Coronet Development Co. v. F.S.W., Inc.

• Decision Date: 06 June 1967
• Docket Number: No. 13,13
• Citation: 150 N.W.2d 809,379 Mich. 302
• Parties: CORONET DEVELOPMENT COMPANY, a Michigan Corporation, Plaintiff-Appellant, Robert G. Elliott, Francis E. Webb, and Albert Boucher, Jr., Plaintiffs, v. F.S.W., INC., a Louisiana Corporation, Leon Godchaux, Paul Godchaux, Jr. and Mrs. Fred S. Weis, Defendants-Appellees, Ralph Banfield, Leon Godchaux and Paul Godchaux, Jr., as Executors of the Succession of Fred S. Weis, Defendants.
• Court: Michigan Supreme Court

Page 809

150 N.W.2d 809

379 Mich. 302

CORONET DEVELOPMENT COMPANY, a Michigan Corporation, Plaintiff-Appellant, Robert G. Elliott, Francis E. Webb, and Albert Boucher, Jr., Plaintiffs, v. F.S.W., INC., a Louisiana Corporation, Leon Godchaux, Paul

Godchaux, Jr. and Mrs. Fred S. Weis, Defendants-Appellees,

Ralph Banfield, Leon Godchaux and Paul Godchaux, Jr., as

Executors of the Succession of Fred S. Weis, Defendants.

No. 13.

Supreme Court of Michigan.

June 6, 1967.

MacLean, Seaman & Laing, Lansing, for plaintiff and appellant.

Dykema, Wheat, Spencer, Goodnow & Trigg, Detroit, for appellees Leon Godchaux and Paul Godchaux, Jr.; James H. Spencer, Detroit, of counsel.

Robert J. Kelly, Farmington, for appellee Mrs. Fred S. Weis.

Before the Entire Bench.

O'HARA, Justice.

Leave was granted in this case to review a Court of Appeals affirmation of a circuit court entry of summary judgment as to all defendants except Ralph Banfield. Plaintiffs is the appellant here.

The controversy arises out of claimed offers and alleged acceptances of offers to purchase realty in Livingston county, Michigan. All of the purported contractual commitments were oral and on their face were void under the statute of frauds. ¹ Appellant denies the statute controls.

Coronet Development Company is a Michigan corporation.

F.S.W., Inc. is a Louisiana corporation, apparently named for its incorporator F. S. Weis. Mrs. Fred Weis is his widow. By her husband's will she is the controlling stockholder in F.S.W., Inc. She is a resident of Louisiana. Paul Godchaux, Jr., and Leon Godchaux are individuals, corporate officers of Weis, Inc. and executors of the Succession ² of Mr. Weis. They are residents of Louisiana. Ralph Banfield is a resident of Livingston county, Michigan.

The long and short of the claims of the parties may be thus summarized. The organizers of Coronet learned of the defendant corporation's ownership of land in Livingston county which they deemed desirable for purchase for subdividing. Originally in person, and later by attorney, they offered $175,000 for the property. According to them the offer was orally accepted by the Godchaux acting for the corporation. No written acceptance was ever executed. Plaintiff claims that this was not done at the behest of defendants because of claimed federal tax advantage to them and that they were assured by defendants the agreement would be fully as binding as though written as required by statute. Plaintiff assigns this reason, as well as alleged part performance, to take the case out of the statute. After the claimed oral acceptance the plaintiffs contend that the Godchaux, acting now, not as corporate officers, but as fiduciaries of the deceased Mr. Weis' estate, advised them that the Civil District Court of the Parish of Orleans, Louisiana, in the succession proceedings would not authorize them to transfer the corporate stock. Neither could they execute a deed to the concerned property without such authorization. Coronet's attorneys went to New Orleans and appeared before the judge of the civil court to seek the requisite authority. Meanwhile, there had been another offer of $210,000 made for the property. This offer was cash. The $175,000 offer originally made was for a $55,000 down payment and the balance on terms. Plaintiff then increased its offer to $211,000 but with the same down payment. The court in New Orleans heard the parties, examined the Godchaux and elicited from them the answer that in their best judgment a cash offer of $210,000 was more advantageous to the estate than the $211,000 offer on terms. Plaintiff carefully and repeatedly made clear in the Louisiana court that it was making its new offer without, in any manner, waiving any rights which might have accured under the original oral offer and alleged acceptance. The Louisiana court authorized the sale for cash and it was consummated.

Plaintiff then instituted this suit against all the New Orleans residents under the 'longarm service' statute. ³ Service was obtained on them in Louisiana. It is conceded these defendants were never in the state of Michigan, and as to the corporation that it was not admitted to do business in this State. Its sole connection with this State was its ownership of the realty here involved, except for the claim that a 'tenant farmer' occupied part of the land. Defendant Banfield was personally served in Michigan. The circuit judge granted summary judgment as to all defendants except Banfield. As to him the motions were denied.

Count 1 of plaintiff's complaint seeks specific performance of the alleged constract either by execution of a deed to the involved property or by transfer of defendant corporation's stock. Alternatively a money judgment in tort is asked in count 2.

The tort relied upon by plaintiffs to establish limited jurisdiction in Michigan thus permitting extended service is characterized by them as 'causing a third person not to perform its contract with appellant.' In substance, it is their claim that Mrs. Weis, the Godchaux, and defendant Banfield conspired to induce F.W.S., Inc. to breach its claimed oral contract with Coronet, Inc.

Defendants moving for accelerated judgment, claimed:

(1) The contract for the sale of the land was absolutely void under the statute of frauds.

(2) The alleged part performance was totally insufficient to take it out of the statute.

(3) The requirements of the statute to give Michigan limited personal jurisdiction over the out-of-State defendants were not alleged and that there was no '* * * doing or causing any act to be done, or consequences to occur, in the state resulting in an action for tort' and in consequence the court had no jurisdiction over the Louisiana defendants not served in Michigan.

The learned trial judge, in a considered and detailed opinion, granted summary judgment as to Mrs. Weis on the theory that irrespective of what she may have done to block the sale of the property, she had a clear legal right to protect her interest in the sale of an asset of her husband's estate, of which she was the beneficiary. He held as to her complicity in the alleged conspiracy that the gravamen of the action is not the conspiracy but the wrongful acts causing the damages. He reasoned that Mrs. Weis had a legal right to see that the asset (whether the stock in F.S.W., Inc., or the realty itself owned by the corporation) bring the highest possible return and hence, that as to her there was no wrongful act. He based his holding on Roche v. Blair, 305 Mich. 608, 613, 9 N.W.2d 861. We agree for the reasons stated and on the authority cited. Her posture in this litigation is distinguishable from any of the other defendants. For this reason we deal with the disposition as to her out of the order in which the issues were pleaded.

We turn now to count 1 and the claim of plaintiff that the contract for sale of the realty was not void under the statute of frauds, supra.

On the basis of the pleadings, affidavits, counter-affidavits, depositions, interrogatories and the answers thereto, the trial court found there was not that measure of part performance which would take the case out of the statute. Effectuating the purpose of the rule authorizing summary judgment often presents a difficult and delicate exercise of judicial acuity. The judge must assiduously avoid making a finding on controverted fact issues. At the same time he must analyze everything properly before him to determine whether any genuine issue of material fact is raised. The line of demarcation is one of the most elusive in procedural law. In this case the trial judge located it and observed it punctiliously.

The support for the claim of part performance after challenge by affidavit had to be found in the deposition of Mr. Elliott, the person who actually did those specific things relied upon. The trial judge made no finding of fact as to what the deponent did or did not do. Rather he accepted as done everything Mr. Elliott claimed to have done. Thereupon, he assessed it on the basis of the legal test applicable thereto. Mr. Elliott deposed specifically that he expended $800 ⁴ in survey charges; that he bought meals for surveyors and potential purchasers; that the act of possession relied upon was entry upon the land to undertake take the survey. Significantly, Mr. Elliott in response to an inquiry by counsel for appellee, said:

'* * * the agreement was to survey the land and take whatever information I needed to satisfy myself I wanted to transact the deal.' (Emphasis supplied.)

A careful examination of the whole deposition fails to reveal any specific item of expenditure in money other than the aforementioned $800. The deponent alleged other expenditures in general terms and claimed 'I spent a lot of time.'

The trial judge, in his opinion, held:

'Here there is no showing of any part performance under the contract. The very most that can be said is that the plaintiff made certain expenditures of an investigative nature in order that it might determine whether or not it wanted to exercise its claimed option.'

As to count 1 we are constrained to agree with the trial judge and the Court of Appeals. The motion for accelerated judgment was properly granted.

Count 2 is somewhat more complex. In this count plaintiff alleges a conspiracy, as hereinbefore noted, among the Godchaux, Mrs. Weis, resident defendant Banfield and alleged agents within Michigan to induce the breach of the asserted contract. We have heretofore disposed of Mrs. Weis' claimed participation and we address ourselves now to the allegations, supporting affidavits, counter-affidavits and depositions forming the basis for the motion for a summary judgment as to the other nonresident defendants. It is the theory of plaintiffs that subdivision (2) of the extended service statute, infra, which premises jurisdiction upon the doing or causing any act to be done or consequences to occur in this State...