Gogebic Auto Co. v. Bd. of Rd. Com'rs of Gogebic Cnty.

• Citation: 290 N.W. 898,292 Mich. 536
• Decision Date: 15 March 1940
• Docket Number: No. 130.,130.
• Parties: GOGEBIC AUTO CO., Inc. v. BOARD OF ROAD COM'RS OF GOGEBIC COUNTY et al.
• Court: Supreme Court of Michigan

292 Mich. 536

290 N.W. 898

GOGEBIC AUTO CO., Inc.

v.BOARD OF ROAD COM'RS OF GOGEBIC COUNTY et al.

No. 130.

Supreme Court of Michigan.

March 15, 1940.

Suit by the Gogebic Auto Company, Inc., against the Board of Road Commissioners of the County of Gogebic, Mich., the Klauer Manufacturing Company of Dubuque, Iowa, and others, for money alleged to be due as commissions upon sale of truck and snowplow. From an adverse decree, defendant Klauer Manufacturing Company appeals.

Decree set aside and entered.Appeal from Circuit Court, Gogebic County, in Chancery; Thomas J. Landers, Judge.

Argued before the Entire Bench.

Jones & Patek, of Ironwood (Leonard J. MacManman, of Ironwood, and Smith & O'Connor, of Dubuque, Iowa, of counsel), for appellant Klauer Mfg. Co.

E. W. Massie, of Ironwood, for appellee.

BUSHNELL, Chief Justice.

An unusually severe blizzard late in January of 1938 made it necessary for defendant Board of County Road Commissioners to obtain a snowplow immediately. They wanted an F.W.D. four-wheel-drive truck and snowplow combination and called defendant Klauer Manufacturing Company of Dubuque, Iowa, who were engaged in manufacturing Snogo snowplows. Klauer Company learned that an F.W.D. truck was not immediately available, called Oshkosh Motor Truck, Inc., at Oshkosh, Wisconsin, and placed an order for one of its four-wheel-drive trucks to be delivered in Dubuque. The Road Commission was advised that a complete unit would be ready to leave the Dubuque plant a few days later. Klauer Company was instructed to proceed with the order under these conditions and two men were sent to Dubuque by defendant Road Commission, where they accepted delivery of the snowplow truck. The price the Road Commission agreed to pay Klauer Company was $16,064.05.

Klauer Company's agent for the State of Michigan resided at Newberry. The exclusive agent of Oshkosh, Inc., in Gogebic and Ontonagon counties was plaintiff Gogebic Auto Company, Inc., of Ironwood. It was the claim of plaintiff that Klauer Company knew of this agency relationship; that the Road Commission expected the sale to be made through plaintiff; that the sale was in fact made by plaintiff; and that plaintiff was entitled to a 25 per cent commission on the truck and a 10 per cent commission on the Snogo. When Oshkosh, Inc., billed Klauer Company for the truck, a 25 per cent reduction was made and Klauer Company billed the Road Commission for the full amount.

The Road Commission paid $5,000 to Klauer Company and, because of the filing of a bill of complaint by Gogebic Company, held up its check for the balance, later tendered it into court, and asked to be discharged from all its obligations to any of the parties. Klauer Company denied any obligation to plaintiff whatever. Oshkosh, Inc., though made a party to the action, never appeared, and an order pro confesso was entered as to it.

Plaintiff's bill of complaint is predicated upon an equitable assignment, and it is claimed that Klauer Company and Oshkosh, Inc., assigned and transferred to plaintiff from the moneys to be due from the Road Commission the sum of $1,634, the 25 per cent commission on the sale of the truck. Defendant Road Commission denied that it ever had notice of or accepted the alleged assignment and denied that it agreed to pay plaintiff any sum of money in connection with the transaction. Defendant Klauer Company denied any agreement or assignment of funds and claimed that the transaction was between defendant Road Commission and itself and that plaintiff had no part therein.

Defendant Klauer Company's repeated motions to dismiss for lack of equitable jurisdiction were denied.

The trial court held that there was a valid contract between plaintiff and Oshkosh, Inc., for a commission on the sale of the truck, and that Klauer Company had sufficient notice to put it on guard. It also appeared from the testimony that Klauer Company would not sell the Snogo except through its authorized agent, and the trial court found that there was no written or oral contract between plaintiff and defendant Klauer Company for a commission on this part of the equipment. A decree was entered holding Oshkosh, Inc., and Klauer Company jointly and severally indebted to plaintiff in the sum of $1,632.50, that being the amount which the court found plaintiff should have received as its share of the proceeds on the sale of the truck. It was further decreed that plaintiff was not entitled to any moneys on account of the sale of the Snogo.

Defendant Klauer Company appeals from this decree, claiming the court had no jurisdiction over the subject-matter, that the answer of the defendant Road Commission was incorrectly treated as a bill of interpleader, and that the court's finding that plaintiff was entitled to a commission as against Klauer Company is contrary to the weight of the evidence. It is also claimed that errors were committed in the admission of certain testimony. Plaintiff did not file a cross-appeal.

The decisive question is whether or not plaintiff had an equitable assignment of any interest in the proceeds of the transaction.

In determining what constitutes an equitable assignment, the court said, in Grand Rapids Trust Co. v. Reliable Coal & Mining Co., 238 Mich. 248, 213 N.W. 100, 101:

‘* * * we quote from syllabus of Christmas v. Russell, 14 Wall. [U.S.] 69, 20 L.Ed. 762:

“To make an equitable assignment there should be such an actual or constructive appropriation of the subject-matter as to confer a...