Westerlin & Campbell Co. v. Detroit Milling Co.

• Decision Date: 22 December 1925
• Docket Number: No. 75.,75.
• Citation: 206 N.W. 371,233 Mich. 384
• Court: Michigan Supreme Court
• Parties: WESTERLIN & CAMPBELL CO. v. DETROIT MILLING CO.

233 Mich. 384

206 N.W. 371

WESTERLIN & CAMPBELL CO.

v.DETROIT MILLING CO.

No. 75.

Supreme Court of Michigan.

Dec. 22, 1925.

Appeal from Circuit Court, Lenawee County, in Chancery; Burton L. Hart, Judge.

Action by the Westerlin & Campbell Company against the Detroit Milling Company. From an adverse decree, defendant appeals. Affirmed.

Argued before McDONALD, C. J., and CLARK, BIRD, SHARPE, MOORE, STEERE, FELLOWS, and WIEST, JJ.Barbour & Martin, of Detroit, and James H. Baker, of Adrian, for appellant.

Baldwin & Alexander, of Adrian, and Scott, Bancroft, Martin & MacLeish, of Chicago, Ill., for appellee.

FELLOWS, J.

Plaintiff is an Illinois corporation which has not complied with the provisions of part 5, c. 1, Act 84, Public Acts 1921. It entered into a contract at Chicago with defendant to sell it a refrigerating machine of the York type to be shipped to defendant at Adrian f. o. b. Chicago. The contract provided for the furnishing of an erecting engineer at the option of defendant; his services and expenses to be paid for by defendant. The machine was shipped, and was installed. Half of the purchase price has been paid, and this bill is filed to foreclose plaintiff's lien for the balance. There is no defense on the merits to plaintiff's claim, and the case presents solely questions of law.

The proofs show that plaintiff maintain a branch agency at Detroit where a small amount of stock is carried for use in emergencies. Doubtless its activities at Detroit are such as to fall within the provisions of the act, but its violation of the act at Detroit does not render invalid a contract executed outside the state and admittedly valid where executed. The act strikes at contracts executed within the state, not those executed elsewhere; its language is (part 5, c. 1, § 3):

‘No foreign corporation shall be capable of making a valid contract in this state until it shall have fully complied with the requirements of the laws of this state with respect thereto, and at the time holds an unrevoked certificate to that effect from the secretary of state.’

And the federal Constitution protects its contracts made in interstate commerce no matter where made. The statute and its predecessors of similar purport have been before this court on numerous occasions. We shall consider but two of our own cases; in the margin will be found a list of our cases which we have examined.¹ The facts vary in the different cases, but in all of them where the question has arisen we have recognized that upon the question of interstate commerce we are bound by the holdings of the Supreme Court of the United States.

If this contract, executed in Chicago, went no further than to provide for the sale of the refrigerating machine and its shipment to defendant at Adrian f. o. b. Chicago, it would, under all the authorities, be a transaction in interstate commerce and beyond the power of the state to directly burden. Does the provisions for furnishing an erecting engineer at the expense of defendant deprive it of that character? This question must be answered in the negative upon the authority of a recent decision of the Supreme Court of the United States to which we shall presently refer. Before taking up that case, we should consider two of our own cases: Decorators' Supply Co. v. Chaussee, 211 Mich. 302, 178 N. W. 665, is clearly distinguishable from the instant case. The contract in that case required the doing of the work in this state as well as furnishing the material for the job. Other concerns located in the state did the same kind of work, and there was no such ‘intrinsic or peculiar quality or inherent complexity’ in the article sold as would prevent its sale unless erected by the vendor, and we therefore followed Browning v. City of Waycross, 233 U. S. 16, 34 S. Ct. 578, 58 L. Ed. 828. But in Power Specialty Co. v. Michigan Power Co., 190 Mich. 699, 157 N. W. 408, we definitely recognized the rule which was later announced by the federal court in the case which controls this one, and we there said, speaking through Mr. Justice Stone:

‘We think that the plaintiff has failed to show the necessity of itself installing these superheaters as an essential requisite to the sale of them. If such were the case, then, clearly, the state could not hamper or place it in a strait-jacket so as to destroy the possibility of itself doing business of an inherently interstate commerce character.’

Rarely do we find a case so squarely in point as is York Mfg. Co. v. Colley, 247 U. S. 21, 38 S. Ct. 430, 62 L. Ed. 963, 11 A. L. R. 611. Indeed the refrigerating machine there sold was the same make as here sold (York), and it was sold under a like contract to the one before us with the same provision as to services of an engineer. The opinion was written by Chief Justice White, who also wrote the Waycross Case. Speaking of this provision found in both contracts, he said:

‘The only possible question open therefore is, was the particular provision of the contract for the service of an engineer to assemble and erect the machinery in question at the point of destination and to practically test its efficiency before complete delivery relevant and appropriate to the interstate sale of the machinery? When the controversy is thus brought in last analysis to this issue there would seem to be no room for any but an affirmative answer. Generically this must be unless it can be said that an agreement to direct the assembling and supervision of machinery whose intrinsic value largely depends upon its being united and made operative as a whole is not appropriate to its sale. The consequence of such a ruling if made in this case would be particularly emphasized by a consideration of the functions of the machinery composing the plant...