George Realty Co. v. Gulf Ref. Co.
| Decision Date | 07 April 1936 |
| Docket Number | No. 105.,105. |
| Citation | 266 N.W. 411,275 Mich. 442 |
| Parties | GEORGE REALTY CO. v. GULF REFINING CO. |
| Court | Michigan Supreme Court |
OPINION TEXT STARTS HERE
Action by the George Realty Company, a Michigan corporation, against the Gulf Refining Company, a Delaware corporation. Judgment for the defendant, and plaintiff appeals.
Affirmed.Appeal from Circuit Court, Wayne County; Lester S. Moll, judge.
Argued before the Entire Bench.
Sydney Rubenstein, of Detroit (Jos. B. Beckenstein, of Detroit, of counsel), for appellant.
Harrison T. Watson, of Detroit (Frank W. Atkinson, of Detroit, of counsel), for appellee.
This is an action to recover rent claimed to be due under a lease upon a gasoline station in the city of Detroit. Under the date of February 16, 1929, the George Realty Company leased certain property to Cadillac Petroleum Corporation for a term of fifteen years for a total rental of $48,000 payable $250 per month during the first five years and $275 per month for the balance of the term. This lease contained no restrictions against assignment and ‘the covenants, conditions and agreements made and entered into by the parties hereto are declared binding on their respective heirs, representatives and assigns.’
In June, 1920, the Cadillac Petroleum Corporation assigned its interest in the lease to the Paragon Refining Company of Michigan, which assumed the obligations of the lease and entered into possession of the premises, and at the same time plaintiff released the Cadillac Petroleum Corporation from any further liability under the lease and accepted the Paragon Refining Company of Michigan as its tenant instead, which company operated the gasoline station until September, 1930, when it assigned its lease to the Gulf Refining Company, a Delaware corporation and defendant herein. This company operated the station until August 23, 1934, when it assigned its lease to one Robert McCausland, who accepted the assignment and went into possession of the property, and upon his failure to pay rent for the property plaintiff began suit against the defendant, Gulf Refining Company.
It also appears from the record that in May, 1930, there was a proposal made by the Union Trust Company of Pittsburgh to the directors of the Paragon Refining Company of Ohio to purchase for its nominee or nominees certain assets of Paragon Refining Company of Ohio and certain other corporations for the sum of $10,000,000. The corporations named are the following: Paragon Refining Company, an Ohio corporation; Paragon Refining Company of Michigan, a Michigan corporation; Wayco Oil Corporation, a Michigan corporation; Wayco Land Company, a Michigan corporation; Wayco Fuel Oil Company, a Michigan corporation; Paragon Oil Company, a Kansas corporation; Paragon Development Corporation, an Ohio corporation licensed to do business in Kentucky. The offer of purchase contained the following clause:
‘(d) Generally, as respects other contracts of seller in effect at the time of the transfers and conveyances herein contemplated, including contracts for supplying jobbers and/or retail dealers in oil products, and contracts for installation of pumps and appurtenances for the vending of seller's products, and leases of premises for service-stationsor otherwise to afford outlet for seller's products, contracts for purchasing crude and/or refined oils from others, contracts for the transportation of crude oil for seller as shipper, construction contracts, and contracts of whatsoever kind or character whether similar to those mentioned or not, our nominee or nominees shall have the opinion, either (1) to take over any one, or more, or all, of said contracts and assume seller's position therein, or else, (2) to decline to take over any one, or more, or all, of said contracts, and leave said contracts for seller's disposition.’
This offer was accepted by the directors of the Paragon Refining Company, an Ohio corporation, at a meeting held May 28, 1930, at Cincinnati, and ratified by the stockholders of the Paragon Refining Company, an Ohio corporation, at a special meeting held June 24, 1930, in Cincinnati.
Defendant, Gulf Refining Company, was incorporated in Delaware June 24, 1930, and on July 3, 1930, was admitted to do business in the state of Michigan. On August 29, 1930, the sale and transfer of the assets of the Paragon Refining Company of Michigan to the Gulf Refining Company was completed. The transfer of assets by assignment of contracts and execution of a bill of sale conveyed all property of the Paragon Refining Company of Michigan except corporate stock, cash, accounts, and notes receivable, miscellaneous receivables, and sinking fund. Also in connection with this transfer of assets an agreement was entered into between the Paragon Refining Company, an Ohio corporation, and the defendant herein whereby the defendant covenants and agrees that it will fully and completely perform from and after September 1, 1930, all leases and agreements, the assignments of which it has or will accept from the Paragon Refining Company, an Ohio corporation.
It is contended on behalf of plaintiff that the assignment of the lease from the Paragon Refining Company of Michigan to the Gulf Refining Company, accompanied by an assumption thereof by defendant, renders it directly liable to plaintiff for the balance of the term; that the legal effect of the documents executed, assignments taken, coupled with occupation of the premises and the payment of rent directly to plaintiff after such occupation of premises constitutes novation; that defendant is estopped to deny that a novation was accomplished; that defendant, a foreign corporation, having purchased and taken over the entire business of the Paragon Refining Company of Michigan, became directly liable to plaintiff under the rule in this state; that defendant's liability to plaintiff became fixed under the law of Ohio, the purchase and agreement of assumption by defendant having taken place in that state; that under the law of Ohio plaintiff as a third party beneficiary was in privity to, and could therefore sue upon, the contract of assumption.
It is the contention of defendant that the transaction between the Paragon Refining Company of Michigan and the Gulf Refining Company resulted in privity of estate between the parties and not privity of contract and that the liability of defendant continued only so long as defendant occupied the premises in question and that the liability ceased as soon as the Gulf Refining Company assigned its contract to McCausland.
The trial court found in favor of defendant, and held that the covenants of agreements of...
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...1212 (6th Cir. 1980). If the place of performance differs, however, the law of that place governs. George Realty Co. v. Gulf Refining Co., 275 Mich. 442, 451, 266 N.W. 411, 414-15 (1936). See generally Liberty Mut. Ins. Co. v. Vanderbush Sheet Metal Co., 512 F.Supp. 1159, 1166-69 (E.D.Mich.......
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Liberty Mut. Ins. Co. v. Vanderbush Sheet Metal Co.
...18 N.W.2d 877 (1945). If the contract is to be "performed" in a different state, however, then the law of the latter state governs its interpretation.5E.g., George Realty Co. v. Gulf Refining Co., 275 Mich. 442, 266 N.W. 411 In order to apply these rules, it is necessary first to define the......
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...Insurance Co. v. Vanderbush Sheet Metal Co., 512 F.Supp. 1159, 1166-69 (E.D.Mich.1981) (citing George Realty Co. v. Gulf Refining Co., 275 Mich. 442, 451, 266 N.W. 411, 414-15 (1936)); Podlaha v. Management Recruiters International, Inc., 171 Mich.App. 1, 3-4, 429 N.W.2d 622, 624 (1988). Be......
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