author: Cynar, J.

text:
    PEOPLE v GRABLE
    Docket No. 78-2023.
    Submitted November 14, 1979, at Lansing.
    Decided January 22, 1980.
    Leave to appeal applied for.
    Defendant, Vanessa Grable, was convicted, on her plea of guilty, of forgery and uttering and publishing a forged instrument in the Lenawee Circuit Court, Rex B. Martin, J. The evidence was that she forged the instrument uttered and published. Defendant appeals, alleging the convictions and sentences violated the double jeopardy clauses of the United States and Michigan Constitutions. Held:

    Her plea of guilty did not waive the constitutional defect claimed on appeal. A guilty plea waives all defects that go to whether the government can actually prove its case but does not waive those defects which would preclude the government from convicting a defendant even if it could prove its case. The double punishment which is constitutionally proscribed for one offense includes another conviction of the same offense and not only another sentence, because the second conviction punishes the defendant in several ways, including parole considerations, impeachment at subsequent trials and treatment as a habitual offender. A defendant may not be convicted of two crimes where, on the facts of the particular case and as is here, the trier of fact must necessarily find him guilty of one in order to find him guilty of the other. This test does not rest solely on the distinction of necessarily included offenses and cognate lesser included offenses, but requires an analysis of the facts in each case. Convictions for both uttering and publishing a forged instrument and forgery may not both stand where the fact of the forgery supplied an element of knowledge indispensable to the conviction for uttering and publishing. When this occurs, the appropriate remedy is to vacate the conviction of forgery.

      References for Points in Headnotes
    [1] 21 Am Jur 2d, Criminal Law § 495.
    Plea of guilty as waiver of claim of .unlawful search and seizure. 20 ALR3d 724.
    [2] 21 Am Jur 2d, Criminal Law § 165 et seq.

    39 Am Jur 2d, Habitual Criminals and Subsequent Offenders § 5. Increased sentence for dnagerous offenders under 18 USCS § 3575.
    41 ALR Fed 576.
    [3] 36 Am Jur 2d, Forgery §§ 3-26.
    [4] 36 Am Jur 2d, Forgery §§ 20, 26.
    [5, 6, 8] 21 Am Jur 2d, Criminal Law § 182.
    36 Am Jur 2d, Forgery §§ 20, 39, 43, 53.
    [7] 21 Am Jur 2d, Criminal Law § 547.
    36 Am Jur 2d, Forgery § 53.

      Affirmed as modified.
    1. Criminal Law — Plea of Guilty — Defects — Waiver of Defects.
    A guilty plea waives all defects that go to whether the government can actually prove its case but does not waive those defects which would preclude the government from convicting a defendant even if it could prove its case.
    2. Criminal Law — Constitutional Law — Double Jeopardy — Double Punishment.
    The double punishment for a single offense which is constitutionally proscribed includes another conviction of the same offense and not only another sentence, because the second conviction punishes the defendant in several ways, including parole considerations, impeachment at subsequent trials and treatment as a habitual offender.
    3. Forgery — Elements.
    The elements of forgery are: 1) an act which results in the false making or alteration of an instrument which makes the instrument appear to be what it is not; and 2) a concurrent intent to defraud or injure; the key to forgery is that the writing itself is a forgery.
    4. Forgery — Uttering and Publishing — Elements.
    The elements of uttering and publishing a forged instrument are: 1) knowledge that the instrument was false; 2) intent to defraud; and 3) presentation of the forged instrument for payment.
    5. Criminal Law — Double Punishment.
    The Supreme Court of the United States has said that, in determining whether separate punishment might be imposed for violation of two distinct statutory provisions, the applicable rule is whether each provision requires proof of a fact which the other does not.

      6. Criminal Law — Multiple Convictions — Lesser Included Offenses — Cognate Included Offenses — Analysis of Facts.
    A defendant may not be convicted of two crimes where, on the facts of the particular case, the trier of fact must necessarily find him guilty of one in order to find him guilty of the other; this test does not rest solely on the distinction of necessarily included offenses and cognate lesser included offenses, but requires an analysis of the facts in each case.
    7. Criminal Law — Multiple Convictions — Multiple Punishments —■ Single Occurrence.
    Absent a clear expression of legislative intent to authorize multiple convictions and cumulative punishments based on a single factual occurrence, multiple convictions and their attendant punishments cannot stand.
    8. Forgery — Uttering and Publishing — Multiple Convictions.
    Convictions for both uttering and publishing a forged instrument and forgery may not both stand where the fact of the forgery supplies an element of knowledge indispensable to the conviction for uttering and publishing; when this occurs, the appropriate remedy is to vacate the conviction of forgery.

      Frank J. Kelley, Attorney General, Robert A. Derengoski, Solicitor General, and Harvey A. Koselka, Prosecuting Attorney (by Thomas C. Nelson, Assistant Attorney General, Prosecuting Attorneys’ Appellate Unit) for the people.

      Richard L. Roble, for defendant on appeal.
    Before: T. M. Burns, P.J., and Cynar and A. M. Bach, JJ.

       Former circuit judge, sitting on the Court of Appeals by assignment pursuant to Const 1963, art 6, § 23 as amended in 1968..

   Cynar, J.

Pursuant to a plea bargain, defendant pled guilty to forgery, MCL 750.248; MSA 28.445, and to uttering and publishing a forged instrument, MCL 750.249; MSA 28.446. In exchange for her plea, similar pending charges were dismissed, and the prosecution agreed to forbear from charging defendant as an habitual offender. Defendant was sentenced to concurrent terms of from 2-1/2 to 14 years imprisonment and now appeals as of right.

The sole issue presented in this appeal is whether, on the facts of this case, the two plea-based convictions and sentences imposed constitute multiple convictions and double punishment for the same offense, in violation of the double jeopardy clause of both the United States and Michigan Constitutions.

I

As a threshold matter, we note that defendant’s guilty plea does not constitute a waiver of the constitutional defect urged in this appeal, as it is a defect irrelevant to defendant’s factual guilt of the crimes charged, and is properly characterized as one which would preclude the government from convicting defendant of both offenses, even assuming it could prove its case. People v Riley, 88 Mich App 727, 730; 279 NW2d 303 (1979).

So too, we note that the fact that the sentences imposed are to be served concurrently does not obviate the potential infirmity of the convictions, as the concept of double punishment applies to the convictions as well as to the sentences. If both convictions are allowed to stand, several collateral consequences could impact upon defendant, including parole considerations, impeachment at subsequent trials, and habitual offender treatment. People v Stewart (On Rehearing), 400 Mich 540, 549-550; 256 NW2d 31 (1977), People v Martin, 398 Mich 303, 310-311; 247 NW2d 303 (1976).

II

The elements of the crime of forgery are: (1) an act which results in the false making or alteration of an instrument (which makes an instrument appear to be what it is not); and (2) a concurrent intent to defraud or injure. The key is that the writing itself is a lie. People v Susalla, 392 Mich 387, 392-393; 220 NW2d 405 (1974).

The elements of the crime of uttering and publishing a forged instrument are: (1) knowledge on the part of the accused that the instrument was false; (2) an intent to defraud; and (3) presentation of the forged instrument for payment. People v Fudge, 66 Mich App 625, 631; 239 NW2d 686 (1976), People v Kimble, 60 Mich App 690, 694; 233 NW2d 26 (1975).

Ill

We must first apply the Blockburger test to the crimes in order to pass upon the claimed double jeopardy defect. The focus under this test is upon the statutory elements of the offenses in issue. The question is whether "each provision requires proof of a fact which the other does not”. Blockburger, supra, 304, Wayne County Prosecutor v Recorder’s Court Judge (People v Brintley), 406 Mich 374, 395-397; 280 NW2d 793 (1979), app dis sub nom Brintley v Michigan, 444 US 948; 100 S Ct 418; 62 L Ed 2d 317 (1979). We have no trouble concluding that the instant convictions surmount this hurdle. Although there is "a substantial overlap in the proof offered to establish the crimes”, id., 397, the violation of each provision, as opposed to the evidence offered to prove the same, is distinctly different under each of the respective statutes. Id., 397. Therefore, legally the two crimes of which defendant was convicted are not the "same offense”.

IV

Next, our analysis takes us into the amorphous area of "factual” double jeopardy. As an abstract proposition, a defendant may not be convicted of two crimes where, on the facts of the particular case, the trier of fact must necessarily find defendant guilty of one crime in order to convict him of the other. People v Martin, supra, 307, People v Stewart, supra, 548-549, People v Terry Alexander, 82 Mich App 621, 624; 267 NW2d 466 (1978).

In Wayne County Prosecutor, supra, the Court reexamined Stewart and Martin, and while not specifically overruling or disapproving of their holdings, concluded that the nub of those cases was that where the Legislature had failed to clearly authorize multiple convictions and cumulative punishments based on one factual occurrence, two convictions and their attendant punishments cannot stand. Wayne County Prosecutor, supra, 399-402.

No such legislative intent rationale is apparent in the case at bar which would support the dual convictions of defendant. In any event, the type of factual double jeopardy defendant complains of does not appear to be addressed in Wayne County Prosecutor, as it does not rest upon the factual parameters spoken to in that case.

What defendant does argue is that the conviction for forgery was the .sine qua non for the conviction for uttering and publishing, i.e., defendant could not have been convicted of the. latter without being found guilty of the former, on the facts as developed at her plea-taking proceeding. She contends that the entire chain of events involving both her forging of an instrument and her presenting of the same for payment constituted a single criminal transaction, a unitary episode.

This is a slightly different concept of a "same transaction” or "one occurrence” than that considered in Wayne County Prosecutor. There, the two crimes of which the defendant was convicted, and which were claimed to be violative of the double jeopardy clauses of the U.S. and Michigan Constitutions, occurred virtually, if not actually, simultaneously. In this case, the events which transpired are said to constitute but subparts of a single transaction, although not compressed into such a short time frame. On the facts as admitted by defendant at her arraignment, it was established that the forgery and the uttering and publishing did occur the same day and were separated temporally by only a minimal amount of time, minutes or at worst only an hour or so.

As posited in People v Terry Alexander, supra, the test which we are applying does not rest upon the distinction between necessarily lesser-included offenses and cognate lesser-included offenses (Blockburger), but instead requires an ad hoc analysis of the facts of each case. The distinction is between offenses which are necessarily lesser-included offenses legally, and those factually so included. Terry Alexander, supra, 624-625.

Initially, we agree with defendant that the acts for which she admitted responsibility constitute a continuum evidencing but a single criminal transaction.

So too, we are persuaded that, on the facts before us, defendant’s right not to be placed twice in jeopardy for the same offense has been unconstitutionally violated. The circumstance of forgery is not severable and apart from the uttering and publishing.

On the facts here, which indicate a forgery of a personal check by defendant and a subsequent presentation of that instrument for payment by her, when the trial judge accepted defendant’s plea of guilty to uttering and publishing, he necessarily made a finding that defendant was guilty of the forgery. The fact of the forgery supplied the element of knowledge indispensable to a conviction for uttering and publishing in this case. It is as if the forgery merged into the latter offense, at least for double jeopardy purposes, so as to constitute but a single wrongful act. People v Stewart, supra, 548-549. There is no evidence of knowledge that the instrument was false apart from the act of forgery. The forgery was therefore a necessary prerequisite or sine qua non for the uttering and publishing of which defendant was also convicted.

V

Having so concluded, we further hold that, consistent with the above analysis, the appropriate remedy is to affirm defendant’s conviction for uttering and publishing a forged instrument, and to vacate defendant’s conviction for the crime of forgery.

Affirmed as modified.

       US Const, Am V; Const 1963, art 1, § 15.

        Blockburger v United States, 284 US 299; 52 S Ct 180; 76 L Ed 306 (1932).


source: Caselaw Access Project

author: N. J. Kaufman, P.J.

license: Public Domain

text:
    DONIGAN v FINN
    Docket No. 78-2240.
    Submitted June 21, 1979, at Detroit.
    Decided January 22, 1980.
    James F. Finn was appointed to represent Leo Donigan, an allegedly indigent criminal defendant, in the United States District Court. Donigan pled guilty to one count of a four-count indictment. He sought to vacate his guilty plea before sentencing, but his motion to vacate the plea was denied. Donigan then brought an action in the state court against Finn for legal malpractice. Finn brought a motion for summary judgment, alleging that appointed counsel for indigent defendants enjoy a qualified immunity from malpractice liability arising from their conduct of the defense and that reversal of the underlying conviction because of ineffective assistance of counsel should be an absolute prerequisite to such malpractice actions. The Wayne Circuit Court, Victor J. Baum, J., denied Finn’s motion, and Finn appeals by leave granted. Held:

    An attorney appointed to defend an indigent criminal defendant is not immune from liability for malpractice in connection with his defense of the indigent defendant.
    Affirmed.
    1. Criminal Law — Constitutional Law — Right to Counsel.
    An indigent defendant has a right to counsel in criminal prosecutions; however, he is not entitled to choose a particular attorney and may change appointed attorneys only upon a showing of adequate cause (US Const, Am VI).

      References for Points in Headnotes
    [1] 7 Am Jur 2d, Attorneys at Law § 148.
    [1, 2] 21 Am Jur 2d, Criminal Law §§ 318, 319.
    Accused’s right to counsel under the Federal Constitution — Supreme Court cases. 18 L Ed 2d 1420.
    Constitutionally protected right of indigent accused to appointment of counsel in state court prosecution. 93 ALR2d 747.
    [2] 7 Am Jur 2d, Attorneys at Law § 167 et seq.

    Court-appointed attorney as subject to liability under 42 USCS § 1983. 36 ALR Fed 594.
    Attorney’s liability for malpractice in connection with defense of criminal case. 53 ALR3d 731.
    Indigent accused’s right to choose particular counsel appointment to assist him. 66 ALR3d 996.

      2. Criminal Law — Appointed Counsel — Attorney and Client — Legal Malpractice.
    An attorney who is appointed to defend an indigent criminal defendant is not immune from liability for legal malpractice in connection with the defense of the indigent defendant.

      Leo Donigan, in propria persona.

      Plunkett, Cooney, Rutt, Watters, Stanczyk & Pedersen (by Charles T. McGorisk and Christine D. Oldani), for defendant.
    Before: N. J. Kaufman, P.J., and D. C. Riley and J. X. Theiler, JJ.

       Circuit judge, sitting on the Court of Appeals by assignment.

   N. J. Kaufman, P.J.

Defendant appeals by leave granted from a March 16, 1978, Wayne County Circuit Court order denying defendant’s motion for summary judgment on grounds of qualified immunity in this attorney malpractice case.

According to the certified concise statement of facts, this case arises out of defendant’s representation of plaintiff in a criminal prosecution entitled United States v Leo Donigan, No. CR-5-80825, in the United States District Court for the Eastern District of Michigan. The indictment in that criminal prosecution was handed down on May 9, 1975, and contained four counts. By an order entered June 25, 1975, Honorable Paul S. Komives, United States Magistrate, appointed Finn to defend Donigan, an alleged indigent, in that criminal prosecution. We note that defendant Finn was not forced to take the appointment. He could have turned it down..

On May 6, 1976, Donigan pled guilty to Count III of the indictment. Counts I, II and IV were dismissed by an order entered September 7, 1976.

The Sixth Circuit Court of Appeals has not reversed that plea-based conviction due to ineffective assistance of counsel or for any other reason.

Before sentencing, Donigan filed a motion to vacate his guilty plea, claiming that he had a meritorious defense to the indictment based on the statute of limitations. The Sixth Circuit Court of Appeals affirmed the denial of that motion by an order entered on March 8, 1977, which read:

"Upon consideration, it is concluded that the District Court did not abuse its discretion in denying the motion to vacate the plea of guilty. Moreover, the Court concludes that three other grounds allegedly justifying a withdrawal of the guilty plea, set forth in the appellant’s brief on appeal, were not presented to the District Court in the first instance, and we decline to address them here. Accordingly,

"IT IS ORDERED that the judgment of the District Court be, and it is hereby affirmed, but without prejudice to any right of the defendant, by proceedings under 28 U.S.C. § 2255 or otherwise, to raise an issue of the propriety of the guilty plea based on the claim that the government failed to keep a plea bargain.”

• Thereafter, on April 15, 1977, plaintiff filed a malpractice claim against his appointed attorney. Defendant moved for summary judgment, arguing that appointed counsel for indigent defendants enjoy a qualified immunity from suits for malpractice in their conduct of the defense. Defendant also contended that an absolute prerequisite to such suits should be that the underlying conviction has been reversed due to ineffective assistance of counsel. The. trial court rejected defendant’s argument and he now appeals. We granted leave to appeal on September 8, 1978.

Our issue of first impression is whether appointed attorneys for indigent criminal defendants are immune from malpractice liability in a state action in connection with the defense of an accused indigent. We conclude that they are not immune.

An indigent defendant has a right to counsel in criminal prosecutions. US Const, Am VI, Gideon v Wainwright, 372 US 335; 83 S Ct 792; 9 L Ed 2d 799; 93 ALR2d 733 (1963), Argersinger v Hamlin, 407 US 25; 92 S Ct 2006; 32 L Ed 2d 530 (1972). However, an indigent defendant is not entitled to choose a particular lawyer and can change appointed attorneys only upon a showing of adequate cause. See People v Ginther, 390 Mich 436, 441; 212 NW2d 922 (1973). Further, when we reflect on the equal protection clause of the 14th Amendment to the United States Constitution, we are reminded of the words of the late Justice Black who, in Griffin v Illinois, 351 US 12, 19; 76 S Ct 585; 100 L Ed 891 (1956), stated: "[tjhere can be no equal justice where the kind of trial a man gets depends on the amount of money he has”.

In light of the foregoing well-established principles of law, we decline to draw a distinction between appointed and retained counsel in criminal cases when it comes to questions of malpractice. The United States Constitution and our own principles of fairness lead us to affirm the trial court.

Affirmed. Costs to appellee.

       It is noteworthy that the United States Supreme Court has reached the same conclusion recently in Ferri v Ackerman, 444 US 193; 100 S Ct 402; 62 L Ed 2d 355 (1979). Although the Ferri case involved an interpretation of Federal law, which expressly allowed a state to reach its own conclusion in this area, it nevertheless serves as a strong indication of a trend away from immunity in the instant situation.


author: L. B. Bebeau, J. D. F. Walsh, J.

text:
    PEOPLE v WILLIS
    Docket Nos. 78-2851, 78-2852.
    Submitted October 2, 1979, at Grand Rapids.
    Decided January 22, 1980.
    Leave to appeal applied for.
    Billy Willis pled guilty to two charges of armed robbery and two charges of possession of a firearm during the commission of a felony at a single plea-taking session in Recorder’s Court of Detroit, Susan D. Borman, J. The two armed robberies were separate and distinct crimes involving different victims, times, and geographical locations, although both occurred on the same day. Defendant was sentenced to one year and one day on each of the armed robberies and to terms of two years on the first felony-firearm conviction and five years on the second felony-firearm conviction. Defendant appeals. On appeal, defendant contends that the mandatory five-year sentence imposed by the trial court for his second felony-firearm conviction was invalid and should have been a two-year sentence. Held:

    Multiple convictions arising out of separate incidents pled to at the same time may serve as the basis for subsequent-offender convictions under the felony-firearm statute. The court did not err in sentencing defendant Willis to five years On the second felony-firearm conviction because pleas of guilty to two separate felony-firearm offenses, rendered at a single plea-taking session, satisfy the felony-firearm statutory requirement that a second conviction under the statute mandates a five-year prison sentence.
    Affirmed.
    D. F. Walsh, J., dissented. He would hold that the criminal activity supporting a subsequent conviction under the felony-firearm statute must have occurred after a prior felony-firearm conviction. He would remand for resentencing.
    References for Points in Headnotes
    [1, 2] 39 Am Jur 2d, Habitual Criminals and Subsequent Offenders §§6, 7.
    Chronological or procedural sequence of former convictions as affecting enhancement of penalty for subsequent offense under habitual criminal statutes. 24 ALR2d 1247.

      Opinion of the Court
    1. Criminal Law — Felony-Firearm — Plea of Guilty — Separate Crimes — Multiple Convictions — Statutes.
    Pleas of guilty to two felony-firearm charges made at a single plea-taking session but arising out of separate incidents may serve as the basis for subsequent-offender convictions under the felony-firearm statute (MCL 750.227b; MSA 28.424[2]).
    Dissent by D. F. Walsh, J.
    2. Criminal Law — Felony-Firearm — Separate Crimes — Separate Convictions.

      Criminal activity supporting a subsequent conviction under the felony-ñrearm statute must have occurred after a prior felonyñrearm conviction.

      Frank J. Kelley, Attorney General, Robert A. Derengoski, Solicitor General, William L. Cahalan, Prosecuting Attorney, Edward Reilly Wilson, Principal Attorney, Appeals, and Paul C. Louisell, Assistant Prosecuting Attorney, for the people.

      Lerner & Sobel, for defendant on appeal.
    Before: Cynar, P.J., and D. F. Walsh and L. B. Bebeau, JJ.

       Former circuit judge, sitting on the Court of Appeals by assignment pursuant to Const Í963, art 6, § 23 as amended in 1968.

   L. B. Bebeau, J.

Pursuant to a sentence agreement, defendant on February 14, 1977, pled guilty to two charges of armed robbery, MCL 750.529; MSA 28.797, and two charges of possession of a firearm during the commission of a felony, MCL 750.227b; MSA 28.424(2). The two armed robberies to which defendant pled guilty were separate and distinct crimes, involving different victims, times, and geographical locations, although both occurred on the same day. Defendant subsequently received concurrent prison terms of two years on the first felony-firearm conviction and five years on the second, in addition to terms of one year and one day on each armed-robbery conviction, the latter to run concurrently with each other but consecutive to the felony-firearm sentences.

The sole issue presented by defendant on appeal which requires discussion is his contention that the mandatory five-year sentence imposed by the lower court for his second felony-firearm conviction was invalid and should have been two years instead. Simply stated, the question is whether defendant’s pleas of guilty to two separate felony-firearm offenses, rendered at a single plea-taking session, satisfied the requirement of MCL 750.227b(l); MSA 28.424(2X1) that "[u]pon a second conviction under this section, the person shall be imprisoned for 5 years”.

The problem presented is no longer one of first impression. In People v Barrett, 93 Mich App 808; 287 NW2d 348 (1979), this Court analyzed a similar fact situation. There, as here, the defendant argued that the felony-firearm statute should be interpreted analogously to Michigan’s habitual offender act, MCL 769.10 et seq.; MSA 28.1082 et seq., so that no enhanced punishment would be proper under MCL 750.227b(l); MSA 28.424(2X1) unless the subsequent felony-firearm offense was committed after the defendant had been convicted of a previous felony-firearm charge. In rejecting this argument the Barrett Court observed (p 815):

"While both statutes are similar in that each is imbued with a general deterrent force common to all criminal statutes, they are strikingly different in language and purpose. The habitual offender act specifically excepts from its coverage the first-time offender whereas the felony-firearm statute applies to all offenders. The habitual offender statute was intended to afford a first offender an opportunity to reform. Thus, a time gap between convictions becomes important. By contrast, the felony-firearm statute is directed at punishing the use of firearms during unlawful acts and, as such, is not concerned with the time at which convictions are received.”

We agree with the result reached in Barrett. The language of the felony-firearm statute is unambiguous and is distinguishable on its face from that of the habitual criminal act. Had the Legislature intended to do so, it coudl easily have incorporated into the felony-firearm statute the clear language already existing in the habitual offender act, and thus dictated the result argued for by defendant. Its failure to do so must be regarded as intentional and meaningful.

Defendant’s allegation that the felony-firearm statute provides inadequate notice is without merit.

Affirmed.

Cynar, P.J., concurred.

D. F. Walsh, J.

(dissenting). I must respectfully dissent. In my judgment in providing for increased terms of imprisonment for subsequent felony-firearm convictions it was the intent of the Legislature to discourage recidivism. The harsh sentencing consequences for subsequent offenders are meant for those who, having already served an additional two-year term of imprisonment for violation of the felony-firearm law, are not dissuaded from again pursuing the same course of conduct.

I would rule that despite the difference in language the felony-firearm act must be given the same interpretation as the habitual offender act and that the criminal activity supporting the subsequent conviction must have occurred after the prior conviction.

I would remand for resentencing.


author: Allen, J.

text:
    MILLER v SWANSON
    Docket No. 78-3174.
    Submitted December 5, 1979, at Grand Rapids.
    Decided January 22, 1980.
    Arnie Miller underwent a series of two operations to correct a deformity caused by a previous injury to his wrist. After the first operation Miller experienced pain in his wrist, and x-rays disclosed a foreign object in the wrist. Prior to the second operation Miller signed an agreement with Alfred Swanson, M.D., the operating physician, and Orthopedic Reconstructive Surgeons, P.C., the professional corporation under which Dr. Swanson acted, to arbitrate any claims or disputes "which may arise in the future out of or in connection with” Miller’s medical care. The day before the second operation Miller signed a similar agreement with Blodgett Memorial Hospital. During the second operation Dr. Swanson removed a surgical needle which had been imbedded in Miller’s wrist. After the time period allowed for revocation of the arbitration agreements had expired Miller brought an action for damages against Dr. Swanson, Orthopedic Reconstructive Surgeons and Blodgett Memorial Hospital. The defendants made a motion to compel arbitration, and the Kent Circuit Court, Roman J. Snow, J., granted the motion. A settlement was reached with Blodgett Memorial Hospital, but Miller appeals by leave granted as to the other defendants, alleging that the arbitration agreement does not apply to the first operation and that, therefore, his action in circuit court is not precluded by that agreement. Held:

    1. The terms of the arbitration agreement are unambiguous and apply only to claims arising subsequent to the date of the agreement. Because the agreement is unambiguous it is not susceptible to a construction which would include claims related to medical services performed in the past as well as those performed in the future. Therefore, the matter is not subject to arbitration under the agreement.

      References for Points in Headnotes
    [1] 5 Am Jur 2d, Arbitration and Award §§ 12, 54.
    [2] 5 Am Jur 2d, Arbitration and Award § 75.
    [3] 5 Am Jur 2d, Arbitration and Award § 167.
    [4] 5 Am Jur 2d, Arbitration and Award § 54.

      2. The plaintiffs malpractice claim arose at the time that the malpractice occurred or was discovered. The defendants’ contention that the claim did not arise until the plaintiff filed his lawsuit is without merit.
    Reversed.
    1. Arbitration and Award — Arbitrability — Contracts.
    The arbitrability of an issue in a contract is ascertained through a three-stage inquiry: (1) is there an arbitration agreement in a contract between the parties, (2) is the complaining party’s claim on its face, or arguably, related to the contract, and (3) is the dispute expressly exempt by the terms of the contract.
    2. Arbitration and Award •— Arbitrability — Burden of Proof.
    A party who seeks to avoid arbitration under an arbitration agreement has the burden of showing nonarbitrability of the matter in question.
    3. Arbitration and Award — Appeal and Error — Clear Error.
    A trial court’s finding that an issue is arbitrable under an arbitration agreement between the parties will be reversed on appeal only if it is clearly erroneous.
    4. Arbitration and Award — Statutes — Controversy.
    The word "controversy” used in a statute controlling arbitration agreements does not necessarily mean a cause of action or a complaint filed in court; a controversy may arise under the statute without the filing of a lawsuit (MCL 600.5001; MSA 27A.5001).

      Norman C. Halbower, for plaintiff.

      Hillman, Baxter & Hammond (by Douglas W. Hillman and David C. Myers), for defendants.
    Before: Bronson, P.J., and Allen and R. M. Maher, JJ.
   Allen, J.

Does an agreement to arbitrate, drawn pursuant to the provisions of the Malpractice Arbitration Act, and entered into after a first operation but prior to a second operation, preclude a suit in circuit court against the operating physician for negligence occurring during the first operation? On June 7, 1978, the Circuit Court for Kent County, having answered this question in the affirmative, entered an order staying plaintiff’s suit in circuit court and directed the parties to proceed with arbitration. Plaintiff appeals by leave granted. The question presented is of first impression.

In April, 1972, plaintiff severely injured his right wrist in a chain saw accident. He was referred by his family physician to defendant Dr. Alfred Swanson, who allegedly recommended a two-step operative procedure to correct the deformity in plaintiff’s right hand caused by the accident. The first operation was performed December 8, 1975, at Blodgett Memorial Hospital. Following the operation plaintiff claims he experienced sharp pains in his wrist. X-rays were taken which, according to plaintiff, disclosed a needle-shaped object imbedded in plaintiff’s wrist. But despite the disclosure in the x-rays, plaintiff alleges, defendant doctor assured plaintiff that nothing was amiss.

A second operation was scheduled at Blodgett Memorial Hospital for May 14, 1976. On February 27, 1976, some 10 weeks prior to the second operation but 11 weeks after the first operation, plaintiff voluntarily signed a standard form arbitration agreement. Under the agreement, plaintiff agreed with Dr. Swanson and Orthopedic Reconstructive Surgeons, the professional corporation under which Dr. Swanson acted, to arbitrate any claims or disputes (except charges for services rendered) "which may arise in the future out of or in connection with my medical care”. On May 14, 1976, Dr. Swanson performed the second operation, during the course of which he removed a surgical needle found imbedded in plaintiffs wrist.

In October 1976, plaintiff attempted to revoke the arbitration agreement but was unable to do so because the 60-day period allowed for revocation under § 5041(5) of the statute, MCL 600.5041; MSA 27A.5041, had long expired. On October 10, 1977, plaintiff filed suit in circuit court charging Dr. Swanson with fraud, negligence and misrepresentation, and charging Blodgett Memorial Hospital with negligence. Defendants answered and moved to compel arbitration. Following hearing on the motion, the trial judge, on June 2, 1978, granted the motion, saying:

"Our Court of Appeals has stated in the case of American Fidelity Fire Insurance Co v Barry, 80 Mich App 670 (1978) that:

" 'The arbitrability of an issue in a contract is ascertained through a three-stage inquiry: (1) Is there an arbitration agreement in a contract between the parties? (2) Is the insured’s claim "on its face” or "arguably” related to the contract? and (3) is the dispute "expressly exempt” by the terms of the contract?’

"In this case there is a signed arbitration agreement with both the hospital and Dr. Swanson. The claim of the plaintiff is arguably related to the agreements that were signed, and there is no express exemption in the terms of the arbitration agreements of whatever may have happened in December of 1975. Therefore, this Court will order the parties to proceed to arbitration.”

In January, 1979, a settlement was • reached between plaintiff and defendant Blodgett Memorial Hospital. On March 12, 1979, this Court granted plaintiff leave to appeal the circuit court’s ruling regarding the claim against Dr. Swanson and the professional corporation under which he did business.

In determining whether defendants’ motion to compel arbitration should be granted, the trial court was correct in applying the three-pronged test set forth in American Fidelity Fire Ins Co v Barry, 80 Mich App 670, 674-676; 264 NW2d 92 (1978), lv den 402 Mich 915 (1978), and again stated in Clinton Twp v Contrera, 92 Mich App 297; 284 NW2d 787 (1979). Also, both parties agree that parts (1) and (3) of the Barry test are met. Thus, the narrow issue before us is whether plaintiffs claim is "on its face or arguably related to” the arbitration agreement which plaintiff signed February 27, 1976. The burden is on plaintiff to show nonarbitrability. Kaleva-Norman-Dickson School Dist No 6 v Kaleva-Norman-Dickson School Teachers Ass’n, 393 Mich 583; 227 NW2d 500 (1975). A trial court’s finding that an issue is arbitrable will be reversed on appeal "only if it is clearly erroneous”. Ferndale Education Ass’n v School Dist for the City of Ferndale #2, 67 Mich App 645, 649; 242 NW2d 481 (1976). With these rules in mind, we address the issue presented.

The arbitration agreement of February 27, 1976, reads as follows:

"ARBITRATION AGREEMENT

Physician-Patient Out-Form

"I understand that my physician(s) and I by signing this document agree to arbitrate any claims or disputes (except for disputes over charges for services rendered) which may arise in the future out of or in connection with my medical care.

"I understand that Michigan Law gives me the choice of trial by judge or jury or of arbitration. I understand that arbitration is a procedure by which a pánel that is either mutually agreed upon or appointed decides the dispute rather than a judge or jury. I freely choose arbitration, and I agree that a judgment of any circuit court may be rendered upon any award or determination made pursuant to this agreement. I also understand that any arbitration will be conducted in accordance with Michigan Law and the Michigan Medical Arbitration Rules, as approved by the Commissioner of Insurance.

"I understand that this agreement to arbitrate is binding on me and all my agents, representatives and heirs and assigns, as well as on my physician(s). I also understand that if my physician(s) act(s) as an employee of a Professional Corporation or as an employee or member of a partnership when providing my medical care, the Professional Corporation or partnership is also bound by this agreement.

"This agreement shall apply to any future claims or disputes arising out of or in connection with medical care received over a period of one year from this date.

"I certify that I have read this agreement or have had it read to me and that I fully understand its content and execute this agreement of my own free will. I have received a complete copy of the booklet which explains this agreement.

"THIS AGREEMENT TO ARBITRATE IS NOT A PREREQUISITE TO HEALTH CARE OR TREATMENT, AND MAY BE REVOKED WITHIN 60 DAYS AFTER EXECUTION BY NOTIFICATION IN WRITING.” (Emphasis added.)

Defendants contend that the February arbitration agreement is ambiguous as to whether its terms relate back to the December surgery, and that since it is ambiguous, it necessarily is "arguably related” thereto. We disagree, since we con-elude that the agreement on its face refers to future medical services rendered by Dr. Swanson. On this issue we do not find the agreement ambiguous. Paragraph four specifically states:

"This agreement shall apply to any future claims or disputes arising out of or in connection with medical care received over a period of one year from this date. ” (Emphasis supplied.)

To argue that a claim is arbitrable does not make it "arguably related” where, as here, the language of the controlling agreement is unambiguous. To hold otherwise would make all claims arising between the parties subject to arbitration by the convenient expedient of arguing that the claims are related to the matter at issue. Defendants contend that the agreement is ambiguous because the phrase "in connection with medical care received” is susceptible to a construction which includes medical care received both in the past and in the future. Had these been the only words, we would agree. But, as is apparent, that language is qualified by the words "over a period of one year from this date”.

At the trial court hearing and upon appeal, defendants assert that the arbitration agreement of February, 1976, could not have been signed at the time of the first operation because the medical malpractice statute was "not implemented” until January 1, 1976. However, the Malpractice Arbitration Act, 1975 PA 140, supra, was enacted July 9, 1975, with an effective date of September 1, 1975.

While great reliance is placed on the fact that Dr. Swanson’s medical services were to be conducted in a two-step operative procedure, we note the only evidence to that effect is two hospital records written by defendants and prepared by defendants after they had the opportunity of learning of the alleged malpractice claim. But, assuming arguendo such to be true, it does not follow that the agreement may be related back to the December surgery, when the agreement expressly refers to "future claims” for medical care received over a period of one year "from this date”.

Finally, we refer to paragraph one of the agreement which states that by signing the agreement the patient agrees with the physician to arbitrate any claims "which may arise in the future”. Defendants contend that the dispute with Dr. Swanson did not arise until plaintiff filed his lawsuit in October, 1977. We disagree. MCL 600.5001; MSA 27A.5001 reads:

"A provision in a written contract to settle by arbitration under this chapter, a controversy thereafter arising between the parties to the contract, with relation thereto, and in which it is agreed that a judgment of any circuit court may be rendered upon the award made pursuant to such agreement, shall be valid, enforceable and irrevocable save upon such grounds as exist at law or in equity for the rescission or revocation of any contract.” (Emphasis added.)

We do not construe the word "controversy” to mean the same as a complaint filed in court or a cause of action. Had the Legislature so intended, we believe it would have said so. The argument that a controversy cannot arise under this statute until a lawsuit is filed is not persuasive. The statute was enacted in response to a medical malpractice crisis. As such, it is a remedial statute. Remedial statutes are to be liberally construed. In re School District No 6, 284 Mich 132, 144; 278 NW 792 (1938).

Reversed, costs to plaintiff.

       MCL 600.5040 et seq.; MSA 27A.5040 et seq. 1975 PA 140, effective September 1, 1975.

       On May 13, 1976, plaintiff signed an agreement to arbitrate claims against Blodgett Memorial Hospital. The agreement was on a form similar but not identical to the arbitration agreement signed February 27, 1976, with Dr. Swanson. See also, footnote 3, infra.

       The standard form arbitration agreement signed with the hospital on May 13, 1976, does not contain the language appearing in paragraph 4 of the agreement signed February 27, 1976, with Dr. Swanson. Plaintiffs brief seems to mistakenly assume both agreements were signed May 13, 1976.


author: M. J. Kelly, J. D. F. Walsh, P.J.,

text:
    INTERNATIONAL HARVESTER CREDIT CORPORATION v VOS
    Docket Nos. 78-3486, 78-3487.
    Submitted June 11, 1979, at Grand Rapids.
    Decided January 22, 1980.
    Leave to appeal denied, 408 Mich 949.
    On February 25, 1975, an International Harvester dealer in Ionia, Michigan, sold a used tractor to Terry Blaser on an installment contract. The sale contract listed Blaser’s residence as Ionia County. At the time of the purchase, Blaser informed the dealer that he was going to move to Barry County. On February 28, 1975, Blaser took delivery of the tractor at his Ionia County address. A financing statement, which was executed with the contract, was filed in Barry County on February 28, 1975. The contract and security agreement were immediately assigned to International Harvester Credit Corporation (IHCC). Blaser moved to Barry County on March 15, 1975, and lived there until the end of June, 1975. He then moved back to Ionia County for a few months, then to Kent County for three weeks and, finally, to Muskegon County where he sold the tractor to Jay and Dale Vos. Blaser informed the Vos brothers that he was the owner of the tractor, but did not tell them it was subject to a lien. The First Michigan Bank & Trust Company accepted the Vos’s application for a loan on the tractor and informed Dale Vos that no prior liens had been discovered. Relying upon the bank’s title search, the Vos brothers paid Blaser $12,000' for the tractor, financing $7,000 through the bank. On May 19, 1977, International Harvester Credit Corporation commenced an action against Jay and Dale Vos seeking possession of the tractor on the grounds that the plaintiff had a prior, perfected security interest in the tractor. The defendants filed a third-party complaint against Blaser and a cross-complaint against First Michigan Bank & Trust Company, who had intervened as a defendant in the action. The Ottawa Circuit Court, James E. Townsend, J., found that the filing of a financing statement in Barry County and the subsequent residence of Blaser in that county constituted a proper perfection of the security interest. As a result, the trial court entered judgment awarding possession of the tractor to the plaintiff. The Vos brothers and First Michigan Bank & Trust Company both appeal. The appeals have been consolidated for consideration. On appeal the following issue is raised: When is a debtor’s residence determined for purposes of perfecting a security interest in farm equipment under the section of the Uniform Commercial Code which requires filing in the office of the register of deeds in the county of the debtor’s residence? Held:

      References for Points in Headnotes
    [1] 69 Am Jur 2d, Secured Transactions §§ 360, 415, 471.
    Construction and effect of UCC Art 9, dealing with secured transactions, sales accounts, contract rights, and chattel paper. 30 ALR3d 9.
    [2-5] 69 Am Jur 2d, Secured Transactions §§ 367, 410, 414.

      For purposes of perfecting a purchase money security interest in farm equipment, which requires local filing under Michigan law, the debtor’s county of residence should be determined as of the moment the debtor’s interest in the collateral attaches. The trial court erred when it found that the plaintiffs misfiling in Barry County was "cured” when the factors necessary for perfection subsequently coalesced in Barry County. The filing in Barry County was improper and the plaintiffs security interest was not perfected.
    Reversed.
    D. F. Walsh, P.J., dissented. He would hold that when the debtor established his residence in Barry County where the financing statement had already been filed, the security interest was perfected. The filing statute does not require that the financial statement be filed in the county in which the debtor resided at the time the security interest attached to the collateral.
    Opinion of the Court
    1. Secured Transactions — Security Interests — Farm Equipment — Perfection — Uniform Commercial Code — Statutes.
    Each step necessary for the perfecting of a lien under the Uniform Commercial Code must be properly undertaken, although the sequence of the steps is immaterial; if a creditor seeking to perfect a security interest in farm equipment files a financing statement in the wrong county, then that filing is improper and, regardless of its sequence in relation to.the other requisites, perfection is unattainable (MCL 440.9401[l][a]; MSA 19.9401[l][a]).
    2. Secured Transactions — Farm Equipment — Uniform Commercial Code.
    Michigan’s Uniform Commercial Code does not impose an obligation on prospective purchasers of farm equipment to search the records of every county in which the seller of the equipment resided during the life of the collateral.
    3. Secured Transactions — Uniform Commercial Code — Perfection — Purchase Money Security Interest — Farm Equipment.
    The Uniform Commercial Code’s purpose of simplifying, clarifying and modernizing the law requires that, in order to perfect a purchase money security interest in farm equipment, the county of the debtor’s residence is the proper place for filing the financing statement and the debtor’s residence should be determined at a specific moment in time.
    4. Secured Transactions — Perfection —■ Purchase Money Security Interest — Farm Equipment — Debtor’s County of Residence — Statutes.
    A debtor’s county of residence, for purposes of perfecting a purchase money security interest in farm equipment which requires local filing under Michigan law, should be determined as of the moment the debtor’s interest in the collateral attaches (MCL 440.9401[l][a]; MSA 19.9401[l][a]).
    Dissent by D. F. Walsh, P.J.
    5. Secured Transactions — Perfection — Farm Equipment —- Filing — Debtor’s County of Residence — Statutes.

      The statute governing where a creditor should hie a hnancing statement in order to perfect a security interest in farm equipment provides only that the proper place to hie in order to perfect the security interest is the county of the debtor’s residence; it does not require that the hnancing statement be hied in the county in which the debtor resides at the time the security interest attaches nor does it require that the debtor’s residence must be determined at any specihc time (MCL 400.9401[1]; MSA 19.9401[1]).

      Wheeler, Upham, Bryant & Uhl (by William R. DeVries), for plaintiff.

      Cunningham & Associates (by Andrew J. Mulder), for First Michigan Bank and Trust Co.

      Before: D. F. Walsh, P.J., and M. J. Kelly and E. F. Oppliger, JJ.

       Circuit judge, sitting on the Court of Appeals by assignment.

   M. J. Kelly, J.

The present case requires that we address an issue of first impression under the Uniform Commercial Code, MCL 440.1101 et seq.; MSA 19.1101 et seq.: when is a debtor’s residence determined for purposes of perfecting a security interest in farm equipment under MCL 440.9401(l)(a); MSA 19.9401(l)(a), which requires filing in the office of the register of deeds in the county of the debtor’s residence?

Facts

On February 25, 1975, Harder & Sons, Inc., an International Harvester dealership in Ionia, Michigan, sold a used International Harvester 1066 diesel tractor to one Terry Blaser on an installment contract. The contract also included three other pieces of farm equipment, but since they are unimportant to the controversy we treat the transaction as though it pertained only to the diesel tractor. The contract listed Blaser’s address as Ionia County; however, as found by the trial court, at the time of purchase Blaser informed Harder that he was going to rent a farm or work and live on a farm in Barry County. On February 28, 1975, Blaser took delivery of the tractor at the Ionia County address. A financing statement, which was executed with the contract, was filed in Barry County on February 28, 1975. The contract and security agreement were immediately assigned to plaintiff, International Harvester Credit Corporation (IHCC).

Blaser subsequently moved to the Aukerman farm in Barry County on the 15th of March, 1975, and lived there continuously until the end of June, 1975. He moved back to Ionia County for a few months, then to Kent County for three weeks, and, finally, to Muskegon County where he sold the tractor to defendants Jay and Dale Vos. At the time, he informed the Vos brothers that he was the owner of the tractor, but did not tell them that the tractor was subject to a lien. In order to obtain financing for the purchase of the tractor, the Vos brothers went to the codefendant, First Michigan Bank & Trust Company. In making a loan application, they asked the bank official to check for liens on the tractor. Three days later the banker informed Dale Vos that the application was accepted and that no prior liens had been discovered. Relying on the accuracy of the bank’s title search, the Vos brothers paid Blaser $12,000 for the tractor, financing $7,000 through the bank.

On May 19, 1977, plaintiff filed this suit against the Vos brothers seeking possession of the tractor on the grounds that plaintiff had a prior, perfected security interest. The Vos brothers first learned of plaintiff’s interest in the tractor when they were served with a complaint and summons initiating this action. Following a bench trial, the lower court found that the filing of a financing statement in Barry County and the subsequent residence of Blaser in that county constituted a proper perfection of the security interest. As a result, the trial court entered judgment awarding possession of the tractor to plaintiff.

In holding for the plaintiff, the trial court acknowledged that, if the defendants had acquired the tractor before Blaser moved to Barry County, they would be protected as intervening lien creditors against plaintiff’s unperfected security inter-

est. MCL 440.9301(b); MSA 19.9301(b). However, the court held that, when Blaser became a resident of Barry County, there was a "unity” of the requisites of perfection, i.e., a security agreement, attachment and filing in the county of the debtor’s residence, which "cured” the misfiled finance statement and perfected plaintiffs security interest. In reaching this conclusion, the court reasoned that, because the UCC recognizes both early and late filing, MCL 440.9402(1); MSA 19.9402(1), MCL 440.9301(l)(b); MSA 19.9301(l)(b), the sequence of steps in obtaining perfection is not determinative, so that perfection would occur whenever and wherever these requisites were met. Furthermore, the court viewed this position as consistent with the defendant’s perceived duty (as a subsequent purchaser and secured party) to search the records in every prior county of the debtor’s residence during the life of the collateral. In re Simpson, 4 UCC Rptr 250, 255 (WD Mich, 1966), In re Gac, 11 UCC Rptr 412 (WD Mich, 1972). Pursuant to this reasoning, the court found the defendants to be on constructive notice of plaintiffs perfected security interest in Barry County as of March 15, 1975, and held that plaintiffs security interest prevailed over subsequent claims.

Discussion

Although it is the purpose of the UCC to simplify and clarify the law regarding the creation and regulation of security interests, certain relatively straightforward questions of commercial law remain unanswered. This case presents one such question: when is a debtor’s residence determined for purposes of perfecting a security interest in farm equipment by local filing? The briefs of the parties, the case law of other jurisdictions, and the opinion of the lower court each supply conflicting answers to the posited question. The plaintiff adopts the position expressed in the lower court opinion and argues that residency is a fluid concept; that is, it is determined when the existence of a security interest, the debtor’s attachment, and filing in the county of the debtor’s residence coalesce in a particular location. On the other hand, the defendants argüe that the debtor’s residence should be determined at a specific moment: that is, when the debtor’s interest in the collateral attaches. Therefore, our disposition of the issue requires a two-tier analysis: first, to ascertain the nature of the determination of residency, and second, if that determination is made at a specific time, whether it be the moment of attachment or filing.

We hold that the trial court erred when it found that plaintiff’s misfiling in Barry County was "cured” when the factors necessary for perfection subsequently coalesced in Barry County. We find the lower court erred in several respects. First, although the sequence of steps necessary for perfecting the lien is immaterial, each step, nevertheless, must be properly undertaken. If the secured party files a financing statement in the wrong county, then that filing is improper and, regardless of its sequence in relation to the other requisites, perfection is unattainable. Secondly, we overrule the lower court’s conclusion that Michigan law imposes an obligation on prospective purchasers to search the records of every county in which the debtor resided during the life of the collateral. In our opinion, this conclusion imposes an onerous burden on the subsequent purchaser which is unwarranted by our case law. Here, Blaser resided in Ionia County and subsequently relocated to Barry County, then Ionia, then Kent, and finally Muskegon County between February 25, 1975, and November 1, 1975. Under the trial court’s ruling, defendant would have had to check the records of each county since a financing statement representing a purchase money security interest filed in any one of them would have resulted in perfection when Blaser ultimately assumed residency there.

Both of the cases relied upon by the lower court in this respect are distinguishable and discuss the point in dicta. In the case of In re Simpson, supra, the risk to the prospective purchaser, which warranted an expansive search of county records, was that of a competing security interest by a subsequent subordinate creditor, not the original purchase money lender. In the latter case, there is no necessity for an expansive search because the purchase money security interest would have arisen at the outset of the debtor’s possession of the collateral. Similarly, in In re Gac, supra, the issue concerned the secured party’s obligation to file a new financing statement when the debtor changed her name. Thus, the reference to the purchaser’s duty to perform an expansive search was unnecessary to the disposition of that case, which held that the UCC imposes no duty on a secured party to refile in the event the debtor changes her name. The underlying purposes of the UCC are "to simplify, clarify and modernize the law governing commercial transactions”. MCL 440.1102(2)(a); MSA 19.1102(2)(a). By upholding plaintiffs priority of lien under a "unity of factors” analysis, the trial court holding perpetuates and encourages a business practice which needlessly complicates, confuses, and impedes the law governing commercial transactions. To condition the perfection of a security interest upon the debtor’s eventual residence in the county of filing results not in a floating lien, as contemplated by the UCC, but in a lien " 'drifting’ in aimless and hazardous disregard of the rights of others necessarily navigating the same lanes of commerce”. In re Pelletier, 5 UCC Rptr 327, 335 (D Maine, 1968). We decline to adopt the "unity of factors” analysis. We hold, on the contrary, that the code’s purpose of simplifying, clarifying and modernizing the law requires that, in the case of a purchase money security interest in farm equipment, the county of the debtor’s residence is the proper place for filing the financing statement, and should be determined at a specific moment in time. We now direct our attention to defining the appropriate point for that determination. Two logical points at which to fix the debtor’s residence under MCL 440.9401; MSA 19.9401, suggest themselves: (1) the date of the attachment of the security interest, and (2) the date of the filing of the financing statement. In this inquiry, the case law of other jurisdictions provides some guidance.

The majority of the cases which have addressed this issue have held that the moment when the security interest attaches is the time that the debtor’s residence should be ascertained for purposes of perfecting a security interest in the collateral. The case which most persuasively expresses this view is In re Pelletier, supra. In Pelletier, the debtor lived in Van Burén, Maine, all of his life. On July 3, 1966, he moved to the town of Freedom, where he lived for one week and then to Water-ville, Maine. On July 28, 1966, he executed a security agreement on a mobile home. The mobile home was then delivered to a site in Benton, Maine. The security agreement gave the debtor’s address as Van Burén, Maine and, pursuant to Maine’s local filing system, the financing statement was filed there on August 10, 1966. When the debtor subsequently went bankrupt, the trustee in bankruptcy disputed the priority of the security interest in the mobile home on the grounds that the financing statement had been misfiled.

In assessing the trustee’s challenge, the bankruptcy referee held that "the aims and purposes of the Code notice filing system will best be served by requiring that the financing statement be filed with the clerk of the municipality in which the debtor has his permanent residence as of the day the security interest attaches”. Id., at 332. In reaching this conclusion, the referee reasoned that:

"The purpose of notice filing is not to notify the world of the debtor’s place of residence at the time of filing, but to notify it of the existence of a security interest in collateral which arose while the debtor resided in the place where the filing is made.

"* * * the filing of the notice should bear some discernible, logical relationship to the occurrence of which it is intended as notice.” Id., at 335.

The referee held that the secured party’s filing in Van Burén, Maine, was unperfected, that the financing statement should have been filed in Benton, Maine, where attachment occurred, and accordingly, rendered judgment for the trustee.

In holding that, for purposes of local filing, the determination of the debtor’s residence should be made at the moment of attachment, the referee marshalled the following arguments. In the first place, this date was deemed preferable to determining the debtor’s residence as of the date of filing the financing statement because "attachment * * * will ordinarily occur on the occasion of the final contact or communication between the parties * * * thereby affording a final opportunity for careful verification of the debtor’s residence”. Id., at 332. Secondly, selection of the place of filing on the basis of the debtor’s residence when the security interest attaches narrows the expanse of time within which the debtor’s residence must be verified and provides a subsequent purchaser with helpful extrinsic evidence as to where the filing should have been made. Id., at 334-335. Finally, the opinion noted that decisions as to the nature of the goods and collateral, MCL 440.9105(l)(f); MSA 19.9105(l)(f), MCL 440.9109; MSA 19.9109, must be made for purposes of determining the necessity for and selection of the place of filing, "it seems both consistent and reasonably convenient, and therefore desirable, to require that the decision as to the debtor’s residence be made in like fashion”. Id., at 336.

The Pelletier holding was subsequently reaffirmed in another opinion by the same referee. In In re O’Donnell, 7 UCC Rptr 888 (D Maine, 1970), the security agreement covering a mobile home was executed by the parties when the debtor resided in East Millinocket, Maine, and intended to remain there following the purchase of the home from the secured party. After the sales contract and security agreement were executed, the debtor moved, and the mobile home was delivered to Medway, Maine, upon her instructions. After the relocation to Medway, the secured party filed the financing statement covering the mobile home in East Millinocket. The referee held that, in accordance with the Pelletier case, the proper place to file is to be determined when the security interest attaches and, because the debtor resided in East Millinocket, Maine, at the time of attachment, the financing statement was properly filed there.

Similarly, in In re Knapp, 23 UCC Rptr 1354 (CA 2, 1978), the issue concerned where a financing statement should be filed when the debtor changes his residence between the time the security interest attaches and the time the financing statement is filed. In that case, the debtors purchased a trailer and listed their address on the security agreement as Herkimer County, New York, even though they were actually living in Fulton County. They were planning to move to Herkimer County when the trailer was delivered to its site there. They informed the secured party (seller) of the fact that they intended to move to Herkimer County. The trailer was delivered to its intended site in Herkimer County and the debtors moved in following delivery. Subsequently, the secured seller filed the financing statement in Fulton County. When the debtors went bankrupt, the trustee challenged the validity of the seller’s claim to perfection. The United States District Court held for the secured seller on the grounds that the place of actual residence at the time the security interest attached was controlling. The Second Circuit Court of Appeals affirmed, stating:

"* * * we cannot accept the trustee’s argument that the county of the debtor’s residence at the time of the filing of the financing statement should control. The choice of the time at which the security interest attaches to determine the place of filing is grounded in solid policy considerations. Credit checks of the debtor are routinely made then, as was the case here, and it is a logical and customary time for the verification of important facts, such as residence. We are as disinclined as other courts have been to tamper with such commercially reasonable rules. In re O’Donnell, supra; In re Kane, 1 UCC Rep Serv 582 (ED Pa 1962). But see Schoel v. Oak Cliff Savings and Loan Association, 21 UCC Rep Serv 325 (ND Ala 1977).” 23 UCC Rep 1357.

In our opinion, the policy considerations present in the Knapp, O’Donnell and Pelletier holdings apply with equal force to any collateral which requires local filing for perfection. Furthermore, because the rule of Pelletier is premised on the existence of a "discernible, logical relationship” between the place of filing and the creation of the security interest, we find that it best serves the UCC’s purpose of simplifying, clarifying and modernizing commercial law. The desirability of such a rúle is evident where, as here, the collateral is farm equipment which requires local filing for perfection of a security interest. Blaser resided in Ionia County when his interest in the tractor attached. Since plaintiff had a purchase money security interest, it stands to reason that subsequent purchasers would logically expect that security interest to arise, and be perfected, in the county of the debtor’s residence at the time he acquired the tractor. To hold, as did the trial court, that a previously misfiled financing statement may be subsequently "cured” frustrates this logical expectation and introduces uncertainty into our commercial law. "Courts ought not adopt rules of filing which fail to advance, if they do not actually obstruct, the sole reason for requiring filing — the giving of notice to those not privy to the security transaction.” Pelletier, surpa, at 335, n 7.

We find that a reasonable measure of protection for the right of third parties necessitates that the rules governing the place of notice filing describe some logical course between the transaction and the filed notification of it. Therefore, we hold that, for purposes of perfecting a purchase money security interest in farm equipment which requires local filing under Michigan Law, the debtor’s county of residence should be determined as of the moment the debtor’s interest in the collateral attaches.

Reversed.

E. F. Oppliger, J., concurred.

D. F. Walsh, P.J.,

(dissenting). I must dissent. I concur in the trial court’s conclusion that when the debtor establishes his residence in the county in which the financing statement is filed, the security interest is perfected.

The relevant statute provides only that the "proper place to file in order to perfect a security interest * * * when the collateral is equipment used in farming operations * * * [is] the county of the debtor’s residence”. When Blaser moved to Barry County, the county in which the financing statement was filed was also the county of the debtor’s residence. The statute requires nothing more for the perfection of the lien.

The statute does not require that the financing statement be filed in the county in which the debtor resided at the time the security interest attached to the collateral. Presumably if the Legislature had intended such a requirement, it would have so provided.

To engraft such a requirement decisionally is permissible only if a strong discernible policy underlying the enactment of the Uniform Commercial Code were otherwise unattainable. I do not perceive that to be the situation here. The majority, however, citing In re Pelletier, 5 UCC Rptr 327, 335 (D Maine, 1968), concludes that the statute must be thus interpreted in order to insure commercial certainty in this type of transaction. I quote from the majority opinion:

"Since plaintiff has a purchase money security interest, it stands to reason that subsequent purchasers would logically expect that security interest to arise, and be perfected, in the county of the debtor’s residence at the time he acquired the tractor. To hold, as did the trial court, that a previously misfiled financing statement may be subsequently 'cured’ frustrates this logical expectation and introduces uncertainty into our commercial law. 'Courts ought not adopt rules of filing which fail to advance, if they do not actually obstruct, the sole reason for requiring filing — the giving of notice to those not privy to the security transaction.’ Pelletier, surpa, at 335, n 7.”

1 fail to understand how the majority’s interpretation of the statute promotes commercial certainty. As the trial court correctly pointed out, since a debtor could have encumbered the collateral in any county in which he may have had his residence, a prospective purchaser or lender, in order to be safe, must search the records in every county in which the debtor lived during the time he owned the collateral. This is true whether the statute is interpreted as the majority interprets it or as the trial court did.

The "sole reason for requiring filing [is] the giving of notice to those not privy to the security transaction”. Pelletier, supra, at 335, n 7. Normally, one "not privy” to a prior security transaction has no knowledge of it or of the date on which the security interest may have attached. Requiring filing in the county in which a debtor resided on the date a security interest attached pursuant to a security transaction of which a subsequent purchaser or lender has no knowledge would not seem to assist the subsequent purchaser or lender or promote commercial certainty.

In this case, acting upon the information it had received, plaintiff filed the financing statement in Barry County in the belief that filing in Barry County gave the best prospect of notice of the prior lien to a subsequent purchaser or lender. In my judgment that belief was well founded since Barry County was the county in which Blaser was going to live and carry on the farming operation for which he had purchased the tractor.

At the time of filing, plaintiffs security interest was not perfected since Blaser had not yet moved to Barry County. When Blaser became a resident of Barry County, however, all of the statutory requirements for the perfection of the lien were fulfilled.

In my judgment neither commercial certainty nor any other desideratum of the Uniform Commercial Code requires that the debtor’s county of residence must be determined at any specific time. All that is required is that the financing statement must be filed in the county of the debtor’s residence. When that is accomplished, the security interest is perfected.

I would affirm.

       Maine’s Uniform Commercial Code, in effect at the time Pelletier, supra, was decided, provided that when collateral consisted of consumer goods a financing statement was to be filed "(b) * * * in the office of the clerk of the municipality in which the debtor resides, or if the debtor (i) is not a resident of this State, or (ii) resides in an unorganized place, then in the office of the Secretary of State. Me Rev Stat Ann, tit 9, 3401(1). Under the analogous section of the Michigan Uniform Commercial Code a financing statement covering such collateral is to be filed in the office of the register of deeds in the county of the debtor’s residence. MCL 440.9401(l)(a); MSA 19.9401(l)(a). The differences in these systems are immaterial to this analysis.

       MCL 440.9401(1); MSA 19.9401(1).

       With respect to this point the majority opinion states: "Secondly, we overrule the lower court’s conclusion that Michigan law imposes an obligation on prospective purchasers to search the records of every county in which the debtor resided during the life of the collateral.”

        I find no conclusion in the trial court opinion that Michigan law imposes any obligation on prospective purchasers with respect to searching records, but rather an observation by the trial court that a prospective purchaser, to be safe, must search the records of every county in which the debtor had lived.

       Obviously if a subsequent purchaser or lender did have knowledge of a prior security transaction, no record search would be necessary.


author: Mackenzie, J.

text:
    NATIONWIDE MUTUAL FIRE INSURANCE COMPANY v THE DETROIT EDISON COMPANY
    Docket No. 78-3712.
    Submitted October 9, 1979, at Detroit.
    Decided January 22, 1980.
    Leave to appeal denied, 409 Mich 854.
    Nationwide Mutual Fire Insurance Company insured a warehouse owned by Thorman Industrial Park, Inc., and leased by The Detroit Edison Company. A lease executed by Thorman and Edison provided that the landlord waived all right to recovery by fire loss except as to such losses resulting from “wilful or gross neglect” on the part of tenant Edison. An Edison employee set fire to the warehouse while changing a muffler on an Edison truck. Eighty percent of the structure was destroyed. Nationwide paid Thorman for its loss, then, as subrogee of Thorman brought suit against Edison claiming gross neglect. At the conclusion of plaintiff’s proofs, defendant’s motion for a directed verdict was granted, Macomb Circuit Court, Raymond R. Cashen, J. The trial court held that the only valid interpretation that can be placed on the phrase "wilful or gross neglect” is a deliberate, concentrated effort on the part of the tenant to do some damage. Plaintiff appeals. Held:

    The trial court definition of what constitutes gross neglect was improper. The term gross neglect, as used by the parties, intended some form of negligence greater than ordinary negligence but less than conduct bordering on deliberateness; therefore, when the parties employed the term gross neglect, they meant that defendant would be liable for failure to exercise the degree of care that even a careless individual would employ under the circumstances. Viewing the proofs in the light most favorable to plaintiff, as an appellate court is required to do in reviewing a motion for directed verdict, it appears that there is ample proof to warrant submission of the question of gross neglect to the jury. A jury question was raised as to whether multiple acts of negligence by defendant and employees, each of which had a cumulative effect, amounted to the commission of gross negligence. The trial court erred in removing this issue from the jury’s consideration.

      References for Points in Headnotes
    [1] 17 Am Jur 2d, Contracts § 249.
    [2] 57 Am Jur 2d, Negligence § 99.
    [3] 75 Am Jur 2d, Trial §§ 482, 483.

      Reversed and remanded with instructions.
    1. Contracts — Legal Terms — Presumptions — Intent of Parties.
    The parties to a written contract which uses terms having a definite legal meaning are presumed to have intended such terms to have their proper legal meaning, absent a contrary intention appearing in the instrument.
    2. Negligence — Gross Negligence — Definition.
    Gross negligence may be described as a failure to exercise that degree of care which even a careless individual would employ under given circumstances; gross neglect is some form of negligence greater than ordinary negligence but less than conduct bearing on deliberateness.
    3. Appeal and Error — Motions — Directed Verdict — Test.
    An appellate court, in reviewing a motion for a directed verdict, views the evidence in the light most favorable to the party opposing the motion, and if reasonable men could differ as to the meaning of the evidence a jury question arises and the motion should be denied.
    Denenberg, Tuíñey, Thorpe, Bocan & Patrick (by John L. Hopkins), for plaintiff.

      Jack M. Abeila, for defendant.
    Before: J. H. Gillis, P.J., and V. J. Brennan and Mackenzie, JJ.
   Mackenzie, J.

Plaintiff Nationwide Mutual Fire Insurance Company appeals as of right an August 28, 1978, judgment of the Macomb County Circuit Court, granting defendant Detroit Edison’s motion for a directed verdict.

Plaintiff issued a three-year fire insurance policy on March 21, 1974, covering a warehouse located in Shelby Township, with liability limited to $75,-000. The named insured was the owner of the property, Thorman Industrial Park, Inc.; however, the premises were leased by defendant. The lease was drafted by defendant, and contains the following pertinent provision:

"Landlord shall insure the demised premises against loss by fire and extended coverage perils. With respect to such losses, so insured, landlord waives all right of recovery from tenant, except as to such losses resulting from wilful or gross neglect on the part of tenants, agents, or employees * * *”. (Emphasis supplied.)

On January 2, 1975, Daniel Walenty, an employee of the defendant who was a senior mechanic in charge of the garage, brought a Detroit Edison truck into the structure in order to repair the exhaust system. A fire ensued during the course of the repair work, resulting in destruction of 80% of the structure. Plaintiff paid the landlord, Thorman Industrial Park, Inc., for its loss and then, as subrogee, brought suit against defendant claiming "gross neglect”. At the close of plaintiffs proofs, defendant moved for a directed verdict, which was granted by the trial judge.

As a general rule, where terms having a definite legal meaning are used in a written contract, the parties to the contract are presumed to have intended such terms to have their proper legal meaning, absent a contrary intention appearing in the instrument. 17 Am Jur 2d, Contracts, § 249, p 642. In ascertaining the proper legal meaning of the term "gross neglect”, the trial court held that the only valid interpretation that can be placed on the phrase "wilful or gross neglect” is "a deliberate, concentrated effort on the part of the tenant to do some damage”. The court referred to SJI 14.03, which deals with the terms gross negligence and wilful and wanton misconduct as used in the now invalid automobile guest passenger statute, MCL 257.401; MSA 9.2101. According to SJI 14.03:

"The terms 'gross negligence or wilful and wanton misconduct’ mean more than the failure to use ordinary care. These terms mean conduct which shows (actual or deliberate intention to harm) (or) (a reckless disregard for the safety of others in the face of circumstances involving a high degree of danger).”

After careful examination of Michigan case law, we disagree that this was the proper definition to employ.

The two definitional sources for the terms gross negligence and wilful and wanton misconduct are common law and cases interpreting the guest passenger statute. See Thone v Nicholson, 84 Mich App 538; 269 NW2d 665 (1978). For purposes of the guest passenger statute, the terms have been held by the Michigan Supreme Court to be synonymous. See Thayer v Thayer, 286 Mich 273, 276; 282 NW 145 (1938).

Unlike under the guest passenger statute, at common law the terms gross negligence and wilful and wanton misconduct are distinct concepts. Thone v Nicholson, supra, at 546. Gross negligence is synonymous with the last clear chance doctrine. See Zeni v Anderson, 397 Mich 117; 243 NW2d 270 (1976). Wanton and wilful misconduct, however, involves a different type of conduct. At common law, it is "an intentional wrong or a reckless and heedless disregard to another’s safety”. Papajesk v Chesapeake & Ohio R Co, 14 Mich App 550, 555; 166 NW2d 46, 48 (1968).

The common-law definition of wilful and wanton misconduct is similar to the definition employed by the trial judge for gross neglect in the instant case. Adherence to the trial judge’s definition would therefore result in equating wilful and wanton misconduct with gross negligence. Although this is what the Supreme Court did with the terms under the guest passenger statute, such equation is inappropriate here, as the concepts of gross negligence and wilful and wanton misconduct are distinct at common law. According to Prosser:

"Several courts * * * have construed gross negligence as requiring wilful misconduct, or recklessness, or such utter lack of all care as will be evidence of either— sometimes on the ground that this must necessarily have been the intent of the legislature. But it is still true that most courts consider that 'gross negligence’ falls short of a reckless disregard of consequences, and differs from ordinary negligence only in degree, and not in kind. There is, in short, no generally accepted meaning; but the probability is, when the phrase is used, that it signifies more than ordinary inadvertence or inattention, but less than conscious indifference to consequences; and that it is, in other words, merely an extreme departure from the ordinary standard of care.” Prosser, Torts (4th ed), § 34, pp 183-184.

Since we reject the interpretation of gross negligence as a deliberate intention to harm or a reckless disregard for another’s safety, we are faced with the determination of the proper definition to employ. The common-law meaning of gross negligence in Michigan, the last clear chance doctrine, is clearly inapplicable to the instant case. In his discussion of gross negligence, Prosser points out that the concept of degrees of negligence has come under much attack and has been rejected at common law by nearly all courts, except in bailment cases. To the extent that the term gross negligence does survive, however, it is often described as a "failure to exercise even that care which a careless person would use”. Prosser, supra, at 183.

In the instant case, we believe that by the term "gross neglect”, the parties intended some form of negligence greater than ordinary negligence, but less than conduct bordering on deliberateness. Therefore, we conclude that for purposes of this lease, when the parties employed the term "gross neglect”, they meant that defendant would be liable for failure to exercise the degree of care that even a careless individual would employ under the circumstances.

Turning to the facts, we note that on the night of the fire the outside temperature was below freezing. Walenty expected expansion of the gasoline in the fuel tank of the truck as a result of being brought into a warm garage. Accordingly, Walenty siphoned off approximately five gallons of gasoline from the fuel tank and directed it into a storage container which was placed on the driver’s side of the truck.

Walenty then raised the truck on jacks, checked for gasoline expansion or leaking and, finding none, began removing the exhaust system with an oxygen acetylene torch. Using the torch, Walenty cut through one of the muffler clamps which held the muffler to the exhaust pipe. Sparks resulted. Upon finishing his first cut, Walenty noticed a fire at his feet. He came out from under the truck, obtained a water-filled C02 charged extinguisher from his welding cart and applied it to the floor. His efforts were unsuccessful, however, as the fire was not only on the floor but also around the gas tank filler neck. Walenty then attempted to use a C02 charged chemical-type extinguisher mounted on one wall of the garage; however, this extinguisher proved to be inoperable.

Walenty then heard an explosion, following which he raised both overhead roll-up bay doors in the hope of venting the gases from the fire. This action, however, provided additional oxygen to feed the fire. Walenty then ran for safety to another building, where he called the Shelby Township Fire Department. By the time the fire was. contained, 80% of the structure was destroyed.

Additional testimony established that defendant’s own safety regulations required placing a 20-lb. field-type chemical fire extinguisher within easy reach of the welding job prior to commencing. Walenty admitted he failed to do so, having available instead the smaller, water-based extinguisher. Walenty also violated company regulations by failing to properly inspect and clean up flammable substances before using a welding torch, by failing to cover the gas tank with an asbestos blanket, and by failing to clear the area of all fire hazards before using any kind of welding apparatus.

It was further established that responsibility for the maintenance, inspection, and reporting of fire extinguishers was a responsibility of defendant’s employees according to defendant’s own regulations, which required annual inspections by the crane and elevator division, monthly inspections by the warehouseman or leader as required by the Occupational Safety and Health Act, MCL 408.1001 et seq.; MSA 17.50(1) et seq. and frequent inspections by supervisors, garage foremen, ware-housemen, and senior district mechanics. All such employees were required to report any defect or malfunction and to follow up with appropriate repairs or replacement.

Viewing the proofs in the light most favorable to plaintiff, as is required in a motion for directed verdict, there is ample proof to warrant submission of the question of "gross neglect” to the jury. A jury question was raised as to whether multiple acts of negligence, each of which had a cumulative effect, amounted to the commission of gross negligence. See 57 Am Jur 2d, Negligence, § 104, p 455. We therefore hold that the trial court erred in removing this issue from the jury’s consideration.

Finally, we conclude that the trial judge erred in preventing plaintiff from introducing evidence as to defendant’s possible violation of the Shelby Township Fire Code concerning the use of a welding torch. On remand, the court is directed to permit plaintiff to present proof of the ordinance and its alleged violation by defendant. See MRE 202.

Reversed and remanded. Costs to plaintiff-appellant.

V. J. Brennan, J., did not participate in this decision.

         But see Bolger v Common Council of Detroit, 153 Mich 540; 117 NW 171 (1908), which deals with the concept "gross neglect of duty”. The term concerns the standard of duty owed by a public officer to the public. The Court stated that gross neglect of duty is not limited to intentional wrongdoing on the part of a public official, but also covers any neglect of official duty which permits the public welfare to be threatened or endangered. See also Attorney General v Jochim, 99 Mich 358; 58 NW 611 (1894).


author: Cynar, P.J.

text:
    IN THE MATTER OF THE ESTATE OF TOM K ZAHARION
    Docket No. 78-3784.
    Submitted October 4, 1979, at Grand Rapids.
    Decided January 22, 1980.
    Leave to appeal applied for.
    Security National Bank, administrator with the will annexed of the estate of Tom K. Zaharion, petitioned the Calhoun Probate Court to determine that it was entitled to possession of certain common stocks as the estate’s fiduciary and that they should be listed as assets of the estate. The probate corut so held. Dorene Zaharion, wife of the deceased, appealed. The Calhoun Circuit Court, Paul Nicolich, J., held that the Uniform Commercial Code required delivery of the securities to effect a valid gift. It affirmed the probate court as to all stock not in the possession of Mrs. Zaharion on the date of the decedent’s death. Mrs. Zaharion appeals by leave granted. Held:

    An inter vivos transfer by gift of any interest in securities is accomplished by either actual or constructive delivery where donative intent is present and acceptance by the donee is proven or may be reasonably inferred. The language of the Uniform Commercial Code concerning transfer of securities does not apply to inter vivos gifts of securities.
    Affirmed in part and reversed in part.
    Gifts — Inter Vivos — Securities — Delivery.
    An inter vivos transfer by gift of any interest in securities is accomplished by either actual or constructive delivery where donative intent is present and acceptance by the donee is proven or may be reasonably inferred.
    References for Points in Headnote
    38 Am Jur 2d, Gifts §§ 17, 20, 22, 54.
    Delivery as essential to gift of tangible chattels or securities by written instruments. 48 ALR2d 1405.

      Early, Starbuck & Lennon (by J. Richardson Johnson and James E. Beck), for Dorene Zaharion.

      Vandervoort, Cooke, McFee, Christ, Carpenter & Fisher, for Security National Bank, et al.

      Before: Cynar, P.J., and D. F. Walsh, and L. B. Bebeau, JJ.

       Former circuit judge, sitting on the Court of Appeals by assignment pursuant to Const Í963, art 6, § 23 as amended in 1968.

   Cynar, P.J.

This matter is before this Court on remand from the Michigan Supreme Court for plenary consideration as on leave granted. See In re Zaharion Estate (Zaharion v Security National Bank), 404 Mich 802 (1978). Both parties appealed a judgment of the Calhoun County Circuit Court, which judgment affirmed in part and reversed in part a judgment of the probate court for the County of Calhoun.

We initially conclude that there was no error in the admission of the testimony by Mrs. Zaharion concerning her deceased husband’s donative intent with regard to the transfer to her of stock held by him in seven corporations, as against a challenge that the admission of such testimony was in violation of the Michigan deadman’s statuté, MCL 600.2166; MSA 27A.2166. We find that her testimony was sufficiently corroborated by other evidence, as required by the statute in question. Schwartz v Davis Manufacturing Co, 32 Mich App 451, 454-458; 189 NW2d 1 (1971), Braidwood v Harmon, 31 Mich App 49, 57-58; 187 NW2d 559 (1971).

Next, we address the major issue in this case, viz., whether there was an effective delivery of the stocks in question prior to decedent’s death, such that a valid inter vivos gift of said shares was made by decedent to his wife, Mrs. Zaharion. Specifically, we are ásked to determine whether MCL 440.8309; MSA 19.8309 is applicable to gratuitous inter vivos transfers of securities, thereby necessitating actual physical delivery of the stock certificates, or whether the aforementioned provision is inapposite to the case at bar. If so, then under the common law rule relating to inter vivos gifts, either actual or constructive delivery of the shares would suffice to effect a completed gift, assuming that the remaining elements of a gift inter vivos are present. Osius v Dingell, 375 Mich 605, 611; 134 NW2d 657 (1965).

We digress briefly only to note that it is of no moment whether decedent intended to transfer to his wife his entire interest in the stock or only a joint interest with right of survivorship, at least insofar as decedent’s donative intent is concerned. This is so because the effect of either would ultimately be to vest complete ownership of the share in Mrs. Zaharion, although at different times. The record is clear that this was decedent’s intent at the time the gift was alleged to have been made. It was only a fortuity that he utilized a gift of a joint interest to effect this intent as opposed to an outright gift of the entire interest in the stock.

The question of the applicability of MCL 440.8309 to gratuitous inter vivos transfers of securities is one of first impression in Michigan. There is no indication of legislative intent in either direction which would serve as a guide to aid our decision. However, in the absence of a clear indicium of a legislative intent to apply the above-noted provision to inter vivos gifts of securities, we decline to infer such an intent. We conclude that the common law rules relative to such transfers remain undisturbed by MCL 440.8309. As such, we hold that an inter vivos transfer by gift of any interest in securities is accomplished by either actual or constructive delivery of the same, where donative intent is also present, and where acceptance by the donee may be presumed or is proven directly, as per the rule in Osius v Dingell, supra, 611. Support for this position is also found in 11 Callaghan’s Michigan Civil Jurisprudence, Gifts, §§ 14, 29, pp 388-391, 426-428, and 1979 Cum Supp, pp 40, 42-43. Cf, Ellis v Secor, 31 Mich 185; 18 Am Rep 178 (1975), and Brown, Personal Property (2d ed), § 60, pp 197-198.

Applying this rule to this instant case, we further hold that an effective inter vivos transfer by gift of a joint tenancy with a right of survivorship was made to Mrs. Zaharion by her husband with regard to all the stocks in dispute. Constructive delivery of the stock certificates was effected by means of the stock powers executed by Mr. Zaharion with the assistance of his wife. As such, it was error for the circuit court to hold that the transfer of the shares of six of seven corporations was ineffective for lack of physical delivery of the stock certificates, as physical delivery was not required. The transfer was effective as to the shares of all seven corporations.

Affirmed in part; reversed in part. Costs to plaintiff.

       The provision reads as follows:
      "Sec. 8309. An indorsement of a security whether special or in blank does not constitute a transfer until delivery of the security on which it appears or if the indorsement is on a separate document until delivery of both the document and the security.”

       This is so because during decedent’s final illness he relied upon the advice of a friend, Stanley Stone, a lay person, with regard to the manner in which to insure that his wife would receive the certificates in question.

       The genuineness of the decedent’s signature on the stock powers is not in dispute in this Court, nor was there any finding to this effect in either the probate court or the circuit court.