Burg v. B & B Enterprises, Inc.

• Decision Date: 22 March 1966
• Docket Number: No. 291,No. 2,291,2
• Citation: Burg v. B & B Enterprises, Inc., 140 N.W.2d 788, 2 Mich.App. 496 (Mich. App. 1966)
• Parties: Saul BURG, Plaintiff-Appellee, v. B & B ENTERPRISES, INC., Defendant-Appellant. Cal
• Court: Court of Appeal of Michigan

Page 788

140 N.W.2d 788

2 Mich.App. 496

Saul BURG, Plaintiff-Appellee, v. B & B ENTERPRISES, INC., Defendant-Appellant.

Cal. No. 291.

Court of Appeals of Michigan, Division No. 2.

March 22, 1966.

Fred H. Keidan, Watson, Lott & Wunsch, Detroit, for appellant.

Stanley E. Wise, Schon & Wise, Detroit, for appellee.

Before McGREGOR, P. J., and T. G. KAVANAGH and FITZGERALD, JJ.

T. G. KAVANAGH, Judge.

This is an appeal from a summary judgment for plaintiff following the denial of a motion for leave to file an amended answer and counter complaint and a motion for leave to intervene.

The complaint alleged a loan of money to defendant and demand and refusal to repay. The answer was a simple denial.

After a considerable time--almost a year--during which a deposition was taken, a request for admission of facts and genuineness of documents was made and answered, and written interrogatories present and answered, the motion for summary judgment was made by plaintiff. At the hearing on such motion the defendant made the motion for leave to amend and a third party moved for leave to intervene.

The answer to plaintiff's interrogatories and the deposition of Jean Burg, a 50% stockholder in defendant corporation, was to the effect that plaintiff owed Jean Burg approximately $20,000 and that the payment by plaintiff to defendant corporation was in discharge of this obligation.

The petition for leave to intervene alleged facts establishing the same charge and constituted the basis for the defendant's proposed amended answer and cross complaint.

We will treat the court's ruling on the motion to intervene first.

The motion averred that the petitioner as a substantial (50%) shareholder in defendant corporation would be adversely affected by a judgment against the corporation, and that the petitioner personally had a claim against plaintiff which had questions of law and fact common to the main action.

Motions for leave to intervene are governed by GCR 1963, 209. The petinent part of which reads:

'.1 Intervention of Right. Anyone shall be permitted to intervene in an action

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(4) when the applicant is so situated as to be adversely affected by a distribution or other disposition of property which is in the custody or subject to the countrol or disposition of the court or officer thereof.

.2 Permissive Intervention. Upon timely application anyone may be permitted to intervene in an action

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* * * (2) when an applicant's claim or defense and the main action have a question of law or fact in common.

In all cases the court, in exercising its discretion, shall consider whether the intervention will unduly delay or prejudice the adjudication of the rights of the original parties.'

We believe the right to intervene contemplated in GCR 1963, 209.1(4) asserted by a stockholder in a suit against the corporation in which the stock is owned, must be established by a showing is owned, corporation is not adequately defending the stockholder's interest. This is necessary in order to show that he is 'so situated' as required. We fell this is in line with the rationale set forth in 18 C.J.S. Corporations § 560, p. 1276; City of Detroit v. Dean (1883), 106 U.S 537, 1 S.Ct. 560, 27 L.Ed. 300; and Stradley v. Chippewa Circuit Judge (1893), 96 Mich. 287, 55 N.W. 807.

Accordingly, it cannot be said that the petitioner could intervene as a matter of right.

However, the common question of law and fact alleged should be the basis for granting the motion for leave to intervene unless the court in his discretion determines that the intervention would unduly delay or prejudice the adjudication of the rights of the original parties.

In his opinion the court stated that, '* * * The third paragraph recites a legal conclusion that the main action has questions of law or fact in common.'

If this be a determination by the court that there is no issue of...