Malooly v. York Heating & Ventilating Corp.

• Decision Date: 29 January 1935
• Docket Number: No. 107.,107.
• Citation: 258 N.W. 622,270 Mich. 240
• Parties: MALOOLY et al. v. YORK HEATING & VENTILATING CORPORATION et al.
• Court: Michigan Supreme Court

270 Mich. 240

258 N.W. 622

MALOOLY et al.

v.YORK HEATING & VENTILATING CORPORATION et al.

No. 107.

Supreme Court of Michigan.

Jan. 29, 1935.

Action by Ameen Malooly and others, copartners, doing business as the Malooly & Azar Company, against the York Heating & Ventilating Corporation and another. Judgment for plaintiffs, and defendants appeal.

Affirmed.

WIEST, J., dissenting.

Appeal from Circuit Court, Wayne County; John V. Brennan, judge.

Argued before the Entire Bench.

Wiley, Streeter, Smith & Ford, of Detroit (Charles J. Staples, of New York City, of counsel), for appellants.

J. F. Youssephany, of Detroit (Monaghan, Crowley, Reilley & Kellogg, of Detroit, of counsel), for appellees.

BUSHNELL, Justice.

For some years plaintiffs, located in Detroit, have been engaged in the business of slaughtering animals and selling dressed meats, particularly lamb and veal, to retail merchants. Desirous of serving their increased trade, an adjoining building was rented for the purpose of enlarging the plant. Defendant York Heating & Ventilating Corporation is a Pennsylvania corporation. Their advertisement of a system of cold storage and meat cooling devices came to the attention of plaintiffs. Shortly thereafter one of the copartners, Boudia, talked with Cohen of the Burge Ice Machine Company of Detroit about refrigerating machines and went to Chicago in January of 1929 for the purpose of seeing the York system in operation. There he met Gillian of the Chicago office of the York Company, and described to him the nature of plaintiffs' business, explained that he had no technical knowledge of refrigeration, and apparently made careful inquiry into the operation of the equipment. Gillian took Boudia to various packing plants where his employer's machines were being used in beef coolers and sausage factories. Boudia claims that when Gillian's attention was called to the fact that lamb and veal were more tender than beef and sausage, he replied: ‘These units are revolutionizing the industry,’ and said in effect that the machines would do almost anything: ‘They will preserve the lamb as well as they will the beef.’ Boudia concluded his investigation and asked for a written guarantee, whereupon Gillian explained that his company would not sell direct, but would do business through Burge Ice Machine Company, or any other local dealer; Boudia declined to do business on this basis and insisted upon dealing only with the York Company. After Boudia returned to Detroit, Euth of defendant Euth-Lambrecht Company called upon plaintiffs and the parties had a discussion about the units. Later York sent Boudia a letter signed by Gillian, referring to the Chicago conversation and reading in part: ‘At your request we are pleased to give you the following guarantee which in turn is given to the Burge Ice Machine Company, who we understand will install this equipment and as you know, will sell the machine to you as we do not do any installation work ourselves and this equipment will have to be sold through the Burge Ice Machine Company, who can give you the same price on our equipment that we give to you ourselves.’

The terms of the guarantee were then given, the letter stating that a blue print would follow. The record contains the blue print and a detailed proposal from Burge, which was not executed, the plaintiffs claiming they refused to sign the proposal because they would deal only with York. The Euth Company was later evidently substituted for Burge, for without any further discussion between the parties, the proposed units arrived at plaintiffs' plant, the bill of lading showing delivery to the carrier by York at Bridgeport, Pa., for transportation to Euth-Lambrecht Company, Detroit. The equipment was installed by the Euth-Lambrecht Company under the direction of engineers of York and Euth, and McConnor, the Detroit sales representative of York.

Some time in April, shortly before the Greek Easter, May 5, 1929, or thereabouts, the plant was ready for operation and the box was filled with dressed calves; the next morning it was discovered that they were black, dry, and unfit for sale. McConnor, after conferring with Gillian, had alternations made, changing the motor, etc., and the box was filled with lamb, with the same result. Every effort was subsequently made to adapt the equipment to plaintiffs' needs by changing ducts, adding moisture, installing new ventilating equipment, etc., during which time, one night through inadvertence of some one, a gasket blew in the ammonia line asphyxiating some 150 live lambs. After several weeks of effort, the representatives of both York and Euth-Lambrecht Company said they could do no more and plaintiffs in August removed the York equipment and installed in its place another type of cooling system. Euth-Lambrecht Company requested the return of the equipment, but it was refused, plaintiffs stating they were ready to deliver to York, from whom they claim the purchase was made. While plaintiffs' claims are contested, it seems undisputed that no written contract was ever executed by the parties and that the damage resulted from the faulty operation of the York equipment.

Defendants appeal from a judgment against York Heating & Ventilating Company in the sum of $32,024.28, and for defendant Euth-Lambrecht Company on set-off against plaintiffs in the sum of $868.13, the last-named defendant claiming a judgment against plaintiffs in the sum of $3,635.33. Plaintiffs declared in trespass on the case upon two counts, the first being a cause of action against the defendant York alone, claiming a breach of warranty, express and implied, and negligence on the part of the defendant; the second count joining both defendants, in which it is alleged that Euth-Lambrecht Company acted as agent for the York Company. To these are added the common counts in assumpsit as to both defendants. There is attached to plaintiffs' declaration a bill of particulars itemizing claimed damages totaling $52,349.11, covering five months' rental of the premises, the value of the shrinkage of the dressed meats, the prices sacrified by plaintiffs, value of live stock asphyxiated, loss of business, and the cost of replacement of equipment.

Defendant York appeared specially and moved to set aside the service of summons, averring that it was not doing business, nor had it at any time done business within the state, and that McConnor, upon whom service was had, was not connected with the defendant corporation other than in the capacity of soliciting orders. Judge Lamb of the Twenty-eighth judicial circuit, sitting in Wayne county, denied the motion, and later an application for leave to appeal from the order of the circuit court was denied. York then answered plaintiffs' declaration, as did Euth, and the cause was heard before a judge of the recorder's court of the city of Detroit, acting as a circuit judge of Wayne county, the parties waiving their demand for a trial by jury.

The first question to be determined is that of service, appellee contending that the question of service of process cannot be raised at this time. We do not construe the denial of an application for leave to appeal as foreclosing litigants from ultimate review of interlocutory orders on appeal in the principal case. The denial of an application for leave to appeal is ordinarily an act of the judicial discretion equivalent to the denial of certiorari. It is held that the denial of the writ of certiorari is not equivalent of an affirmation of the decree sought to be reviewed. United States v. Carver, 260 U. S. 482, 43 S. Ct. 181, 67 L. Ed. 361;Hamilton-Brown Shoe Co. v. Wolf Bros. & Co., 240 U. S. 251, 36 S. Ct. 269, 60 L. Ed. 629. The question would not arise under our present rules as rule 18, § 4, Michigan Court Rules (1933) provides: ‘A defendant may, within the time for appearing, file a motion to quash the service of the process, on the ground that such service was invalid. Said motion may be supported by affidavits. Every denial of a motion to quash the service of process shall be without prejudice, whereupon the defendant shall have the right to appear generally and plead, and upon general appeal assign error on the trial court's denial of said motion.’

Plaintiff served McConnor as agent of defendant York, a foreign corporation. Was this service good? Section 14094, C. L. 1929, provides: ‘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.’

To paraphrase the concluding paragraph of the opinion of Mr. Justice Sharpe in Cheli v. Cudahy Bros. Co., 260 Mich. 496, 245 N. W. 503: Had McConnor been merely an agent soliciting business for the defendant in this state, a different question would be presented. But, as shown by the testimony, he performed services other than as a solicitor. He supervised the installation of the equipment; when it failed to function properly, he consulted his principals and undertook to remedy the defects. He worked with other employees of York who came here for the definite purpose of correcting the difficulty. York also purchased fabricated material in Detroit for use in its attempt to make the apparatus work. McConnor was the agent of the defendant corporation within the language of the above-quoted section as it has been construed by this court. See Republic Acceptance Corp. v. Bennett, 220 Mich. 249, 189 N. W. 901, and A. Harvey's Sons Mfg. Co. v. Sterling Materials Co., 247 Mich. 317, 225 N. W. 538.

The more difficult question is whether York was doing business in this state so as to be amenable to service of process. The mere presence of the agent in the state is not alone sufficient; the corporation must also be doing business within the state. Bachler v. Maytag Co., 251 Mich. 439, 232 N. W....