author: Bronson, P. J.

text:
    DETROIT AUTOMOBILE INTER-INSURANCE EXCHANGE v KURAK
    1. Insurance — Arbitration and Award — Multiple Policies — Compensation.
    An insured who is covered by more than one insurance policy and who recovers an award in arbitration within the limits of one policy may nevertheless demand arbitration under the other policies for the same claim, provided, however, that he may be compensated only once for any damage suffered.
    2. Insurance — Arbitration and Award — Parties—Res Judicata.
    Arbitration under one policy of insurance is not binding as res judicata on subsequent arbitration between a party and a nonparty to the first arbitration; neither a release of one insurer nor an arbitration award against one insurer affects the insured’s rights under another contract.
    3. Arbitration and Award — Public Policy — Statutes.
    There is a strong public policy in favor of arbitration of disputes, and any dispute under a contract which contains an arbitration clause may be arbitrated unless it has been expressly exempted by the terms of the contract (MCLA 600.5001[2]; MSA 27A.5001[2]).
    Appeal from Wayne, Richard D. Dunn, J.
    Submitted November 14, 1977, at Detroit.
    (Docket No. 77-662.)
    Decided February 6, 1978.
    Leave to appeal applied for.
    Complaint by Detroit Automobile Inter-Insurance Exchange against Karen Kurak for a declaratory judgment that the defendant had already received fair and just compensation from another insurer for injuries incurred in an automobile accident and was not entitled to further payment from the plaintiff. Summary judgment for plaintiff. Defendant appeals.

      References for Points in Headnotes

       43 Am Jur 2d, Insurance §§ 238, 501, 997.

       44 Am Jur 2d, Insurance §§ 2084, 2086.

       5 Am Jur 2d, Arbitration and Award § 36.

      Reversed.
    Selby, Dickinson, Pike, Mourad & Brandt (by Daniel P. Makarski), for plaintiff.

      Stempien & Stempien, P. C., for defendant.
    Before: Bronson, P. J., and Allen and T. M. Burns, JJ.
   Bronson, P. J.

Defendant, Karen Kurak, was involved in an automobile accident with an uninsured motorist on January 27, 1973, while driving her personal automobile which was insured by the League General Insurance Company. Defendant made a claim under this policy, which went to arbitration, and was awarded $5,750.

Defendant’s father had a policy of automobile insurance with the plaintiff, which also contained uninsured motorist coverage, and covered the defendant in certain situations. The defendant filed a claim under this policy after receiving her award. Plaintiff filed a complaint for declaratory action alleging that defendant had already received fair and just compensation.

Defendant’s motion for summary judgment and order of arbitration was denied. Plaintiff’s motion for summary judgment and to dismiss arbitration was granted. Defendant appeals as of right.

We hold that when an insured is covered by more than one insurance policy and recovers an award in arbitration within the limits of one policy, he may nevertheless demand arbitration under the other policies for the same claim, provided however, that he may be compensated only once for any damage suffered.

Initially, we note that "stacking” of insurance policies is clearly permissible in some instances. Boettner v State Farm Mutual Insurance Co, 388 Mich 482; 201 NW2d 795 (1972); Blakeslee v Farm Bureau Mutual Insurance Co, 388 Mich 464; 201 NW2d 786 (1972). Furthermore, stacking has been permitted when the insured settles a claim under one of two or more policies for less than the policy limits. In Detroit Automobile Inter-Insurance Exchange v Joseph, 67 Mich App 393; 241 NW2d 221 (1976), defendants settled a claim under one of three policies for $8,000. Each policy contained uninsured motorist coverage of $10,000. The Court, holding that arbitration under the other two policies was not barred, stated at 395-396:

"Under Boettner and Blakeslee, the Josephs clearly have valuable contract rights under each one of their three policies, for they have paid premiums for each one of their policies. Á release that concerns recovery under one contract does not necessarily affect claims under other contracts.” (Citation omitted.)

See, also, Auto-Owners Insurance Co v Higby, 57 Mich App 604; 226 NW2d 580 (1975).

The same rationale applies to the case at bar. As in Joseph, defendant has valuable rights under both contracts of insurance. Also, arbitration under one policy is not binding as res judicata on subsequent arbitration between a party and a nonparty to the first arbitration. See Auto-Owners Insurance Co v Higby, supra; 5 Am Jur 2d, Arbitration and Award, § 149, pp 630-631. Neither a release of one insurer nor an arbitration award against one insurer affects the insured’s rights under another contract.

Under MCLA 600.5001(2); MSA 27A.5001(2), any dispute under a contract which contains an arbitration clause may be arbitrated unless it has been expressly exempted by the terms of the contract. The arbitration clause of the D.A.I.I.E. policy does not exclude claims which were subject to arbitration under a different policy. The statute is backed by a strong public policy in favor of arbitration of disputes. See, e.g., Campbell v Community Service Insurance Co, 73 Mich App 416; 251 NW2d 609 (1977). We therefore hold that the trial court should not have dismissed arbitration.

Of course, defendant may still only recover her actual losses. Thus, the $5,750 recovered in arbitration under the League General policy is to be considered in any subsequent arbitration.

Reversed. Costs to defendant-appellant.

       The policy limit was $20,000.

       Plaintiff-appellee argues on appeal that defendant was validly excluded from coverage under her father’s policy. This argument was not presented to the trial court. Consequently, we decline to consider it on appeal. See, e.g., Three Lakes Association v Whiting, 75 Mich App 564; 255 NW2d 686 (1977).

       The D.A.I.I.E. arbitration clause provides:
      "The determination as to whether the insured shall be legally entitled to recover damages and if so entitled the amount thereof, shall be made by agreement between the insured and the Exchange.
      "In the event of disagreement and upon the written demand of either, the matter or matters upon which the insured and Exchange do not agree shall be settled by arbitration in accordance with the rules of the American Arbitration Association and judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. The insured and the Exchange each agrees to consider itself bound and to be bound by any award made by the arbitrators pursuant to this coverage. Such an award shall be a condition precedent to any action against the Exchange by reason of the insurance afforded by this coverage.”

       We note that the doctrine of collateral estoppel does not apply in the case at bar; the mutuality requirement has not been met. See City of Mason v Mason State Bank, 63 Mich App 288; 234 NW2d 489 (1975).


source: Caselaw Access Project

author: A. C. Miller, J.

license: Public Domain

text:
    CITY OF STERLING HEIGHTS v GENERAL EMPLOYEES CIVIL SERVICE COMMISSION
    1. Municipal Corporations — Charters—Construction of Charters —Plain Meaning.
    The courts should give rational construction to city charters because they are not always as judicially framed as they might be; the language employed must be given its plain meaning and no words should be treated as surplusage.
    2. Municipal Corporations — Ordinances—Civil Service Commission — Suspensions—Appeals to Commission.
    A city ordinance which states that a suspended municipal employee has a right of appeal to the Civil Service Commission but that the right of appeal shall not apply to one or more suspensions totalling not more than seven days does not bar the Commission from conducting a hearing on an employee’s appeal from a suspension of not more than seven days, but means that suspensions of less than seven days may be appealed only by leave of the Commission.
    3. Municipal Corporations — Labor Relations — Public Employment Relations Act — Collective Bargaining Agreement— Statutes.
    Grievance and other disciplinary procedures are "other terms and conditions of employment” within the meaning of the public employment relations act and the duty to perform in accordance with the terms of a collective bargaining agreement prevails over conflicting provisions of the charter of a home rule city (MCLA 423.201 et seq.; MSA 17.455[1] et seq.).

    Appeal from Macomb, Howard R. Carroll, J.
    References for Points in Headnotes

       56 Am Jur 2d, Municipal Corporations, Counties, and Other Political Subdivisions §§ 30, 195.

       56 Am Jur 2d, Municipal Corporations, Counties, and Other Political Subdivisions §§ 329, 331.

       48 Am Jur 2d, Labor and Labor Relations §§ 1191, 1193-1197, 1201, 1202.

      Submitted November 9, 1977, at Detroit.
    (Docket No. 77-867.)
    Decided February 6, 1978.
    Complaint by the City of Sterling Heights, Leonard G. Hendricks, City Manager for the city, and Elmer Modde, building official for the city, against the General Employees Civil Service Commission of the City of Sterling Heights and Morton Garelik for a declaratory judgment that the Civil Service Commission was without jurisdiction to hear an appeal of a suspension of an employee where that suspension was for less than seven days. Judgment for defendants. Plaintiffs appeal.
    Affirmed.

      Stewart, O’Reilly, Cornell, Donovan, Lascoe & Rancilio, P. C, for plaintiffs.

      Glime, Daoust & Wilds (by Raymond G. Glime and Ronald R. Tonks), for defendant Civil Service Commission.

      Brukoff, Dubin, Beras & Stewart, P. G, and Melvin M. Raznick, for defendant Morton Garelik.
    Before: D. C. Riley, P. J., and D. F. Walsh and A. C. Miller, JJ.

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

   A. C. Miller, J.

Defendant, Morton Garelik, employed by the City of Sterling Heights, was suspended from his job for five days on charges which, if true, would seriously blemish his career. He requested a hearing on the matter before the Sterling Heights Civil Service Commission. The Civil Service Commission, in fact, held a full hearing and found the evidence insufficient and unsubstantial and ordered him reinstated with other appropriate remedies.

Plaintiffs, the City of Sterling Heights and some of its officers, challenged the hearing on the grounds that the Civil Service Commission was without jurisdiction to hear an appeal from a suspension, when that suspension was less than seven days. They sought declaratory judgment, superintending control, or appropriate injunctive relief in the Macomb County Circuit Court. The trial court held that the Civil Service Commission did have jurisdiction to hear the appeal and entered judgment for defendants Morton Garelik and the Civil Service Commission.

The issue here revolves around three sections of the Sterling Heights City Charter. They are §§ 8.15, 8.16 and 8.32. The first two sections set out the procedure for suspensions, by appointing authorities, of classified employees. Section 8.16 states that, upon request of the employee, the Civil Service Commission shall conduct a full and fair hearing into the matter and if it decides that the suspension was unfounded, it may reinstate the employee and provide appropriate remedies. Section 8.32 provides a procedure for appeal by any employee "aggrieved” by action affecting his status. Where one is so aggrieved, under this section, the Civil Service Commission is required to hold a "prompt hearing” on the appeal. Section 8.32 specifically states that "[t]his right of appeal shall not apply to one or more suspensions totalling not over seven (7) days”. It is upon this section that appellants base their argument that the defendant Civil Service Commission was without jurisdiction to hear defendant Garelik’s claim. We find the assertion without merit.

The courts will give rational construction to city charters, aware as we are that they are not always as judiciously framed as they might be. Torrent v Common Council of the City of Muskegon, 47 Mich 115, 118; 10 NW 132 (1881). The language employed must be given its plain meaning, and no words should be treated as surplusage. Baker v General Motors Corp, 74 Mich App 237; 254 NW2d 45 (1977). We take the plain meaning of §§ 8.15 and 8.16 to mean that the Civil Service Commission shall conduct hearings on a suspension where an employee requests it. We take the plain meaning of § 8.32 to mean that, as it says, there is no right of appeal where the suspension is for less than seven days. The words "right of appeal” are not surplusage — they are there for a reason. Since § 8.09 of the Charter gives the Civil Service Commission both the power and the duty to conduct hearings on employees’ appeals, and since § 8.16 makes such hearings in the case of suspensions mandatory, the Charter can only mean that suspensions of less than seven days may be appealed by leave of the Commission. If the Commission desires to hear the matter, it may. Section 8.32 does not divest the Civil Service Commission of jurisdiction, where it so clearly resides.

Furthermore, there may be appeals to the Commission based on grounds other than the quantum of the sanction. In this case, the allegation of misfeasance was so serious that it constituted a basis for a grievance whether or not any sanction was imposed. Defendant Garelik also has rights under the collective bargaining agreement between the City of Sterling Heights and the Building Trades Council which provides in Article 7, § 2, in part:

"Should any grievance arise there shall be an earnest effort on the part of the parties to settle such grievances promptly through the following steps:
Step 1. By oral conference between the aggrieved employee, the steward, or both, and the immediate supervisor and, if not resolved, it shall be the responsibility of the aggrieved to then reduce any grievance to writing on the regular grievance form provided by the Union within five (5) working days of the alleged grievance if not resolved, or he may appeal to the Civil Service Commission, but not both.” (Emphasis supplied.)

In Pontiac Police Officers Association v Pontiac, 397 Mich 674; 246 NW2d 831 (1976), the Supreme Court ruled that as to detail and procedure, a collective bargaining agreement controls a conflicting provision of a home rule charter. The Court stated, p 677:

"We hold that grievance and other disciplinary procedures are 'other terms and conditions of employment’ within the meaning of the [public employment relations act, MCLA 423.201 et seq.; MSA 17.455(1) et seq.] and that the duty to bargain collectively on such issues and to perform in accordance with the terms of a collective bargaining agreement prevails over confficting provisions of the charter of a home rule city.” (Emphasis supplied.)

Here, the Commission saw merit in the claim of the defendant Garelik, it took evidence at a hearing, and it reinstated him. This is their function. It was within their jurisdiction.

Affirmed.


author: M. J. Kelly, J.

text:
    PEOPLE v MALCHI WHITE PEOPLE v NEWSON
    1. Criminal Law — Appeal and Error — Prosecutors—Remarks—Responding to Defense Counsel.
    Remarks of a prosecutor, even if otherwise improper, are not reversibly erroneous where the remarks are induced by and made in response to matters previously discussed by defense counsel.
    2. Criminal Law — Assistance of Counsel — -Effective Assistance— Trial Strategy — Defendant’s Failure to Testify.
    A closing argument by a defense attorney wherein he mentioned the defendant’s failure to testify did not amount to ineffective assistance of counsel where it appeared that defense counsel used his argument as part of valid trial strategy based on a concern that jurors are often distressed by a defendant’s failure to testify.
    3. Criminal Law — Sentences—Minimum Sentences — Maximum Sentences- — Indeterminate Sentence Act — Statutes.
    A minimum sentence which exceeds two-thirds of the maximum is an improper sentence only where the indeterminate sentence act applies (MCLA 769.8; MSA 28.1080).
    4. Criminal Law — Sentences—Indeterminate Sentence Act — Application of Act — Statutes.
    The indeterminate sentence act has mandatory application only to those persons convicted for the first time; therefore, the rule which requires a minimum sentence not to exceed two-thirds of the maximum sentence where an indeterminate sentence is given does not apply in the sentencing of a defendant with prior felony convictions (MCLA 769.8; MSA 28.1080).

      References for Points in Headnotes

       75 Am Jur 2d, Trial § 193.

       75 Am Jur 2d, Trial § 240.

       21 Am Jur 2d, Criminal Law §§ 540, 581, 592, 614.
    Comment note. — Length of sentence as violation of constitutional provisions prohibiting cruel and unusual punishment. 33 ALR3d 335.
    Indeterminate sentence: validity of sentence fixing identical minimum and maximum terms of imprisonment. 29 ALR2d 1344.

       73 Am Jur 2d, Statutes §§ 145, 146.

      5. Statutes — Statutory Construction — General Rules.
    The general rules of statutory construction require that every word, phrase, clause, and sentence of the provision to be construed must be given force and effect and that no word, phrase, or clause shall be rendered nugatory; it is not to be presumed that the Legislature intended to do a useless thing and if possible every part of a statute must he given effect.
    Appeal from Recorder’s Court of Detroit, Joseph A. Gillis, J.
    Submitted November 1, 1977, at Detroit.
    (Docket Nos. 77-897, 77-990.)
    Decided February 7, 1978.
    Leave to appeal applied for.
    Malchi White and Glenn Newson were convicted of breaking and entering an unoccupied building with intent to commit larceny therein. Defendants appeal.
    Affirmed.

      Frank J. Kelley, Attorney General, Robert A. Derengoski, Solicitor General, William L. Cahalan, Prosecuting Attorney, Edward R. Wilson, Principal Attorney, Appeals, and Anne B. Wetherholt, Assistant Prosecuting Attorney, for the people.

      Carl Ziemba, for defendant White on appeal.

      Charles Burke, for defendant Newson on appeal.
    Before: Beasley, P. J., and D. E. Holbrook, Jr. and M. J. Kelly, JJ.
   M. J. Kelly, J.

Defendants Malchi White and Glenn Newson were convicted of breaking and entering an unoccupied building, with intent to commit larceny therein, by a Detroit Recorder’s Court jury after being tried jointly. MCLA 750.110; MSA 28.305. Both defendants were sentenced to serve nine to ten years in prison. Defendants have appealed as of right and their cases have been consolidated.

Defendant White raises five issues, while defendant Newson raises only one.

Initially, defendant White contends that the prosecutor impermissibly commented on his failure to testify. Defendant immediately objected, but the court gave no cautionary instruction. A review of the record indicates that defendant’s counsel initiated remarks in his closing argument about his client’s failure to testify. The prosecutor in his rebuttal commented on the defense remarks.

The objectionable rebuttal was in response to the following argument made by defense counsel:

"I didn’t see the necessity of putting him [White] on any witness chair and letting the slilled [sic] and shrewd prosecutor interrogate him under examination. There is always the possibility under fear and cross-examination that something might come out and might be misunderstood by you ladies and gentlemen of the jury.”

Whereupon, the prosecutor in rebuttal noted in part:

"That Mr. Miller [defense counsel] was afraid to put his man on the stand to subject him to my skilled cross-examination and he was afraid something might come out. My only comment is, ladies and gentlemen, had this happened, maybe the truth might come out.”

We fail to see what further prejudice was caused defendant White after his own counsel stated that "something might come out and might be misunderstood” if White had taken the stand, compared to the prosecutor’s remark that "maybe the truth might come out”. Both sides speculate.

The jury was well aware that defendant White had not testified. Defense counsel’s remarks could be interpreted by a jury as expressing concern that his client would incriminate himself. Of course bis intention was to parade the prosecutor’s sophistication against defendant’s supposed naiveté. The prosecutor’s rebuttal did not prejudice defendant White’s case. There is no reversible error when the prosecutor’s remarks, even if otherwise improper, are "made primarily in response to matters previously discussed by defense counsel”. See People v Pomranky, 62 Mich App 304, 310-311; 233 NW2d 263 (1975), lv den, 397 Mich 823 (1976), People v Jones, 75 Mich App 261, 277; 254 NW2d 863 (1977).

Turning the coin defendant White next contends that he was denied effective assistance of counsel because his attorney argued his failure to testify thus canceling his constitutional fifth amendment right to silence. It appears that White’s trial counsel used his argument as part of valid trial strategy. There is no merit to defendant’s contention that this amounts to ineffective assistance of counsel. See People v Garcia, 398 Mich 250, 266; 247 NW2d 547 (1976). Able counsel know that jurors are often distressed by a defendant’s failure to testify.

The last issue requiring any discussion is raised by both defendants White and Newson. They assert that their sentences of nine to ten years violate the provisions of the indeterminate sentencing act, MCLA 769.8; MSA 28.1080, and the rule set forth in People v Tanner, 387 Mich 683; 199 NW2d 202 (1972).

The indeterminate sentencing act, MCLA 769.8; MSA 28.1080 provides:

"When any person shall hereafter be convicted for the ñrst time of crime committed after this act takes effect * * * the court imposing sentence shall not fix a definite term of imprisonment, but shall fix a minimum term except as hereinafter provided.” (Emphasis added.)

In People v Tanner, supra, at 690, the Supreme Court established the following rule under this act:

"Convinced as we are, that a sentence with too short an interval between minimum and maximum is not indeterminate, we hold that any sentence which provides for a minimum exceeding two-thirds of the maximum is improper as failing to comply with the indeterminate sentence act.”

The sentences in the present case are nine to ten years, clearly contra to the Tanner "two-thirds” rule if it applies. The question is whether the rule applies to the defendants who have previous felony convictions. This is not a new question.

We adopt the following reasoning set forth recently by another panel of this Court in People v Banks, 73 Mich App 492, 494; 252 NW2d 501 (1977), wherein the majority stated:

"It is apparent * * * that the Supreme Court [in People v Tanner] limited its holding that a minimum sentence exceeding two-thirds of the maximum is improper applies only to cases to which the indeterminate sentence act applies.
"The indeterminate sentence act, MCLA 769.8; MSA 28.1080, reads in part as follows:
" 'When any person shall hereafter be convicted for the ñrst time of crime committed after this act takes effect. [The court imposing sentence shall not fix a definite term of imprisonment but shall fix a minimum term except as hereinafter provided.]’ Since defendant’s conviction for larceny in a dwelling house was defendant’s third conviction the court was not bound by the indeterminate sentence act and was free to sentence defendant as its discretion dictated. Absent an abuse of discretion, the trial court’s decision will not be disturbed. We find no abuse of discretion and defendant’s sentence [three to four years] shall stand.” (Emphasis in 73 Mich App.)

Cf. People v Ungurean, 51 Mich App 262; 214 NW2d 873 (1974), People v Redwine, 73 Mich App 83, 85; 250 NW2d 550 (1976) (Anderson, J., dissenting).

We are aware of and undismayed by other decisions of this Court applying Tanner to defendants with prior convictions. Courts sometimes make mistakes. Even supreme courts. See People v Red-wine, supra, People v Bullock, 48 Mich App 700, 705-706; 211 NW2d 108 (1973), People v Hempton, 43 Mich App 618; 204 NW2d 684 (1972), People v Justice, 50 Mich App 55; 212 NW2d 762 (1973), lv den, 391 Mich 792 (1974). See also Judge Cavanagh’s dissent in People v Banks, supra. Even the Supreme Court has adopted this approach. People v Haggitt, 388 Mich 773; 200 NW2d 321 (1972), and People v Jordan, 388 Mich 773; 200 NW2d 321 (1972). Both of these decisions were memorandum opinions and did not discuss the indeterminate sentencing statute in its application to multiple offenders. See also People v Moore, 391 Mich 426, 430; 216 NW2d 770 (1974), wherein the Supreme Court noted that the Court of Appeals, in an unpublished opinion, applied Tanner to prior offenders. The Supreme Court did not discuss the issue.

The plain language of the statute applies the indeterminate sentencing act to those who are first offenders. MCLA 8.3a; MSA 2.212(1). The general rules of statutory construction require that: "[e]very word, phrase, clause, and sentence of the provision to be construed must be given force and effect and no word, phrase, or clause shall be rendered nugatory”. Chrysler Corp v Washington, 52 Mich App 229, 237; 217 NW2d 66 (1974), lv den, 399 Mich 859 (1977). "[I]t will not be presumed that the legislature intended to do a useless thing and if possible every part of a statute must be given effect.” Davis v Imlay Township Board, 7 Mich App 231, 236; 151 NW2d 370 (1967), lv den, 379 Mich 780 (1967).

The courts, by adapting the rule of Tanner to factual situations involving prior offenders, are creatively expanding the scope and legal effect of Tanner. Tanner is inapplicable because that ruling is precisely directed to sentences under the indeterminate sentencing act. To hold that the Tanner decision applies to multiple offenders would presuppose that the Legislature intended to do a useless thing when it inserted the words "convicted for the first time of crime”. To bind trial courts to the Tanner sentencing rule for all multiple offenders is illogical and those decisions which do so are either prognosticating correctly or ignoring established canons of statutory construction.

If the Supreme Court wishes to expand the rule of Tanner to the instant facts, we think that further reasoning is required and not mere reliance on Tanner in a memorandum opinion. See People v Haggitt, People v Jordan, supra. Until the Supreme Court does issue an explicit decision expanding Tanner to the instant facts, we feel free to follow the reasoning in People v Banks, supra. See also People v Ungurean, supra.

Defendant White has raised two other issues relating to the trial court’s instructions to the jury. Defendant did not object, and a review of the record indicates no manifest injustice has resulted. Therefore, there is no reversible error. MCLA 769.26; MSA 28.1096.

Affirmed.


author: V. J. Brennan, J.

text:
    LAWRENCE v DEPARTMENT OF CORRECTIONS
    1. Constitutional Law — Due Process — Notice op Proceeding — Opportunity to Respond.
    Due process of law requires that notice of a proceeding must be given to an opposing party sufficiently in advance of the scheduled proceeding to afford the opposing party a reasonable opportunity to prepare and answer.
    2. Constitutional Law — Due Process — Notice op Proceeding — Opportunity to Respond.
    A plaintiff was denied due process where the defendant moved for summary judgment and did not timely serve the plaintiff with a notice of the hearing on the motion, where because the plaintiff, a prison inmate, was incarcerated the court had already denied him the opportunity to argue on a previous motion in person so that the only way the plaintiff could appear was by way of written material sent through the mail, and where the record indicates that the plaintiff did not actually receive notice of the scheduled hearing on the motion until after the hearing was held and the motion granted.
    3. Motions — Oral Arguments — Court Rules — Discretion.
    A trial court has the discretion to dispense with or limit oral arguments on motions; this discretion was abused where the court refused a plaintiff’s request to appear in person yet allowed the defendant to appear and argue a motion unopposed (GCR 1963, 119.2).
    4. Torts — Pleading—Conversion—Governmental Immunity— Statutes.
    An allegation by a plaintiff prison inmate that his property was stolen by prison employees is an allegation of conversion, which is an intentional tort; the commission of an intentional tort is not a governmental function, and in such a case the defendant Department of Corrections if possibly liable under a theory of
      respondeat superior is not protected by governmental immunity (MCLA 691.1407; MSA 3.996[107]).

      References for Points in Headnotes

       16 Am Jur 2d, Constitutional Law §§ 560-568.

       20 Am Jur 2d, Courts §§ 82-86.

       57 Am Jur 2d, Municipal, School, and State Tort Liability, § 243.

      Appeal from Court of Claims, Kenneth B. Glaser, Jr., J.
    Submitted October 6, 1977, at Detroit.
    (Docket No. 77-1066.)
    Decided February 7, 1978.
    Complaint in four counts by James Lawrence against the Department of Corrections for recovery of the value of personal property allegedly stolen by employees of Southern Michigan State Prison while plaintiff was an inmate at the prison. Accelerated and summary judgments for defendant. Plaintiff appeals.
    Remanded for further proceedings.
    James Lawrence, in propria persona.

      Frank J. Kelley, Attorney General, Robert A. Derengoski, Solicitor General, and Michael J. Hodge, Assistant Attorney General, for defendant.
    Before: D. F. Walsh, P. J., and V. J. Brennan and Beasley, JJ.
   V. J. Brennan, J.

Plaintiff James Lawrence appeals by right from a Court of Claims grant of accelerated judgment, pursuant to GCR 1963, 116.1(5) on counts 1 and 2 of his complaint, and summary judgment, pursuant to GCR 1963, 117.2(1) on counts 3 and 4. Plaintiff, an inmate at Jackson Prison, sought to recover $130.95 for the loss of personal property allegedly taken by prison employees.

Plaintiff claimed that on August 3, 1976, he was placed in a detention cell for an alleged violation of prison rules. At that time, he had a quantity of personal property in his cell. Between August 3 and August 12, 1976, defendant Department of Corrections moved this property to the prison property room. When his property was returned after his release from detention, several items were missing.

Count 1 of plaintiffs complaint alleges negligence in that prison officials when they placed him in detention had a duty to exercise reasonable care to see that his property was not lost, stolen or destroyed and that they breached that duty causing him loss. Count 2 alleged under the same facts that the property had been converted. Counts 3 and 4 pled in summary fashion that his property was taken in violation of due process and was a public taking without just compensation.

The Attorney General on behalf of defendant filed a motion for accelerated judgment claiming the operation of a prison is a state function and therefore defendant was immune under the statute. MCLA 691.1407; MSA 3.996(107). This motion was filed on January 3, 1977.

Plaintiff responded to that motion on January 10, 1977. He reasoned that governmental immunity would not apply to his complaint because he alleged his property had been unconstitutionally taken. He also observed that governmental immunity applied wholly to tort claims and that the last two counts in his complaint were not based on tort law.

The Attorney General then moved for summary judgment on March 10, 1977. In support of the motion, the Attorney General argued that due process was not denied because no need for a hearing existed before a prisoner’s property could be removed from his cell after the prisoner had been placed in detention. He further alleged that no "taking” within the meaning of the constitution occurred because the constitutional provision does not apply to the theft of personal property.

The motion for summary judgment was mailed to plaintiff on Thursday, March 10, 1977. The Court of Claims granted the motion on Tuesday, March 15, 1977. The court had previously denied plaintiff’s application for a writ of habeas corpus, so plaintiff was not represented or present to respond in person to defendant’s motion. He claims now he did not even receive a copy of the motion until after the court had granted the motion.

The orders from the Court of Claims pursuant to granting the motion state only that counts 1 and 2 are barred by governmental immunity and that counts 3 and 4 fail to state a claim upon which relief can be granted. GCR 1963, 117.2(1).

Plaintiff brings three assignments of error on appeal. We need deal with only one at this time.

Plaintiff claims that the procedure by which the Court of Claims granted summary judgment denied him due process of law because he failed to receive adequate notice and an opportunity to appear and present his defense to the motion for summary judgment brought by defendant.

Plaintiff contends the Court of Claims procedure denied him procedural due process in two particulars. First, plaintiff claims he received no notice that the Attorney General had filed a motion for summary judgment on counts 3 and 4 of this complaint until after the motion had been granted by the court. Second, he claims that allowing the Attorney General to present oral arguments on the motion while denying him a similar opportunity is fundamentally unfair.

On the basis of the record presented, we find that notice of the motion for summary judgment was not mailed to plaintiff until Thursday, March 10, 1977. The motion was granted on Tuesday, March 15, 1977. Plaintiff claims that he did not receive actual notice the motion had been filed until after the motion was granted. We have no reason to doubt this claim, given the quality of mail service generally and within a prison particularly. Clearly, the motion was not timely served even under the court rule. GCR 1963, 108.4 generally allows notice of a motion 4 days before the motion is heard; but where the mailing must be delivered to another county, an additional 2 days are required, not including the day of mailing. GCR 1963, 108.6 and 108.7(1). But see also Court of Claims Rules 6 and 7.

Plaintiff was denied due process. Underlying the claim made here is the principle that notice must be given sufficiently in advance of the scheduled proceeding to afford the party a reasonable opportunity to prepare and answer. People v Gulley, 66 Mich App 112, 116; 238 NW2d 421 (1975), lv den, 396 Mich 850 (1976). See also Laird v Rinckey, 371 Mich 96, 98; 123 NW2d 243 (1963); Ridenour v Bay County, 366 Mich 225, 240; 114 NW2d 172 (1962).

Because plaintiff was incarcerated, the Court of Claims had already denied him the opportunity to argue the motion for accelerated judgment in person. The only way plaintiff could appear was through written material he sent through the mail. Plaintiff had no way of responding to the motion through the mail when defendant had not mailed the motion to him until five days before the actual hearing. The procedure employed by the Attorney General and accepted by the Court of Claims prevents plaintiff from properly and fairly responding to the motion. The court granted the motion without ever hearing opposing argument.

We thus find plaintiff was denied due process by a procedure which effectively excluded any opportunity for him to be heard. Therefore, we find a remand necessary in order to allow plaintiff to properly respond to the motion for summary judgment filed by the Attorney General. Though lacking clarity, we do observe that plaintiff did a creditable job of "filling out” the complaint in his brief in response to the governmental immunity motion filed by the Attorney General. If given the opportunity, he might well do the same on the questions presented by the Attorney General in his motion for summary judgment. We feel fairness and proper procedure dictate that plaintiff be given the opportunity.

Plaintiff also claims he was denied due process when the court allowed the Attorney General to present oral argument while at the same time preventing him from being present. We find this procedure objectionable, but need not subject the problem to constitutional scrutiny.

GCR 1963, 119.2 gives trial courts discretion to "dispense with or limit oral arguments on motions”. We find an abuse of discretion where the court refused plaintiffs request to appear in person and yet allowed defendant to appear and argue the motion unopposed. The proper procedure would have been either to allow both parties to argue or to allow neither to argue. See generally Florence v Moors Concrete Products Inc (On Rehearing), 35 Mich App 613, 620-621; 193 NW2d 72 (1971), lv den 387 Mich 761 (1972). Given that defendant has already been provided an opportunity to present his position and information to the court, on remand the court should allow plaintiff to appear in person to present his response to defendant’s motion.

We also strongly urge that the court reconsider its grant of summary judgment to defendant on the basis that governmental immunity precludes plaintiff’s suit for conversion under count 2 of his complaint. MCLA 691.1407; MSA 3.996(107). Plaintiff is charging that prison employees stole his property. Such conversion is an intentional tort. The commission of an intentional tort is not a governmental function. If not a governmental function, then defendant is not protected by governmental immunity. McCann v State of Michigan, 398 Mich 65; 247 NW2d 521 (1976); Galli v Kirkeby, 398 Mich 527; 248 NW2d 149 (1976). We would give the trial court an opportunity to review its decision concerning this second count with special regard to defendant’s possible liability under a theory of respondeat superior. In any case, more complete factual allegation by plaintiff will be necessary. See 18 Am Jur 2d, Conversion, § 125; Annotation, 15 ALR2d 829.

Having reviewed plaintiff’s third allegation of error and found the court’s decision concerning counts 3 and 4 of plaintiff’s complaint essentially correct, we find no grounds to disturb the court’s judgment here.

Remanded for proceedings in conformity with this opinion.

       We find that Rule 7 of the Court of Claims was violated in this case where plaintiff received no notice of the motion hearing before the court acted. We would require receipt of the motion by personal or registered mail service four days or more prior to the time for hearing to constitute proper compliance with the rule.


author: Beasley, J.

text:
    VILLAGE OF HOLLY v GROMAK
    1. Zoning — Nonconforming Use — Change in Use — Statutes.
    Extended or expanded uses of land or structures exceeding the boundaries of an existing nonconforming use are unlawful uses that violate the statute governing nonconforming use; however, a lesser or diminishing nonconforming use is not only lawful, but proceeds toward the objectives of the statute (MCLA 125.583a; MSA 5.2933[1]).
    2. Zoning — Ordinances—Reasonableness—Circumstances.
    Zoning ordinances, as a rule, stand by themselves and the reasonableness of an ordinance must be judged by the circumstances of each case.
    3. Zoning — Nonconforming Use — Change in Use — Circumstances.
    A decision of whether to permit a proposed change in a nonconforming use must be made by viewing each situation in the light of all the surrounding facts and circumstances.
    4. Zoning — Nonconforming Use — Boards of Appeal — Courts— Change in Use — Factors Considered.
    A zoning board of appeals and courts, in considering a proposed change in a nonconforming use, should consider, in addition to the use of the property at the time of the enactment of the zoning ordinance, such factors as prior interruptions in the nonconforming use and the reasons for them, expansions or contractions of the nonconforming use and the intent of the user in making such changes, whether there has been a partial or total abandonment of the nonconforming use, and the role of governmental agencies involved.

      References for Points in Headnotes

       82 Am Jur 2d, Zoning and Planning §§ 196-199.
    Zoning: Changes, repairs, or replacements in continuation of nonconforming use. 87 ALR2d 4.

       82 Am Jur 2d, Zoning and Planning § 15.

       82 Am Jur 2d, Zoning and Planning §§ 200, 201.
    Plan: Requirement that zoning variances or exceptions be made in accordance with comprehensive plan, 40 ALR3d 372.

       82 Am Jur 2d, Zoning and Planning § 234.
    Zoning: Right to resume nonconforming use of premises after involuntary break in the continuity of nonconforming use caused by governmental activity. 56 ALR3d 138.

      Appeal from Oakland, Frederick C. Ziem, J.
    Submitted December 14, 1977, at Detroit.
    (Docket No. 77-1886.)
    Decided February 7, 1978.
    Complaint by the Village of Holly against Frank Gromak, Romila Development Corporation and William Eller to enjoin the defendants from violating the village’s zoning ordinance. Counter complaint by Romila Development against the Village of Holly to enjoin the village from enforcing its zoning ordinance and for damages. Judgment for plaintiff. Defendants appeal.
    Affirmed.

      Albert H. Callahan, for plaintiff.

      Campbell, Kurzman & Plunkett, for defendants.
    Before: Bashara, P. J., and Beasley and D. E. Holbrook, Jr., JJ.
   Beasley, J.

This case comes before this court on defendants-appellants’ appeal as of right from a trial court judgment affirming denial by plaintiffs board of zoning appeals of an application to operate a so-called "convenience food” establishment in a structure on property that is the subject of a valid nonconforming use.

The record indicates that in 1945 or 1946 defendant Gromak put a war surplus Quonset hut on the premises and started a farm equipment sales and service business. Around 1955, as farming in the area lessened, he switched emphasis to heavy industrial equipment including bulldozers, caterpillars, back hoes and fork-lifts which continued until 1967 or 1968 when he ventured into the lawn, garden and outdoor power equipment sales and service business.

In 1970, plaintiff enacted a zoning ordinance which zoned the subject land R1C, a single-family residence classification. In 1973, defendant Gromak sold the premises on land contract to defendant Romila, but rented part of the premises back from the new purchaser and started slowly to phase out his business. Defendant Romila subdivided part of the property, built houses on two parcels and rented the front part of the Quonset hut to defendant Bennett Insulation Company for an insulation, storage and sales business.

Plaintiff started this suit to oust the insulation operation from the premises and defendant Bennett Insulation Company counter-claimed. While the case was pending, defendant Romila, desiring to use part of the property for a so-called convenience food establishment, petitioned the board of zoning appeals for permission to change the nonconforming use, if no structural alterations were made and if the proposed use was equally appropriate or more appropriate to the district than the existing nonconforming use. This request was made pursuant to § 4.5(c) of plaintiff’s zoning ordinance which provides as follows:

"c) If no structural alterations are made, any nonconforming use of a structure, or structure and premises, may as a special exception be changed to another nonconforming use provided that the Board of Appeals, either by general rule or by making findings in the specific case, shall find that the proposed use is equally appropriate or more appropriate to the district than the existing nonconforming use. In permitting such change, the Board of Appeals may require appropriate conditions and safeguards in accord with the provisions of this ordinance * * * ,”

Extensive hearings were held in October 1975 and May 1976.

The board of zoning appeals denied the petitions, concluding that a convenience food store was less appropriate to the district than the then-existing use of the part-time sales and service of lawn and garden equipment. Defendants then amended their claims in this lawsuit, seeking superintending control in the circuit court. After trial, the trial court, in a carefully prepared opinion, concluded that although the nonconforming use had not been abandoned, the decision of the board of zoning appeals denying permission for the changed nonconforming use was supported by competent and material evidence and, thus, met the constitutional test under Article 6, § 28 of the 1963 Michigan Constitution.

On appeal, as in the trial court, defendants-appellants argue that the board of zoning appeals proceeded on an erroneous conception of the law, namely, that it looked to the use of the subject premises as it existed at the time of filing of the petition, which appears to have been servicing of lawnmowers and other lawn equipment on a part-time basis by a semi-retired owner. Appellants say that the board of zoning appeals should have looked to the use on the effective date of the zoning ordinance in 1970 when a busy retail sales and service lawnmower and equipment business was in operation. The trial judge took into consideration that the 1973 land contract purchaser built two residential structures on the premises and altered the use to put an insulation company-in part of the Quonset hut. After noting that the case involved a close question, with respect to defendants-appellants’ chief claim, the trial judge said, among other things, as follows:

" * * * in view of the fact that the present lawn and garden equipment business has become a limited operation run by a person who is in a semi-retired or work as he pleases; even though the Court has made a finding with the nonconforming use, it has not been abandoned; nevertheless, in view of the wording of the ordinance which speaks of the existing nonconforming use, this Court is of the opinion that the Board of Appeals had the right to compare the proposed use to the use as it existed in the last three or four years.
"This Court is not ruling that the Defendants couldn’t go back to the use of the prior years, because that is not before the Court. But this Court is of the opinion that the Board did have the right to compare the proposed use to the use as it had existed in the last three or four years.”

Appellants cite City of Hillsdale v Hillsdale Iron & Metal Co, Inc, 358 Mich 377; 100 NW2d 467 (1960), as authority to support the proposition that absent abandonment, the basis for comparison with the proposed use is the lawful use exactly as such existed at the time of enactment of the ordinance. In Hillsdale, at the date of adoption of the zoning ordinance, defendant’s business was "largely storage of scrap metal”, 358 Mich at 385. The court found extension of use after the effective date of the ordinance. Defendant claimed that the use was expanded because mechanization and modernization were necessary to meet competition. The trial court enjoined the use and maintenance of machinery, equipment and buildings placed on the premises after effective date of the ordinance. Consequently, as distinguished from the within case where we have abatement or reduction of a nonconforming use, in Hillsdale there was an expansion or broadening of a nonconforming use. Defendant also cites Dearden v Detroit, 70 Mich App 163; 245 NW2d 700 (1976), where, from 1938 through 1971, the Roman Catholic Archdiocese of Detroit owned and used the subject building as a convent. In 1940, defendant city adopted a zoning ordinance under which the area became R2 (two family); thus, the convent became a nonconforming use. In 1971, plaintiff sought to lease to the Michigan Department of Corrections the premises for use in rehabilitating convicts. The zoning ordinance did not specifically exclude governmental use. This Court held that the nonconforming use must be substantially the same size and Same essential nature as the use existing at the time of passage of a valid zoning ordinance, citing White Lake Twp v Lustig, 10 Mich App 665; 160 NW2d 353 (1968). This Court held that the proposed use as a correctional facility was an expansion of the nonconforming use, that housing is only one aspect of the proposed use by the Department of Corrections and, therefore, affirmed the denial by defendant of the proposed use.

In Dearden, the nonconforming use as a convent appears to have remained constant while the proposed new use would be a clear extension of the nonconforming use. Thus, both Hillsdale and Dear-den are distinguishable from the within case. Extended or expanded uses exceeding the boundaries of an existing nonconforming use are unlawful uses that violate the nonconforming use statute. On the other hand, lesser or diminishing nonconforming uses are not only lawful, but proceed toward the objectives of the nonconforming use statute. The trial court did not ignore the use existing in 1970 at the date of enactment of the zoning ordinance, but also gave consideration to the actual use of the subject premises thereafter. Just as each zoning ordinance, as a rule, stands by itself and its reasonableness must be judged by the circumstances in each case, each situation where a decision must be made whether to permit a proposed change in a nonconforming use must be viewed in the light of all the surrounding facts and circumstances.

It would be neither practical nor desirable to attempt to formulate a rule that described the weight to be given to each fact and circumstance.

While the use of the property at the time of enactment of the ordinance is a proper starting place in analysis of nonconforming use questions, there are additional factors that must be considered. To be considered are such factors as prior interruptions in the nonconforming use and the reasons for them, expansions or contractions of the nonconforming use and the intent of the user in making such changes, whether there has been a partial or total abandonment of the nonconforming use and the role of governmental agencies involved. Appellants’ argument that the only factor properly considered is the nonconforming use existing when the ordinance is adopted would be a sterile, limiting approach that we do not care to embrace. Under these circumstances, we do not find that the trial court clearly erred in its interpretation of the law. Each case must be decided upon its own peculiar circumstances. In this case, the trial court’s application of the law to the facts was not clearly in error; there was evidence to support the findings of the board of zoning appeals as the trial court found.

Affirmed, with costs.

       The statute authorizing § 4.5(c) provides as follows:
      "The lawful use of land or a structure exactly as such existed at the time of the enactment of the ordinance affecting them, may be continued, except as hereinafter provided, although such use or structure does not conform with the provisions of such ordinance. The legislative body may in its discretion provide by ordinance for the resumption, restoration, reconstruction, extension or substitution of non-conforming uses or structures upon such terms and conditions as may be provided in the ordinance.” MCLA 125.583a; MSA 5.2933(1).

       Redford Moving & Storage Co v Detroit, 336 Mich 702, 711; 58 NW2d 812 (1953), citing Pere Marquette R Co v Muskegon Township Board, 298 Mich 31; 298 NW 393 (1941).


author: R. B. Burns, J. W. R. Brown, J.

text:
    AMERICAN FEDERAL SAVINGS AND LOAN ASSOCIATION v ORENSTEIN
    Opinion of the Court
    1. Vendor and Purchaser — Investigation of Title — Duty of Purchaser — Inquiry Notice — Due Diligence.
    A purchaser of real estate has the duty to investigate the title of his vendor and to take notice of any adverse rights or equities of third parties which he has the means of discovering and as to which he is put on inquiry; if he fails to inquire with due diligence he is chargeable, as a matter' of law, with notice of the facts which the inquiry would have disclosed.
    2. Mortgages — Priorities—Subordination Clause — Ambiguities— Inquiry Notice — Summary Judgment.
    Summary judgment granting a plaintiff mortgagee priority over the mortgage of a defendant was improper where the judgment was based upon a subordination clause in the defendant’s mortgage which was so obviously ambiguous that it should have put plaintiff on inquiry notice of a third-party interest in the realty.
    Concurrence in Part, Dissent in Part by W. R. Brown, J.
    3. Judgment — Final Judgment — Prior Orders — Appeal by Right— Court Rules.

      An otherwise nonñnal judgment is considered to be ñnal only upon an express determination that there is no just reason for delay and upon an express direction for the entry of judgment; upon entry of a ñnal judgment all prior nonñnal rulings and

      orders are incorporated into the final judgment and are ñnalized for purposes of appeal and upon perfection of an appeal by right from a ñnal judgment a party may seek review of any prior ruling in the case affecting the 'party that would otherwise be only a nonñnal order (GCR 1963, 518.2).

      References for Points in Headnotes
    [1, 2, 5, 8] 55 Am Jur 2d, Mortgages §§ 324, 325, 1096-1099.
    66 Am Jur 2d, Records and Recording Laws §§ 102, 104, 105.
    [2, 5, 8] 55 Am Jur 2d, Mortgages §§ 343, 344.

       46 Am Jur 2d, Judgments §§ 457, 675.
    47 Am Jur 2d, Judgments § 926.

       55 Am Jur 2d, Mortgages § 99.

       55 Am Jur 2d, Mortgages §§ 328, 345.

       55 Am Jur 2d, Mortgages § 175.

      4. Mortgages — Discharge of Mortgage — Forged Instrument— Rights of Parties.

      A forged document purporting to be a discharge of a mortgage and duly recorded as such does not affect the rights of one mortgagee over the rights of another mortgagee.

    5. Property — Recording Statutes — Property Interests — Extrinsic Evidence.

      One important purpose of the recording statutes is to impart certainty so that parties can rely on the public record of outstanding property interests; it is impermissible to resort to extrinsic evidence to determine what property interests are protected by recording, the constructive notice imparted by the record of an instrument being strictly limited to that which is set forth on its face.

    6. Mortgages — Recording Statutes — Waiver of Priority — Constructive Notice — Statutes.

      A recorded waiver of priority of a mortgage is constructive notice thereof to all persons dealing with the mortgage (MCLA 565.391; MSA 26.701).

      7. Mortgages — Subordination Clause — Ambiguities—Construction.

      An ambiguous subordination clause in a recorded mortgage should be construed against the party who drafted the clause.

      8. Mortgages — -Defects in Title — Discharge of Mortgage — Inquiry Notice — Reliance on Record.

      A party who has searched the record regarding a particular piece of property and in reliance on a discharge of mortgage contained therein has attained the status of a bona ñde mortgagee without notice of defects in the title should not be charged with inquiry notice as to a more subtle defect earlier in time; for purposes of inquiry notice, a mortgagee is fully entitled to rely on an apparently perfect legal title as shown by the records.

    Appeal from Oakland, Robert L. Templin, J.
    Submitted October 18, 1977, at Detroit.
    (Docket No. 77-2223.)
    Decided February 7, 1978.
    Leave to appeal denied, 402 Mich 945.

      Complaint by American Federal Savings and Loan Association against Charles Orenstéiñ and others for foreclosure Of a mortgage and fór a declaratory judgment that á mortgage held by Orenstein was a nullity. A partial summary judgment was entered declaring plaintiffs mortgage to be senior to defendant’s and a subsequent judgment of foreclosure was entered in favor of plaintiff. Defendant appeals.
    Reversed and remanded.

      Smith, Miró, Hirsch & Brody (by David M. Miro and Martin C. Weisman), for plaintiff.

      Schlussel, Lifton, Simon, Rands, Kaufman & Lesinski (by T. John Lesinski and Joseph F. Galvin), for defendant.
    Before: T. M. Burns, P. J., and R. B. Burns and W. R. Brown, JJ.

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

   R. B. Burns, J.

We concur in the opinion of Judge Brown, except as to his discussion and resolution of the substantive issue. The reader is referred to Judge Brown’s opinion for the facts in the instant case.

The trial court granted summary judgment because it found the subordination clause unambiguously subordinated Orenstein’s mortgage to that of plaintiff. However, each party on appeal has presented reasonable interpretations of the same clause which are at variance with each other. If the clause is interpreted, as plaintiff suggests, as subordinating Orenstein’s mortgage not only to the interests of the New York State Teacher’s Retirement System and the General Electric Pension Trust, but also to an unspecified, yet-to-be-incurred interest of $4,125,000, then one immediately encounters an obvious ambiguity. If Orenstein’s mortgage is subordinate to three interests, why are only two numerals listed?

Judge Brown’s argument that the ambiguity must be resolved against the drafter of the clause, Orenstein, rests on the premise that a title searcher is never chargeable with inquiry notice when an ambiguity is encountered. This is not the law.

"It is the duty of a purchaser of real estate to investigate the title of his vendor, and to take notice of any adverse rights or equities of third persons which he has the means of discovering, and as to which he is put on inquiry. If he makes all the inquiry which due diligence requires, and still fails to discover the outstanding right, he is excused, but, if he fails to use due diligence, he is chargeable, as a matter of law, with notice of the facts which the inquiry would have disclosed.
"The questions in such cases are: First, whether the facts were sufficient to put the party on inquiry; and, second, did he fail to exercise due diligence in making the inquiry?” Schweiss v Woodruff, 73 Mich 473, 477-478; 41 NW 511, 512-513 (1889). (Emphasis in original.)

Cases in which a title defect would prevent a diligent title searcher from discovering the deed or recognizing its applicability must be distinguished from those in which the deed would have been discovered and a possible error revealed. Schweiss v Woodruff, supra at 478-479; 41 NW at 513; see, e.g., Savidge v Seager, 175 Mich 47; 140 NW 951 (1913); Van Slyck v Skinner, 41 Mich 186; 1 NW 971 (1879). In Patterson v Miller, 249 Mich 89, 96; 227 NW 674, 677 (1929), the ambiguity contained in a subordination clause was so subtle that the Court indicated that a covenant would have had to have been read into the clause to give it the asserted meaning.

The ambiguity in the instant subordination clause was so obvious as to put a prudent person on inquiry notice. Whether plaintiff would have discovered that the Orenstein mortgage would be superior or inferior to its own is a fact which is in dispute. Summary judgment was therefore improper.

Reversed and remanded for trial.

T. M. Burns, P. J., concurred.

W. R. Brown, J.

(concurring in part, dissenting in part). Defendant Orenstein appeals from a partial summary judgment of June 23, 1976, that Orenstein’s mortgage was junior to that of plaintiff, and Orenstein appeals from the July 26, 1976, judgment of foreclosure, as well as the June 17, 1977, order making the judgment of foreclosure a final judgment pursuant to GCR 1963, 518.2.

Defendant Orenstein was given a mortgage on the subject property on March 10, 1972, to secure a loan of $1,300,000. The purpose of the loan was to supplement construction funds for the completion of an office building in Southfield, Michigan. Previously, a mortgage had been conveyed to a third party in the amount of $3,025,000 to provide funds for construction of the building, with an agreement for an additional loan of $1,100,000 upon attaining a certain percentage of tenants for the building. The other mortgagee, however, declined to consummate the additional $1,100,000 loan and the building owners eventually sought and obtained the loan from Orenstein in the amount of $1,300,000. Although the agreement was reached on March 10, 1972, the Orenstein mortgage was pot recorded until November 20, 1973. The Orenstein mortgage contained the following emphasized subordination clause which is at the crux of the dispute before us:

”12. This Mortgage and Assignment of Leases and Rentals is subject and subordinate in all respects to the following: (i) The lien of that certain mortgage given by Mortgagor by assignment to the New York State Teacher’s Retirement System dated May 21, 1970, recorded at Liber 5508, Page 167, Oakland County Records on May 22, 1970, and all obligations and indebtedness thereof up to the sum of Four Million One Hundred Twenty-Five Thousand and 00/100 Dollars ($4,125,000.00), exclusive of interest; and all advances, obligations and indebtedness now or hereafter incurred up to the sum of $4,125,000.00, exclusive of interest, and (ii) The terms and conditions of a land lease from the Trustees of General Electric Pension Trust fee holder granted to Mortgagor from said Trustees executed on May 21, 1970 and recorded on May 22, 1970, in Liber 5508, Page 167, Oakland County Records.” (Emphasis added.)

On November 28, 1973, a document purporting to discharge the Orenstein mortgage was recorded. Defendant Orenstein claims that the document is a forgery and for purposes of review of the summary judgment, we will assume this assertion is correct. On April 1, 1974, plaintiff recorded its mortgage securing a loan in the amount of $4,110,-000, It is undisputed that, at that time, plaintiff had no actual knowledge of the existence of the Orenstein mortgage. On December 13, 1974, the Orenstein mortgage was re-recorded.

Plaintiff commenced this action on October 13, 1975, alleging default and requesting that the Orenstein mortgage be declared a nullity and that plaintiffs mortgage be foreclosed. Following the filing of counter-complaints and cross-complaints, plaintiff moved for a summary judgment that its mortgage has priority over the Orenstein mortgage based on the above-quoted subordination clause in the Orenstein mortgage. Defendant Orenstein seeks review of the summary judgment as well as the judgment of foreclosure and the confirmation of sale.

I. Appeal By Leave or By Right

The threshold issue is whether defendant Orenstein has an appeal by right or only by leave. We hold this appeal to be by right. Even the judgment of foreclosure did not resolve all of the claims of all the parties. Thus, like the prior partial summary judgment as to priorities, it is subject to GCR 1963, 518.2. That rule makes an otherwise nonfinal order a final judgment "only upon an express determination that there is no just reason for delay and upon an express direction for the entry of judgment”. Absent such a finding, the judgment is not final. See Pigott v City of West-land, 48 Mich App 169, 172-173; 210 NW2d 111 (1973). Thus, the 20-day appeal by right period of GCR 1963, 803.1 did not commence until the entry of the order specifying finality. See Chevrolet Local 659, UAW-CIO v Reliance Insurance Cos, 21 Mich App 123, 124-125; 174 NW2d 924 (1970). Upon entry of a final judgment, all prior nonfinal rulings and orders, (including in this case the partial summary judgment as to priorities), are incorporated into the final judgment and are finalized for purposes of appeal. We reject plaintiff’s argument that the claim of appeal is defective in not further delineating the nonfinal orders appealed from. Standing alone, the nonfinal orders are not appealable as of right. Chevrolet Local 659, supra. The árgument advanced by plaintiffs would result in piecemeal appeals, a result sought to be avoided by GCR 1963, 518.2. See 2 Honigman & Hawkins, Michigan Court Rules Annotated (2d ed), p 628. See also Panichella v Pennsylvania R Co, 252 F2d 452, 455 (CA 3, 1958), cert den, 361 US 932; 80 S Ct 370; 4 L Ed 2d 353 (1960). Upon perfection of an appeal by right from a final judgment, a party may seek review of any prior ruling affecting the party that would otherwise be only a nonfinal order.

II. Priorities of the Mortgages

The majority and I part company as to the substantive issue in this appeal, whether the subordination clause in the Orenstein mortgage gives plaintiff priority. I respectfully dissent.

Absent the subordination clause of Orenstein’s mortgage, Orenstein’s would have priority over plaintiff’s as being the first mortgage recorded for purposes of constructive notice by virtue of MCLA 565.25; MSA 26.543. The forged discharge does not entitle plaintiff to priority. Ferguson v Glassford, 68 Mich 36, 47; 35 NW 820 (1888). See also Saginaw Building & Loan Assoc v Tennant, 111 Mich 515, 516; 69 NW 1118 (1897), 66 Am Jur 2d, Records and Recording Laws, § 123, p 415, cf. Horvath v National Mortgage Co, 238 Mich 354, 360; 213 NW 202 (1927). However, if the subordination clause is read to afford plaintiff priority, Orenstein cannot prevail despite the earlier recorded mortgage. See generally, 59 CJS, Mortgages, § 246, p 315.

Defendant Orenstein argues on appeal that the trial judge should not have granted summary judgment because the subordination clause is ambigúous, thereby leaving fact questions to be resolved by further testimony. While such an argument might be appropriate if this case involved only a contract, we are dealing with constructive notice to the public at large as well as plaintiff. It does great violence to the recording statutes to hold that a party may on the one hand rely on the recording statutes for priority purposes, but on the other hand assert an ambiguity in the recorded document and bring in extrinsic evidence to explain such an ambiguity.

One important purpose of the recording statutes is to impart certainty so that parties can rely on the public record of outstanding property interests. Atwood v Bearss, 47 Mich 72, 73; 10 NW 112 (1881). In Savidge v Seager, 175 Mich 47, 55; 140 NW 951 (1913), the Michigan Supreme Court indicated that it is impermissible to resort to extrinsic evidence to determine what property interests are protected by recording:

"[T]he constructive notice imparted by the record of an instrument is strictly limited to that which is set forth on its face * * * .”

While Savidge was concerned with a property description, the same requirement of certainty should be required of any interest sought to be protected by recording. See also Van Slyck v Skinner, 41 Mich 186, 190; 1 NW 971 (1879). Nor should a different rule apply by virtue of the fact that this is a subordination clause. By statute, a recorded waiver of priority of a mortgage is "constructive notice thereof to all persons dealing with the mortgage”. MCLÁ 565.391; MSA 26.701. Even in a case arising prior to the effective date of this statute, the Michigan Supreme Court gave effect to a subordination clause in a recorded mortgage and held that it should be strictly construed against the party who drafted and recorded the subordination clause. See Patterson v Miller, 249 Mich 89, 96-97; 227 NW 674 (1929).

As a matter of constructive notice, the trial court properly considered and resolved the motion for summary judgment as to the priorities. No extrinsic evidence can be submitted to explain the import of a recorded document, Savidge v Seager, supra, and the extent of constructive notice by virtue of a recorded document should be regarded as peculiarly one of law for a trial court to resolve from within the four corners of the recorded document. Defendant Orenstein’s argument that the clause is ambiguous concedes the point that the clause can be interpreted to afford plaintiff protection; thus, construing the subordination clause against defendant Orenstein, Patterson v Miller, supra, plaintiff is entitled to priority.

The inquiry notice on which the majority rests reversal raises entirely separate considerations. While the forged discharge cannot be considered for constructive notice purposes, I believe the majority holding in this case goes too far in failing to give due regard to the forged discharge for purposes of inquiry notice. I have no quarrel with the law quoted from Schweiss v Woodruff, 73 Mich 473, 477-478; 41 NW 511, 512-513 (1889). However, where a party such as plaintiff has searched the record and in reliance on a discharge contained therein has attained the status of a bona fide mortgagee without notice of defects in the title, it is incorrect to hold that the mortgagee must be charged with inquiry notice as to a more subtle defect earlier in time. As Schweiss, supra, points out, "If he makes all the inquiry which due diligence requires, and still fails to discover the outstanding right, he is excused”.

For inquiry notice purposes, a mortgagee is fully entitled to rely on an apparently perfect legal title as shown by the records:

"He will generally be justified in relying on an apparently perfect legal title in his mortgagor, as shown by the records.” 59 CJS, Mortgages, § 235, p 305.

Ferguson v Glassford, supra, 68 Mich at 46-47, indicates that this is the law in Michigan, stating that parties "have a right to look to the record for protection”.

A similar statement of the law is found in 92 CJS, Vendor & Purchaser, § 335, p 250:

"It is the duty of a purchaser of real estate to search the public records with respect to the title he plans to purchase and he is entitled to rely on the record.” (Emphasis added.)

In light of plaintiff having obtained title insurance following a search of the record, I cannot agree that plaintiff must be charged with inquiry notice as plaintiff might be if the forged discharge had not been filed. Cf. 92 CJS, Vendor & Purchaser, § 326, p 238.

Lastly, I dissent from the absence of meaningful instructions to the trial court on remand. The majority holds that plaintiff is chargeable with inquiry notice as a matter of law. The case should then be remanded for entry of judgment against plaintiff, or, trial of the secondary issue as to whether or not Orenstein’s attorney had authority to sign and enter the discharge. I cannot agree with the last paragraph of the majority opinion, indicating on the one hand that plaintiff is chargeable with inquiry notice as a matter of law, and on the other hand, indicating that this is a fact question yet to be resolved.

       Plaintiff had obtained title insurance, but because of the discharge, Orenstein’s mortgage was not shown as an outstanding interest.