Wells v. Detroit News, Inc.

• Citation: 360 Mich. 634,104 N.W.2d 767
• Decision Date: 15 September 1960
• Docket Number: No. 38,38
• Parties: Edward D. WELLS, Plaintiff and Appellant, v. DETROIT NEWS, INC., a Michigan corporation, Defendant and Appellee.
• Court: Michigan Supreme Court

Page 767

104 N.W.2d 767

360 Mich. 634

Edward D. WELLS, Plaintiff and Appellant, v. DETROIT NEWS, INC., a Michigan corporation, Defendant and Appellee.

No. 38.

Supreme Court of Michigan.

Sept. 15, 1960.

Alexander, Cholette, Buchanan, Perkins & Conklin, Grand Rapids (Edward D Wells, Grand Rapids, of counsel), for plaintiff-appellant.

Butzel, Eaman, Long, Gust & Kennedy, Detroit (Rockwell T. Gust, James D. Ritchie, Detroit, of counsel), for defendant-appellee.

Before the Entire Bench.

EDWARDS, Justice.

This is an appeal from the denial by a Wayne county circuit judge of a motion by plaintiff to amend a declaration, and the subsequent entry of a judgment of no cause for action. Plaintiff's declaration named as defendant The Detroit News, Inc., a Michigan corporation. The motion sought an amendment correcting and changing the name of the defendant The Detroit News, Inc., a Michigan corporation, to The Detroit News, or to The Evening News Association, a Michigan corporation.

The nature of the action is indicated by the first 6 paragraphs of the declaration:

'1. The defendant is a Michigan corporation with its main place of business in the City of Detroit, Michigan.

'2. That the plaintiff's assignor, whose name defendant well knows, was employed on the Editorial Staff of said defendant for a period of approximately twenty-four years prior to his retirement in June of 1949.

'3. That prior to his retirement the Editor of said defendant advised the plaintiff's assignor that the base retirement plan or annuity was no good for him and the defendant, by and through its Editor and duly authorized Agent, promised and agreed to pay said assignor upon and following his retirement an adequate retirement sum supplemental and in addition to the monthly sums received under the regular employees' retirement plan.

'4. In consideration of and in reliance on said promise and agreement the plaintiff's assignor thereafter announced his retirement, retired in June of 1949, giving up his employment with defendant at a salary approximating Ten Thousand Dollars ($10,000) a year, and was paid and received the sum of One Hundred Dollars ($100) per month from defendant, above the amount received under the regular employees' plan, for a period of twelve months thereafter.

'5. By letter dated June 19, 1950 the said defendant by and through its Editor and authorized Agent advised the said assignor of the repudiation of the promise, agreement or contract and the discontinuance thereafter of any payments supplemental to the base employees' retirement plan.

'6. That although demand has been made by plaintiff and plaintiff's assignor on the defendant to fulfill said promise, agreement and contract to pay plaintiff's assignor an adequate retirement sum supplemental to the basic employees' retirement plan for the remainder of the assignor's life, defendant has failed and refused so to do, to the damage of the plaintiff or his assignor in the sum of Sixty Thousand Dollars ($60,000).'

In response, defendant The Detroit News, Inc., filed an appearance and an answer which simply denied all plaintiff's allegations.

Subsequently, at a pretrial hearing, after the statute of limitations would have run against the filing of the cause of action, defendant disclosed to plaintiff that his assignor had never been employed by The Detroit News, Inc., which in fact was a Michigan corporation, but had been employed by The Detroit News which was owned by The Evening News Association, a different Michigan corporation.

Plaintiff filed with his motion to amend an affidavit and exhibits which alleged the following additional facts:

1) That prior notice of claim and intention to sue The Detroit News had been served upon the vice president and general manager of The Detroit News, in response to which plaintiff had been referred to present counsel for The Detroit News, Inc.

2) That service of process had been made upon one N. J. Nicholl who, at the time, was both business manager for The Detroit News and The Evening News Association, and for The Detroit News, Inc.

3) That the corporate address of the 2 corporations is the same, and that most of the officers of the 2 corporations are the same.

No answer was filed as to any of these allegations, and no testimony was taken. The parties apparently accepted these as the facts upon which the motion was to be considered by the trial judge. They did likewise in argument of the appeal before this Court. The denial of plaintiff's motion to amend was made by the trial judge in an opinion wherein he held that the amendment was not a correction of error, but a substitution of parties, and was beyond the power of the court.

The controlling legal principle is set forth in a Michigan statute, C.L.1948, § 616.1; Stat.Ann. § 27.838:

'The court in which any action or proceedings shall be pending, shall have power to amend any process, pleading or proceeding in such action or proceeding, either in form or substance, for the furtherance of justice, on such terms as shall be just, at any time before judgment or decree rendered therein. The court at every stage of the action or proceeding shall disregard any error or defect in the proceedings, which do [does] not affect the substantial rights of the parties.'

See, also, Michigan Court Rule No. 25.

We have no doubt but that 'furtherance of justice' suggests disposition of this suit by hearing on the merits. The statute of limitations was designed to eliminate stale claims, and The Evening News Association, on these facts, obviously had notice of suit within the statutory limits.

Nonetheless, the question as to whether this may be regarded as an amendment rather than a substitution of parties is not a simple one. It is clear that 2 separate and distinct corporations are involved.

But the motion is predicated upon undisputed allegations:

1) That service was had upon a person who actually was a proper representative of both corporations, at the legal address of both corporations;

2) That both corporations are in the same general business, have most of the same officers, and are represented by the same law firm; and

3) That the officers of The Evening News Association, Inc., were clearly informed of facts which indicated to them the particular corporate entity which plaintiff desired and intended to sue.

Under similar or less appealing circumstances, many courts have held that they possessed the power to grant amendment. Hernan v. American Bridge Co., 6 Cir., 167 F. 930; Williams v. Pennsylvania R. Co., D. C., 91 F.Supp. 652; Nelson v. Glenwood Hills Hospitals, Inc., 240 Minn. 505, 62 N.W.2d 73; Spence v. Commercial Motor Freight, Inc., 99 Ohio App. 143, 127 N.E.2d 427, 53 A.L.R.2d 1445.

In the Nelson case, supra, the Minnesota supreme court had before it a case remarkably similar in essential facts to that with which we deal here. Plaintiff had started suit against Glenwood Hospital when it should have served the closely associated Homewood Hospital. The Minnesota court said [240 Minn. 505, 62 N.W.2d 78]:

'It can hardly be assumed that the officers of Homewood Hospital, Incorporated, Rascop and Davidson, were is the dark as to the true facts involved or that they were in any way misled to their prejudice, when we consider the fact that Rascop was also an officer of Glenwood Hills Hospitals, Incorporated, and that the two corporations had the same accountant-attorney and liability insurer, shared a working business and operational association, and, to some extent at least, had the same interest in avoiding liability on the claims as set forth in the complaints. If service of summons and complaint results in an intended defendant being fully informed as to the circumstances of the action, the court has acquired sufficient jurisdiction over that defendant, even though an amendment is necessary to correct a misnomer.

'Viewing the record as a whole it seems almost an inescapable conclusion that plaintiffs intended to sue the owner and operator of Homewood Hospital and Veronica Davidson. It seems quite obvious from the facts that the error in naming Glenwood Hills Hospitals, Incorporated, instead of Homewood Hospital, Incorporated, was due only to misinformation received prior to and at the time the pleadings were prepared and served. From the facts as we view them, we have here, not a case of mistaken identity, but a misnomer of a party defendant. See, 2 Moore, Federal Practice (2 ed.)...