Wiles v. B. E. Wallace Products Corp.

• Citation: 25 Mich.App. 300,181 N.W.2d 323
• Decision Date: 27 July 1970
• Docket Number: No. 2,Docket No. 6472,2
• Parties: Richard WILES, Plaintiff-Appellee, v. B. E. WALLACE PRODUCTS CORPORATION; a Pennsylvania corporation; Lansing Board of Water and Light; and Bernard E. Wallace, d/b/a B. E. Wallace Products Company, Defendants-Appellants
• Court: Court of Appeal of Michigan (US)

Page 323

181 N.W.2d 323

25 Mich.App. 300

Richard WILES, Plaintiff-Appellee, v. B. E. WALLACE PRODUCTS CORPORATION; a Pennsylvania corporation; Lansing Board of Water and Light; and Bernard E. Wallace, d/b/a B. E. Wallace Products Company, Defendants-Appellants.

Docket No. 6472.

Court of Appeals of Michigan, Division No. 2.

July 27, 1970.

Leave to Appeal Denied Nov. 19, 1970.

Released for Publication Nov. 27, 1970.

John P. O'Brien, O'Brien, Skekan & Bos, Lansing, for B. E. wallace co.

Everett R. Trebilcock, Fraser, Trebilcock, Davis & Foster, Lansing, for Bd. of Water and Light.

James A. Timmer, Denfield & Timmer, Lansing, for Bernard E. Wallace.

Barry D. Boughton, Sinas, Dramis, Brake & Turner, Lansing, for plaintiff-appellee.

Before J. H. GILLIS, P.J., and DANHOF and O'HARA, ^* JJ.

J. H. GILLIS, Presiding Judge.

This is an appeal upon leave granted from an order denying defendant B. E Wallace Products Corporation's motion for accelerated judgment. The motion was based on a claimed lack of In personam jurisdiction. See GCR 1963, 116.1(1).

On September 3, 1964, the plaintiff, Richard Wiles, was injured when the gantry with which he was working collapsed. He filed suit against the Lansing Board of Water and Light, purchaser of the gantry, and the B. E. Wallace Products Corporation, (hereinafter Corporation), the manufacturer of the gantry. When plaintiff learned that the B. E. Wallace Products Company, a sole proprietorship (also located in Pennsylvania), had designed, manufactured and sold the gantry, he amended his complaint.

The amended complaint added Bernard E. Wallace, doing business as B. E. Wallace Products Company, as a defendant. It alleged that the Corporation was the successor in interest of the sole proprietorship.

The manufacture of the gantry, and its sale and delivery to the Lansing Board of Water and Light by the proprietorship Before incorporation of defendant Corporation was not disputed. The plaintiff claimed, however, that since jurisdiction was obtained over the proprietorship, the Corporation, as successor to the assets and liabilities of the proprietorship, stood in the shoes of the proprietorship and was, therefore, subject to our jurisdiction.

The Corporation moved to quash, arguing that since it was not in existence at the time the gantry was manufactured and sold, it could not be subjected to the jurisdiction of Michigan Courts. The motion was temporarily denied; it was subsequently renewed in the form of a motion for accelerated judgment. The trial judge denied this latter motion on the ground that jurisdictional facts arose which could not be dealt with summarily.

On appeal, the question presented is whether denial of defendant Corporation's motion to dismiss for lack of jurisdiction was proper where the jurisdictional facts were yet to be established. Analysis of this issue necessarily concerns the question of whether plaintiff can ever succeed on his theory of 'successor in interest' in light of our 'long-arm' jurisdictional statutes.

The bases of jurisdiction over foreign corporations are founded in statute. M.C.L.A. § 600.711(3) (Stat.Ann.1962 Rev. § 27A.711(3)) grants general In personam jurisdiction over foreign corporations who carry on 'a continuous and systematic part of its general business within this state.' Arguably, neither the Corporation nor the proprietorship falls within this provision. However, Limited personal jurisdiction arises over a foreign corporation by 'the doing or causing any act to be done, or consequences to occur, in the state resulting in an action for tort.' M.C.L.A. § 600.715(2) (Stat.Ann.1962 Rev. § 27A.715(2)).

The premise that jurisdiction may be based upon isolated or sporadic contacts when the claim arises out of such contacts is well established. McGee v. International Life Insurance Company (1957) 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223. It appears from the record that there is, at least, limited personal jurisdiction over the sole proprietorship in the instant case, by virtue of the sale of the gantry to the Lansing Board of Water and Light.

Plaintiff's contention that this finding of jurisdiction may be applied against the Corporation as a successor in interest, or as an alter ego of the proprietorship, is not wholly outside of the law. For instance, in Michigan, the debts and contracts of a partnership become the debts and contracts of the corporation succeeding the partnership, If they are expressly assumed by it. McLellan v. Detroit File Works (1885) 56 Mich. 579, 23 N.W. 321; Piette v. Bavarian Brewing Co. (1892), 91 Mich. 605, 52 N.W. 152. See also, Rodgers v. Lincoln Hospital (1927), 239 Mich. 329, 214 N.W. 88. In some case...