW2d 673 (1989) (same as Thomas). Thus, as a general rule, a limitation period is tolled only by a substantive restriction on the plaintiffs ability to bring an action in a timely manner, not by mere procedural or technical irregularities whose correction is within the control of the plaintiff. See Fisher v Volkswagenwerk Aktiengesellschaft, 115 Mich App 781; 321 NW2d 814 (1982). To hold otherwise would exalt form over substance and create an environment ripe for abuse or manipulation of the system in contraven tion of the policies that underlie statutes of limitation.
Relying on Wright v Estate of Treichel, supra, plaintiff asserts that the period of limitation, set forth in MCL 600.5852; MSA 27A.5852, was tolled while her letters of authority were suspended. In Wright, the plaintiffs, who were injured in an accident involving two automobiles, filed a lawsuit against the estate of the driver of the other automobile and served the complaint and summons on the attorney for the estate. The estate’s administrator had died 3 Vi months after the administrator’s letters of authority were issued, and a successor administrator had not been appointed. The defendant’s motion for an accelerated judgment on the basis that service of process on the estate attorney was improper was denied by the trial court. On appeal, this Court held that the period of limitation was tolled while the estate was without an administrator and that the plaintiffs were entitled to petition the probate court for appointment of a successor administrator who could then be served with process. Id. at 37, 39.
We find plaintiff’s reliance on Wright to be misplaced inasmuch as it is distinguishable from the present case. In Wright, the lack of an administrator prevented the court from obtaining jurisdiction over the estate; therefore, the period of limitation was held to be tolled during this period. While, the plaintiffs in Wright had attempted to bring suit against the defendant estate, plaintiff here is the estate’s personal representative, who is attempting to bring suit against defendants over whom personal jurisdiction is not an issue. Thus, while the plaintiffs in Wright were prevented from commencing the lawsuit by an event beyond their control — i.e., the death of the estate administrator —no such obstacle prevented plaintiff here from commencing a timely lawsuit against defendants. Indeed, it is undisputed that plaintiff’s original letters of authority were suspended when she, or her attorney acting on her behalf, failed to file a required estate accounting. Plaintiff’s apparent negligence does not constitute a tolling act or event.
B
Plaintiff alternatively asserts that the medical malpractice claim against defendants did not accrue until she discovered the existence of the claim on April 13, 1992, when her second attorney was advised by a retained medical expert that a possible claim existed. She asserts that because the complaint was filed within six months of this discovery, the claim is not time-barred. See MCL 600.5838a(2); MSA 27A.5838(1)(2). Plaintiff’s allegations regarding this issue are vague, inconsistent, and unsupported by any citation of legal authority. Moreover, this issue was not raised at the hearing regarding defendants’ motion for summary disposition and therefore was not addressed by the trial court. Notwithstanding plaintiff’s failure to preserve this issue properly for appellate review, Amrhein v Philip Petachenko, DC, PC, 174 Mich App 242, 246; 435 NW2d 10 (1988), we afford it cursory review because, the issue was raised in plaintiff’s complaint and in her brief in answer to defendants’ motion for summary disposition and because of the nature of our review of summary disposition motions brought under MCR 2.116(C) (7).
Under the six-month discovery rule, the plaintiff has the burden of establishing that she did not discover or could not have discovered through the exercise of reasonable diligence the existence of a possible medical malpractice claim more than six months before she filed her complaint. MCL 600.5838a(3); MSA 27A.5838(1)(3); Chase, supra at 198; Amrhein, supra. This Court has held that the discovery rule does not act to hold a matter in abeyance indefinitely while a plaintiff seeks professional assistance to determine the existence of a claim. Grimm v Ford Motor Co, 157 Mich App 633, 639; 403 NW2d 482 (1986). A plaintiff must act diligently to discover a possible cause of action and "cannot simply sit back and wait for others” to inform her of its existence. Id.
Here, the undisputed facts indicate that plaintiff discovered, or reasonably should have discovered, the existence of a possible medical malpractice claim against defendants more than six months before the filing of her complaint. Plaintiffs failure to pursue in a diligent manner a determination whether a claim existed is evidenced by her allowing her letters of authority to be suspended and then not seeking reissuance for nearly one year. Under these circumstances, plaintiffs claim is time-barred because she failed to investigate the existence of the claim in a diligent and timely manner. Id.; Griffith v Brant, 177 Mich App 583, 587-588; 442 NW2d 652 (1989). Accordingly, as a matter of law, defendants were entitled to summary disposition on this alternative basis. MCR 2.116(C)(7).
Affirmed.
Contrary to defendants’ claim, the Legislature’s amendment in 1988 of MCL 600.5852; MSA 27A.5852 to change the title of an estate’s representative from "executor or administrator” to "personal representative” was merely a change in phraseology to conform with the Revised Probate Code, not a substantive change implicitly overruling Wright, which was decided before the 1988 amendment.
In her complaint, plaintiff alleged that she did not discover the existence of the claim until February 24, 1992; yet, in her brief in answer to defendants’ motion for summary disposition, she alleged that the discovery date was April 13,1992. | [
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Per Curiam.
On September 19, 1982, after a preliminary examination, defendant was bound over to circuit court on a charge of breaking into a coin operated device, MCL 752.811(a); MSA 28.643(101)(a). Subsequently, the circuit court de nied his motion to quash the information. He appeals by leave granted.
At the preliminary examination, the prosecution presented evidence that defendant, then a coach operator, had taken money with a wire metal instrument from a bus fare box while the bus was parked at the SEMTA bus terminal in Inkster. Defendant now argues that a bus fare box is not covered by MCL 752.811; MSA 28.643(101), which reads:
"An Act relating to coin operated devices, including but not limited to parking meters, coin telephones and vending machines; and providing for a penalty.
"A person shall be guilty of a felony punishable upon conviction by confinement in the state prison for a period not to exceed 3 years or by a fine of not more than $1,000.00 or both if he does either of the following:
"(a) Enters or forces an entrance, alters or inserts any part of an instrument into any parking meter, vending machine dispensing goods or services, money changer or any other device designed to receive currency or coins with the intent to steal.
"(b) Knowingly possesses a key or device, or a drawing, print or mold thereof, adapted and designed to open or break into any such machine with intent to steal money or other contents from it.”
Reading only the body of the statute, we could reasonably conclude that defendant’s alleged actions are included. A bus fare box may be defined as "a device designed to receive currency or coins”. However, we decline to include a bus fare box within the statute because we believe that such interpretation would violate the title-object clause of the Michigan Constitution. Const 1963, art 4, § 24.
The legal concept of ejusdem generis states that, in a statute where general words follow the designation of particular subjects, the meaning of the general words will ordinarily be presumed to be and construed as restricted by the particular designation and as including only things of the same kind, class, character, or nature as those specifically enumerated. People v Smith, 393 Mich 432, 436; 225 NW2d 165 (1975). As recited above, the title to 1970 PA 126 states: "An Act relating to coin operated devices, including but not limited to parking meters, coin telephones and vending machines * * In the present statute, the general words are "coin operated devices”. The more particular words are "parking meters, coin telephones and vending machines”. Obviously, the statute is not restricted to only parking meters, coin telephones, and vending machines. It is also obvious, however, that parking meters, coin telephones, and vending machines are of a type clearly different from currency receptacles such as bus fare boxes.
We conclude that a bus fare box is not included in this title. As commonly understood, a "coin operated device” includes such objects as vending machines, pay telephones, pay video games, and slot machines. Other courts have defined a coin operated device as "a device or a machine operated by a coin or by a substitute for a coin”, Remington-Rand, Inc v Gage, 4 F Supp 199, 200 (WD NY, 1933), and, "In addition to its function as a dispenser, it serves as a salesman”, United Postage Corp v Kammeyer, 581 SW2d 716, 721 (Tex Civ App, 1979). Black’s Law Dictionary (4th ed), p 1243, defines "operation” in turn as "Exertion of power; * * * an effect brought about in accordance with a definite plan; action; activity”. Under these definitions, a coin operated device is the type of object that itself provides the desired service or good by reacting mechanically after the coin is inserted.
A bus fare box is not such a device. Instead, it is merely a receptacle that receives and stores money. While a coin operated device physically requires payment before the service or good is rendered, inserting money in a bus fare box does not trigger a mechanism which provides the service.
Therefore, if we interpreted "a device designed to receive currency or coins” to include a bus fare box, the act would exceed the scope of its title. But the title-object clause requires that the act itself not exceed the scope of its title. Maki v East Tawas, 385 Mich 151, 157; 188 NW2d 593 (1971). A statute will satisfy this requirement if it fairly indicates to a reasonable and inquiring mind its general scope, intent, and purpose. Green v Court Administrator, 44 Mich App 259, 263-264; 205 NW2d 306 (1972). A statute likewise satisfies this requirement "if the act centers to one main general object or purpose which the title comprehensively declares * * Loomis v Rogers, 197 Mich 265, 271; 163 NW 1018 (1917).
In Maki, supra, the title to the act in question stated that the act would grant governmental immunity for injuries caused by negligence. How ever, the body of the act itself granted such immunity for "tort liability”. The Supreme Court held that this discrepancy violated the title-object clause.
In Bankhead v Mayor of River Rouge, 387 Mich 610; 198 NW2d 414 (1972), the Supreme Court again held that the clause was violated. There, the title stated that the act would create a board of tenant affairs in every city of 1,000,000 or more having a housing commission and operating one or more housing projects. The Supreme Court therefore held that, even though the body of the act created a board of tenant affairs for each city having a housing commission and operating one or more housing projects, the defendant was not entitled to the benefits of the act because its population was less than 1,000,000. Where the body of the act is broader in scope than the limitations of its title, the title prevails. Bankhead v Mayor of River Rouge, 35 Mich App 7, 15; 192 NW2d 289 (1971), aff’d 387 Mich 610; 198 NW2d 414 (1972).
Likewise, the Supreme Court again held that the clause was violated in People v Stanton, 400 Mich 192; 253 NW2d 650 (1977). There, the title stated that the act proscribed bringing weapons into a prison. By the time the defendant was tried, the act (but not the title) had been amended to also proscribe possessing a weapon in a prison.
Although the title to 1970 PA 126 clearly refers to coin operated devices, it does not refer to currency receptacles like bus fare boxes. Defining the words "device designed to receive currency” in the body of the act to include a bus fare box would cause the scope of the act to exceed the scope of the title. This construction would violate the title-object clause because we have no power to enlarge the scope of the title. In the Matter of Charles Hauck on Habeas Corpus, 70 Mich 396, 403; 38 NW 269 (1888).
However, construing MCL 752.811; MSA 28.643 to exclude bus fare boxes does not leave bus companies unprotected. MCL 750.113; MSA 28.308 proscribes stealing from such boxes. Under that statute, the Legislature clearly provided that stealing from a bus fare box constitutes a six-month misdemeanor.
Reversed and remanded. The information is quashed.
In addition, when interpreting a statute, we must construe ambiguities in favor of lenity. Bell v United States, 349 US 81; 75 S Ct 620; 99 L Ed 905 (1955); People v Bergevin, 406 Mich 307; 279 NW2d 528 (1979).
In United Postage, the defendants had characterized the machines in that case as silent salesmen.” 581 SW2d 721.
Webster’s Third New International Dictionary, p 441, brings out this distinction. It defines a coin box as "a locked receptable to store the coins inserted in a coin-operated device (as in a pay phone)”. | [
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Smolenski, J.
In this medical malpractice action, plaintiffs appeal as. of right from orders granting summary disposition pursuant to MCR 2.116(C)(10), no issue of material fact, in favor of defendants Rheka Khera, M.D., Gregorio V. Ferrer, M.D., and Gregorio V. Ferrer, M.D., P.C., and denying plaintiffs’ motion to amend their complaint. We reverse and remand.
i
Plaintiff Kimberly Weymers, then twenty years old, was admitted to defendant St. Joseph Mercy Hospital in Pontiac on October 23, 1990, where she was treated by defendant Khera and, subsequently, by defendant Ferrer. Plaintiff’s kidneys failed by October 25, 1990. Plaintiff was also placed on a respirator. On October 26, 1990, plaintiff was transferred to another hospital facility where she remained on a respirator for approximately two weeks. Plaintiff was diagnosed as suffering from Goodpasture’s Syndrome, a disease of the immune system that affects the lungs and kidneys. Plaintiff suffered complete and permanent kidney failure.
Plaintiff brought a medical malpractice action against, among others, defendant hospital and defendants Khera and Ferrer. Plaintiff alleged that defendants Khera’s and Ferrer’s negligent failure to timely diagnose and treat her Goodpasture’s Syndrome caused the following damages: medical expenses, lost earnings, physical and mental pain and suffering, and permanent loss of all kidney function.
During discovery, plaintiff’s expert testified that if plaintiff had been timely and properly diagnosed with and treated for Goodpasture’s Syndrome upon being admitted to defendant hospital she would have had a thirty to forty percent chance of retaining kidney function. Defendant hospital moved for summary disposition pursuant to MCR 2.116(0(10) with regard to the issue of causation. Defendants Khera and Ferrer joined in defendant hospital’s motion, which the trial court granted. Plaintiff subsequently moved to amend her complaint to specifically allege pulmonary damage, but the motion was denied by the trial court. Plaintiff appeals as of right.
ii
On appeal, we review the trial court’s grant or denial of summary disposition de novo. Allstate Ins Co v Elassal, 203 Mich App 548, 552; 512 NW2d 856 (1994). A motion for summary disposition pursuant to MCR 2.116(0(10) tests whether there is factual support for a claim. When deciding such a motion, a court must consider the pleadings, affidavits, depositions, admissions, and other documentary evidence available to it. Allen v Keating, 205 Mich App 560, 562; 517 NW2d 830 (1994). Summary disposition pursuant to MCR 2.116(0(10) is proper when, except with regard to the amount of damages, there is no genuine issue regarding any material fact, and the moving party is entitled to judgment as a matter of law. Allstate, supra.
in
The essential facts in this case are not in dispute. Defendants Khera and Ferrer do not dispute that plaintiff’s expert would testify that plaintiff had a thirty to forty percent chance of retaining kidney function if her disease had been timely and properly diagnosed and treated. However, defen dants argue that they were, entitled to judgment as a matter of law because plaintiff cannot establish that their conduct more likely than not was the proximate cause of her injuries, and because the doctrine of lost chance or lost opportunity as interpreted in Falcon v Memorial Hosp, 436 Mich 443; 462 NW2d 44 (1990), only applies in wrongful death cases. Plaintiff argues that Falcon applies in this case because she will suffer a premature death.
In Falcon, a nineteen-year-old patient suffered an unpreventable and fatal amniotic-fluid embolism after the birth of her child. The plaintiff, the administratrix of the decedent’s estate, filed suit against the hospital and the attending physician, alleging that the failure to insert an intravenous line into the decedent before the onset of the embolism deprived the patient of a 37.5 percent chance of survival. Id. at 454-455 (Levin, J.), 475 (Riley, C.J.).
A four-justice majority held that the patient’s lost opportunity to survive was an actionable injury distinct from the patient’s death, provided that the negligence of the defendant, more probably than not, caused the loss of opportunity. Id. at 461-462 (Levin, J.), 472-473 (Boyle, J.). Justices Levin and Archer further stated in the lead opinion that
[a] patient who suffers [a loss of an opportunity for a better result caused by] a failure to diagnose or a misdiagnosis has an actionable claim for damages without regard to whether death ensues. . .
The accrual of a cause of action for loss of an opportunity of achieving a better result does not, thus, depend on whether death ensues as a result. The cause of action accrues when harm and damages result from the loss of a substantial opportunity for a better result. The plaintiff has the burden of establishing through expert testimony the difference between the course of the disease and treatment had there been a correct diagnosis, and the course of the disease and treatment as a result of failure to diagnose or misdiagnosis.
The patient, or, if death ensues, his personal representative, need not show that it was probable, measured as more than fifty percent, that the course of the disease and treatment would have been different. It is sufficient to show, more probably than not, that had there been a correct diagnosis, the patient would have had a substantial opportunity of avoiding the course of the disease and treatment that occurred. [Id. at 470, n 43 (Levin, J.).]
However, the concurring opinion of Justices Boyle and Cavanagh emphasized
that the Court today is called upon to decide the viability of a claim for "lost opportunity” only where the ultimate harm to the victim is death. Thus, any language in the lead opinion suggesting that a similar cause of action might lie for a lost opportunity of avoiding lesser physical harm is dicta. Whether the social and policy factors which justify compensation for a lost chance of survival would justify recovery for the loss of a chance to avoid some lesser harm is a question for another day. [Id. at 473 (Boyle, J.).]
We believe that day has arrived. We hold that the loss of a substantial opportunity to avoid physical harm is harm distinct from the underlying injury for which tort law should allow recovery in proportion to the extent of the lost opportunity, provided that the negligence of the defendant, more probably than not, caused the loss of opportunity.
We believe that the arguments for allowing a cause of action for the loss of an opportunity to survive apply equally to allowing a cause of action for the loss of an opportunity to avoid lesser physical harm. In recognizing such harm, the traditional rule that the plaintiff must prove that the defendant’s negligent conduct, more likely than not, caused the harm is not contradicted. Falcon, supra at 462-463 (Levin, J.), 472-473 (Boyle, J.); Harris v Kissling, 80 Or App 5; 721 P2d 838 (1986); but see Falcon, supra at 473-495 (Riley, C.J., dissenting).
Allowing recovery for the loss of a substantial opportunity to avoid physical harm is an equitable approach. DeBurkarte v Louvar, 393 NW2d 131, 137 (Iowa, 1986). In this case, defendants undertook to protect plaintiff from the type of harm that occurred. Falcon, supra at 461 (Levin, J.). As Justice Levin stated in Falcon, an actor’s negligent omission in cases like this prevents the plaintiff from being able to prove the defendant’s liability, and destroys the ability to allow fate to run its course. Id. at 456-457, ns 20, 21. Here, assuming for the purpose of argument only that defendants should have diagnosed and treated plaintiff for Goodpasture’s Syndrome upon her admission to the hospital, plaintiff might still have lost kidney function, but she would know that it was because of "fate,” i.e., the natural progression of the disease, and not because of any failure by defendants.
If the lost opportunity doctrine is limited to cases only involving death, potentially flagrant examples of malpractice could go uncompensated in cases in which the same negligent failure to diagnose or treat results in a lost opportunity to avoid egregious harm, i.e., paralysis or coma. Thus, the deterrent and loss-allocation functions of tort law would be undermined if defendants could escape liability for the effects of negligent conduct that cause demonstrable losses. DeBurkarte, supra at 137 (citing King, Causation, valuation, and chance in personal injury torts involving preexisting conditions and future consequences, 90 Yale L J 1353, 1377-1378 [1981]); but see Falcon, supra at 494-495 (Riley, C.J., dissenting).
We are aware that in extending the doctrine of lost opportunity to cases not involving death
there can be many gradations in the level of improved recovery through the use of the proper diagnosis and treatment. That is, with the proper diagnosis and treatment there can be a very likely chance of a slight improvement in the condition as well as a slim chance of a complete recovery, as well as many degrees of likelihood and levels of recovery in between. Death, on the other hand, is a quantum event. The patient either lives or dies. Recovery, to this extent, is either complete or nonexistent. [Falcon v Memorial Hosp, 178 Mich App 17, 23-24; 443 NW2d 431 (1989).]
However, we do not believe that the range of likelihood and levels of recovery are insurmountable problems. See Deburkarte, supra (allowing recovery for a loss of opportunity offers the most easily administered and consistent method for dealing with complicated cases where, but for the defendant’s negligence, dealing with the imponderables of chance would not have been necessary). Cases involving a claim for loss of opportunity will inevitably include expert testimony concerning the plaintiff’s chance of recovery. See Falcon, 436 Mich 470, n 43 (Levin, J.). It seems a small addition for such experts to testify regarding whether the plaintiff had a full or partial chance of recovery. For example, in this case the plaintiff’s expert testified that plaintiff had a thirty to forty percent chance of retaining kidney function. Presumably that expert could also testify whether that was a thirty to forty percent chance of a full recovery or a thirty to forty percent chance of retaining only limited kidney function and, if so, what those limits are. Defendants, of course, could provide conflicting expert testimony at trial.
Finally, we note, as did Justice Levin in Falcon, 436 Mich 469, n 41, that other courts have recognized that the lost opportunity doctrine applies in cases not involving death. See, e.g., Borgren v United States, 723 F Supp 581 (D Kan, 1989); James v United States, 483 F Supp 581, 587 (ND Cal, 1980); Harris, supra.
Because we extend the lost opportunity doctrine to cases not involving death, we find that the testimony of plaintiffs expert that plaintiff would have had a thirty to forty percent chance of retaining kidney function had she been timely diagnosed and treated for Goodpasture’s Syndrome created a question of fact. Accordingly, we reverse the trial court’s grant of summary disposition and remand the case to the trial court for further proceedings consistent with this opinion.
IV
Plaintiff next argues that the trial court abused its discretion in denying her motion to amend her complaint to further allege physical and mental pain and suffering from the aggravation of the pulmonary pathology. We agree.
Where a motion for summary disposition is grounded on MCR 2.116(0(10), the trial court is required to give the parties an opportunity to amend their pleadings as provided by MCR 2.118, unless the amendment would be futile. MCR 2.116(I)(5); Blue Water Fabricators, Inc v News Apex Co, Inc, 205 Mich App 295, 299; 517 NW2d 319 (1994). MCR 2.118(A)(2) provides that leave to amend shall be freely given when justice so requires. Jackson v White Castle System, Inc, 205 Mich App 137, 142-143; 517 NW2d 286 (1994). The rules pertaining to the amendment of pleadings are designed to facilitate amendment except when prejudice to the opposing party would result. Amendment is generally a matter of right rather than grace. Patillo v Equitable Life Assurance Society of the United States, 199 Mich App 450, 456; 502 NW2d 696 (1992). A motion to amend ordinarily should be granted; denial should only be for particularized reasons, such as undue delay, bad faith, dilatory motive, repeated failure to cure deficiency by amendments previously allowed, undue prejudice to the opposing party, or futility. Ben P Fyke & Sons v Gunter Co, 390 Mich 649, 656; 213 NW2d 134 (1973).
In this case, the trial court stated:
The Court is satisfied that this is a 1991 case. The Defendant did not have notice that the general damage element of pain and suffering was specific to the damages arising out of pulmonary pathology. Defendants prepared for trial and the Defendants prepared for mediation, the Court is satisfied, due to the loss of renal function. And despite the Plaintiffs contentions, the Court’s [sic] satisfied that the Motion for Amendment of the Complaint, Second Amended Complaint, should be denied, and I do so.
However, plaintiff stated in her mediation summary that her damages included the "probability that pulmonary damages would have been minimized such that mechanical ventilation and extensive respiratory therapy would not have been necessary.” Plaintiff also alleged in both her original and first amended complaint that on October 23, 1990, she went to defendant Walled Lake Medical Center with a symptom, among others, of "bloody sputum with cough,” that she subsequently was admitted to defendant hospital and examined by defendant Khera, and that defendant Khera failed to obtain a timely pulmonary consultation. Defendants Khera and Ferrer both testified in their depositions that Goodpasture’s Syndrome affects the lungs and that they observed plaintiff having pulmonary problems. Plaintiff was subsequently placed on a respirator. These facts indicate that defendants had notice of potential pulmonary complications and thus would not have been unduly prejudiced by allowing plaintiff to amend her complaint to allege that her damages included pain and suffering from pulmonary aggravation. Terhaar v Hoekwater, 182 Mich App 747, 752; 452 NW2d 905 (1990). Because the amendment would not have prejudiced defendants, the mere fact that this case originated in 1991 is an insufficient reason to deny leave to amend. Id.
Defendants argue that Dacon v Transue, 441 Mich 315; 490 NW2d 369 (1992), is on point. In Dacon, our Supreme Court upheld the denial of the plaintiffs motion to amend her complaint. Id. at 328. However, in that case the plaintiff sought to add a new theory of medical malpractice. Id. The plaintiff had alleged and developed the case on the theory that the defendants prescribed the wrong medicine, and not until trial did she seek to add a theory alleging that the defendants had negligently delayed treating and medicating her. Id. at 321-324, 328. However, Dacon is distinguishable. In this case, plaintiff sought the amendment before trial. Moreover, plaintiff’s claim of pulmonary damage arises from her original theory that defendants negligently failed to timely diagnose or treat her Goodpasture’s Syndrome. Cf. Sherrard v Stevens, 176 Mich App 650, 654-655; 440 NW2d 2 (1988).
Thus, although allowing the amendment might have affected the result of the trial, it would not have denied defendants a fair trial. Fyke, supra at 657-658. Accordingly, the trial court abused its discretion in denying plaintiff’s motion to amend. Froede v Holland Ladder & Mfg Co, 207 Mich App 127, 137; 523 NW2d 849 (1994). We reverse the trial court’s denial of plaintiff’s motion to amend her complaint. On remand, the plaintiff is to be allowed to amend her complaint to add an allegation of pain and suffering relating to pulmonary damage.
We do not retain jurisdiction.
Reversed and remanded._
Because the claim alleged by plaintiff Jonathan Weymers, the husband of Kimberly Weymers, is solely for loss of consortium, and thus derivative of Kimberly Weymers’ claims, "plaintiff” in the singular will be used hereinafter to refer to Kimberly Weymers.
Only defendants Khera and Ferrer, including Ferrer’s professional corporation, are parties to this appeal. Plaintiff has settled her claims with the remaining defendants.
Plaintiff underwent approximately fifteen months of dialysis until she received a kidney transplant. According to plaintiff’s mediation summary, the average life of a transplanted kidney is approximately seven years.
The Legislature recently has recognized the loss of an opportunity to achieve a better medical result if the opportunity is greater than fifty percent. See MCL 600.2912a(2); MSA 27A.2912(1)(2). The statutory cause of action for loss of opportunity does not control this case because it does not apply to causes of action arising before October 1, 1993. See 1993 PA 78, § 4(1). We acknowledge the limited applicability of our holding in light of MCL 600.2912a; MSA 27A.2912(1)(2) and emphasize that we are concerned today only with the facts of this case.
We are persuaded that the loss of a thirty to forty percent opportunity of retaining kidney function constitutes a loss of a substantial opportunity of avoiding physical harm. See Falcon, 436 Mich 470 (Levin, J.).
In light of our disposition of this issue, we decline to address plaintiffs argument that the trial court erred in ruling that an allegation in the complaint that plaintiff suffered physical pain and suffering did not encompass her temporary pain and suffering due to untreated pulmonary hemorrhage.
We note that the trial court could condition the amendment on plaintiffs reimbursing defendant for any additional expense upon a finding that inexcusable delay in requesting the amendment caused or will cause defendants additional expense that would have been unnecessary had the request for amendment been filed earlier. MCR 2.118(A)(3). | [
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Per Curiam.
Defendant Rabideau appeals from a circuit court affirmance of a district court decision. The circuit court awarded judgment for plaintiff after holding that certain defenses could not be considered in view of the passage of time. Accordingly, the district court allowed writs of garnishment to be filed by plaintiff based upon a judgment rendered by that court three years earlier. Defendant applied for and was denied leave to appeal to this Court on February 25, 1982. On April 29, 1982, defendant applied for delayed leave to appeal to the Supreme Court. The Supreme Court ordered the case remanded to this Court as on leave granted on February 4, 1983. 417 Mich 880 (1983).
Defendant was a retailer of snowmobiles in Marinette, Wisconsin. During the operation of this retail business, he borrowed money from plaintiff to purchase an inventory. This inventory loan was eventually changed in form to a consumer installment note on September 9, 1975, to accommodate defendant because he could not make the larger payments required by an inventory loan. At this time, defendant held three snowmobiles which were referred to in the note as collateral. Defendant eventually went out of business and moved these snowmobiles to his residence in Menominee, Michigan. On March 19, 1976, plaintiff sued defendant in Marinette, Wisconsin, County Court, small claims division, seeking repossession of the collateral and a deficiency judgment. Defendant failed to respond and a default judgment was entered against him on April 1, 1976. A complaint on this judgment was filed on April 13, 1976, in the Menominee (95A) district court. A summons issued and service was effectuated. Defendant again failed to answer and a default judgment was entered on April 30, 1976. The amount of this judgment was $3,410.89. While defendant did not appear in court to answer, he was apparently directly contacted by plaintiff and agreed to deliver possession of the snowmobiles to plaintiff.
On May 8, 1979, about three years after entry of the district court judgment, a writ of garnishment was issued by that court to First National Bank & Trust as garnishee defendant against defendant’s assets in the bank. First National disclosed assets caught by this writ on May 11, 1979, and froze defendant’s bank account. Defendant responded on June 11, 1979, by filing a motion to quash the writ of garnishment and a motion to remove the matter from district court to the circuit court. Additionally, defendant filed a four-count complaint against plaintiff for damages. On July 10, 1979, and September 10, 1979, the district court heard evidence on the limited issue of whether or not the judgment issued by the Marinette county court, small claims division, was within the jurisdiction of that court. At the conclusion of the hearing, the district court found that the rendering court in Marinette was without subject matter jurisdiction and voided its previous default judgment of April 30, 1976. Accordingly, it entered an order quashing the writ of garnishment. The district court found that the Wisconsin judgment was issued by the small claims court in that jurisdiction, and that that court’s jurisdiction is limited to actions, " 'where the amount claimed is $1,000 or less’ (Wis Statutes 299.01[4]) or 'where the value of the property claimed does not exceed $1,000’ (Wis Statutes 299.01[3])”. In its original complaint filed in Wisconsin, plaintiff listed the value of the property as $1,800. Since the judgment ultimately entered was in excess of $3,000, the court concluded that the Marinette court did not have subject matter jurisdiction and reasoned that a void judgment is attackable whenever its effects are felt. Therefore, it concluded no writ of garnishment could issue based upon this void judgment.
Plaintiff appealed this decision to the circuit court. That court reversed the district court order voiding its prior judgment of April 30, 1976. While the circuit court agreed that the underlying Wisconsin judgment was void for lack of subject matter jurisdiction, it found that defendant had waived this defense because this defense could have and should have been brought to the attention of the trial court by a timely action. The circuit court remanded the case to the district court for resolution of the other issues. Although, on appeal, defendant challenges the district court’s resolution of these other issues, we find that we must address the issue of whether the Wisconsin small claims court judgment was void for lack of subject matter jurisdiction and whether the circuit court erred by holding that defendant waived this defense by failing to raise it in a timely manner.
In 1976, the Wisconsin statute dealing with procedure in county court in small claims type actions stated, in part:
"[T]he procedure in this chapter shall be used in county court in the following actions:
"(3) Replevins. Actions for replevin under §§ 810.01 to 810.13, where the value of the property claimed does not exceed $1,000.” Wis Stat Ann 299.01, now Wis Stat Ann 799.01.
In addition, the Wisconsin Consumer Act contained the following provision regarding actions to recover collateral:
"[A] creditor seeking to obtain possession of collateral shall commence an action for replevin of such collateral. Such actions shall be conducted in accordance with ch. 299, notwithstanding § 299.01(3) and the value of the collateral sought to be recovered, except that:
"(e) Judgment in such action shall determine only the right to possession of the collateral, but such judgment shall not bar any subsequent action for damages or deficiency to the extent permitted by this subchapter.” Wis Stat Ann 425.205(1).
Based on the above, we hold that the district court was correct in holding that the Wisconsin small claims court lacked subject matter jurisdiction to issue the deficiency judgment which plaintiff attempted to enforce in this state.
Contrary to the holding by the circuit court that defendant waived this defense by failing to raise it in a timely manner, we hold that the defense of lack of subject matter jurisdiction can be raised at any time.
"A judgment entered by a court without subject-mat ter jurisdiction is a void judgment and may be vacated at any time on the court’s own motion or upon the motion of any party thereto, including the party who originally invoked the jurisdiction of the court. Carpenter v Dennison, 208 Mich 441 [175 NW 419] (1919); Orloff v Morehead Manufacturing Co, 273 Mich 62 [262 NW 736] (1935); Shane v Hackney, 341 Mich 91 [67 NW2d 256] (1954); Millman Brothers, Inc v Detroit, 2 Mich App 161 [139 NW2d 139] (1966).” Banner v Banner, 45 Mich App 148, 153; 206 NW2d 234 (1973).
Because of our disposition of the above issue, we need not address the other issues raised by defendant on appeal.
Reversed. | [
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Per Curiam.
The Michigan Exchange Carriers Association (meca) and the Telephone Association of Michigan (tam) appeal as of right the February 23, 1993, and May 11, 1993, orders of the Public Service Commission, by which the psc established filing requirements for certain telecommunication service rate alterations. We affirm but remand for clarification of the filings required of average schedule access companies.
i
This case involves interpretation of the psc’s authority to regulate telecommunication services under 1991 PA 179, the Michigan Telecommunications Act, MCL 484.2101 et seq.; MSA 22.1469(101) et seq., which, by its terms, took effect January 1, 1992, and is repealed effective January 1, 1996.
All parties agree that the act substantially changed the regulatory framework for telecommunication services in this state. Previously, the psc regulated entities that provided telecommunication services as it did other utilities that monopolized public services. The new act regulates services provided by entities and not the entities themselves. The extent of regulation depends upon the type of telecommunication services offered. For example, basic local exchange service, i.e., basic local telephone service, is subject to extensive regulation because local exchange carriers retain a monopoly position. On the other hand, toll services, such as long distance,' are regulated to a lesser extent. In the case of access service, which is the service that provides toll carriers with a network connection to the local exchange so that they may originate or terminate a call in that exchange for their toll customers, the act provides for structured competition and free contracting, subject to regulation when parties cannot reach agreement and to prevent discrimination. A variety of services, such as paging, cellular, and mobile services, are subject to little or no regulation.
Section 201 of the act provides:
(1) The Michigan public service commission shall have the jurisdiction and authority to administer this act.
(2) In administering this act, the commission shall be limited to the powers and duties prescribed by this act. [MCL 484.2201; MSA 22.1469(201).]
The act provides for means by which the providers of telecommunication services may apply for rate increases or changes in service, and also provides for the filing of complaints by persons or entities aggrieved by the action or inaction of providers. For example, § 304(5), MCL 484.2304(5); MSA 22.1469(304)(5), allows a provider to alter its rates for basic local exchange service simply by giving notice to the psc and to the public in the manner established by rule or order of the psc. Pursuant to subsection 6, if the rate proposed does not exceed one percent less than the Consumer Price Index, it automatically takes effect ninety days from the date of the notice. However, subsection 9 requires the psc to hold a hearing within forty-five days from the date of the notice and issue an order within the ninety-day period finding either that the rate alteration was just and reasonable, holding the rate alteration in abeyance pending a review, or requiring the provider to file a formal application for rate hike. Under subsection 6, a formal application is always required when the rate hike exceeds one percent less than the CPI.
The filing of applications for rate alterations and complaints is governed by § 203, which provides:
(1) Upon receipt of an application or complaint filed pursuant to a provision of this act, or on its own motion, the commission may conduct an investigation, hold hearings, and issue its findings and order in accordance with the contested hearings provisions of the administrative procedures act of 1969, Act No. 306 of the Pubic Acts of 1969, being sections 24.201 to 24.328 of the Michigan Compiled Laws.
(2) The commission shall require uniform filing standards for a case commenced under this section. An application filed under this act shall contain all information, testimony, exhibits, or other documents and information on which the person intends to rely to support the application. Applications that do not meet the requirements of this subsection shall be dismissed or suspended pending the receipt by the commission of the required information. The burden of proving a case filed under this act shall be with the party filing the application or complaint.
(3) The commission shall have the power to administer oaths, certify to all official acts, and to compel the attendance of witnesses and the production of papers, books, accounts, documents and testimony.
(4) Except as otherwise provided in subsection (2), the commission shall issue a final order in a case filed under this act within 150 days from the date the application or complaint is filed. If a hearing is held, the commission shall have an additional 60 days to issue its final order.
(5) An order of the commission shall be subject to review as provided by section 26 of Act No. 300 of the Public Acts of 1909, being section 462.26 of the Michigan Compiled Laws.
(6) Before commencing a hearing under this section, the commission may attempt alternative means of resolving a dispute under its jurisdiction. [MCL 484.2203; MSA 22.1469(203).]
On July 22, 1992, the psc issued an order and notice of opportunity to comment, inviting interested parties to submit comments regarding proposed uniform filing standards for applications and complaints under the act. Attached to its order was a 110-page document containing its proposals. The document is divided into six parts, each of which deals with a different issue under the act. For example, Part n addresses filing requirements for licensing procedures and Part m addresses requirements for a rate alteration that does not exceed one percent less than the cpi. Part iv, which is concerned with rate alterations that do exceed one percent less than the cpi, is the only part at issue in this case.
Under Part iv, a provider seeking a rate alteration in excess of one percent less than the cpi for a regulated service is offered two options. The provider may file both a traditional rate case and a delta rate case simultaneously, or simply file a delta rate case, where "delta rate case” means submitting only data regarding changes in investments, revenue, costs, and taxes since the effective date of Act 179 or since the date of the last basic local exchange service rate alteration granted by the psc. Both options require the provider to submit total company data, i.e., data regarding costs, revenues, investments, rate of return, and taxes on all services provided, whether regulated or unregulated, even though the rate alteration is sought regarding only some specific service and not all services.
A number of interested parties filed responses to the proposed filing requirements, including the meca and the tam. The meca is an association whose members consist of thirty-six small rural telephone companies that provide basic local exchange service and access. Meca members charge toll service providers for the access they provide to their local exchange network, but do not themselves provide toll service. Because the two largest local exchange carriers in Michigan, Michigan Bell (now Ameritech) and GTE North also provide toll service, they are not members of the meca. The tam is a trade association representing local exchange carriers. Its members include all but one of the members of the meca, as well as Michigan Bell and GTE North.
The tam argued that the psc overstepped its authority under the act by requesting information regarding completely unrelated services and that the psc was attempting to reassert its old plenary regulatory authority under the guise of establishing filing requirements. The tam also expressed concern that the filing requirements would require its members to disclose confidential information. The psc rejected these arguments by order dated February 23, 1993:
The Commission disagrees with tam’s arguments regarding the scope of the filing requirements. Filing requirements do not control the outcome of a case. Rather, they are intended to hasten resolution of cases. Filing requirements make the processing of cases more orderly. Because all parties to a case will share a common starting point, the Commission will be able to better understand the issues presented. Further, each case will be presented in a uniform manner, which will facilitate comparisons among cases.
The Commission concludes that the filing requirements proposed by the Staff are necessary to effectuate the rapid processing of cases required by Act 179. The broad array of information to be filed with an application should reduce prehearing discovery efforts, shorten the hearing process and provide the Commission with the information necessary to determine the issues in a manner consistent with Act 179. Accordingly, the Commission finds that tam’s criticisms regarding the scope and focus of the filing requirements are not well taken.
The Commission finds that tam’s objections are not well taken. As previously discussed, there is an existing methodology for protecting confidential information from public disclosure. Accordingly, the Commission is not persuaded by tam’s argument that confidential information should not be included in the filing requirements if the information is in fact confidential. Further, the Commission agrees with the Staff that the underlying cost structure of a service must be reviewed in order to allow the Commission to fulfill the statutory mandate of setting rates that are just and reasonable. Finally, the Commission remains convinced that broad filing requirements will expedite the hearing process and allow cases filed pursuant to Act 179 to be resolved according to the statute’s time constraints.
The meca argued that § 203(2) of the act implies that the applicant should determine what information it believes is necessary to support its application. The psc, agreeing with its staff, rejected this contention as follows:
In response, the Staff argues that the information required by Part iv of the filing requirements is necessary for the Commission to determine issues related to access service. The Staff believes that it would be inappropriate to construe § 203 to allow applicants to place limits on the Commission’s ability to determine the scope of a proceeding conducted pursuant to Act 179.
The Commission agrees with the Staff. The filing requirements ensure uniformity and provide the Commission with information that is essential to the determination of disputes. Although applicants must adhere to the filing requirements, nothing prohibits them from including additional information in support of their applications or tailoring their applications to meet their individual needs.
On rehearing, the tam reiterated its earlier position and, in the alternative, argued that, at most, total company cost data may be relevant for purposes of determining the appropriate cost allocation made by a provider. The tam therefore requested the psc to rule that total company cost data would be used only for this limited purpose. On May 11, 1993, the psc refused to do so for the following reasons:
The Commission is not persuaded that the relief requested in tam’s petition should be granted. The Commission previously rejected tam’s claim that revenues for services other than those for which a rate alteration is sought are not relevant to the determination of whether a rate application for a particular service or group of services should be granted. The Commission remains convinced that it has authority pursuant to Sections 203 and 304 of Act 179 to adopt broad filing requirements to facilitate determination of whether rate revisions will result in just and reasonable rates. Contrary to tam’s contentions, the Commission finds that total company revenue information and net operating income data on a total company basis will shed light on the Commission’s determination of whether a provider’s rates for basic local exchange service are just and reasonable. Further, the Commission must have sufficient information to ensure that revenue from basic local exchange and access rates and the proceeds from the disposition of rate-acquired assets are not being used to directly or indirectly subsidize other services offered by the provider or an affiliate of the provider in violation of Section 308(1) of Act 179.
Additionally, the Commission declines to impose limitations on the use of information contained in the filing requirements as proposed by tam. As previously noted, filing requirements do not control the outcome of a case. Accordingly, it would not be appropriate in this proceeding to determine how the information contained in documents filed pursuant to filing requirements will be used in individual cases. Rather, the Commission concludes that tam’s concerns should be addressed on a case-by-case basis.
On rehearing, the meca argued that the proposed filing requirements would be burdensome for at least some of its members. According to the meca, there are two accepted methods for an access service provider to determine and allocate costs. One method is to do a "cost study” that determines total company costs and separates them between intrastate and interstate jurisdictions, resulting in what is called "jurisdictionalized total company costs.” Those costs are then allocated to specific access services, which results in a determination of a company’s "fully embedded costs.” The meca represents that twenty-two of its members perform such studies for purposes of reporting to the Federal Communications Commission. However, fourteen of the meca’s member companies utilize "average schedules,” by which companies use industry-wide formulas as a surrogate for performing fully embedded cost studies. This allows companies, especially small companies, to avoid the expense and effort of cost studies, which the meca contends cost between $25,000 and $45,000 each and would increase the total pool access cost (the total cost shared by the meca members when the association files an application on their behalf) by $350,000 to $630,000. The meca argued to the psc that such costs should not be imposed where the information required is at best marginally useful. The psc rejected the meca’s position as follows:
Further, the Commission finds that meca’s concern that the filing requirements may require average schedule companies to provide expensive cost separation studies is not well taken. The Commission has never required average schedule companies to perform separation studies. The filing requirements adopted by the Commission’s February 23, 1993 order should not be interpreted as imposing such a requirement. Average schedule companies should continue to file average schedule information regarding their intrastate access revenue requirements with an explanation for company-specific deviations as their part of a pool filing. Accordingly, the Commission finds that the filing requirements do not impose any new burdens on meca companies.
From the psc’s determinations, the tam and the meca appeal as of right.
ii
The psc contends that this Court should not address the merits of the issues raised on appeal because neither the tam nor the meca have standing. The psc argues that neither association has been harmed, and notes that no individual member of either association has joined in the appeal. We disagree. Standing is a legal term used to denote the existence of sufficient interest by a party in the outcome of litigation to ensure sincere and vigorous advocacy. Standing requires a demonstration of a substantial interest that will be detrimentally affected in a manner different from the citizenry at large. House Speaker v State Administrative Bd, 441 Mich 547, 554; 495 NW2d 539 (1993). We hold that appellants have standing because their members have a substantial interest in questions regarding the amount and type of information required for telecommunication rate alterations, and that their interest is affected by the psc’s decisions in a manner different from the citizenry at large.
Section 203(5) provides that orders of the psc implementing the act are subject to review as provided by MCL 462.26(8); MSA 22.45(8). That statute provides that a party contesting a psc order must prove by clear and satisfactory evidence that the order is unlawful or unreasonable by showing that it is arbitrary, capricious, an abuse of discretion, or not supported by the record. Residential Ratepayer Consortium v Public Service Comm, 198 Mich App 144, 151; 497 NW2d 558 (1993).
Appellants argue that this Court should not give deference to the psc’s decisions in this case because the courts may not defer to an agency’s interpretation of statutory provisions regarding the agency’s powers and jurisdiction. They also contend that deference is due only to a longstanding interpretation of a statute by the agency charged with its administration, and so no deference should be given to the psc’s initial interpretation of the new statute at issue here.
We disagree.. The deference due an agency’s interpretation of a statute entrusted to its care extends to statutory provisions regarding the agency’s power and jurisdiction. Mississippi Power & Light Co v Mississippi, ex rel Moore, 487 US 354, 381; 108 S Ct 2428; 101 L Ed 2d 322 (1988). It is true that this Court has held that judicial deference is given only to longstanding interpretations, which cannot exist with respect to a newly minted statute. In re Quality of Service Standards, 204 Mich App 607, 612; 516 NW2d 142 (1994). On the other hand, due regard for legislative intent must always be had, and so deference must be given to an administrative agency when it exercises the powers necessary to effectuate the authority granted it by the Legislature. Id. at 613. For this reason, this Court has held that the psc did not err in requiring nonregulated affiliates of a regulated utility to provide information that the psc believed was reasonably necessary for the proper performance of its duties with regard to a regulated entity. Midland Cogeneration Venture Limited Partnership v Public Service Comm, 199 Mich App 286, 297-298; 501 NW2d 573 (1993).
Appellants contend that, contrary to appearances, this case goes beyond mere procedure and does not involve the psc’s discretion in determining what information a telecommunication provider should submit with an application. Instead, they contend that the psc’s decisions touch on substantive questions regarding the psc’s power and jurisdiction, and that the psc is engaged in a back-door attempt to regulate telecommunication providers, as opposed to the telecommunication services of those providers, contrary to the explicit language and implicit purpose of the act.
The psc responds in part by arguing that the allegedly improper substantive use of information required by the psc is not an issue that is ripe for review. We agree. This case is limited solely to the question whether the psc has authority to require certain information from telecommunication providers seeking a rate increase of more than one percent less than the cpi. This case does not involve the substantive use of such information. Nothing in this opinion should be construed as approving or disapproving any use to which the psc may put the requested information.
We hold that appellants have not shown by clear and satisfactory evidence that the psc’s orders are unlawful or unreasonable. Although the new act changes the regulatory framework for telecommunication services, the psc retains the power to regulate many services to some degree. We do not construe the act as requiring the psc to carry out its lawful functions in the dark. Requiring providers to submit detailed information in support of a rate increase in order to facilitate meaningful administrative review is the sort of prudential decision to which great deference should be afforded. This is especially true in light of the fact that § 203 requires the psc to reach decisions regarding rate increases in a relatively short time. Moreover, § 203(3) gives the psc power to compel the attendance of witnesses and the production of materials and testimony. Because the psc could obtain the information at issue here pursuant to this power and because requiring applicants to submit all potentially relevant information with an application will expedite a decision regarding the application, the psc did not overstep its authority in requiring providers to submit the information "up front.”
Appellants’ arguments often trade on an ambiguity in the word "regulate.” It is undisputed that the psc’s regulatory authority is less under the new act than it was under previous acts, in the sense that the psc is not empowered to set rates or otherwise control the provision of certain services. However, appellants appear to believe that "regulate” also includes the oversight and information-gathering functions of the psc. We do not agree. Although appellants may wish to be free from inquiries by the psc regarding any services but regulated ones, and only those regulated services for which they are requesting a rate increase, the psc is within its authority in requesting information regarding both regulated and unregulated services when reviewing a request to alter the rates for a regulated service. Midland Cogeneration, supra.
In addition, the psc persuasively argues that total company information is relevant to questions regarding the subsidization of one service by another, which is disallowed by § 308(1), MCL 484.2308(1); MSA 22.1469(308)(1). Although the test for whether a service is being subsidized under the statute is whether that service is being offered at less than long-run incremental cost, appellants have not shown that the psc unreasonably believes that such a determination requires a review of total company costs.
The tam notes that the statute allows providers to alter rates for basic local exchange services simply by giving notice to the psc and to affected consumers when a rate change is no more than one percent less than the cpi. However, the psc on its own motion, or if a complaint is filed, may require a provider to file an application pursuant to § 304(8), MCL 484.2304(8); MSA 22.1469(304)(8). The tam contends that the psc’s authority in this regard is limited by subsection 10, which provides:
In determining if a filing under section 203 should be commenced pursuant to subsection (8), the commission shall consider all public comments received pursuant to subsection (5) and only review one or more of the following:
(a) Cost allocations to basic local exchange services.
(b) Competition.
(c) Network quality, improvement, and maintenance.
(d) Changes in costs of providing the service.
(e) Expenditures between affiliated entities of the provider and the provider. [MCL 484.2304(10); MSA 22.1469(304X10).]
The tam contends that just as the psc’s review in these circumstances is limited to certain enumerated factors, the psc’s review of applications themselves should be so limited.
Although the psc is limited to reviewing the enumerated factors in determining whether a §203 application must be filed, nothing in the statute appears to limit the psc to those factors in reviewing any resulting § 203 application. In addition, some of those factors, for example a, d, and e, appear to require just the sort of total company information that the psc has determined must accompany an application.
Finally, the meca contends that the psc’s decisions are inconsistent in their treatment of average schedule companies, i.e., providers of access services that rely on average schedules for determining costs instead of paying large sums for fully embedded cost studies. In its order on rehearing, the psc attempted to allay the meca’s concern in this regard by noting that the psc had never required average schedule companies to perform cost separation studies. The psc held that the filing requirements contained in the February 23, 1993, order should not be interpreted as imposing such a requirement. However, the psc went on to state that average schedule companies must provide an explanation for "company-specific deviations as their part of a pool filing.” The meca contends that this requirement means in essence that average schedule companies must justify their rate request by means of company-specific information regarding total costs and revenues, which is just the sort of company-specific information that the psc held they are not required to supply. We agree with the meca that the psc’s decision appears inconsistent. We therefore remand to the psc for clarification of the filing requirements imposed upon average schedule companies.
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Connor, P.J.
A jury convicted defendants of second-degree murder, MCL 750.317; MSA 28.549, and possession of a firearm during the commission of a felony, MCL 750.227b; MSA 28.424(2). The sentencing guidelines for defendant McCray provided for a minimum sentence of ten to twenty-five years’ imprisonment. The trial court sentenced McCray to prison for twenty-five to fifty years for the murder conviction and the mandatory two years for the felony-firearm conviction. The sentencing guidelines for defendant Scott provided for a minimum sentence of fifteen to thirty years’ imprisonment or life. The trial court sentenced Scott to prison for fifteen to thirty years for the murder conviction and two years for the felony-firearm conviction. Defendants appeal as of right. The appeals were consolidated by the Court of Appeals. We remand with regard to McCray and affirm with regard to Scott.
KELVIN MAURICE McCRAY
We find remand is necessary for an evidentiary hearing for purposes of determining, first, whether the police had probable cause to arrest McCray and, second, whether the police unreasonably delayed his arraignment following his arrest in order to extract incriminating evidence. Although not properly preserved below, we have reviewed this issue for manifest injustice because it is constitutional in nature. People v Bettistea, 173 Mich App 106, 129; 434 NW2d 138 (1988). McCray was arrested on May 7, 1990, at 12:15 a.m. His first statement, which was exculpatory, was given to the police at 6:05 p.m. on that day. His second statement, also exculpatory, was given at 9:00 a.m. on May 8, 1990. His third statement, which was the first inculpatory statement, was given at 10:28 a.m. on May 9, 1990. A warrant was issued for his arrest, and he was arraigned on May 10, 1990. McCray was held continuously without a warrant from the time of his arrest until his arraignment three days later.
In Riverside Co v McLaughlin, 500 US 44, 56; 111 S Ct 1661; 114 L Ed 2d 49 (1991), the United States Supreme Court determined that an arrest without a warrant is unreasonable if it is not followed by arraignment within forty-eight hours. The inculpatory statement made by McCray was the only evidence that identified him as the shooter. The facts suggest that the police were motivated by a desire to gain additional information to justify the arrest and may have intentionally delayed arraigning McCray in hopes of eliciting an incriminating statement. Accordingly, we order that this matter be remanded to the trial court for a hearing to ascertain whether the police unreasonably delayed McCray’s arraignment. Furthermore, if, on remand, the trial court determines that McCray’s inculpatory statement must be suppressed, then it was also error requiring reversal to admit Scott’s redacted statement. See People v Banks, 438 Mich 408, 419; 475 NW2d 769 (1991).
The remaining issues raised by McCray are not persuasive. The trial court did not abuse its discretion in denying McCray’s pretrial motion for a separate trial. People v Hana, 447 Mich 325, 331; 524 NW2d 682 (1994). Severance is mandated only when a defendant demonstrates that his substantial rights will be prejudiced and that severance is the necessary means of rectifying the potential prejudice. Id. at 345. Severance is required where the defenses are mutually exclusive or irreconcilable, not simply where they are inconsistent. Id. at 349. The statements of defendants in the present case were not mutually exclusive. Accordingly, reversal is not warranted. People v Cadle, 204 Mich App 646, 649; 516 NW2d 520 (1994). Finally, we find no merit in McCray’s claim that he was sentenced improperly. His prior record, or lack of record, was factored into the guidelines. Because McCray’s sentence is within the guidelines, the sentence is presumptively proportionate. People v Broden, 428 Mich 343, 354-355; 408 NW2d 789 (1987).
ORLANDO SCOTT
Defendant Scott makes a number of claims on appeal, none of which have merit. Viewing the evidence in a light most favorable to the prosecution, we find Scott’s conviction of second-degree murder is supported by sufficient evidence. People v Jones (On Rehearing), 201 Mich App 449, 451; 506 NW2d 542 (1993). Testimony revealed that Scott was the only person at the crime scene with a gun and that Scott was seen firing the gun. People v Flowers, 191 Mich App 169, 177; 477 NW2d 473 (1991). Furthermore, even if we assume arguendo that it was McCray who fired the shots, there was sufficient evidence to support Scott’s conviction. One who procures, counsels, aids, or abets the commission of an offense may be prosecuted, convicted, and punished as if he directly committed the offense. MCL 767.39; MSA 28.979; In re McDaniel, 186 Mich App 696, 697; 465 NW2d 51 (1991).
Scott also argues that the trial court’s instructions regarding the felony-firearm charge were deficient because the court failed to instruct properly with regard to the elements of the underlying felony. Because we find there was sufficient evidence to convict Scott of second-degree murder, and find the aiding and abetting instructions were proper, we find his claim to be without merit.
Scott argues that the trial court abused its discretion in accepting a stipulation with respect to one witness’ testimony. However, a party cannot request a certain action of the trial court and then argue on appeal that the action was error. People v Murry, 106 Mich App 257, 262; 307 NW2d 464 (1981). Not only is this issue unpreserved, but Scott was not prejudiced as a result of the trial court’s accepting the stipulation. Under the circumstances, there was no error. People v Pearson, 404 Mich 698, 723; 273 NW2d 856 (1979).
Scott’s claim that the prosecutor made an improper remark during closing remarks is unpreserved. People v Biggs, 202 Mich App 450, 455; 509 NW2d 803 (1993). At any rate, the remark was not improper and did not deny Scott a fair trial. People v Sharbnow, 174 Mich App 94, 100; 435 NW2d 772 (1989).
Both defendants claim that the trial court improperly instructed the jury regarding when they could be convicted as aiders and abettors. We find these claims to be unpersuasive. This Court has held numerous times that the intent of the aider and abettor is satisfied by proof that he knew the principal’s intent when he gave the aid or assistance. See Jones, supra at 451, and People v Buck, 197 Mich App 404, 425; 496 NW2d 321 (1992). Moreover, defendants failed to object to the trial court’s reinstructions with respect to aiding and abetting. People v Van Dorsten, 441 Mich 540, 544-545; 494 NW2d 737 (1993).
Affirmed with regard to defendant Scott. Affirmed in part and remanded in part with regard to defendant McCray.
Wahls, J., concurred. | [
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Per Curiam.
Plaintiffs Larry and Sue Markillie, as personal representatives of the estate of Carrie Anne Markillie, deceased, appeal as of right from an order granting defendant’s motion for summary disposition pursuant to MCR 2.116(0(10). We affirm.
This case arises out of an automobile accident that occurred at the intersection of Latson Road, a Livingston County road, and M-59, a state highway. On August .16, 1990, seventeen-year-old Carrie Anne Markillie, traveling north on Latson Road, ran the stop sign at the intersection of Latson Road and M-59 and was killed when her car was struck by a truck proceeding west on M-59.
Plaintiffs filed a complaint against defendant Board of County Road Commissioners of County of Livingston. Plaintiffs allege negligence in the design, construction, inspection, and maintenance of the intersection. Specifically, plaintiffs claim that a slope in Latson Road located six feet south of the stop bar blocked the stop bar from Carrie Anne Markillie’s view.
In its motion for summary disposition, defendant argued that the intersection is under the exclusive jurisdiction of the Michigan Department of Transportation (mdot). Defendant admitted that in 1986 it had paved Latson Road; however, defendant presented evidence that it had to obtain a permit from the mdot in order to perform construction on the intersection. Defendant had submitted drawings for its proposed project, which the mdot had approved. Plaintiffs responded by contending that defendant has jurisdiction over the Latson Road slope.
The trial court noted that the relevant statute, MCL 691.1402(1);. MSA 3.996(102X1), does not define the word "jurisdiction,” nor is there any case law addressing the question. The trial court then held that jurisdiction is equivalent to control and found that the mdot has control of both the intersection and the area six feet south of the stop bar. The trial court therefore granted defendant’s motion for summary disposition.
On appeal, an order granting or denying summary disposition is reviewed de novo. A motion for summary disposition may be granted pursuant to MCR 2.116(C)(10) when, except with regard to the amount of damages, there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Giving the benefit of reasonable doubt to the nonmovant, the trial court must determine whether a record might be developed that would leave open an issue upon which reasonable minds might differ. Michigan Mutual Ins Co v Dowell, 204 Mich App 81, 85-86; 514 NW2d 185 (1994).
Governmental agencies are immune from any tort liability that would arise out of the operation and maintenance of public highways. MCL 691.1407; MSA 3.996(107). However, governmental immunity is not available to a governmental agency as a defense where the injuries arise out of the failure to maintain a public highway under its jurisdiction in reasonable repair so that it is reasonably safe for travel. The statutory provision is as follows:
Each governmental agency having jurisdiction over any highway shall maintain the highway in reasonable repair so that it is reasonably safe and convenient for public travel. Any person sustaining bodily injury or damage to his or her property by reason of failure of any governmental agency to keep any highway under its jurisdiction in reasonable repair, and in condition reasonably safe and fit for travel, may recover the damages suffered by him or her from the governmental agency. [MCL 691.1402(1); MSA 3.996(102)(1).]
No action may be maintained under the highway exception unless it is clearly within the scope and meaning of the statute. Scheurman v Dep’t of Transportation, 434 Mich 619, 630; 456 NW2d 66 (1990).
The governmental immunity act limits liability under the highway exception to the governmental agency having jurisdiction over the highway at the time of the injury. Fuller v Dep’t of Transportation, 168 Mich App 682, 684; 425 NW2d 693 (1988). Only one governmental agency can have jurisdiction over a highway at any time; there is no concurrent jurisdiction. Mitchell v Steward Oldford & Sons, Inc, 163 Mich App 622, 632; 415 NW2d 224 (1987). Intersections of state highways and county roads are within the state’s jurisdiction. Lain v Beach, 177 Mich App 578, 582; 442 NW2d 650 (1989).
Plaintiffs argue that the term "intersection” is defined in the Vehicle Code, which provides that an intersection is an area where two highways join at right angles. See MCL 257.22; MSA 9.1822. Therefore, plaintiffs reason, because the curb lines of the northbound approach of Latson Road to M-59 do not intersect at right angles with the curb lines of M-59 until a point north of the stop bar, the stop bar is not located within the intersection.
We do not believe that the Vehicle Code is an appropriate guide to a governmental agency’s liability under the highway exception. The preamble to the Vehicle Code emphasizes the Legislature’s specific concern with the regulation of vehicles upon the highways. People v Rogers, 438 Mich 602, 620; 475 NW2d 717 (1991) (Brickley, J., concurring). The Vehicle Code does not contain directives for the design, construction, and maintenance of roadways.
As the trial court recognized, the critical issue in this case is what is meant by the word "jurisdiction” in MCL 691.1402(1); MSA 3.996(102X1). The trial court related "jurisdiction” to "control.” It then held that the mdot has control over the Latson Road/M-59 intersection and therefore has jurisdiction over it.
Statutory interpretation is a question of law that is reviewed de novo on appeal. Smeets v Genesee Co Clerk, 193 Mich App 628, 633; 484 NW2d 770 (1992). Unless defined in the statute, every word or phrase of a statute should be accorded its plain and ordinary meaning. MCL 8.3a; MSA 2.212(1); Consumers Power Co v Lansing Bd of Water & Light, 200 Mich App 73, 76; 503 NW2d 680 (1993). When a term is not defined within a statute, a court may consult dictionary definitions. Nalepa v Plymouth-Canton Community School Dist, 207 Mich App 580, 586; 525 NW2d 897 (1994).
The Random House College Dictionary: Revised Edition (1988) defines "jurisdiction” as "1. the right, power, or authority to administer justice. 2. authority; control. 3. the extent or range of judicial or other authority. 4. the territory over which the authority of a person, court, etc., is exercised.” The Supreme Court has defined jurisdiction as "the power to act.” State Hwy Comm’r v Gulf Oil Corp, 377 Mich 309, 312; 140 NW2d 500 (1966); Campbell v Plymouth, 293 Mich 84, 86; 291 NW 231 (1940).
In light of the above definitions, we believe that the trial court properly equated "jurisdiction” with "control.” This definition is consistent with the Legislature’s purpose in enacting the highway exception to governmental immunity. The Legislature’s goal was to keep public highways "reasonably safe and convenient for public travel.” MCL 691.1402(1); MSA 3.996(102X1). That objective will be served by limiting liability for a defective highway to the entity with the authority to construct, maintain, and repair it. We therefore hold that the word "jurisdiction” in MCL 691.1402(1); MSA 3.996(102)(1) is synonymous with "control.”
The trial court found that the mdot, not defendant, has control over the intersection. This Court reviews a trial court’s findings of fact for clear error. MCR 2.613(C); Triple E Produce Corp v Mastronardi Produce, Ltd, 209 Mich App 165, 171; 530 NW2d 772 (1995). A finding of fact is clearly erroneous when, although there is evidence to support it, the reviewing court is left with a definite and firm conviction that a mistake has been made. Id.
After reviewing the record, we conclude that the trial court’s finding that the mdot has control over the area plaintiffs claim to be defective is not clearly erroneous. The mdot and defendant agree that the mdot has control over the intersection. In order to perform construction on the intersection in the course of paving Latson Road, defendant had to obtain a permit from the mdot. Defendant submitted its work plans for the mdot’s approval. In 1992 (after the accident involving Carrie Anne Markillie), the mdot rebuilt the intersection of M-59 and Latson Road without seeking the permission of any other entity. An expert employed by the mdot testified that the area six feet south of the stop bar is under the mdot’s control. Accordingly, the trial court did not err in granting defendant’s motion for summary disposition.
Plaintiffs also contend that defendant had a duty to warn of the danger presented by the Latson Road slope. However, because the site of the accident was under the exclusive jurisdiction of the mdot, defendant had no duty to warn of possible hazards associated with the site. Lain, supra.
Affirmed.
The preamble to the Vehicle Code describes it as:
An act to provide for the registration, titling, sale, transfer, and regulation of certain vehicles operated upon the public highways of this state or any other place open to the general public or generally accessible to motor vehicles and distressed vehicles; to provide for the licensing of dealers; to provide for the examination, licensing, and control of operators and chauffeurs; to provide for the giving of proof of financial responsibility and security by owners and operators of vehicles; to provide for the imposition, levy, and collection of specific taxes on vehicles, and the levy and collection of sales and use taxes, license fees, and permit fees; to provide for the regulation and use of streets and highways; to create certain funds; to provide penalties and sanctions for a violation of this act; to provide for civil liability of owners and operators of vehicles and service of process on residents and nonresidents; to provide for the levy of certain assessments; to provide for the enforcement of this act; to provide for the creation of and to prescribe the powers and duties of certain state and local agencies; to repeal all other acts or parts of acts inconsistent with this act or contrary to this act; and to repeal certain parts of this act on a specific date. | [
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Shepherd, P.J.
Appellant was placed on probation by the juvenile court on July 29, 1982, after being found to have committed larceny from a person, MCL 750.357; MSA 28.589. On April 26, 1983, appellant’s probation was revoked upon a finding that he had committed the offense of felonious assault, and he was committed to the custody of the State Department of Social Services. Appellant now appeals his probation revocation as of right.
Appellant first argues that he was entitled to an adjudicative hearing or trial on the issue of his guilt or innocence, a right he was denied. Furthermore, argues appellant, a juvenile has a right to a jury trial in a probation revocation proceeding. We find our resolution of the first issue to be determinative of the second, and affirm the juvenile court’s revocation of appellant’s probation.
Proceedings in juvenile court are of two general types: adjudicative and dispositional. JCR 1969, 8.1 and 8.3 describe the two types of proceedings.
"(a) Adjudicative Phase. The adjudicative phase determines whether the child comes within the court’s jurisdiction under MCL 712A.1 et seq.; MSA 27.3178(598.1) et seq., as alleged in the petition. There is a right to jury trial.
"(b) Dispositional Phase. The dispositional phase determines measures to be taken by the court with respect to the child and adults properly within its jurisdiction if the court has determined at the adjudicative phase that the child comes within the statute. There is no right to jury trial.” JCR 1969, 8.1.
The admissibility of evidence and the standard of proof vary according to the type of proceeding involved.
"Evidence.
"(a) Adjudicative Phase. Absent a valid plea in confession, only competent, relevant, and material evidence is admissible at the adjudicative phase. In a case involving an offense by a child, the rules of evidence for a criminal proceeding and the standard of proof beyond a reasonable doubt apply. In a case involving an offense against a child, the rules of evidence for a civil proceeding and the standard of proof by a preponderance of the evidence apply.
"(b) Dispositional Phase. In the dispositional phase only relevant and material evidence may be considered. Clear and convincing evidence is required to terminate parental rights.” JCR 1969, 8.3.
Appellant argues that, in a proceeding charging probation violation, a juvenile is entitled to both phases of proceedings: an adjudicative hearing on the issue of guilt and a dispositional hearing for sentencing. This issue is not resolved in the juvenile code. The only reference to a petition for revocation of probation is contained in the juvenile code at MCL 712A.15; MSA 27.3178(598.15), a reference which provides no guidance with regard to the nature of the proceeding itself.
JCR 9.2, however, provides as follows:
".2 Procedures. In a hearing on a probation violation * * * the same procedure as for an original petition must be followed, except that there is no right to jury trial.”
MCL 712A.21; MSA 27.3178(598.21), while it makes no mention of probation revocation, provides for a rehearing
"at any time while the child is under the jurisdiction of the court * * * upon all matters coming within the provisions of this chapter. * * * The rehearing shall be conducted in accordance with the provisions of this chapter relative to the conduct of original hearings. At any time the court may enter an order for supplemental disposition as long as the child remains under the jurisdiction of the court.”
While not relying on the language of MCL 712A.21; MSA 27.3178(598.21), appellant interprets the language of JCR 1969, 9.2, calling for the same procedure in a hearing on probation violation as is employed in an original petition, to mean that probation revocation hearings are to be divided into adjudicative and dispositional phases. In support of his position, appellant points to the commentary to JCR 9.2 contained in the Michigan Juvenile Court Procedure Sourcebook (1970 ed), pp 30-31. The notes to the rule read in part:
"Rule 9.2 is included as a means of clarifying an area of question with regard to procedures followed upon violation of probation or 'parole’. While 'revocation of probation’ is referred to in the Code (§ 15) no procedure is specified. The summary procedure in the Criminal Code (MCL 771.4; MSA 28.1134) was considered for incorporation by reference provided an appropriate order establishing authority to so proceed had been originally entered. However, this was felt by the committee too loose a practice, and procedure as in the original proceedings is provided, excepting only the right to a jury.”
Since the drafters of the rule rejected the standards for criminal probation revocation hearings, appellant argues, they must have intended that juveniles be entitled to adjudicative hearings for violation of probation, with all protections inher ent therein other than trial by jury, including proof beyond a reasonable doubt and application of the more restrictive rules of evidence. Appellant supports this interpretation by arguing that, while in adult probation revocation cases a defendant can only be sentenced in accordance with the original offense, in juvenile cases a minor may receive the most restrictive disposition possible without the safeguards included in a trial. This, argues appellant, denies juveniles due process of law. We cannot agree.
At the adjudicative phase, the juvenile court determines whether a child comes within the jurisdiction of the court. Clearly, where a juvenile is before the court for having violated terms of the probation upon which he was placed by that same court, jurisdiction has already been determined and the adjudicative phase is no longer necessary. In the Matter of Rebecca Oakes, 53 Mich App 629, 632; 220 NW2d 188 (1974). While we agree that juveniles are entitled to due process of law, see In re Winship, 397 US 358; 90 S Ct 1068; 25 L Ed 2d 368 (1970); In re Gault, 387 US 1; 187 S Ct 1428; 18 L Ed 2d 527 (1967), we find no due process violation here. Presumably appellant was given all the due process protection incorporated within the requirements for an adjudicative hearing at the initiation of juvenile court proceedings when he was found to have committed larceny from a person. Once the juvenile court found that appellant had indeed violated the statute prohibiting larceny, it had continuing jurisdiction over appellant until he was 19 years old. MCL 712A.2a; MSA 27.3178(598.2a). Probation, a matter of grace rather than a right owned by appellant, was discretionary with the juvenile court. MCL 712A. 18; MSA 27.3178(598.18). Although not specifically enunciated in the juvenile code, the juvenile court is free to revoke probation upon a violation of its terms. See JCR 1969, 9.2. The hearing at which appellant’s probation was revoked and he was remanded to the custody of the Department of Social Services was, by its very nature, dispositional rather than adjudicative. We do not interpret JCR 9.2 as requiring every safeguard provided in the case of an adjudicative hearing; first, such an interpretation would be neither logical nor sensible and, second, we find it just as likely that the provision requires only that a certain procedural format be followed, e.g., requiring that JCR 1969, 8.2 procedural requirements be met with regard to dispositional hearings. No determination of guilt or innocence is made at the probation revocation hearing, since the juvenile is not being tried on the substantive charge. The hearing is conducted only to determine whether probation has been violated; the hearing does not result in a conviction on the underlying crime.
We find that only a dispositional hearing was required before revoking appellant’s probation; furthermore, we find that such a procedure is not violative of appellant’s due process rights.
Appellant next argues that a right to a jury trial attaches to a juvenile delinquency probation revocation proceeding. Based on our analysis of the previous issue, we find this claim to be without merit. Furthermore, we note that JCR 1969, 9.2 specifically prohibits a trial by jury in probation revocation proceedings. We cannot agree that this prohibition denies appellant equal protection of the law. See People v Gladdis, 77 Mich App 91; 257 NW2d 749 (1977).
Finally, appellant argues that the juvenile court erred in failing to make findings of fact. Again, we cannot agree. The Juvenile Court Rules make no provision for findings of fact in probation revocation proceedings. While in general it might be desirable for juvenile courts to state findings of fact upon the record, we do not find reversal to be warranted here. Where it is clear on the record that the court resolved the factual question of appellant’s participation in the claimed offense and believed appellant had so participated, a remand for further articulation would be of little assistance in this Court’s review. See People v Jackson, 390 Mich 621, 627, fn 3; 212 NW2d 918 (1973); People v Kelly, 122 Mich App 427, 432; 333 NW2d 68 (1983).
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AFTER REMAND
Before: Michael J. Kelly, P.J., and Holbrook, Jr., and Murphy, JJ.
Per Curiam.
This case is again before this Court following our remand to the trial court. This case involves the public roadways exception to governmental immunity, MCL 691.1402; MSA 3.996(102). The relevant facts are contained in our prior opinion, Zwolinski v Dep’t of Transportation, 205 Mich App 532; 517 NW2d 852 (1994). Previously, we found it necessary to remand this matter, as follows:
Accordingly, it is necessary to remand this matter to the trial court to make detailed findings of fact and conclusions of law concerning the design and construction of the roadway. In particular, the trial court is instructed to expand upon and clarify the language in its written opinion that “according to expert testimony, the design and construction of the intersection was unsafe as compared with similar intersections, and that safer and more reasonable construction and installations were available.” [Id., at 538.]
On remand, the trial court expanded upon its findings. The court found that defendant’s failure to install a guardrail at the intersection "was the proximate cause of plaintiffs’ injuries.” The trial court found that a guardrail was necessary because of the steep slope of the embankment adjoining the roadway and the presence of a nonflared culvert that ran underneath the intersecting side road, parallel to the main road. The trial court relied on Hutchinson v Allegan Co Bd of Rd Comm’rs (On Remand), 192 Mich App 472, 479; 481 NW2d 807 (1992), in support of its conclusion that defendant may be held liable for the failure to install a guardrail.
We also had relied upon Hutchinson in our earlier opinion for the proposition that "while liability may not be premised solely upon features located outside that portion of the roadway designed for public vehicular travel (such as the culvert and embankment in this case), the fact-finder may consider those features when determining whether there is a duty to install a guardrail so as to make the road reasonably safe for travel.” Zwolinski, supra at 537. Previously, we distinguished the case of Chaney v Dep’t of Transportation, 198 Mich App 728; 499 NW2d 29 (1993), and found that Hutchinson was prior controlling authority under Administrative Order No. 1994-4.
Since the release of this Court’s earlier opinion in Zwolinski, as well as the trial court’s opinion on remand from this Court, our Supreme Court decided the appeal brought from this Court’s opinion in Chaney. In Chaney v Dep’t of Transportation, 447 Mich 145; 523 NW2d 762 (1994), a majority of the justices agreed that the defendant Department of Transportation could not be held liable for an alleged defect in a guardrail. A majority of the Supreme Court is of the opinion that there can be no liability for an alleged failure to install a guardrail. Although the Supreme Court in Chaney did not specifically reverse, modify, or mention this Court’s opinion in Hutchinson, we are constrained to conclude that Chaney has implicitly overruled this Court’s opinion in Hutchinson. Accordingly, we reverse the two judgments of the Court of Claims awarding damages to James Zwolinski and the estate of Dennis Zwolinski, deceased, for injuries arising out of the automobile accident.
Reversed.
In Chaney, Justice Brickley concluded that because the railing was not located physically within the improved portion of the highway designed for vehicular travel, and because it did not integrally and directly affect safe vehicular travel on the improved portion of the highway, the highway exception to governmental immunity was inapplicable. Justice Riley, joined by Justice Griffin, concurring in part and dissenting in part, concluded that there could be no liability because the railing was not part of the improved portion of the highway designed for vehicular travel. Justice Boyle, concurring, concluded that the claim was barred because the plaintiff did not allege a failure to repair and maintain the paved surface of the roadway or a traffic sign or signal. Chief Justice Cavanagh, concurring, found that Justice Brickley’s and Justice Boyle’s interpretations were preferable from a policy standpoint, but that Justice Riley’s interpretation was in accord with the plain language of the statute. Justice Levin, joined by Justice Mallett, dissented.
Chaney, supra at 161, 162. The facts in this case more closely parallel the situation in Hutchinson than in Chaney, as discussed in our prior opinion. However, the legal reasoning of the majority of the justices in Chaney apply in this case to invoke immunity. | [
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M. Warshawsky, J.
Defendant was charged with carrying a concealed weapon, MCL 750.227; MSA 28.424. The alleged weapon was described in the information as a "pistol, to-wit: a 12-gauge Olin flare gun”, which is apparently a type of signaling device. The flare gun was loaded with one live flare at the time defendant was arrested. Defendant waived the preliminary examination and subsequently filed a motion to quash the information. The trial court granted the motion finding that the flare gun was not a pistol within the meaning of § 227. The prosecutor appeals.*
The statute under which defendant was charged provides in pertinent part as follows:
"[A] person who shall carry a pistol concealed on or about his person, or, whether concealed or otherwise, in a vehicle operated or occupied by him, except in his dwelling house or place of business or on other land possessed by him, without a license to carry the pistol as provided by law or if licensed, carrying in a place or manner inconsistent with any restrictions upon such license, shall be quilty of a felony, punishable by imprisonment in the state prison for not more than 5 years, or by fine of not more than $2,500.00.”
The precise issue raised in this case was considered by the Attorney General in OAG, 1981-1982, No 5958, p 317 (August 14, 1981):
"I am writing in response to your request for my opinion regarding the applicability of state firearm laws to the 'Olin’ 12-gauge flare launcher. Specifically, you have asked whether this device is a 'firearm’ under Michigan law and therefore subject to the purchase, inspection and carrying restrictions which apply to the more conventional firearms of similar size and character.
"The term 'firearm’ is defined by the Legislature in RS 1846, c 1, § 3t, MCL 8.35 [sic, 8.3t]; MSA 2.212(20) which provides in pertient [sic] part:
" 'The word "firearm”, except as otherwise specifically defined in the statutes, shall be construed to include any weapon from which a dangerous projectile may be propelled by using explosives, gas or air as a means of propulsion * * * .’
Since the term 'firearm’ is not 'otherwise specifically defined’ in the pertinent firearms statute, the above definition is controlling for purposes of this opinion.
"The aerial flare launcher you describe is clearly capable of propelling a dangerous projectile by one of the methods of propulsion specified in RS 1846, c 1, § 3t, supra. Indeed, at the request of State Representative Patrick L. Harrington, the Department of State Police tested the specific device to which you refer. Those tests (Appendix A) reveal that the device is quite capable of inflicting injury if used against the person of another. In fact, by reinforcing the barrel, the device was capable of firing a modified 12-gauge shotgun shell.
"1927 PA 372, § 1(a), MCL 28.421(a); MSA 28.91 defines the term 'pistol’ to mean 'any firearm, loaded or unloaded, 30 inches or less in length, or any firearm, loaded or unloaded, which by its construction and appearance conceals it as a firearm.’ [See also MCL 750.222(a); MSA 28.419(a).] Having concluded the Olin 12-gauge launcher is a firearm and it being clearly less than 30 inches in length, it follows the device is a 'pistol’.
"As a pistol, the device is subject to the licensing restrictions applicable to handguns. * * *
"This may represent overregulation of flare guns but any changes to the controlling statutes must be ordered by the Legislature.
"It is my opinion, therefore, that this device is a 'firearm’ and as a 'pistol’, is subject to the purchase, inspection and carrying restrictions contained in State law.”
We do not agree with the Attorney General’s analysis. The term "firearm” is defined in MCL 8.3t; MSA 2.212(20), as "any weapon from which a dangerous projectile may be propelled”. (Emphasis supplied.) "Weapon” may be defined as "[ajnything used or designed to be used in destroying, defeating, or injuring an enemy; an instrument of offensive or defensive combat”. Ballentine’s Law Dictionary, 3d ed. There is no indication that the flare gun in this case was designed for such purpose or that defendant used or intended to use it for such purpose.
Certainly any device from which a dangerous projectile may be propelled is capable of inflicting injury and, in that sense, is capable of being used as a weapon. Had the Legislature intended to include all such devices within the definition of firearm, it would have been unnecessary to include the phrase "any weapon”. In order to give effect to every word of the statute, we find that to constitute a firearm within § 8.3t, the device must be designed or used (either actually or for the purpose of making a threat) as a weapon. Since no such evidence is before us, we hold that the flare gun possessed by defendant in this case is not a firearm and is therefore not a pistol within § 227.
This conclusion is supported by 1982 PA 185, MCL 750.231c; MSA 28.428(3), enacted subsequent to the Attorney General’s opinion cited above. Section 231c is a specific statute regulating the sale, possession, and use of "approved signaling devices” and providing that § 227 and related stat utes do not apply to such devices. It provides in pertinent part:
"(1) As used in this section:
"(b) 'Approved signaling device’ means a pistol which is a signaling device approved by the United States coast guard pursuant to regulations issued under section 4488 of the Revised Statutes of the United States, 46 U.S.C. 481, or under section 5 of the federal boat safety act of 1971, Public Law 92-75, 46 U.S.C. 1454.
"(2) Sections 223, 227, 228, 232, 232a and 237 shall not apply to an approved signaling device.”
Section 231c sets forth specific circumstances under which signaling devices may be sold, possessed, and used, and makes violation of the statute a misdemeanor. Although § 231c did not become effective until June 17, 1982, twelve days after the charged offense occurred, we believe it is indicative of the Legislature’s intent that flare guns not be regulated under the general weapons statutes.
The order quashing the information is affirmed.
The prosecutor’s claim that defendant’s waiver of the preliminary examination precluded her from raising this legal issue in the trial court is not supported by any applicable authority or rationale. We will not consider it further.
See also 1982 PA 182, MCL 28.432b; MSA 28.98(2), effective June 17, 1982, providing that MCL 28.422; MSA 28.92, and MCL 28.429; MSA 28.97, do not apply to approved signaling devices.
The pertinent federal statutes are now contained in Subtitle II, Vessels & Seamen, of Title 46, Shipping, recodified as 46 USC 2101(34), 2106, 3306, 3318, and 4302. The pertinent regulations are in 46 CFR 160.001-1 etseq.
Had the alleged offense occurred after the effective date of MCL 750.231c; MSA 28.428(3), we would find it necessary to remand for a determination of whether the flare gun possessed by defendant is an approved signaling device within § 231c(l)(b). | [
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Per Curiam.
Petitioner appeals as of right from a decision of the Michigan Underground Storage Tank Financial Assurance Policy Board that denied petitioner’s application for funds under the Michigan Underground Storage Tank Financial Assurance Act (mustfa), MCL 299.801 et seq.; MSA 13.29(201) et seq. We affirm.
Petitioner owned land that was leased by Clark Oil and operated as a gas station until January 14, 1989. During an attempt to properly close the underground storage tanks located on the property, it was discovered that the tanks had leaked. A report was made on January 25, 1989. On June 26, 1990, petitioner filed a claim under the mustfa that was denied by the mustfa administrator on January 4, 1991. While the administrator cited several reasons for the denial of the claim, at issue in this appeal is the administrator’s finding that, because petitioner’s discovery and report of the leakage occurred before the July 18, 1989, effective-date of an amendment of the mustfa, petitioner’s claim was not covered by the act.
Petitioner requested a review of the administrator’s decision, which was upheld after a February 22, 1991, public meeting. Petitioner then requested a contested-case hearing, which was held before a hearing referee on September 4, 1991. On January 14, 1992, the referee submitted his proposal for decision with a recommendation that petitioner’s claim be honored. The mustfa administrator filed exceptions and proposed conclusions of law and petitioner filed a response.
The mustfa board entered its final order on September 22, 1992. In this order, the board adopted the referee’s findings of fact and the mustfa administrator’s proposed conclusions of law and denied funds to petitioner. The circuit court affirmed the board’s decision.
Petitioner first asserts that although the circuit court agreed with the board’s position that the amendment was being applied prospectively, the application of the amendment has a retroactive effect. This argument rests on the premise that the amendment affected petitioner’s eligibility for funds by adding a new requirement for eligibility: that the release be discovered and reported on or after July 18, 1989.
In support of this position, petitioner argues that the 1989 amendment was neither remedial nor procedural, but rather affected a substantive right, i.e., eligibility for mustfa funds. However, the Michigan Supreme Court has held that
it is presumed that provisions added by the amendment affecting substantive rights are intended to operate prospectively. Provisions added by the amendment that affect substantive rights will not be construed to apply to transactions and events completed prior to its enactment unless the legislature has expressed its intent to that effect or such intent is clearly implied by the language of the amendment or by the circumstances surround ing its enactment. [Hurd v Ford Motor Co, 423 Mich 531, 535; 377 NW2d 300 (1985).]
Here, the Legislature had made its intent absolutely clear: an owner or operator of an underground storage tank will be eligible for funds only if the release "was discovered and reported on or after July 18, 1989.” MCL 299.809(l)(a); MSA 13.29(209)(l)(a). Hence, the asserted retroactive eifect is permissible. Consequently, petitioner must meet all eligibility requirements of the act as amended to qualify for funds. Lahti v Fosterling, 357 Mich 578, 587-588; 99 NW2d 490 (1959). The trial court properly affirmed the board’s denial of funds on the basis that petitioner discovered and reported the leak before July 18, 1989.
Petitioner also asserts that his right to mustfa funds had vested and that the amendment therefore cannot be applied retroactively. However, this Court has stated:
The question of determining what is a vested right has always been a source of much difficulty to all courts. The right which [plaintiff] claim[s] sprang from the kindness and grace of the legislature. It is the general rule that that which the legislature gives, it may take away. A statutory defense, or a statutory right, though a valuable right, is not a vested right, and a holder thereof may be deprived of it. [Riza v Delray Baking Co, 200 Mich App 169, 176; 504 NW2d 193 (1993). Emphasis in Riza.]
The mustfa was enacted, in part, to provide financial assistance to those who must remediate leaking underground storage tanks. This statutory right to funds, although clearly valuable, is not a vested right.
Next, petitioner claims that the board’s adoption of the referee’s findings of fact and the administrator’s proposed conclusions of law was improper and did not follow the requirement of the Administrative Procedures Act (apa), MCL 24.201 et seq.; MSA 3.560(101) et seq., that an agency make a final decision or order in a contested case "in writing or stated in the record and shall include findings of fact and conclusions of law.” MCL 24.285; MSA 3.560(185). Specifically, petitioner argues that the findings of fact and conclusions of law should be contained in the same document or, in the alternative, the relationship between the documents should be reasonably discernible.
An examination of the referee’s proposal for decision reveals a section clearly identified as findings of fact. These findings of fact do not conflict with the conclusions of law that were supported by authority or reasoned opinion and were adopted by the board. Petitioner cites no authority for the proposition that it is improper for the board to adopt as its own the administrator’s proposed conclusions of law.
Last, petitioner has failed to cite authority in support of his argument that a memorandum to the board from an assistant attorney general not involved with this case was an improper ex parte communication as that term is defined in the apa. This Court will not search for authority to sustain or reject a party’s position. Winiemko v Valenti, 203 Mich App 411, 415; 513 NW2d 181 (1994). Nonetheless, we note that the assistant attorney general was not a party, or a representative of a party, to the action. MCL 24.282; MSA 3.560(182).
Affirmed.
The original version of MCL 299.809(l)(a); MSA 13.29(209)(lXa), 1988 PA 518, effective January 19, 1989, did not impose a date restriction. | [
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K. N. Hansen, J.
Petitioner appeals as of right from a December 3, 1981, dismissal by the Michi gan Employment Relations Commission (MERC) of an unfair labor practice charge.
Petitioner and respondent were parties to a collective-bargaining agreement that expired on June 30, 1979. The agreement provided for quarterly cost-of-living allowance (COLA) adjustments as follows:
"Section 2: Effective with the B.L.S. Consumers Price Index for July, 1977, as the base, the adjustment in the Cost-of-Living Allowance shall be made quarterly as of the first pay period beginning on or after the first day of the ninth, twelfth, sixth and third calendar months of the year and shall be based on the B.L.S. Consumers Price Index as of the second preceding month. For example:
"Adjustment Based Upon
"Shall Be Made In Index for Preceding
"September July
"December October
"March January
"June April
"In no event will a decline in the B.L.S. Consumers Price Index below that of July 31, 1976, provide the basis for any reduction in the Cost-of-Living.
"If the Bureau of Labor Statistics changes the form or the basis of calculating the B.L.S. Consumers Price Index, the parties agree to request the Bureau to make available, for the life of the agreement, a monthly Consumers Price Index in its present form and calculated on the [same, sic] basis as the Index for April, 1977.” (Emphasis added.)
On April 30, 1979, petitioner sent a letter to respondent indicating that it was ready to negotiate a new contract. Negotiation sessions were held on June 11, August 8, and August 16, 1979. On August 24, 1979, respondent notified the union in writing that it would not continué periodic COLA adjustments pursuant to the expired agreement during the bargaining process. The parties continued negotiations on September 5, 1979. On September 7, 1979, petitioner filed an unfair labor practice charge with MERC, alleging that respondent’s unilateral change in COLA adjustments was a violation of its duty to bargain, contrary to § 10 of the public employment relations act (PERA), MCL 423.210; MSA 17.455(10). Thereafter, the parties met and continued negotiations including discussions on wages and COLA adjustments on October 16, November 1, and November 7, 1979. In January, 1980, petitioner filed for binding arbitration. A hearing was held on the unfair labor practice charge before hearing referee Bixler on May 15, 1980.
Referee Bixler determined that COLA adjustments of the contract were a condition of employment that would continue after the expiration date of the collective-bargaining agreement and that COLA adjustments could not be unilaterally altered in the absence of an impasse reached in good faith. As it was undisputed that no impasse existed at the time respondent ceased paying contractual COLA adjustments, Referee Bixler concluded that respondent’s unilateral action violated § 10(l)(a) of PERA, as the action discouraged employees from the exercise of their right to bargain collectively with their employer, and § 10(l)(e) of PERA, as the action resulted in changing the conditions of employment without bargaining with the employees’ representative. He issued his "Decision and Recommended Order” with sanctions based thereon.
In a two to one decision, the Michigan Employ ment Relations Commission (MERC) reversed and dismissed the charges. It relied on the contractual language "for the life of the agreement, * * *” as set forth above, to determine that the:
"contract does not contain language that clearly and convincingly indicates an intent by the parties to continue making adjustments to the base pay rates after expiration of the contract. * * *”
It further stated:
"We can imagine the situation in which the parties agree to continue making further COLA adjustments after expiration of contract. It would call for a strong showing by the union of language clearly and unmistakably requiring periodic adjustments to be made indefinitely as a way of maintaining constant real purchasing power.”
Petitioner contends that the COLA provision herein is a "mandatory subject” of bargaining that, as a matter of law, continued in effect after the expiration date of the said contract and during the bargaining process prior to impasse in negotiations. Respondent contends that MERC made a factual finding that the contract herein did not provide for continued COLA adjustments beyond the life of the contract and that this factual deter mination is supported by competent, material, and substantial evidence.
MERC’s findings of fact are upheld if supported by competent, material, and substantial evidence. Employment Relations Comm v Detroit Symphony Orchestra, Inc, 393 Mich 116, 124; 223 NW2d 283 (1974). This Court may review the law regardless of the factual findings of the commission. Regents of University of Michigan v Employment Relations Comm, 389 Mich 96, 102; 204 NW2d 218 (1973).
At the expiration of a labor contract, a public employer is charged with the duty to bargain in good faith pursuant to a proposed new contract with regard to "wages, hours, and other terms and conditions of employment”. MCL 423.215; MSA 17.455(15). Subjects of bargaining included in this phrase are referred to as "mandatory subjects” of bargaining. Detroit Police Officers Ass’n v Detroit, 391 Mich 44, 54; 214 NW2d 803 (1974). At contract expiration, those "wages, hours, and other terms and conditions of employment” established by the contract which are "mandatory subjects” of bargaining survive the contract by operation of law during the bargaining process. The public employer, thus, has the continuing obligation during the bargaining process to apply those "wages, hours, and other terms and conditions of employment” so designated as "mandatory subjects” until such time as impasse is reached in the bargaining process. National Labor Relations Bd v Haberman Construction Co, 618 F2d 288, 302-303 (CA 5, 1980), rev’d on reh on other grounds 641 F2d 351 (1981); Bay Area Sealers, 251 NLRB No 17; 105 LRRM 1545; 1980-81 CCH, NLRB, § 17, 477 (1980).
Neither party may take unilateral action on a "mandatory subject” of bargaining absent an impasse in negotiations. Central Michigan University Faculty Ass’n v Central Michigan University, 404 Mich 268, 277; 273 NW2d 21 (1978). An employer taking unilateral action on a "mandatory subject” of bargaining prior to impasse in negotiations has committed an unfair labor practice. MCL 423.210(l)(e); MSA 17.455(10)(l)(e); see Detroit Police Officers Ass’n v Detroit, 61 Mich App 487, 490; 233 NW2d 49 (1975), lv den 395 Mich 756 (1975). This prohibition against unilateral action prior to impasse serves to foster labor peace and must be liberally construed, particularly in light of the prohibition against striking by public employees set forth in MCL 423.202; MSA 17.455(2). See Van Buren Public School Dist v Wayne Circuit Judge, 61 Mich App 6, 27; 232 NW2d 278 (1975).
Any matter that has a significant impact on "wages, hours, or other conditions of employment” or settles an aspect of the employer-employee relationship is a "mandatory subject” of bargaining. Detroit v Michigan Council 25, American Federation of State, County and Municipal Employees, 118 Mich App 211, 215; 324 NW2d 578 (1982); Houghton Lake Ed Ass’n v Houghton Lake Community Schools, 109 Mich App 1, 6; 310 NW2d 888 (1981). A review of the COLA provision herein plainly indicates that a policy or practice of making periodic adjustments to the wages of the employees was established as per the schedule/formula set forth in the said provision. As such, the COLA provision clearly had a significant impact on the wages and conditions of employment of the employees herein so as to be a "mandatory subject” of bargaining which survived the expired contract during the bargaining process. See Office & Professional Employees International Union, Local 2 v Washington Metropolitan Area Transit Authority, 552 F Supp 622, 633-634 (D DC, 1982). The phrase of the contract "/or the life of the agreement, * * *” therefore could not terminate the policy or practice established by the COLA provision during the bargaining process any more than it could terminate a wage itself during the process. Haberman Construction Co, supra, and Bay Area Sealers, supra.
We, therefore, hold that where a COLA provision establishes a practice or policy of making regular COLA adjustments to wages which has a significant impact on the said wages or other conditions of employment so as to be a "mandatory subject” of bargaining, the provision survives the expiration date of the contract during the bargaining process as a matter of law pursuant to PERA. The decision of MERC is, therefore, reversed and the cause is remanded for further proceedings consistent with this opinion. On remand, the commission shall issue an order corresponding to that recommended by the hearing referee, with allowance for subsequent changes in circumstance. We retain no jurisdiction.
MERC has reversed itself to the extent that this matter is inconsistent with Wayne County Bd of Comm’rs v American Federation of State, County and Municipal Employees, Council 25, and its affiliated Locals 25, 409, 1659, 1905, 1917, and 2926, MERC Case No C83 E-136 (1984).
In addition, a review of the record set forth herein reveals that MERC properly placed the burden of proof of establishing the unfair labor practice in this matter on the petitioner. However, it does appear that they improperly applied the standard of proof of that of clear and convincing evidence. The standard of proof in unfair labor practice matters is that of the preponderance of the evidence. MCL 423.216; MSA 17.455(16).
Precedent under the NLRA is persuasive in construing PERA’s requirements, because of the parallel language of the two statutes. See Kalamazoo City Ed Ass’n v Kalamazoo Public Schools, 406 Mich 579, 593, fn 1; 281 NW2d 454 (1979); Lamphere Schools v Lamphere Federation of Teachers, 400 Mich 104, 120; 252 NW2d 818 (1977); Pontiac Police Officers Ass’n v Pontiac, 397 Mich 674; 246 NW2d 831 (1976); Employment Relations Comm v Reeths-Puffer School Dist, 391 Mich 253, 260; 215 NW2d 672 (1974), cf. Abood v Detroit Bd of Ed, 431 US 209, 233; 97 S Ct 1782; 52 L Ed 2d 261 (1977). | [
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Per Curiam.
Plaintiff appeals as of right from the circuit court’s order granting defendants’ motion for summary judgment pursuant to GCR 1963, 117.2(3), now MCR 2.116(0(10), based upon plaintiff’s failure to show that her injuries met the no-fault threshold standard under MCL 500.3135; MSA 24.13135. We reverse.
On March 18, 1983, plaintiff was a passenger on a dot bus when a vehicle driven by defendant Steven Lemicex struck the rear of the bus. Plaintiff was jolted forward and then backward by the impact and sustained injuries as a result. Plaintiff did not receive emergency treatment nor was she hospitalized. However, on March 25, 1983, plaintiff was examined by Dr. Nicholas Doinidis, a chiropractor. Plaintiff complained of headaches, ringing in the ears, muscle spasms in her shoulders, and pain in the neck, back, joints, arms, legs and feet. Dr. Doinidis’ report indicated that x-rays revealed some deviation from normal structure, however the nature of these deviations was not specified. His examination revealed that plaintiff had a loss of strength in her arms and legs. In addition, his examination revealed palpable cervical, thoracic and lumbar muscle spasms, and palpable edema in the cervical, thoracic and lumbar regions. Plaintiff was diagnosed as suffering from a sprain-strain injury accompanied by ligamentous instability, myofascitis and localized evidence of nerve irritation. Dr. Doinidis indicated that her symptoms would be recurrent and that plaintiff could anticipate exacerbations and remissions of pain and stiffness in the cervical, thoracic and lumbar spinal areas. Dr. Doinidis treated plaintiff on twenty-nine occasions oyer a one-year period.
Plaintiff was also examined by Dr. J. Paul Leonard, an orthopedic surgeon, on November 4, 1983. His examination revealed subacute contracture of the trapezius musculature bilaterally, trunk flex-ion to forty-five degrees with pain beyond that point, and marked tension through the musculature of the lumbar spine bilaterally. Plaintiff had marked tenderness to palpation over the left sacroiliac articulation and very weak muscle strength bilaterally. Dr. Leonard noted that plaintiff had full cervical spine motion, and her shoulder, elbow, wrist and hand motions were physiologic. Dr. Leonard’s diagnosis was that plaintiff suffered from spasms of the trapezius bilaterally, left sacroiliac strain and left lumbar myositis. He stated that plaintiff would benefit from an intensive physical therapy program for the lower back, hotpacks and intermittent pelvic traction along with rehabilitative back exercises. He concluded that this would be a long-term rehabilitation program. Future resi dual instability in the lower back could require work restrictions and restrictions on heavy lifting following plaintiffs therapy.
Plaintiffs affidavit of April 4, 1984, stated that she still suffered from pain in her lower back, left shoulder and left leg. As a result, she has trouble bending and lifting and has limited movement in her back, shoulder and leg. Furthermore, plaintiff has been unable to carry out her daily functions, including cooking and housekeeping, and asserted that her recreational activities had been severely curtailed. Plaintiff was unemployed at the time of the accident and is currently unemployed.
In determining whether the no-fault threshold standard of MCL 500.3135(1); MSA 24.13135(1) of a serious impairment of a body function has been met, where there is no material factual dispute regarding the nature and extent of a plaintiffs injury, the trial court can determine as a matter of law that there has been a serious impairment of a body function when it finds that the following three criteria have been met: (1) the body function which is impaired must be an important one; (2) the impairment must be serious; and (3) the injuries must be objectively manifested. Cassidy v McGovern, 415 Mich 483, 502-505; 330 NW2d 22 (1982); Williams v Payne, 131 Mich App 403; 346 NW2d 564 (1984).
In the instant case, we find that plaintiffs ability to move her back is an important body function. Argenta v Shahan, 135 Mich App 477, 488; 354 NW2d 796 (1984), lv gtd 421 Mich 859 (1985). Furthermore, her injuries have been objectively manifested by the medical examinations revealing contracture or spasm of her musculature. See Franz v Woods, 145 Mich App 169, 176; 377 NW2d 373 (1985). Thus the determinative question is whether the impairment of her body function was serious enough to impact on her general ability to live a normal life. See Franz, supra, p 177. Factors to be considered include the extent of the injury, the treatment required, the duration of the disability, the extent of residual impairment, and the prognosis for eventual recovery, which impact on her ability to live a normal life. See Cassidy, supra, pp 504-505. In the instant case, plaintiff presented medical opinions that she would be involved in long-term rehabilitation and that she could suffer residual and recurrent problems from the injury. Plaintiff also asserted in her affidavit that she could not perform her day-to-day activities, which included cooking and housekeeping. Contrast Franz, supra, p 177 where the plaintiff set her own limits for her activities; see also Pohl v Gilbert, 89 Mich App 176; 280 NW2d 831 (1979), lv den 406 Mich 981 (1979).
Although we find that plaintiffs threshold showing of serious impairment of a body function was marginal, it was sufficient to defeat defendants’ motion for summary judgment in the instant case. On a motion for summary judgment, the benefit of any reasonable doubt should accrue to the party opposing the motion. Usher v St Paul Fire & Marine Ins Co, 126 Mich App 443, 446; 337 NW2d 351 (1983).
Reversed and remanded.
Defendants contended at the hearing on their motion for summary judgment that plaintiffs deposition clearly indicated that she had not suffered a serious impairment of a body function. However, a transcript of this deposition has not been submitted on appeal by either party, and the only sworn statements as to the impact of her injury on plaintiffs lifestyle are contained within her affidavit.
To the extent that Flemings v Jenkins, 138 Mich App 788, 790; 360 NW2d 298 (1984), indicates or implies that muscle spasms are not objective manifestations of injury, see Franz, supra, p 176, Judge Gribbs retreats from this position and finds that objective evidence of spasm, such as evidenced by medical examination and palpation of the tissues, should be considered objective manifestations of an injury. | [
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Per Curiam.
Defendant was charged with assault with intent to commit murder, MCL 750.83; MSA 28.278. Following a jury trial, defendant was convicted of the lesser offense of assault with intent to do great bodily harm less than murder, MCL 750.84; MSA 28.279. He was sentenced to a term of from 6 to 10 years in prison and appeals as of right. Several issues are raised on appeal, none of which require reversal.
Defendant first argues that the trial court abused its discretion in admitting for impeachment purposes evidence of his 1977 conviction of assault with intent to commit murder, MCL 750.83; MSA 28.278. We find, however, that the trial court exercised its discretion on the record as required under MRE 609(a) by considering the probative nature of the evidence as well as the fact that the prior conviction was for a crime identical to the crime charged. Moreover, while we recognize that another trial judge may have excluded, in the proper exercise of his or her discretion, the same prior conviction evidence, we cannot say that the trial court’s decision here constitutes an abuse of discretion. People v Jackson, 391 Mich 323; 217 NW2d 22 (1974).
The admission of evidence of a defendant’s prior conviction for a crime similar or identical to the crime charged does not per se result in reversible error. People v Pedrin, 130 Mich App 86; 343 NW2d 243 (1983); People v Carpenter, 120 Mich App 574, 581; 327 NW2d 523 (1982); People v Monasterski, 105 Mich App 645, 655; 307 NW2d 394 (1981), lv den 411 Mich 1017 (1981). Where similarity weighs against admission, the prejudicial effect of that evidence must be balanced against two other factors: the extent to which the crime is probative of credibility and the effect of admission of the evidence on defendant’s decision not to testify. People v Williams, 413 Mich 72; 318 NW2d 462 (1982); People v Rush, 118 Mich App 236, 239-240; 324 NW2d 586 (1982). While in this case the prior conviction did not involve a crime of theft and was therefore not actually probative of defendant’s credibility, defendant did testify at trial knowing that the evidence would be admitted. The fact that the trial court’s decision had no apparent effect on defendant’s decision to testify distinguishes this case from People v Williams, supra, upon which defendant relies in arguing that reversal is mandated. We further note that, while there is some suggestion that defendant’s prior conviction was not for the crime of assault with intent to commit murder, defense counsel stipulated on the record that such was the nature of the conviction. We will not allow defendant to obtain reversal on error intentionally introduced into the record.
Defendant secondly contends that the trial court abused its discretion in finding that the prosecution had exercised due diligence in attempting to produce an alleged res gestae witness at trial. During the testimony of a prosecution witness, the police and prosecutor were first made aware of the presence at the scene of the crime of a man known only as "Bull”. Upon being informed by the witness that. "Bull” frequently played basketball at the Kronk Center, the police went to the center that evening and questioned several people, including the director, with no success. On the next day of trial, the defendant moved for and was granted a due diligence hearing, following which the trial court ruled that the prosecution had exercised due diligence in attempting to locate the missing witness.
We find no abuse of discretion in the trial court’s finding of due diligence. Although the police did not make inquiries at a house allegedly visited on occasion by "Bull”, the prosecution is required to do everything reasonable, rather than everything possible, in locating a res gestae witness. People v Joseph LeFlore (After Remand), 122 Mich App 314, 318; 333 NW2d 47 (1983); People v Moreno, 112 Mich App 631, 637; 317 NW2d 201 (1981). We agree with the trial court that the prosecution did everything reasonable in this case to locate "Bull”.
Finally, defendant objects to several alleged instructional errors which he contends resulted in reversible error. Inasmuch as defendant failed to preserve any of these issues by objecting at trial, we will not consider them on appeal absent a showing of manifest injustice. People v Sommerville, 100 Mich App 470, 479; 299 NW2d 387 (1980), lv den 417 Mich 1022 (1983). We are not persuaded that instructional error resulted in manifest injustice in this case.
Viewing the instructions in their entirety, People v Dupie, 395 Mich 483, 488; 236 NW2d 494 (1975), we first find that the court did not erroneously instruct on the prosecution’s burden of proving that defendant did not act in self-defense. People v Jackson, 390 Mich 621; 212 NW2d 918 (1973). While the trial court’s introduction to the theory of self-defense could have been better stated, the clear message of the instruction is that "[i]t is not for Mr. Stokes to prove to you beyond a reasonable doubt that he acted in self-defense, it is for the prosecution to prove that he did not”.
While the trial court failed to properly instruct the jury on the intent required to convict on felonious assault, see People v Joeseype Johnson, 407 Mich 196; 284 NW2d 718 (1979), we find no manifest injustice inasmuch as defendant was convicted of a greater offense.
Although the trial court did not precisely state that one element of assault is the present ability of defendant to commit violence against the complainant, that message is clearly apparent from the trial court’s instruction when read as a whole. The trial court explained that an example of an offer of violence is a person raising a fist at an other person who is standing nearby. Given the undisputed facts that defendant possessed a knife at the time of the assault and that defendant and the complainant stood in close proximity to each other, we find no manifest injustice in the trial court’s omission of the present ability language.
Finally, we find no manifest injustice in the trial court’s instruction on guilt beyond a reasonable doubt. While there appears to be one isolated misstatement in the instruction, the instruction in its entirety is accurate and consistently refers to the jury’s duty to acquit defendant unless guilt is proven beyond a reasonable doubt.
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Per Curiam.
Plaintiff filed this paternity action on March 3, 1981, alleging that defendant was the father of her child born on February 2, 1973. The trial court granted defendant’s motion for accelerated judgment pursuant to GCR 1963, 116.1(5), on the ground that plaintiff’s cause of action was barred by the six-year statute of limitations applicable to paternity actions. MCL 722.714(b); MSA 25.494(b). We affirmed the trial court’s decision in Wolfe v Geno, 122 Mich App 250; 332 NW2d 457 (1982) , relying on Shifter v Wolf, 120 Mich App 182; 327 NW2d 429 (1982), lv den 417 Mich 892 (1983) .
Several months after the release of our decision the United States Supreme Court decided Pickett v Brown, — US —; 103 S Ct 2199; 76 L Ed 2d 372 (1983), in which Tennessee’s two-year statute of limitations for paternity actions was declared violative of equal protection principles. On plaintiff’s application for leave to appeal, the Michigan Supreme Court directed us to reconsider our prior decision in light of Pickett v Brown, 417 Mich 1090 (1983).
In striking down Tennessee’s two-year limitations period, the United States Supreme Court followed precisely the reasoning set forth in Mills v Habluetzel, 456 US 91; 102 S Ct 1549; 71 L Ed 2d 770 (1982), where a one-year limitations period imposed by Texas was also found to be violative of equal protection principles. The analysis of Mills v Habluetzel had been followed by this Court in Shifter v Wolf, supra, where a different result was deemed justifiable given the difference in length between a one-year and a six-year statute of limitations.
Upon full consideration of plaintiffs claims, we reaffirm our earlier decision and again hold that Michigan’s six-year statute of limitations for paternity actions does not violate the Equal Protection Clause of either the state or federal constitutions. US Const, Am XIV; Const 1963, art 1, § 2. Pickett v Brown does not alter the constitutional analysis to be applied in this case and we continue to rely on Shifter v Wolf, supra, in holding that (1) the six-year limitations period is substantially related to a permissible state interest in preventing the litigation of stale or fraudulent claims, see Herrick v Taylor, 113 Mich App 370, 374; 317 NW2d 631 (1982) and (2) six years provides a reasonable opportunity for legally interested parties to file paternity actions. See also Daniel v Collier (On Remand), 130 Mich App 345; 343 NW2d 16 (1983).
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Holbrook, Jr., P.J.
Defendant State Tax Commission appeals as of right from the Ingham Circuit Court order that granted plaintiff Richland Township’s motion for summary disposition pursuant to MCR 2.116(0(10). We affirm.
i
In early 1991, the Richland Township assessor established the 1991 assessments for all forty-nine commercial parcels in the township by applying an across-the-board increase of 17.6 percent, based in large part on a county equalization study that purported to demonstrate that the 1990 assessment levels of the parcels no longer reflected true cash value. Owners of thirty-one of the forty-nine commercial parcels challenged their increased assessments to the Richland Township Board of Review. Determining that the assessment roll was improper, inasmuch as it was based on an improperly prepared equalization study, the board rolled back the assessments of the thirty-one commercial parcels to 1990 levels.
Following the board of review’s action, the Montcalm County Board of Commissioners met in April 1991 to perform the intracounty equalization. After determining that the assessed value of Richland Township’s commercial class of property was less than its equalized value, the equalization director recommended, and the Montcalm County Board of Commissioners adopted, an equalization factor of 1.11839 to be applied to the township’s commercial parcels._
During this time period, the State Tax Commission (stc) became aware of the actions of the Richland Township Board of Review and began an investigation into the matter. The stc determined that the board of review’s action had resulted in a nonuniform assessment roll, i.e., assessments of the eighteen commercial parcels whose owners had not appealed their increased assessments to the board of review were not rolled back to 1990 levels, and application of the intracounty equalization factor had exacerbated the disparity. The stc concluded that the board of review’s actions had violated the Michigan Constitution, which requires a uniform assessment roll, see Const 1963, art 9, § 3, and also violated the due process and equal protection rights of the owners of the eighteen parcels. On June 28, 1991, the stc entered an order rendering the actions of the board of review null and void and reinstating the assessor’s proposed assessments.
The stc prepared to conduct its own hearings to allow property owners to challenge their assessments as reset by the stc, intending to act not merely as an appellate body by hearing appeals from the board of review, but rather to take over the function of the township board of review. The stc asserted that any decision it made at these hearings would be appealable by the aggrieved party to the Tax Tribunal. Richland Township sought and obtained a temporary restraining order from the circuit court to prevent such hearings.
On July 29, 1991, the township brought this action seeking judicial review of the stc’s June 28, 1991, order or, in the alternative, a declaratory judgment that the stc was without jurisdiction to review the actions of the board of review. Plaintiff township moved for summary disposition pursuant to MCR 2.116(C)(10). The circuit court granted plaintiffs motion, declaring the stc’s June 28, 1991, order null and void. The court held that review of the Richland Township Board of Review’s actions in reducing the assessments for the thirty-one parcels of commercial property was within the exclusive jurisdiction of the Tax Tribunal and that the stc lacked jurisdiction to conduct such a review.
ii
The gravamen of this appeal is whether the State Tax Commission has statutory authority, after determining that a local governmental unit’s assessment rolls have been improperly prepared, to overturn the actions of a local board of review. We hold that it does not.
A
The General Property Tax Act (gpta), MCL 211.1 et seq.; MSA 7.1 et seq., provides for the annual assessment and equalization of property for ad valorem tax purposes. The principal successive steps in the process include assessment of individual parcels by the local assessor at fifty percent of true cash value, intracounty equalization by each county’s board of commissioners, and intercounty (state) equalization by the stc.
Before 1974, the stc was the primary state agency involved in the administration of the property tax laws, performing the dual roles of investigating complaints and hearing appeals of various types. See In re Dearborn Clinic & Diagnostic Hosp, 342 Mich 673; 71 NW2d 212 (1955). Pursuant to the gpta, a taxpayer who wished to contest an assessment could appeal to the stc or bring a lawsuit in the circuit court. MCL 211.152, 211.53; MSA 7.210, 7.97. Xerox Corp v Kalamazoo, 76 Mich App 150, 152-153; 255 NW2d 797 (1977).
With enactment of the Tax Tribunal Act, 1973 PA 186; MCL 205.701 et seq.; MSA 7.650(1) et seq., the Legislature created the Michigan Tax Tribunal:
The tribunal’s exclusive and original jurisdiction shall be:
(a) A proceeding for direct review of a final decision, finding, ruling, determination, or order of an agency relating to assessment, valuation, rates, special assessments, allocation, or equalization, under property tax laws.
(b) A proceeding for refund or redetermination of a tax under the property tax laws. [MCL 205.731; MSA 7.650(31).]
The act further provides:
A person or legal entity which, immediately before the effective date of this act, was entitled to proceed before the state tax commission or circuit court of this state for determination of a matter subject to the tribunal’s jurisdiction, as provided in [MCL 205.731; MSA 7.650(31)], shall proceed only before the tribunal. [MCL 205.741; MSA 7.650(41).]
Section 7 of the Tax Tribunal Act provides that its provisions "are effective notwithstanding the provisions of any statute, charter, or law to the contrary.” MCL 205.707; MSA 7.650(7). Thus, the act vested the Tax Tribunal with jurisdiction over matters previously heard by the stc as an appellate body including individual assessments, allocation disputes, and intracounty equalization. Emmet Co v State Tax Comm, 397 Mich 550, 553-555; 244 NW2d 909 (1976); Consumers Power Co v Big Prairie Twp, 81 Mich App 120, 152-160; 265 NW2d 182 (1978). See also Washtenaw Co v State Tax Comm, 422 Mich 346, 366, n 3; 373 NW2d 697 (1985).
B
Notwithstanding the above, the stc asserts that it was not acting as an appellate body in reviewing the actions of the Richland Township Board of Review. Rather, the stc asserts that it acted pursuant to § 150 of the gpta, which provides in pertinent part:
It shall be the duty of the commission:
(3) To receive all complaints as to property liable to taxation that has not been assessed or that has been fraudulently or improperly assessed, and to investigate the same, and to take such proceedings as will correct the irregularity complained of, if any is found to exist. [MCL 211.150; MSA 7.208.]
Thus, the stc claims that it "investigated” the board’s actions and, upon finding an "irregularity,” attempted to "correct” it. We are unpersuaded by the stc’s efforts to characterize its actions as falling outside the ambit of the Tax Tribunal’s plenary authority to review final decisions regarding assessments and valuations.
Notwithstanding creation of the Tax Tribunal, we do not conclude that the stc is either irrelevant or superfluous. Indeed, we agree with the Attorney General, who has opined that the stc retained its purely administrative functions under the gpta:
The Tax Commission must comply with the provisions of sections 148, 149, 150, 151 and 152 of [the gpta], except for those functions which were transferred to the Tax Tribunal .... Those func tions transferred were the appellate or review functions of the Tax Commission. The Tax Commission retains the purely administrative functions contained in sections 148, 149, 150, 151 and 152 of [the gpta]. Emmet County v State Tax Commission, supra.
These administrative functions include, but are not limited to: taking possession of assessment rolls for use in carrying out the provisions of the act, issuing subpoenas, examining books and records of persons liable for property tax ([the gpta], § 148, supra); conducting its meetings in accordance with the Open Meetings Act ([the gpta], § 149, supra); exercising general supervision over the assessing officers of this state, requiring from any officer in this state reports to aid in the furtherance of its duties ([the gpta], § 150, supra); issuing of a report to the Governor of this state setting forth the activities of the commission ([the gpta], § 151, supra); and inspecting the various assessment rolls ([the gpta], § 152, supra). [OAG, 1981-1982, No 6007, pp 450, 457-458 (November 18, 1981).]
Therefore, where the stc exercises its purely administrative powers and determines that an irregularity hás occurred in the preparation of a local governmental unit’s assessment rolls, appellate review of the alleged irregularity is vested in the original and exclusive jurisdiction of the Tax Tribunal.
Clearly, the party aggrieved by a decision of a board of review — i.e., the local governmental unit or individual taxpayer who protested an assessment to the board of review — is entitled to seek administrative review of the decision by the Tax Tribunal. MCL 205.741; MSA 7.650(41); see also Detroit v Jones & Laughlin Steel Corp, 77 Mich App 465; 258 NW2d 521 (1977). Moreover, consistent with the stc’s retained administrative functions under the gpta, even where the local govern mental unit declines to appeal, as happened in this case, the stc is implicitly authorized under its general supervisory authority over state tax laws to petition for review as a "party in interest” before the Tax Tribunal. See MCL 209.104, 209.153, 205.735(2); MSA 7.634, 7.622, 7.650(35X2). Contrary to the stc’s claim, the Tax Tribunal has broad powers to remedy any alleged irregularity in the assessment and valuation process. MCL 205.732, 205.755; MSA 7.650(32), 7.650(55); Johnson v Michigan, 113 Mich App 447; 317 NW2d 652 (1982). Thus, the stc’s determination, following an investigation, that the assessment rolls certified by the Richland Township Board of Review were improperly prepared and nonuniform was reviewable by the Tax Tribunal.
Accordingly, we find that plaintiff Richland Township was entitled to judgment as a matter of law and that summary disposition was properly granted.
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Shepherd, P.J.
Defendant Michigan Department of Agriculture appeals as of right from an order of declaratory judgment entered on February 25, 1985, by the Ingham Circuit Court. The circuit court held that the federal Agricultural Fair Practices Act, 7 USC 2301 et seq., (hereafter the afpa) preempts Michigan’s Agricultural Commodities Marketing Act, MCL 290.651 et seq.; MSA 12.94(21) et seq. We reverse and hold that the federal act does not preempt the Agriculture Commodities Marketing Act.
The Agricultural Commodities Marketing Act authorizes Michigan producers of agricultural commodities to form marketing programs to promote their products. Such marketing programs may establish advertising and market-development programs, conduct research, disseminate market information, set quality standards, inspect and grade commodities, institute surplus controls, and provide for payment to producers according to estab lished grades. Finally, under the terms of the statute, a marketing program, if it chooses, may exempt nonparticipating producers. MCL 290.653; MSA 12.94(23).
In 1968, Michigan apple growers initiated and approved by referendum vote a marketing program pusuant to the Agricultural Commodities Marketing Act. The Michigan Apple Committee was formed to administer the program. The committee provides producers with market information and conducts advertising, promotion, publicity, and research programs in accordance with MCL 290.653; MSA 12.94(23). The program is funded by assessments levied against each producer. The apple committee has made no provision to exempt producers who do not wish to participate. However, MCL 290.663; MSA 12.94(33) does provide a procedure for producers to petition the director of the Department of Agriculture to call a vote to terminate the program.
R. V. Saur and Sons Orchards, Inc., an apple processor, and Old Orchard Brands, Inc., an apple grower, refused to pay assessments levied for the 1982-1983 growing season, ending June 30, 1983. In an unrelated proceeding, pursuant to MCL 290.669; MSA 12.94(39), the director of the Department of Agriculture instituted actions against the above parties in the district court, seeking to collect the unpaid assessments plus interest, penalties, and costs. Thereafter, on May 18, 1984, R. V. Saur and Sons Orchards, Inc., and Old Orchards Brands, Inc. (hereinafter plaintiffs) filed the instant action in the circuit court against the Department of Agriculture and the 63rd Judicial District, seeking to enjoin the enforcement action in the district court and a declaratory judgment that the Agricultural Commodities Marketing Act was not applicable to apples. On July 11, 1984, plaintiffs amended their complaint and alleged that the federal Agricultural Fair Practices Act prohibited mandatory participation in the Michigan Apple Committee program and that the federal act preempted Michigan’s Agricultural Commodities Marketing Act. As authority, plaintiffs relied principally upon a June 11, 1984, decision by the United States Supreme Court, Michigan Canners & Freezers Ass’n, Inc v Agricultural Marketing & Bargaining Bd, 467 US 461; 104 S Ct 2518; 81 L Ed 2d 399 (1984). Both parties moved for summary judgment. The circuit court agreed with plaintiffs’ position and ruled that the afpa preempted the Agricultural Commodities Marketing Act "to the extent that it allows producers’ associations such as the apple committee to fail to provide exemption for nonparticipating producers.”
The sole issue before this Court on appeal is whether the federal afpa preempts Michigan’s Agricultural Commodities Marketing Act. The afpa is a federal agricultural statute that was the object of interpretation by the United States Supreme Court in Michigan Canners & Freezers Ass’n v Agricultural Marketing & Bargaining Bd, supra. In that decision, the Supreme Court concluded that the afpa preempted Michigan’s Agricultural Marketing and Bargaining Act, MCL 290.701 et seq.; MSA 12.94(101) et seq. The latter act established a state administered system by which a majority of the producers of a particular commodity could organize a producers’ association and then certify that association as the exclusive bargaining agent for all the producers of that particular commodity in the state. Pursuant to that authority, the Michigan Agricultural Cooperative Marketing Association, Inc., (hereafter macma), was formed and accredited as the sole sales and bargaining representative for all asparagus producers in the state. Thus, a producer who objected to a contract negotiated by macma would nevertheless be bound by the terms (including price), be precluded from marketing his produce himself, and be forced to pay fees to the association for the services rendered. The Supreme Court held that the Michigan act was in clear violation of 7 USC 2303(c) because it had the effect of coercing a producer to "enter into [or] maintain ... a marketing contract with an association of producers or a contract with a handler.” 467 US 478. Unlike the Agricultural Marketing and Bargaining Act, the Agriculture Commodities Marketing Act, which is the subject of this appeal, does not empower a producers’ association to act as a sales and bargaining agent to producers.
The United States Supreme Court in Michigan Canners explained the three ways federal law may preempt state law:
Federal law may pre-empt state law in any of three ways. First, in enacting the federal law, Congress may explicitly define the extent to which it intends to pre-empt state law. Second, even in the absence of express pre-emptive language, Congress may indicate an intent to occupy an entire field of regulation, in which case the States must leave all regulatory activity in that area to the Federal Government. Finally, if Congress has not displaced state regulation entirely, it may nonetheless pre-empt state law to the extent that the state law actually conflicts with federal law. Such a conflict arises when compliance with both state and federal law is impossible, or when the state law "stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.” [Citations omitted. 467 US 469.]
The Supreme Court concluded that the afpa neither contains preemptive language nor reflects a congressional intent to occupy the entire field. Id. In fact, the afpa contains express language eliminating its preemptive effect on existing state law. The fifth section of the afpa, 7 USC 2305(d), states in part:
The provisions of this chapter shall not be construed to change or modify existing State law nor to deprive the proper State courts of jurisdiction. [Emphasis added.]
The Agricultural Commodities Marketing Act was enacted by 1965 PA 232, effective March 31, 1966. The afpa was enacted by Pub L 90-288 on April 16, 1968. Since the Agricultural Commodities Marketing Act was "existing State law,” the afpa, by its own terms has no preemptive effect. The trial court’s opinion does not mention § 2305(d) and thus fails to explain how its clear import may be ignored. Plaintiffs without elaboration argue that the same argument was made and rejected in Michigan Canners. However, § 2305(d) was not a bar to the Supreme Court’s decision in Michigan Canners, because, as the Supreme Court noted, the Michigan act under scrutiny there, unlike the subject act of this appeal, was enacted after the afpa was enacted.
We conclude that the Agricultural Commodities Marketing Act was "existing State law” and, accordingly, the afpa, by its clear language, has no preemptive effect. We reverse the contrary declaratory judgment of the circuit court.
Reversed.
Under the Agricultural Commodities Marketing Act, processors may be required to collect and remit producer assessments. MCL 290.655; MSA 12.94(25).
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Corrigan, J.
Plaintiff Michigan Up & Out of Poverty Now Coalition appeals as of right an Ingham Circuit Court order denying it injunctive relief. Plaintiff challenged the validity of several sections of the Michigan Capitol Committee Procedures for the Use of the Public Areas of the Michigan State Capitol as prohibiting it, in violation of the First Amendment of the United States Constitution and Const 1963, art 1, § 5, from continuing its tent-city protest on the State Capitol grounds. The circuit court ruled that various questioned committee procedures were valid time, place, and manner restrictions on protected expressive activity. We affirm.
Plaintiff presents fifteen issues on appeal, attacking thirteen sections of the revised procedures. We decline to rule on several issues that were not presented in the circuit court and address only those questions that were explicitly raised and evaluated in the circuit court.
I. UNDERLYING FACTS AND PROCEDURAL HISTORY
In December 1991, plaintiff sought and received a series of permits to erect a "tent city” on the Michigan State Capitol grounds in its quest to dramatize the plight of the homeless. The permits were issued by the Michigan Capitol Committee, pursuant to committee rules then in effect for the use of the Capitol building and grounds. Those permits allowed plaintiff to erect tents on the Capitol grounds from December 5 to December 14, 1991. Although plaintiffs last permit expired on December 14, the tents remained on the Capitol grounds until December 20. Three days later, plaintiff received a permit and held a rally on the Capitol lawn between noon and 4:00 p.m. Although the permit merely permitted plaintiff to hold the rally, the executive director of the Capitol Committee allowed plaintiff to keep in place the tent it had erected in conjunction with the demonstration until the permit expired. At 4:00 p.m., Capitol security removed the tent. The same day, plaintiff requested another permit to erect a tent and to hold a prayer vigil on the Capitol grounds the following day. The executive director denied the request because no further permits could be issued without the approval of the full committee.
On an emergency basis, plaintiff obtained an ex parte temporary restraining order, preventing Capitol security from "interfering in any way with plaintiffs placement of not more than six tents on the State Capitol grounds.” Plaintiff thereafter filed a complaint, requesting an order to show cause and a preliminary injunction. Before any formal hearings were held, the parties agreed to extend the temporary restraining order, pending review of the committee rules governing the use of the public areas of the State Capitol._
At the direction of the circuit court, plaintiffs lead counsel fully participated in the review process by attending meetings and supplying written memoranda and comments for the committee’s consideration in redrafting the rules. After a 2 Vi-month period of review and comment, during which approximately twenty drafts of revised procedures were generated, on March 25, 1992, the committee finally approved an amended version of procedures governing the Capitol building and grounds. In its newly revised procedures, the committee succeeded in deleting all waiver requirements, all insurance requirements, all permit requirements, and all references to religious practices. Indeed, plaintiffs lead counsel wrote that the revised procedures had "succeeded in many respects.”
The day after the committee approved the revised procedures, plaintiff sought to enjoin enforcement of the procedures, alleging that §§II(M)(5) and IV(A), (D), and (G) of the new committee procedures unconstitutionally prohibited its tent-city vigil on the Capitol lawn. In a supplemental brief, plaintiff asserted that §IV(J) violated its right to erect symbolic tents on the Capitol grounds and presented a facial challenge to § IV(D). At a hearing in the circuit court, plaintiff seemed principally to object to the new restrictions on overnight camping on the Capitol lawn and on the erection of structures greater than three feet by three feet by three feet, which would preclude habitable structures, including tents. The circuit court observed that prohibitions against overnight camping or sleeping on the Capitol grounds were clearly constitutional, citing Clark v Community for Creative Non-Violence, 468 US 288; 104 S Ct 3065; 82 L Ed 2d 221 (1984). The circuit court thereafter held that the contested committee procedures were valid time, place, and manner restrictions on protected expressive activity under the Michigan and federal constitutions, dissolved the temporary restraining order effective April 3, 1992, and dismissed the case.
Plaintiff appealed and also sought an emergency stay of proceedings. This Court denied plaintiffs motion for a stay of proceedings. The committee procedures thereafter became final and effective pursuant to MCL 4.1702(1); MSA 2.138(702X1).
II. ISSUE PRESERVATION
On appeal, plaintiff challenges an array of committee procedures that were not passed on in the circuit court. For the first time on appeal, plaintiff mounts challenges to §§ 11(A), (D), (E), and (P); 111(H) and (J); IV(E) and (F); and V(D). Plaintiff also argues for the first time on appeal that the existence of the Capitol Committee violates the Separation of Powers Doctrine, Const 1963, art 3, §2. Finally, plaintiff contends that the court improperly denied it an evidentiary hearing, although it neither sought an evidentiary hearing nor objected to the entry of a final order by the circuit court.
Issues raised for the first time on appeal, even those relating to constitutional claims, are not ordinarily subject to appellate review. Booth Newspapers, Inc v Univ of Michigan Bd of Regents, 444 Mich 211, 234; 507 NW2d 422 (1993), citing In re Forfeiture of Certain Personal Property, 441 Mich 77, 84; 490 NW2d 322 (1992), and Butcher v Dep’t of Treasury, 425 Mich 262, 276; 389 NW2d 412 (1986); see, also, FW/PBS, Inc v Dallas, 493 US 215, 237; 110 S Ct 596; 107 L Ed 2d 603 (1990). Because plaintiff has not demonstrated exceptional circumstances, we decline to reach the host of unpreserved constitutional claims that plaintiff has presented. We are fully cognizant that political speech in this state’s Capitol lies at the heart of the free speech guarantees of the state and federal constitutions. We are also mindful that this Court functions as a court of review that is principally charged with the duty of correcting errors. We see no exigent circumstances in this case that would mandate review of constitutional arguments presented for the first time on appeal. Booth, supra.
III. STANDARDS FOR INTERPRETATION OF FREE SPEECH CLAIMS
We now turn to those issues that plaintiff has properly preserved. Plaintiff challenges various committee procedures both facially and as applied, contending that those procedures violate its rights to free speech under the state and federal constitutions. Const 1963, art 1, § 5 provides:
Every person may freely speak, write, express and publish his views on all subjects, being responsible for the abuse of such right; and no law shall be enacted to restrain or abridge the liberty of speech or of the press.
The relevant text of the First Amendment of the federal constitution states "Congress shall make no law . . . abridging the freedom of speech.”
Our Supreme Court has interpreted the rights to free speech under the Michigan and federal constitutions, US Const, Am I, as coterminous. Woodland v Michigan Citizens Lobby, 423 Mich 188, 202; 378 NW2d 337 (1985). Plaintiff has identified no compelling reason for interpreting the Michigan Constitution more broadly than the federal constitution, Sitz v Dep’t of State Police, 443 Mich 744, 763; 506 NW2d 209 (1993). We thus review plaintiff’s challenges to the new procedures in accordance with federal authority construing the First Amendment.
iv. standing: facial challenges
Plaintiff facially challenges the new Capitol Committee procedures on grounds that §IV(D) grants the committee overly broad discretion to deny the public permission to picket or distribute leaflets on the Capitol grounds. Section IV(D) provides:
Picketing and the distribution of literature shall not impede or interfere with State business or public access to and use of the Capitol. In order to inform individuals and organizations of the procedures for the use of public areas of the Capitol and grounds, it is recommended, but not required, that individuals and organizations desiring to distribute literature on the Capitol grounds advise the Capitol Facility Manager of the date and time of this activity. In order to assure the reasonable conduct of public business, unobstructed access to the Capitol for its occupants and the public, and to maintain the Capitol grounds, the Executive Committee (composed of the Chair and Vice-Chairs) of the Michigan Capitol Committee has been delegated the authority to designate specific areas of the grounds for picketing and the distribution of literature, which shall apply equally to all such activities. Individuals distributing literature shall remove all discarded items from the grounds at the conclusion of their activity. [Emphasis added.]
Plaintiffs facial attack on the committee rules cannot succeed.
Generally, facial challenges to legislation are disfavored. In the context of free speech, however, an overbroad regulation of expressive activity may be subject to facial attack, even where its application in the case under consideration would be constitutionally unobjectionable. Forsyth Co, Georgia v Nationalist Movement, 505 US 123; 112 S Ct 2395, 2400-2401; 120 L Ed 2d 101 (1992); City Council of Los Angeles v Taxpayers for Vincent, 466 US 789, 798-799; 104 S Ct 2118; 80 L Ed 2d 772 (1984). Two forms of overbreadth challenges have been recognized: where a law or ordinance sweeps too broadly, covering a substantial amount of protected free speech, and where every application of a law or ordinance creates an unreasonable risk of censorship. Forsyth Co, supra at 129-130. For example, when a licensing law allegedly vests "unbridled discretion in a government official over whether to permit or deny expressive activity, one who is subject to the law may challenge it facially without the necessity of first applying for, and being denied, a license.” Lakewood v Plain Dealer Publishing Co, 486 US 750, 755-756; 108 S Ct 2138; 100 L Ed 2d 771 (1988); Freedman v Maryland, 380 US 51, 56; 85 S Ct 734; 13 L Ed 2d 649 (1965); Thornhill v Alabama, 310 US 88, 97; 60 S Ct 736; 84 L Ed 1093 (1940). In Lakewood, the Supreme Court struck down a municipal ordinance granting the mayor unbridled discretion to deny permit applications and unbounded authority to condition permits on any terms he deemed necessary and reasonable. Id. at 772.
This exception to the usual standing requirements arises because a licensing law that places "unbridled discretion in the hands of a government official or agency constitutes a prior restraint and may result in censorship.” Id. at 757, citing Shuttlesworth v Birmingham, 394 US 147; 89 S Ct 935; 22 L Ed 2d 162 (1969); Cox v Louisiana, 379 US 536; 85 S Ct 453; 13 L Ed 2d 471 (1965). The dangers of censorship and abridgment of free speech exist when a permit process " 'involves appraisal of facts, the exercise of judgment, and the formation of an opinion’ ” by the licensing authority. Forsyth Co, supra at 131, quoting Cant-well v Connecticut, 310 US 296, 305; 60 S Ct 900; 84 L Ed 1213 (1940), and citing Southeastern Promotions, Ltd v Conrad, 420 US 546, 553; 95 S a 1239; 43 L Ed 2d 448 (1975). To mitigate the risk of censorship, " 'a law subjecting the exercise of [free speech] to the prior restraint of a license’ must contain 'narrow, objective, and definite standards to guide the licensing authority.’ ” Forsyth Co, supra at 131, quoting Shuttlesworth, supra at 150-151.
Plaintiff has not shown that §IV(D) creates a censorship risk and is therefore subject to facial attack. Plaintiff argues that § IV(D) is overly broad because the committee has unbridled discretion to deny permission to anyone wishing to picket or distribute literature on the Capitol grounds. Plaintiff asserts that the recommendation that individuals notify the facility manager of their intent to distribute literature or picket amounts to a license or permit requirement.
We think that plaintiff has misread the provision. Section IV(D) does not impose either a licensing requirement or a prior restraint on speech. The revised procedures do not require anyone to obtain permission to picket or distribute leaflets on the Capitol grounds. The facility manager has no discretion to deny individuals the right to picket or distribute leaflets. Indeed, § IV(D) states that "to inform individuals and organizations of the procedures for the use of public areas of the Capitol and grounds, it is recommended, but not required, that individuals” advise the facility manager of their intent to distribute literature. (Emphasis added.) The rule is couched in terms of a recommendation. It contains no hint of a penalty for noncompliance. Neither the facility manager nor the committee can prevent speech from taking place. Because § IV(D) is not a licensing law that grants overly broad discretion to the committee, it is not subject to facial attack.
V. RESTRICTIONS ON SPEECH IN A PUBLIC FORUM
Plaintiff also challenges the Capitol Committee’s regulation of expressive activity on the Capitol grounds. The Capitol grounds constitute a traditional public forum, where the right to free speech is closely guarded. Quintessential public fora include "those places 'which by long tradition or by government fiat have been devoted to assembly and debate,’ such as parks, streets, and sidewalks.” Burson v Freeman, 504 US 191; 112 S Ct 1846, 1850; 119 L Ed 2d 5 (1992) (plurality opinion), citing Perry Ed Ass’n v Perry Local Educators’ Ass’n, 460 US 37, 45; 103 S Ct 948; 74 L Ed 2d 794 (1983). Plaintiff contends that any restrictions on free expression in a public forum must pass muster under a strict scrutiny test, a shift in this Court from its posture below. In the circuit court, plaintiff conceded defendant’s regulation of speech need only satisfy a time, place, and manner analysis. Plaintiff now claims that the government must demonstrate a compelling state interest in order that its regulations pass constitutional muster. We disagree.
Even in a traditional public forum, the state may impose reasonable restrictions on the time, place, and manner of protected speech. Ward v Rock Against Racism, 491 US 781, 791; 109 S Ct 2746; 105 L Ed 2d 661 (1989). Restrictions of this kind are valid provided that they " 'are justified without reference to the content of the regulated speech, that they are narrowly tailored to serve a significant governmental interest, and that they leave open ample alternative channels for communication.’ ” Id., quoting Clark, supra at 293; United States v Grace, 461 US 171, 177; 103 S Ct 1702; 75 L Ed 2d 736 (1983); Perry, supra. Only where a regulation restricts speech on the basis of its content must the state demonstrate that the regulation is necessary to further a compelling governmental interest. Ward, supra; Perry, supra. Because plaintiff does not allege that the committee procedures regulate speech on the basis of content, we consider whether they qualify as valid time, place, and manner restrictions.
Section IV(D) does not destroy the public-forum status of the Capitol grounds. Section IV(D) is a valid time, place, and manner restriction on protected free speech. First, § IV(D) is content-neutral; it applies equally to all citizens " 'without reference to the content of the regulated speech,’ ” Madsen v Women’s Health Center, Inc, 512 US —; 114 S Ct 2516, 2523; 129 L Ed 2d 593 (1994), quoting Ward, supra at 791. Second, the state has a significant interest in providing access, free from obstruction, to and from the Capitol for its occupants and for the public in general. Heffron v Int’l Society for Krishna Consciousness, Inc, 452 US 640; 101 S Ct 2559; 69 L Ed 2d 298 (1981).
Heffron upheld a local rule that designated certain areas at a state fair for literature distribution. Id.; see, also, Cameron v Johnson, 390 US 611; 88 S Ct 1335; 20 L Ed 2d 182 (1968) (upholding statute that prohibited picketing that obstructed or unreasonably interfered with ingress and egress to or from public buildings, including courthouses). A restriction on speech is narrowly tailored " 'so long as the . . . regulation promotes a substantial government interest that would be achieved less effectively absent the regulation.’ ” Ward, supra at 799, quoting United States v Albertini, 472 US 675, 689; 105 S Ct 2897; 86 L Ed 2d 536 (1985).
Section IV(D) limits the committee’s discretion to designate areas for picketing or distributing leaflets only to further the purpose of allowing safe ingress and egress to and from the Capitol building. Because § IV(D) leaves all other areas of the Capitol grounds available for picketing and literature distribution, it is narrowly tailored and leaves open ample alternative channels of communication. Heffron, supra. Accordingly, § IV(D) is a permissible regulation._
Plaintiff next contends that §§IV(A) and (G) unconstitutionally limit the duration of a protest that may be held on the Capitol lawn. We disagree. Sections IV(A) and (G) provide:
A. In order to maintain the security, safety and aesthetic appearance of the Capitol and Capitol grounds, and to provide for regular maintenance, improvements or alterations, scheduled events or exhibits on the Capitol grounds shall occur between the hours of 8:00 a.m. to 11:00 p.m. on a daily basis, and shall at no time block any entrance or exit of the building, or impede free access to the building by its occupants or the public. When either house of the legislature or legislative committee is in session prior to 8:00 a.m. or after 11:00 p.m., the grounds shall be open 30 minutes before commencement of the session and closed 30 minutes after adjournment of the Senate, House of Representatives, or legislative committee.
G. Equipment or structures of any kind that are placed on the Capitol grounds in connection with an event or exhibit shall be entirely removed at the conclusion of the event or exhibit, or no later than the time set for closing of the grounds as set forth in Section IV(A).
Sections IV(A) and (G) are valid time, place, and manner restrictions on the time an individual or group may hold an event or exhibit on the Capitol grounds. The time limitations apply to all individuals or groups desiring to hold an event or exhibit, regardless of the message to be conveyed. The rule is therefore content-neutral. Madsen, supra. Sections IV(A) and (G) also further the government’s interests in protecting the Capitol grounds and the safety of those using the grounds. See Clark, supra. Section IV’s time restrictions allow daily maintenance and cleanup on the lawn, but do not prevent an individual or group from voicing a cause. Because "a regulation need not be the least speech-restrictive means of advancing the Government’s interests,” § IV is a valid restriction. Turner Broadcasting System, Inc v FCC, 512 US —; 114 S Ct 2445, 2469; 129 L Ed 2d 497 (1994). Moreover, the fifteen-hour period between 8:00 a.m. and 11:00 p.m. and the additional time provided when both houses are in session outside these hours during which events and exhibits may be held do provide ample alternative channels of communication. Sections IV(A) and (G) do not impermissibly abridge plaintiffs free speech guarantees.
Plaintiff next contends that § IV(J) unconstitutionally restricts the number and size of structures that may be erected on the Capitol grounds. We disagree. Plaintiff asserts that § IV(J) was enacted specifically to prevent plaintiffs tent city and, therefore, amounts to viewpoint discrimination and that there is no justification for the specific size or numerical limitation.
Assuming that the regulation of non-shelter structures in the second paragraph of § IV(J) restricts expressive conduct, it is a reasonable time, place, and manner restriction. Section IV(J) applies equally to all organizations and is content-neutral; it restricts the size and number of structures without regard to the content of the expressive activity. Madsen, supra at 2523. Second, it serves a significant governmental interest, i.e. aesthetics and safety on the Capitol grounds. Taxpayers for Vincent, supra at 808-810; Students Against Apartheid Coalition v O’Neil, 838 F2d 735 (CA 4, 1988). The limitation in number and size of structures avoids visual clutter and blight. O’Neil, supra.
Plaintiff claims that the committee restricted the size of structures specifically to prevent it from erecting its tent city. On the contrary, the rules apply equally to all organizations and individuals. Plaintiff has not shown that the committee procedures were directed at its demonstration merely because the implementation of the new rules negatively affects plaintiff. Section IV(J) is a valid time, place, and manner restriction.
Affirmed.
Weaver, P.J., did not participate.
Appendix
PROCEDURES FOR THE USE OF THE PUBLIC AREA
THE MICHIGAN STATE CAPITOL
Approved by the Michigan Capitol Committee
March 25, 1992
[As amended by the Michigan Capitol Committee on April 1, 1993]
PUBLIC AND OTHER AREAS OF THE CAPITOL
The public areas of the Capitol are under the jurisdiction of the Michigan Capitol Committee. All other areas of the Capitol are under the jurisdiction of either the Senate, the House of Representatives, or the Executive Branch.
The public areas of the Capitol include the rotunda and its galleries; the main corridors; the grand staircases; the ground floor entrances; the first floor exterior porches and staircases; all exterior building surfaces; and the Capitol’s grounds, defined as the property on which the state Capitol building is situated, bordered on the north by Ottawa Street; on the east by Capitol Avenue; on the south by Allegan Street; and on the west by Walnut Street.
Information on and requests for use of the Capitol for an event or exhibit shall be provided by the agency holding jurisdiction over the space. Requests should be addressed to the appropriate office:
1. Requests about the public areas of the Capitol, which are under the jurisdiction of the Michigan Capitol Committee, must be addressed to the Facility Manager’s Office, State Capitol, State of Michigan, Lansing, Michigan 48909.
2. Requests about the use of space under the jurisdiction of the Senate must be addressed to the Secretary of the Senate, P.O. Box 30036, Lansing, Michigan 48909-7536.
3. Requests about the use of space under the jurisdiction of the House of Representatives must be addressed to the Business Office, Michigan House of Representatives, P.O. Box 30014, Lansing, Michigan 48909-7514.
4. Requests about the use of space under the jurisdiction of the Executive Branch must be addressed to the Office of the Governor, State Capitol, Lansing, Michigan 48909.
The following procedures shall be followed in the administration and operation of the public areas of the Michigan State Capitol. At no time will enforcement of these procedures be influenced or affected by age, sex, race, national origin, handicap, religion, or partisan politics.
i. definitions:
The following words and terms, when used in this document, shall have the following meanings, unless the context clearly indicates otherwise.
A. Exhibit: Any display of artwork, including but not limited to paintings, sculptures, arts and crafts, and photographs; public service and educational presentations; and historical displays.
B. Event: Any performance, ceremony, presentation, meeting, rally or reception held in the public areas of the Capitol. A rally is defined as a gathering of people for the purpose of actively promoting a cause.
C. Partisan Political Event: An event held for the primary purpose of advancing or advocating the political candidacies of a particular party or group.
D. Capitol: The Michigan State Capitol. Unless otherwise specified, the use of the term "Capitol” will be taken to include the building and its grounds.
E. Capitol Security: Regular state police officers, Capitol security officers, and civilian guards employed by the Michigan Capitol Committee.
II. CONDITIONS GOVERNING THE PUBLIC AREAS OF THE CAPITOL:
The following conditions apply to all public areas of the Capitol. For conditions specific to the interior or exterior public areas of the Capitol, see Sections hi and iv below.
A. No public event or exhibit may discriminate on the basis of race, national origin, religion, sex, age, or handicap.
B. Public use of the Capitol shall not interfere with any legislative session or the conduct of public business by agencies of the State which normally occupy and use the Capitol, and shall not affect the safety and well-being of the individuals conducting the work of these agencies.
C. In case of fire, bomb threat, utility malfunction, structural failure or other unforeseen emergency or threat endangering public safety or health, the Executive Director of the Michigan Capitol Committee may delay or postpone any scheduled event until the emergency or threat is over.
D. Individuals or organizations are responsible for returning the areas used in conducting their events or exhibits to their original condition. Individuals or organizations are responsible for any vandalism, damage, breakage, loss or other destruction to the Capitol caused by that individual or organization. Costs will be assessed to individuals or organizations for damages incurred. The cost of the repair will include the costs for the services of specialists in relevant historical restoration skills as determined by the Executive Director of the Michigan Capitol Committee.
E. Individuals or organizations using the Capitol shall indemnify and hold harmless the State of Michigan, its departments, agents and employees, from and against any and all suits, damages, claims, or other liabilities due to personal injury or death, damage to or loss of property to the State or to others, or for any other injury or damage arising out of or resulting from the use of the Capitol.
F. Alcoholic beverages shall not be served or consumed in a public area of the Capitol or on the Capitol grounds.
G. Food and beverages may be served at a scheduled event or exhibit if all of the following criteria are met:
1. The applicant specifies in writing, prior to the event or exhibit, the type of food and beverages to be served and the desired service area.
2. Food and beverages shall be provided by a state licensed caterer; otherwise, individuals or organizations shall obtain a temporary food stand license from the Ingham County Health Department’s Bureau of Environmental Health, as required by state law (Public Act 368 of 1978).
3. The applicant assumes responsibility for the preparation, service, and consumption of all food and beverages provided during the event or exhibit.
4. The food and beverage service will not cause physical damage to the Capitol.
H. Posting or affixing signs, announcements, or other documents on any exterior or interior wall, ceiling, floor, door, window or other surface of the public areas of the Capitol not designed for that purpose is prohibited. Stickers, labels, tape, or any other adhesive material that might leave a residue or otherwise damage interior or exterior surfaces of the Capitol, including porches, stairs, statuary, monuments, light wells, fences and trees is also prohibited. Likewise, tacks, nails, staples or other attachments may not be used. Display board space may be requested or arranged through the Facility Manager’s Office.
I. No item or material with the potential to damage the Capitol may be used. All items or materials must be removed promptly after an exhibit or event.
J. No item may be leaned against exterior or interior walls, pillars, portraits, furnishings, staircases, or other feature of the Capitol.
K. The Capitol Facility Manager has limited equipment (for example, public address system, chairs, tables, podium, etc.) for use at exhibits or events. Arrangements may be made for the Facility Manager to provide such equipment upon payment of reasonable charges (see attached rate sheet), if available; otherwise it shall be provided by the individuals or organization sponsoring the event or exhibit. If equipment is required, the Facility Manager’s Office should be contacted to discuss what is available, how it is intended to be used, and to place a reservation. Requests for equipment should be made at least one week in advance of the event or exhibit. Individuals or organizations using such equipment will be responsible for any damage to or loss of that equipment.
L. Other than fees charged for the use of equipment, power, and labor to set up, operate, and remove equipment, no charges will be made to individuals or organizations for use of the Capitol’s public space. See attached rate sheet.
M. Exhibits are allowed at the Capitol subject to the following conditions:
1. The State of Michigan is not responsible for damage to or loss or theft of exhibits during the period of their installation, display or removal. No special security can be provided for exhibits by Capitol security; all special security required for an exhibit must be provided by the exhibit’s sponsor.
2. Exhibitors must bear all costs of assembling, mounting, displaying and removing exhibits and of cleaning up and restoring the exhibit space to its original condition under the supervision of the Facility Manager.
3. All displays must be free-standing. Exhibits may not hang from walls or ceilings or be affixed to doors, windows, railings or other building surfaces (except for standing on the floor). Exhibits on the Capitol’s grounds may not hang or be affixed to trees, shrubbery or other plantings, statuary, monuments, fences, light fixtures, light wells, or the exterior surfaces of the building.
4. Exhibits must contain a disclaimer stating that the display is not owned, maintained, promoted, supported by or associated with the State of Michigan.
5. Exhibits may be scheduled for display for up to 14 calendar days. Exhibits on the Capitol grounds must be removed by the time and for the reasons set forth in Section IV(A).
6. Requests for exhibit space must include a clear layout, scale drawing or sketch of the proposed exhibit, preferably as it will be displayed. The dimensions of the space required should be indicated, as well as the manner in which the exhibit will be mounted or displayed.
N. No sound amplifying equipment may be used whose sound level interferes with any legislative session or the conduct of public business by agencies of the State which occupy or use the Capitol.
O. A person shall not remove state property from the Capitol or its grounds except as permitted in the normal course of business, unless the removal has been previously authorized in writing by the Executive Director of the Michigan Capitol Committee.
P. To enhance security and public safety, security officers may do the following: packages and briefcases suspected of concealing stolen items or contraband may be inspected. Items being brought into the State Capitol building may be inspected if suspected to be capable of destructive or disruptive use within the building.
Proper identification of all employees and any other visitor may be demanded at any time after normal working hours. If the facility is closed during an emergency, access may be denied for the duration of the emergency. Employees or other persons may be require[d] to sign a registration sheet after normal working hours or when the building is closed.
Q. A person who refuses to adhere to these conditions is subject, in addition to criminal penalties provided by law, to immediate removal from the Capitol building or grounds, or both, by the Executive Director of the Michigan Capitol Committee, Capitol security, the Facility Manager, or any other person designated by the Facility Manager. Nothing contained herein shall be construed as limiting prosecution under any existing or future law.
III. CONDITIONS GOVERNING THE PUBLIC AREAS OF THE CAPITOL; THE INTERIOR:
The following conditions governing the use of the public areas of the Capitol apply specifically to the use of the interior of the Capitol:
A. Hours of Operation: Visiting hours for the public are from 8:00 a.m. to 5:00 p.m. daily except Saturdays, Sundays, and holidays. When either house of the legislature or a legislative committee is in session prior to 8:00 a.m. or after 5:00 p.m., or on Saturday, Sunday or a holiday, the building shall be open to the public 30 minutes before commencement of the session and closed 30 minutes after adjournment of the Senate, House of Representatives, or legislative committee. The visiting hours on Saturday, Sunday and holidays shall be posted.
B. In case of fire, bomb threat, utility malfunction, structural failure or other unforeseen emergency or threat endangering public safety or health, the Executive Director of the Michigan Capitol Committee or Capitol security may lock the Capitol at any time and require the entrances be used from within only as a means of egress in case of emergency. A person shall not enter or attempt to enter through an entrance which is closed pursuant to these conditions until the emergency is over.
C. State law prohibits smoking in public buildings. Furthermore, the Capitol is a historic building with highly decorated walls, ceilings, and original works of art. Therefore, smoking or carrying lighted tobacco products is not permitted in any public area inside the Capitol, including the corridors, staircases, rotunda, restrooms and elevators.
D. Alcoholic beverages shall not be served or consumed in any public area of the Capitol.
E. An event or exhibit shall not obstruct entrances or block traffic flow through the building.
F. Moving the Capitol’s furnishings, such as furniture, lighting, and paintings, by the organiz ers, conductors or participants at an event or exhibit is not permitted.
G. Tables, displays, chairs, or other items shall not be dragged or rolled on the marble floors of the corridors or the glass floor of the rotunda.
H. A partisan political event, as defined in Section 1(C), is not ¿lowed in the public areas inside the Capitol.
I. An individual or organization shall not solicit or sell any article or service in the public areas inside the Capitol, nor shall any exhibit or display be allowed for that purpose, including the display of business cards or promotional materials.
J. Due to the constricted space and crowded conditions which often prevail inside the Capitol, handcarried signs and signs on handsticks represent a serious safety hazard to visitors and occupants. They are not allowed in the public areas inside the Capitol.
K. Helium balloons are not allowed in the public spaces inside the Capitol because they are very difficult to retrieve.
L. Food and beverages shall not be served in the public areas inside the Capitol without the approval of the Executive Director of the Michigan Capitol Committee (see Section II-G). Food and beverages must be consumed in the area approved for an event or exhibit.
M. Except as may be required in the course of state business, animals are not allowed in the public areas inside the Capitol building. Guide dogs, however, may be used when necessary to assist handicapped persons in the Capitol building. The owner or person having the animal under his or her control shall be responsible.
N. Exhibits intended for the public areas inside the Capitol will be located in the ground floor rotunda. Requests will be scheduled on a first-come, first-served basis if the following criteria are met:
1. Exhibits do not obstruct entrances, interrupt traffic flow through the building, or disrupt legisla tive sessions or the normal conduct of public business in the building.
2. Mounted materials, whether items of display or information related to displays, are secured to tripods, display panels or other freestanding devices. Such panels, tripods, etc., when provided by the exhibitor, must meet the approval of the Facility Manager.
IV. CONDITIONS GOVERNING THE PUBLIC AREAS OP THE CAPITOL; THE EXTERIOR INCLUDING GROUNDS:
This portion of the public areas of the Capitol includes the exterior walls and surfaces of the building, the ground and first floor entrances, porches, and staircases, and the grounds. Public use of the Capitol grounds for scheduled events or exhibits is subject to the following:
A. In order to maintain the security, safety and aesthetic appearance of the Capitol and Capitol grounds, and to provide for regular maintenance, improvements or alterations, scheduled events or exhibits on the Capitol grounds shall occur between the hours of 8:00 a.m. to 11:00 p.m. on a daily basis, and shall at no time block any entrance or exit of the building, or impede free access to the building by its occupants or the public. When either house of the legislature or legislative committee is in session prior to 8:00 a.m. or after 11:00 p.m., the grounds shall be open 30 minutes before commencement of the session and closed 30 minutes after adjournment of the Senate, House of Representatives, or legislative committee.
B. Defacing or damaging the Capitol grounds, including trees, shrubbery, flowers, lawns, sidewalks, fences, lighting fixtures, light wells, fire hydrants, benches, statues, monuments, plaques, and such subterranean features as are necessary for the maintenance and operation of the Capitol (such as lawn sprinkler systems, sewer and water mains, electrical conduit, etc.), or any other feature in any manner is not allowed. Likewise, defacing or damaging the exterior walls and surfaces of the building, including the entrances, porches and staircases, is not allowed.
C. Stepping or climbing upon statues, monuments, fences, lighting fixtures, light wells, trees, or parts of the Capitol building not intended for such purposes is not allowed.
D. Picketing and the distribution of literature shall not impede or interfere with State business or public access to and use of the Capitol. In order to inform individuals and organizations of the procedures for the use of public areas of the Capitol and grounds, it is recommended, but not required, that individuals and organizations desiring to distribute literature on the Capitol grounds advise the Capitol Facility Manager of the date and time of this activity. In order to assure the reasonable conduct of public business, unobstructed access to the Capitol for its occupants and the public, and to maintain the Capitol grounds, the Executive Committee (composed of the Chair and Vice-Chairs) of the Michigan Capitol Committee had been delegated the authority to designate specific areas of the grounds for picketing and the distribution of literature, which shall apply equally to all such activities. Individuals distributing literature shall remove all discarded items from the grounds at the conclusion of their activity.
E. Due to the presence of underground utility, electrical and drainage lines, signs or banners shall not be driven into the ground nor shall they be supported in or by any tree, monument or other structure affixed to the Capitol grounds. Signs (excluding disclaimer signs required under Section II(M)(4) or banners supported by freestanding devices may not be left unattended, i.e., an individual must be stationed within two feet of a freestanding sign or banner at all times to prevent damage to the grounds[,] injury to individuals, and for security reasons.
F. Use of the Capitol grounds by an individual or organization for an event or exhibit is authorized only if the event or exhibit has been scheduled with the Capitol Facility Manager in accordance with the procedures described herein.
G. Equipment or structures of any kind that are placed on the Capitol grounds in connection with an event or exhibit shall be entirely removed at the conclusion of the event or exhibit, or no later than the time set for closing of the grounds as set forth in Section IV(A).
H. Alcoholic beverages shall not be dispensed or consumed on the Capitol grounds.
I. Camping or sleeping overnight on the Capitol grounds is not allowed.
J. In order to maintain the security, safety and aesthetic appearance of the Capitol and Capitol grounds, and to provide for regular maintenance, improvements or alterations, structures, whether for shelter or for any other purpose, erected by an organization as part of a scheduled event or exhibit, shall be removed from the grounds by the time scheduled for the closing of the grounds as set forth in Section IV(A).
The size, number and location of structures erected for shelter shall be determined by the Executive Director of the Michigan Capitol Committee based on the physical conditions of the grounds and the expected size and nature of the event or exhibit. Such determination shall be stated in writing to the organization scheduling the event or exhibit.
Structures for a scheduled event or exhibit, for purposes other than shelter, shall be limited in number to one, in size to 3 feet x 3 feet x 3 feet, and shall not be capable of habitation. The Executive Committee of the Michigan Capitol Committee has been delegated the authority to designate specified areas of the Capitol grounds for location of structures of this kind, which shall apply equally to all such structures.
K. Vehicles are not allowed on the Capitol grounds, except in areas designated for vehicular use, without permission of the Executive Director of the Michigan Capitol Committee.
L. Hunting and trapping are not allowed on the Capitol grounds.
V. SCHEDULING EVENTS AND EXHIBITS:
Requests to schedule events or exhibits in the public areas of the Capitol or on the Capitol grounds shall be made to the Facility Manager’s Office, Capitol Building, State of Michigan, Lansing, Michigan 48909.
A. Requests will be scheduled on a first-come, first-serve basis. Since the areas available for events and exhibits are limited and the demand is at times high, it is recommended, but not required, that requests be made at least one month in advance. In the case of exhibits, due to the length of time an exhibit may remain on display, additional lead time may be necessary to secure the desired space and date. These factors should be kept in mind when making requests.
B. Each request shall be in writing and shall contain the following information:
1. Name and description of sponsoring organization.
2. Name/address/telephone number(s) of contact person(s).
3. Name/address/telephone number(s) of backup contact person(s).
4. Description of planned event or exhibit.
5. Date and hours requested for event or exhibit, and duration of an event or exhibit.
6. Area requested for use.
7. Number of anticipated attendees.
8. Equipment or services available through the Capitol Facility Manager can be used in connection with an event or exhibit on an "as available” basis, upon payment of reasonable fees and charges. A list of the equipment and the charges is available upon request from the Capitol Facility Manager. See attached rate sheet.
C. All decisions by the Executive Director of the Michigan Capitol Committee required under these procedures shall be made as promptly as possible, but no later than two state business days after receiving the written request.
D. In order to schedule an event or exhibit, a sponsor is required to sign an acknowledgment that the sponsor has read, understood, and will abide by the procedures governing the use of the public areas of the Capitol; that the sponsor is responsible for damages incurred as a result of its event or exhibit; that the sponsor will either restore or pay to have restored the area used for its event or exhibit to the condition that existed prior to its use; and that it will indemnify and hold harmless the State of Michigan for any damage or loss the state incurs arising out of its use of the Capitol or the Capitol grounds. Any sponsor that fails to abide by the terms of the agreement will not be permitted to schedule a future event or exhibit until the outstanding obligations have been fully satisfied.
VI. APPEALS
If a person or organization is aggrieved by a decision of the Executive Director, an appeal may be taken to the Executive Committee of the Michigan Capitol Committee within three state business days of that decision. The appeal shall be in writing, stating the basis therefor and the relief sought. The Executive Committee has been delegated the authority to review the decision and shall announce its decision as promptly as possible, but no later than six state business days after the members have received the appeal.
See Appendix, infra.
The Michigan Capitol Committee is a statutorily created legislative/executive committee charged with developing written procedures for the management and operation of the Capitol building and grounds. MCL 4.1701 et seq.; MSA 2.138(701) et seq. Pursuant to MCL 4.1701(1); MSA 2.138(701X1), the Capitol Committee is composed of twelve members: four from the state House of Representatives, four from the state Senate, and four individuals appointed by the Governor.
See Appendix, infra.
See Appendix, infra.
Plaintiff has not shown a live controversy involving the actual or threatened application of § IV(D). Plaintiff has not sought to engage in picketing or distributing leaflets and been denied access to the Capitol grounds at any time. Plaintiff’s assertion that it may seek to picket or distribute leaflets sometime in the future does not confer standing. Renne v Geary, 501 US 312; 111 S Ct 2331; 115 L Ed 2d 288 (1991). Additionally, plaintiff’s claim is not ripe. Id.
Plaintiffs claim that the executive director of the Capitol Committee retains unfettered discretion concerning the size, number, and placement of for-shelter, as opposed to non-shelter, structures may be summarily dismissed. For-shelter structures include only those structures that are used to shield an exhibit or event from the elements. Because such structures do not constitute expressive activity, they do not implicate Const, 1963, art 1, § 5, or the First Amendment, US Const, Am I.
Plaintiff also argues that § IV(D) unconstitutionally applies to the sidewalks abutting the Capitol grounds. However, defendant stipulated in its brief on appeal that the Capitol Committee procedures do not apply to the sidewalks. Moreover, nothing in the rules’ definition of the grounds suggests that it includes the sidewalks. In any event, the rule could validly apply to the surrounding sidewalks for the same reasons that it validly applies to the Capitol grounds. The sidewalks command no greater status as a traditional public forum than do the Capitol grounds. United States v Grace, 461 US 171, 177; 103 S Ct 1702; 75 L Ed 2d 736 (1983).
Section 1(B) of the procedures defines an "event” as follows:
Any performance, ceremony, presentation, meeting, rally or reception held in the public areas of the Capitol. A rally is defined as a gathering of people for the purpose of actively promoting a cause.
Section 1(A) of the procedures defines an "exhibit” as follows:
Any display of artwork, including but not limited to paintings, sculptures, arts and crafts, and photographs; public service and educational presentations; and historical displays.
We do not decide under what circumstances structures may constitute expressive activity. However, the state may ban structures that do not express ideas without implicating free speech guarantees. | [
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Per Curiam;.
Respondent JoAnn McPeak appeals as of right an order of the probate court granting summary disposition to respondents Kristine and Kerry McPeak, the natural daughters of decedent Michael McPeak. The probate court determined that Emily McPeak, decedent’s adopted daughter, could not take under decedent’s will. We affirm.
Decedent executed his will on May 8, 1991, shortly after being diagnosed with brain cancer and shortly before undergoing brain surgery. At that time, he was married to respondent JoAnn McPeak and was considering adoption of Emily McPeak, respondent’s daughter from a previous marriage and decedent’s stepdaughter. Decedent filed for adoption on May 31, 1991, which was formally completed in July 1991. He died in April 1992.
In this action to determine Emily’s status under the will and her interest in decedent’s estate, Kristine and Kerry McPeak, decedent’s natural daughters from a previous marriage, moved for summary disposition, arguing that Emily was excluded under the plain language of the will and that she did not qualify as a pretermitted heir under the Probate Code.
The will contained the following provision: "My Children/My Descendants. . . . All references to 'my descendants’ are to Kristine and Kerry and the descendants of Kristine and Kerry.” The will bequeathed one-half of the residuary estate to respondent, in the event she survived decedent, and the balance to "my descendants.” In a contingent bequest, the will provided for a bequest of one-third of the residuary estate to Emily in the event that respondent did not survive decedent.
Respondent first argues that the trial court erred in not finding a latent ambiguity in the will regarding whether decedent intended to include adopted children in referring to "my children” or "my descendants.” The role of the probate court is to ascertain and give effect to the intent of the testator as derived from the language of the will. In re Woodworth Trust, 196. Mich App 326, 327; 492 NW2d 818 (1992). Absent an ambiguity, the court is to glean the testator’s intent from the four corners of the testamentary instrument. Id. An ambiguity may be patent or latent. Id. at 327-328. A latent ambiguity may be proved by facts extrinsic to the testamentary instrument. See id. at 328.
Relying on Thurston v Thurston, 140 Mich App 150, 153; 363 NW2d 298 (1985), respondent argues that decedent’s postexecution adoption of Emily creates a latent ambiguity regarding the definition of "children” or "my descendants” in the will. We disagree. Although Thurston also involved a postexecution adoption, the similarities end there. In Thurston, the adoption was not by the testator, but rather by a devisee under her will, and there was no indication that the testator was even aware of the adoptee at the time of execution. Here, it is undisputed that Emily was living with decedent and that decedent was contemplating adoption at the time he executed his will. Under these circumstances, there can be no ambiguity concerning whether decedent meant to exclude prospective adoptees when he sought to define "children” and "my descendants.”
. Even if a latent ambiguity existed, the statutory presumption that adoptees are included in the term "children” would apply. See MCL 700.128; MSA 27.5128. This presumption may be rebutted in three ways: (1) by the language in the instrument itself; (2) by extrinsic evidence of abuse of the adoption procedure for the primary purpose of obtaining benefits under the will; and (3) by evidence that the interest vested before June 23, 1966. Thurston, supra at 154. Only the first is a possibility here. However, under the language of decedent’s will, it is clear that Emily was not intended to be included in the term "children” or "my descendants.” She was provided for in a separate, contingent devise.
Respondent also argues that Emily is entitled to a forced share of decedent’s estate as a pretermitted heir under MCL 700.127; MSA 27.5127. Specifically at issue is whether an adopted child who is named in a preadoption will in a different capacity qualifies as a pretermitted heir. This is apparently an issue of first impression in Michigan. Other jurisdictions are split regarding the issue. See anno: Adopted children as subject to protection of statute regarding rights of children pretermitted by will, or statute preventing disinheritance of chüd, 43 ALR4th 947, 952.
We find most persuasive Davis v Davis, 278 Md 534; 365 A2d 1004 (1976), in which the Maryland Court of Appeals declined to recognize the adopted child as a pretermitted heir. There, much like here, the will provided that the testator’s stepson was to receive a contingent devise in the event his mother failed to survive the testator. Id. at 536. The testator was contemplating adoption at the time of execution: Id. at 540. The testamentary plan was a thoughtful and careful one. Id. at 541. Under these circumstances, we do not believe that the child can be deemed overlooked or ignored either as a stepchild or as a prospective adoptee. It is unlikely that the subsequent adoption would have altered the testator’s intent, especially where, as here, the testator was already contemplating adoption of his spouse’s child at the time of execution and therefore had the opportunity to devise a greater portion of his estate to the child in the event that the contemplated adoption occurred.
Our holding comports with the plain language of the pretermitted heir statute, which provides in pertinent part:
If a child is born or adopted after the making of his parent’s will and a provision for the child is not made in the will, that child shall have the same share in the estate of the testator as if the parent died intestate. [MCL 700.127(1); MSA 27.5127(1).]
The statute makes no distinction between a devise made to a child as a prospective adoptee and a devise made to a child as a stepchild or in a different status. Rather, the statute simply requires a failure by the testator to provide for his child. Here, decedent did provide for Emily in a contingent devise. The fact that the contingency did not occur and that Emily therefore took nothing under the will does not mean that decedent failed to make a provision for her under the pretermitted heir statute. Cf. In re Norwood Estate, 178 Mich App 345, 349; 443 NW2d 798 (1989). See also In re Estate of Eversole, 885 P2d 657 (Okla, 1994). The contingent provision cléarly evidenced an intent to take care of Emily through her mother’s share, directly or indirectly. Because Emily was provided for in decedent’s will, she does not qualify as a pretermitted heir.
Affirmed.
Throughout this opinion, "respondent” will be used to refer solely to JoAnn McPeak.
Decedent drafted a codicil to his will after his adoption of Emily. The codicil acknowledged the adoption but provided that the provisions of the will, including the references to "my descendants,” remained the same. However, decedent never signed the codicil. The parties dispute what inferences may be drawn from this. In any event, the codicil is immaterial to our holding in this case. | [
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Marilyn Kelly, J.
Plaintiff, Jackhill Oil Company, appeals as of right from a grant of summary disposition in favor of defendants, Powell Production, Inc., Marathon Oil Company and Northern Michigan Exploration Company, under MCE 2.116(C)(10). Plaintiff asserts that the trial judge erroneously resolved genuine issues of material fact in the course of granting summary disposition. It also claims that the court’s apparent dislike for some of the litigants caused it to exceed its authority and resolve factual issues in order to dispose of the case. We affirm.
i
The dispute involves the redrilling of Flick 7-16, a working oil well in Hillsdale County, owned jointly by the parties. The well was operated under a 1985 agreement signed by the parties. The agreement contained provisions regarding redrilling or reworking the well, and for its abandonment.
In 1990, the president of defendant Powell pro posed redrilling the well to a different bottom hole, as the original well had become unprofitable. The procedures for redrilling and other modifications of the well were set forth in § VI.B. of the operating agreement. Powell also obtained the Department of Natural Resources’ (dnr) approval, but filed the request with the Department on a form entitled "Application to Plug and Abandon.”
Defendants Marathon and Northern Michigan agreed to participate in the proposed redrilling. However, plaintiff did not. It objected to what it characterized as "the plugging and abandonment of the Flick 7-16 Well.”
Plaintiff further expressed the opinion that Powell’s management of the well was governed by § VI.E.2 of the operating agreement. Under its terms, if the well was to be abandoned, any parties not in agreement to plug and abandon it were entitled to purchase the other parties’ interests. When paid, the others were then required to assign all their interests in the well, related equipment and the leasehold estate to the objecting party. Plaintiff made the tender required under § VI.E.2.
Defendants disagreed with plaintiff’s characterization of the original proposal, asserting that their actions were controlled by § VLB., and refused the tender. They redrilled the well to a new bottom hole, which proved to be dry.
Plaintiff filed the present action, alleging that defendants improperly confiscated its interest in the well under the pretense that it had not consented to the redrilling. Plaintiff argued that it was entitled to acquire sole interest in the well according to the terms set forth in § VI.E.2.
Defendants moved for summary disposition, arguing that they never intended to abandon the well; their sole reason for redrilling it was that it had operated at a loss for some time. They also contended that they had complied with the requirements of §VI.B. of the contract which, they argued, controlled the transaction. The trial court granted defendants’ motions.
ii
On appeal, plaintiff contends that the circuit court erroneously resolved genuine issues of material fact in the course of granting summary disposition. Plaintiff also contends that the trial court so disliked the parties involved in the litigation that it granted summary disposition primarily to remove the matter from its docket.
We review a motion for summary disposition pursuant to MCR 2.116(0(10) de novo, using the same standard required of the trial court. We consider the factual support for the claim, giving the benefit of any reasonable doubt to the nonmoving party. We determine whether a record might be developed which might leave open an issue upon which reasonable minds could differ. Coleman-Nichols v Tixon Corp, 203 Mich App 645, 660; 513 NW2d 441 (1994). We are mindful that a trial court may not make findings of fact in deciding a motion for summary disposition. Haji v Prevention Ins Agency, Inc, 196 Mich App 84, 88; 492 NW2d 460 (1992).
Plaintiff contends that there existed a question of fact on whether the drilling procedure used by defendants revealed an intent to abandon the well. Plaintiff also contends that the dnr form used by defendants created a question of fact, because it is generally used by parties intending to plug and abandon a well. Defendants counter that their actions left no question on their intention to attempt to preserve the well and keep it operational. Plaintiff also contends that there existed a question of fact on whether the well was profitable.
hi
Having reviewed the evidence available to the court, we conclude that the trial judge did not make findings of fact in deciding defendants’ summary disposition motion.
We find persuasive the reasoning of a recent, unpublished opinion of our Court. Krol v Amoco Production Co, unpublished opinion per curiam, decided March 5, 1992 (Docket No. 132336). In Krol, the plaintiffs alleged that the defendant had "plugged and abandoned” an oil well, entitling them to an assignment of the defendant’s interest in the well under their contract. The language in the Krol agreement was similar to that found in §VI.E.2 of the operating agreement here. The defendant in Krol countered that, although it had plugged a portion of the well, the record showed undisputed efforts to preserve the well, not abandon it. In Krol, the defendant had engaged in a "sidetrack” operation, which involved creating an opening in the casing of the old well and drilling through to a new bottom hole. There, the Court concluded that a well must be both plugged and abandoned before operating agreement language pertaining to the salvage of an abandoned well becomes applicable.
Here, defendants embarked upon a similar sidetracking operation. They plugged the original bottom hole, but, as in Krol, preserved and continued to use a substantial portion of the upper well to drill to the new bottom hole. Since defendants here did not intend to plug and abandon the well, and it was in actuality plugged but not abandoned, §VI.E.2 of the contract was not applicable. The court properly concluded that plaintiff was not entitled to defendants’ interests in the well, the related equipment or the leasehold under § VI.E.2.
IV
Furthermore, the trial court did not make factual determinations in concluding that the well was not profitable. It is uncontested that the well operated at a loss from January, 1989, through February, 1990. The only question raised by plaintiff was whether the profits earned in March and April, 1990, could justify a finding that the well was profitable.
The president of Powell first circulated his letter proposing to redrill on March 10, 1990. Most of the profits upon which plaintiff relied were earned after the 30 day deadline for responding to Powell’s proposal. Moreover, the profits for March and April did not offset the well’s general unprofitability. In order to redrill a well, the contract required that it be unprofitable. The circuit court correctly found that plaintiff had not raised a genuine issue of material fact as to whether the well was unprofitable or whether defendants had breached § VI.B.
We similarly find that the trial court did not make factual findings when it concluded that use of the particular dnr form did not create a question of fact. Defendants sought and obtained permission to redrill the well to a different bottom site. The dnr granted permission. No genuine issue of fact was created by the application having been made on the wrong form.
v
Finally, plaintiff asserts that the judge disposed of the case on a summary disposition motion, because he disliked the parties and did not wish to deal with them further.
We have reviewed the record. The judge summarized the animosity between the parties. However, we find his comments not to have been excessively critical or hostile. They would not lead one to believe that his decision was the result of bias, prejudice or dislike of the parties. His comments cannot establish actual prejudice as is required to disqualify a judge, nor do they merit reversal of his decision granting summary disposition. Plaintiff is unable to overcome the presumption of impartiality. In re Forfeiture of $1,159,420, 194 Mich App 134, 151; 486 NW2d 326 (1992); Mourad v Automobile Club Ins Ass'n, 186 Mich App 715, 731; 465 NW2d 395 (1991). The judge rendered his opinion on the basis of sound legal principles which we find to be entirely correct and applicable.
Affirmed. | [
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Per Curiam.
The defendant, Byron Lynn Whetro, pled guilty as charged to two counts of breaking and entering an occupied dwelling, MCL 750.110; MSA 28.305, and one count of malicious destruction of property over $100, MCL 750.377a; MSA 28.609(1). He was sentenced on August 6, 1984, to ten to fifteen years for each burglary conviction and two years eight months to four years for the malicious destruction of property conviction, all three sentences to run concurrently. Defendant appeals as of right.
Defendant contends that he must be resentenced because the sentence information report (sir) filed by the trial judge after the sentencing contained inaccurate scoring and an improper sentence range and consequently failed to state reasons for departing from the proper guideline sentence range. Because we are unable to determine whether the sir is accurate, we remand this case to the trial court for resentencing.
We note, initially, that this case does not involve the use of inaccurate information by the sentencing court. By claiming that the sir was inaccurately scored, defendant merely challenges the trial court’s application of the facts to the sentencing guidelines. Normally, allocation of points on the sir is discretionary, and, unless counsel voices a specific objection to the point assessment at the time of sentencing, this Court will not upset such allocation. However, in the present case neither the trial judge nor counsel discussed the sentencing guidelines on the record at the sentencing. The judge apparently did not prepare and file a sir until two weeks after the sentencing. Thus, defendant did not have an opportunity prior to sentencing to review the sir or to suggest an appropriate scoring. If the judge does not address the guidelines at the time of sentencing, we encourage counsel to request that the judge do so. See, for example, People v Love, 144 Mich App 374; 375 NW2d 752 (1985). However, we do not consider defendant’s failure to do so in this case to be a waiver of his right to challenge the accuracy of the sir. Since use of the sentencing guidelines is mandatory, finding a waiver in a case where the judge failed to offer the defendant an opportunity to challenge the judge’s guidelines calculations and conclusions would undermine our Supreme Court’s directive that judges use the guidelines in imposing sentences for offenses included in the guidelines. See Supreme Court Administrative Order 1984-1, 418 Mich lxxx. Because we do not find a waiver in the present case, we will address defendant’s allegations regarding the accuracy of the SIR.
The sir indicates that the trial judge calculated a prior record variable (prv) level of F and an offense variable (ov) level of in, for a minimum sentence range on one of the burglary convictions of sixty to one hundred twenty months. The minimum sentence actually imposed (ten years) was thus the highest minimum allowed by that sentence range. Defendant contends that this range was incorrect because the judge erred in scoring two of the offense variables. He contends that the minimum sentence range should have been eighteen to thirty-six months. Specifically, defendant alleges that OV 9 (offender’s role) should have been two points rather than three points because it was not proven or admitted that defendant was the leader in the criminal enterprise. Defendant also argues that it was improper for the judge to score three points for OV 24 (wanton or malicious damage) since the guidelines provide that points should be assessed for that variable only where the property damage is not formally charged. Defendant points out that he was convicted of malicious destruction of property.
We do not here decide whether these variables were properly scored. We note, however, that it is for the sentencing judge to conclude from the facts of the case whether defendant was a leader or an active participant in a multiple offender situation. See People v Benson, 142 Mich App 720; 370 NW2d 16 (1985). Further, in response to defendant’s contention that the trial judge should not have assessed any points for OV 24, we note that, while defendant was separately convicted of malicious destruction of property with respect to one of the burglaries, there was no such conviction as to the other burglary. Thus it may have been proper for the judge to assess points for OV 24 as to one of the breaking and entering convictions.
On remand the trial judge should give defendant an opportunity to challenge the accuracy of the sir filed in this case. If defendant does so, the judge then should decide what points should be scored for the appropriate variables, based on the facts of the case, and determine the proper sentence range. The trial judge should amend the sir if changes are made.
Further, if the trial judge departs from the guidelines, he should state the reasons for departure both on the sir and on the record at the time of resentencing. People v Fleming, 142 Mich App 119, 123; 369 NW2d 499 (1985). We agree with the Fleming panel’s conclusion that our Supreme Court intended that departure reasons be placed on the record, although we recognize that the panel in People v Good, 141 Mich App 351; 367 NW2d 863 (1985), held to the contrary. Logically, the same justification for requiring the judge to articulate the reasons in support of the sentence imposed, i.e., a more complete record on appeal, also applies to the judge’s articulation of the reasons for departing from the guidelines. We also believe that placing the reasons for departure on the record promotes greater utilization of the guidelines.
In the future, trial judges should determine the proper guidelines variables and the resulting sentence range at the time of sentencing. Counsel should be given an opportunity to argue for corrections, after which the judge can make appropriate changes. We believe that providing the guidelines variables and sentence range to the defendant prior to imposition of the sentence will avoid sentences based on inaccurate information.
We vacate the sentences imposed and remand this case to the lower court for resentencing in accordance with this opinion. We do not retain jurisdiction.
It appears that appellate counsel may have miscalculated the PRV score and level. If PRV 1 (prior high severity felony convictions) is zero points, it is impossible for PRV 3 (prior high severity similar felony convictions) to be six points, as scored by appellate counsel.
We do not agree with the Fleming panel’s conclusion that placing the reasons for departure on the record, as opposed to only on the sir, will prevent sentences based on inaccurate information. If the defendant has an opportunity prior to sentencing to challenge information contained in either the presentence investigation report (psir) or the sir but fails to do so, then the judge has a right to consider as admitted any facts contained in either of those reports. Once the judge states the reasons for the sentence and, if applicable, the reasons for departing from the guidelines, the sentence will already have been imposed. Allowing a defendant to wait until after the sentence is imposed to challenge information contained in a psir or sir which was available to him prior to sentencing would allow the defendant to undermine the sentencing process.
We acknowledge that, as a practical matter, the sir cannot be finalized until after the sentencing hearing, since changes often are required after both sides argue their interpretation of the facts of the case. However, if the trial judge proceeds as we have here suggested, we do not believe it will matter if the final sir is completed and filed a few days after the sentence is imposed. | [
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Per Curiam.
This case arose from efforts to secure additional financing for a development project to renovate and lease five buildings in Detroit known as "Trappers Alley”. Among the original financial backers of the project was defendant Detroit Economic Growth Corporation (DEGC). Seeking a method to attract additional funds for the financially troubled project, DEGC contacted a group of investors, including plaintiff Gary Edidin. Edidin and Farbman/Stein & Company formed a partnership known as "Trappers Associates”; plaintiffs concede that the proposed limited partnership to be known as "Trappers Alley Associates”, the other plaintiff in this case, was never formed.
In a May 11, 1982, letter to defendant Stonehaven Associates (a partnership formed by defendant Americal Development Corporation, owner of the property, defendant Stonehaven Enterprises, Inc., a wholly owned subsidiary of defendant DEGC, and the City of Detroit), Edidin and his partner, Farbman/Stein, agreed to secure additional investors for the project. Then, together with Stonehaven Associates, they would purchase the property and become owners and operators of the development project. The May 11 agreement also contemplated additional financing and changes in management as the project progressed and was made contingent on obtaining a mortgage and extending lines of credit.
DEGC immediately began obtaining loan extensions from its corporate lenders and also consulted with the United States Department of Housing and Urban Development about possible ways of incorporating an Urban Development Action Grant into the project. On June 14, 1982, a HUD consultant advised DEGC that the project could not succeed unless financing in addition to that contemplated by the May 11, 1982, agreement were obtained. On June 25, 1982, DEGC informed plaintiff Edidin that conditions had changed and that defendants were awaiting a HUD review of the project. Edidin immediately sent defendants a telegram that they had breached the agreement, and filed this action on October 14, 1982.
Plaintiffs’ complaint included three counts for damages for breach of the May 11 agreement and for negligent misrepresentation. The fourth and final count alleged that plaintiff lacked "an adequate remedy at law since the Trappers Alley land, building and improvements were unique properties”. Plaintiffs, therefore, prayed the court to order defendants to enter into a lease with plaintiffs and to transfer title to the property to plaintiffs.
Defendants moved for summary judgment on Count IV, the prayer for equitable relief, pursuant to GCR 1963, 117.2(3). Counsel for plaintiffs told the court that plaintiffs were seeking specific performance of the May 11 agreement. The court granted defendants’ motion, finding that the May 11 agreement was not a final agreement which the court could order the parties to enter into and that the agreement contained "too many executory things” for the court to ever say it would consider granting specific performance of the agreement. The court noted that plaintiffs might be entitled to damages if they could prove that there actually was an agreement with defendants. From the trial court’s order, plaintiffs appeal as of right.
Before addressing plaintiffs’ concerns on appeal, we note that defendants’ argument that this Court lacks jurisdiction to review the trial court’s ruling is without merit. Defendants suggest that the trial court’s partial order of summary judgment is not a final order, since Count IV is merely an alternative theory of recovery. However, the trial court expressly complied with the requirements of GCR 1963, 518.2 regarding motions for partial summary judgment and termed its partial summary judgment a final order. It is, therefore, proper for us to review the decision.
Plaintiffs attack the summary judgment on Count IV by saying that genuine issues of material fact still exist as to whether the agreement was final, whether contingencies had been fulfilled which made it capable of being specifically performed, and whether plaintiffs were the proper parties to request specific performance. The trial court had answered each of these in the negative.
Under GCR 1963, 117.2(3), a grant of summary judgment is proper only when there are no mate rial issues of fact and the trial court may determine as a matter of law the appropriate disposition of the claim. Reeder v Hammond, 125 Mich App 223, 227; 336 NW2d 3 (1983). The court should give the benefit of any reasonable doubt to the nonmoving party, and must be satisfied that no factual development is possible which would support the nonmoving party’s claim. Anderson v Kemper Ins Co, 128 Mich App 249, 252; 340 NW2d 87 (1983).
In this case, even when the alleged factual issues are resolved in favor of plaintiffs, the trial court could still have properly concluded that, as a matter of law, plaintiffs were not entitled to specific performance of the May 11 agreement. This is because of the nature of specific performance.
Specific performance is an equitable^ remedy which may not be claimed as a matter of right. Lamar v Detroit Apartments Corp, 237 Mich 206, 213; 211 NW 643 (1927); Goldman v Cohen, 123 Mich App 224, 228; 333 NW2d 228 (1983). "Specific performance of contracts must always rest in the sound discretion of the court, to be decreed or not, as shall seem just and equitable under the peculiar circumstances of each case.” Waller v Lieberman, 214 Mich 428, 443; 183 NW 235 (1921); Derosia v Austin, 115 Mich App 647, 652; 321 NW2d 760 (1982). This Court will "sustain the findings of the trial court unless convinced, on review of the evidence, that [it] would have reached a contrary result”. Goldman, supra, p 228.
Specific performance will not be decreed where enforcement of the decree would require continuous judicial supervision, or where there is an adequate remedy at law. Laker v Soverinsky, 318 Mich 100, 104; 27 NW2d 600 (1947); Goldman, supra, p 230. Furthermore, the material terms of the agreement must be sufficiently certain so as to ensure that the court can "proceed intelligently and practically in carrying into execution the very things agreed on and standing to be performed”. Czeizler v Radke, 309 Mich 349, 358; 15 NW2d 665 (1944), citing Blanchard v Detroit, L & LMR Co, 31 Mich 43, 52-53 (1875).
The agreement in this case contemplated not simply an agreement to convey real estate, as plaintiffs contend, but an ongoing partnership between the parties. Both plaintiffs and defendants would have been involved in management of the project, both before and after construction was complete. To enforce a decree of specific performance would require continuous, long-term judicial supervision. To order the parties to engage in a cooperative venture of this nature could pose great difficulties for the circuit court.
Additionally, the May 11 agreement presupposed future agreement on such particulars as the terms and conditions under which the managing agent of the project, Farbman/Stein, would be employed. Specific performance would necessarily require resolution of these uncertainties, yet "the court will not make a contract for the parties or supply any material stipulation thereof’. Czeizler, supra, p 358.
Finally, plaintiffs advance no argument as to the inadequacy of their remedy at law. Indeed, the amount of expenses incurred in reliance upon the May 11 agreement, and loss of income resulting from the alleged breach, should be readily ascertainable. Cf. Ruegsegger v Bangor Twp Relief Drain, 127 Mich App 28; 338 NW2d 410 (1983).
The trial court’s grant of defendants’ motion for summary judgment on plaintiffs’ Count IV requesting specific performance is affirmed.
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Per Curiam.
Plaintiff appeals from an order entered in the Saginaw County Circuit Court on October 18, 1982, dismissing his complaint without prejudice, for the reason that plaintiff had not tendered the necessary filing fees when he attempted to institute this action._
Plaintiff attempted to file his complaint against Mr. Ramah on February 25, 1982. This complaint alleged that Ramah’s ineffective assistance of counsel (legal malpractice) had caused plaintiff to be wrongfully convicted and incarcerated for crimes which he had not committed. Along with this complaint, plaintiff filed an ex parte affidavit of indigency and a motion for waiver of fees and costs, averring that he was limited to prison wages through his institutional assignment, which wages he needed for the maintenance of his personal hygiene.
The Saginaw County Circuit Court judges disqualified themselves because of Mr. Ramah’s membership in the Saginaw County Bar Association and active practice in Saginaw County. Consequently, this matter was reassigned to a visiting judge from Bay County. On June 1, 1982, the visiting judge denied the motion to waive fees. The trial court further ordered that the filing fees be paid within 90 days from the date of the order, or else plaintiff’s complaint would be dismissed without prejudice. When the filing fees were not tendered, the court entered an order on October 18, 1982, dismissing plaintiffs complaint.
Plaintiff then claimed an appeal to this Court. On November 5, 1982, plaintiff filed a motion in this Court to waive the fees on appeal. This motion was granted on December 7, 1982.
On September 2, 1983, Mr. Ramah filed a motion to dismiss plaintiff’s appeal on the basis that plaintiff had failed to make service of his claim of appeal in accord with GCR 1963, 804.1(l)(c). Apparently the claim of appeal was sent to Ramah’s former business address and he avers, in an affidavit filed in this Court, that the claim of appeal was never received. In his answer to the motion to dismiss, plaintiff admitted sending the appellate documents to Ramah’s old business address, asserting that this was the last known address of Mr. Ramah.
I
We first consider whether Mr. Ramah’s motion to dismiss should be granted. Ramah concedes that GCR 1963, 804.1(2) and 107.3 allow a party to make effective service by mailing the applicable documents to the last known address of the attorney representing the opposition. He contends, however, that, because original service of the complaint and summons was never made, GCR 1963, 107.2 precluded service by mail of the appellate documents. While Ramah’s interpretation of the court rules may well be correct as a general proposition, we do not believe it controls this dispute.
Although plaintiff sent his complaint to the Saginaw County Circuit Court clerk and the clerk began a lower court file for this matter, until such time as the filing fees were actually paid or the circuit court waived these fees, we do not believe that an official action had been commenced such that plaintiff was obligated to serve Mr. Ramah with his complaint. GCR 1963, 101 provides that an action is commenced by the filing of a complaint. However, GCR 1963, 120.1 recognizes that, when a litigant submits a complaint accompanied by an affidavit of indigency,. the complaint is a pleading "to be filed”. The mere tendering of the complaint to the clerk of the court without the appropriate fees does not constitute a completed "filing”.
GCR 1963, 120.3 specifically provides that a litigant claiming indigency may submit an ex parte affidavit setting forth facts which show his inability to pay required fees and costs. Given this fact, we believe that GCR 1963, 120 impliedly recognizes the propriety of ex parte proceedings until the required fees are actually paid or are waived. Until one of these occurs, there is simply no lawsuit officially pending to which the potential defendant is entitled to service. GCR 1963, 804.1(l)(c) requires a claim of appeal to be served upon "all other nondefaulted parties to the cause or their attorneys of record”. Here, however, Mr. Ramah is accurately characterized as a tentative or potential defendant or party. Until plaintiffs complaint was officially accepted for future judicial proceedings, service of the complaint was not required.
Our holding does not prejudice the rights of Mr. Ramah or similarly situated persons. In the event that the lower court had waived the filing fees, plaintiff would have been required to effect service in accordance with the court rules. Assuming the official acceptance of plaintiffs complaint for further proceedings, Mr. Ramah would not have been deprived of any of the procedural or substantive defenses available to any other defendant in an action in which the filing fees have been paid.
The motion to dismiss is denied.
II
We now turn to the merits of plaintiff’s appeal. We reject plaintiffs claim that the federal constitution mandates the waiver of the filing fees in this case. While indigent prisoners are guaranteed access to the courts, and this guarantee requires the waiver of filing fees in criminal appeals and petitions for habeas corpus relief, Burns v Ohio, 360 US 252, 257; 79 S Ct 1164; 3 L Ed 2d 1209 (1959), the United States Supreme Court has not extended this right of court access to include all civil litigation.
In Boddie v Connecticut, 401 US 371; 91 S Ct 780; 28 L Ed 2d 113 (1971), heavily relied upon by plaintiff, the Supreme Court held that when a suit involves a fundamental right and the state maintains a monopoly over the settlement of the dispute involving that right, an indigent’s inability to pay a filing fee cannot be the basis of depriving him of the opportunity to settle the dispute involving the right. Boddie was a class action suit brought on behalf of indigent women desirous of dissolving their marriages. Subsequent Supreme Court decisions reveal that Boddie has a narrow scope. See, e.g., United States v Kras, 409 US 434; 93 S Ct 631; 34 L Ed 2d 626 (1973) (federal constitution does not require waiver of indigent’s fees to file a bankruptcy petition); Ortwein v Schwab, 410 US 656; 93 S Ct 1172; 35 L Ed 2d 572 (1973) (no federal constitutional right to waiver of required filing fee for applications made to appellate courts to obtain review of decisions of administrative agencies).
The Supreme Court of Michigan, however, by promulgating GCR 1963, 120, has extended an indigent’s right to the waiver of fees beyond what is required by the federal constitution. GCR 1963, 120.3, the rule which plaintiff relies on, provides:
"In instances where the person is not receiving public assistance, the court shall order waiver of the payment of all fees and costs as to a person in the action, required to be paid by law or court rule, or shall order the suspension of the payment of those fees or costs until the conclusion of the litigation upon that person submitting to a judge of the court an ex parte affidavit stating facts showing that person’s inability to pay those fees and costs because of indigency.”
The accepted rules of statutory construction have been held to be applicable as aids to discovering and effectuating the intent of the Supreme Court in its promulgation of a particular rule. Greek v Bassett, 112 Mich App 556, 565; 316 NW2d 489 (1982), lv den 414 Mich 961 (1982), and cases cited therein. GCR 1963, 120.3 states that the court shall order waiver or suspension of the payment of fees and costs, upon the submission of an ex parte affidavit stating facts showing an inability to pay fees and costs because of indigency. The term "shall” normally denotes a mandatory duty. State Highway Comm v Vanderkloot, 392 Mich 159, 180; 220 NW2d 416 (1974); McGrath v Clark, 89 Mich App 194, 197; 280 NW2d 480 (1979).
In light of the foregoing, GCR 1963, 120.3 seemingly requires the trial court to waive fees and costs if the litigant seeking the waiver submits an affidavit setting forth his inability to pay the fees and costs due to indigency. In dictum, this Court, in Bachor v Detroit, 49 Mich App 507, 513; 212 NW2d 302 (1973), also construed GCR 1963, 120.3 as mandating the waiver of fees and costs upon the filng of the required affidavit. Despite the apparent mandatory nature of the court rule, however, we do not believe that, where the circuit court knows or has reason to believe that the facts set forth in the affidavit are untrue, the court has no discretion to do anything other than order the requested waiver of fees and costs. Some limitation on the apparent mandatory duty under GCR 1963, 120.3 is suggested by the Michigan Supreme Court’s order in Jordan v Dep’t of Corrections, 412 Mich 939; 315 NW2d 862 (1982). In Jordan, this Court had refused to waive fees and dismissed plaintiff’s appeal. In rendering its decision, this Court relied on information which tended to show that plaintiff was not indigent as late as in October, 1980, in determining that he was not indigent in April, 1981. The Supreme Court held that, merely because plaintiff was not indigent in October, 1980, did not establish that he was not indigent in April, 1981. The Supreme Court remanded the matter to this Court and specifically stated that defendant could provide the Court with information that plaintiff was not presently indigent. Thus, we believe that the Jordan order suggests that a circuit court may hold an evidentiary hearing to determine the financial status of the indigent requesting a fee waiver. However, if an affidavit of indigency comporting with GCR 1963, 120.3 has been filed, any information obtained by the trial court concerning the litigant’s financial condition must be sufficient to overcome the presumption of indigency created by the filing of the affidavit.
In this case, two affidavits relating to plaintiff’s indigency were filed before the court’s ruling which denied the requested fee waiver. Plaintiff’s first affidavit stated: (1) that he was a prisoner at Marquette Prison, (2) that his "only wages are the prison wages of his institutional assignment”, which wages he needed "for the maintenance of his personal hygiene”, and (3) that he had insufficient funds to pay the costs and fees necessary to commence and pursue his lawsuit. Plaintiff’s second affidavit specifically represented that he had only some $5 in his prison account and no income other than the wages from his prison job of approximately $20 per month.
Given plaintiff’s affidavits, we conclude that the trial court erred in denying the waiver of fees on the document filed. The court assumed that plaintiff had no need of income because he was a prisoner and, therefore, concluded that his prison wages could be used to "pay the minimal filing and service fees”. However, this assumption conflicts with plaintiff’s affidavit, and the trial court’s order fails to reveal that any investigation was conducted to obtain information supporting its assumption. Thus, we remand this matter to the trial court for further proceedings. The court may, in its discretion, conduct an evidentiary hearing to determine plaintiff’s status as an indigent, require a new affidavit from plaintiff which sets forth his current financial status, request an affidavit from appropriate representatives of the Department of Corrections familiar with plaintiffs financial status or adopt some similar procedure to discover plaintiffs true financial state. The trial court may not, however, refuse to waive plaintiffs fees and costs on an assumption which is unsupported by any record evidence.
Remanded for proceedings consistent with this opinion. We do not retain jurisdiction.
A second motion to proceed in forma pauperis and for appointment of counsel was later filed. This motion was supported by a second affidavit, stating that plaintiff had some $5 in his prison account and monthly wages of approximately $20.
We do not address whether any provision of the Michigan Constitution requires such a waiver as the issue has not been raised or briefed.
This order provides:
"Leave to appeal considered February 19, 1982 and, pursuant to GCR 1963, 853.2(4), in lieu of granting leave to appeal, we vacate the orders of the Court of Appeals which denied plaintiffs motion to waive fees and dismissed plaintiffs appeal, and remand the case to the Court of Appeals for further consideration. Under the circumstances, information which showed plaintiff may not have been indigent in May or October, 1980, was insufficient in itself to overcome plaintiffs affidavits relating to his indigency in April, 1981. GCR 1963, 120.3. On remand, the defendant may provide the Court with information indicating that plaintiff is not presently indigent. GCR 1963, 120.6. We retain no jurisdiction.”
Although the second affidavit was dated-stamped June 11, 1982, it was referred to in one of the court’s orders denying the waiver of fees, which order was date-stamped June 4, 1982. A typewritten date of May 24, 1982, appears on this second affidavit.
One of the court’s orders denying the fee waiver stated that because plaintiff was a prisoner "his basic needs should be taken care of without resort to his earned income”. | [
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H. R. Gage, J.
After a joint jury trial, defendants Cortez and Gonzales were convicted of possession of more than 650 grams of a mixture containing cocaine with intent to deliver, MCL 333.7401(2)(a)(i); MSA 14.15(7401)(2)(a)(i). Defendant Cespedes was convicted of the same crime in a separate nonjury trial. Defendants were sen tenced to imprisonment for life, and they appeal as of right.
I
Defendant Gonzales argues that the trial court erred by ruling that evidence of his prior conviction of delivery of cocaine could be used to impeach him if he testified. In making such a ruling, a court must consider the nature of the prior offense, whether it is for substantially the same conduct for which the defendant is on trial, and the effect on the decisional process if defendant does not testify from fear of impeachment. See People v Jackson, 391 Mich 323, 333; 217 NW2d 22 (1974), citing Gordon v United States, 127 US App DC 343; 383 F2d 936 (1967). MRE 609(a)(2) requires the trial court to determine whether the probative value of the evidence of the prior conviction outweighs the prejudicial effect and to articulate on the record the factors considered in making its determination. An appellate court reviews such a ruling by determining whether the trial court committed an abuse of discretion. People v Worden, 91 Mich App 666, 676; 284 NW2d 159 (1979).
Here, the trial court recognized the prejudicial effect of the similarity of the prior offense to the offense for which defendant was on trial. The trial court was informed that defendant Gonzales might not testify if the court decided to permit use of the prior conviction, and the court expressly considered the adverse effect on the decisional process that would result. However, the court had heard the testimony of defendant Gonzales at a previous trial which ended in a mistrial. The defendant, a citizen of Columbia, claimed that he entered this country illegally at short notice in order to at tempt to secure a commission to paint a portrait and that his presence at the place where the cocaine was found was purely coincidental. In concluding that under these circumstances the probative value of the evidence of the prior conviction outweighed its prejudicial effect, the court pointed to People v Jones, 98 Mich App 421, 428-429; 296 NW2d 268 (1980), in which the Court said:
"People v Baldwin, 405 Mich 550; 275 NW2d 253 (1979), held that the similarity of a prior conviction to the offense charged increases its prejudicial effect and is a factor to be weighed against its use for impeachment. But frequently the probative value of a conviction, or series of convictions, is increased, proportionally or greater, on the issue of credibility because of that similarity. The principles underlying MRE 404(b) may bear upon the credibility issue, depending in part on the nature of the defense defendant’s testimony presents, even if the similarities are not great enough so that the evidence would qualify under that rule.
"When a victim says 'He did it!’ and the defendant says T didn’t,’ or T was so drunk I didn’t mean to,’ or even T was ten miles away at the time,’ it is relevant to the central issue of who is telling the truth that the defendant has been guilty of similar criminal conduct before, perhaps repeatedly. Both the prejudicial effect and the probative value on the issue of credibility are because of the true fact of life, based on human experience and fundamental to human insight, that it is more probable that a person has committed a crime if he has done it before, maybe several times. A jury should not be deprived of that information simply because the crimes are similar or because the criminal record is extensive. When it comes to whom to believe, it should not benefit the defendant that he is a repeater, perhaps specializing in this kind of crime, or that his record is so bad that it will weigh heavily against him. After all, he committed the previous crimes and they tell a great deal about him and about whether he is lying now.”
We agree with the reasoning of the Jones opinion, and on this record we cannot say that the trial court committed an abuse of discretion.
II
Defendants complain of the prosecution’s failure to produce two alleged res gestae witnesses, Phyllis Lambros and Marlena Eric, at either trial. In 7 Wigmore, Evidence (Chadbourne Rev), §§ 2079, 2080, pp 536-543, it is pointed out that Michigan’s rule requiring the prosecution to endorse and call all res gestae witnesses is virtually unique, and the rule is criticized as unnecessary to assure defendants fair trials and as unfair to prosecutors. We believe that 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. We therefore urge abolition of the rule.
The prosecutor’s duty to call res gestae witnesses does not extend to accomplices. People v McCullough, 81 Mich 25; 45 NW 515 (1890); People v Resh, 107 Mich 251; 65 NW 99 (1895); People v Knoll, 258 Mich 89; 242 NW 222 (1932); People v White, 401 Mich 482; 257 NW2d 912 (1977); People v Belenor, 408 Mich 244; 289 NW2d 719 (1980). A potential witness need not be actually charged with the crime in order to fall within the accomplice exception. People v Threlkeld, 47 Mich App 691, 695; 209 NW2d 852 (1973). A potential witness falls within the accomplice exception if he or she could have been charged with the same crime as the defendant. Threlkeld, supra, p 696; People v John Moore, 78 Mich App 150, 154; 259 NW2d 403 (1977). See also People v Belenor, supra, p 246, in which the Court held that a witness fell within the accomplice exception because the witness was "thought” and "perceived” by the prosecutor to be an accomplice.
In People v Raider, 256 Mich 131, 135-136; 239 NW 387 (1931), the Court explained the purpose behind the accomplice exception and similar exceptions:
"Obviously the exceptions were founded upon the recognized inclination or inducement of those close to the accused, by community of interest in the crime or relationship, to perjure themselves, if they deem it necessary, in his behalf, and the incongruity of requiring the prosecution to make such witnesses its own.”
At each trial, the court ruled that Lambros and Eric were accomplices. Defendant Cespedes claimed that there was no evidence before the court at his trial to support this ruling. However, after the court ruled, Cespedes himself testified that Lambros and Eric brought the cocaine at issue onto the premises concealed under their skirts. Because this testimony conclusively established that Lambros and Eric could have been charged with the same offense as Cespedes, any deficiency in the evidence before the court at the time of its ruling was harmless beyond a reasonable doubt.
Defendants Cortez and Gonzales argue that, because they had no opportunity to cross-examine Cespedes at his previous trial, and because the testimony of Cespedes fell within no exception to the hearsay rule, the court should not have relied on that testimony to conclude that Lambros and Eric were accomplices for the purpose of the trial of Cortez and Gonzales. However, this argument is based on a fundamental misconception concerning the accomplice exception. The prosecution was not required to prove that Lambros and Eric were guilty in order to invoke the exception; rather, the prosecution was merely required to show that Lambros and Eric could have been charged or were thought or perceived to be accomplices. In his testimony, Cespedes asserted that Lambros and Eric were guilty, but at the subsequent trial of Cortez and Gonzales the testimony was used merely to show that Lambros and Eric had been accused and that testimony to support that accusation could be produced. The testimony was not hearsay when used for such purpose; see MRE 801(c). Because the testimony was not oifered to prove the truth of the matter asserted, we fail to see how the absence of an opportunity to cross-examine Cespedes concerning the truth of the matter asserted was relevant. The accusations of Cespedes created the "community of interest” discussed in Raider between Lambros, Eric, Cortez, and Gonzales.
Defendant Cespedes also complains of the prosecutor’s delay in disclosing that Lambros and Eric would not be produced. The names of Lambros and Eric were originally endorsed on the information. At the beginning of trial, counsel for defendant Cespedes demanded to know whether the prosecutor would be able to produce all endorsed witnesses; the prosecutor declined to respond. At the close of his proofs, the prosecutor informed the court that he could not produce Lambros and Eric, and the court concluded that Lambros and Eric were accomplices that the prosecution need not produce. In People v Lytal, 415 Mich 603, 611; 329 NW2d 738 (1982), the Court explained:
"It is argued that if the prosecutor is required to indorse the name of an accomplice he would then he obliged to produce him at the trial and call him as a witness. In holding that the prosecutor is required to indorse the name of an accomplice that he intends to call, we do not oblige the prosecutor to produce at the trial or to call the accomplice as a witness. The prosecutor may have greater difficulty in producing an accomplice than other witnesses and, as he approaches the time of trial or, indeed, as the result of developments during trial, he should be able to change his mind about calling the accomplice as a witness if it appears to him that the accomplice should not be called.” (Emphasis added.)
Lytal shows that defendant Cespedes’s argument is without merit. We note, moreover, that the failure of Cespedes’s counsel to move for a continuance in order to attempt to obtain the presence of the witnesses refutes any claim of surprise or prejudice.
Ill
Defendants argue that the trial judge was biased and should have disqualified himself. Defendant Cespedes points to the statement by the judge which indicated that the judge examined the court file. In People v Ramsey, 385 Mich 221, 225-226; 187 NW2d 887 (1971), the Court held:
"[A]s an absolute rule it is reversible error for the trial court sitting without a jury to refer to the transcript of testimony taken at the preliminary examination except under the exceptions provided by statute. A jury, if impanelled, would not be aware of the testimony taken at a preliminary examination except under the provisions of the statute. A trial judge, sitting as the trier of the facts, can assume no greater prerogatives than a jury if a jury were impanelled to determine the facts.”
What occurred at the trial of Cespedes is not at all comparable to what occurred in Ramsey. It was necessary for the judge to determine what another judge had ruled in the course of pretrial proceedings in order to resolve a legal question raised by Cespedes. The judge noted that he had carefully refrained from examining anything of an evidentiary nature in the file. Examination of pleadings, motions, opinions, and similiar documents by a trial judge sitting without a jury is not improper; a contrary rule would render it impossible for a judge to control the trial while sitting as the trier of fact.
Defendants Cortez and Gonzales claim that actual bias was shown by remarks made by the trial judge in the course of resolving the motion by defendant Gonzales to prevent use of evidence of his prior conviction for impeachment purposes. However, a claim of bias can never be based solely upon a decision in the due course of judicial proceedings. Kolowich v Ferguson, 264 Mich 668; 250 NW 875 (1933). The remarks of which defendants complain concern the credibility of defendant Gonzales as a witness and were made by the trial judge in the course of carrying out his duty pursuant to MRE 609(a)(2) to articulate on the record his reasons for determining that the probative value of the evidence of the prior conviction outweighed its prejudicial effect. Kolowich shows that such remarks do not demonstrate judicial bias.
IV
In the course of a search authorized pursuant to a warrant, defendants were arrested and virtually all of the evidence against them was seized. Defendants attack the sufficiency of the affidavit which induced the magistrate to issue the warrant. In Illinois v Gates, — US —; 103 S Ct 2317; 76 L Ed 2d 527, 548 (1983), the Court stated a new test of the sufficiency of an affidavit containing hearsay:
"The task of the issuing magistrate is simply to make a practical, common-sense decision whether, given all the circumstances set forth in the affidavit before him, including the 'veracity’ and 'basis of knowledge’ of persons supplying hearsay information, there is a fair probability that contraband or evidence of a crime will be found in a particular place. And the duty of a reviewing court is simply to ensure that the magistrate had a 'substantial basis for * * * concluding]’ that probable cause existed. Jones v United States, [362 US 257, 271; 80 S Ct 725; 4 L Ed 2d 697 (1960)].”
The Court overruled the test previously stated in Aguilar v Texas, 378 US 108; 84 S Ct 1509; 12 L Ed 2d 723 (1964), and Spinelli v United States, 393 US 410; 89 S Ct 584; 21 L Ed 2d 637 (1969).
The affidavit at issue here was executed by a member of the Oakland County Sheriffs Department working with the state police narcotics enforcement team. According to the affidavit, the team had a person named James Leadbetter under surveillance. They observed Leadbetter enter the premises empty-handed and exit from the premises carrying something in his hand. An undercover officer then purchased from Leadbetter three ounces of a substance which a field test indicated was cocaine. Leadbetter was arrested and informed the affiant that he purchased the cocaine on the premises from a person named "Charlie” and that another person, "Raffel”, was in possession of a large amount of cocaine on the premises in clear plastic bags. The members of the team had Lead-better telephone a certain number and talk to "Charlie” under a controlled situation. Leadbetter was informed by "Charlie” that he could obtain a quarter pound of cocaine by coming to the premises.
Considering all the circumstances, particularly the corroboration of Leadbetter’s story by surveillance and the telephone call under a controlled situation, we cannot say that the magistrate did not have a substantial basis for concluding that probable cause existed.
Defendants ‘Cortez and Gonzales also argued that the trial court erred by declining to permit them to introduce the affidavit in evidence at trial. Defendants sought to have the affidavit introduced pursuant to MRE 803(6), which states an exception to the hearsay rule for records of regularly conducted activity. Defendants point to testimony that execution of affidavits to obtain search warrants is part of the regular activity of a police officer. However, MRE 803(6) contains an important qualification: records of regularly conducted activity are not admissible if the method or circumstances of preparation indicate lack of trustworthiness. As a general rule, documents prepared for use in litigation are excluded by this qualification. Otherwise, businesses or organizations regularly involved in litigation could avoid cross-examination of their witnesses by regularly recording all favorable extrajudicial statements. See Palmer v Hoffman, 318 US 109; 63 S Ct 477; 87 L Ed 2d 645 (1943). Because the affidavit at issue was prepared to obtain a search warrant, MRE 803(6) did not render it admissible at the subsequent trial.
V
Defendants make several arguments relating to the sufficiency of the evidence to sustain their convictions. Evidence is sufficient to sustain a conviction if, viewed in the light most favorable to the prosecution, it would enable a rational trier of fact to conclude that the essential elements of the crime were proven beyond a reasonable doubt. People v Hampton, 407 Mich 354, 368; 285 NW2d 284 (1979).
Defendant Cespedes points out that there was no evidence from which it could be inferred that he knew that the mixture containing cocaine which he possessed weighed more than 650 grams. However, defendant does not cite, and we cannot find, any authority suggesting that knowledge of the weight of the mixture is an essential element of the crime. In People v Delgado, 404 Mich 76, 86-87; 273 NW2d 395 (1978), the Court held that knowledge of the character of the substance possessed was not an essential element of a controlled substance offense, although the Court recognized that in some cases defendants could successfully claim that their lack of knowledge of the character of the substance showed the absence of any criminal intent. Although Delgado was decided under a previous statute, its reasoning is equally applicable to the current statute. If knowledge of the character of the substance is not an essential element of the crime, we cannot see how knowledge of the amount could be. Moreover, because possession of any amount of a controlled substance is a crime, we cannot see how lack of knowledge of the amount could show the absence of any criminal intent.
Defendant Cespedes also points out that the evidence at his trial showed two distinct quantities of cocaine, each weighing less than 650 grams. Cespedes was found hiding in a closet with a bag containing slightly more than 550 grams on his person. In the room outside the closet, a similar amount of cocaine was found in several plates on a table, together with a set of scales and a quantity of a substance commonly used to dilute cocaine. Defendant Cespedes’s coat was found on a chair next to the table.
Defendant Cespedes contends that these two distinct quantities could not be combined to support a single conviction for possession of an amount greater than either individual quantity. In support of his contention, defendant points to United States v Privett, 443 F2d 528, 531 (CA 9, 1971); however, in that case the Court merely held that the constitutional prohibition of double jeopardy did not preclude multiple convictions where each conviction was supported by different evidence concerning the purity of the substance, its location, and acts by defendant. The reasoning employed in Privett would permit rather than require multiple convictions.
If we were to accept defendant Cespedes’s contention, drug dealers could protect themselves against exposure to serious criminal charges by simply dividing their drugs into a large number of small packages. Nothing in the statute suggests that the Legislature intended such an absurd result. Compare People v Portefield, 128 Mich App 35; 339 NW2d 683 (1983), in which the Court held that the defendant was properly convicted of a single conspiracy to deliver more than 50 grams of heroin rather than several conspiracies to deliver less than 50 grams, although the various quantities aggregated in Porterñeld were more distinct in time and space than the two quantities aggregated here.
Defendants Cortez and Gonzales argue that the evidence was insufficient to support an inference that they possessed more than 650 grams of a mixture containing cocaine. The theory presented by these defendants was that they were present on the premises merely to purchase a relatively small quantity for personal use and that the large quantities found on the premises were actually possessed by other persons, the dealer and his associates. In support of this theory, defendants Cortez and Gonzales point to evidence that the premises on which the cocaine was found were owned and rented by others and that they arrived from New York only hours before their arrest. However, in the trial of Cortez and Gonzales, as at the trial of Cespedes, evidence showed that a large quantity of cocaine was found in plates on a table, together with a set of scales and a quantity of a substance commonly used to dilute cocaine. Fingerprints belonging to Cortez and Gonzales were found on bottles and plates found on the table. Testimony of another person found on the premises, Pedro Gekas, showed that Cortez and Gonzales entered the room containing the table at least twice.
This case was presented to the jury on an aiding and abetting theory. In People v Palmer, 392 Mich 370, 378; 220 NW2d 393 (1974), the Court explained:
"In criminal law the phrase 'aiding and abetting’ is used to describe all forms of assistance rendered to the perpetrator of a crime. This term comprehends all words or deeds which may support, encourage or incite the commission of a crime. It includes the actual or constructive presence of an accessory, in preconcert with the principal, for the purpose of rendering assistance, if necessary. 22 CJS, Criminal Law, § 88(2), p 261. The amount of advice, aid or encouragement is not material if it had the effect of inducing the commission of the crime. People v Washburn, 285 Mich 119, 126; 280 NW 132 (1938).”
The evidence previously discussed supports an inference that defendants Cortez and Gonzales at least assisted in the preparation of the cocaine for sale. A rational trier of fact, viewing the evidence in the light most favorable to the prosecution, could therefore conclude that the essential elements of aiding and abetting the crime were proven beyond a reasonable doubt.
VI
Defendants argue that their sentences of life imprisonment constituted "cruel and unusual punishment” in violation of US Const, Am VIII or "cruel and unusual punishment” in violation of Const 1963, art 1, § 16. We reject this argument for the reasons stated in People v McCarty 113 Mich App 464; 317 NW2d 659 (1982). Defendants Cortez and Gonzales contend that a sentencing scheme which places possession of cocaine in the same category as possession of other drugs such as heroin is irrational, but we reject this contention for the reasons stated in People v Kaigler, 116 Mich App 567; 323 NW2d 486 (1982), and People v Kirchoff, 120 Mich App 617; 327 NW2d 535 (1982).
Defendant Cespedes argues that it is cruel and unusual to treat aiders and abettors the same as principals for sentencing purposes. It is not clear that Cespedes was convicted as an aider and abettor, but we will assume without deciding that he has standing to raise such an argument. In the course of the last century, the common-law distinction between aiders and abettors and principals has been abolished in England and in nearly every jurisdiction in this country by statutes providing that aiders and abettors may be tried and punished as principals. See LaFave & Scott, Criminal Law, § 63, pp 500-501, and the authorities dis cussed in Standefer v United States, 447 US 10, 16-18; 100 S Ct 1999; 64 L Ed 2d 689 (1980). In Michigan, such a statute was enacted by 1855 PA 77; see MCL 767.39; MSA 28.979, for the current provision. In view of this consensus, we cannot say that punishment of an aider and abettor as a principal constitues cruel and unusual punishment.
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Per Curiam.
In two separate but consolidated appeals, respondents appeal as of right from the Tax Tribunal’s decision that certain equipment used by petitioner to process produce was exempt from the general property tax pursuant to MCL 211.9Q); MSA 7.9(j). We affirm.
This case stems from a tax assessment on personal property owned by petitioner on its farm located in Grant Township in Newaygo County. The property consists of equipment used by petitioner in processing carrots and onions. Before 1987, the subject property was not included in the personal property tax rolls of Grant Township. On May 15, 1990, the State Tax Commission issued two orders directing that the property be added to the tax rolls from 1987-1990. The assessments included $278,500 for 1987, $254,300 for 1988, $238,400 for 1989, and $267,000 for 1990. The 1991 assessment was $244,200.
Petitioner farms approximately 2,400 acres in Newaygo County. Each year, petitioner grows approximately 1,100 acres of carrots, 500 acres of onions, and 800 acres of corn. Petitioner is not engaged in the retail sale of the carrots and onions it grows. Moreover, it uses its processing equipment to clean, sort, wash, inspect, and package the produce. However, because the capacity of its processing equipment exceeds its own production, petitioner uses its equipment to process carrots and onions grown by other farmers. From 1987 to 1991, petitioner grew approximately fifty-seven percent of the carrots and approximately eighty-five percent of the onions processed.
In June 1990, petitioner filed a petition with the Tax Tribunal seeking to reverse the decision of the State Tax Commission. Petitioner argued that its equipment was exempt under MCL 211.9(j); MSA 7.9(j) because it was used for a purpose incidental to, or in conjunction with, petitioner’s agricultural operations. The Tax Tribunal agreed and ruled that the personal property was exempt from ad valorem taxation from 1987-1991 and ordered that the tax rolls be amended to reflect the exemption.
The Tax Tribunal’s decision to. exempt equipment used to clean, sort, bag, and store produce (most of which was grown by petitioner) was supported by competent, material, and substantial evidence on the whole record. Michigan Bell Telephone Co v Dep’t of Treasury, 445 Mich 470, 476; 518 NW2d 808 (1994). Likewise, the tribunal’s decision was not contrary to law and was not based on wrong principles. See Michigan Allied Dairy Ass’n v State Bd of Tax Administration, 302 Mich 643, 651; 5 NW2d 516 (1942) (milk bottles and cans used in dairies "come within the agricultural producing and industrial processing exemptions”); Saginaw Co Agricultural Society v Saginaw, 142 Mich App 173, 177-178; 368 NW2d 878 (1984) (limited nonqualifying use does not defeat tax exemption). Compare OAG, 1989-1990, No 6586, pp 143-144 (June 13, 1989). The correctness of the tribunal’s conclusion is confirmed by the 1993 amendment of the exemption statute, MCL 211.9(j); MSA 7.9(j). 1993 PA 273. See Detroit v Walker, 445 Mich 682, 697; 520 NW2d 135 (1994).
Affirmed. | [
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M. J. Kelly, J.
Defendant appeals as of right from a jury verdict of $1.5 million in favor of plaintiff, reduced by one-third for the comparative negligence of plaintiff’s decedent. We affirm.
Facts
On September 30, 1976, plaintiff’s decedent was struck and killed by one of defendant’s trains as he sat in a rented dump truck straddling defendant’s railroad tracks. The decedent, 49-year-old Charles L. Kovacs, and John Hibbard, an employee of Copeland Construction Company, were repairing or deepening a ditch into which water drained from Kovacs’s property. The ditch ran alongside defendant’s railroad tracks. The accident occurred about a mile and a half west of Fowler-ville, Michigan, on a country road known as Potts Road. Immediately prior to impact, the train was traveling at a speed of 46 miles per hour and visibility was severely limited because of dense fog.
Plaintiff’s complaint alleged that defendant’s negligence had caused the death of her husband. The case proceeded to trial on the following claims: (1) defendant was negligent in failing to sound the warning bell and warning whistle as required by law and (2) defendant was negligent in failing to reduce the speed of the train given the absence of appropriate warning signals, the absence of gates or flashers or other warning devices at the Potts Road crossing and the extremely dense fog.
Defendant raises numerous issues on appeal which we consider separately.
Issues
I
Defendant first contends that the trial court erred in denying defendant’s motion for a directed verdict made at the close of plaintiffs proofs. Defendant’s motion was premised on the theory that decedent was a trespasser on defendant’s property and the defendant thus owed no duty to decedent other than to exercise reasonable care and diligence after his presence on the tracks was discovered. Because there was no dispute regarding the impossibility of stopping the train within the extremely short distance available once the engineer observed the decedent on the tracks, defendant argues that the trial court erred in not directing a verdict in defendant’s favor as a matter of law.
Defendant relies on Kelly v Michigan Central R Co, 65 Mich 186; 31 NW 904 (1887), for the proposition that a person who does more than merely walk or travel straight across a railroad track at a public crossing is a trespasser on railroad property for purposes of negligence law. We do not agree with plaintiffs interpretation of Kelly. In Kelly, plaintiff had been walking along defendant’s railroad tracks for a quarter to half a mile when he came upon a railroad yard which was intersected by a public road. While in the yard and on the public road, plaintiff was injured by a "stake” connecting an engine on one track with freight cars on another. Apparently the railroad was engaged in a process whereby an engine pushes or pulls a railroad car located on a parallel track by the attachment of a rod or stake to the powerless car. The rods or stakes are barely visible in the darkness or semidarkness. As plaintiff Michael J. Kelly (the identity of names between that plaintiff and this author is purely coincidental since the author’s ancestors were still in Ireland) was walking between two tracks through the yard, he was struck and injured by one of these rods.
The Kelly trial court ruled that the practice of staking constituted negligence on the part of the railroad. On appeal, the Supreme Court disagreed and remanded the case for a new trial.
In its opinion, the Supreme Court discussed the reciprocal rights and duties of pedestrians and railroads:
"The railroad company is the owner of its right of way, and has the right of passage and of use, in the ordinary manner, of its tracks at highway crossings. Likewise do the public have a right of way and of passage across the railroad track to be used and enjoyed in the ordinary manner. These rights are in a sense reciprocal, and must be exercised with a due regard to the rights of each other.
"The right of the public in a highway crossing a railroad is simply a right of passage across the railroad. The public, and no individual thereof, have the right to commit a trespass upon the railroad company’s property within the limits of the highway crossing. He cannot interfere with the rails or grounds, or obstruct the tracks, simply because it is in the highway, without committing a trespass. The highway crossing is for the purpose of passage from one side of the railroad to the other, and any other use thereof, whether between the tracks or between the rails, is unwarranted.” 65 Mich 190-191. .
Defendant argues that the "right of passage” language implies that members of the public will be considered trespassers on the rails unless execut ing a traverse across tracks intersecting a public crossing.
In undercutting defendant’s interpretation of the holding in Kelly, we need look no further than Fehnrich v Michigan Central R Co, 87 Mich 606; 49 NW 890 (1891), decided only four years after the release of Kelly. In Fehnrich, a 14-year-old boy had been walking along a public street when he came upon railroad tracks intersecting the street. As he was midway over the tracks, the boy decided to pursue an alternate route and took two steps along the tracks when he was struck by a railroad car slowly moving in his direction. The court specifically refused to construe Kelly as authority for the rule that "a man is a trespasser [on a railroad track] unless he travels squarely across them” and instead held that whatever rule of trespass could be gleaned from Kelly was limited to the facts of that case. Kelly has since been cited (1) for the rule that pedestrian and railroad rights to the use of railroad tracks over public crossings are reciprocal and that any use by either party must be in an ordinary manner, Fish v Grand Trunk Western R Co, 275 Mich 273; 266 NW 349 (1936), on rehearing 275 Mich 718, 720; 269 NW 568 (1936); (2) for the rule that the railroad is not the insurer of the public’s safety, Wiles v New York Central R Co, 311 Mich 540; 19 NW2d 90 (1945); and (3) for the rule that railroads own the right-of-way and have first right of passage. Bauman v Grand Trunk Western R Co, 376 Mich 675, 692-693; 138 NW2d 285 (1965) (Justice Black’s concurring opinion).
In the instant case, decedent was clearly not "squarely traveling” across the railroad tracks when he was struck by defendant’s train. According to the testimony of the only eyewitness to the accident, John Hibbard, the two men were engaged for the second consecutive day in clearing away a ditch that drained decedent’s fields. Hibbard operated a backhoe which scooped out dirt and debris from the ditch and deposited it in the dump truck which the decedent then drove away to empty. The ditch ran in an east-west direction, parallel to the railroad tracks, and was separated from the tracks by a somewhat narrow strip of land. Potts Road ran in a north-south direction. According to Hibbard’s testimony decedent would drive the dump truck north on Potts Road up to and just over the railroad crossing, then back over the tracks, turning the truck at an angle so as to position it on the strip of land between the tracks and the ditch.
Hibbard testified that he arrived at the work site on his second day on the job just after the decedent and observed decedent pull his truck up to and over the tracks as he had done on the previous day. As decedent was backing over the tracks or momentarily stopped on them, Hibbard heard a train whistle for the first time despite the fact that he had approached the crossing with his window down, deliberately listening and looking for signs of a train. When he looked in the direction of the whistle, he saw a train emerging from the fog approximately 50 feet east of the crossing.
Given our interpretations of Kelly and Fehnrich and viewing the evidence in a light most favorable to plaintiff, as we must in reviewing a trial court’s denial of a motion for directed verdict, Rickrode v Wistinghausen, 128 Mich App 240, 244; 340 NW2d 83 (1983), we cannot say that the trial court erred in refusing to find as a matter of law that the decedent was a trespasser on defendant’s property. Decedent’s use of defendant’s railroad tracks at Potts Road was in an ordinary manner.
Defendant also claims that the trial court erred in refusing to instruct the jury as follows:
"The right of the public in a highway crossing a railroad is simply a right of passage across the railroad, and no individual has the right to commit a trespass upon the railroad company’s property within the limits of the highway crossing, which is for the purpose of passage from one side of the railroad to the other, and any other use thereof, whether between the tracks or rails is unwarranted. The right of way and of use, when not used or required for such passage, belongs to the railroad company, and may be used by it in the same manner as if no street crossing was there. Therefore, if you find that plaintiff-decedent, Mr. Kovacs[,] was using the railroad’s right of way for a purpose other than as a traveler from one side to the other, then you must find Mr. Kovacs was a trespasser.”
Given our rejection of defendant’s construction of Kelly, we find no error in the trial court’s refusal to read this instruction to the jury.
II
Defendant next contends that it had no duty to sound a warning bell as the train approached the Potts Road crossing and that the trial court thus erred in allowing the jury to consider defendant’s negligence on this ground. Specifically, defendant contends that the trial court erred in (1) refusing to grant defendant’s motion for directed verdict on its alleged negligence in failing to sound the bell, (2) refusing to instruct the jury that defendant was not required by law to sound a warning bell, and (3) reading to the jury, over objection, plaintiffs theory of the case in which plaintiff stated that defendant was required by law to sound a warning bell.
It is true that defendant was not required by statute to sound a warning bell as it approached the Potts Road crossing. MCL 466.13; MSA 22.272 provides:
"A bell of at least 30 pounds weight, and a steam or air whistle or siren, shall be placed on each locomotive engine, and except in incorporated cities and villages said whistle or siren shall be twice sharply sounded at least 40 rods before any highway crossing is reached, and at street crossings in incorporated cities and villages the bell shall be rung continuously until the crossing is passed, under a penalty of $100.00 for each neglect.”
At trial, neither the plaintiff nor the trial court construed this statute as imposing a duty upon defendant to sound a warning bell as the train approached the site of the accident since there was no dispute but that the Potts Road crossing is outside the limits of a village or incorporated city. However, the trial court refused to direct a verdict in favor of defendant on the bell issue. Plaintiff argued and the trial court held that the jury could find defendant obligated by custom to sound a warning bell.
A train approaching a rural railroad crossing may be required under a common-law duty to sound its warning bell. Beasley v Grand Trunk Western R Co, 90 Mich App 576, 591-592; 282 NW2d 401 (1979). Where trains have customarily sounded warning bells upon approaching a particular crossing, a duty may arise to continue that practice, particularly where there is heavy fog. Custom may be established by the testimony of residents who live in the neighborhood of the crossing or by the testimony of railroad employees. Beasley, supra, p 593.
Defendant does not dispute that a common-law duty may sometimes arise requiring trains to sound warning bells upon approaching a rural railroad crossing. Defendant argues instead that plaintiff failed to introduce any evidence to support a finding that such a duty existed in this case. While we agree that plaintiff did not thoroughly develop this aspect of her negligence case at trial, we find sufficient evidence to support the trial court’s denial of defendant’s motion for directed verdict. The engineer of the train, Leo J. Norman, testified by deposition that prior to crossing the road located before Potts Road, he activated the warning bell and left it on through Potts Road "as required”. Elsewhere in the deposition, Norman testified about a pamphlet or rule book which was disseminated to railroad employees and which described various duties of the employees in operating the train. The head brakeman, Dennis Kehoe, testified by deposition taken two weeks after the accident that the engineer had activated the warning bell before the train approached the Potts Road crossing. At trial, Kehoe could not independently recall the engineer’s actions in ringing the bell but did recall hearing the bell once he had departed from the train after the accident. While the testimony of the engineer and the brakeman is generally favorable to the defendant as evidence that the warning bell was sounded, the testimony may also support an inference that defendant’s train engineers were instructed to and did, as a matter of custom, sound the warning bell as they approached the Potts Road crossing. We thus find no error in the trial court’s denial of defendant’s motion for directed verdict on this aspect of plaintiff’s negligence claim.
We also conclude that the trial court did not err in refusing to instruct the jury that defendant had no obligation to sound its warning bell. While the trial court failed to specifically instruct on a common-law duty, the court did instruct that the statute only required defendant to sound a warning whistle.
Defendant also objects to the trial court’s reading of the following portion of plaintiff’s theory of the case:
"There was a whistle post, a concrete pillar, set 1356 feet east of the crossing at which point the engine should have begun to blow its whistle and ring its bell.
"John Hibbard never heard a bell being operated and the whistle was blown according to his testimony, only an instant before the accident. The law requires that a bell be sounded and a whistle or siren be sounded at least 666 feet or 40 rods from the crossing.”
While we agree that the statement as read may have improperly implied to the jury that defendant was required by statute to sound the warning bell 666 feet from the railroad crossing, we do not believe that any reversible error resulted. Plaintiff’s theory of the case does not expressly state that the duty to sound a bell was imposed by statute. Moreover, the trial court explained to the jury that each party’s theory of the case was simply a theory and was not binding on facts or law. The court also gave the standard instructions on attorney comments. We conclude that if error resulted in the trial court’s reading of plaintiff’s theory of the case, that error was harmless beyond a reasonable doubt given the trial court’s instructions viewed as a whole.
Ill
Defendant next alleges error in the trial court’s refusal to direct a verdict in favor of defendant on plaintiffs claim that defendant was negligent in failing to sound its warning whistle upon approaching the Potts Road crossing and in failing to reduce its speed given the absence of bell and whistle warnings, the absence of crossing protection devices and the dense fog conditions.
Defendant is required by statute to sound a warning whistle whenever its trains approach a public railroad crossing outside the limits of a city or village. MCL 466.13; MSA 22.272. We agree with the trial court’s finding that the Potts Road crossing was public and not private and that defendant thus had a statutory duty to sound its warning whistle within 666 feet of the crossing. Potts Road provides access to at least four residences and bears normal public traffic such as school buses, farm equipment, and residential traffic. In this way, Potts Road is to be distinguished from the private road in Beasley, supra, which only provided access to one residence.
Whether the defendant’s engineer did sound the train’s warning whistle within 666 feet of the Potts Road crossing was a matter properly left to the trier of fact. John Hibbard testified that on the day before the accident he and the decedent worked on the drainage ditch and observed trains pass by three or four times. On that day, Hibbard heard the train whistles before he observed the trains despite operating a backhoe which made considerable noise. Hibbard testified that on the morning of the accident he did not hear the whistle until the train was only 50 feet away despite the fact that he had slowed down as he approached the tracks and had looked both ways and listened for sounds of a train. Hibbard’s testimony was thus not inadmissible negative testimony. Dal ton v Grand Trunk Western R Co, 350 Mich 479, 484, 488; 87 NW2d 145 (1957). The trial court did not err in allowing the jury to determine whether defendant was negligent in failing to sound a warning whistle as it approached the railroad crossings.
Neither did the trial court err in refusing to direct a verdict on the issue of defendant’s speed in operating the train at 46 miles per hour at the time of the accident. The train had left Fowlerville where the maximum speed was 35 miles per hour and was increasing its speed to 50 miles per hour, the rate at which defendant’s trains usually traveled over rural tracks.
We agree with defendant that, as a matter of law, the 46 or 50 mile per hour rate of speed is not alone sufficient to support a finding of negligence. In Hudson v Grand Trunk Western R Co, 227 Mich 1, 2-3; 198 NW 339 (1924), the Supreme Court held that "[a] rate of 40 or 45 miles an hour in the open country would not be negligence, as a matter of law”, and in Ommen v Grand Trunk Western R Co, 204 Mich 392, 398-399; 169 NW 914 (1918), the Court affirmed the trial court’s instruction to the jury which stated that train speeds of 40, 50, or 60 miles an hour over open country tracks do not constitute negligence.
Plaintiff, however, does not simply argue that defendant was negligent in operating its train at 46 miles per hour. Plaintiff argues instead that the 46 miles per hour rate of speed was negligent in light of several attendant circumstances: (1) the dense fog, (2) the absence of any warning whistle or bell, and (3) the absence of protection devices such as crossguards or signal lights at the railroad crossing. In both Hudson and Ommen, the Supreme Court noted that while speeds of 40 to 60 miles an hour over country tracks did not constitute negligence per se, such speeds may be negligent when considered in light of other circumstances:
"It is true that there was no village ordinance with reference to the speed of trains operating across this crossing, but we do believe that the situation presented brings it within the rule which says that where there are special circumstances and conditions which should, and ordinarily would, induce an ordinarily prudent person to exercise greater caution, the question as to whether or not the train was operated with ordinary care and prudence with reference to speed is one for the jury.” 204 Mich 400-401.
We believe that the attendant circumstances in this case are sufficient to raise a question of fact for the jury as to whether defendant exercised ordinary care in failing to reduce the train’s speed. The key question here is whether defendant was negligent in maintaining normal speed under conditions of low visibility absent the use of any kind of device or signal to warn of the train’s approach. In other words, while adverse weather conditions alone may not support a finding of negligent train speed, weather conditions plus failure to warn may. The trial court did not err in this case in reserving for the trier of fact the question of whether defendant’s train speed under the circumstances was consistent with the defendant’s duty to exercise ordinary care in its use of the railroad tracks.
Finally, we reject defendant’s argument that the trial court erred in refusing to direct a verdict on defendant’s failure to provide adequate protection devices at the Potts Road crossing. It is true that railroads may not, without state authorization, install or maintain "any sign, signal, marking, device, blinking, oscillating or rotating light or lights, decoration or banner which is or purports to be or is in imitation of or resembles or which can be mistaken for a traffic control device or railroad sign or signal”. MCL 257.615; MSA 9.2315. Masters v Grand Trunk R Co, 13 Mich App 80, 82-83; 163 NW2d 661 (1968); People v Grand Trunk R Co, 3 Mich App 242, 246; 142 NW2d 54 (1966). But plaintiff did not assert at trial that defendant was liable for inadequate protection devices and the trial court properly instructed the jury on defendant’s non-liability in this regard.
While plaintiffs counsel did refer during closing argument to the inadequate protection devices at Potts Road, his purpose in doing so was to illustrate the importance of the bell and whistle warnings, particularly under such heavy conditions of fog. Viewed in this context, we find no unfair prejudice to the defendant.
IV
Defendant next contends that the trial court erred in refusing to read eight requested non-standard jury instructions. GCR 1963, 516.6(4) authorizes a trial court to give instructions not included in the standard jury instructions and the trial court is obligated to honor written requests for additional jury instructions so long as the instructions properly instruct on applicable case law. Failure to do so constitutes error. Device Trading, Limited v Viking Corp, 105 Mich App 517, 522; 307 NW2d 362 (1981), lv den 414 Mich 960 (1982).
We have reviewed the eight instructions requested by defendant and denied by the trial court. We find that four of these instructions were not applicable to the facts or issues developed at trial in this case. Plaintiff did not contend that defendant was the insurer of the public’s safety at highway railroad crossings and did not suggest that defendant owed a greater duty of care to the decedent since decedent had conducted himself in a negligent manner. In fact, it was plaintiffs position at trial that decedent was not negligent in working on the drainage ditch in the fog. Nor was the jury asked to determine whether defendant was negligent in failing to stop the train once the engineer observed the decedent’s truck on the tracks. It was undisputed that, because of the dense fog, decedent was not visible to the engineer until well beyond the critical distance required to bring the train to a halt. Plaintiffs negligence claims were based solely on defendant’s failure to sound the required warning signals or failure to reduce speed in light of the attendant circumstances. Finally, there was no evidence introduced at trial tending to establish that decedent was "stalled” on the railroad tracks. The trial court thus did not err in refusing to read defendant’s requested instructions nos. 27, 28, 30, and 32.
We further conclude that three of the remaining four instructions improperly stated the law. Defendant’s instructions nos. 33, 34, and 35 were essentially premised on the old "stop, look, and listen” rule developed in automobile/buggy and carriage cases and now abandoned in Michigan. Beasley, supra, p 582.
The remaining instruction requested by defendant and rejected by the trial court read as follows:
"I charge you that the plaintiff-decedent, Mr. Kovacs[,] had a duty to exercise as much caution about remaining on the tracks as going on [to] them.”
While this instruction is not an incorrect state ment of the law, we find that the trial court’s rejection of this instruction in favor of a standard jury instruction, SJI 10:04, was proper and adequately apprised the jury of decedent’s duty of care in crossing over the railroad tracks. We find no abuse of discretion in the trial court’s choice of the standard jury instruction over defendant’s requested instruction. Range v Gorosh, 121 Mich App 1, 10; 328 NW2d 128 (1982), vacated on other grounds 417 Mich 1059 (1983).
V
Defendant also challenges the trial court’s instructions on damages on the ground that the instructions were incomplete, inaccurate, and resulted in an unfairly inflated jury verdict in favor of plaintiff. We are assaulted so regularly with multi-million dollar verdicts in personal injury cases that the "inflated” claim on this wrongful death award amount lacks any particular meaning and is not seriously considered in our analysis. We focus instead on the legal accuracy of the instructions given and, where there is error, whether the error is reversible or harmless.
Defendant first objects to the trial court’s reading of standard jury instruction SJI 53:03 which instructed the jury to reduce its award for future damages by five percent. Defendant argues that the court should instead have instructed the jury to reduce any future damages award by a rate of 12%, pursuant to MCL 600.6013; MSA 27A.6013. We disagree and choose instead to follow the recent opinion of this Court in Goins v Ford Motor Co, 131 Mich App 185; NW2d (1983), in which it was held that MCL 600.6013; MSA 27A.6013 does not apply to reductions of future damages awards. The trial court thus did not err in reading SJI 53:03.
Defendant also contends that the trial court erred in refusing to instruct the jury that any sum of money awarded to plaintiff would not be subject to income tax. Defendant’s requested instruction is based on Norfolk & Western R Co v Liepelt, 444 US 490; 100 S Ct 755; 62 L Ed 2d 689 (1980), reh den 445 US 972; 100 S Ct 1667; 64 L Ed 2d 250 (1980), in which the United States Supreme Court held that a similar requested instruction was improperly denied in an action under the Federal Employer’s Liability Act. The Internal Revenue Code provision which exempts from taxation damages obtained in personal injury actions is 26 USC 104(a)(2). Under this statute, only compensation for personal injuries is exempted from gross income. Compensation for lost wages, lost pension benefits, and other non-personal injury damages, however, is not similarly excluded under this statute. Wolfson v Comm’r of Internal Revenue, 651 F2d 1228 (CA 6, 1981); Stanford v Comm’r of Internal Revenue, 297 F2d 298 (CA 9, 1961). Since plaintiff in this case sought damages for loss of financial support, loss of pension benefits, loss of gifts and loss of investment and industry, the trial court did not err in refusing to instruct on the non-taxability of any damages awarded by the jury in favor of plaintiff.
Defendant also alleges error in the trial court’s modification of standard jury instruction SJI 45:02 as follows:
"If you decide that the plaintiff is entitled to damages, you shall give such amount as you decide to be fair and just, under all the circumstances, to those persons represented in this case. Such damages may include the following items to the extent you find they have been proved by the evidence:
"Losses suffered by Rosemary Kovacs, Mary Ann, Lois and Kathleen Kovacs, as a result of Charles L. Kovacs, including loss of financial support, loss of service, loss of gifts or other valuable gratuities, loss of parental training and guidance, loss of society and companionship, loss of pension beneñts, loss of investment and industry, loss of sexual relationship with her husband by Rosemary Kovacs, damage to the family social unit.
Defendant contends that the addition of the last four emphasized elements resulted in an unfairly inflated verdict in favor of plaintiff.
While we agree that the four elements of damages added by the trial court are essentially subcategories of the five elements contained in SJI 45:02, we find the instruction given, though repetitive, neither confusing nor incorrect nor unduly prejudicial to the defendant. We will not reverse on the basis of this instruction.
Finally, defendant contends that the trial court erred in reading, over defendant’s objection and at plaintiffs request, the following instruction:
"You jurors may, in considering the reduction of the verdict rendered in this matter to its present worth, further consider the effect of inflation on the reduction to present worth and the amount of damages which you find the plaintiffs have suffered.
"It is for you to determine from the evidence whether in determining damages, the damage should be reduced to the value of today’s dollar due to the changes taking place in the purchasing power of money and the cost of living as well as inflationary forces.”
While Michigan appellate courts have rejected this inflationary argument as a basis for excusing a trial court’s failure to instruct sua sponte on the necessity of reducing to present value damages for future losses, Grewe v Mount Clemens General Hospital, 404 Mich 240, 259; 273 NW2d 429 (1978); Freeman v Lanning Corp, 61 Mich App 527; 233 NW2d 68 (1975), the trial court’s instruction was not contrary to any law of damages in Michigan. We thus find no error in the trial court’s instruction on inflation.
VI
Defendant raises one final objection to the instructions given at trial. The court instructed the jury on the presumption set forth in standard jury instruction SJI 10:08:
"Because Charles L. Kovacs has died and cannot testify, you jurors must presume that he was in the exercise of ordinary care for his safety at and before the time of the occurrence, unless you find the presumption is overcome by the evidence.
"In deciding whether the presumption is overcome, you must weigh the presumption with all of the evidence. If, after so weighing, you are unable to decide that the presumption has been overcome, then you must find that Charles L. Kovacs was not negligent.”
Defendant argues that the evidence clearly overcame the presumption of due care on the part of the decedent and the trial court’s reading of SJI 10:08 thus constituted reversible error.
We decline to consider defendant’s argument since the jury’s action in reducing the award by one-third due to decedent’s comparative negligence clearly evidences the harmlessness of the instruction, even assuming that it was erroneously given. The jury obviously found that defendant had overcome the presumption that decedent was not negligent.
VII
Defendant next argues that certain evidence introduced at trial was irrelevant, improper, and so unfairly prejudicial to the defendant that a new trial is required. We separately consider each of these evidentiary objections.
Defendant first challenges the admission at trial of testimony regarding the presence of a school bus carrying children over the Potts Road crossing just prior to the accident. At the beginning of trial, defendant moved to exclude all reference to the school bus. The trial court denied defendant’s motion without prejudice to defendant’s right to renew the objection as the evidence was offered. While defendant failed to pursue the objection at trial, we nevertheless afford review to determine whether manifest injustice resulted.
We have carefully reviewed each reference in the testimony to the presence of a school bus near the railroad crossing, as cited in defendant’s brief on appeal, and we find no error. All of the witnesses who testified about the presence of the school bus did so briefly and casually and in reference to some other relevant matter. In describing the thickness of the fog, a sheriff’s deputy explained that while rushing to the scene of the accident he could travel only 35 miles per hour and, even then, narrowly avoided a collision with a school bus which was backing out of a driveway and which he was unable to see because of the dense fog. John Hibbard was asked to describe what he saw as he approached the Potts Road crossing moments before the accident and explained that one of the things he saw was a school bus heading toward him out of the fog from the direction of the crossing. A resident near the crossing testified that she learned of the accident from John Hibbard not very long after she had put her son on the school bus.
We conclude that none of the objected-to testimony was injected for improper purposes. In fact, some of the school bus testimony was relevant to a clearer understanding of material facts, such as the density of the fog or the public nature of Potts Road. References to the school bus by plaintiffs attorney in closing argument were limited to the context in which the testimony was introduced and do not appear to have been injected to inflame the passions of the jury.
Defendant next alleges reversible error in the introduction of 14 photographs of the decedent as a youth, in the paratroopers, on his wedding day and with his children. Defendant argued at trial and argues on appeal that the photographs were irrelevant to any material fact since photographs cannot depict family relationships, which were not, in any event, contested and that introduction of the photographs was so prejudicial as to result in an unfair trial to the defendant. The trial court denied defendant’s motion to exclude the evidence on the ground that the photographs depicted the decedent in natural settings and revealed the nature of the loss suffered by plaintiff and her daughters. The court further stated that the photographs were relevant to damages despite the fact that family relationships were uncontested.
As with all evidence, the admission of photographs on the grounds that they are more probative than prejudicial is within the discretion of the trial court. MRE 403; City of Grand Rapids v Assfy, 44 Mich App 473, 476; 205 NW2d 502 (1973). It is clear from the record in this case that the trial court exercised its discretion in ruling the photographs admissible. We find no abuse in the exercise of that discretion since the photographs were calmly described by the plaintiff who does not appear to have created a dramatic scene in the courtroom upon viewing the photographs. Nor can we say that the photographs were completely irrelevant to any material issue of fact, such as damages suffered by plaintiff. We find no error. See Amedeo v Grand Rapids & Indiana R Co, 215 Mich 37, 55; 183 NW 929 (1921); Carreras v Honeggers & Co, Inc, 68 Mich App 716, 724-725; 244 NW2d 10 (1976).
Defendant next challenges the admission of testimony regarding the decedent’s habit of approaching railroad crossings in a prudent and careful manner. Defendant failed to object to the introduction of this evidence at trial and argues on appeal that the evidence was inadmissible reputation testimony rather than admissible habit testimony. McNabb v Green Real Estate Co, 62 Mich App 500, 510-511; 233 NW2d 811 (1975), lv den 395 Mich 774 (1975). We have reviewed all of the challenged testimony and conclude that it was properly admitted as evidence of the decedent’s habit, or regular response, in approaching and in traveling over railroad crossings. MRE 406. We find no error.
Fourth, defendant complains of the admission of Hibbard’s testimony regarding his prior experience with trains operating in the vicinity of the Potts Road crossing. Hibbard testified that, two years prior to the accident, he had been employed by a fertilizer company at a facility located 2-1/2 miles east of the Potts Road crossing, halfway between Potts Road and the whistle post. According to Hibbard, the trains would often pass by the fertilizer. plant and the warning whistle was not sounded until the train was nearly upon the work ing men. On several occasions, workers narrowly avoided being run down by the trains.
When defendant objected to the admission of this testimony, plaintiff responded that the evidence was relevant to Hibbard’s particular attentiveness to the sound of train whistles while working near the railroad tracks, particularly on the day of the accident, and the trial court agreed. Hibbard’s attentiveness is clearly probative of the credibility of his testimony regarding the failure of defendant to sound its warning whistle on the day of the accident. We do not believe that the probative value of this evidence was outweighed by its prejudicial effect on the defendant since defendant was required by statute to sound its warning whistle only 660 feet before crossing Potts Road. The whistle post was located more than 1300 feet east of Potts Road so that failure to sound the whistle until midway between the post and the road does not constitute evidence that defendant violated the statute. We find no abuse of discretion in the trial court’s admission of this evidence.
Defendant’s fifth evidentiary challenge is to the trial court’s grant of plaintiff’s request to have defendant’s engineer, Leo Norman, read the answers to his entire deposition rather than testify spontaneously to plaintiff’s questioning. While we recognize that such a practice is somewhat unusual, we cannot say that error resulted given the scope of the rule on the use of all or any part of a deposition of an employee of an adverse party for any purpose. GCR 1963, 302.4(2). Defendant had ample opportunity to expand Leo Norman’s testimony on cross-examination or to put him on the stand in defendant’s presentation of its own proofs. We find no error.
Finally, defendant objects to the admission of the opinion testimony of a nonexpert witness, Rosemary Klinger, regarding the economic value of decedent’s loss of life. Defendant complains that Klinger’s testimony was based on hearsay data and that Klinger gave opinion testimony on matters which were not within her personal knowledge.
At trial, plaintiff attempted to introduce Klinger as an expert witness. Upon examination on her qualifications, Klinger testified that she was a "human life value consultant”. Following extensive questioning by both sides, the trial court declined to qualify her as an expert:
"I am going to let her testify. But I am going to indicate to this jury that I do not consider her to be an expert witness, but she does have some expertise, some experience in areas that most people do not have. And that she has an ability, apparently, to read census reports, Department of Agriculture statistics, what it costs to raise a kid, what it costs to run this and that and so forth. And she can pass this information on to assist the jury.
"And like any other witness, if she were an expert witness, the jury could be getting a charge they do not have to believe that testimony. They can reject, accept, do whatever.
"Rule 701 covers it, in my opinion. We have a person who has some knowledge over and above what the common ordinary person would have, but not to the extent she would be an expert.”
Klinger then went on to testify that as a tinsmith enjoying continued skilled trade employment with the Oldsmobile Division of General Motors Corporation, decedent would have earned $687,787 from the time of his death until retirement at age 65. Klinger further testified that decedent would have earned retirement benefits of $130,539 had he lived out his life expectancy of 78 years. She estimated a 10-1/2% rate of growth in decedent’s real estate investments and estimated the economic value of services regularly supplied to the family by the decedent, including bookkeeping, accounting, home improvements, repairs, carpentry, auto repairs, machinery repairs, and grocery shopping. The total economic loss to the decedent’s family as a result of his death was estimated at $1,064,929. Klinger’s figures were based on employment records, census data, standard mortality tables, income tax returns, decedent’s farm ledgers and books, and local wage rates. Klinger did not attempt to transform into economic terms any noneconomic losses suffered by plaintiff and her family as the result of the tragedy.
On appeal, defendant claims that the admission of Klinger’s testimony constituted reversible error because it was based on hearsay data — documents not personally prepared by her. Defendant, however, raised only one hearsay objection at trial regarding Klinger’s testimony and that objection was to Klinger’s reliance on the decedent’s employment records and on wages earned by an Oldsmobile tinsmith from 1977 through 1981. We thus consider only that hearsay objection properly preserved for appellate review. Tucker v Sandlin, 126 Mich App 701, 706; 337 NW2d 637 (1983).
Prior to the introduction of Klinger’s testimony at trial, Daniel Tibbits testified that he was a senior supervisor of payroll and benefit records at Oldsmobile, decedent’s former employer. Tibbits provided the pay rates earned by Kovacs prior to his death as well as the pay rates earned by Oldsmobile tinsmiths after his death and until 1981. Tibbits also testified that decedent and all tinsmiths regularly worked overtime as needed. We thus find that Klinger’s testimony regarding the value of decedent’s lost wages was properly based on facts admitted earlier into evidence. We find no error.
VIII
Defendant next contends that the jury’s verdict was excessive and against the great weight of the evidence. Given our disposition of the other issues raised by the defendant on appeal, we conclude that the verdict was within the range of evidence introduced at trial and must be upheld. Decker v Norfolk & Western R Co, 81 Mich App 647, 658-661; 265 NW2d 785 (1978), lv den 403 Mich 845 (1978).
IX
We find no manifest injustice, no "cumulative error” effect; on the contrary, defendant received a fair trial with due process and a just damage award — although adverse. As in most trials, somebody wins and somebody loses.
Affirmed. | [
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Per Curiam.
Defendant was convicted at a non-jury trial of armed robbery, MCL 750.529; MSA 28.797. He was sentenced to from 5 to 15 years imprisonment and he appeals as of right.
The complainant described the knife used by defendant in the robbery as "a very cheap steak knife with a serrated edge”. Over defense counsel’s objection, the prosecutor was permitted to place into evidence a knife which had been confiscated from defendant. This knife was described as a folding knife 3-1/2 to 4 inches long when closed, with a brown and white handle. The complainant was unable to identify this knife as being the weapon used by defendant, and it is clear from the descriptions that the knife placed into evidence was not the weapon used by defendant in the robbery. We therefore agree with defendant that there was no adequate foundation established and that the trial court clearly erred in admitting the knife into evidence. See People v Prast (On Rehearing), 114 Mich App 469, 490; 319 NW2d 627 (1982). However, we are convinced that the admission of the knife into evidence was harmless error in the circumstances of this case. The trial court as finder of fact viewed the trial as a credibility contest and resolved the issue in favor of the complainant and another eyewitness. There is no indication that the trial court gave any weight to the knife which was admitted into evidence. We conclude that the admission of the knife was not so offensive to the maintenance of a sound judicial system that it could never be regarded as harmless, and, further, that it was harmless beyond a reasonable doubt. See, e.g., People v Bailey, 101 Mich App 144, 152; 300 NW2d 474 (1980).
Defendant next contends that reversal is required because the prosecutor commented during closing argument on defendant’s failure to produce corroborating witnesses. Defendant did not object to the remarks, which precludes appellate review unless failure to consider the issue would result in a miscarriage of justice. People v Duncan, 402 Mich 1, 15-16; 260 NW2d 58 (1977). Where, as in this case, the defendant takes the stand and testifies in his own behalf, the prosecutor is permitted to comment on the defendant’s failure to produce corroborating witnesses. People v Jackson, 108 Mich App 346, 351-352; 310 NW2d 238 (1981), and cases cited therein. Defendant’s challenge to the remarks is clearly without merit.
With regard to the final issue raised by defendant, we have reviewed the record and conclude that the trial court did not abuse its discretion in determining that the prosecutor had exercised due diligence in attempting to identify and produce the res gestae witness. See People v Pearson, 404 Mich 698; 273 NW2d 856 (1979).
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Per Curiam.
Plaintiff was found by defendant to have served alcoholic beverages to a minor. Plain tiff appeals by right from two orders denying his request for interrogatories and an order of superintending control. Defendant commission suspended plaintiff’s liquor license for a period of seven days and assessed costs of $19.50, and the circuit court has stayed enforcement of defendant’s decision pending review by this Court.
Plaintiff first argues that the decision of the commission was not supported by competent, material, and substantial evidence on the whole record. Although "substantial evidence” must be more than a mere scintilla of evidence, it may be substantially less than the preponderance of the evidence necessary for many civil cases. Russo v Dep’t of Licensing & Regulation, 119 Mich App 624, 631; 326 NW2d 583 (1982). Great deference is given to the findings of an administrative hearing officer or other administrative officer sitting as the trier of fact. Id. Since the evidence in this case resulted in what was largely a credibility battle between the witnesses, we must give deference to the judgment of the hearing commissioner, who had the opportunity to hear the testimony and view the witnesses. There is no doubt that the complainant, Penny Sue Hibbard, was competent to testify and that her testimony, if believed, would support defendant’s ruling. See, for example, Saksey’s Lounge, Inc v Liquor Control Comm, 29 Mich App 656, 658-659; 185 NW2d 840 (1971).
Plaintiff next asserts that the trial court erred in denying his request for an order of superintending control pursuant to GCR 1963, 711. Plaintiff had requested that defendant answer interrogatories for the purpose of showing that the penalties imposed upon plaintiff by defendant were arbitrary, capricious, and more strict than others given to first-time offenders. Plaintiff’s request for discovery was denied by the trial court.
The purpose of an order of superintending control is to permit a higher court to review the actions of a lower tribunal. The constitution, Const 1963, art 4, § 40, vests the commission, subject to legislatively imposed limitations, with complete control of the alcoholic beverage traffic within the state. Since the Legislature has declined to impose limits on the commission in revoking or suspending a license, this Court has allowed a significant degree of discretion to that agency when it is acting within the scope of this authority. See Mallchok v Liquor Control Comm, 72 Mich App 341; 249 NW2d 415 (1976). The penalty imposed in the instant case — a seven-day suspension of plaintiffs liquor license plus costs of $19.50 — was well within the authority of the commission and was not an abuse of discretion. Ron’s Last Chance, Inc v Liquor Control Comm, 124 Mich App 179; 333 NW2d 502 (1983); Triantafillou v Liquor Control Comm, 322 Mich 670, 673-674; 34 NW2d 471 (1948). We find no error in the denial of the order of superintending control.
Finally, plaintiff claims that defendant’s rules of appellate procedure violate MCL 436.20; MSA 18.991. This issue is without merit. MCL 436.20; MSA 18.991 provides: "The commission after reviewing the record made before the commissioner or examiner may allow or refuse to allow the hearing in accordance with the commission’s rules and regulations.” 1979 AC, R 436.1921(1) limits appeal hearings to the record created below. Since the Legislature clearly indicated an intent to allow the commission to regulate its own appeals procedure, this rule is proper. Further, there is no conflict between the rules and MCL 436.20; MSA 18.991. This section provides only that the commission "shall provide the procedure by which any licensee feeling aggrieved by any such suspension or revocation and/or penalty ordered by the commission or a commissioner may request a hearing for the purpose of laying any facts or reasons before said commission why said suspension or revocation and/or penalty should be modified or rescinded”. MCL 436.20; MSA 18.991. A review of the Administrative Code discloses that the commission has done this.
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Per Curiam.
Following a bench trial, defendant was convicted of two counts of first-degree criminal sexual conduct. MCL 750.520b(1); MSA 28.788(2)(1). He was sentenced to a prison term of from twelve to twenty-five years. Defendant appeals as of right.
The complainant, a seventy-one-year-old woman, testified that at approximately 8 p.m. on the evening of November 9, 1985, defendant knocked on the door of her Detroit flat, looking for the upstairs resident. After complainant told him that no one was home, defendant asked her for a glass of water. As she turned to get him a drink, defen dant knocked her to the floor. He then dragged her into her bedroom, picked her up and threw her on the bed.
After ordering complainant to remove her clothes, defendant began to "sexually handle” her. She testified that defendant put his hand into her vagina. Defendant then rolled complainant onto the dining room floor where he continued to "handle” her until 5 a.m. the following morning. Despite a lengthy attempt by the prosecution to refresh her memory, complainant was unable to recall any other act of sexual penetration.
The trial court found that one count of first-degree criminal sexual conduct was established by the act of penetration with defendant’s hand. In addition, based on the other evidence presented, particularly the length of time involved, complainant’s state of undress and defendant’s continued "handling” of complainant, the court inferred that cunnilingus and intercourse also occurred.
The sole issue raised on appeal is whether sufficient evidence of penetration was presented to support defendant’s conviction for two counts of first-degree criminal sexual conduct. In reviewing defendant’s claim, we must examine the evidence in a light most favorable to the prosecution to determine whether a rational trier of fact could have found the elements of the crime established beyond a reasonable doubt. People v Hampton, 407 Mich 354; 285 NW2d 284 (1979), cert den 449 US 885 (1980); People v Petrella, 424 Mich 221; 380 NW2d 11 (1985).
Our review of the record convinces us that sufficient evidence was presented to establish one count of first-degree criminal sexual conduct. Complainant testified unequivocally that defendant inserted his hand into her vagina. This act was sufficient to constitute "penetration” within the meaning of the statute. MCL 750.520a(h); MSA 28.788(1)(h), People v Baker #1, 103 Mich 255; 303 NW2d 14 (1981). Any inconsistencies in complainant’s testimony were properly resolved by the trier of fact. GCR 1963, 517.1, MCR 2.613(C).
On the other hand, the record does not support the court’s conclusion that additional acts of penetration also occurred. Although the prosecution made a lengthy attempt to refresh complainant’s memory, it was to no avail. When asked whether defendant put his mouth on her vagina, complainant repeatedly responded that she was unable to remember. Even when shown a copy of her preliminary examination transcript in which she testified to that act, complainant remained unable to recall at trial whether the additional penetration had occurred.
We recognize that complainant was an elderly and admittedly forgetful witness and that the crime occurred more than a year prior to the trial. It is equally apparent that the assault was particularly embarrassing to complainant and she experienced considerable difficulty describing the assault. These factors make an accurate determination of the events difficult and it is certainly conceivable that other acts of penetration occurred which complainant was simply unable to recall. Nonetheless, neither this Court nor the trial court can supplant the necessary quantum of evidence with guesswork and surmise.
Here, a gap existed between the testimony of the complainant and proof of the act of penetration. The circumstantial evidence relied upon by the court was insufficient to bridge the gap. While an inference may be based on an established fact, the circumstances must warrant the inference. People v Atley, 392 Mich 298; 220 NW2d 465 (1974). The inference that complainant forgot the act is no more compelling than the conclusion that the second act of penetration never occurred. Further, the fact that complainant clearly remembered one act of penetration, but not a second act, is equally supportive of the conclusion that the latter never occurred. We conclude that, based on the evidence presented, a rational trier of fact could not have found the elements of two counts of first-degree criminal sexual conduct established beyond a reasonable doubt. Defendant’s conviction on the second count of first-degree criminal sexual conduct should be reversed.
The prosecution suggests on appeal that the trial court erred in refusing to admit for substantive purposes complainant’s testimony at the preliminary examination. MRE 804(a)(3) and (b)(1), People v Hayward, 127 Mich App 50; 338 NW2d 549 (1983). However, the prosecution has failed to file a cross-appeal and this issue is not properly before the Court for appellate review. Faigenbaum v Oakland Medical Center, 143 Mich App 303, 318; 373 NW2d 161 (1985). Further, even when we consider the merits of the prosecution’s claim, we are not persuaded that the trial court abused its discretion in excluding the evidence. See People v Bowers, 136 Mich App 284; 356 NW2d 618 (1984). Nor are we convinced that the preliminary examination testimony, even if admitted, was sufficient to overcome the inadequacies in the complainant’s trial testimony.
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M. J. Kelly, P.J.,
Plaintiff appeals as of right from an order denying her motion to set aside a mediation judgment pursuant to GCR 1963, 528.3. We reverse and remand to the assigned pretrial judge for reconsideration of plaintiffs motion.
Plaintiff in this case neglected timely to file a rejection of the $5,000 mediation award entered under the local mediation court rule, WCCR 403. At the time, failure to reject a mediation evaluation constituted an acceptance thereof in Wayne County only. WCCR 403.15(a). As authorized by the local court rule, the Chief Judge of the Wayne Circuit Court properly notified the parties that a judgment consistent with the mediation award would be entered on December 7, 1984. WCCR 403.15(a). On that day, plaintiff’s attorney appeared before the Chief Judge contesting the judgment but we do not know what occurred since there is no transcription of that proceeding. On January 14, 1985, however, plaintiff filed with the Chief Judge a motion to set aside the judgment under GCR 1963, 528.3. Plaintiff’s motion was denied on the ground that the mediation judgment was final.
In Muntean v Detroit, 143 Mich App 500; 372 NW2d 348 (1985), we disapproved of the practice of the Chief Judge of the Wayne Circuit Court’s deciding motions to set aside judgments ministerially entered under the local mediation court rule. We reasoned that motions to set aside a mediation judgment required the exercise of judicial discretion, unlike entry of the judgment which occurred automatically under the court rule, and concluded that there were no statutes or rules authorizing the Chief Judge to take over such contested pretrial motions. To the contrary, the court rules in effect at that time provided that the assigned judge was to hear "all preliminary matters until trial of the case begins.” WCCR 6.1(b).
More recently, in Williams v Kamin, 151 Mich App 496; 390 NW2d 735 (1986), another panel of this Court side-stepped the decision in Muntean and instead deferred to the general rule requiring that a motion to set aside a judgment go before the same judge who entered the judgment. Although we think that the decisions of Muntean and Williams are in direct conflict, the panel in Williams attempted to distinguish Muntean on the theory that the plaintiff in Muntean had preserved the issue for appellate review. Even assuming, however, that Williams and Muntean may be distinguished on this basis, it is clear that the panels reached opposite conclusions on the substantive issue of the Chief Judge’s authority in these matters.
We agree with Muntean and conclude that the Chief Judge of the Wayne Circuit Court is without authority to rule on a motion to set aside a ministerially entered mediation judgment. While we recognize the general rule favoring submission of motions for relief from judgment to the same judge who entered the order or judgment, see GCR 1963, 529.2 and WCCR 119.8(a), we do not think the principle applies in the context presented here, in Muntean or in Williams.
The underlying policies of GCR 1963, 529.2 are to refer a motion to the judge most qualified to decide the motion and to prevent forum shopping. 3 Honigman & Hawkins, Michigan Court Rules Annotated (2d ed), p 230; Totzkay v DuBois (After Remand), 140 Mich App 374, 379-381; 364 NW2d 705 (1985), and Berar Enterprises, Inc v Harmon, 101 Mich App 216, 228-229; 300 NW2d 519 (1980). In Wayne Circuit Court, it is the assigned judge who should be familiar with the parties and issues and who is best able to make a reasoned decision on a motion to set aside a mediation judgment. For reasons of judicial administration and economy, the Chief Judge of the Wayne Circuit Court has taken over the ministerial task of entering judgments on mediation awards where both parties have accepted the evaluation. There is no exercise of discretion on the part of the Chief Judge in entering these judgments and there is no reason to assume that the Chief Judge, rather than the assigned judge who has heard all other pretrial motions in the case, is the one best suited to determine whether relief from a mediation judgment should be granted.
We do not share the concern expressed in Williams regarding the dangers of forum shopping. A party seeking to set aside a mediation judgment entered by the Chief Judge in Wayne Circuit Court must submit the appropriate motion to the assigned judge. There is no choice as to which judge to select, no forum in which to shop.
As in Williams, the plaintiff in this case did not first present her motion to set aside the mediation judgment to the assigned judge. However, we are not persuaded that plaintiff has waived the issue for appellate purposes. The Chief Judge acted without authority in deciding plaintiff’s motion and we are not generally inclined to find jurisdictional issues waived. In addition, manifest injustice will result absent our appellate review since we are convinced that the Chief Judge failed to exercise any discretion in deciding plaintiff’s motion. Essentially, the court determined that plaintiff had in fact failed to timely reject the mediation evaluation. Once the court established that fact, the court stated simply: "I’m not going to set it aside. As far as I’m concerned, it is final. The motion is denied.”
On remand, the assigned judge shall consider plaintiff’s motion and exercise his discretion under the standards set forth in Muntean, supra, pp 507-511. We do not retain jurisdiction.
Reversed and remanded.
We note that under the new Michigan Court Rules, effective March 1, 1985, failure to file a rejection of a mediation award now constitutes acceptance in all district and circuit courts of this state. MCR 2.403(L)(1). | [
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Wahls, P.J.
Plaintiff commenced an action on October 28, 1980, seeking equitable relief, a declaration relieving him of liability on a mortgage note and mortgage, and money damages. Following a bench trial, the circuit court granted plaintiff partial relief but declined to invalidate the mortgage or its interest payment provisions. Plaintiff appeals as of right, and we affirm.
Defendant Thomas A. Handlos was licensed both as a real estate broker and a residential builder. In 1976, he joined his mother’s Grosse Pointe Woods real estate office as an associate broker and subsequently did business as a residential builder at her office. In 1978, his mother, Lucile M. Handlos, opened a branch office of Handlos Real Estate in Houghton Lake, Roscommon County, and placed Thomas in charge of the office Thomas commenced doing business as a residential builder out of the new office and named his business Handlos Build ing Company. Lucile registered the name Handlos Real Estate in Wayne County and Roscommon County, and Thomas likewise registered the name Handlos Building Company. Lucile was not involved in the operation of the Houghton Lake office. Defendant Alphonse A. Handlos, Thomas’ father and Lucile’s husband, was only minimally involved in the real estate and building business, on occasion having answered the phone at his wife’s office and having prepared a few blueprint drawings for his son.
Thomas combined his real estate and building activities under the name of Handlos Real Estate and Building Company and adopted a unique logo, which he used in conjunction with the National Association of Realtors registered trademark which was licensed to Handlos Real Estate. Thomas was unable to register the new business name because of its similarity to the name Handlos Real Estate registered by his mother. On May 15, 1979, Thomas incorporated Handlos Real Estate and Building Corporation. The corporation was never licensed as a residential builder as required by statute but continued doing the building work begun by Thomas as an individual. The corporation also continued using the same logo, stationery and checking accounts used by the unincorporated business. Thomas was the sole shareholder, officer and director of the corporation.
In the spring of 1979, Thomas circulated a general advertising flier to Higgins Lake Forest Estates property owners and touted the advantages of building on property "up north.” Plainitff received a flier, called the Handlos Real Estate and Building Corporation and spoke with Robert Wieland, a broker licensed in Flint but operating out of Thomas’ office, about the possibility of having a home build on his Higgins Lake property. On June 8, 1979, plaintiff signed a building agreement to have a chalet built by the corporation for $24,990. The agreement required a $3,000 down payment and was contingent on a mortgage for $21,990. On the same date, plaintiff applied for a mortgage from the corporation. Plaintiff paid the $3,000 deposit and Thomas then used his individual residential builder’s license to obtain a building permit.
On July 2, 1979, Thomas notified plaintiff by letter that he had accepted plaintiff’s mortgage application. The letter stated that the mortgage would be subject to a twelve percent annual interest rate and a $5 charge for late payment and would be finalized upon payment of closing costs of $533 as itemized in the letter. A subsequent letter indicated that the interest rate was lowered to eleven percent "due to regulations of the government.” On August 15, 1979, plaintiff signed the mortgage and mortgage note. As written, the mortgage papers indicated the mortgagee as Thomas A. Handlos. Plaintiff commenced payment on the mortgage in October, 1979, to an account at Roscommon State Bank.
During construction of plaintiff’s chalet, a dispute arose between Thomas and Wickes Corporation, doing businss as Wickes Lumber, regarding payment for some defective materials which Thomas had purchased. On November 14, 1979, plaintiff received a notice from Wickes of its intention to claim a lien on his property. Plaintiff called defendants about the lien and was apparently assured by Thomas not to worry about it. Plaintiff received the keys to his chalet in February, 1980, although it was not quite completed. The chalet was subsequently completed and plaintiff was satisfied with the work.
On February 27, 1980, Wickes recorded its lien. On August 21, 1980, Wickes’ attorney wrote to Thomas, with copy to plaintiff, stating that foreclosure proceedings would be initiated if arrangements for settlement of the debt and discharge of the mechanic’s lien were not made within ten days. In the meantime, plaintiff had engaged counsel and withheld his mortgage payment for August, 1980. Plaintiff also withheld payment for September, 1980, and demanded that Thomas discharge the Wickes lien.
On September 29, 1980, Wickes executed a full and final waiver of the lien. On October 4, 1980, Thomas informed plaintiff that the mortgage and note had been assigned, but he refused to disclose the identity of the assignees. On October 17, 1980, Lucile and Alphonse, as assignees, sent plaintiff a letter demanding payment and imposing a late fee of $15 per overdue monthly installment. Lucile and Alphonse also had their attorney send plaintiff a letter warning that foreclosure proceedings would be instituted if payment was not made.
Thomas had assigned plaintiff’s mortgage and note to his parents on January 31, 1980, along with two other mortgages. Lucile drafted the assignments, which were signed by Thomas individually. The assignments constituted repayment for several personal loans, of the sum total of $72,640, made to Thomas by his parents. The loans generally were made to Thomas for his business affairs, although one was for the purpose of investing in a condominium project.
Given the above set of facts, plaintiff makes the claim that his building agreement with Handlos Real Estate and Building Corporation is void because the corporation was not licensed as a residential builder as required by MCL 338.1501; MSA 18.86(101), repealed by 1980 PA 299. Because the building agreement is void, the mortgage and mortgage note must also be void, plaintiff asserts. Even if the mortgage and note are not void, plaintiff argues that the interest rate is usurious and he is entitled to actual attorney fees and costs provided by MCL 438.32; MSA 19.15(2). Plaintiff argues that defendants are not protected by the mortgage assignment because Alphonse and Lucile are not holders in due course. Plaintiff further argues that the assignment of the mortgage violated MCL 570.152, 570.153; MSA 26.332, 26.333, and he is therefore entitled to statutory damages, actual damages for lost work and expenses, and attorney fees and costs.
The trial court upheld the building agreement, mortgage and note, found no usury question and concluded that the mortgage assignment was a business deal and that Alphonse and Lucile were holders in due course. The court awarded plaintiff $270 which had been estimated and then charged by Thomas as part of the mortgage closing fee even though Thomas had not incurred the cost, $170 for phone calls and travel expenses incurred by plaintiff relative to the Wickes lien problem, and $500 for reasonable attorney fees incurred by plaintiff in trying to discharge the Wickes lien.
We note that our review is not based on transcripts of the trial but on a stipulated statement of facts. Whether the actual trial testimony would tell another story we cannot say, but the necessarily condensed statement of facts simply does not suggest the conspiracy, collusion and bad faith by defendants that plaintiff alleges on appeal. To the best that we can discern, this is not a case where defendants are guilty of any fraud, malice, shady dealing or ill intentions toward plaintiff. The circuit court summed up the matter as follows:
The Court finds that the controversy between these parties was caused by the action of Wickes Lumber to obtain payment for the material it furnished for the construction of the chalet. . . . To state the same finding another way, there never would have been any litigation if the Wickes matter had not been injected. The Wickes claim was settled on November 12, 1980, by the filing of a release of mechanics lien. . . . However, the Plaintiff had already filed a lawsuit, and, to use the vernacular, the horse was out of the barn.
It appears in this case that plaintiff is seeking to take advantage of several mistakes made by Thomas Handlos through ignorance. While it is commonly said that ignorance of the law is no excuse, our decision in this case reveals that the civil law is not without its limits in imposing penalties on the ignorant.
In the following parts of our opinion, we address plaintiff’s defenses to the note and mortgage held by the Handloses and we conclude that the alleged defenses are either no defense or that the Hand-loses take free of them as holders in due course.
I
MCL 338.1516; MSA 18.86(116), repealed by 1980 PA 299, provided in part:
No person engaged in the business or acting in the capacity of a residential builder and/or residential maintenance and alteration contractor may bring or maintain any action in any court of this state for the collection of compensation for the performance of any act or contract for which a license is required by this act without alleging and proving that he was duly licensed under this act at all times during the performance of such act or contract.
This statute clearly meant that a residential builder not duly licensed, whether as a plaintiff or counterclaimant, could not sue for a money judgment. Kirkendall v Heckinger, 403 Mich 371, 374; 269 NW2d 184 (1978); Charles Featherly Construction Co v Property Development Group, Inc, 400 Mich 198, 203; 253 NW2d 643 (1977). In earlier cases, it was said that contracts by a residential builder not duly licensed were void as against public policy because of the statute. Bilt-More Homes, Inc v French, 373 Mich 693; 130 NW2d 907 (1964); Alexander v Neal, 364 Mich 485; 110 NW2d 797 (1961); Brummel v Whelpley, 46 Mich App 93; 207 NW2d 399 (1973). However, more recent cases have shown that the statute does not deprive unlicensed builders of all rights. In Parker v McQuade Plumbing & Heating, Inc, 124 Mich App 469; 335 NW2d 7 (1983), this Court held that the statute was intended to protect the public as a shield, not a sword, and does not prohibit an unlicensed contractor from defending a breach of contract suit on its merits. And in Kirkendall, supra, p 374, the Supreme Court stated the following, which is particularly applicable to the instant case:
Heckinger, whether a plaintiff or as here a counterclaimant, could not seek a money judgment against the Kirkendalls because of the statute. The trial court was consequently correct in dismissing the counterclaim.
That does not end our inquiry, however.
"It is a cardinal principle that equity will not aid a party in doing that which is not equitable. He who seeks equity must be prepared to do equity.” Goodenow v Curtis, 33 Mich 505, 509 (1876).
See, also, Bonninghausen v Hansen, 305 Mich 595; 9 NW2d 856 (1943).
The plaintiffs sought an equitable remedy. Be fore ordering the conveyance to Dennis Kirkendall, the trial court was obliged to determine the amount the plaintiffs were required to pay the defendants in order to do equity. As the equitable mortgagee, Heckinger was entitled as a condition to reconveyance to reasonable expenditures for improvements on the property made with the Kirkendalls’ consent (and in fact with Dennis Kirkendall’s active participation) while Heckinger had title to the property. Osborne, Mortgages, §§ 169-170; 4 Pomeroy’s Equity Jurisprudence (5th ed), § 1217.
See also Green v Ingersoll, 89 Mich App 228; 280 NW2d 496 (1979).
As did the plaintiffs in Kirkendall and Green, plaintiff herein has sought unclouded title to his property at the expense of the equitable rights of the mortgagees. To receive equity, he must do equity. Accordingly, plaintiff must, at the least, pay for reasonable expenditures incurred by Thomas Handlos in improving plaintiff’s property.
Plaintiff asserts that Lucile and Alphonse must have known that Thomas did not have a corporate residential builder’s license. We are not persuaded that the circuit court’s conclusion to the contrary was clearly erroneous. As a builder, Thomas was not an agent of his mother. His parents were not affiliated with the buiding operations in Roscommon County except as unsecured creditors.
We are cognizant that actual knowledge of plaintiff’s defense by the holders of the note and mortgage is not required. "Notice” for purposes of MCL 440.3302; MSA 19.3302, defining holder in due course, includes receiving a notice or notification of a fact or having reason to know that the fact exists from all the facts and circumstances known at the time in question. MCL 440.1201(25); MSA 19.1201(25). However, we are not persuaded from the record that Thomas’s parents had reason to know of the lack of a corporate license.
II
MCL 570.151; MSA 26.331 provides that the building contract fund paid by a person to a contractor shall be considered a trust fund. MCL 570.152; MSA 26.332 states:
Any contractor or subcontractor engaged in the building construction business, who, with intent to defraud, shall retain or use the proceeds or any part therefor, of any payment made to him, for any other purpose than to first pay laborers, subcontractors and materialmen, engaged by him to perform labor or furnish material for the specific improvement, shall be guilty of felony in appropriating such funds to his own use while any amount for which he may be liable or become liable under the terms of his contract for such labor or materiál remains unpaid.
MCL 570.153; MSA 26.333 provides that a contractor’s appropriation of any moneys paid him for building operations before he has paid all construction costs is evidence of intent to defraud.
Plaintiff claims that Thomas’s assignment of the mortgage to his parents in January, 1980, although work on plaintiff’s chalet was not yet completed, was appropriation of moneys paid for building operations in violation of the building contract fund act. The circuit court did not specifi cally address this claim of plaintiff and it is not clear to what extent plaintiff litigated the claim at trial. On the record presented to us for review, we can find no reversible error. It appears that the mortgage payments were not paid directly for building operations and that the construction fund, if any, was established by a loan from Thomas’s parents. Furthermore, we are convinced that the evidence as a whole does not require a finding that Thomas had intent to defraud.
III
MCL 438.31c(6); MSA 19.15(1c)(6) permits non-qualified lenders to make mortgage loans providing for an interest rate not to exceed eleven percent per annum, which interest is inclusive of all amounts defined as the "finance charge” in the federal Truth-in-Lending Act and accompanying regulations. If this provision is violated, MCL 438.32; MSA 19.15(2) bars the lender from recovering any interest, any official fees, delinquency or collection charge, attorney fees or court costs and the borrower is entitled to attorney fees and court costs. MCL 438.101; MSA 19.21 provides that, when an installment of interest on a mortgage is due and unpaid, interest may be charged on the due and unpaid interest at the rate specified in the mortgage, not exceeding ten percent. Plaintiff claims that he has four defenses to the mortgage and note arising out of the usury statutes.
A
Plaintiff claims that defendants are bound by the twelve percent figure stated in Thomas Handlos’s letter of acceptance of plaintiffs mortgage application. We disagree. If any usurious taint arose out of the letter, it was purged by the mortgage and note provisions of eleven percent. Mathews v Tripp, 285 Mich 705; 281 NW 412 (1938).
B
Plaintiff also asserts that some of the mortgage closing costs were improperly charged and rendered the mortgage and note usurious. These costs nowhere appeared in the mortgage or note but were part of a separate agreement between plaintiff and the corporate defendant. While Lucile and Alphonse certainly must have assumed that their son had a building agreement with plaintiff, there is no evidence that they knew or had reason to know of any defense arising out of that agreement. MCL 440.3304(4)(b); MSA 19.3304(4)(b); Hakes v Thayer, 165 Mich 476, 486-489; 131 NW 174 (1911).
We note that, as between plaintiff and Thomas, the court rendered judgment for plaintiff for the improperly charged costs.
c
Plaintiff contends that Lucile and Alphonse Handlos have rendered the mortgage and note usurious by charging a $15 fee for late payment of the monthly installments. This argument fails because late payment charges ordinarily do not constitute interest. OAG, 1981-1982, No 5904, p 199 (May 15, 1981). Plaintiff gives no reason why the charges in this case should be excepted from the general rule.
D
Plaintiff contends that, because the mortgage provides for eleven percent interest on due and unpaid interest and is usurious pursuant to MCL 438.101; MSA 19.21, Lucile and Alphonse Handlos cannot be holders in due course of the note and mortgage. After careful review of the statement of facts and the law, we are not convinced that the court below erred reversibly although the question is very close.
We begin our analysis with some observations about the nature of and relationship between notes and mortgages. "It has often been said that a negotiable promissory note is a courier without luggage whose face is its own passport.” Baker State Bank v Grant, 54 Mont 7, 9; 166 P 27 (1917), quoted in East Lansing State Bank v Keil, 213 Mich 17, 20; 180 NW 347 (1920). Thus, while a note may put its holder on notice of a collateral agreement, the holder is thereby ordinarily put on neither inquiry nor constructive notice of the contents of or defenses to the collateral agreement. MCL 440.3304(4)(b); MSA 19.3304(4)(b); Hakes v Thayer, supra. In Howry v Eppinger, 34 Mich 29, 33 (1876), our Supreme Court stated,
As we have already said, the words "secured by mortgage” formed no part of the notes. The object and intent of the parties in putting these words upon the notes was not to limit or impair their value, but to add to it. It was not to notify third parties that the mortgage contained some clause inconsistent with the notes, and which would destroy or affect their negotiable character. One object undoubtedly was, to show they were the notes referred to in the mortgage and thus connect them. But the principal one was, to show that in addition to the responsibility of the makers they were also secured by mortgage. If the makers intended to limit the effect of the notes by the terms or conditions of the mortgage securing their payment, they should have done so by language which could admit of no doubt as to its intent and meaning. We think these words were neither sufficient to inform third parties of the contents or terms of the mortgage, or to put them upon inquiry.
The Court went on to note that, in any event, the note and mortgage were not inconsistent. It does not appear that our courts have yet considered a case on all fours with the instant one, in which the assignees apparently received the note and mortgage together and the mortgage contained a term affecting payment not reflected in the note. Nevertheless, we think the quotation above from Eppinger aptly summarizes the instant case. The note on its face appears to comprehensively address payment terms. There is no reason to think that the mortgage, having as its purpose the provision of security, would be inconsistent with the note on the subject of payment. Accordingly, we conclude that mere receipt of a mortgage does not constitute actual notice of its payment terms where they are different from those on the note secured by the mortgage. In the instant case, the record is not convincing that Lucile and Alphonse Handlos had actual notice of the payment terms of the mortgage and, therefore, we do not reverse the finding of the circuit court that the two were holders in due course.
IV
Apart from the claims and defenses discussed in parts i-m, of which plaintiff claims the elder Hand-loses had notice, plaintiff still maintains that they are not holders in due course. Relying on MCL 440.3302(3)(c); MSA 19.3302(3)(c), plaintiff contends that assignment of his mortgage was part of a bulk transaction not in the regular course of Thomas’s business and therefore the assignees cannot be holders in due course. We disagree; we conclude that assignment of the Barbour note and mortgage along with two other notes and mortgages was not a bulk transaction as contemplated by the statute. We note the official UCC Comment which states:
Subsection (3)(c) applies to bulk purchases lying outside of the ordinary course of business of the seller. It applies, for example, when a new partnership takes over for value all of the assets of an old one after a new member has entered the firm, or to a reorganized or consolidated corporation taking over in bulk the assets of a predecessor. It has particular application to the purchase by one bank of a substantial part of the paper held by another bank which is threatened with insolvency and seeking to liquidate its assets.
Plaintiff also claims that the Handloses did not take "for value” because they did not part with anything of value at the time of receiving the note and mortgage. We disagree. MCL 440.3303(b); MSA 19.3304(b) is clearly applicable here. The statute states that a holder takes an instrument for value when he takes the instrument in payment of or as security for an antecedent claim. In this case, while the Handloses sometimes stated that the assignment was security for their loan to their son, the better view of the evidence is that the assignment was made in full payment of the prior loan. In either case, though, sufficient value was given. Kewanee Private Utilities Co v Runzel, 256 Mich 345; 239 NW 325 (1931); Outhwite v Porter, 13 Mich 533 (1865).
Plaintiff further claims that the note and mortgage were defective because they were in Thomas’ name individually, although Thomas stipulated at trial that the intention was that the corporation be mortgagor. However, whatever Thomas’ and plaintiffs’ intent, there is nothing on the face of the note or mortgage to suggest that they were not validly in Thomas’ individual name. Nor is there any record evidence suggesting that the Handloses knew or had reason to know that the note and mortgage were not what they appeared to be.
v
Plaintiff lastly argues that he adequately established compliance with the mechanics’ lien law, MCL 570.4; MSA 26.284, and he is therefore entitled to damages because of Thomas Handlos’ noncompliance. The statute, repealed by 1980 PA 497, provided for a written demand of the contractor for an accounting. The certified statement of facts in the instant case specifically states that there was no demand for an accounting as required by law. It appears that the only demand made of Thomas or his corporation was for payment of Wickes’s account and discharge of the lien.
Plaintiff attempts to enlarge the record on appeal with evidence that he did in fact make a demand for an accounting. However, evidence filed for the first time in appellant’s brief is not properly before us for review. Spartan Asphalt Paving Co v Tri-Cities Construction, Inc, 68 Mich App 305, 309; 242 NW2d 565 (1976).
We note that the court did require Thomas to reimburse plaintiff for the properly identified costs of defending against Wickes’ lien. We do not find that plaintiff is entitled to further relief.
Affirmed.
This Court has held that an individual and his corporation are not the same entity for purposes of the licensing act. Bernard F. Hoste, Inc v Kortz, 117 Mich App 448; 324 NW2d 46 (1982). Thomas Handlos’s holding of a license is probably not "substantial compliance” with the licensing act on the part of his corporation. Superior American Homes v Fry, 130 Mich App 379; 343 NW2d 561 (1983). However, we do not address the question of substantial compliance. We do note that, after plaintiff commenced suit, Thomas immediately obtained a license for the corporation.
Defendant assumes that he is entitled to the relief of MCL 438.32; MSA 19.15(2). However, that provision for penalties and attorney fees applies only to 1966 PA 326. The provision for interest on due and unpaid interest is 1869 PA 11. We express no views on what penalty is imposed or what relief is available where a violation of this latter provision occurs. | [
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Per Curiam.
The people appeal by leave granted from an order suppressing the use of certain statements which had been made by defendant without the benefit of Miranda warnings. The parties agree that, when he made the statements, defendant was not in custody but was the focus of a gas fraud investigation. The people contend on appeal that it is custody, and not "focus,” that triggers the duty to give Miranda warnings.
Miranda v Arizona, 384 US 436, 444; 86 S Ct 1602; 16 L Ed 2d 694 (1968), applies to "custodial interrogation,” of which the United States Supreme Court said,
By custodial interrogation we mean questioning initiated by law enforcement officers after a person has been taken into custody or otherwise deprived of his freedom of action in any significant way.4
In People v Reed, 393 Mich 342; 224 NW2d 867 (1975), cert den 442 US 1044; 95 S Ct 2660; 45 L Ed 2d 696 (1975), the Michigan Supreme Court addressed the issue of whether the defendant was in custody for Miranda purposes. The Court observed that Professor Kamisar had suggested guidelines for determining whether an investigation is custodial, one of which was whether the accused had been the focus of the investigation. Reed, supra, p 357 n 6. While Professor Kamisar maintained that the controlling approach should be whether a person subject to such investigation would reasonably believe that his freedom was significantly impaired, the Supreme Court approved the "focus” test as stated by this Court in People v Wasson, 31 Mich App 638, 642; 188 NW2d 55 (1971):
The deciding factor, in each case, is determined by examining the specificity of the investigation, i.e., whether the investigation has focused on one suspect.
The Supreme Court added that this test was to be employed by examining the totality of the circumstances.
In People v Ridley, 396 Mich 603, 606 n 1; 242 NW2d 402 (1976), Justice Coleman, writing for a unanimous Court, followed Reed as the law under the doctrine of stare decisis but noted her personal disagreement with the "focus only” test. In People v Brannan, 406 Mich 104; 276 NW2d 14 (1979), the Supreme Court again followed Reed.
The difficulty in this case arises because the United States Supreme Court clearly rejected the "focus” test in Beckwith v United States, 425 US 341; 96 S Ct 1612; 48 L Ed 2d 1 (1976), and Oregon v Mathiason, 429 US 492; 97 S Ct 711; 50 L Ed 2d 714 (1977). See also Berkemer v McCarty, 468 US —; 104 S Ct 3138; 82 L Ed 2d 317 (1984). Since Beckwith and Mathiason, this Court has been divided over what standard to apply.
In People v Martin, 78 Mich App 518; 260 NW2d 869 (1977), and People v Konke, 83 Mich App 356; 268 NW2d 42 (1978), panels viewed the issue as solely one of federal law and followed Beckwith and Mathiason. However, in People v Wallach, 110 Mich App 37, 48-50; 312 NW2d 38 (1981), vacated on other grounds 417 Mich 937 (1983), a panel of this Court decided that the Michigan Supreme Court’s use of the focus test in Brannan, well after the United States Supreme Court had rejected the test, militated in favor of a conclusion that the focus test was a requirement of state constitutional law. The Wallach analysis was rejected in People v Belanger, 120 Mich App 752; 327 NW2d 554 (1982).
Other panels have addressed the issue without lengthy discussion. The panel in People v Robinson, 79 Mich App 145, 152-153; 261 NW2d 544 (1977), lv den 403 Mich 814 (1978), followed Reed but noted that it was unnecessary to decide the effect of Beckwith. In People v Hangsleben, 86 Mich App 718, 724-725; 273 NW2d 539 (1978), the panel found it unnecessary to resolve the controversy. Martin, supra, was followed in People v Schram, 98 Mich App 292, 306-307; 296 NW2d 840 (1980). Reed, supra, was followed in People v Benjamin, 101 Mich App 637, 647, n 2; 300 NW2d 661 (1980) (defendant was clearly in custody, though); People v Snell, 118 Mich App 750, 764; 325 NW2d 563 (1982) (any error, however, was harmless); People v D’Avanzo, 125 Mich App 129, 133; 336 NW2d 238 (1983) (defendant was an inmate and clearly in custody).
In Paramount Pictures Corp v Miskinis, 418 Mich 708, 726; 344 NW2d 788 (1984), the Supreme Court stated,
Having examined prior decisions of this Court, we find nothing which requires an interpretation of our constitutional privilege against selfiincrimination different from that of the United States Constitution. "The provision in each Constitution is the same.” In re Moser, 138 Mich 302, 305; 101 NW 588 (1904).
While there is no indication that the Court considered the controversy presented in this case, its stated conclusion lends support to the decisions of this Court in Martin, supra, and Belanger, supra. We are persuaded to follow the United States Supreme Court’s rejection of the focus test.
Accordingly, we conclude that the trial court erred in suppressing the use of defendant’s statements on the basis of the Reed focus test. We reverse and remand for further proceedings not inconsistent with this opinion.
Reversed and remand.
In People v Marbury, 151 Mich App 159; — NW2d — (1986), a decision released for publication after this opinion was drafted, two judges of this Court announced a change in their positions from the "focus” to the "custody” test.
Judge Cynar, who signed the Wallach, Benjamin and Snell opinions, is now persuaded that the "custody test” is the proper test to be applied to determine whether Miranda warnings must be given.
This is what we meant in Escobedo v Illinois, 378 US 478; 84 S Ct 1758; 12 L Ed 2d 977 (1964) when we spoke of an investigation which had focused on an accused. | [
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J. P. Swallow, J.
Defendants Clay, Moore, and Ardati appeal by leave granted from an order denying their motion for reconsideration of an opinion and order dated December 6, 1983. The order barred defendants from introducing the expert testimony of Larry E. Fleischman, M.D., plaintiff’s treating physician subsequent to defendants’ alleged malpractice.
This appeal arises from a malpractice action filed on June 10, 1981. During discovery, plaintiff learned that defense counsel had consulted Fleischman for his expert opinon on plaintiff’s medical records compiled prior to Fleischman’s treatment of plaintiff. Plaintiff moved to bar Fleischman from acting as an expert witness for defendants because "defense counsel acted in utter disregard of the General Court Rules applicable to discovery” by conferring with Fleischman on plaintiff’s file and because Fleischman "owes a fiduciary duty of confidentiality to the plaintiff.” Defendants countered that, because Fleischman would not be disclosing information gained during his treatment of plaintiff, but would be testifying only as to the applicable standard of care, defendants violated no rules of discovery and Fleischman’s testimony was not barred by the physician-patient privilege, MCL 600.2157; MSA 27 A.2157.
The trial court acknowledged that defendants could limit their questions to matters not within the physician-patient privilege. The trial court found no violation of discovery rules or ethics, and was "not persuaded that Michigan law imposes a fiduciary obligation upon a physician not to deal with the adverse party.” However, the court found that "[i]f defendants are allowed to call Dr. Fleischman, it is unavoidable that the jury would learn Dr. Fleischman was the treating physician of plaintiff.” The court concluded that plaintiff’s failure to call Fleischman would lead the jury to surmise that Fleischman would render testimony adverse to plaintiff but for the physician-patient privilege. The court found that the probative value of Fleischman’s testimony was outweighed by its prejudicial impact and barred Fleischman’s testimony under MRE 403.
We find this ruling to be in error. It is well-settled that the determination of whether the prejudicial impact of evidence outweighs its probative value is a matter left to the trial court’s discretion. Stachowiak v Subczynski, 411 Mich 459; 307 NW2d 677 (1981). In order to find an abuse of discretion, an order must not evidence the exercise of judgment, "but defiance thereof.” Wendel v Swanberg, 384 Mich 468, 475-476; 185 NW2d 348 (1971). Here, we will not second-guess the trial court’s determination that disclosure of the fact that Fleischman was plaintiff’s treating physician would be prejudicial to plaintiff because the fact would be given undue weight by the jury. However, the court’s method of vitiating the perceived prejudice was not within the discretion granted by MRE 403. MRE 403 does not authorize the total exclusion of a witness’s testimony, but only of evidence. The perceived prejudicial impact of Fleischman’s testimony could have been avoided by excluding any mention of the fact that Fleischman was plaintiff’s treating physician.
Nor do we believe that Fleischman should be barred from testifying for defendants because of the fiduciary relationship between physician and patient.
In Michigan, the exclusion of testimony based on the relation between treating physician and patient has long been limited to the confines of the physician-patient privilege as defined by statute. See e.g., Cooley v Foltz, 85 Mich 47, 49; 48 NW 176 (1891) (proper for treating physician called by defense counsel to testify that the plaintiff told him that she was instituting suit and intended to call him as a witness). See also Yager v Yager, 313 Mich 300, 308; 21 NW2d 138, 141 (1946), People v Cole, 113 Mich 83; 71 NW 455 (1897). We see no valid policy reason to extend the limits on a treating physician’s testimony in the manner plaintiff suggests. This is founded, in part, on our belief that, if Fleischman were to testify, there would be no breach of fiduciary duty in the instant case.
A fiduciary duty arises out of the relation subsisting between two persons of such a character that each must repose trust and confidence in the other and must exercise a corresponding degree of fairness and good faith. Portage Aluminum Co v Kentwood Nat’l Bank, 106 Mich App 290, 294; 307 NW2d 761 (1981), lv den 413 Mich 922 (1982). A person in a fiduciary relation to another is under a duty to act for the benefit of the other as to matters within the scope of the relation. See 1 Restatement Trusts, 2d, § 2, Comment b, p 6. The relation between treating physician and patient, requiring confidence, trust, and good faith, is founded on the proper diagnosis and treatment of medical problems. Permitting a treating physician to testify with regard to matters traditionally not privileged should have no deleterious effect on his treatment of a patient and should have no chilling effect on a patient’s disclosures during the course of their relationship. In this manner, the policies underlying the fiduciary relationship between physician and patient, which plaintiff claims should bar Fleischman’s testimony here, and the policies underlying the physician-patient privilege statute, traditionally the only bar to a treating physician’s testimony, are closely parallel. Each advances the same interests, and supports the conclusion that the statute adequately protects the physician-patient relationship.
Reversed and remanded for further proceedings consistent with this opinion. We do not retain jurisdiction.
J. H. Gillis, J., concurred.
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Allen, P.J.
Plaintiff, Charlotte Rosenberg, is the widow of Jack Rosenberg and the personal representative of his estate. At the time of his death on July 7, 1977, Jack Rosenberg was involved in numerous corporations, partnerships, and business ventures with, inter alia, his brothers Edward Rosenberg, A1 Rosenberg, and Lester Rosenberg, and their accountants and attorneys._
After Jack Rosenberg’s death, negotiations between plaintiff and defendants began to determine the extent of Jack Rosenberg’s estate, and the estate’s interests in the business enterprises named as defendants herein. The negotiations did not produce a mutually acceptable settlement, and plaintiff filed a 22-count complaint, individually and as executrix of the estate, in the Oakland County Circuit Court on August 20, 1980, alleging, inter alia, breach of contracts, breach of fiduciary duties, causes of action for dissolution, and intentional infliction of emotional distress. On September 17, 1981, plaintiff filed her second amended complaint, incorporating her first complaint by reference, and adding an additional nine counts relating to the Mt. Pleasant Shopping Center, a Michigan partnership of which Jack Rosenberg was a partner. After amendments, plaintiff’s complaint totaled 31 counts, consisting of 367 paragraphs, in accordance with GCR 1963, 113.3. Mercifully, however, the instant appeal involves only counts 21 through 31.
Defendants thereafter filed two motions for partial summary judgment pursuant to GCR 1963, 117.2, subds (1) and (3), seeking to have counts 21 through 31 stricken from the complaint. Count 21 alleged that Edward Rosenberg intentionally and maliciously engaged in a course of extreme and outrageous conduct to inflict severe emotional distress on plaintiff for the purpose of forcing her to sell her respective interests in the Mt. Pleasant partnership and her common stock in Friendship Materials, Friendship Plaster, Lakeland, Dealer Sales, and MECA Associates for amounts less than the purchase price required in accordance with the Mt. Pleasant partnership agreement and other named business agreements. In support of said allegations, plaintiff set forth instances (a) through (z) of specific misconduct on the part of defendant Edward Rosenberg towards plaintiff.
Count 22 alleged that defendants Edward Rosenberg, A1 Rosenberg, Lester Rosenberg, Robert Boesky (Edward Rosenberg’s son-in-law), Leon Schurgin, and Howard Rosenberg (Edward Rosenberg’s son, individually and as partners in the law offices of Schurgin and Rosenberg, did wilfully conspire to intentionally inflict emotional distress on plaintiff so as to force plaintiff to sell her interest in the Mt. Pleasant partnership and her common stock in Friendship Materials, Friendship Plaster, Lake-land, Dealer Sales, and MECA Associates for less than the purchase price as prescribed in the various partnership and business agreements. In support of this allegation, plaintiff set forth specific instances (a) through (z) of misconduct of said named defendants.
Counts 23 through 31 alleged that defendants Edward Rosenberg and his son-in-law, Richard Agree, as partners in the Mt. Pleasant Shopping Center, did breach certain contracts and fiduciary duties, and failed to comply with the Mt. Pleasant Shopping Center partnership agreement. Specifically, plaintiff’s complaint alleged that, after Jack Rosenberg’s death, Edward Rosenberg and Richard Agree acted in violation of critical terms of the partnership agreement by failing to follow the procedures for buying out a deceased partner’s share. Further, plaintiff’s complaint alleged that defendants violated their fiduciary duties by misappropriating partnership funds to make unapproved investments, the profits from which were never allocated to the deceased partner’s share. Plaintiff requested the court to declare defendants to be constructive trustees for the misappropriated partnership funds, any resulting profits, and to require a full accounting of the fund and profits.
Following a hearing held on February 16, 1983, the trial court granted summary judgment on defendants’ motions. On April 6, 1983, an order was entered by the trial court dismissing counts 23 through 31 (Mt. Pleasant Shopping Center partnership agreement). Plaintiff appealed as of right from this order in Docket No. 70976. On May 31, 1983, the trial court entered an order dismissing counts 21 and 22 (intentional infliction of emotional damage). Plaintiff appealed as of right from this order in Docket No. 72067. The two appeals were consolidated by order of this Court on July 1, 1983.
Defendants’ motion for summary judgment, seeking to have counts 21 and 22 dismissed, was brought pursuant to GCR 1963, 117.2, subds (1) and (3). The trial court granted the motion explaining its reasons for so doing as follows:
"I have read and re-read the two counts in question. And, as Mr. Trogan said, there’s two sides to every question. But, when I read counts 21 and 22 I’m only reading the plaintiff’s side.
"I think that those two counts, 21 and 22, claims of intentional infliction of mental distress, do not in my judgment, present the type of gross or outrageous or shocking conduct required under the law of Michigan, if proved, even if proved to the satisfaction of the fact-finder, the court or the jury, to support such a claim. I think rather they do present the taking of opposite positions on the legal relationship and the effect thereof that resulted by the unfortunate demise of the plaintiff’s husband.
"I think summary judgment of dismissal should be, and will be granted, with regard to counts 21 and 22.”
Because it is unclear whether the court based its ruling on GCR 1963, 117.2, subds (1) or (3), an analysis of the court’s ruling under both subsections is necessary. We shall do so, first as to count 21 and then as to count 22.
Count 21 — Defendant Edward Rosenberg
Before determining whether Edward Rosenberg’s conduct (a) as a matter of law did not, or (b) as a matter of fact could not, constitute the offense of intentional infliction of emotional distress, it is necessary to identify the offense itself. This Court has held that intentional infliction of emotional distress is a separate cause of action which is not necessarily parasitic to another cause of action as an aggravating element of damages. Holmes v Allstate Ins Co, 119 Mich App 710, 714; 326 NW2d 616 (1982); Ross v Burns, 612 F2d 271 (CA 6, 1980). We have explicitly adopted the definition found in the Restatement Torts, 2d, § 46, pp 71-72, which provides:
" '(1) One who by extreme and outrageous conduct intentionally or recklessly causes severe emotional distress to another is subject to liability for such emotional distress, and if bodily harm to the other results from it, for such bodily harm. * * *’
"See Ross v Burns, supra, p 273; Warren v June’s Mobile Home Village & Sales, Inc, 66 Mich App 386, 390; 239 NW2d 380 (1976); Frishett v State Farm Mutual Automobile Ins Co, 3 Mich App 688, 692; 143 NW2d 612 (1966), lv den 378 Mich 733 (1966).
"As explained in the Restatement, § 46, comment d, p 73:
" 'It has not been enough that defendant has acted with an intent which is tortious or even criminal, or that he has intended to inflict emotional distress, or even that his conduct has been characterized by "malice,” or a degree of aggravation which would entitle the plaintiff to punitive damages for another tort. Liability has been found only where the conduct has been so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community. Generally, the case is one in which the recitation of the facts to an average member of the community would arouse his resentment against the actor, and lead him to exclaim, "Outrageous!”
" 'The liability clearly does not extend to mere insults, indignities, threats, annoyances, petty oppressions, or other trivialities.’ See Warren, supra, pp 390-391.” 119 Mich App 714-715.
Under the above settled definition, it is clear that the conduct in question must be extreme and outrageous. Thus, under GCR 1963, 117.2(1) the critical issue is whether Edward Rosenberg’s conduct is extreme and outrageous, or whether, as defendants contend, his actions merely rose to the level of insult, indignity, threat, and annoyance. A motion based on subsection (1) challenges the legal sufficiency of the claim and is to be considered by an examination of the pleadings alone. In so doing the reviewing court must take plaintiff’s factual allegations as true, along with those inferences and conclusions that may be fairly drawn therefrom, and determine whether defendant’s conduct must, as a matter of law, be classified not extreme and outrageous so as to make plaintiff’s claim unenforceable.
In making this assessment under GCR 1963, 117.2(1), it is essential to look to the context in which the alleged offensive conduct occurred, for what may be extreme and outrageous under one set of circumstances may be justifiable under different circumstances.
"It is essential in making this assessment to look to the context in which the remarks were made. Although the Restatement acknowledges that the law in this area is in a stage of development, it points toward a contextual approach. For example, the extreme and outrageous character of the conduct may arise from the position of the actor, his relation to the distressed party, or from his knowledge of peculiar susceptibilities of the distressed party. Moreover, where the actor does no more than insist upon his own legal rights, liability will not be imposed. 1 Restatement Torts, 2d, §46, comments e-g, pp 74-76.” Ledsinger v Burmeister, 114 Mich App 12, 19; 318 NW2d 558 (1982). (Footnote omitted.)
Plaintiff’s complaint, in ¶¶ 179 and 180, describes more than 26 instances where defendant Edward Rosenberg exerted his position over the recently widowed Charlotte Rosenberg to browbeat her into submission. Edward Rosenberg was not only the brother of Charlotte Rosenberg’s deceased husband, he also had complete control of the records, books, and business affairs in which Jack Rosenberg played a part. Additionally, plaintiff was dependent upon defendant for information relating to decedent’s estate, and for her own income. If plaintiff is able to demonstrate the allegations made in her complaint, the question of whether the allegations are sufficiently outrageous to constitute the tort of intentional infliction of emotional distress should be left to the trier of fact. Therefore, under the above criteria, plaintiff’s claim was not so clearly unenforceable as a matter of law as to warrant dismissal under 117.2(1).
An easier question is presented when we look to determine whether summary judgment was properly granted under GCR 1963, 117.2(3). In order to dismiss under 117.2(3), it was necessary for the trial court to have decided either (1) the acts complained of were not sufficiently "outrageous” or (2) that defendant did not act with the intent to cause severe emotional distress. As these are both questions of material fact, the court improperly granted partial summary judgment. Whether defendant’s acts were sufficiently outrageous depends upon the context in which the acts were committed. This issue was discussed above. Regarding defendant’s intent, summary judgment is not appropriate in cases involving intent, credibility, or state of mind. Tumbarella v Kroger Co, 85 Mich App 482, 492; 271 NW2d 284 (1978).
When summary judgment is claimed for lack of factual merit, the court must be careful not to substitute a summary hearing for a trial. The trial may be avoided only if the record shows that an essential element of proof of the claim cannot be supplied. The court must be satisfied that it is impossible for the claim to be supported at trial because of some deficiency which cannot be overcome. Rizzo v Kretschmer, 389 Mich 363, 371; 207 NW2d 316 (1973). The court should be liberal in finding that a genuine issue exists, and must give the benefit of any reasonable doubt to the opposing party. Rizzo, supra; Northern Plumbing & Heating, Inc v Henderson Brothers, Inc, 83 Mich App 84; 268 NW2d 296 (1978).
Having decided that plaintiffs claim against Edward Rosenberg was not so clearly unenforceable either as a matter of law or of fact as to warrant dismissal, the trial court’s order of summary judgment is reversed and plaintiff’s count 21 is reinstated.
Count 22 — Edward Rosenberg, Al Rosenberg, Lester Rosenberg, Robert Boesky, Leon ScHURGIN, AND HOWARD ROSENBERG, INDIVIDUALLY AND AS PARTNERS IN SCHURGIN AND ROSENBERG
Count 22 alleges that the above-named defen dants conspired together to intentionally inflict emotional and mental distress upon plaintiff. Are the allegations sufficient as a matter of law under GCR 1963,H7.20)? We think not.
A conspiracy is a combination of two or more persons, by some concerted action, to accomplish an unlawful purpose, or to accomplish a lawful purpose by criminal or unlawful means. Fenestra, Inc v Gulf American Land Corp, 377 Mich 565, 593; 141 NW2d 36 (1966); Bloss v Paris Twp, 10 Mich App 497, 502; 159 NW2d 867 (1968). All those who, in pursuance of a common plan to commit a tortious act, actively take part in it and further it by cooperation or request, or who lend aid or encouragement to the wrongdoer, or who ratify and adopt the acts done for their benefit, are equally liable with him. Prosser, Torts (4th ed), § 46, p 292.
It is essential that each particular defendant who is to be charged with responsibility shall be proceeding tortiously, which is to say with intent to commit the tort or with negligence. One who innocently does an act which furthers the tortious purpose of another is not acting in concert with him. Prosser, supra.
Under count 22 of plaintiff’s complaint, only defendant Edward Rosenberg can be said to have acted with the necessary intent to inflict severe mental and emotional distress. But he has been so charged under count 21. The remaining defendants’ conduct, however, were privileged. Their acts were legally performed, and no one act could be termed outrageous. It is the totality of the acts and the context in which they were performed which warrant reinstating count 21 against Edward Rosenberg. There is no allegation, however, that the remaining defendants acted with a knowledge of all the other acts complained of, or that each defendant acted with intent of furthering Edward Rosenberg’s tortious purposes. Further, the other defendants were not in a position of authority or power to affect plaintiff’s affairs, nor were any of the other defendants in a direct relationship with plaintiff. Although plaintiff’s complaint indicates that each defendant acted on behalf of Edward Rosenberg, a legal act, innocently performed, which furthers the tortious purpose of another is not action in concert with him. Prosser, supra. Based on the foregoing, we conclude that the trial court did not err in granting summary judgment under GCR 1963, 117.2(1) as to count 22.
Similarly, we conclude that the trial court did not err in striking count 22 under 117.2(3). Unlike the situation in count 21 as to Edward Rosenberg, the "totality of the acts” analysis is not controlling as to the remaining defendants. There is no indication that any of the remaining defendants acted with a knowledge of the totality of the acts complained of or intended to further a tortious purpose. None were in as close a relationship as Edward Rosenberg or in a position of authority with plaintiff or in control of plaintiff’s affairs. Further, each individual act alleged was not sufficiently outrageous in itself to constitute intentional infliction of emotional distress. Therefore, count 22 was properly dismissed pursuant to 117.2(3).
Counts 23-31 — Mt. Pleasant Shopping Center Partnership Agreement
Counts 23 through 31 allege that Edward Rosenberg and his son-in-law, Richard Agree, as partners with plaintiffs deceased husband, Jack Rosenberg, in the Mt. Pleasant Shopping Center, failed to abide by the terms of the partnership agreement prescribing what steps should be followed if the surviving partners wished to buy the interest of a deceased partner. The procedure to be followed for purchasing a deceased partner’s share is found in ¶ 13 of the partnership agreement. It provides in relevant part:
"13. Death of a Partner.
"(a) In the event of the death of a member of this partnership, the surviving Partners may, within one hundred twenty (120) days after the death of the Partner, purchase the deceased Partner’s interest in this partnership, upon payment to the deceased Partner’s personal representatives of an amount which shall be the sum of:
"(i) Credits to the decedent on the partnership’s books for loans made to the partnership;
"(ii) Undistributed profits to the date of death;
"(iii) The value of the deceased Partner’s interest in the partnership and its assets, including his capital account as of the date of death, if any, but exclusive of the amounts of preceding items (i) and (ii) * * *
"Interest shall accrue on such amount at seven (7%) percent per annum from the date of death and shall be paid quarter-annually and without regard to the earnings of the partnership. Items (i) and (ii) shall be determined by the certified public accountants retained by the partnership by reference to the books of account.
"(b) If the parties to the sale cannot agree upon the value of item (iii) within fifteen (15) days after the determination of the preceding items (i) and (ii) by the said certified public accountants, then the value thereof shall be determined by appraisal in the following manner:
"(i) Within seven (7) days after the expiration of the aforementioned fifteen (15) day period, one appraiser each shall be selected by the surviving Partners and by the representative of the deceased Partner, and written notice thereof shall be given to the other party, and said two appraisers’ determination as to value shall be conclusive and binding.
"(ii) In the event either party fails or refuses to select an appraiser and give notice thereof within the seven (7) day period mentioned in the preceding subparagraph (i), the determination of value made by the appraiser selected by the other party shall be conclusive and binding upon both parties.
"(iii) If two appraisers are selected in the foregoing manner but cannot agree on a determination of value within fifteen (15) days after the expiration of the seven (7) day period mentioned in subparagraph (i), then said two appraisers shall select a third appraiser, whose determination, of value shall be conclusive and binding upon both parties.
"(iv) If the said two appraisers cannot agree upon a third appraiser within ten (10) days after the expiration of the fifteen (15) day period mentioned in preceding subparagraph (iii), then such third appraiser shall be appointed by the Presiding Judge of Wayne County, Michigan, upon petition of either party.
"(v) The cost of such appraisal shall be borne one-half (1/2) by each party.
"(c) If the surviving Partners have not exercised their option to buy within the time set forth in subparagraph (a), then the deceased partner’s interest in this partnership may be sold to any third party. Any purchaser must agree to continue this partnership with the surviving Partners upon the same terms and conditions as herein contained.
"(d) The purchase price determined hereunder shall be payable in no more than ten (10) equal annual installments, the first to be made within thirty (30) days after the determination of the purchase price. The purchase price may be prepaid at any. time without penalty.” (Emphasis supplied.)
It is not disputed that Edward Rosenberg and Richard Agree notified plaintiff of their intent to purchase Jack Rosenberg’s interest in the shopping center. What is disputed is whether mere notice of intent to purchase followed by inability of the parties to agree upon the purchase price (as provided in paragraph 13[bj) would automatically terminate plaintiff’s interest leaving nothing more to be done except to have the certified public accountants determine the value by following the procedure set forth in subparagraphs (b) (i through v). On appeal the defendants argue — and the trial court agreed in ruling on the motion — that notice to purchase terminated plaintiff’s interest in the partnership. The trial court ruled:
"The court does conclude, and I guess this is in the nature of a partial summary judgment, I conclude at this time that an election to purchase the deceased partner’s share was made by the surviving partners and that no operation of law or equity or buy-out agreement canceled that election. This suit only remains to determine if indeed a price was struck at $106,000.00 or was not; if not, then what price should be paid. Of course, the agreement for the appraisers will control what that price is and it’s not limited to Mt. Pleasant or anything. It’s a 25 percent share of the partnership at the time that Jack died in 1977.
"Thank you gentlemen.”
Plaintiff argues that issues of fact exist as to what the partnership agreement provided and whether defendants in fact followed the terms of the agreement. We agree with plaintiff. On its face, the agreement appears to require payment within 120 days in order to purchase the decedent’s share. Notice alone, therefore, would be insufficient to terminate plaintiffs interest, and both parties agreed that payment was not made. Subparagraph 13(b) of the agreement states what steps are to be followed in determining the value of decedent’s share. It is clearly possible to complete the necessary appraisal procedures and determine a binding price within the 120-day period specified in 13(a). Both parties agreed, however, that neither party attempted to utilize the appraisal procedures.
Further, subparagraph 13(c) states:
"(c) If the surviving Partners have not exercised their option to buy within the time set forth in subparagraph (a), then the deceased Partner’s interest in this partnership may be sold to any third party. Any purchaser must agree to continue this partnership with the surviving Partners upon the same terms and conditions as herein contained.” (Emphasis supplied.)
The agreement is unclear as to what constitutes "exercising] their option to buy within the time set forth in subparagraph (a)”. Defendants argue that mere notice to plaintiff of their intent to purchase is sufficient. Plaintiff claims that the option is only exercised upon payment to plaintiff within 120 days of the deceased partner’s death of the amount as determined under subparagraph (b). Subparagraph (c) clearly states that, if the option to buy is not exercised within 120 days, plaintiffs interest continues, and plaintiff may then sell that interest to a third party. It should be noted that plaintiff could not sell decedent’s interest under subsection (c) if that interest terminated upon mere notice. Defendants did not pay plaintiff within 120 days, nor did defendants attempt to utilize the appraisal procedures. The result being that, according to defendants, plaintiff has neither the money, nor an interest in the partnership, and defendants can indefinitely continue to refuse to pay since no penalty accrues for late payment.
Further ambiguities exist in subpáragraph 13(d), which states:
"(d) The purchase price determined hereunder shall be payable in no more than ten (10) equal annual installments, the first to be made within thirty (30) days after the determination of the purchase price. The purchase price may be prepaid at any time without penalty.”
If 13(a) requires payment within 120 days, 13(d) indicates that full payment within 120 days is not required and defendants can pay the purchase price in installments.
The ambiguities in the partnership agreement and plaintiff’s and defendants’ conflicting interpretations need not, and should not, be resolved by this Court. More importantly, they should not have been resolved by the trial court. If plaintiff’s interpretation is correct, counts 23 through 31 of her complaint state a valid cause of action and should not have been stricken. The conflicting interpretations of the agreement are over material facts in dispute, going to the heart of the agreement.
The trial court is required to be liberal in finding that a genuine issue exists, and must give the benefit of any reasonable doubt to plaintiff. Rizzo, supra. This the trial court failed to do. Accordingly, we reverse and reinstate counts 23 through 31 in plaintiffs complaint.
The trial court’s grant of summary judgment is affirmed as to count 22, and is reversed as to count 21, and counts 23 through 31. Counts 21 and 23 through 31 are reinstated. No costs, neither party having prevailed in full.
While defendants’ motion was brought under subsections 1 and 3, it is clear that defendants relied solely on subsection 3. Thus, unlike the situation as to counts 21 and 22, it is unnecessary to determine whether summary judgment under subsection 1 would have been proper.
Defendants made a check payable to plaintiff within the 120-day period but did not tender the check. Further, a question is raised as to whether funds in the account on which the check was drawn were sufficient. Defendants contend the account was sufficient; plaintiff claims it was not. | [
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R. M. Maher, J.
On March 16, 1981, plaintiffs were awarded $40,000 in their wrongful death action against defendant. On February 15, 1982, the trial court entered an order holding garnishee-defendant not liable. Plaintiffs appeal by leave granted.
On October 14, 1973, plaintiffs’ decedents died in a car accident with defendant. At that time, garnishee-defendant insured defendant’s car. Just less than three years later, plaintiffs sued. Although garnishee-defendant provided counsel and was willing to defend the suit, defendant allegedly did not cooperate. Not only did he fail to appear at his deposition, but, among other things, he failed to appear for trial. Garnishee-defendant’s insurance policy with defendant contained the following clause as a condition precedent to its own liability:
"The insured shall cooperate with the company and, upon the company’s request, assist in making settlements, in the conduct of suits * * * and the insured shall attend hearings and trials and assist in securing and giving evidence and obtaining the attendance of witnesses.”
For purposes of this appeal, we will assume that defendant violated this cooperation clause in his contract.
Garnishee-defendant argues, and the trial court ruled, that, provided garnishee-defendant was actually prejudiced due to defendant’s noncooperation, it is not obligated to pay plaintiffs under its policy. This principle was followed in Allen v Cheatum, 351 Mich 585; 88 NW2d 306 (1958). However, the accident in Allen occurred in 1951. In 1972 Michigan enacted 1972 PA 294 making automobile insurance mandatory. MCL 500.3101; MSA 24.13101. The act applies to accidents occurring on or after October 1, 1973. MCL 500.3179; MSA 24.13179. Therefore, Allen does not apply in this case:
"When the proceeds of a policy which a claimant seeks to reach come from a noncompulsory insurance policy, any defense available to the insurer against the insured is also available against the claimant because the claimant has no greater rights than the insured. Thus, the general rule is that unless a policy can be construed as creating an independent right of action for the claimant, his rights to recover are subject to such defenses as the insurer may have against the insured.
"An entirely different situation arises, however, when states enact statutes which require liability insurance or prescribe their format. Liability policies issued in compliance with such statutes have as their primary purpose the protection of the public. One recent case noted that the primary purpose of compulsory automobile insurance is to provide security for payment of damages to travelers on public highways and not to protect the owner or driver from financial loss. The purpose of the financial security laws is the protection of passengers and members of the public who may be injured by the negligence of the motor vehicle operators. The prevailing view is that policies issued in compliance with such acts are for the benefit of the traveling public and insurers will not be relieved by the failure of the insured to cooperate. Another court has held that under a financial responsibility act the injured party’s right of recovery is not derived from the insured but is created by statute and becomes absolute upon the occurrence of an injury which is covered by the policy. In cases involving required insurance, the insurer may not assert noncooperation as a defense to an action or garnishment proceedings brought by an injured member of the public within the class sought to be protected by the applicable fínancial responsibility statute.” 2 Long, Law of Liability Insurance, § 14.19, pp 14-51 — 14-52. (Footnotes omitted; emphasis added.)
The same principle was stated in Anno: Failure to give notice, or other lack of cooperation by insured, as defense to action against compulsory liability insurer by injured member of the public, 31 ALR2d 645, 647:
"[M]ost of the cases * * * recognize that failure to give notice of an accident, or other lack of co-operation on the part of the insured, does not constitute a defense to an action by an injured member of the public to recover from the insurer, where the policy or bond was procured in compliance with a general compulsory liability or financial responsibility insurance statute, such statutes being for the benefit of members of the public, and not of the insured.”
Among the cases that have taken this position are Huse v Fulton, 678 F2d 132 (CA 11, 1982); Young v Allstate Ins Co, 248 Ga 350; 282 SE2d 115 (1981); National Indemnity Co v Simmons, 230 Md 234; 186 A2d 595 (1962); Rowley v Diaryland Ins Co, Inc, 44 Or App 333; 605 P2d 1356 (1980); Tibbs v Johnson, 30 Wash App 107; 632 P2d 904 (1981). See also cases cited in Tibbs.
In Michigan, the present no-fault automobile insurance laws were passed to provide compensation for people injured in automobile accidents on Michigan highways. Belcher v Aetna Casualty & Surety Co, 409 Mich 231, 240; 293 NW2d 594 (1980); Shavers v Attorney General, 402 Mich 554; 267 NW2d 72 (1978); Dolson v Secretary of State, 83 Mich App 596, 599; 269 NW2d 239 (1978). In Shavers the Supreme Court explained that:
"The Michigan No-Fault Insurance Act, which became law on October 1, 1973, was offered as an innovative social and legal response to the long payment delays, inequitable payment structure, and high legal costs inherent in the tort (or 'fault’) liability system. The goal of the no-fault insurance system was to provide victims of motor vehicle accidents assured, adequate, and prompt reparation for certain economic losses. The Legislature believed this goal could be most effectively achieved through a system of compulsory insurance, whereby every Michigan motorist would be required to purchase no-fault insurance or be unable to operate a motor vehicle legally in this state. Under this system, victims of motor vehicle accidents would receive insurance benefits for their injuries as a substitute for their common-law remedy in tort.” 402 Mich 578-579 (emphasis added).
In determining that the no-fault act , is constitutional, the Supreme Court stated:
"This principle, that those who use the public highways may properly be required to provide security for loss that may predictably be suffered by others on account of such use, can properly be extended to require security for the loss that the state itself might otherwise incur on account of such use.” 402 Mich 596-597.
Therefore, the trial court erred in ruling that garnishee-defendant has a valid defense to plaintiffs’ garnishment action. Where the insurance is mandatory, the insured’s noncooperation is not a defense to a third-party garnishment action.
In its opinion, the trial court stated:
"Insurance coverage is not a matter of strict liability where the only hindrance in presenting valid defenses to a claim is the intransigence of the insured. To so hold would be to render the issuance of automobile insurance coverage into a game of Russian roulette, totally dependent upon the whims of an insured. It is not at all unlikely that insurance companies would refuse to issue insurance under such circumstances, inasmuch as insurers are legitimately concerned with a profit motive. See Shavers v Attorney General, 402 Mich 554, 601; 267 NW2d 72 (1978). The spectre that such a consequence would totally eviscerate the no-fault system and the rights of its intended beneficiaries compels a conclusion that it was not the intent of the Legislature to abolish noncooperation clauses in insurance contracts.
"Moreover, there is the problem of enforcement of discovery orders. At present, the noncooperation clause is a legitimate lever of power by which the insurer may obtain the cooperation of a reluctant insured. If the insured refuses to cooperate, he runs the risk of losing his coverage under the policy because of breach of contract.
"An abolition of the noncooperation clause would force courts to have to attempt to compel insureds to cooperate. This would enormously aggravate the already crowded dockets of the courts; would seriously jeopardize the ethics of defense attorneys by forcing them to adopt two opposing positions between the insured and the insurer; and would, in short, create unimaginable legal chaos. Again, the court cannot conceive that such a result was the intent of the Legislature in enacting the no-fault act.”
We disagree with this assessment. Today’s decision does not invalidate noncooperation clauses. Not only is garnishee-defendant not liable to defendant under the contract, but it still has the right to sue defendant for breach of contract. This right provides the necessary incentive for the insured to comply with the issuance contract. Yet, our decision does so without jeopardizing the victim’s right to recovery. Where insurance coverage is mandatory, the risk of nonrecovery should be placed on the insurance company and not on the victim.
Reversed and remanded for entry of judgment consistent with this opinion.
Although the accident in Burgess v American Fidelity Fire Ins Co, 107 Mich App 625; 310 NW2d 23 (1981) occurred after 1973, the case is not on point. The issue was not whether or not the insurer has a defense to a garnishment action because the insured failed to cooperate as required by the contract. Instead, it dealt with whether or not the defendant insurance company was sufficiently prejudiced. Apparently, the plaintiff did not argue the issue argued in the present case. | [
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Per Curiam.
Plaintiff initiated a wrongful death action approximately one year after the death of her husband. Defendants successfully moved for accelerated judgment purusant to GCR 1963, 116.1(3) and 116.1(5) on the grounds that plaintiff lacked legal capacity to bring suit in 1981 and that by the time she acquired legal capacity her claim was barred by the statute of limitations. Plaintiff appeals as of right.
Plaintiff’s husband was killed in an automobile accident. She filed her wrongful death action as the "duly appointed personal representative of the estate.” However, plaintiff was not the personal representative at that time as probate proceedings had not been commenced. She was subsequently appointed in May of 1984. The probate judge refused to give retroactive effect to her appointment. Plaintiff is now seeking to have her appointment as a personal representative relate back so as to validate the filing of her wrongful death action.
Michigan law requires that a wrongful death action shall be brought by the personal representative of the deceased. MCL 600.2922(2); MSA 27A.2922(2). The period of limitations for wrongful death claims is three years. MCL 600.5805(8); MSA 27A.5805(8). Plaintiff was not appointed as the personal representative until one year after the period of limitations expired. If plaintiff’s 1984 appointment could relate back to when she filed the suit in 1981, plaintiff’s suit would not be barred by the statute of limitations.
This Court has addressed the relation back of an appointment of a personal representative in Doan v Chesapeake & Ohio R Co, 18 Mich App 271; 171 NW2d 27 (1969); Castle v Lockwood-MacDonald Hospital, 40 Mich App 597; 199 NW2d 252 (1972); and Fisher v Volkswagenwerk AG, 115 Mich App 781; 321 NW2d 814 (1982), lv den 418 Mich 874 (1984). A federal court, which assumed jurisdiction based on diversity, discussed this line of cases in Wieczorek v Volkswagenwerk AG, 731 F2d 309 (CA 6, 1984). After a careful and thorough review, we reverse the circuit court and permit the relation back of plaintiff’s appointment.
The policy behind the doctrine of relation back is to avoid allowing legal technicalities to defeat valid claims. Castle, supra, p 604. Apparently, in the instant case, plaintiff had been informed by the attorney representing her at that time that she was automatically the personal representative because she was the spouse of the decedent. Thus, when the suit was filed in 1981 she stated that she was the personal representative. This statement was a misrepresentation. In Fisher, supra, the majority did not permit relation back when the plaintiffs misrepresented their capacity to sue.
However, it is not clear what the Fisher court meant by misrepresenting capacity to sue. That phrase is subject to several interpretations. [Wieczorek, supra, p 311.]
We adopt the conclusion stated in Wieczorek, supra, p 312:
We therefore conclude that, under Michigan law, an appointment as administrator after the statute of limitations has expired relates back to the filing of a wrongful death suit if at the time the suit was filed the plaintiff reasonably believed he had authority to bring suit as administrator.
Therefore a misrepresentation made in good faith will not bar "relation back.” Plaintiffs attorney’s innocent or negligent misrepresentation of her status when the complaint was filed was not done in bad faith. We find that plaintiffs belief in her capacity to sue was reasonable.
Accordingly, the trial court’s grant of accelerated judgment was improper and is therefore reversed. Plaintiffs appointment "relates back” to the date of original filing and the suit is not barred by the statute of limitations.
Reversed. Costs to appellant. | [
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