author: D. E. Holbrook, J.

text:
    POWERS v BAKER-PERKINS, INC
    Docket No. 78-2956.
    Submitted June 14, 1979, at Lansing.
    Decided October 1, 1979.
    Leave to appeal applied for.
    Mark Powers was injured while operating a commercial dough-mixing machine. He brought an action for damages against Baker-Perkins, Inc., which was the successor to the machine’s manufacturer, Century Machine Company. Powers alleged that Baker-Perkins has successor liability for his injuries, that Baker-Perkins had a duty to warn users of the dangers of the dough mixer, and that Baker-Perkins had failed to do so.
    The machine was manufactured by Century prior to 1929. In 1929, Baker-Perkins acquired Century by an exchange of stock, and subsequently operated Century as a wholly-owned subsidiary until 1957, at which time the assets of Century were either sold or incorporated directly into Baker-Perkin’s operations, and the Century corporation was dissolved. Baker-Perkins continues to use the trade name "Century”, several members of Century’s management were offered positions with Baker-Perkins following dissolution, and Baker-Perkins assumed responsibility for Century’s accounts payable during part of 1957 and insured itself against the type of liability claimed by Powers.
    Baker-Perkins moved for summary judgment and the Saginaw Circuit Court, Joseph R. McDonald, J., granted the motion on the basis that Powers had failed to state a claim upon which relief could be granted and that, except as to damages, there was no genuine issue of material fact. Powers appeals. Held:

    The question of whether Baker-Perkins, as the successor corporation of Century, could be liable for Power’s injury is to be decided using products liability principles rather than principles of corporate law. There was in this case a continuation of the business such that after 1929 Century may have become Baker-Perkins. Because Century was an Ohio corporation, Ohio law governs the liability of the corporation, and under that law Powers may still bring an action against Century as an added defendant.

      References for Points in Headnotes

       73 Am Jur 2d, Summary Judgment § 35.

       63 Am Jur 2d, Products Liability § 5.
    Liability of successor corporation for injury or damage caused by product issued by predecessor. 66 ALr3d 824.

      Reversed and remaiided for further proceedings.
    i. Judgment — Summary Judgment — Appeal and Error.
    Review bf a summary judgment is to be made viewing the facts in the light most favorable to the party against Whom the summary judgment was found.
    2: Products Liability — Successor Corporations — Corporate Law.
    A products liability cáse brought against a corporation which is a successor to the corporation Which manufactured the allegedly defective, product is to be decided on principles of products liability law rather than by reexamining and adjusting corpofate law principles.

      Jaffe, Snider, Raitt, Garratt & Heuer, P.C. (by Brian G. Shannon), for plaintiff.

      Harvey, Kruse & Westen, P.C., for defendant.
    Before: ALLen, P.J., and T. M. Burns and D. E. Holbrook, JJ.

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

   D. E. Holbrook, J.

This is a products liability áction brought by plaintiff, Mark Powers, for injuries received While operating a dough mixer manufactured by Century Machine Company, against Bakér-Perkins, Inc., purchaser of Century Machine Cohipaiiy. Defeiidant’s motion for summary judgment was granted by the trial court and plaintiff appeals as of right.

The facts as alleged in plaintiffs complaint, emended complaint, Baker’s admissions and interrogatory answers appear to show that Mark Powers suffered serious injuries while operating a commercial dough-mixing machine designed and manufactured by Century Machine Company* now a defunct corporation. Plaintiff Powers contends that defendant Baker-Perkins has "vicarious”, "successor” or "enterprise” liability for plaintiffs injuries. Further, plaintiff claims that Baker had a duty to warn users of certain dangers associated with the dough mixer’s operation, which Baker-Perkins failed to do. The merits of Powers’ claim were not before the trial court and are not now before our Court. This matter concerns only the products liability consequences of Baker-Perkins’ relationship to Century.

On June 6, 1973, Powers Suffered traumatic amputation of both arms and other serious injuries while using a Century commercial doügh-mixing machine in the course of his employment. The dough-mixer had no guard or interlock device to prevent entry of the operator’s hand while it was running.

The machine was designed, manufactured and sold by Century sometime prior to 1929. On July 22, 1929, Baker-Perkins acquired all the outstanding shares of Century’s stock in exchange for 6000 shares of its own stdck* thus becoming Century’s sole shareholder. Baker-Perkins is, as Century was, a manufacturer of bakery machinery. Baker-Perkins operated Century as a wholly-oWned subsidiary, continuing to use the Century name and to manufacture the Century product line at the same location with the same employees for many years following the acquisition. Five members of Baker-Perkins’ board of directors were also directors of Century and at least two officers of Baker-Perkins were officers of Century.

In 1957 Baker-Perkins decided to close down the Century plant and end the corporate existence of Century. Certain of the subsidiary’s assets Were distributed to Baker-Perkins and its Canadian affiliate both before and at the time of the formal dissolution. Baker-Perkins held title to Century’s land and plant until September 1958, about a year after Century had ceased operating, at which time Baker-Perkins sold it to an unrelated buyer. The machinery necessary to manufacture replacement parts for the Century product line was transferred to Baker-Perkins’ Saginaw operation and its Canadian affiliate. Some of these machines were transferred prior to Century’s dissolution. Other Century assets were sold at auction in September 1957, and Century closed its books the following month, two months before the effective date of dissolution in December. Century had transferred $650,000 in cash to Baker-Perkins by the forepart of November. With other liquid assets and the Century plant Baker-Perkins probably realized about $1,500,000 in addition to the machinery, inventory, drawings, plans, and marketing and sales data which it retained.

These retained assets not sold by Baker-Perkins were incorporated directly into the operations of Baker-Perkins and its affiliates. After Century’s dissolution, Baker-Perkins marketed and its Canadian affiliate marketed and manufactured bakery equipment (including dough mixers) under the trade name "Century”. Baker-Perkins continues to the present to manufacture and distribute replacement parts for Century dough-mixers.

At least five members of Century’s management were offered positions with Baker-Perkins following dissolution.

Baker-Perkins assumed responsibility for Century’s trade payables during the last two months of 1957.

Baker-Perkins has insured itself against the liability claimed by Powers.

In an opinion dated March 17, 1978, the trial court ruled that it would grant Baker-Perkins’ motion for summary judgment under GCR 1963, 117.2(1) and (3), unless Powers amended his complaint to set forth additional facts establishing "successor” liability. Plaintiff filed a first amended complaint which more clearly alleged the grounds of liability claimed against Baker-Perkins, but which did not contain significant additional evidentiary facts. On July 13, 1978, the trial court entered an order granting Baker-Perkins’ motion for summary judgment.

Plaintiff presents on appeal the following issue:

Did the trial court err in ñnding no genuine issue of material fact as to whether Baker-Perkins’ relationship with Century was such that:

(a) Baker-Perkins is vicariously liable for Century’s products liability, or

(b) Baker-Perkins had a duty to warn users of Century’s unguarded dough-mixers?

As this case ended in summary judgment, the facts must be viewed in the light most favorable to plaintiff, against whom the summary judgment was found, Turner v Bituminous Casualty Co, 397 Mich 406; 244 NW2d 873 (1976). Both parties to this suit cite the Turner case as supporting their respective positions on liability.

Turner is helpful because it did set forth some fundamental rules. Mr. Justice Williams, speaking for the Court, stated in part as follows:

"After the transfer of the name, personnel, properties and products of a manufacturing corporation in a cash sale, and the corporation’s subsequent dissolution as a part of the acquisition plan, an injury occurred on a press manufactured and sold by that corporation prior to the corporate transfer. The purchasing corporation was sued in tort and defended on the basis that it was a corporate stranger to the manufacturer and hence not liable.
"Where the Corporate transfer involves either a merger or a de facto merger, the law is clear that liability attaches to the consolidated or acquiring corporation. The issue here narrows down to whether an acquisition for cash should be treated the same as an acquisition for stock; and, if So, under what circumstances.
"In our opinion there may be a cause of action where the totality of the transaction demonstrates a basic continuity of the enterprise.” 397 Mich at 411.
"This is a products liability casé first and foremost.
"Products liability law is a fast-devéloping area. All the rules have not yet been formulated and products liability law, as it matures, has to shake off various impediments associated with traditional concepts, which, while relevant to other problems, are inappropriate for this new area.
"Thus, for example, it was not until Spence v Three Rivers Builders & Masonry Supply, Inc, 353 Mich 120, 135; 90 NW2d 873 (1958), that we rejected the indirect approach and forthrightly abolished the requirement of privity in products liability cases. We did so because We were persuaded that the concept of privity of contract had nothing to do with liability or nonliability predicated on the law of torts.
"In a similar vein, the New York Court of Appeals rejected the contractual statute of limitations in products liability cases, reasoning that '(r)ather than arising out of the "will or intention of the parties”, [products liability] * * * is predicated largely on considerations of sound social policy’. Victorson v Bock Laundry Machine Co, 37 NY2d 395; 335 NE2d 275, 277; 373 NYS2d 39 (1975).
"For the same reasons, defendants’ reliance on the sécalled 'general rule of non-liability’ whereby, with certain limited exceptions the purchasing Corporation is not liable for obligations of the transferor corporation, is inapposite. That rule developed not in response to products liability problems, but largely in the areas of creditors’ protection, Note, Assumption of Products Liability in Corporate Acquisitions, 55 Boston U L Rev 86, 95 (1975), and of tax assessments, Cyr v B Offen & Co, Inc, 501 F2d 1145, 1150 (CA 1, 1974), or, in the case of the de facto merger, in the context of shareholder rights. See Applestein v United Board & Carton Corp, 60 NJ Super 333; 159 A2d 146, 151 (1960); aff'd 33 NJ 72; 161 A2d 474 (1960). Most of these policies may fairly be said to have arisen from case law, and are not specifically found in the statutes.
"While the Legislature has spoken directly to problems of creditors and shareholders, nonetheless the courts have had to fill in the interstices where legislation was lacking. Consequently, it is not surprising in the much newer field of products liability to find that legislatures have not yet come to grips with some of the problems of the victim of defective products and that therefore the courts must do so.
"Further, case law that developed to protect the rights of creditors and minority shareholders, in all probability is not applicable to meeting the substantially different problems associated with products liability torts. Thus, not only do we operate in a relatively uncharted field when we explore the ramifications of products liability, but the facts of the instant case reveal a situation not previously dealt with in our jurisdiction.
"In order to develop a reasonable rule for products liability cases which arise subsequent to corporation transfers, it is necessary to go back to basics. In doing so we must review the problem from the standpoints of both the plaintiff injured person and the defendant acquiring corporation.
"To the injured person the problem of recovery is substantially the same, no matter what corporate process led to transfer of the first corporation and/or its assets. Whether the corporate transaction was (1) a traditional merger accompanied by exchange of stock of the two corporations, or (2) a de facto merger brought about by the purchase of one corporation’s assets by part of the stock of the second, or (3) a purchase of corporate assets for cash, the injured person has the same problem, so long as the first corporation in each case legally and/or practically becomes defunct. He has no place to turn for relief except to the second corporation. Therefore, as to the injured person, distinctions between types of corporate transfers are wholly unmeaningful.
"From the corporate point of view likewise, the implications of a possible products liability suit after transfer do not depend on the form of corporate transfer. Regardless of the mode selected, both transferor and transferee wish to know as exactly as possible what they are buying and selling in order to establish an appropriate price.
"Further, the transferee would be equally handicapped by products liability suits developing after the transfer has occurred, regardless of what that transfer is called. Once the deal is made and the transferor corporation is extinguished, the transferee has nowhere to go for relief.
"Despite this reality, the traditional corporate law approach in non-products-liability cases has been to largely condition successor responsibility on whether the transaction is labeled a merger, a de facto merger, or a purchase of assets for cash.
"It is the law in Michigan that if two corporations merge, the obligations of each become the obligations of the resulting corporation. DF Broderick, Inc v Continental Credit Corp, 309 Mich 546, 550; 16 NW2d 68 (1944). In such a situation, therefore, the injured person could sue the new corporation.
"This is also true if, regardless what the parties call it, the transaction is deemed to be a de facto merger. E.g., Shannon v Samuel Langston Co, 379 F Supp 797, 801 (WD Mich, 1974); Fairfield v Samuel Langston Co, No K-18-71 CA (WD Mich, May 12, 1974); Knapp v North American Rockwell Corp, 506 F2d 361 (CA 3, 1974). As summarized in Shannon, the requirements of a de facto merger are:
" '(1) There is a continuation of the enterpise of the seller corporation, so that there is a continuity of management, personnel, physical location, assets, and generally business operations.
" '(2) There is a continuity of shareholders which results from the purchasing corporation paying for the acquired assets with shares of its own stock, this stock ultimately coming to be held by the shareholders of the seller corporation so that they become a constituent part of the purchasing corporation.
" '(3) The seller corporation ceases its ordinary business operations, liquidates, and dissolves as soon as legally and practically possible.
" '(4) The purchasing corporation assumes those liabilities and obligations of the seller ordinarily necessary for the uninterrupted continuation of normal business operations of the seller corporation.’ Citing McKee v Harris-Seybold Co, Div of Harris-Intertype Corp, 109 NJ Super 555; 264 A2d 98, 103-105 (1970), aff’d 118 NJ Super 480; 288 A2d 585 (1972). (Emphasis added.)
"The defendant herein contends that where there is a cash transfer, as opposed to the stock transaction described in the second principle, supra, the injured party is not entitled to sue. McKee, 264 A2d 104.” 397 Mich at 416-420.
"Summarizing then, logically and teleologically, there is no basis for treating a purchase of corporate assets different from a de facto merger. Both the injured party and the transferee corporation have common goals in each situation. It would make better sense if the law had a common result and allowed products liability recovery in each case.
"This is precisely the result when the problem is correctly treated as a products liability case and is decided on products liability principles rather than simply by reexamining and adjusting corporate law principles.
"As the court in Alad [Ray v Alad Corp, 55 Cal App 3d 855; 127 Cal Rptr 817, 821 (1976)] so forthrightly stated:
" 'This case has nothing to do with * * * the technical differences between a sale of assets * * *, mergers, consolidation * * * and the many other ways by which ownership of the Alad manufacturing enterprise could have been transferred from Hambly to Stern and his associates.
" 'The issue is, rather, one of tort law: does a manufacturer’s responsibility for its defective products survive a change in ownership, where the manufacturing business, as such, maintains its identity and continues to operate as before "at the same old stand” ’. 127 Cal Rptr 819-820.
"With products liability in mind, the most significant opinion for our guidance is Cyr v B Offen & Co, Inc, 501 F2d 1145 (CA 1, 1974). The assets of one corporation were purchased for cash by the defendant company. Two persons were subsequently injured by a machine built by the first corporation. Defendant contended it was a stranger to the sale of the machine. The opinion, in allowing recovery, is noteworthy in three regards. First, it recognized the problem as one of tort. Second, it clearly relied on the rule of 'continuity’. Third, it recognized the underlying policy 'that the hazards of predicting and insuring for risk from defective products are better borne by the manufacturer than the consumer’. 501 F2d 1145, 1154.
"The Court of Appeals said:
" 'Thus, where tort liability is concerned, we should look to factors relevant to the specific claim and not be bound by the factors that control where other debts and liabilities are concerned. But first we face two threshold arguments. Offen first contends that it could not be held liable to plaintiffs for the simple reason that it was not in existence when the equipment was sold and installed and thus had no relationship with buyers or users of the equipment on which a duty of care could be predicated. This argument begs the question at issue: should B. Offen & Co., Inc. be treated as the continuation of B. Offen Company? The corporate veil has never been treated as an iron curtain barring examination of the facts peculiar to the individual case.
" * * The very existence of strict liability for manufacturers implies a basic judgment that the hazards of predicting and insuring for risk from defective products are better borne by the manufacturer than by the consumer. The manufacturer’s successor, carrying over the experience and expertise of the manufacturer, is likewise in a better position than the consumer to guage the risks and the costs of meeting them. The successor knows the product, is as able to calculate the risk of defects as the predecessor, is in position to insure therefor and reflect such cost in sale negotiations, and is the only entity capable of improving the quality of the product.
"'* * * [I]t is true that the successor, by definition, was not the legal entity which launched the product on the stream of commerce or made an implied representation as to its safety. But in the most real sense it is profiting from and exploiting all of the accumulated good will which the products have earned, both in its outward representations of continuity and in its internal adherence to the same line of equipment.’ 501 F2d 1145, 1153, 1154. (Footnotes omitted, emphasis added.)” 397 Mich at 423-425.
"Defendant contends that it is necessary to insulate transactions involving the purchase of assets for cash from the possibility of successor liability for defective products in order to avoid crippling the market for such purchases. This kind of objection was made and ultimately rejected, for example, when courts debated when the statute of limitations should start running in products liability cases. It is even less persuasive in the present context of an existing, thriving market in corporate mergers, where the possibility of such liability is already established.
"Even the argument of surprise is likewise without merit.
" 'While the first such successor to be faced with such a liability may claim surprise, the claim lacks legal force. For this kind of surprise is endemic in a system where legal principles are applied case by case and is no more an injustice than was the retroactive application of the strict liability doctrine in Stephan v Sears, Roebuck & Co, 110 NH 248, 266 A2d 855 (1970).’ 501 F2d 1145, 1154.” 397 Mich at 427-428.
"In our analysis of the matter we must conclude at this point that in a products liability case where the corporation fabricating the injury-producing item changes corporate structure before injury and suit, as a matter of policy neither the victim nor the successor corporation has a different interest vis-á-vis the suit whatever the type of corporate metamorphosis— merger, de facto merger, or sale of assets for cash—so long as the transferor corporation becomes defunct.
"While a difference in degree can be established between the continuity arising from a stock transfer as opposed to a cash payment for assets, it is just that, a difference in degree. Logically it is not dispositive. As the brief of defendant, set out above, so eloquently indicates, continuity through transfer from the first corporation to the second of its policy, operations, personnel and properties is the major purpose of the acquisition and corporate change. It is this continuity that makes business sense. It is the consideration for the whole deal.
"These reasons lead us to believe that the first, third and fourth criteria quoted in Shannon from McKee as tests of continuity of interest, and therefore responsibility, are all relevant, with the first as perhaps of greatest significance.
"Furthermore, we must recognize that it does not make sense or promote justice to require a merger and a de facto merger to respond to products liability suits, and then to leave a transfer of assets for cash free from suit, when the needs and objectives of both the injured party and the corporation are the same in all three instances. Finally, it is difficult to see that the possibility of products liability litigation is a manageable problem in mergers and de facto mergers, and an unmanageable one when corporate assets are sold for cash.
"As a consequence, we adopt the rule that in the sale of corporate assets for cash, the first, third and fourth criteria set forth in the Shannon quotation from McKee shall be guidelines to establish whether there is continuity between the transferee and the transferor corporations. If there is such continuity, then the transferee must accept the liability with the benefits.
"Applying to the relevant principles the facts developed in the instant case prior to summary judgment, we find:
"1) There was basic continuity of the enterprise of the seller corporation, including, apparently a retention of key personnel, assets, general business operations, and even the Sheridan name.
"2) The seller corporation ceased ordinary business operations, liquidated, and dissolved soon after distribution of consideration received from the buying corporation.
"3) The purchasing corporation assumed those liabilities and obligations of the seller ordinarily necessary for the continuation of the normal business operations of the seller corporation.
"4) The purchasing corporation held itself out to the world as the effective continuation of the seller corporation.” 397 Mich at 429-430.

Plaintiff herein claims that Baker-Perkins should be liable for the plaintiffs injuries because in fact it was and is the successor of Century. Continuity of the enterprise is plaintiffs argument, when viewed from the totality of the transaction. He claims that products liability law should govern in this case, and Turner is cited as his authority. Further, there is no applicable contractual statute of limitations in products liability cases because such liability is predicated largely on considerations of sound social policy.

Fundamentally, Turner views the whole problem facing both the injured person and the defendant acquiring corporation. An injured plaintiff, in order to win redress must look to the successor corporation because the transferor corporation has become defunct. He has no part in the type of corporate transfer conducted by the parties involved, and usually has no knowledge of the situation until later when he is injured and seeks legal counsel. Even then, he personally does not attach meaning to the types of corporate transfers. From the corporate point of view the implications of a possible products liability suit after transfer do not ordinarily depend upon the form of corporate transfer. It is very important to both corporations to know what they are buying and selling in order to establish a proper price.

In the instant case we would have a de facto merger but for satisfying the third requirement as set forth in Shannon v Samual Langston Co, 379 F Supp 797 (WD Mich, 1974), see Turner, at 420, i.e., the seller corporation ceases its ordinary business operations, liquidates, and dissolves as soon as legally and practically possible. Baker-Perkins, sole owner of Century, continued Century as a wholly-owned subsidiary for 28 years before dissolving Century. As to continuity, as set forth in Turner at 430, the instant case appears to satisfy all but the second condition, again, that the seller corporation liquidate and dissolve as soon as possible after distribution of consideration received for its assets. This is true unless we consider the purchase as occurring when Baker-Perkins dissolved Century in 1957; in that event, whether Baker-Perkins continued the business of Century is a question of fact.

Turner cites the case of Ray v Alad Corp, 55 Cal App 3d 855; 127 Cal Rptr 817 (1976). Also see the opinion of the California Supreme Court at 19 Cal 3d 22; 136 Cal Rptr 574; 560 P2d 3 (1977), for the principle that the case is decided on products liability principles rather than by simply reexamining and adjusting corporate law principles. Turner, at 423.

In answer to the plaintiffs position in this case, defendant Baker-Perkins replies that Century was incorporated under the laws of Ohio in 1915. In 1929 defendant acquired all the capital stock of Century from Century’s shareholders. For 28 years defendant operated Century and continued to manfacture equipment and operate as a separate, independent Ohio corporation. On December 3, 1957, the stockholder of Century, being Baker-Perkins, voted that Century be dissolved as of December 31, 1957. Assets of Century were sold or retained by Baker-Perkins. This dissolution of Century was totally in compliance with Ohio law and Baker-Perkins did not carry on any of Century’s business after such dissolution. The mixer in question was manufactured by Century before defendant purchased Century and there is no basis under Turner for defendant to be held liable herein.

Technically, under Turner and McKee v Harris-Seybold Co, Div of Harris-Intertype Corp, 109 NJ Super 555; 264 A2d 98 (1970), there was no merger, actual or de facto, unless we consider the dissolution and defendant’s acquiring Century as occurring at the same time in 1957. In so considering we would in effect give substance to the form of defendant’s claim that the corporate law would override the products liability principles hereinbefore enumerated. This we are reluctant to do. However, if this is the law in Michigan then plaintiff should have the right to show, if he can, the continuity of Century’s business by defendant after 1958 when Century was finally wound up.

We approach the issue differently and consider whether, in fact, defendant, even though operating Century as a wholly-owned subsidiary, operated Century as a successor or continuing operation.

First we point out that McKee has been overruled in part by the case of Wilson v Fare Well Corp, 140 NJ Super 476; 356 A2d 458 (1976).

The Wilson Court first noted that liability may be imposed upon a successor corporation when there has been a merger or consolidation. 140 NJ Super 485. Neither of those conditions applies to our case, and therefore neither need be discussed here.

The Court further observed, however, that a de facto merger or consolidation will also operate to impose liability. Id. The characteristics involved here include "transfer or sale of all assets, exchange of stocks, change of ownership whereby stockholders, officers and creditors go to the surviving corporation, and assumption of a variety of liabilities pursuant to previously negotiated agreements.”

The next possibility recognized by the Wilson Court was liability imposed via a continuation of a business which could "be said to occur where the operations of the selling corporation become those of the buying corporation. The primary elements of continuation include use of the same name, at the same location, with the same employees and common identity of stockholders and directors.” Id.

After analyzing several applicable cases the Court observed, p 490:

"Therefore, if one adheres to the more modern approach, the most relevant fact [in determining liability] is the degree to which the predecessor’s business entity remains intact. The more a corporation physically resembles its precedessor, the more reasonable it is to hold the successor fully responsible. In this way, the innocent, injured consumer is protected without the possibility of being left without a remedy due to the subsequent corporate history of the manufacturer.”

The Wilson Court then found C & K, a successor corporation, liable on both the de facto merger and "complete continuation of business” theories. Since the de facto merger theory is inapplicable to the facts in our case, we will not discuss this aspect of the Wilson case further.

Wilson then pointed out that liability also attached to D & F, another successor corporation, for the tortious acts of its predecessor on the "continuity of business” theory although the requirements for a de facto merger or consolidation were not met because there was no stock transfer, a different location was used to manufacture the same product, and certain personnel were changed. In applying the "continuation” theory to C & K, the Court noted that every aspect of the predecessor’s operation was assumed by C & K. Half of the purchase price was with stock. Most of the contractual and property liabilities were expressly assumed. All management and other personnel were taken on by C & K. As to the "continuation” theory vis-á-vis D & F, the Court pointed out that the latter became a "new hat” for the predecessor company. Two top personnel of the predecessor became in charge of manufacturing and servicing the same product for D & F. Other predecessor personnel also went to D & F. D & F stated that the transaction was a "joining of the two longstanding companies” and that it was "taking over and carrying on” their business. Wilson, 140 NJ Super at 491. This indicated that D & F agreed to assume all the benefits and burdens of its predecessor in the continuation of the business.

It appears to us that the Wilson Court’s analysis of the essential ingredients of the "continuation” theory is germane to our fact situation.

One additional point raised in Wilson deserves consideration. The Wilson Court, at 491 begins discussion of what it calls an "independent ground for liability” by referring to Chadwick v Air Reduction Co, Inc, 239 F Supp 247, 250 (ND Ohio, 1965), which states the general proposition that the mere purchase of the assets of a manufacturer which had put a negligently designed device into the channels of trade imposes no duty to warn third persons of the negligence even when the buying corporation becomes aware of the negligence.

Wilson then cites Shane v Hobam, Inc, 332 F Supp 526 (D Pa, 1971), as criticizing Chadwick and as evaluating the "modern approach of an independent ground for liability, i.e., when some control over the product is given to the successor, as in servicing, or the successor becomes aware of a defect in the product, there is an assumption of liability for injuries thereafter caused by that product”. 140 NJ Super at 492.

Wilson concludes its analysis by stating at 493:

"In finding that there was a de facto merger between Hunter and C & K, that there was a continuation of business by C & K and D & F, and that an independent ground for liability may be imposed upon C & K and D & F upon a showing of control over, or knowledge of, the defective product, the court is departing from the narrow approach of McKee and adopting the more modern, fair-minded broad approach as stated in Shannon and Shane, supra.

It thus appears to us that Wilson found liability against successor corporations on three separate grounds: (1) de facto merger; (2) continuation of business; and (3) the additional independent ground for liability when some control over the product is given to the successor, as in servicing, or the successor becomes aware of a defect in the product, causing an assumption of liability by the successor for injuries thereafter caused by that product.

It appears to this Court that plaintiff may prevail herein under Wilson if his proofs satisfy the requirements and we find that he has asserted sufficient facts in his pleadings to present proofs in a trial of the case.

Turner considered the Ray v Alad Corp case, 19 Cal 3d 22; 136 Cal Rptr 574; 560 P2d 3 (1977), and we believe it to be helpful in the instant case to understand better its interpretation of the developing law of products liability.

The Ray court began its analysis by candidly recognizing that liability on the part of Alad II, a purchasing corporation, to plaintiff could not be found on any of the four traditional grounds for imposing liability on a purchasing corporation. Thus, there was no express or implied agreement to assume liability for injury from defective products previously manufactured by Alad I, the selling corporation. Similarly, there was no indication of fraudulent intent on the part of Alad II to escape liability for Alad I’s debts. Furthermore, the Ray Court could not honestly find that there had been a consolidation or merger such as would impose liability on Alad II for injury resulting from Alad I’s defective products. Finally, the "continuation of business” theory could not be relied upon as a liability-producing basis because under California law there existed no showing that one or both of the following factual requirements for a finding of continuation had been met: (1) no adequate consideration was given for the predecessor corporation’s assets and made available for meeting the claims of its unsecured creditors; and (2) one or more persons were officers, directors, or stockholders of both corporations.

At this point it might appear that a finding of nonliability on the part of Alad II would have to follow as a matter of course. Not so. Implicit in the Ray case is that Court’s strong sympathy for the injured plaintiff and its firm belief that if at all possible the injured party should recover something from somone. Thus, although Ray conceded that "the general rule governing succession to liabilities does not require Alad II to respond to plaintiff’s claim”, the Court set out to determine "the separate issue of what if any special rule should be applicable to a successor corporation’s tort liability for its predecessor’s defective products”. 19 Cal 3d at 30. (Emphasis in original.)

The Ray Court analogized to the approach taken by the United States Supreme Court in determining whether an employer acquiring and continuing to operate a going business succeeds to the prior operator’s obligations to employees and their bargaining representatives imposed by Federal labor law, noting that the Court refused to be bound by state law where its application would unduly thwart the public policies underlying the applicable labor law. The Ray Court stated that by analogy it was compelled to "decide whether the policies underlying strict tort liability for defective products call for a special exception to the rule that would otherwise insulate the present defendant from plaintiff’s claim”. Id.

After looking to California products liability cases which indicated that the purpose of products liability theory was to spread the costs of injuries resulting from defective products to the manufacturers which put the products on the market, rather than to the injured persons who are powerless to protect themselves, the Court remarked, p 31:

"Justification for imposing strict liability upon a successor to a manufacturer under the circumstances here presented rests upon (1) the virtual destruction of the plaintiff’s remedies against the original manufacturer caused by the successor’s acquisition of the business, (2) the successor’s ability to assume the original manufacturer’s risk-spreading role, and (3) the fairness of requiring the successor to assume a responsibility for defective products that was a burden necessarily attached to the original manufacturer’s good will being enjoyed by the successor in the continued operation of the business.” (Emphasis in original.)

Since the injury which gave rise to the plaintiffs claim in Ray did not occur until more than six months after the filing of the dissolution certificate of Alad I, it appears unlikely that plaintiff could have obtained a judgment against the dissolved Alad I under California corporation law. (See footnote 5, p 31). Also, the Ray Court argued that even assuming a judgment could be obtained against the dissolved Alad I, plaintiff would face "insuperable obstacles” in attempting to satisfy the judgment from Alad I’s former stockholders or directors, and the Court also noted that the record did not disclose whether Alad I had insurance against liability on plaintiffs claim.

Faced with the distinct possibility of an injured plaintiff cut off from any source of recovery, the Ray Court quite understandably looked to Alad II and noted that the latter’s acquisition of Alad I’s name and operating assets had the further effect of transferring to Alad II the resources that had previously been available to Alad I for meeting its responsibilities to persons injured by defects in ladders which Alad I had produced. "These resources included not only the physical plant, the manufacturing equipment, and the inventories of raw material, work in process, and finished goods, but also the know-how available through the records of manufacturing designs, the continued employment of the factory personnel, and the consulting services of Alad I’s general manager. With these facilities and sources of information, Alad II had virtually the same capacity as Alad I to estimate the risks of claims for injuries from defects in previously manufactured ladders for purposes of obtaining insurance coverage or planning self-insurance. * * *. Moreover, the acquisition of the Alad enterprise gave Alad II the opportunity formerly enjoyed by Alad I of passing on to purchasers of new 'Alad’ products the costs of meeting these risks.” 19 Cal 3d at 33.

The Court concluded, p 34:

"Finally, the imposition upon Alad II of liability for injuries from Alad I’s defective products is fair and equitable in view of Alad It’s acquisition of Alad I’s trade name, good will, and customer lists, its continuing to produce the same line of ladders, and its holding itself out to potential customers as the same enterprise. This deliberate albeit legitimate exploitation of Alad I’s established reputation as a going concern manufacturing a specific product line gave Alad II a substantial benefit which its predecessor could not have enjoyed without the burden of potential liability for injuries from previously manufactured units. Imposing this liability upon successor manufacturers in the position of Alad II not only causes the one 'who takes the benefit [to] bear the burden’ * * * but precludes any windfall to the predecessor that might otherwise result from (1) the reflection of an absence of such successor liability in an enhanced price paid by the successor for the business assets and (2) the liquidation of the predecessor resulting in avoidance of its responsibility for subsequent injuries from its defective products. (See Turner v Bituminous Casualty Co, supra, 397 Mich 406 * * *). By taking over and continuing the established business of producing and distributing Alad ladders, Alad II became 'an integral part of the overall producing and marketing enterprise that should bear the cost of injuries resulting from defective products’ * * *.
"We therefore conclude that a party which acquires a manufacturing business and continues the output of its line of products under the circumstances here presented assumes strict tort liability for defects in units of the same product line previously manufactured and distributed by the entity from which the business was acquired.”

It appears to this Court that Ray either considered that Alad II continued Alad I’s business in a de facto fashion and was therefore liable, or that in spite of the fact under California law there was no liability on the "continuation of business” theory the Ray Court presented an independent, alternative basis for placing liability in the instant case on Baker-Perkins.

It appears to this Court that Baker-Perkins could not have more effectively controlled Century, nor benefited more from the good will and continuation of its business, by any other method of corporate make-up than in the manner by which it did acquire Century. Is it too much to consider in the fast developing law of products liability to pierce the veil of this corporate transaction and reveal that Century after 1929 was actually Baker-Perkins? We think not. Under Ray it was accomplished. Under Wilson it was liberally construed under the continuation of business theory. Under Turner a traditional rule of law was disregarded in favor of the recognition of the facts in the case calling for possible liability.

We therefore reverse the trial court’s summary judgment in favor of defendant herein.

This would ordinarily be a sufficient ruling to be made by this Court on appeal of a products liability case. We deem there is more to be said.

Inasmuch as Century was an Ohio Corporation, it was and is subject to Ohio laws.

The Ohio statutes on corporations are applicable, and specifically Ohio Rev Code Ann § 1701.88, Winding up; powers and duties of directors:

"(A) When a corporation is dissolved voluntarily or when the articles of a corporation have been canceled or when the period of existence of the corporation specified in its articles has expired, the corporation shall cease to carry on business and shall do only such acts as are required to wind up its affairs, but for such purpose it shall continue as a corporation.
"(B) Any claim existing or action or proceeding pending by or against the corporation or which would have accrued against it may be prosecuted to judgment, with right of appeal as in other cases, but any proceeding, execution, or process, or the satisfaction or performance of any order, judgment, or decree, may be stayed as provided in section 1701.89 of the Revised Code.”

This statute has been construed in the case of Chadwick v Air Reduction Co, Inc, 239 F Supp 247, 251 (ND Ohio, 1965), as follows:

"It is this Court’s opinion that the intent of O.R.C. § 1701.88(B) is as follows:
" 'Any claim existing [not yet sued upon] or action or proceeding [already commenced] pending by or against the [dissolved] corporation or [any claim not yet sued upon or action or proceeding] which would have accrued against it [had dissolution not occurred] may be prosecuted to judgment, with right of appeal as in other cases * * *.’
"Under this Court’s construction of the Ohio statute, plaintiff’s claim may be brought against Gordon Armstrong Company, Inc. at this time. The inclusion of 'any claim’ imposes a broader liability than merely for liabilities incurred as a part of the winding up process, which construction is urged on behalf of defendant.”

Under the ruling in Chadwick plaintiffs action against Century is still viable and remand is in order to permit plaintiff to add Century as a party defendant. The officers or directors of Century now serving Baker-Perkins may be served. If none are now acting, defendant may be served as sole beneficiary of the assets of Century upon its dissolution.

Reversed and remanded for further proceedings not inconsistent with this opinion.

Costs to plaintiff.


source: Caselaw Access Project

author: M. J. Kelly, P.J.

license: Public Domain

text:
    PEOPLE v MATHIS
    Docket No. 78-3544.
    Submitted May 9, 1979, at Detroit.
    Decided October 1, 1979.
    Frank Mathis was convicted of assault with intent to do great bodily harm less than murder, Recorder’s Court of Detroit, Joseph A. Gillis, J. The defendant appeals, alleging that 1) his sentence violated constitutional standards in that the trial court penalized the defendant for exercising his right to have a jury trial instead of pleading guilty, 2) there was error in the introduction of prior written statements given by the people’s witnesses where their testimony was inconsistent with such statements, and 3) there was prosecutorial misconduct arising out of statements made by the prosecutor during cross-examination of the defendant. Held:

    1. The trial court’s reference to an earlier discussion on the possible sentence should the defendant plead guilty was to an informal discussion and the offhand references cannot be considered binding on the trial court. At sentencing the trial court was fully informed, not only by testimony at trial, but also by the resources of the probation department, and properly considered the information that was before the court in sentencing the defendant.
    2. The prosecution may impeach res gestae witnesses whom it is obligated by law to call. Introduction of the prior inconsistent statements was not error.
    3. Any prejudice caused by the statement of the prosecutor on cross-examination of the defendant was cured by the instructions to the jury.
    Affirmed.
    1. Criminal Law — Sentences — Defendant’s Refusal to Plead Guilty.
    A sentencing judge may not take into consideration a defendant’s refusal to plead guilty in determining the sentence.
    References for Points in Headnotes

       21 Am Jur 2d, Criminal Law § 583 et seq.

       [No Reference]

       81 Am Jur 2d, Witnesses § 596.

      2. Criminal Law — Plea Bargaining — Trial Judges.
    A trial judge should not actively participate in plea bargaining negotiations; the trial judge should be called upon in open court to approve the plea bargain reached by the adversaries, but should not be the instigator of, nor the conduit for, negotiations.
    3. Witnesses — Criminal Law — Res Gestae Witnesses — Impeachment — Statutes.
    The people are entitled to impeach the credibility of a properly endorsed and called res gestae witness by the use of his prior inconsistent statement (MCL 767.40a; MSA 28.980[1]).

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

      Charles Burke, for defendant on appeal.
    Before: M. J. Kelly, P.J., and R. B. Burns and Bashara, JJ.
   M. J. Kelly, P.J.

The defendant was charged with assault with intent to murder in violation of MCL 750.83; MSA 28.278. Following a jury trial in Detroit Recorder’s Court he was convicted of assault with intent to do great bodily harm less than murder, contrary to MCL 750.84; MSA 28.279. On July 14, 1978, he was sentenced to 6-1/2 to 10 years imprisonment and appeals of right raising three issues.

I

Defendant first claims that the sentence violated constitutional standards in that the trial court penalized the defendant for exercising his right to have a jury trial instead of pleading guilty. Defendant analogizes to the United States Supreme Court’s holding in North Carolina v Pearce, 395 US 711; 89 S Ct 2072; 23 L Ed 2d 656 (1969), wherein the Court held that an increased sentence upon reconviction of a defendant, after having had his original conviction set aside, must affirmatively appear to be free of vindictiveness on the part of the sentencing judge:

"In order to assure the absence of such motivation, we have concluded that whenever a judge imposes a more severe sentence upon a defendant after a new trial, the reasons for his doing so must affirmatively appear. Those reasons must be based upon objective information concerning identifiable conduct on the part of the defendant occurring after the time of the original sentence proceeding. And the factual data upon which the increased sentence is based must be made part of the record, so that the constitutional legitimacy of the increased sentence may be fully reviewed on appeal.” 395 US at 726.

This case is not on all fours with Pearce because it does not involve a reconviction, but it is well-settled that a sentencing judge may not take into consideration a defendant’s refusal to plead guilty in determining the sentence. People v Travis, 85 Mich App 297, 303; 271 NW2d 208 (1978), People v Earegood, 383 Mich 82, 84-85; 173 NW2d 205 (1970). The basis for this claim of error is a recorded conference that took place in the trial court’s chambers immediately preceding commencement of trial. Defendant and his mother were present in chambers when the following discourse took place:

"My name, for the record, is David Cato, representing the defendant Frank Mathis in this matter.
"In a discussion I had with my client today and before today, which was Sunday the 25th, my client told me that he would like to plead guilty in this matter.
"The only difference is that your Honor before a week ago had mentioned a possibility of a year maximum in the case—excuse me—a year minimum in the case, and I think that’s changed this morning.
"So I think my client is aware of that.
"As far as the plea this morning, I think he would like to speak up on that issue.
"DEFENDANT: Exactly I want to know how much time I’m getting.
"THE COURT: I don’t know until I get a pre-sentence report. You can take a trial and take your chances on life.
"I do understand Mr. Barron Gay is paralyzed for the rest of his life. They don’t expect him to live more than three or four years. I’m sure you will be around long after that, and you will be back with your parents.
"Now, you can go out and hear the trial, and I will hear all the gory details, and the sentence will be accordingly; or you can take a plea in here.
"I told your lawyer a week ago the sentence would be one to twenty years. Now we have twenty witnesses sitting out there and a jury panel sitting there. It’s no longer one to twenty, I can assure you of that.
"No promise is made as to your sentence. I’m not going to make any promises today.
"We can start the trial right now. It’s up to you. The trial will start in 60 seconds if you don’t make up your mind.
"If you are innocent, you should go to trial. If you didn’t intend to kill him, you should go to trial.”

Neither defendant nor plaintiff enlighten us with a context surrounding the trial court’s reference to the discussion of "a week ago”. The record does not show any pretrial hearing occurring the week prior. Apparently the pretrial was conducted on May 11th because there is a form in the record entitled "Final Conference Memorandum” which includes the following information:

"PRESENT: THE HON. Joseph A. Gillis D 5-11-78
"The court and counsel have reviewed the court file and all pleadings filed. The transcript of any preliminary examination, appearances of counsel, prior rulings of the Court, and all other necessary filings are present and in good order.
"The Court has informed the defendant of the Prosecutor’s position regarding plea negotiations. The defendant understands that the Court will not accept any Plea to a reduced charge and will not discuss sentence or other concessions after the close of the final conference.”

This form is not signed, but bears signature lines for counsel for defense, assistant prosecuting attorney and defendant.

A motion was praeciped for June 2, 1978, before Judge Gillis on behalf of a co-defendant designated as a "MOTION TO HAVE JUROR QUESTIONNAIRE PRODUCED IN COURT ROOM ON DAY OF TRIAL”. The co-defendant pleaded on June 8, 1978, before Judge Gillis. There is nothing in the record that has anything to do with any proceeding in this case that took place a week prior to the trial date. We have no record of any kind which describes the context in which a communication with the defense lawyer was made regarding a one to twenty sentence.

This case presents a good example of difficulties which can arise when a trial judge actively participates in the plea bargaining process. We have said in dicta that trial courts should not actively participate in plea bargaining negotiations. People v Bennett, 84 Mich App 408; 269 NW2d 618 (1978), lv den 405 Mich 835 (1979). We are well aware that in an overburdened high-crime population center trial courts are disposed to accept plea bargains involving favorable sentence considerations to defendants in advance of trial. Our concern is with the extent of the trial judge’s participation in such negotiations. This Court favors a nonparticipatory, passive approach to the plea bargaining process on the part of the trial bench. The trial judge should be called upon in open court to approve the plea bargain reached by the adversaries, but should not be the instigator of, nor the conduit for, negotiations. A defendant’s right to trial is sacrosanct and his judge must be, and appear to be, impartial.

Obviously, in this case, the trial judge’s reference was to an informal discussion. It may have been an untoward intrusion on the bargaining process, as it is not even apparent that the prosecutor was present. There is no record of any previous proceedings documenting this reference, and we cannot conceive how such an offhand reference could be considered binding on the trial court. If the defendant missed a plea bargain opportunity, it cannot be enforced on appeal as it never ripened into a plea under GCR 1963, 785.7. Certainly the trial court could have rejected any such plea bargain, even had it ripened into a formal recorded proceeding. See People v Hagewood, 88 Mich App 35; 276 NW2d 585 (1979). At sentencing the court was fully informed, not only by the testimony at trial, but also by the resources of the probation department, and properly considered the information that was before it. United States v Grayson, 438 US 41; 98 S Ct 2610; 57 L Ed 2d 582 (1978).

II

Defendant next alleges error in the introduction of prior written statements given by the peoples’ witnesses where their testimony was inconsistent with such statements.

We believe the defendant’s specification of error is answered by MCL 767.40a; MSA 28.980(1) which provides:

"Witnesses whom the people are obliged by law to call as res gestae witnesses may be impeached the same as though such witnesses had been called by the respondent.”

The trial court properly instructed the jury in accordance with People v Williams #2, 45 Mich App 630; 207 NW2d 180 (1973).

Ill

Defendant’s final claim of error is prosecutorial misconduct. The defendant cites an instance where, after the defendant hesitated in responding to the prosecutor’s question on cross-examination stating, instead: "Would you give me a chance”, the prosecutor responded: "I’ll give you more of a chance than you gave Barron Gay”. A review of the transcript indicates that the defendant was a recalcitrant witness, often argumentative and antagonistic. If the prosecutor was intemperate in the heat of the trial, the jury was very properly instructed that:

"Any statements or arguments of the attorneys are not evidence but are only intended to assist you in understanding the evidence and the theory of each party.
"The questions which attorneys ask witnesses are not themselves evidence. It is the answers of witnesses which provide evidence.
"You should disregard anything said by an attorney which is not supported by the evidence or by your own general knowledge and experience.”

We find no reversible error in this regard.

Affirmed.


author: V. J. Brennan, P.J.

text:
    PEOPLE v ELMORE
    Docket No. 78-3647.
    Submitted April 9, 1979, at Lansing.
    Decided October 1, 1979.
    Robert Elmore was convicted in Lenawee Circuit Court of delivery of heroin, Rex B. Martin, J. The defendant was also convicted, on his plea of guilty, of being a third felony offender. The defendant appeals, alleging that 1) the trial judge erred in failing to grant the defendant’s motion to disqualify the trial judge, 2) his waiver of a jury trial went unheeded, thus warranting reversal of the conviction on the charge of delivery of a controlled substance, 3) the trial court improperly denied the defendant’s request for a cautionary instruction concerning an outburst by the defendant before the jury, 4) one of the instructions to the jury was coercive and another failed to define specific intent and reasonable doubt, and 5) a new jury should have been empaneled to hear the supplemental charge of being a habitual offender. Held:

    1. There is nothing in the record to show that the trial judge felt any bias or prejudice towards the defendant at the time of trial. The fact that the trial court had heard prior matters involving criminal charges against the defendant is insufficient to require his disqualification without a showing of bias or prejudice. There was no error resulting from the failure to disqualify.
    2. A careful reading of the record shows that, in the outbursts by the defendant, he did not waive a trial by jury but wanted a jury trial with a different judge presiding.
    3. The trial court’s refusal to give the cautionary instruction requested by the defendant may well have been predicated on the fear that such an instruction would emphasize the defendant’s outburst and prejudice him. It was within the trial court’s discretion to refuse to give the instruction. The basic message of the requested instruction was contained in the trial court’s instructions to the jury. There was no abuse of discretion.

      References for Points in Headnotes

       46 Am Jur 2d, Judges § 179.

       75 Am Jur 2d, Trial § 589.

       5 Am Jur 2d, Appeal and Error § 623.

       [No Reference]

      4. The defendant did not raise before the trial court the other alleged errors in the instructions to the jury. In the absence of a miscarriage of justice, the Court of Appeals will not review such alleged errors for the first time on appeal. There was no error.
    5. The defendant was not entitled to have a new jury empaneled to hear evidence on the habitual offender charge.
    Affirmed.
    1. Criminal Law — Judges — Disqualification of Judges — Bias — Prejudice.
    The record must show actual bias or prejudice before a conviction will be reversed on the ground that the trial judge should have disqualified himself; a judge is not automatically disqualified because he has made prior rulings adverse to a defendant.
    2. Appeal and Error — Instructions to Jury — Criminal Law — Discretion — Requested Instructions.
    The failure to give a requested cautionary instruction to the jury is reversible error in some circumstances; however, the trial court has some discretion in giving instructions to the jury and where it is not clear that an instruction requested by a defendant would have been favorable to the defendant, the refusal to give it does not require reversal.
    3. Appeal and Error — Preserving Issue — Jury Instructions — Miscarriage of Justice.
    Failure to object at trial to the jury instructions precludes appellate review of alleged error in such instructions, except where a miscarriage of justice would otherwise result.
    4. Criminal Law — Multiple Offenders — New Jury.
    The empanelment of a new jury is not required where a defendant is tried as a multiple felony offender after his conviction by a jury of the original crime charged.

      Frank J. Kelley, Attorney General, Robert A. Derengoski, Solicitor General, and Harvey A. Koselka, Prosecuting Attorney (Prosecuting Attorneys Appellate Service, Mark I. Leach, Assistant Attorney General, of counsel), for the people.
    Robert Elmore, in propria persona.

      Before: V. J. Brennan, P.J., and Bronson and Cynar, JJ.
   V. J. Brennan, P.J.

Defendant appeals as of right from his March 23, 1978, jury conviction of delivery of a controlled substance, heroin, MCL 335.341(1)(a); MSA 18.1070(41)(1)(a). Defendant also pled guilty to a supplemental information charging him as a third felony offender, MCL 769.11; MSA 28.1083, and was sentenced to prison for 20 to 40 years with credit for 311 days served.

This case is one of a series of heroin delivery cases that resulted from the activities of police undercover agents in Lenawee County in the spring of 1977. In this particular case an addict informant working with the Michigan State Police testified that on March 24, 1977, he went with Michigan State Police undercover agent David W. Hubbard to the E & E Pool Hall in Adrian, Michigan, defendant’s place of business. After the informant had engaged in some preliminary conversation with Elmore, Hubbard gave the informant $100 with which to purchase heroin. The informant testified that he gave defendant the money in return for 10 aluminum foil packets which were later determined to contain heroin.

Defendant testified and denied selling heroin to anyone. Defendant was convicted and this appeal followed.

Defendant first argues that the lower court erred when it failed to grant his motion to disqualify. We disagree.

On the date of trial, defendant asked Judge Martin to disqualify himself. Defendant argued that Judge Martin was biased because the judge had heard several cases arising from the metro squad operation in Lenawee County. Some of these cases had involved defendant and some had occurred at defendant’s place of business, the E&E Pool Hall. Defendant also referred to Jackson County Circuit Judge Charles Falahee’s ruling disqualifying both Judge Martin and Lenawee County Circuit Judge Kenneth B. Glaser from hearing a case involving Cleveland Edmonds.

The trial court responded that:

"Well, I, of course, I didn’t hear what went on when Mr. Wilcox had his motion before Judge Falahee under the rules that then prevailed. Seems to me in this particular case that the Court is duty bound as part of his responsibility to deny the motion. I don’t think there’s any personal prejudice here, and I know of none, and if I have to disqualify myself in this case because I have heard other matters both relative to the drug raid and other matters relative to this Defendant, then there’s going to be dozens and dozens and dozens of cases through the years that I am going to have to be disqualified on. There have been other people charged in this Court with very serious felonies, and some of 'em we have tried four and five times, and some of those trials, they have been found not guilty with this Judge sitting here. Others have been found guilty, and this Judge has had to sentence 'em. But I felt it my responsibility to continue to do a job I have been sworn to do.”

The record must show actual bias or prejudice before a conviction will be reversed on the ground that the trial judge should have disqualified himself. People v Rorke, 80 Mich App 476, 480; 264 NW2d 30 (1978), People v Lobsinger, 64 Mich App 284; 235 NW2d 761 (1975). A judge is not automatically disqualified because he has made prior rulings adverse to a defendant. People v Rorke, supra.

The present case differs from People v Lobsinger, supra, where Judge Ravitz of Detroit Recorder’s Court acknowledged that he and the defendant were opposed politically and that he, Judge Ravitz, had some degree of animus towards the defendant.

Here defendant argues that Judge Martin’s presence at earlier trials and remarks at the sentencings required his disqualification in this case to avoid the appearance of impropriety. There is no showing that the court’s prior contact with defendant interferred with his impartiality towards defendant in this trial. Wayne County Prosecutor v Doerfler, 14 Mich App 428; 165 NW2d 648 (1968). Our inquiry focuses on the trial court’s state of mind at the time of the trial. People v Lobsinger, supra. The record shows that the trial court felt no bias or prejudice towards the defendant. In such a case there is nothing to prevent the trial court from hearing several cases involving the same defendant.

Next defendant claims that his waiver of jury trial went unheeded, thus warranting reversal. This claim is without merit. Defendant was upset by the trial judge’s refusal to disqualify himself. His displeasure led to an outburst which ultimately resulted in his removal from the courtroom. During the course of his outburst, defendant first said "I don’t want no jury trial”. Later he said "I want a trial by jury, but that trial cannot be by a jury if you [Judge Martin] is the juries [sic], if you want to reside over that [sic]”. A careful reading of defendant’s outburst shows that he wanted a trial by jury, but with a different judge presiding. This conclusion is supported by the fact that no written waiver of a jury trial was filed as required by MCL 763.3; MSA 28.856.

Next defendant argues that the trial court improperly denied his request for a cautionary instruction concerning his outburst before the jury.

In certain circumstances the failure to give a requested cautionary instruction is reversible error. People v Guilinger, 30 Mich App 711; 186 NW2d 861 (1971). However, the trial court has some discretion in giving instructions to the jury, People v Emmert, 76 Mich App 26; 255 NW2d 757 (1977), and where it is not clear that a requested instruction would have been favorable to the defendant, the refusal to give it does not require reversal. See People v Dermartzex, 390 Mich 410; 213 NW2d 97 (1973).

Here the lower court’s refusal may well have been predicated on the fear that the cautionary instruction would emphasize defendant’s outburst and prejudice him. In addition the basic message of any cautionary instruction concerning defendant’s outburst was contained in the instructions the court gave the jury. In its instructions, the trial court told the jury that "[y]ou must make your determination of the facts from what you heard from the witness stand and from the one exhibit offered and received and from no other source * * * anything said in the Courtroom [that] is not said under oath is not evidence”. We find no error.

Next defendant challenges two separate instructions to the jury, the first as coercive and the second as failing to define specific intent and reasonable doubt. The defendant did not raise these alleged instructional errors below. We do not review this type of objection raised for the first time on appeal absent miscarriage of justice. GCR 1963, 516.2; People v Haney, 86 Mich App 311, 318; 272 NW2d 640 (1978), People v Sherman Hall, 77 Mich App 456, 462; 258 NW2d 517 (1973). Such is not the case here. The instruction which defendant argues to be coercive does not fall within the ambit of People v Ray, 43 Mich App 45; 204 NW2d 38 (1972), where the trial court charged the jury that they must reach unanimous agreement of acquittal on the greater charge before considering the lesser included offenses. As to defendant’s latter claim, a review of the court’s instructions reveals that the court did place the issue of defendant’s specific intent before the jury and did instruct the jury on the definition of reasonable doubt. The court’s intent instructions informed the jury that they had to find that the defendant knowingly possessed the substance which he knew was heroin and knowingly delivered the heroin to another person. This was sufficient. In the reasonable doubt instruction the trial court repeatedly referred to the burden on the people to produce evidence to convince the jury beyond a reasonable doubt that the defendant was guilty of the charged offense. We find no error.

Contrary to defendant’s next contention there is no right to the empanelment of a new jury to hear habitual offender charges. People v Eroh, 47 Mich App 669, 676; 209 NW2d 832 (1973). We find no error in sentencing.

Defendant’s conviction is affirmed.

       Defendant’s remarks included the following:
      "THE RESPONDENT: Want to tie me up, gag me, tie me up, gag me, tie me up and gag me; no—no—-no, I can’t do it decently. He won’t dismiss himself. He say I’m number two dope seller. He’s the king. He’s the kangaroo, so he ain’t going to try me. Just tie me in the corner just like I’m a god damned nigger. That’s the way you treating me, so tie me up in the corner. You didn’t then and (Respondent talking in an unintelligible manner at this time) for something, God damned. He believe a junkie, and same junkie going to come back down here.
      "(At this time several deputies escorting the Defendant out of the Courtroom)
      "THE RESPONDENT: Take me out; take me out; take me out.
      "(The following remarks are from the Defendant who is at this time out of the Courtroom in the hallway)
      "THE RESPONDENT: Now you all go in and try me and give me a hundred more years, mother fucker. You ain’t going to try me no more, give me hundred and ten years on what the junkie said.”


author: B. D. Burdick, J.

text:
    BUSH v BRUNSWICK CORPORATION
    Docket No. 78-3870.
    Submitted June 6, 1979, at Grand Rapids.
    Decided October 1, 1979.
    Orlo Bush, a maintenance supervisor at Brunswick Corporation, slipped and fell backwards on a cement stairway striking his lower back on a step. The injury caused him pain and numbness in his left foot. This slip and fall occurred on September 22, 1972. The pain in his back and numbness in his leg continued and interferred with his employment at Brunswick. On January 12, 1973, Bush was laid off at Brunswick, although Other maintenance supervisors with less seniority were not. At his subsequent hearing he testified that he could have continued working in a somewhat limited capacity because he could not do all the things he had done before he was injured. After he was laid off, he worked for short periods of time at East Shore Chemical Company and Fedders Corporation, although his back and leg condition remained the same. In April, 1975, Bush was examined by an orthopedic surgeon who found vertebra, disc and nerve root problems which were possibly caused or aggravated by his fall at Brunswick. Bush filed a claim for compensation benefits. Following a hearing by the Worker’s Compensation Appeal Board, the board issued its opinion and order finding that plaintiff had been limited in his field of skill since the Brunswick accident and was therefore entitled to compensation benefits. Defendants Brunswick Corporation and its insurer, Travelers Insurance Company, appeal. The contentions on appeal are: (1) that there was insufficient evidence to support the board's finding of fact that one employed as a skilled maintenance supervisor is required to be able to perform the work of those whom he supervises, (2) that the board applied an impairment of physical ability test in determining plaintiffs disability which is unsupported by the record, (3) that the board erred in finding that plaintiffs post-injury job at Brunswick was favored work, and (4) that the board erred in reinstating plaintiffs benefits in full on April 21,1975, the date on which medical testimony demonstrated that plaintiff was no longer suffering any residual effects of a stroke which occurred on July 12, 1974. Held:

      References for Points in Headnotes

       82 Am Jur 2d, Workmen’s Compensation § 631.

       82 Am Jur 2d, Workmen’s Compensation § 630.

       2 Am Jur 2d, Administrative Law §§ 518, 519.

      1. Remand to the board is necessary so that it may make a finding of fact as to whether plaintiff suffered a loss of wage earning capacity in his field of skill, taking into consideration the fact that there is no evidence to support a finding that a maintenance supervisor is required to perform the physical labor of the skilled workers under his supervision.
    2. The board specifically relied in its opinion on the standards for physical disability which defendant cites in his brief as correct. This does not constitute error,
    3. The board’s decision that plaintiffs post-injury job at Brunswick was favored work was supported by the evidence and is conclusive; however, on remand the board should indicate the testimony adopted, the legal standard applied and the reasoning used in reaching its decision,
    4. The board erred in reinstating benefits on April 12, 1975. Plaintiff was entitled to benefits beginning on July 12, 1974, He was unemployed, had a disability which prevented work in his field of skill, and was therefore eligible for benefits in spite of the fact that he was also suffering from a noncompensable ailment at the time.
    Remanded to the Worker’s Compensation Appeal Board,
    1. Workmen’s Compensation — Findings op Fact —- Appeal and Error — Evidence — Constitutional Law.
    Findings of fact by the Worker’s Compensation Appeal Board, in the absence of fraud, are conclusive if supported by any evidence (Const 1963, art 6, § 28).
    2. Workmen’s Compensation — Question of Law — Appeal and Error — Questions of Fact — Limited Review,
    Appellate review in worker’s disability compensation cases is limited to questions of law,
    3. Workmen’s Compensation — Support for Decisions — Appeal, and Error.
    The Worker’s Compensation Appeal Board in reaching a decision must indicate the testimony it has adopted, the legal standard it has applied to that testimony, and the reasoning it has used in reaching its decision.

      McCroskey, Libner, VanLeuyen, Feldman, Kort

      ering, Cochrane & Brock (by James L. Waters), for plaintiff.

      Lindman, Hathaway, Latimer, Clink & Robb (by David B. Merwin and John D. Vander Ploeg), for Brunswick Corporation and Travelers Insurance Company.

      Cholette, Perkins & Buchanan (by Edward D. Wells), for defendants East Shore Chemical Company and General Accident, Fire & Life Insurance Company.
    Before: R. B. Burns, P.J., and D. E. Holbrook, Jr. and B. D. Burdick, JJ.

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

   B. D. Burdick, J.

Defendants Brunswick Corporation and Travelers Insurance Company appeal by leave granted on August 25, 1978, Worker’s Compensation Appeal Board opinion and order awarding plaintiff benefits.

At a hearing, plaintiff testified that he was hired by Brunswick Corporation as a maintenance supervisor in 1959. Plaintiff was in good physical condition when he began work at Brunswick. However, on September 22, 1972, while descending a cement stairway, he slipped, fell backwards and struck his lower back on a step, causing him pain and numbness in his left foot. Plaintiff had not experienced these symptoms before he fell and had not injured himself since. Plaintiff further testified that he returned to work a few days after the fall and completed his job activities as best he could, that he could not spend too much time on his feet and could not climb the stairs even though there were several floors in the factory and he needed to climb the stairs 3 to 4 times per day, that the pain in his back and the numbness in his leg had never ceased entirely since the accident, and that there had been no improvement in his condition between the time of the injury and the time of the hearing. He testified that he could have continued working at Brunswick had he not been laid off, but only in a somewhat limited capacity because he could not do all the things he had done before he was injured. At Brunswick, pursuant to a union contract, supervisors did not do any heavy work. Plaintiff was laid off by Brunswick on January 12, 1973; maintenance supervisors with less seniority than plaintiff were not laid off at that time.

Plaintiff subsequently took an unskilled job at East Shore Chemical Company, but left after 3 to 4 months because he could not do the climbing and lifting that he was expected to do and because he intended to take another job.

Plaintiff next took a job with Fedders Corporation as a maintenance supervisor, the same type of position he had held at Brunswick, with the exception that no climbing was required at Fedders because plaintiff’s work was all on one floor. Plaintiff made higher wages at Fedders than he had at Brunswick. Plaintiff’s back and leg condition remained the same while he was at Fedders. Plaintiff left Fedders after 13 months, in July 1974, after a slight stroke from which plaintiff fully recovered.

In April, 1975, plaintiff’s physical problems were diagnosed by an orthopedic surgeon as spondylolisthesis, Le., a forward displacement or slipping of a vertebra over its fellow below, multiple disc degeneration, and nerve root pressure, all possibly caused or aggravated by plaintiff’s fall at Brunswick. The doctor opined that plaintiff was not employable at general physical labor, but that he might be able to work as a supervisor doing some walking and light sedentary work. The doctor indicated that plaintiff would simply have to try and see what he was and was not able to do without discomfort and restrict his activities accordingly.

Defendant Brunswick appeals the decision of the Worker’s Compensation Appeal Board that plaintiff has been limited in his field of skill since the Brunswick accident. The board awarded plaintiff compensation at $95 per week from the time he was laid off at Brunswick until March 23, 1973, and from April 21, 1975, until further order of the board. The board also awarded the plaintiff compensation from March 24, 1973, to June 25, 1973, pursuant to MCL 418.361; MSA 17.237(361), at a rate not to exceed $95 per week.

Defendant Brunswick first argues that there was insufficient evidence to support the Worker’s Compensation Appeal Board’s finding of fact that one employed as a skilled maintenance supervisor is required to be able to perform the work of those whom he supervises. The board’s findings of fact are conclusive, in the absence of fraud, if supported by any evidence. Const 1963, art 6, § 28; Carter v Kelsey-Hayes Co, 386 Mich 610, 615; 194 NW2d 326 (1972). This Court finds no evidence in this record that a skilled maintenance supervisor is often required to perform the more physical aspects of the work of the employees under his supervision. Plaintiff was a maintenance supervisor at Brunswick and at Fedders; at neither place was he required to perform such physical labor. He was not a maintenance supervisor at East Shore, so evidence pertaining to his duties there is not pertinent to this issue. Therefore, the board’s finding of fact is erroneous.

This Court cannot deal with the evidence presented and decide whether the plaintiffs specific loss claim is justified. Our review here is limited to questions of law and we may not make our own factual findings. Hence, it is necessary to remand this case to the board so that it may make a finding of fact as to whether plaintiff suffered a loss of wage-earning capacity in his field of skill, taking into consideration the fact that there is no evidence to support a finding that a maintenance supervisor is required to be able to perform the physical labor of the skilled workers under his supervision.

The defendant’s argument that the board applied an "impairment of physical ability” test in determining plaintiff’s disability is unsupported by the record. The board specifically relied in its opinion on the standards which defendant cites in his brief as correct.

Defendant next argues that the board erred in finding that plaintiffs post-injury job at Brunswick was favored work. We find that the board’s decision in this regard was supported by evidence and therefore was conclusive pursuant to the standard of review set forth in Carter v Kelsey-Hayes Co, supra. The plaintiff testified that his job at Brunswick required him to climb stairs 3 to 4 times a day. Plaintiff testified that he could no longer climb or spend much time on his feet after the accident and that he could only continue the Brunswick job in a somewhat limited capacity because he no longer could do all the things he had done prior to the injury. The fact that plaintiff, a long-time employee, was laid off 4 months after the accident, when maintenance supervisors with less seniority than plaintiff were not laid off, would also support a reasonable inference that plaintiffs capacity to do his job had diminished since the accident and that he had been allowed to continue his job in a modified way as a form of favored employment by defendant Brunswick. This finding was not contradictory with the fact that plaintiffs subsequent duties at Fedders were very similar, because the testimony indicated that the work at Fedders was all on one floor and therefore did not involve the climbing that plaintiff was unable to do.

The board’s findings with regard to favored work, although supported by evidence, did not indicate the testimony adopted, the legal standard applied, or the reasoning used in reaching its decision, as required in Brown v Premier Manufacturing Co, 77 Mich App 573, 578; 259 NW2d 143 (1977). On remand, the decision of the board should address these points.

Defendant finally argues that the board erred in reinstating plaintiffs benefits in full on April 21, 1975, the date at which medical testimony demonstrated that plaintiff was no longer suffering any residual effects of a stroke occurring on July 12, 1974. We conclude that the board erred in reinstating benefits on that date. If, after his accident at Brunswick, plaintiff had a disability in his field of skill and a resulting loss of wage-earning capacity, then only the amount of, ánd not the eligibility for, benefits was affected by plaintiffs wages from Fedders. See MCL 418.371(1); MSA 17.237(371)(1). Consequently, plaintiff was again entitled to the benefits once the wages from Fedders were no longer being earned, beginning July 12, 1974, in spite of the fact that plaintiff was also suffering from a noncompensable ailment at that time. Medacco v Campbell, Wyant & Cannon Foundry Co, 48 Mich App 217; 210 NW2d 360 (1973).

In accordance with the foregoing analysis, this case is remanded to the Worker’s Compensation Appeal Board for proceedings consistent with this opinion.


author: Cynar, P.J,

text:
    TUER v NIEDOLIWKA
    Docket .No. 78-4636.
    Submitted June 21, 1979, at Lansing.
    Decided October 1, 1979.
    Michele V. Tuer commenced an action under the Michigan paternity act seeking an order of filiation against William J. Niedoliwka. During the pendency of that action, the parties negotiated an agreement whereby defendant promised to pay plaintiff in monthly installments a total of $2,000 in exchange for her dismissal of her suit without prejudice. Plaintiff further agreed, upon receipt of payment in full from defendant, to execute a full release of all of her claims against defendant and enter a stipulation to dismiss with prejudice. The agreement neither expressly stated that plaintiff disavowed any claim that defendant was the father nor was any mention made that plaintiff released defendant of any claims for support and education of plaintiffs son. This agreement was never submitted to the trial judge for his approval. Plaintiff did dismiss the action without prejudice; however, she did not execute a release or file a stipulation to dismiss that action with prejudice upon payment in full of the agreed amount by defendant. In 1977, plaintiff reinstated paternity proceedings against defendant. Defendant moved for accelerated judgment, arguing that the prior agreement operated as a full release and barred reinstating the paternity action. The Genesee Circuit Court, Harry B. McAra, J., denied defendant’s motion for accelerated judgment, holding that the agreement was ineffective as a release in that it had not been approved by the trial judge in the prior action, as required by the paternity act. Following trial in this second action, an order of filiation directing defendant to pay for the child’s support and education was entered. Defendant appeals, arguing that the agreement was not one concerning the support and education of the child, but was rather a settlement as to liability or paternity, which would not be subject to the statutory requirement of judicial approval. Held:

      References for Points in Headnotes

       17 Am Jur 2d, Contracts § 253.

       59 Am Jur 2d, Parent and Child § 49.

       10 Am Jur 2d, Bastards § 75.

       10 Am Jur 2d, Bastards § 98.

      1. The agreement, having been drawn up by defendant’s attorneys, must be strictly construed against defendant.
    2. The language of the agreement fails to support defendant’s construction of that agreement, since the agreement did not expressly state that plaintiff disavowed any claim that defendant was the father, did not mention that plaintiff released defendant from any claims for support of the child, and expressly stated that the parties were desirous of settling their respective claims against each other. Moreover, plaintiff had no authority by virtue of the parental relationship to waive, release or compromise claims of the child or to do any act which was detrimental to the child. Authorization by statute is necessary to give the mother power to bind her child.
    3. The primary purpose of the paternity act is to provide support for children born out of wedlock. Paternity actions, therefore, are initiated for the benefit of such children.
    4. The agreement was not binding upon plaintiff and the child with respect to the claim for the support and education of the child, since the agreement was not approved by the trial court, as required by the paternity act.
    5. The agreement, at best, only operated to extinguish the plaintiff’s right to recoup the expenses of her confinement and those expenses incurred in connection with her pregnancy.
    Affirmed.
    1. Contracts — Attorney and Client — Construction of Agreements — Strict Construction.
    An agreement drawn up by the attorneys for a party must be strictly construed against that party.
    2. Parent and Child — Authority — Claims of Child.
    A parent in Michigan has no authority by virtue of the parental relationship to waive, release or compromise claims of his or her child; authorization by statute is necessary to give the parent power to bind the child.
    3. Parent and Child — Paternity Act — Purpose — Statutes.
    The primary purpose of the paternity act is to provide support for children born out of wedlock; therefore, paternity proceedings are initiated for the benefit of such children (MCL 722.711 et seq.; MSA 25.491 et seq.).

      4. Parent and Child — Paternity Act — Support and Education Agreements — Judicial Approval — Effect.
    An agreement or compromise of a claim of a mother or child under the paternity act which is made with the father concerning the support and education of the child is binding upon the mother and child only if such agreement is approved by the court having jurisdiction to compel support and education of the child (MCL 772.713; MSA 25.493).

      William J. Priehs, for plaintiff,

      James J. Zimmer, P.C., 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.

   Cynar, P.J,

Defendant appeals as of right from the denial of his motion for accelerated judgment on October 13, 1977, and from the subsequent entry of a judgment and order of filiation against him on October 16, 1978, which order was made retroactive to April 19, 1978.

On July 21, 1971, plaintiff, then 17 years of age and seven months pregnant, filed suit against defendant under the Michigan paternity act, MCL 722.711 et seq.; MSA 25.491 et seq., seeking an order of filiation. Plaintiff subsequently gave birth to a son on September 23, 1971. During the pendency of that action, the parties negotiated an agreement whereby defendant promised to pay plaintiff a total amount of $2,000, payable in monthly installments, in exchange for plaintiffs dismissal of her suit without prejudice. The agreement further provided that upon receipt of payment in full from defendant, plaintiff would execute a full release of all claims which were the subject of the above action, and enter a stipulation to dismiss with prejudice. The preamble to the agreement stated that defendant disavowed any and all liability to the plaintiff. The said agreement was never submitted to the trial judge for his approval.

Plaintiff did dismiss the action without prejudice, and defendant made full payment as agreed. However, plaintiff never executed a release nor filed any stipulation to dismiss with prejudice.

On April 21, 1977, plaintiff reinstituted paternity proceedings against defendant. Alleging that the above agreement operated to fully release him from any liability and thus barred reinstituting the action, defendant moved for accelerated judgment under GCR 1963, 116.1(5). By written opinion dated October 13, 1977, the trial judge denied defendant’s motion. The lower court ruled that the agreement in question was ineffective as a release or compromise of plaintiff’s claim and that it had not been approved by the judge presiding in the previous action, required by MCL 722.713; MSA 25.493, as a condition precedent to the agreement being binding upon the mother and child.

Following trial in the second action, an order of filiation, which also directed defendant to pay for the child’s support and education, was entered October 16, 1978.

The question for decision is whether MCL 722.713; MSA 25.493, § 3 of the paternity act, operated to bar plaintiff and her son from reinstituting a paternity action or from seeking other remedies for the support and education of the child as a result of defendant’s full performance under the above-described agreement, when such agreement was never submitted to nor approved by the court having jurisdiction over the original paternity proceeding. No prior Michigan case has addressed this issue.

Defendant argues that the agreement entered into by the parties was not for the support and education of the child, but rather a settlement as to liability or paternity, an agreement in compromise of a lawsuit. Thus, defendant concludes that MCL 722.713; MSA 25.493 is inapplicable and no judicial approval was required to make the settlement binding upon plaintiff, as well as her son, and that ordinary contract principles would therefore apply, and the reinstitution of the suit would be barred by the compromise.

We cannot accept defendant’s expansive interpretation of the effect of the agreement. As the agreement was drafted by defendant’s attorneys, it must be strictly construed against him. Greenspan v Rehberg, 56 Mich App 310, 326; 224 NW2d 67 (1974). Nowhere in the agreement is it expressly stated that plaintiff disavowed any claim that defendant was the father, nor is mention made anywhere that plaintiff released defendant with regard to any claims for support and education by plaintiff’s son. The agreement itself states that the parties thereto were desirous of settling their respective claims against each other.

Moreover, in Michigan a parent has no authority merely by virtue of the parental relation to waive, release, or compromise claims bf his or her child. Generally speaking, the natural guatdian has no authority to do an act which is detrimental to the child. Authorization by statute is necessary to give the mother power to bind the child. Reliance Ins Co v Haney, 54 Mich App 237, 242; 220 NW2d 728 (1974).

Other jurisdictions have adopted an identical point of view, and have held that an illegitimate child’s right to support from a putative father cannot be contracted away by its. mother, and that any release or compromise executed by the mother is invalid to the extent that it purports to affect the rights of the child. Gammon v Cobb, 335 So 2d 261 (Fla, 1976), Shinall v Pergeorelis, 325 So 2d 431 (Fla App, 1975), Reynolds v Richardson, 483 SW2d 747 (Tenn App, 1971), cert den, 410 US 944; 93 S Ct 1381; 35 L Ed 2d 611 (1973). Ih Reynolds, the court further held that such a release was no bar to the mother instituting, or even reiristituting, a paternity proceeding for the benefit of the child.

We approve of the reasoning in those cases, and adopt their holdings as the rule in Michigan.

Since it is well settled that the Legislature’s primary purpose in enacting the paternity act was to provide support for children, born out of wedlock, Whybra v Gustafson, 365 Mich 396, 400; 112 NW2d 503 (1961), it is clear that paternity proceedings are initiated for the benefit bf such children. Thus, under , the facts in this case, the attempted settlerhent, to be binding on the mother and child, required the approval of a court having jurisdiction to compel support and education of the child. The use of the word shall in subsection (a) of § 3 indicates that the provision is mandatory. Law Dep’t Employees Union v Flint, 64 Mich App 359, 368; 235 NW2d 783 (1975).

Thus, at best, the settlement entered into here only operated to extinguish plaintiff’s right to recoup the expenses of her confinement and those expenses incurred in connection with her pregnancy, for which defendant would otherwise be liable under MCL 722.712(a); MSA 25.492(a), upon determination of paternity.

Further, in cqnjunction with this provision of the act, we find an additional failure to comply with its requirements, in that there was no determination by the trial judge in the first proceeding that adequate provision for the support and education of the child was secured by payment or otherwise.

For the above reasons, we conclude: first, that the trial judge was correct in denying defendant’s motion for accelerated judgment; and second, that the release executed by the parties did not operate to bar the reinstitution of the paternity proceeding by plaintiff. We affirm the order of filiation and order of support entered in the court below.

Affirmed. Costs to plaintiff.

       1956 PA 205.

       The statute in question provides as follows:
      "Sec. 3. (a) An agreement or compromise made by the mother or child or by some authorized person on their behalf with the father concerning the support and education of the child shall be binding upon the mother and the child only when the court having jurisdiction to compel support and education of the child shall have determined that adequate provision is reasonably secured by payment or otherwise and has approved the agreement or comromise.
      "(b) The performance of the agreement or compromise, when so approved, shall bar other remedies of the mother or child for the support and education of the child.”

       MCL 722.713; MSA 25.493.