Bratton's Estate v. Trojan Boat Co.

• Decision Date: 01 October 1969
• Docket Number: No. 1,Docket No. 3530,1
• Citation: 19 Mich.App. 236,172 N.W.2d 457
• Parties: ESTATE of George BRATTON by Ruth Bratton, Special Administratrix, Ruth Bratton, Individually and Carolyn Senay, Individually, Plaintiffs-Appellants, v. TROJAN BOAT COMPANY, a foreign corporation, Defendant-Appellee
• Court: Court of Appeal of Michigan — District of US

Page 457

172 N.W.2d 457

19 Mich.App. 236

ESTATE of George BRATTON by Ruth Bratton, Special Administratrix, Ruth Bratton, Individually and Carolyn Senay, Individually, Plaintiffs-Appellants, v. TROJAN BOAT COMPANY, a foreign corporation, Defendant-Appellee.

Docket No. 3530.

Court of Appeals of Michigan, Division No. 1.

Oct. 1, 1969.

Rehearing Denied Nov. 24, 1969.

Released for Publication Dec. 17, 1969.

Raymond L. Krell, Schiff, Krell & Gordon, Detroit, for plaintiffs-appellants.

Leonard B. Schwartz, Detroit, for defendant-appellee.

Before HOLBROOK, P.J., and McGREGOR and BRONSON, JJ.

HOLBROOK, Presiding Judge.

On or about July 22, 1962, plaintiffs were injured when a boat manufactured and sold by defendant foreign corporation to a third person, not a party to this suit, exploded in Lake St. Clair, when about 50 feet from Jefferson Beach Marina, Wayne county, Michigan.

Plaintiffs commenced suit against defendant foreign corporation in Wayne county circuit court on July 20, 1965, and on the same day left with the Wayne county sheriff's office original of the summons together with copies of the complaint and summons, for immediate service upon defendant. Plaintiffs' counsel requested the sheriff to send copies of the summons and complaint to the defendant corporation in Lancaster, Pennsylvania, by registered mail. On July 22, 1966, the sheriff sent the summons and the complaint by registered mail to the defendant as requested. The return receipt indicates that it was received by defendant on July 27, 1965. On August 13, 1965, defendant filed a motion to quash the service because defendant is a foreign corporation, not registered in Michigan and does not perform a continuous and systematic operation of its business within this State and therefore the court lacks jurisdiction of the person or the property. On August 16, 1965, counsel for plaintiffs sent a copy of the summons and the complaint to the sheriff in Lancaster county, Pennsylvania, for personal service on the defendant which was duly served on Mr. Hull, vice president, on August 24, 1965.

On September 2, 1965, defendant filed an amended motion to quash service of summons and for accelerated judgment which reiterated the reasons stated in the first motion and also asserted as a ground for accelerated judgment the running of the statute of limitations. It was claimed that proper service was not accomplished within the 3 year period; that service by registered mail is not sufficient under the court rules; and personal service by the sheriff of Lancaster county, Pennsylvania, on defendant, August 24, 1965, was too late.

On September 15, 1965, the affidavit of Harper H. Hull, vice president of the defendant was filed in support of the motion to quash service and for accelerated judgment. ¹ Plaintiffs asserted in their answer to the motion to quash and for accelerated judgment that defendant, through its sales agents, distributors and dealers carries on a systematic operation of its business within the State of Michigan; that the defendant had the necessary minimum contacts in Michigan to bring it within the jurisdiction of the Wayne county circuit court. Plaintiffs also denied that the statute of limitations was applicable in the case.

The trial judge after hearing the motions, granted an accelerated judgment in favor of the defendant as to the adult plaintiffs, ruling in effect that the defendant was subject to the jurisdiction of the court under the Long Arm statute, ² but that the statute of limitations had run before effective service had been obtained. We conclude that this is a proper interpretation of the court's ruling for it is stated in the opinion of the court in part as follows:

'In the actions by the minors, the statute of limitations does not run, because they are minors, and they can proceed. However, the defendant must file his answer to the bill of complaint with respect to those minor plaintiffs within 20 days from the date of the entry of the order.'

In accordance with the ruling of the court, the defendant did file its answer to the complaint of the minor plaintiffs.

The adult plaintiffs appeal and raise 3 questions for review which we restate and deal with in order.

1. Did defendant foreign corporation have the minimum contacts in the State of Michigan necessary to be subject to the jurisdiction of its courts by selling 7.9% Of its products within the State and by maintaining a sales agent and three distributors therein?

The trial judge ruled that defendant was subject to the jurisdiction of the Wayne county circuit court under M.C.L.A. § 600.715 (Stat.Ann.1962 Rev. § 27A.715), and cited the case of Chovan v. E. I. DuPont De Nemours & Company (E.D.Mich., 1963), 217 F.Supp. 808. We conclude that the court's ruling as to jurisdiction was proper under the facts in this case. Woods v. Edgewater Amusement Park (1969), 381 Mich. 559, 165 N.W.2d 12.

2. Prior to the enactment of the Revised Judicature Act, was defendant present and available for service of process in the State of Michigan pursuant to prior law so as to permit the running of the statute of limitations during the period from July 22, 1962, to January 1, 1963? ³

The statute of limitations effective at the time of the accident was C.L.1948, § 609.13 (Stat.Ann.1959 Cum.Supp. § 27.605) which provides in part as follows:

'All actions in any of the courts of this state shall be commenced within 6 years next after the causes of action shall accure, and not afterward, except as hereinafter specified: Provided, however, * * *

'2. Actions to recover damages for injuries to person or property shall be brought within 3 years from the time said actions accrue, and not afterwards.' (Emphasis supplied in Statutes Annotated)

C.L.1948, § 609.17 (Stat.Ann. § 27.609) provided:

'If at the time when any cause of action shall accrue against any person, he shall be out of the state, the action may be commenced within the time herein limited therefor, after such person shall come into this state; and if after any cause of action shall have accured, the person against whom it shall have accrued shall be absent from this state, any and all periods of absence in excess of 2 months at 1 time, shall not be taken as any part of the time limited for the commencement of the action.'

Plaintiffs claim that defendant foreign corporation was out of the State at the time the action accrued and therefore the period from July 22, 1962, to January 1, 1963, should not be considered as a part of the period in which the statute of limitations could run. Plaintiffs cite McLaughlin v. Aetna Life Insurance Co. (1922), 221 Mich. 479, 191 N.W. 224, as authority for the rule that a foreign corporation failing to maintain a registered agent in the State for service of process bars a foreign corporation from claiming the benefit of the statute of limitations.

"No presumption will be indulged that the corporation has been at all times amenable to process so as to enable it to take advantage of the domestic statute of limitations.'

'It is supported by our own cases. (citing cases) The burden was on defendant to show that it was domiciled in this state.' McLaughlin v. Aetna Life Insurance Co., Supra, pp. 484, 485, 191 N.W. p. 226. (Emphasis in McLaughlin)

C.L.1948, § 609.17 (Stat.Ann. § 27.609) has been repealed and in its place, P.A.1961, No. 236, § 5853 (M.C.L.A. § 600.5853 (Stat.Ann.1962 Rev. § 27A.5853)) was enacted and it provides as follows:

'If any person is outside of this state at the time any claim accrues against him the period of limitation shall only begin to run when he enters this state unless A means of service of process sufficient to vest the jurisdiction of a Michigan court over him was available to the plaintiff.' (Emphasis supplied)

In the committee notes appearing in 23 Stat.Ann.1962 Rev. it is stated on p. 124 as follows:

'Section (27A.5853) is based on C.L.1948, § 609.17 (Stat.Ann. § 27.609). However, the section allows the period of limitations to run in those cases where the defendant is subject to the jurisdiction of the Michigan court even though he is outside of the state at that time. Since this exception is based on the fact that the court could not acquire jurisdiction over an out-of-state defendant in most cases it seems most reasonable to allow the period of limitations to run in those cases where the court is able to acquire jurisdiction over the defendant.'

The defendant asserts that service could have been had by serving its sales representative who lived in Macomb county for the entire period in question or upon one of its distributors, separate corporations in the metropolitan Detroit area pursuant to C.L.1948, § 613.31 (Stat.Ann. § 27.761) which reads in part:

'In all cases where suit is brought against a foreign corporation, process may be served upon any officer or agent of such corporation within this state, and any person representing such corporation in any capacity, shall be deemed an agent within the meaning of this section.'

The basis of jurisdiction over a foreign corporation is not contained in this section of the statute. It merely sets a foundation for the manner in which this service may be effected if jurisdiction is acquired over the corporation. Ability to serve the sales agent or distributors of defendant's boats that may effect service on an agent may not be sufficient, for there was no showing that the necessary jurisdiction over the defendant would have been obtained thereby. We construe C.L.1948, § 609.17 (Stat.Ann. § 27.609) to mean the same as P.A.1961, No. 236, § 5853 (M.C.L.A. § 600.5853 (Stat.Ann.1962 Rev. § 27A.5853)). Further, defendant was absent from the State for the period, under McLaughlin v. Aetna Life Insurance Co., Supra.

The pleading of the statute of limitations by the defendant was an affirmative defense and the burden of proving it was upon the defendant for it asserted the affirmative of the issue. Defendant was...