text:
    SMITH v SAGINAW SAVINGS & LOAN ASSOCIATION
    Docket No. 78-2595.
    Submitted June 21, 1979, at Lansing.
    Decided December 6, 1979.
    Plaintiffs Joseph D. and Mary Ann Smith contracted with Docter Building Co. (Docter) for the construction of a summer home. The Smiths arranged a construction loan with defendant, Saginaw Savings & Loan Association (Saginaw), through Mr. Sauer, Saginaw’s Gaylord branch manager. During construction Docter purchased material for use on the Smith job, other jobs financed by Saginaw and other jobs not financed by Saginaw from plaintiff Great Lakes Sales & Distributing, a partnership. Before completion of construction of the Smith home, the builder filed bankruptcy. Plaintiffs filed suit against defendant in the Otsego Circuit Court for alleged breach of contract. After a jury verdict for plaintiffs, the court, William A. Porter, J., denied defendant’s motion for judgment non obstante veredicto or a new trial and entered a judgment for plaintiffs. Defendant appeals. Held:

    1. A promise by a branch manager of a savings and loan association financing certain new construction made to a materialman supplying the general contractor of the construction project that future disbursements of construction funds to the general contractor would be by two-party checks naming the materialman as one payee in return for the extension of future credit by the materialman to the general contractor constitutes an ordinary contract between the materialman and the association, not a contract of guaranty of payment by the general contractor. Characterization of the arrangement by the materialman as one "guaranteeing” payment to the materialman by the association does not automatically transform the agreement into a guaranty contract where, as here, the parties were using the word "guarantee” in its nonlegal common sense meaning.

      References for Points in Headnotes

       17 Am Jur 2d, Contracts §§ 1 et seq., 287.

       3 Am Jur 2d, Agency §§ 74, 75.

       3 Am Jur 2d, Agency § 73 et seq.

       75 Am Jur 2d, Trial § 406.
    Question as one of law for court or fact for jury, whether oral promise was an original one or was a collateral promise to answer for the debt, default, or miscarriage of another. 20 ALR2d 246.

       4 Am Jur 2d, Appeal and Error § 309 et seq.

       3 Am Jur 2d, Agency §§ 1 et seq., 199.

    27 Am Jur 2d, Equity § 20.

      2. Apparent authority for which a principal may be liable must be traceable to him and cannot be established by the acts and conduct of the agent. Apparent authority of an agent to act is to be determined from all the surrounding facts and circumstances and is prima facie coextensive with the business entrusted to his care. Under the facts of this case, Mr. Sauer had apparent authority to bind Saginaw to a promise to Great Lakes to issue construction draws to the contractor by two-party checks, naming Great Lakes as one of the payees in exchange for the extension of future credit to the contractor.
    3. It is for the trier of fact to determine what the terms of an agreement really are where its terms are partly written, partly oral and disputed. Here the written construction loan agreement recited a "construction” fee paid by the Smiths to Saginaw. The oral explanation by Mr. Sauer to the Smiths regarding the obligations for which the fee was paid were proper parol supplementation of the written agreement. The terms of the agreement and whether or not the terms were breached were properly submitted for the jury’s determination.
    4. A fiduciary relationship exists when there is a reposing of faith, confidence 'and trust, and the placing of reliance by one upon the judgment and advice of another. Relief will be granted when such position of influence has been acquired and abused or when confidence has been reposed and betrayed. The origin of the confidence and source of the influence are immaterial. Under the facts of this case the jury properly found the existence of a fiduciary relationship between the Smiths and Saginaw and a breach by Saginaw.
    5. Failure by Great Lakes to serve Saginaw with a copy of its trial brief was harmless error in the absence of a showing of prejudice.
    Affirmed.
    1. Contracts —• Ordinary Contracts — Guaranty Contracts.
    A promise by a branch manager of a savings and loan association financing certain new construction made to a materialman supplying the general contractor of the construction project that future disbursements of construction funds to the general contractor would be by two-party checks naming the material-man as one payee in return for the extension of future credit by the materialman to the general contractor constitutes an ordinary contract between the materialman and the association, not a contract of guaranty of payment by the general contractor.
    2. Principal and Agent — Apparent Authority — Evidence — Conduct of Agent.
    Apparent authority for which a principal may be liable must be traceable to him and cannot be established by the acts and conduct of the agent.
    3. Principal and Agent — Apparent Authority — Evidence.
    Apparent authority of an agent to act is to be determined from all the surrounding facts and circumstances and is prima facie coextensive with the business entrusted to his care.
    4. Contracts — Oral Contracts — Written Contracts — Question of Fact.
    It is for the trier of fact to determine what the terms of an agreement really are where its terms are partly written, partly oral and disputed.
    5. Appeal and Error — Preserving Appellate Review.
    An appellant who merely asserts a position without citing any applicable case law or policy considerations fails to preserve his position.
    6. Equity — Fiduciaries — Existence of Relationship.
    A fiduciary relationship exists when there is a reposing of faith, confidence and trust, and the placing of reliance by one upon the judgment and advice of another; relief will be granted when such position of influence has been acquired and abused, when confidence has been reposed and betrayed; the origin of the confidence and source of the influence are immaterial.

      Karl A. H. BohnhofF, for plaintiffs.

      Walter Martin, for defendant.
    Before: Cynar, P.J., and Mackenzie and L. W. Corkin, JJ.

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

   Per Curiam.

Defendant appeals as of right from a judgment entered upon two verdicts, one in the amount of $10,000 in favor of plaintiffs Smith and a second for $80,000 in favor of plaintiff Great Lakes Sales & Distributors (hereinafter Great Lakes), which judgment also awarded costs to plaintiffs, and from an order denying defendant’s motion for a judgment non obstante veredicto or, in the alternative, for a new trial.

On June 15, 1974, plaintiffs Smith entered into a building agreement with Docter Building Co. for the construction of a summer and retirement home in Otsego County. The contract price for the house was $29,500. The Smiths then obtained a construction loan from defendant Saginaw Savings & Loan Association (hereinafter Saginaw) in the amount of $25,000 on August 2, 1974. Saginaw additionally charged a $250 "construction” fee. The Smiths were informed by Mr. Eugene Sauer, branch manager of Saginaw’s Gaylord branch office, that the fee covered Saginaw’s expenses in sending a man out to inspect the progress of the construction prior to the release of any progress payments to the builder.

The $25,000, as well as an additional $1,500 of the Smiths’ own funds, were placed in a Due Borrower’s Account, from which mortgage draws could be made in order to pay the builder periodically for work completed.

During this time period, the Smiths lived some 250 miles from the construction site and Mr. Smith was in poor health and had recently been hospitalized. Testimony established that the Smiths spoke only with Eugene Sauer when dealing with Saginaw, and that Sauer assured them that sufficient funds to complete the house would always be in the Due Borrower’s Account. Sauer told the Smiths that Saginaw would make certain that any work claimed by Docter Building Co. to have been completed was actually done prior to the release of any payments to Docter and that all required waivers of lien would be obtained. Sauer personally approved the builder and the building agreement signed by the Smiths.

The Smiths also stated that they had placed complete trust and confidence in Sauer and relied upon his judgment regarding the builder and the agreement with him as well as Sauer’s representations regarding the quality and the progress of the construction.

Finally, it was brought out that Sauer knew of severe financial difficulties being encountered by Docter Building Co. during the period the Smith home was under construction which eventually culminated in the builder filing a voluntary petition in bankruptcy December 30, 1974. In spite of this knowledge, Sauer never informed the Smiths of it nor took any steps to protect the Smith retirement home, even though he had done so with his own home, which at the time was being constructed by the same builder.

Following the bankruptcy, the Smiths eventually were able to have construction completed on the project, at a cost far in excess of the original contract price.

Shortly after April 1, 1974, Docter Building Co. opened an account for building materials with plaintiff Great Lakes with a $10,000 credit limit. Charges accumulated on this account, first on construction projects not financed by Saginaw and then later on residential construction projects financed by Saginaw mortgages. Docter shortly thereafter fell in arrears in making payments on account, and Great Lakes cut off any future extensions of credit.

In late July of 1974, Gordon Peterson and Ronald Fiser, general partners of Great Lakes, went to Saginaw’s Gaylord branch to meet with Eugene Sauer following a conversation they had with Russell Docter. During that discussion, Sauer stated that it was his understanding that Docter’s bills were being paid. Sauer promised that the mortgage monies would be paid to Great Lakes through the use of two-party checks when all future draws were made, said checks to include Great Lakes as a payee. In consideration, Great Lakes was to release their credit cut-off as to Docter Building Co. so that those projects financed by Saginaw would continue toward completion.

Great Lakes allowed the builder to purchase additional materials on account and did receive some checks, said payments coming from the builder, not Saginaw, and not by two-party checks as promised by Sauer. In October of 1974, when additional billings had been made and no checks received therefor, Sauer was asked by Peterson and Fiser why no two-party checks had been issued or any mortgage draws had been made. Sauer indicated that no two-party checks were issued because he did not wish to arouse the suspicion of Saginaw’s main office. Sauer then reaffirmed his pledge to issue two-party checks.

The next day Sauer, Peterson, Fiser, and Russell Docter met at Great Lakes’ offices. It was agreed that Great Lakes would reapply payments previously made by the builder on jobs not financed by Saginaw to Saginaw-financed projects, some of which jobs were commenced later in time than the non-Saginaw construction.

By the end of October, the financial turmoil had not subsided, despite these promises, and Great Lakes threatened to file mechanics liens on all Saginaw-backed projects.

Sauer did not wish this to occur, since, if such liens were filed, no disbursements could be made to Great Lakes and the projects would be stalled. He asked Great Lakes to forbear filing any liens and represented that Docter at that time had $10,000 in an escrow account for the benefit of Great Lakes with an additional $8,000 to follow shortly. In return for its forbearance, Great Lakes was to receive the $18,000 mentioned above.

In November, one project was completed. Sauer had Peterson execute a waiver of lien in the amount of $6,581.67, then presented Peterson with a two-party check payable to the builder and Great Lakes but for only $3,182.91. Upon confronting a vice president from Saginaw’s main office with the entire story, Peterson and Fiser were told that Sauer was solely responsible for the situation. Returning to Sauer, they were told that no further payments would be forthcoming and that they should seek legal redress. Shortly thereafter the builder filed the aforementioned bankruptcy petition, leaving a large balance on account unpaid.

Defendant raises numerous claims related to the trial court’s denials of a number of its motions for directed verdict as well as other unrelated assignments of error.

Initially, Saginaw contends that the trial court erred in denying its motion for a directed verdict based upon its claim that the only agreement between it and Great Lakes was a contract of guaranty and that any claim thereunder had been discharged by the compromise settlement between Great Lakes and the trustee in bankruptcy for the estate of the builder. Plaintiff Great Lakes argues that the agreement between the two parties was an ordinary contract unaffected by the compromise in bankruptcy.

We are unpersuaded by Saginaw’s argument. It is predicated upon a fallacious assumption that the colloquial language employed by Great Lakes’ partners when testifying, i.e., that Sauer guaranteed that Great Lakes would receive payment via two-party checks, evidenced not an ordinary contract between Great Lakes and Saginaw but a contract of guaranty.

It is clear that all parties concerned were employing the word guarantee in a nonlegal common sense manner. Sauer’s "guarantee” was nothing more than a promise to issue two-party checks which were to have the effect of "guaranteeing” payment to Great Lakes because of the requirement that Great Lakes countersign each such check prior to payment thereon. We find nothing which would indicate that Sauer, as an agent of Saginaw, was guaranteeing that Saginaw would pay Great Lakes in full upon the builder’s failure to perform by tendering payment, the traditional paradigm of a contract of guaranty. Moore v Capital National Bank of Lansing, 274 Mich 56, 61; 264 NW 288 (1936), Angelo Iafrate Co v M & K Development Co, 80 Mich App 508, 514; 264 NW2d 45 (1978). Additionally, the promise by Sauer was bargained for and supported by consideration in the form of Great Lakes’ reinstatement of credit to Docter Building Co.

Conversely, there was ample evidence indicating a promise on the part of Sauer, as branch manager of Saginaw, to pay Great Lakes irrespective of the builder’s nonperformance in order to protect Saginaw’s security interest in the mortgaged construction projects. This evidence was sufficient to allow submission of Great Lakes’ claim to the jury on an ordinary contract theory and thus to defeat Saginaw’s motion for directed verdict. Kujawski v Cohen, 56 Mich App 533, 535-537; 224 NW2d 908 (1974). We decline to reverse on this issue.

We next address the major issue involved in this case, viz., whether the trial court erred in denying Saginaw’s motions for a directed verdict against both plaintiffs based on Saginaw’s claim that there was insufficient evidence that Saginaw’s branch manager, Eugene Sauer, had authority either (1) to bind defendant to a promise to issue two-party checks to Great Lakes or (2) to bind defendant to a promise to supervise and ensure construction of the retirement home of plaintiffs Smith.

The resolution of this issue turns on whether Sauer had either actual or apparent authority to do either act.

With respect to Sauer’s authority to issue two-party checks, the evidence presented established that he had actual authority to do so and did in fact issue two-party checks to Docter Building Co. and various other materialmen and subcontractors during the period in question. The question then is reduced to whether Sauer could bind Saginaw with his promise to issue two-party checks to Great Lakes. We find that he could and did.

It is well established that the apparent authority for which the principal (here Saginaw) may be liable must be traceable to it and cannot be established by the acts and conduct of the agent. LaPointe v Chevrette, 264 Mich 482, 493; 250 NW 272 (1933). Apparent authority to act is to be determined from all the surrounding facts and circumstances, Atlantic Die Casting Co v Whiting Tubular Products, Inc, 337 Mich 414, 422; 60 NW2d 174 (1953). Continuing, the Court in Atlantic Die Casting Co, supra, 422 stated:

"Whenever a principal has placed an agent in such a situation that a person of ordinary prudence, conversant with business usages and the nature of the particular business, is justified in assuming that such agent is authorized to perform in behalf of the principal the particular act, and such particular act has been performed, the principal is estopped from denying the agent’s authority to perform it. * * *
" 'The general rule is that the powers of an agent are prima facie coextensive with the business intrusted to his care.’ Grossman v Langer, 269 Mich 506, 510 [257 NW 875 (1934)].”

The facts and circumstances in this case compel the conclusion that Sauer had apparent authority to bind Saginaw to his promise to issue two-party checks.

Mr. Sauer was manager of Saginaw’s Gaylord branch, occupying the only separate office in the Gaylord building. He was in complete charge of the operation of the Gaylord branch. His desk had a sign on it indicating that he was an assistant vice president. Customer draws on mortgage funds were directed to him, and he distributed the checks therefrom to the contractors. He was equipped with the trappings of a managing executive by Saginaw. A prudent observer would see that contractors went to Sauer with requests for draws. Inspections were done at Sauer’s direction. He also dealt directly with loan customers and was the only representative of Saginaw who would make contact with nine of ten loan customers.

Thus, a reasonable belief would be created in the minds of Great Lakes’ partners that Sauer had been vested with authority by Saginaw not only to issue two-party checks but to make a binding promise to do so.

We also find that Sauer had apparent authority to bind Saginaw to a promise to insure the satisfactory completion of the Smith retirement home. Many of the above-noted facts are equally apposite when reviewing this question. In addition, Sauer was charged with the duty of dealing with construction mortgage loan customers, as well as explaining to them the terms of loan agreements, including the $250 "construction” fee. He also explained the obligations undertaken by Saginaw in return for such fee, which to the reasonable individual, under the Atlantic Die Casting Co test, would appear to be promises exacted as a quid pro quo for the fee. Further, in this case Saginaw did nothing affirmative to dispel these appearances but instead passively acquiesced by its silence.

Saginaw next claims that the trial judge erred in submitting the claim of plaintiffs Smith to the jury on a breach of contract theory as there was insufficient evidence thereon. Defendant argues that its motion for directed verdict on this question should have been granted. We disagree with Saginaw.

Although the written agreement between the Smiths and Saginaw did not expressly comprehend Saginaw’s liability for failure to supervise construction, the oral "explanations” of Eugene Sauer regarding the obligations for which the $250 construction fee was paid, which were not in the written agreement, were proper parol supplementation of the written memorandum. Also, the admission of this evidence was not met with any objection at trial. Where, as here, the terms of an agreement are partly written and partly parol and are disputed, it is for the trier of fact to determine precisely what the terms of the agreements really are. Barton v Gray, 57 Mich 622; 24 NW 638 (1885). We find no error in the jury’s findings as to the terms of the agreement.

We further find that there was sufficient evidence of a breach of the above agreement for submission of that question to the jury. It was established that Saginaw, through Sauer, allowed construction to fall behind progress payments, allowed Docter Building Co. to breach its obligation to plaintiffs Smith, and failed to ensure that construction was completed within the limits of the committed funds. Therefore, no error resulted from allowing the jury to decide whether these facts constituted a breach of the construction loan agreement. Kujawski v Cohen, supra, 535-537.

Saginaw further alleges that it was error for the trial court to deny its motion for a directed verdict as against plaintiffs Smith’s claim of breach of fiduciary duty by Saginaw through Eugene Sauer.

By failing to cite applicable case law or any policy considerations and by merely asserting a position, Saginaw has abandoned this argument. Mitcham v Detroit, 355 Mich 182, 203; 94 NW2d 388 (1959). Were we to address the merits of this question, there is little doubt that a fiduciary relationship between the Smiths and Saginaw, through its agent, Sauer, was established and a breach thereof occurred. This relationship was not the general one existing between a bank and its depositors but was one of trust and confidence predicated on the unique facts of this case.

A fiduciary relationship exists when there is a reposing of faith, confidence and trust and the placing of reliance by one upon the judgment and advice of another. Williams v Griffin, 35 Mich App 179, 183; 192 NW2d 283 (1971). Relief is granted when such position of influence has been acquired and abused, when confidence has been reposed and betrayed. The origin of the confidence and the source of the influence are immaterial. Stephenson v Golden, 279 Mich 710, 739; 276 NW 849 (1937).

Plaintiffs Smith placed their trust in Eugene Sauer. Joseph Smith, at the time, was in and out of the hospital and quite sick. He and his wife were 250 miles away when construction was in progress and, necessarily, were unable to oversee day-to-day activities. Sauer additionally gave repeated assurances to the Smiths that funds were on hand to complete construction and the project would be finished without cost overruns. Aside from their striking an agreement with Russell Docter, Sauer was their sole contact in the area and the only emissary of Saginaw with whom they dealt. Sauer further assured them that no funds would be released without the work therefor actually being done. Sauer approved of the builder, the building agreement and the building specifications. Sauer knew of Docter Building’s financial straits and protected his own interests without in any way doing the same for the Smiths. He also permitted Docter Building Co. to fall behind in construction and allowed the release of funds for work not fully completed. These facts plainly established the existence of a fiduciary obligation and the breach thereof.

Defendant further assigns as reversible error the failure of plaintiffs to serve upon it a copy of their trial brief pursuant to a pretrial order of the trial court. The defendant submitted no trial brief. The record does not support defendant’s position that it was unaware of plaintiff Great Lakes’ theory of recovery under ordinary contract principles before trial and was prejudiced at trial by the failure to receive a copy of Great Lakes’ trial brief from which it could formulate a defense. Great Lakes’ complaint, contrary to Saginaw’s claim, did not allege a contract of guaranty but only recited facts consistent with a theory of recovery under general contract principles. Defendant fixed upon the notion of a guaranty, not plaintiffs. Saginaw having failed to establish that it was prejudiced by the failure of Great Lakes to serve it with a copy of their trial brief, the error caused by such omission, if any, was harmless. Cf., In re Grand Haven Highway, 357 Mich 20, 25-26; 97 NW2d 748 (1959), Union Trust Co v Detroit Trust Co, 240 Mich 646, 651-652; 216 NW 442 (1927).

Defendant Saginaw’s final predication of error, that the verdicts rendered in the court below were against the great weight of the evidence, is devoid of merit. Under the applicable standard, there was more than sufficient evidence to substantiate the jury findings. Doyle Vacuum Cleaner Co v F J Siller & Co, 55 Mich App 601, 611; 223 NW2d 86 (1974). Reed v Stretten, 69 Mich App 519, 520-521; 245 NW2d 117 (1976).

Finding no error necessitating reversal, we hereby affirm.

Affirmed. Costs to plaintiffs.


source: Caselaw Access Project

author: Per Curiam.

license: Public Domain

text:
    DUNDEE CEMENT COMPANY v SCHUPBACH BROTHERS, INC
    Docket No. 78-5037.
    Submitted October 9, 1979, at Lansing.
    Decided December 6, 1979.
    Dundee Cement obtained a consent judgment against Schupbach Brothers, Inc., and a writ of garnishment was issued on D & C Builders, Inc., which denied garnishee liability to Schupbach. Dundee then obtained a default judgment against D & C for failure to disclose its liability and thereafter obtained a garnishment against Citizens Commercial & Savings Bank, which admitted liability to D & C and paid Dundee. D & C then moved to quash the writ of garnishment and to overturn the judgment which ordered Citizens Bank to pay Dundee. The Genesee Circuit Court, Ollie B. Bivins, Jr., J., granted the motion and ordered Dundee to repay Citizens Bank, to the account of D & C. Dundee appeals. Held:

    1. The circuit court was correct in setting aside the default judgment and garnishment. The entry of a default provides the basis for entry of a default judgment, and in this case a default was never entered; therefore, the default judgment was void ab initio.

    2. Overturning the invalid default judgment leaves the parties in the same position as before entry of that judgment. If the plaintiff does not obtain a valid default judgment, the matter shall proceed to trial. At trial, the court is directed to hear evidence regarding the piercing of the corporate veil of D & C.
    Affirmed, and remanded for further proceedings.
    1. Judgment — Default Judgment — Entry of Default.
    The entry of a default provides the basis for entry of a default judgment; a default judgment was void ah initio where no default was entered (GCR 1963, 520).
    2. Judgment — Default Judgment — Discovery Order — Refusal to Comply.
    Entry of a default judgment is appropriate for refusal to comply with a discovery order.
    References for Points in Headnotes

       47 Am Jur 2d, Judgments § 1162.

       23 Am Jur 2d, Depositions and Dsicovery § 260.

      Hooper, Hathaway, Fichera & Price (by Bruce T. Wallace and Mark R. Daane), for plaintiff.

      Robert J. White, for defendant D & C Builders, Inc.
    Before: R. B. Burns, P.J., and D. E. Holbrook, Jr. and P. J. Glennie, JJ.

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

   Per Curiam.

This case arises from a contract action in which plaintiff obtained a consent judgment for $67,238.99 against Schupbach Brothers. A writ of garnishment was issued on D & C Builders, which denied garnishee liability. Based on what appeared to be a valid default judgment against D & C for failure to disclose, plaintiff obtained a garnishment against Citizens Commercial & Savings Bank for its admitted liability of $7,463.40 to D & C. The trial court granted garnishee defendant D & C’s motion to quash the writ of garnishment and/or judgment, citing procedural defects regarding the default judgment, and ordered plaintiff to repay the $7,463.40 to D & C. Plaintiff appeals.

Plaintiff contends that a judgment against the garnishee defendant and an order requiring payment were properly signed by the circuit court judge and filed and that setting aside such a judgment must be done according to the provisions of GCR 1963, 520.4, which require defendant to demonstrate both good cause and a meritorious defense.

The problem is that the default was not regularly entered in accordance with GCR 1963, 520.7. The trial judge did not base his decision on the standards set forth in GCR 1963, 520.4 in setting aside a default, but rather on the theory that without entry of a default there could not be a default judgment in existence.

In McHenry v Grosse Pointe Farms, 265 Mich 581; 251 NW 783 (1933), no order of. default was on file when judgment was entered. The irregularly entered default judgment was set aside more than a year later despite a court rule which prohibited setting aside a default judgment six months after the filing date.

Similarly, in the instant case, plaintiff did not comply with the court rules. The default was not entered, therefore the default judgment was void ab initio. The entry of a default provides the basis for the entry of the default judgment. 2 Honigman & Hawkins, Michigan Court Rules Annotated (2d ed), p 655.

In so ruling we do not leave plaintiff without a. remedy. The parties are merely returned to the positions they held prior to entry of the invalid default judgment. While the entry of a default judgment is appropriate for refusal to comply with a discovery order, Philips Industries, Inc v Smith, 90 Mich App 237; 282 NW2d 788 (1979), whether plaintiff ultimately obtains same remains to be seen. If not, the court shall proceed to trial on the issue of the garnishee’s liability in accordance with GCR 1963, 738.11(4).

Moreover, if the court proceeds to trial, it shall hear evidence regarding the appropriateness of piercing the corporate veil of garnishee defendant for we hold that the trial judge erred by refusing to hear evidence relative thereto, as requested by the plaintiff.

The prima facie case for piercing was presented by sworn deposition testimony of Richard Cocke, which tended to establish that D & C, Schupbach Brothers, and Richard Cocke had no independent existence. Nevertheless, there is not an adequate record upon which this Court could base a decision for piercing of the corporate veil. Herman v Mobile Homes Corp, 317 Mich 233, 243; 26 NW2d 757 (1947), held:

"In determining whether the corporate entity should be disregarded and the parent company held liable on the contracts of its subsidiary because the latter served as a mere instrumentality or adjunct of the former, each case is sui generis and must be decided in accordance with its own underlying facts.”

Thus, when the facts of each case are so significant to the outcome, a full scale trial on the merits is essential to allow the judge to see and hear individual witnesses and also to allow opposing counsel the opportunity of cross-examination.

The trial court’s vacation of the default judgment is affirmed and this cause is remanded to the trial court for further proceedings not inconsistent with this opinion.

       GCR 1963, 738.11(4) provides:
      "Upon the trial of the issue of the garnishee’s liability, the plaintiff may offer the record of the garnishment proceedings or any other competent evidence supporting or controverting it. The garnishee may offer any competent evidence not controverting the disclosure, or in the discretion of the court, he may be allowed to show errors and mistakes in the disclosure.”


text:
    BREWER v PAYLESS STATIONS, INC
    Docket No. 78-1845.
    Submitted April 5, 1979, at Detroit.
    Decided August 23, 1979.
    John Brewer was injured in an automobile accident. The accident occurred when an automobile with unknown occupants was recklessly driven from a Payless Gas Station causing the driver of the vehicle in which Brewer was a passenger to swerve into a lane of oncoming traffic. The Brewer vehicle was struck by a third car, the gas tank on Brewer’s car exploded, and Brewer was seriously burned. Brewer sued Payless Stations, Inc., for negligent design of its gas station. General Motors was joined as a party defendant on an allegation of negligent fuel tank design. Plaintiff settled with General Motors for $150,000. On the first day of the Brewer-Payless trial plaintiff filed a motion in limine seeking a lower court order prohibiting reference in the presence of the jury to plaintiffs settlement with General Motors. Wayne Circuit Court, John M. Wise, J., denied the motion holding that evidence of the settlement could go to the jury so that the jury could deduct the amount of the settlement from any damages that they might assess against defendant Payless. On appeal by leave granted, plaintiff challenges the propriety of the court’s ruling. Held:

    Reference to the pretrial settlement with General Motors is not material in the action against Payless. Plaintiff stipulated that the court could deduct the amount of the settlement from any verdict against Payless. The trial judge can effect such a deduction. Plaintiff cannot receive a double recovery. There is no need for the jury to know the amount of plaintiff’s settlement with General Motors or, in fact, to even know that a settlement has occurred.
    Reversed and remanded.
    1. Evidence — Issue of Fact — Relevancy — Admissibility — Rules of Evidence.
    Evidence that has no bearing on a material issue of fact is not relevant and is inadmissible at trial (MRE 402).
    References for Points in Headnotes

       29 Am Jur 2d, Evidence §§ 249, 251, 252.

       15A Am Jur 2d, Compromise and Settlement § 48. 29 Am Jur 2d, Evidence § 632.

      2. Damages — Evidence — Cotortfeasor — Settlements — Admissibility — Jury.
    Reference to a pretrial settlement with a cotortfeasor in the presence of a jury is inadmissible where a plaintiff has stipulated to permit the trial court to deduct the total amount of the settlement from any verdict the jury may render against the defendant because plaintiff will not receive a double recovery; and, assuming that the defendant is liable, there is no need for the jury to know the amount of plaintiff’s settlement with the cotortfeasor or, in fact, to know that a settlement has occurred.

      Richard M. Goodman, for plaintiff.

      Garan, Lucow, Miller, Lehman, Seward & Cooper, P.C., for defendant.
    Amicus Curiae: Richard F. Schaden, P.C. (by Victoria C. Heldman), for Michigan Trial Lawyers Association.
    Before: T. M. Burns, P.J., and M. F. Cavanagh and Mackenzie, JJ.
   Per Curiam.

Plaintiff John Brewer appeals by leave a May 11, 1978, circuit court order denying his motion in limine for a protective order to prohibit mention at trial of a pretrial settlement between plaintiff and General Motors Corporation, a prior codefendant.

Plaintiff was injured in an automobile accident on February 8, 1979. The accident occurred when an automobile with unknown occupants was recklessly driven from a Payless Gas Station causing the driver of the vehicle in which plaintiff was a passenger to swerve into a lane of oncoming traffic. Plaintiff’s vehicle was struck by a third car, the gas tank on the Brewer car exploded, and plaintiff was seriously burned.

In December, 1973, plaintiff filed suit against Payless alleging that Payless had negligently designed its gas station and that it had negligently maintained a nuisance. Plaintiff also joined as a defendant the General Motors Corporation, alleging negligent design of the fuel tank of plaintiffs vehicle.

In November, 1976, plaintiff and General Motors executed an indemnity release in which plaintiff, in consideration of $150,000, released General Motors from any liability for his injuries.

On May 8, 1978, the first day of trial on plaintiffs cause of action against Payless, plaintiff filed a motion in limine seeking a lower court order prohibiting reference in the presence of the jury to plaintiffs settlement with General Motors. The lower court denied plaintiffs motion, holding that evidence of the settlement could go to the jury so that the jury could deduct the amount of the settlement from any damages that they may assess against Payless.

Plaintiff sought, and was granted, permission of the Court to pursue an interlocutory appeal.

Recently, in Stitt v Mahaney, 403 Mich 711; 272 NW2d 526 (1978), the Supreme Court held that evidence of a plaintiffs settlement with one independent tortfeasor was admissible at plaintiffs subsequent trial against the remaining tortfeasor where the jury would be required to determine whether the settlement was meant to release the remaining tortfeasor from any liability and, if not, whether plaintiff had received full or partial satisfaction of his claim in the settlement such that a portion of its amount should be deducted from any judgment rendered against the remaining defendant. Thus, a superficial reading of Stitt would lead us to affirm the lower court’s ruling. However, upon a closer reading of the Supreme Court’s opinion, we hold that Stitt is distinguishable from the instant case and that the lower court’s ruling was in error.

Under the new rules of evidence, evidence that is not relevant, that is, has no bearing on a material issue of fact, is inadmissible at trial. MRE 402. In the instant case, unlike that of Stitt, evidence of plaintiffs settlement with General Motors had no bearing on an issue of fact for the jury.

In the case at bar, plaintiff has stipulated to permit the trial court to deduct the total amount of his settlement with General Motors from any verdict the jury may render against Payless. Thus, plaintiff has waived the right to have the jury consider whether only a portion of the General Motors settlement should be deducted from a possible judgment against Payless. Further, defendant in this case, Payless, does not argue as the defendant in Stitt did that this settlement purports to release it from any liability.

As is obvious, the reasons supporting the Supreme Court’s decision in Stitt have no application here. Because plaintiff has stipulated to permit the trial court to deduct the total amount of the settlement with General Motors from any jury verdict against Payless, plaintiff will not receive a double recovery. As long as the jury can fairly determine the portion of plaintiffs damages caused by the negligence of Payless, assuming that Pay-less has any liability at all, there is no need for the jury to know the amount of plaintiffs settlement with General Motors or, in fact, to even know that a settlement occurred.

Plaintiff argues that evidence of a settlement is inadmissible under MRE 408. Because we find that, in this case, the evidence of a settlement did not meet the threshold for admissibility at trial, we decline to rule on the question presented by plaintiff.

Reversed and remanded. Costs to abide final outcome of this suit.


text:
    PEOPLE v GODWIN
    Docket No. 30456.
    Submitted September 4, 1979, at Detroit.
    Decided November 7, 1979.
    Defendant, Charles Godwin, was convicted of possession of heroin with intent to deliver in the Recorder’s Court of Detroit. At trial defendant moved to suppress the heroin discovered by police during an inventory search of an automobile. Defendant had been the victim of a gunshot wound. The car in which he was found had a window shot out and the keys in it. The glove compartment was locked. After defendant was taken, to a hospital, the car was taken into custody. The police lot where the car was to be kept had a history of extensive vandalism and the police routinely inventoried impounded vehicles. The police took the keys from the ignition and unlocked the glove compartment, where the heroin was found. The court, Peter Spivak, J., allowed introduction of the heroin. Defendant appeals. Held:

    1. The people argue that the defendant lacks standing to challenge the legality of the police search because at no time did defendant assert a possessory interest in the car or the heroin. A defendant has automatic standing to contest a search and seizure where he is charged with an offense that includes, as an essential element, possession of the seized evidence at the time of the contested search and seizure.
    2. The justifications for an inventory search are 1) the protection of property while in police custody, 2) protection of the police against claims over lost or stolen property, and 3) protection of police from potential danger. Under the facts of this case the search was justifiable under the first two justifications.
    Affirmed.
    References for Points in Headnotes

       29 Am Jur 2d, Evidence § 418.
    Nature of interest in, or connection With, premises searches as affecting standing to contest legality of search. 78 ALR2d 246.

       68 Am Jur 2d, Searches and Seizures § 57.
    Lawfulness of "inventory search” of motor vehicle impounded by police. 48 ALR3d 537,

      1. Searches and Seizures — Standing — Automatic Standing.
    A defendant has automatic standing to contest a search and seizure where he is charged with an offense that includes, as an essential element, possession of the seized evidence at the time of the contested search and seizure.
    2. Searches and Seizures — Inventory Search — Glove Compartment — Justification for Search.
    A locked glove compartment of a vehicle may properly be opened as part of an inventory search of the vehicle where the keys are in the ignition, the vehicle has been rendered unsecurable by a window having been shot out and the impounding lot where the vehicle was to be stored had a record of extensive vandalism; heroin found in such a search may properly be admitted in a prosecution of the occupant of the vehicle for possession of heroin; the justifications for an inventory search are 1) the protection of property while held in police custody, 2) the protection of the police against claims over lost or stolen property, and 3) protection of the police from potential danger.

      Frank J. Kelley, Attorney General, Robert A. Derengoski, Solicitor General, William L. Cahalan, Prosecuting Attorney, Appeals, and Timothy A. Baughman, Assistant Prosecuting Attorney, for the people.

      Godfrey J. Dillard, for defendant on appeal.
    Before: N. J. Kaufman, P.J., and R. M. Maher and D. C. Riley, JJ.
   Per Curiam.

Defendant was convicted of possession of heroin with the intent to deliver, MCL 335.341(l)(a); MSA 18.1070(41)(l)(a), by a Recorder’s Court jury. He was subsequently sentenced to three years probation. From this conviction and sentence, defendant appeals as of right.

The facts are not in dispute. Defendant was the victim of a gunshot wound to the head. After he was transported to the hospital in critical condition, the car in which he was discovered was taken into police custody. One of the car’s windows had been shot out and the keys were left in the ignition. In conducting a subsequent inventory search of the automobile, a police officer unlocked the glove compartment with these keys and discovered a brown bag containing heroin. Defendant moved to suppress this evidence on the ground that it was discovered through an illegal search. The court denied defendant’s motion and admitted the heroin into evidence at trial over defendant’s objection.

Defendant now claims the trial court’s denial of his motion and its admission of this heroin into evidence constituted reversible error.

Preliminarily, it is necessary to address the people’s challenge to defendant’s standing. The people argue that at no time did defendant assert a possessory interest in the automobile or the bag containing the heroin. Therefore, he did not demonstrate his standing to complain of the search and seizure. We disagree. This Court continues to follow the "automatic standing” rule established in Jones v United States, 362 US 257; 80 S Ct 725; 4 L Ed 2d 697 (1960). Thus, a defendant has standing to contest a search and seizure where, as here, he is charged with an offense that includes, as an essential element of the offense charged, possession of the seized evidence at the time of the contested search and seizure. See Brown v United States, 411 US 223, 229; 93 S Ct 1565; 36 L Ed 2d 208 (1973), and People v Greenwood, 87 Mich App 509, 512-513; 274 NW2d 832 (1978).

Although defendant had standing to challenge the legality of the inventory search, we find that this search did not exceed permissible bounds under the peculiar facts presented in this case. To reiterate, the heroin was found in the locked glove box of the car defendant was discovered in. The car had one window shot out and the keys were in the ignition.

The scope of an inventory search does extend to the glove compartment of a vehicle since it is frequently a repository for important documents and other valuables deserving police protection. South Dakota v Opperman, 428 US 364, 372; 96 S Ct 3092; 49 L Ed 2d 1000 (1976). The justifications for such an inventory search are: (1) the protection of property while held in police custody; (2) protection of the police against claims over lost or stolen property; and (3) protection of police from potential danger, South Dakota v Opperman, supra, 369, People v Merchant, 86 Mich App 355, 361; 272 NW2d 656 (1978).

The central question in this case, then, is whether, under any of the above rationales, the police were justified in searching the locked glove compartment. The South Dakota v Opperman case dealt with the inventory search of an unlocked glove compartment.

The inventory search of a locked trunk has been upheld, however. In United States v Gerlach, 350 F Supp 180 (ED Mich, 1972), an inventory search of a locked trunk was held as valid. The Court indicated, in pertinent part, that because the keys were left in the vehicle and no locks were forced, it was in the interest of the defendant and the police to inventory all property in places that were open or could be opened through use of the keys. There was no indication of an attempt to avoid obtaining a warrant. The police were merely following good police procedures. In the instant case, defendant was not under suspicion at the time of the search but was himself the victim of a crime. The police were conducting a routine inventory for valid reasons rather than searching for evidence against the defendant.

An additional factor on the side of the propriety of the instant inventory search should be noted. The River Rouge police lot for impounded vehicles was located a half mile from the station and the record discloses that extensive vandalism was common at this site. Impounded automobiles were sometimes totally dismantled. For this reason, River Rouge police inventoried all impounded vehicles in the same manner as the instant one. Moreover, the instant vehicle was rendered unsecurable due to the fact that one window was shot out. Under this limited set of circumstances, we find the police properly inventoried all the areas of the automobile to preserve valuables and protect themselves against claims over lost or stolen property, Merchant, supra, 361.

Affirmed.

       The recent case of Rakas v Illinois, 439 US 128; 99 S Ct 421; 58 L Ed 2d 387 (1978), does not affect this conclusion. In that case, the Supreme Court was not faced with a situation wherein the same possession needed to establish standing was an essential element of the offense charged. The Court therefore did not deem the.case a proper one for a review and reconsideration of the automatic standing rule. Accordingly, this rule remains viable. See Rakas, supra, 439 US 128, 135 fn 4.


author: Per Curiam. N. J. Kaufman, J.

text:
    NUNNALLY v INTERNATIONAL FIDELITY INSURANCE COMPANY
    Docket No. 77-4356.
    Submitted August 27, 1979, at Detroit.
    Decided November 7, 1979.
    Plaintiff, Roosevelt Nunnally, was injured when his automobile was struck by a truck driven by Captain John Smith. Within two years of the accident plaintiff filed suit against Lillian G. Daniels and Louis H. Cheff, doing business as Mr. Kelley’s Lounge, under the dramshop act. Plaintiff obtained a consent judgment over three years later. Plaintiff then filed the present action against defendant, International Fidelity Insurance Company (International), the surety on the Mr. Kelley’s Lounge liquor bond in force at the time of the accident, alleging an unlawful sale of intoxicants to Smith, the accident and the consent judgment. Defendant filed a third-party complaint against Lillian Daniels and Louis Cheff, alleging that, in the event International was held liable on the bond, Daniels and Cheff would become liable to International. The Wayne Circuit Court, Theodore R. Bohn, J., granted summary judgment for plaintiff. Defendant International appeals. Held:

    The dramshop act affords the exclusive remedy for injuries arising out of the unlawful furnishing of intoxicants. It creates a statutory cause of action of trespass on the case, not debt on a bond, against the dramshop’s liquor bond surety. The action accrues immediately upon the unlawful furnishing of intoxicants by the principal and the statute of limitations, two years, begins to run from that point. The action by plaintiff against the surety is barred by the statute of limitations.
    Reversed and remanded.
    N. J. Kaufman, J., dissented. He would hold that the dram-shop act’s statute of limitations only requires that a suit to determine the liability of the tavern owner be commenced within two years and does not bar a later action against the surety where the tavern owner was sued within two years and a judgment against him was obtained. He would affirm.

      References for Points in Headnotes

       45 Am Jur 2d, Intoxicating Liquors §§ 579, 589.
    What statute of limitations applies to action under dramshop or civil damage act. 55 ALR2d 1286.

       45 Am Jur 2d, Intoxicating Liquors § 561.

      Opinion of the Court
    1. Intoxicating Liquors — Dramshop Act — Limitation of Actions.
    The dramshop act creates a statutory cause of action of trespass on the case, not debt on a bond, against the dramshop’s liquor bond surety; the action accrues immediately upon the unlawful furnishing of intoxicants by the principal and the statute of limitations, two years, begins to run from that point (MCL ' 436.22; MSA 18.993).
    2. Intoxicating Liquors — Dramshop Act — Remedies.
    The dramshop act affords the exclusive remedy for injuries arising out of the unlawful furnishing of intoxicants (MCL 436.22; MSA 18.993).
    Dissent by N. J. Kaufman, J.
    3. Intoxicating Liquors — Dramshop Act — Limitation of Actions.

      The two-year limitation period embodied in the dramshop act requires that a suit to establish the liability of the tavern owner be brought within two years of the date on which the cause of action arose; it does not operate to bar a claim against a tavern owner’s surety where the tavern owner was sued within two years of the accident and the plaintiff subsequently sues the surety on the judgment obtained against the tavern owner (MCL 436.22; MSA 18.993).

      Lopatin, Miller, Bindes, Freedman & Bluestone (by Michael Gagleard), for plaintiff.

      Norman L. Zemke, for defendant.
    Before: J. H. Gillis, P.J., and R. B. Burns and N. J. Kaufman, JJ.
   Per Curiam.

On January 11, 1970, plaintiff suffered injuries when his automobile was struck by a truck driven by John Smith. On December 22, 1971, plaintiff commenced suit against the third-party defendants under the dramshop act, MCL 436.22; MSA 18.993. The defendant herein, the surety upon the third-party defendants’ liquor bond, was not a party to that action.

On April 2, 1975, a consent judgment was entered against the third-party defendants. On June 14, 1976, plaintiff instituted the present action against the defendant in reliance on the consent judgment and the defendants’ surety bond, which was in full force and effect on the date of the accident.

Defendant moved for accelerated judgment asserting that plaintiff’s claim was barred by the two-year period of limitations contained in the dramshop act. The motion was denied. Plaintiff thereafter moved for summary judgment alleging the existence of the unlawful sale, the surety bond and the consent judgment and asserting that, based thereon, there existed no question of fact to be .resolved. Defendant brings this appeal as a matter of right from the order granting plaintiff’s motion. GCR 1963, 806.1.

MCL 436.22; MSA 18.993 provides in relevant part:

"Every * * * [person] * * * who shall be injured * * * by a visibly intoxicated person by reason of the unlawful selling, giving or furnishing * * * any intoxicating liquor, and the sale is proven to be a proximate cause of the injury or death, shall have a right of action * * * against the person who shall by such selling * * * have caused or contributed to the intoxication * * * or who shall have caused or contributed to any such injury, and the principal and sureties to any bond given under this law shall be liable, severally and jointly, with the person or persons selling, giving or furnishing any * * * intoxicating * * * liquors * * *. Any action shall he instituted within 2 years after the happening of the event and all factual defenses open to the alleged intoxicated person * * * shall be open and available to the principal and surety * * *. Such damages together with the costs of suit shall be recovered in an action of trespass on the case before any court of competent jurisdiction,” (Emphasis supplied.)

The question before us is whether the two-year limitations period applies to an injured party’s cause of action against a liquor bond surety when the plaintiff has timely commenced suit against the principal. To answer this question we must ascertain the nature of the action against the surety.

The dramshop act creates a statutory cause of action unknown to the common law. Koehler v DRT Sportservice, Inc, 55 Mich App 567; 223 NW2d 461 (1974). Under the statute, there exists a direct cause of action against the liquor bond surety, Scahill v Aetna Indemnity Co, 157 Mich 310; 122 NW 78 (1909), which is an action of trespass on the case, not an action in debt on the bond. The bond is not the foundation of the action. Squires v Miller, 173 Mich 304, 312; 138 NW 1062 (1912). The action against the surety accrues at once upon the unlawful furnishing of intoxicants by the principal. Anthony v Krey, 70 Mich 629, 632; 38 NW 603 (1888). The period of limitations begins to run at that time.

In the present case, the unlawful sale of intoxicants and the resulting accident occurred on January 11, 197Ó. The two-year limitations period began to run as of that date. Plaintiff did not commence his action against the defendant until June 14, 1976, approximately 6-1/2 years after the date of the injury and approximately 4-1/2 years after the expiration of the two-year period. Having failed to commence the action against the defendant timely, plaintiff’s claim is barred. The denial of defendant’s motion for accelerated judgment was reversibly erroneous.

Notwithstanding the foregoing, plaintiff contends that he has a remedy against the surety on the bond independent of the provisions of the dramshop act. We do not agree. The dramshop act affords the exclusive remedy for injuries arising out of the unlawful furnishing of intoxicants. Manuel v Weitzman, 386 Mich 157, 164-165; 191 NW2d 474 (1971).

Reversed and remanded. Costs to appellant.

N. J. Kaufman, J.

(dissenting). I find it difficult to disagree with anything my colleagues state in their opinion, with the exception of their interpretation of the statute, MCL 436.22; MSA 18.993.

I agree that if plaintiff sues the principal he must do so within two years from the happening of the event.

I further agree that if plaintiff sues the principal and surety jointly he must do so within two years from the happening of the event.

I further agree that if plaintiff sues the surety only he must do so within two years from the happening of the event.

I further agree that in any of the situations stated above the action is, and rightfully so, trespass on the case.

However, our situation is different as can be seen by the settled record.

Defendant knew' about the pending case. Therefore, if it wanted to intervene in the original action, it could have done so. The letter from plaintiffs former attorney to the bonding company reads in part as follows:

"On or about January 11, 1970, your insured, Mr. Kelley’s Bar, located at 4462-4472 Chene Detroit, Michigan was owned and operated by Lillian G. Daniels and/ or Louis H. Cheff.
"Liquor served at this establishment in violation of Michigan Statutes resulted in injury to my client, Roosevelt Nunnally, and suit was instituted accordingly prior to the two (2) year Statute of Limitations.
"This letter will act as my attorney’s lien for any and all sums paid or to be paid to my client, Roosevelt Nunnally, as a result of this claim.
"As your Insurance Company is liable for the amount of bond posted, please contact me with reference to settlement of this claim.”

McMillan v School District No. 2, Portsmouth Twp, 200 Mich 280, 284; 167 NW 48 (1918) states:

"It cannot be doubted that the bondsmen had a direct financial interest in the outcome of the litigation and this is true whether in the bankruptcy court the whole sum recovered by the trustee should be held to be the property of the bondsmen by right of subrogation or that they were entitled to share in the distribution of the fund so created the same as any ordinary creditor. There was no error in permitting the intervention of which complaint is made.”

It cannot be doubted that defendant International Fidelity had a direct interest in the lawsuit against Lillian G. Daniels, etc. as they initiated and filed a third party complaint against them on June 24, 1977, claiming in part "[t]hat if Third Party Plaintiff is found liable on said bond, and pays the same to Plaintiff, Third Party Defendants will become liable to Third Party Plaintiff herein in the amount, if any, of Plaintiff’s judgment against Third Party Plaintiff” and subsequently filed a default judgment against Lillian G. Daniels, etc. on May 24, 1977.

Therefore, the two-year statute of limitations period embodied in MCL 436.22; MSA 18.993, does not operate to bar a claim against a tavern owner’s surety where the tavern owner was sued within two years of the accident and the plaintiff subsequently sues the surety on the judgment obtained against the tavern owner. All MCL 436.22; MSA 18.993, requires is that suit to establish the liability of the tavern owner be brought within two years of the date on which the cause of action arose.

If the Legislature wanted the surety to be a mandatory party litigant they could have said so as they did in the amendment to MCL 436.22; MSA 18.993:

"No action against a retailer or wholesaler or anyone covered by this act or his surety, shall be commenced unless the minor or the alleged intoxicated person is a named defendant in the action and is retained in the action until the litigation is concluded by trial or settlement.”

The immediate effect of this amendment, 1972 PA 196, § 1, was June 29, 1972 (the so-called name and retain statute).

I would affirm the trial court.

       "ORDER SETTLING RECORD ON APPEAL
      "At a session of said Court, held in the City-County Building, in the City of Detroit, County of Wayne, State of Michigan, on: May 10, 1979.
      PRESENT: Honorable Theodore R. Bohn Circuit Court Judge
      "The Defendant, INTERNATIONAL FIDELITY INSURANCE COMPANY, having heretofore taken an appeal to the Court of Appeals, its case number being 77-4356, and the Court of Appeals having on March 9, 1979, directed this Court to prepare a settled record, and the matter having been brought on to be heard and the Court being fully advised in the premises,
      "IT IS HEREBY DETERMINED AND CERTIFIED that this case arose from the following factual context, to-wit:
      "On January 11, 1970, Plaintiff suffered personal injuries when his automobile was struck by a truck being operated by one Captain John Smith. On December 22, 1971, Plaintiff instituted suit against Lillian G. Daniels, d/b/a Mr. Kelley’s Lounge, Louis H. Cheff, d/b/a Mr. Kelley’s Lounge, Wayne County Circuit Court Civil Action Number 196-444, alleging that the cause of the accident was the intoxicated condition of Captain John Smith, and that such intoxication was the result of the unlawful sale of intoxicating beverages by Mr. Kelley’s Lounge.
      "That in pertinent part, a letter from Plaintiff’s former attorney, Elliott Baron, to Defendant, International Fidelity Insurance Company reads as follows:
      " 'On or about January 11, 1970, your insured, Mr. Kelley’s Bar, located at 4462-4472 Chene, Detroit, Michigan, was owned and operated by Lillian G. Daniels and/or Louis H. Cheff
      Liquor served at this establishment in violation of Michigan Statutes resulted in injury to my client, Roosevelt Nunnally, and suit was instituted accordingly prior to the two year Statute of Limitations.
      This letter will act as my attorney’s lien for any and all sums paid or to be paid to my client, Roosevelt Nunnally, as a result of this claim.
      As your insurance company is liable for the amount of bond posted, please contact me with reference to settlement of this claim.’
      The aforementioned letter was dated April 14, 1972. On April 2, 1975, a Consent Judgment in the amount of $31,000.00 was entered by Plaintiff against Mr. Kelley’s Lounge.
      "On the date of the accident, January 11, 1970, there was in full force and effect and on file with the Michigan Liquor Control Commission a $5,000.00 Class 'C’ liquor bond filed by Defendant, International Fidelity Insurance Company.
      "On September 30, 1975, a Writ of Garnishment (No. 196 444; issued pursuant to the Consent Judgment which had been entered on April 2, 1975).
      “That the April 14, 1972 letter from Plaintiff’s former attorney to Defendant, International Fidelity Insurance Company was attached as an exhibit to Plaintiff’s 'Supplemental Brief in Support of Plaintiff’s Motion for Summary Judgment’ in Civil Action No: 196 444.
      "In a 'Memorandum Opinion’ issued by Wayne County Circuit Court Judge John M. Wise, dated September 1, 1976, relative to Civil Action No: 196 444 R, the Court denied Plaintiff’s Motion for Summary Judgment '* * * for the reason that garnishment proceedings against the International Fidelity Insurance Company is an improper procedure against the bonding company’, and sometime thereafter, the Order dismissing Civil Action No: 196-444 R was entered. On June 14, 1976, Plaintiff instituted the instant lawsuit in reliance not only upon the Consent Judgment, alleging that Plaintiff was injured on January 11, 1970 as the proximate result of an unlawful sale of intoxicating liquors by Mr. Kelley’s Lounge, that Defendant had a surety bond on file on that date and was, in fact, in full force and effect on that date, and that a $31,000.00 Consent Judgment was obtained on April 2, 1975, and that $6,000.00 was 'uncollected’ on said Judgment.
      "Defendant, International Fidelity Insurance Company, filed a Motion for Accelerated Judgment pursuant to GCR 116.1(5) for the reason that Plaintiff’s claim was barred by the Statute of Limitations. Defendant also moved for Summary Judgment pursuant to 117.2(1) for the reason that Plaintiff failed to state a claim upon which relief could be granted. The Motions were denied.
      "Defendant, International Fidelity Insurance Company, then filed an Answer and Affirmative Defenses. Thereafter, Plaintiff filed a Motion for Summary Judgment, urging the unlawful sale, the existence of the liquor bond on the date of sale, and the Consent Judgment, and urged that based thereon, there is no question of fact. Plaintiff’s Motion for Summary Judgment was granted, and Defendant appealed as of right.
      "IT IS FURTHER DETERMINED AND CERTIFIED that the settled record on appeal shall consist of all those documents recited in the annexed copy of docket entries prepared by the Wayne County Circuit Court Clerk as well as the letter from Plaintiff’s former attorney to Defendant, International Fidelity Insurance Company, the Writ of Garnishment (No. 196 444), Memorandum Opinion issued by Wayne County Circuit Judge John Wise, dated September 1, 1976.
      "/s/ Theodore R. Bohn CIRCUIT COURT JUDGE
      "APPROVED AS TO FORM:
      /s/ Peter J. Lyons
      NORMAN L. ZEMKE Peter J. Lyons
      Attorney for Defendant
      International Fidelity Insurance Company”


text:
    PEOPLE v STEPHENSON
    Docket No. 78-3744.
    Submitted October 9, 1979, at Lansing.
    Decided November 26, 1979.
    Roger D. Stephenson was convicted of armed robbery and possession of a firearm during the commission of a felony, Oakland Circuit Court, Frederick C. Ziem, J. Defendant appeals his felony-firearm conviction claiming that the felony-firearm statute covers only those situations in which the firearm could be used to inflict injury on the victim of the original felony and therefore the word firearm as used in the statute does not mean guns made inoperable because they are unloaded or defective. Held:

    The term firearm as it is used in the statute includes any firearm, loaded or unloaded, operable or inoperable.
    Affirmed.
    Weapons — Criminal Law — Felony Firearm — Statutes.
    The term firearm as it is used in the felony-firearm statute includes any firearm, loaded or unloaded, operable or inoperable (MCL 750.227b; MSA 28.424[2]).

      Frank J. Kelley, Attorney General, Robert A. Derengoski, Solicitor General, L. Brooks Patterson, Prosecuting Attorney, Robert C. Williams, Chief Appellate Counsel, and Robert F. Davison, Assistant Prosecuting Attorney, for the people.

      Faintuck, Shwedel, Wolfram, McDonald & Zipser, for defendant on appeal.
    Before: R. B. Burns, P.J., and D. E. Holbrook, Jr., and P. J. Glennie, JJ.
    References for Points in Headnote
    79 Am Jur 2d, Weapons and Firearms §§ 1, 16.
    Fact that gun was unloaded as affecting criminal responsibility. 79 ALR2d 1412.

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

   Per Curiam.

Defendant was convicted of one count of armed robbery, MCL 750.529; MSA 28.797, and a second count of possession of a firearm during the commission of a felony, MCL 750.227b; MSA 28.424(2). He was sentenced to from 1-1/2 to 15 years imprisonment on the armed robbery count and an additional two years on the second count for possession of a firearm during the commission of a felony. Defendant appeals as of right his conviction and sentence under the second count.

Defendant claims the Legislature’s intent behind the passage of the felony-firearm statute covers only those situations in which the firearm could be used to inflict injury on the victim of the original felony. Thus, defendant contends that the word "firearm” in the statute does not mean guns made inoperable because they are unloaded or defective.

The statutory definition of a firearm is found in MCL 8.3t; MSA 2.212(20). It states that a "firearm”, where not otherwise defined, includes "any weapon from which a dangerous projectile may be propelled by using explosives, gas or air as a means of propulsion” with listed exceptions. A companion definition of a pistol is found in MCL 750.222; MSA 28.419 which states:

" 'Pistol’ as used in this chapter means any firearm, loaded or unloaded, 30 inches or less in length, or any firearm, loaded or unloaded, which by its construction and appearance conceals it as a firearm.”

Therefore, reading the above two statutes together, it is clear that the term "firearm” includes guns both loaded and unloaded and which "may” fire a dangerous projectile by any of the means listed.

No such explicit reading is available, however, for a statutory inclusion of a firearm which is not operable. The question thus presented is whether a statute including firearms made inoperable because they are unloaded would apply equally to those not operable for mechanical reasons.

The present case compares favorably with the situation addressed by this Court in People v Clark, 24 Mich App 440; 180 NW2d 342 (1970), and People v Jiminez, 27 Mich App 633; 183 NW2d 853 (1970). In both cases, the defendants based a portion of their appeals of convictions for carrying a concealed weapon contrary to MCL 750.227; MSA 28.424 on the question'of proof that the gun was not operable. In Clark, the people’s evidence that the gun was operable was found to be irrelevant and unnecessary to proof of the offense. In Jiminez, this Court relied on the definition of a pistol to state that since the gun need not be loaded, "the fact that a pistol may be inoperable does not prevent conviction under this statute”. People v Jiminez, supra at 635; 183 NW2d at 854.

The type of statutory construction given to the concealed weapon statute is applicable to the felony-firearm law. Both statutes refer to a pistol or firearm which is carried by the person. The concealed weapon statute refers to a pistol "on or about his person” while the felony-firearm statute refers to firearms "in his possession”. It is clear that the Legislature intended that a broad construction be given both laws. As this Court stated in People v Bailey, 10 Mich App 636, 640; 160 NW2d 380, 382 (1968):

"Courts should look for reasonable rather than tortured interpretations of statutes, or exceptions thereto, so as to reflect the intent of the legislature.”

Therefore, we find that the felony-firearm statute includes any firearm, operable or inoperable.

Affirmed.


author: Cynar, J.

text:
    PEOPLE v ELMORE
    Docket No. 78-43.
    Submitted September 4, 1979, at Lansing.
    Decided December 18, 1979.
    Robert Elmore was convicted of delivery of heroin and of being a habitual offender, Lenawee Circuit Court, Kenneth B. Glaser, Jr., J. Defendant appeals, alleging that his sentence was improperly enhanced by the use of both the habitual offender statute and the enhanced punishment provisions of the Controlled Substances Act and that the trial court erred by not instructing the jury on specific intent. Held:

    1. The trial court, by using both the habitual offender statute and the sentence-enhancing provision of the Controlled Substances Act, increased the maximum prison term for delivery of heroin from 20 years to 80 years. The use of both statutes was improper, and the defendant’s sentence is reduced to a maximum of 40 years.
    2. No request was made at trial for an instruction on specific intent. The instructions which were given defined delivery to include both knowledge of the nature of the substance and an intent to deliver the substance to another. The instructions thereby properly informed the jury on the essential elements of the charged offense.
    Affirmed, and sentence modified.
    1. Drugs and Narcotics — Habitual Offenders — Enhanced Punishment — Statutes.
    Use of both the habitual offender statute and the enhanced punishment provisions of the Controlled Substances Act to increase the maximum prison term of a defendant from 20 to 80 years for delivery of heroin is an improper enhancement of the sentence (MCL 335.348, 769.11; MSA 18.1070[48], 28.1083).

      References for Points in Headnotes

       25 Am Jur 2d, Drugs, Narcotics and Poisons §§ 40, 48.
    21 Am Jur 2d, Criminal Law § 533 et seq.

    Review for excessiveness of sentence in narcotics case. 55 ALR3d 812.

       5 Am Jur 2d, Appeal and Error §§ 810, 891.

       5 Am Jur 2d, Appeal and Error §§ 810, 894.
    75 Am Jur 2d, Trial § 719.

      2. Appeal and Error — Criminal Law — Instructions to Jury.
    Generally, failure in a criminal trial to object to an instruction as given before the jury retires to deliberate precludes appellate review of the instruction; exceptions to this rule are recognized where failure to review the instructions for error would result in a miscarriage of justice or where the instructions omit an essential element of an offense.
    3. Drugs and Narcotics — Instructions to Jury — Delivery of Heroin — Specific Intent.
    Specific intent in a trial for delivery of heroin was properly covered in the court’s instructions where the instructions, when viewed as a whole, defined delivery to include both knowledge of the nature of the substance and an intent to deliver that substance to another.

      Frank J. Kelley, Attorney General, Robert A. Derengoski, Solicitor General, and Harvey A. Koselka, Prosecuting Attorney (by Leonard J. Malinowski, Assistant Attorney General, Prosecuting Attorneys Appellate Service), for the people.
    Robert Elmore, in propria persona.

    Before: M. J. Kelly, P.J., and M. F. Cavanagh and Cynar, JJ.
   Cynar, J.

Defendant was convicted by a jury of delivery of a controlled substance (heroin), MCL 335.341(l)(a); MSA 18.1070(41)(l)(a), and of being an habitual offender, MCL 769.11; MSA 28.1083, and was sentenced under the above provisions and under MCL 335.348; MSA 18.1070(48), to 53 years 4 months to 80 years imprisonment. Defendant appeals as of right in propria persona.

Defendant initially contends that the lower court’s use of both the habitual offender statute, MCL 769.11; MSA 28.1083 and § 48 of the controlled substances act, MCL 335.348; MSA 18.1070(48), to increase the maximum term for delivery of heroin from 20 to 80 years, was an improper enhancement of his sentence. We agree. People v Edmonds, 93 Mich App 129; 285 NW2d 802 (1979). Therefore, in accordance with § 48 of the Controlled Substances Act, in effect at the time defendant was sentenced, an abatement of the sentence to 26 years 8 months to 40 years is in order. People v Edmonds, supra, at 135.

Next, defendant claims that reversible error was committed when his request for an instruction on specific intent was refused. He argues that the offense of which he was convicted, delivery of a controlled substance, requires a specific intent to deliver, thus necessitating the giving of the omitted instruction.

The record indicates that defense counsel made no request for an instruction on specific intent, instead merely asking for one on delivery of a controlled substance. Counsel also approved the instructions as proposed and as given.

Generally, the failure to object to an instruction as given before the jury retires precludes appellate review of any claimed error therein. GCR 1963, 516.2. If a miscarriage of justice would result from a failure to review the instructions for error, the general rule does not obtain. People v Haney, 86 Mich App 311, 318; 272 NW2d 640 (1978), inter alia. So, too, reversible error may be found even in the absence of an objection where the charge omits an essential element of an offense. People v Peoples, 75 Mich App 616, 620; 255 NW2d 707 (1977), People v Ashford, 91 Mich App 693; 283 NW2d 830 (1979).

No Michigan case has spelled out the elements of the crime of which defendant was convicted. However, in the commentary to CJI 12:2:03, found at page 12-31, the commentators quote with approval the instructions on delivery of heroin given in People v Dyson, 56 Mich App 59, 64; 223 NW2d 364 (1974), which instructions include intent to deliver as an element of the offense. It is worth nothing that the Court in Dyson approved that instruction even though no separate instruction on specific intent was given. Nor does the use note to CJI 12:2:03 suggest an instruction on specific intent where, as here, an attempt is not alleged.

The instruction given in the instant case was a combination of CJI 12:2:03 and the Dyson instruction. Reading and assessing the instructions as a whole, we find that delivery was defined to include both knowledge of the nature of the substance and an intent to deliver the same to another. As such, the instruction did not fail to include an essential element of the charged offense, nor did the use of such instruction in charging the jury result in a miscarriage of justice. We find no error in failing to instruct on specific intent on these facts.

As defendant made no attempt to have the trial court rule on the issue of entrapment, appellate review is precluded. People v Ginther, 390 Mich 436, 443; 212 NW2d 922 (1973), People v Edmonds, supra, 134.

Defendant’s conviction is affirmed with his sentence reduced in conformity with this opinion.

Affirmed.

       We note that the conclusion reached on this question by the panel in Edmonds is further reinforced by the Legislature’s subsequent amendment of MCL 769.11; MSA 28.1083, which now provides:
      "Sec. 11. (1) If a person has been convicted of 2 or more felonies, attempts to commit felonies, or both, whether the convictions occurred in this state or would have been for felonies in this state if the convictions obtained outside this state had been obtained in this state, and that person commits a subsequent felony within this state, the person shall be punished upon conviction as follows:
      "(a) If the subsequent felony is punishable upon a first conviction by imprisonment for a term less than life, then the court, except as otherwise provided in this section or section 1 of chapter 11, may sentence the person to imprisonment for a maximum term which is not more than twice the longest term prescribed by law for a first conviction of that offense or for a lesser term.
      "(b) If the subsequent felony is punishable upon a first conviction by imprisonment for life, then the court, except as otherwise provided in this section or section 1 of chapter 11, may sentence the person to imprisonment for life or for a lesser term.
      "(c) If the subsequent felony is a major controlled substance offense, the person shall be punished as provided by Act No. 196 of the Public Acts of 1971, as amended.

      "(2) If the court pursuant to this section imposes a sentence of imprisonment for any term of years, the court shall fix the length of both the minimum and maximum sentence within any specified limits in terms of years or fraction thereof, and the sentence so imposed shall be considered an indeterminate sentence.” (Emphasis added.) 1978 PA 77, immediately effective March 22, 1978.
      Of course, we also note that the prior Controlled Substances Act, cited in the above statute, has been repealed and superseded by 1978 PA 368, effective September 30, 1978, the new Public Health Code, which in Part 74 thereof contains a modified sentence enhancement provision, viz., MCL 333.7413; MSA 14.15(7413).

       The instruction approved in Dyson stated:
      "[I]n order to convict the defendant of this crime, the prosecutor must have proven beyond a reasonable doubt each and all of the following elements:
      "1. That the crime occurred on or about the 12th day of December, 1972, in Benton Township, Berrien County, Michigan.
      "2. That this defendant intended to and did deliver a substance which, in fact, was heroin.
      “3. That at the time and place the defendant knew the substance was, in fact, heroin,” Id., 64.

       The court charged the jury as follows:
      "* * * To establish this charge the prosecution must prove each of the following elements beyond a reasonable doubt.
      "First, that the substance involved in this case is, in fact, heroin.
      "And second, that the Defendant knowingly delivered this substance.
      “Delivery means that the Defendant transferred this substance to another person, knowing that the substance was heroin and intending to so deliver it to another person.”

        People v Choate, 88 Mich App 40, 45; 276 NW2d 862 (1979).


author: M. J. Kelly, J.

text:
    McCROSKEY v GENE DEMING MOTOR SALES, INC
    Docket No. 78-2171.
    Submitted June 14, 1979, at Grand Rapids.—
    Decided December 18, 1979.
    Leave to appeal applied for.
    Jerry S. McCroskey died in an automobile collision when another vehicle, driven by Kevin M. Gallentine, over which Gallentine lost control on wet pavement, crossed the center line and entered the path of the McCroskey automobile. Joy D. Mc-Croskey, executrix of Jerry’s estate, brought a wrongful death action against Gene Deming Motor Sales, Inc., Kevin M. Gallentine, and Daniel, Leo and Geraldine Manier, doing business as Honest Lee’s Used Cars. Defendant Gallentine was driving the automobile with the express consent of Honest Lee’s Used Cars (owned by the Manier defendants), having obtained permission to take the car over the weekend preceding the fatal crash in order to check it out prior to purchase. A dealer license plate belonging to defendant Deming was affixed to the automobile. Summary judgment in favor of defendant Gene Deming Motor Sales, Inc., Wexford Circuit Court, Walter F. Ransom, J. Plaintiff appeals. Held:

    The Deming dealer plate was loaned to Honest Lee’s on August 14, 1974. Thereafter, on August 29, 1974, a letter was sent to Honest Lee’s requesting return of the plate. On September 30, 1974, a second letter was sent demanding return of the plate. Apparently no attempt was made by Deming to go and pick up the plate. In addition Deming testified that he made unanswered phone calls to Honest Lee’s and to the Leo Manier residence. The fatal accident occurred on October 14, 1974. Summary judgment is improper where reasonable minds could differ on the resolution of factual issues. Reasonable men could differ as to whether Deming complied with the due diligence requirement. Summary judgment should not have been granted.
    Reversed and remanded.
    References for Points in Headnotes

       7 Am Jur 2d, Automobiles and Highway Traffic §§ 131, 369.
    8 Am Jur 2d, Automobiles and Highway Traffic § 603.

       73 Am Jur 2d, Summary Judgment § 27.

      1. Automobiles — Automobile Dealers — Dealer License Plates — Return of Plates — Due Diligence — Questions of Fact — Statutes.
    A statute requires that an automobile dealer use due diligence to procure the return of its dealer license plates within 72 hours following the sale of an automobile or be guilty of a misdemeanor; where the vendee of a motor vehicle with dealer license plates was involved in an accident which resulted in an action for damages and reasonable men could differ as to whether the dealer complied with the 72 hour due diligence mandate a question of fact arises concerning not only due diligence but, if the jury finds a lack of due diligence, then the further and more difficult questions of proximate cause and reasonable foreseeability of consequences should be decided to resolve the ultimate question of liability (MCL 257.244[f]; MSA 9.1944[f¡).
    2. Judgment — Summary Judgment — Failure to State Claim — Reasonable Minds — Factual Issues.
    Summary judgment is improper where reasonable minds could differ on the resolution of factual issues.

      McCroskey, Libner, VanLeuven, Feldman, Kortering, Cochrane & Brock, P.C., for plaintiff.

      Sommers, Schwartz, Silver & Schwartz, P.C., for defendant.
    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.

Plaintiff, Joy D. McCroskey, appeals from the trial court’s grant of summary judgment in favor of defendant, Gene Deming Motor Sales, Inc., in this wrongful death action. Plaintiff’s decedent died on October 14, 1974, in an automobile collision when defendant driver, Kevin M. Gallentine, lost control of his car on wet pavement, crossed the center line, and entered the path of the oncoming McCroskey vehicle.

Defendant Gallentine was driving a 1966 Chevrolet automobile with the express consent of Honest Lee’s Used Cars (owned by the Manier defendants), having obtained permission to take the car over the weekend preceding the fatal crash in order to "check it out” prior to purchase. A dealer license plate belonging to defendant Deming was affixed to the automobile. The circumstances which gave rise to Deming’s dealer plate being on a car owned by Honest Lee’s and driven by Gallentine are the subject of this appeal. Although there has been no trial, extensive discovery was taken.

The deposition of F. Russell Reeder, a salesman for Deming, indicated that Honest Lee’s had purchased four automobiles from Deming in mid-August, 1974; the 1966 Chevrolet involved in this accident was not one of them. On August 14, 1974, when Leo and Daniel Manier went to Cadillac to pick up two of the vehicles, Reeder was asked by one of the Maniers if a Deming dealer plate could be borrowed in order to get one of the cars back to Baldwin, Michigan. Reeder replied, "Well, I guess you can, providing you get it back to us right away”. When the license plate was not returned, Reeder sent a letter to Honest Lee’s dated August 29, 1974, requesting its return. When no response was forthcoming, a second letter, dated September 30, 1974, was sent demanding that the plate be returned. The record does not reveal the distance between Cadillac and Baldwin, but we take judicial notice of the fact that it is a relatively short distance. Apparently no attempt was made by Deming to go and pick up the plate. In his deposition Mr. Eugene Deming stated that he phoned Honest Lee’s place of business and the Leo Manier residence on two separate occasions with regard to obtaining the return of the plate, but that neither of the calls was completed because there was no answer either time.

On Saturday, October 12, 1974, Gallentine went to Honest Lee’s with the intention of trading in his car for the 1966 Chevrolet. Leo Manier (presumably "Honest Lee”) suggested that he take the car for the weekend and attached Deming’s dealer plate. The fatal crash occurred on October 14th, the following Monday, two months after the plate was borrowed.

Both parties concede that the disposition of this case turns upon whether or not the case of Wieland v Kenny, 385 Mich 654, 657-658; 189 NW2d 257 (1971), controls. In Wieland, the plaintiff was injured in a collision with an automobile driven and owned by defendant Kenny, an uninsured driver. Plaintiff sued both defendant driver and defendant’s employer, a used car dealer. The evidence indicated that defendant dealer allowed his employees, including the defendant driver, regular access to his automobile dealer plates for their personal use. The Court held that the defendant dealer was estopped to deny that the automobile driven by Kenny was owned by the dealership due to his "flagrant” violation of MCL 257.256; MSA 9.1956, which provides:

"No person shall lend to another any certificate of title, registration certificate, registration plate, special plate, or permit issued to him if the person desiring to borrow the same would not be entitled to the use thereof, nor shall any person knowingly permit the use of any of the same by one not entitled thereto, nor shall any person carry or display upon a vehicle any registration certificate or registration plate, not issued for such vehicle or not otherwise lawfully used thereon under this act. Any violation of this section is a misdemean- or.”

In so holding, the Court stated:

"* * * this dealer’s course of conduct was not confined to an isolated transaction. It enabled some if not all of the dealer’s employees to flaunt MCLA § 257.256 * * * regularly and make of all participants law breakers by habit. It served for the case of this plaintiffs negligently inflicted injuries to put upon the road an ancient motor vehicle, * * * a motor vehicle which upon these evidentiary facts could not have been licensed save as an 'historic’ or 'antique’ vehicle * * * and then only upon showing by affidavit that it 'has been inspected and found safe to operate on the highways in the state’ * *
"All this considered, we cannot hear him or anyone else on behalf of the defendant dealership say there was no causal connection between the aforesaid statutory violation and the plaintiffs sustained injuries.” (Citations omitted.)

Our review of the facts persuades us that Wieland is distinguishable from the instant case. Defendant Deming loaned Manier the license plate for the limited purpose of driving a newly purchased automobile to Baldwin, Michigan. This is a proper use of the license plate under MCL 257.244(f); MSA 9.1944(f), which states in part:

"(f) Upon the sale of a vehicle * * * the vendee shall be permitted to operate the vehicle upon the public highways for a period not to exceed 72 hours after taking possession thereof, but during such period the vehicle shall have attached thereto the dealer plate as provided in this section. * * * the dealer and the vendee shall be jointly responsible for the return of the dealer plate to the dealer within the period of 72 hours, and the failure of the vendee to return or the vendor to use due diligence to procure the dealer plate shall constitute a misdemeanor, and in addition thereto the license of the dealer may be revoked.”

Therefore, we are not presented here with an improper loan of the dealer plate or continued improper use of the plate with the dealer’s knowledge and consent as in Wieland. However, Deming’s conduct raises a question of fact as to its compliance with the statutory mandate that it exercise due diligence in seeking return of the borrowed plate within 72 hours. Deming’s efforts to procure the plate consisted of a letter dated August 29, 1974, requesting its return, a second letter dated September 30, 1974, demanding its return, and two unanswered phone calls. It hardly requires citation that a violation of a statute is negligence per se and questions of proximate cause, including questions of foreseeable consequences, are questions for the trier of fact. Moning v Alfono, 400 Mich 425; 254 NW2d 759 (1977).

If defendant Deming’s course of conduct failed to meet the statutory requirement of due diligence, an easily justifiable conclusion for a trier of fact, the further and more difficult questions of proximate cause and reasonable foreseeability must be addressed and decided by the trier of fact to resolve the ultimate question of liability.

The test for granting a summary judgment for defendant as set forth in Davis v Thornton, 384 Mich 138; 180 NW2d 11 (1970), has not been satisfied here; reasonable minds could differ on resolution of these factual issues. Consequently, the trial court’s grant of summary judgment is reversed and the case remanded for trial.

Reversed and remanded.