People's Wayne Cnty. Bank v. Wolverine Box Co.

• Decision Date: 07 April 1930
• Docket Number: No. 129.,129.
• Parties: PEOPLE'S WAYNE COUNTY BANK v. WOLVERINE BOX CO. et al.
• Court: Michigan Supreme Court

250 Mich. 273

230 N.W. 170

PEOPLE'S WAYNE COUNTY BANK

v.WOLVERINE BOX CO. et al.

No. 129.

Supreme Court of Michigan.

April 7, 1930.

Error to Circuit Court, Wayne County; Guy A. Miller, Judge.

Suit by the People's Wayne County Bank, a Michigan corporation, against the Wolverine Box Company, a Michigan corporation, and another. Judgment for plaintiff, and defendants bring error.

Affirmed.

Argued before Entire Bench, except McDONALD, J.Atkinson, O'Brien & Clark, of Detroit, (Frank W. Atkinson, of Detroit, of counsel), for appellant Box Co.

Lightner, Oxtoby, Hanley & Crawford, of Detroit (A. George Abbott, of Detroit, of counsel), for appellee.

BUTZEL, J.

Plaintiff, a Michigan banking corporation has brought suit on a note for $3,638.87 and interest, dated September 20, 1928, against defendant Wolverine Box Company, as maker, and defendant J. A. Matheson, as payee and indorser. The note was indorsed by payee to plaintiff. After issue was joined, plaintiff moved in proper form for summary judgment. Its affidavit showed it was a bona fide purchaser for value, and contained a complete statement of the transaction. Defendant Wolverine Box Company filed an affidavit of merits, sworn to by its attorney, in which it alleges that the note was given to Matheson, not for the purpose of paying an indebtedness, but pending an accounting; that plaintiff knew both that Matheson lacked authority to discount the note and that he owed the box company a sum in excess of the amount of the note; that the bank held collateral for Matheson's indebtedness to the bank; and that there was a credit balance due Matheson on the books of the bank. The affidavit of merits was insufficient. It stated conclusions, without giving facts with the particularity demanded by Circuit Court Rule 34. Defendant Matheson interposed no defense. The trial court held the affidavit of merits was insufficient, and rendered a judgment against both defendants for the full amount of the note, with interest.

The record failed to disclose the reason why the credit balance and the collateral were not applied to the note, but, on the oral argument before this court, it was admitted that the credit balance and collateral were applicable to other indebtedness due plaintiff from Matheson. It was also conceded that, unless the summary judgment law of this state is unconstitutional, the judgment of the lower court was correct; that an adjustment was being consummated by the parties; and that the main purpose of the action was to test the constitutionality of the summary judgment law of Michigan (section 12581, C. L. 1915), together with Circuit Court Rule 34.

A speedy method of obtaining a judgment on a note or liquidated claim, where no valid defense is interposed, has been employed in this state for almost a hundred years. The Session Laws of 1844 (Act 13, § 2), and the court rules from time to time since then, have provided for a method by which a judgment on inquest could be taken on a note or account supported by proper affidavit, unless an affidavit of merits was filed within a certain prescribed time. The first complete summary judgment law appears in the Judicature Act (Act No. 314, c. 18, § 9) of 1915 (section 12581, supra). Circuit Court Rule 34 relating to summary judgment was amended in 1926 so as to require that the affidavit of merits be made with particularity by defendant, his agent or attorney, having personal knowledge of the facts, and that it be shown affirmatively by it that the affiant, if sworn, can testify conpetently as to such facts, or, if such facts are not within his knowledge, then that there be supporting affidavits drawn with the same particularity by persons who can so testify.

It is contended by defendant Wolverine Box Company that the summary judgment law, together with Circuit Court Rule 34, are unconstitutional, in that they deprive the defendant of the right of trial by jury, in contravention of section 13 of article 2 of the Constitution of the state of Michigan, and that they offend the due process and equal protection clauses of both the Federal and State Constitutions. It is further pointed out that the statute, and particularly Rule 34, do not provide that the affidavit of plaintiff be made with the same degree of particularity as is demanded of the defendant in its affidavit of merits; that it further works to the disadvantage, and sometimes to the deprivation of the legal rights, of defendant, in that frequently he cannot testify as is necessary under the rule in regard to facts that are wholly within the knowledge of plaintiff, or of an adverse witness; that, upon the hearing of a motion submitted solely on affidavits, there is no manner provided by which plaintiff or an adverse witness may be subpoenaed and compelled to testify to facts that might be a complete defense to the action; that there is no method of cross-examining plaintiff or adverse witnesses from whom necessary testimony to establish the defense might be elicited.

The summary judgment law provides a speedy method of determining whether there are any issues of fact in causes arising upon contract, judgment, or statute. If there are such issues of fact, the motion for summary judgment is denied, and the issues are left for a jury to determine; if there are no questions of fact, the judge applies the law in accordance with the admitted facts as disclosed by the affidavits. The only deprivation that defendant suffers, in most instances, is that of the delay usually ensuing until the case is brought on for trial by a jury. He cannot complain on this account. The situation corresponds to that of a judge directing a jury to render a verdict on admitted facts in plaintiff's favor. The defendant claims that even the right to have a jury determine the facts after an instruction by the judge is a substantive right. We do not agree to this proposition. Nor do we believe that defendant's constitutional rights are abridged because the court does not go through the form of having a jury impaneled and sworn, then having evidence taken before it, and then directing a verdict according to the rules as applied by the judge to such admitted facts. The summary judgment rule is not an innovation. It was adopted in this country in South Carolina as early as 1768. It was used extensively in New York, New Jersey, Connecticut, Pennsylvania, Indiana, Virginia, West Virginia, Delaware, District of Columbia, Kentucky, Arkansas, Missouri, and other states. We have had frequent occasion to pass upon the 1915 law, and have uniformly upheld it. La Prise v. Wayne Circuit Judge, 234 Mich. 371, 208 N. W. 449;Slebodnick v. La Buda, 238 Mich. 550, 213 N. W. 698;Warren Webster & Co. v. Pelavin, 241 Mich. 19, 216 N. W. 430;Barsky v. Katz, 241 Mich. 63, 216 N. W. 382;Smith v. Applebaum, 241 Mich. 493, 217 N. W. 401;Tomlinson v. Imperial Hotel Corp., 245 Mich. 52, 222 N. W. 104;Straus v. Elless Co., 245 Mich. 558, 222 N. W. 752.

A question never before decided in this state is raised in the contention that defendant is deprived of his right to trial by jury, as vouchsafed under section 13 of article 2 of the Constitution of this state. This same question has been raised in other jurisdictions. We believe there is no merit to the contention. In Hanna v. Mitchell, 202 App. Div. 504, 196 N. Y. S. 43, 55, affirmed in 235 N. Y. 534,139 N. W. 724, the summary judgment rule of New York state was attacked in a similar manner. The court stated as follows:

‘As we have already stated, the requirement that an issue of fact in the actions enumerated in section 425 must be tried by a jury does not deprive the court of the power to ascertain whether there is in truth an issue of fact to be tried. To say that a false denial, which defendants are unable to justify, must nevertheless put the plaintiff to his common-law proof before a jury, although the result would be a directed verdict in plaintiff's favor as a matter of law, is to exalt the shadow above the substance.

‘ That this rule has worked a substantial reform in practice and greatly relieved an overburdened trial calendar has been demonstrated by experience.’

To like effect are Dwan v. Massarene, 199 App. Div. 872, 192 N. Y. S. 577;General Investment Co. v. Interborough Rapid Transit Co., 235 N. Y. 133, 139 N. E. 216. In Fidelity & Deposit Co. v. United States, 187 U. S. 315, 23 S. Ct. 120, 122, 47 L. Ed. 194, Mr. Justice McKenna, in delivering the opinion of the court, said:

‘There is but one element in this contention-the right of a jury trial. In passing upon it we do not think it necessary to follow the details of counsel's elaborate argument. In Smoot v. Rittenhouse, 27 Wash. Law R. 741, the validity of the rule was sustained, as well as the power of the court to make it. If it were true that the rule deprived the plaintiff in error of the right of trial by jury, we should pronounce it void without reference to cases. But it does not do so. It prescribes the means of making an issue. The issue made as prescribed, the right of trial by jury accrues. The purpose of the rule is to preserve the court from frivolous defenses, and to defeat attempts to use formal pleading as means to delay the recovery of just demands.

‘Certainly a salutary purpose, and hardly less essential to justice than the ultimate means of trial. And the case at bar illustrates this. It certainly does not seem unreasonable to charge one who has become responsible for the performance of an act by another with knowledge of that act or with means of ascertaining it, so as to state a defense within the liberal interpretation of the rule declared by the court of appeals.

‘As early as 1879 the supreme court of the District recited the history of the rule, and explained its purpose. ‘It is a rule,’ the court said, ‘to prevent vexatious delays in the maturing of a judgment where there is no defense. * * * Now, what does the rule mean, this being its office? It is couched in...