Newhall v. Ace Steel & Fabricating Co.

• Decision Date: 11 June 1958
• Docket Number: A,No. 71,71
• Citation: 352 Mich. 528,90 N.W.2d 459
• Parties: Elbridge G. NEWHALL, Jr., and Florence L. Newhall, his wife, Plaintiffs and Appellees, v. ACE STEEL AND FABRICATING COMPANY, a Michigan corporation, Defendant and Appellant. pril Term.
• Court: Michigan Supreme Court

Page 459

90 N.W.2d 459

352 Mich. 528

Elbridge G. NEWHALL, Jr., and Florence L. Newhall, his wife Plaintiffs and Appellees, v. ACE STEEL AND FABRICATING COMPANY, a Michigan corporation Defendant and Appellant.

No. 71, April Term.

Supreme Court of Michigan.

June 11, 1958.

Irwin I. Cohn, Detroit (John Sklar, Detroit, of counsel), for defendant and appellant.

Patterson, Patterson & Barrett, Pontiac, for plaintiffs and appellees.

Before the Entire Bench.

KAVANAGH, Justice.

Plaintiff filed a bill of complaint in the Oakland county circuit court on March 7, 1957, praying for a chancery foreclosure of a land contract entered into between plaintiffs appellees as vendors and the defendant appellant as vendee. Summons issued March 7, 1957, returnable May 7, 1957. On April 25, 1957, proof of service on defendant corporation was filed by Forest E. Youngblood, deputy sheriff for Wayne county. The return of service states:

'* * * on the 17th day of April A.D. 1957, at city of Detroit in the State of Michigan, I served the within Summons, personally on Ace Steel and Fabricating Company, a Michigan corporation Defendant named in said Summons, by then and there, at the place and on the date above mentioned, delivering to * * * Maurice M. Mackey, last known secretary-treas. for said above named Defendant a true copy of the said Summons, inscribed 'copy' and subscribed by Harry D. Wise, Jr. Attorney for Plaintiff, and by showing at the same time to him for the said above named Defendant * * * the said Summons, with the seal of the Court impressed thereon, on which copy so served was a true copy of the Underwriting on the said Summons.'

On May 9, 1957, an order of default was filed. On June 3, 1957, Mr. Mackey forwarded to the court and to counsel for plaintiffs an affidavit stating as follows:

'State of Michigan,

'County of Wayne--ss.

'Maurice M. Mackey, being first duly sworn, deposes and says that neither on March 7, 1957 nor any date thereafter was he an officer of Ace Steel and Fabricating Company, a Michigan corporation, nor a representative or agent of said company, nor in charge of any office of said company; and further, more particularly, that on April 17, 1957 at the time papers in the above entitled cause were left with him, he was not an officer, agent or representative of Ace Steel and Fabricating Company nor was he in charge of any office of Ace Steel and Fabricating Company nor was he an employee of Ace Steel and Fabricating Company;

'That in 1956 he was an officer of said Ace Steel and Fabricating Company but that he had resigned his office and all connection as an officer and agent of the company on October 1, 1956.

/s/ 'Maurice M. Mackey.'

(Oath attached.)

This affidavit was received and filed in the cause on June 4, 1957. Subsequently the matter was praeciped and noticed for hearing by plaintiffs on August 5, 1957. On August 2, 1957, Defendant mailed to counsel for plaintiffs and to the clerk of the court a special appearance and motion to set aside default and quash return of service, which motion was also noticed for hearing on August 5, 1957. The grounds of the motion were as follows:

'1. Because the court did not obtain jurisdiction over the defendant herein.

'2. Because there was no valid service of process in this cause upon this defendant, or upon any authorized officer, agent or representative.

'3. Because the default herein was irregularly and improperly entered.'

A supporting affidavit of I. Michael Bloch stated as follows:

'State of Michigan.

'County of Wayne--ss.

'I. Michael Block, being duly sworn, deposes and says:

'That he is the president of the defendant above named, and is and has at all times subsequent to 1953, been its duly designated resident agent, as more fully appears from the documents on file with the Michigan Corporation and Securities Commission and the Wayne County Clerk, which records are hereby incorporated herein and made a part of this affidavit.

'Deponent states that both in 1957 and 1956, the registered office of defendant was and is at 17129 Swift Avenue, in the City of Detroit, Michigan, and prior thereto, had for four years been at 12401 Cloverdale Avenue, in said City of Detroit.

'Deponent states that no process in this cause was served upon any officer, agent or representative of the corporation. Deponent is informed that the ostensible service of process in this cause was in fact effected elsewhere than at the office or place of business of defendant and was upon one Maurice M. Mackey at his personal office, said Mackey being a Certified Public Accountant with his own office at 17379 Wyoming, in said City of Detroit. That said Mackey at one time had been an officer of defendant, but had resigned all office and all connection as officer, agent or representative of the defendant on October 1, 1956, and has, at no time subsequent to that date, been an officer, agent or representative of said defendant, or authorized in any way to accept service of process for it.

/s/ 'I. Michael Bloch.'

(Oath attached.)

Counsel for the respective parties appeared before the lower court on August 5, 1957, and argued their respective positions. Counsel for plaintiff advised the court that he had received defendant's motion through the mail that morning, and objected to consideration thereof on the ground that he had not received the required 5-day notice of hearing. Defendant's counsel conceded that the motion did not bear the required amount of notice, offered to renotice it, if desired, but also specifically urged upon the court the necessity of determining the jurisdictional question prior to any entry of proposed default decree. The court overruled defendant's request, took proofs, and entered a default decree. Defendant next moved the court to vacate the decree of foreclosure, set aside the default, and quash the return of service. Defendant's motions were denied without opinion. From these rulings, defendant has appealed.

The sole question is whether or not a valid service of process was made upon defendant so as to confer jurisdiction on the court.

Defendant contends that Michigan statutes contemplate three methods of service: (1) Service upon an actual (not former) officer or representative, whether or not at the corporate office; (2) Service at the corporate office upon any person in charge thereof; (3) Substituted service by publication upon showing of nonresidence, absence, concealment, or unknown whereabouts. Attached to defendant appellant's motion to set aside default and quash return of service is an affidavit of I. Michael Bloch, president of defendant corporation, stating that Maurice M. Mackey had resigned all connections with defendant corporation as of October 1, 1956; that Mackey was an accountant operating his own business; that Mackey had no connection with said corporation after October 1, 1956, and specifically was not an officer of the defendant corporation at the time of service on him at his own personal office on April 17, 1957.

Plaintiffs contend that they had a right to rely on the written annual statement filed by defendant with the corporation and securities commission which listed as its resident agents, officers, and directors the names and addresses of the officers of the corporation as well as the address of the registered office of the defendant appellant corporation; that upon defendant's failure to file the record changes in its officer's names and addresses and location of its registered office, defendant's recorded officers remained as officers for purposes of service of process until the changes were made and filed with the corporation and securities commission, as well as the Wayne county clerk's office.

The record discloses that on October 24, 1956, defendant corporation filed with the Michigan corporation and securities commission at Lansing, Michigan, its annual report for 1956, which report disclosed the condition of defendant corporation at the close of business on March 31, 1956, and therein stated that its resident agent was I. Michael Bloch, and that the address of the registered office was 17129 Swift Avenue, Detroit 3, Michigan, and listed as secretary and treasurer Maurice M. Mackey, and also listed Maurice M. Mackey as a director. This report, although filed October 24, 1956, was not accepted by the Michigan corporation and securities commission until May 7, 1957.

Plaintiffs contend that changes in the officers of a corporation or change of registered address of office of a corporation will not be binding upon the general public until such time as such changes are filed with the corporation and securities commission.

It is to be noted, although having nothing to do with service of summons in this case, that there are affidavits on file by deputies Williams and Hudak which seem to indicate that they investigated and found that the defendant, Ace Steel and Fabricating Company, had no office in the city of Detroit. However, these affidavits also informed that I. Michael Bloch and A. Howard Bloch, officers and resident agents of defendant corporation, could be located at 1301 E. McNichols Road, Detroit 3, Michigan; that they made bona fide efforts on numerous occasions to serve the defendant company (the...