author: M. B. Breighner, J.

text:
    PEOPLE v COOK
    Docket No. 77-2646.
    Submitted November 15, 1978, at Lansing.
    Decided March 19, 1979.
    Leave to appeal denied, 406 Mich 1002.
    C. Eugene Cook, II, was convicted in a bench trial of securities fraud in connection with the offer and sale of a security, of securities fraud as an investment advisor, and of obtaining money under false pretenses, Van Burén Circuit Court, Meyer Warshawsky, J. The convictions arose from a transaction in which the defendant, who previously had been a registered stockbroker in Michigan, obtained and sold some bonds to a woman for whom he had acted as stockbroker for several years. The defendant charged a markup on the bonds which the prosecution considered excessive and had not disclosed the amount of his markup to the customer prior to billing her for the bonds. Defendant appeals, questioning the sufficiency of the trial court’s findings of fact and the validity of those findings and the court’s conclusions of law. Held:

    1. The trial court’s findings of fact, although conclusory on their face, when judged in the context of legal and factual issues raised by the parties, are not so insufficient as to require that the case be remanded for a more detailed statement of facts.
    2. The trial court did not clearly err in determining that the defendant’s failure to disclose the market price of the bonds and his markup was a material omission, that the omission was misleading under the circumstances, and that the defendant’s conduct operated as a fraud.
    3. The defendant’s conviction of securities fraud as an investment advisor was error because the evidence did not show that he received any compensation primarily for investment advice.

      References for Points in Headnotes

       5 Am Jur 2d, Appeal and Error §§ 414, 839.

       5 Am Jur 2d, Appeal and Error § 727.

       69 Am Jur 2d, Securities Regulation — State, §§ 6, 8, 10.

       69 Am Jur 2d, Securities Regulation — Federal, § 478.
    69 Am Jur 2d, Securities Regulation — State, §§ 102, 103.

       69 Am Jur 2d, Securities Regulation — Federal, § 475.

       69 Am Jur 2d, Securities Regulation — Federal, §§ 416, 482.

       69 Am Jur 2d, Securities Regulation — State, §§ 8, 10, 102, 103.

       69 Am Jur 2d, Securities Regulation — State § 94.

       32 Am Jur 2d, False Pretenses § 15.

      4. The relationship between the defendant and the customer was such that she could not be expected to protect herself from the defendant’s misrepresentations and omissions regarding the excessive and arbitrary nature of his markup. Therefore, his conviction of obtaining money under false pretenses was proper.
    Affirmed in part, reversed in part, and remanded for resentencing.
    1. Appeal and Error — Findings of Fact — Remand — Court Rules.
    The purpose of the court rule which requires a trial court sitting without a jury to find the facts specially is to facilitate appellate review by revealing the law applied by the judge, and a case should not be remanded for further findings of fact unless a remand would serve the purpose of the court rule (GCR 1963, 517.1).
    2. Appeal and Error — Findings of Fact — Sufficiency of Findings.
    A trial court’s findings of fact cannot be judged sufficient or insufficient on their face; they must be judged in the context of specific legal and factual issues raised by the parties and the evidence.
    3. Securities Regulation — Uniform Securities Act — Statutes — Liberal Construction.
    The Uniform Securities Act should be construed liberally in order to effectuate the purpose of the act, which is to insure full disclosure and fair dealing in the context of security transactions (MCL 451.501 eí seq.; MSA 19.776[101] et seq.).

    4. Securities Regulation — Fraud — Omission of Facts — Question of Fact.
    The determination of whether a particular omission of any facts by a securities broker in a securities transaction is material and misleading and whether a particular course of conduct operates as a fraud varies from case to case and is a question of fact to be determined in the first instance at trial.
    5. Securities Regulation — Stockbrokers — Duties — Material Facts — Statutes.
    A material fact, for purposes of the statute regarding the duties imposed upon a securities broker, is one that a reasonable investor might have considered important to his investment decision (MCL 451.501; MSA 19.776[101j).

      6. Securities Regulation — Sale of Securities — Failure to Reveal Markup — Misleading Omission.
    A trial court did not clearly err in its finding that a stockbroker’s failure to reveal to an investor the markup on a bond was misleading where the evidence and testimony indicated that the markup was excessive and arbitrary, the broker characterized the size of his fee to be small and attributed the markup to paperwork and difficulty in obtaining the bond, the investor was not a sophisticated buyer, and the broker had gained the confidence of the buyer who relied on the broker’s special knowledge.
    7. Securities Regulation — Sale of Securities — Omissions — Fraud — Wilfullness — Statutes.
    "Wilfullness”, as used in the Uniform Securities Act, differs essentially from negligence; in order to wilfully violate those provisions dealing with material and misleading omissions and fraudulent conduct in connection with the offer, sale or purchase of any security, a person must intend the omission or the course of conduct and must know or recklessly fail to discover facts that render his conduct violative of those provisions, however, he need not act with the conscious purpose to mislead or defraud nor is it necessary that he know his conduct violates the law (MCL 451.501, 451.809; MSA 19.776[101], 19.776[409]).
    8. Securities Regulation — Fraud — Investment Advisors — Statutes — Findings of Fact.
    A trial court’s finding of fact is clearly erroneous where although there is evidence to support it the reviewing court on the entire evidence is left with the firm and definite conviction that a mistake has been committed; a defendant’s conviction for securities fraud as an investment advisor must be reversed where the evidence does not show that the defendant, who charged an excessive markup in the sale of a bond, received any of the markup in exchange for investment services (MCL 451.502[a]; MSA 19.776[102][a]).
    False Pretenses — Opinion — Representation of Fact — Criminal Law — Statutes.
    A false opinion, as opposed to a false representation of fact, is not a false pretense within the meaning of the statute prohibiting the obtaining of money under false pretenses; however, a dishonest statement of opinion may be a false pretense if the relationship between the defendant and the victim is such that the victim cannot be expected to protect himself (MCL 750.218; MSA 28.415).

      Frank J. Kelley, Attorney General, Robert A. Derengoski, Solicitor General, and Thomas C. Nelson, Assistant Attorney General, for the people.

      Reid & Reid, P.C. (by Joseph D. Reid and Lawrence J. Emery), for defendant on appeal.
    Before: Cynar, P.J., and R. B. Burns and M. B. Breighner, JJ.

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

   M. B. Breighner, J.

Defendant was charged with seven violations of the Michigan Uniform Securities Act, MCL 451.501 et seq.; MSA 19.776(101) et seq. The information also charged one count of obtaining money under false pretenses, MCL 750.218; MSA 28.415. After a bench trial, defendant was convicted of the false pretenses charge and two of the securities charges. The court sentenced him to 23 days incarceration and fined bim $4,750. Defendant appeals as of right. We affirm in part and reverse in part.

The three guilty verdicts involved a bond transaction between defendant and Winifred G. La-Fever. The bond transaction was one in a series of business transactions between defendant and Mrs. LaFever during a period from May to September, 1974.

Prior to 1974, defendant had been a registered stockbroker in this state. From 1963 to 1969, he acted as a stockbroker for Mrs. LaFever and her husband. After the death of her husband in 1969, Mrs. LaFever continued to contact defendant regarding her investments. She relied on his advice in buying and selling shares of stock.

In 1973, defendant moved to Arizona and incorporated an investment firm dealing in precious metals. Before leaving Michigan, he notified Mrs. LaFever he would no longer manage her portfolio.

In late 1973 or early 1974, defendant began to solicit Mrs. LaFever to purchase gold and silver. The first conversation with her was mostly social. In subsequent conversations, defendant suggested the purchase of gold and silver coins to hedge against loss of security value. To finance the purchase of coins he discussed sale of shares of stock held by Mrs. LaFever.

Mrs. LaFever decided to liquidate some of her investments and purchase coins from defendant. Following defendant’s instructions, stock certificates, secured from her New York stockbroker, were forwarded to defendant with authority to sell. Proceeds of sale went into Mrs. LaFever’s account with defendant and were used to purchase foreign coins at a high markup.

As more coins were purchased from stock sales, Mrs. LaFever told defendant she needed to earn some income from her assets. Defendant offered to explore the acquisition of an appropriate municipal bond. Subsequently, defendant recommended purchase of a $5,000 Puerto Rican Telephone Authority bond. Mrs. LaFever agreed to the purchase.

Defendant purchased five Puerto Rican municipal bonds in his firm’s name. The combined face value of the bonds was $5,000. Their cost to defendant was $5,192. Defendant billed Mrs. LaFever $5,750.

Upon receiving the price statement Mrs. La-Fever called defendant and asked why it cost her $5,750 for a $5,000 bond. "He assured”, she testified, "that there was a lot of paperwork and it was hard to get”. She also stated defendant did not tell her what part of the total price was his "fee”, but he "probably” characterized the "size of the fee” as " 'a percent’ or 'a small amount’ Defendant disclaimed representations as to commissions on the bond transaction. He testified the bonds were sold on a dealer-principal basis.

Defendant’s percentage markup on bonds sold Mrs. LaFever was 10.7. The state’s expert testified a normal markup on such bonds was less than five percent, but industry rules did not require markup disclosure. Defendant’s expert said a markup of even 11 percent could not be considered excessive without knowledge of other factors attending the transaction, especially an isolated transaction.

Defendant testified he bought the bonds "short” and the markup reflected his risk. The state’s expert testified the price of the subject bonds fluctuated in a narrow range during the month in question. In his argument to the court, the prosecutor pointed out defendant charged the same price for bonds held for 12 or 13 days as for bonds held two days.

Regarding the difficulty in obtaining the bonds, evidence showed they were obtainable from a broker with whom Mrs. LaFever had an account.

One count of the information against defendant charged wilfull failure to disclose material facts and engaging in a course of business which operated as a fraud "in connection with the offer to sell and sale by him of a security”. Another count charged him with wilfull fraud as an investment advisor. A third count charged that defendant, with intent to defraud, falsely represented he was a licensed securities agent in Michigan; that he would locate an appropriate bond for Mrs. LaFever and sell it to her at the current market price plus a small commission; and that the purchase price of the bond was based on difficulty in acquiring it.

Defendant was found guilty on these three counts. He was acquitted on five others charging fraud and deceit in connection with the coin sales and violations of certain registration requirements.

The trial court’s findings are conclusory. With regard to the securities counts, the court stated it found each ultimate fact necessary to sustain a conviction. It did not reveal the basis for each finding. With regard to the false pretenses count, the court stated its findings with more specificity by repeating language of the information. The court found defendant had "falsely represented and pretended that he was a securities agent authorized in Michigan * * * [and] that he would locate * * * an appropriate municipal bond for said Winifred G. LaFever to purchase at the then existing current market price plus a small commission”.

Defendant’s appeal raises an issue as to the sufficiency of the trial court’s findings of fact. It also presents questions concerning the validity of the trial court’s findings of fact and conclusions of law with respect to each of the defendant’s three convictions.

Sufficiency of the Findings of Fact

Rule 517.1 of the Michigan Court Rules imposes two distinct duties upon a trial court sitting without a jury. The court must make a sufficient statement of its findings of fact and must not make findings of fact that are clearly erroneous. Failure to satisfy the first obligation necessitates remand for further findings. Any finding of fact that is clearly erroneous may be set aside on appeal. As stated above, the present appeal challenges both the sufficiency of the lower court’s fact findings and the validity of certain findings made. This part of the opinion discusses the sufficiency issue only.

Defendant claims his case must be remanded because the trial court’s conclusory statement of facts fails to disclose key factual determinations which caused the court to convict. We agree the court’s findings on their face are conclusory. There is, however, no need to remand for a more detailed statement.

The purpose of requiring a trial court to "find the facts specially” is to facilitate appellate review. People v Jackson, 390 Mich 621; 212 NW2d 918 (1973). "Findings of fact in a nonjury case serve a function paralleling the judge’s charge in a jury case, that of revealing the law applied by the fact finder.” Id., 627. A case will not be remanded for further findings of fact unless a remand would serve the purposes of the court rule. People v Jackson, 81 Mich App 18; 264 NW2d 101 (1978).

It follows that findings of fact cannot be judged sufficient or insufficient on their face. But see, 2 Honigman & Hawkins, Michigan Court Rules Annotated, pp 593-595. They must be judged in the context of specific legal and factual issues raised by the parties and the evidence. See People v Jackson, supra at 627, fn 3. Compare, e.g., People v Green, 32 Mich App 482; 189 NW2d 122 (1971), and People v George Scott, 21 Mich App 217; 175 NW2d 312 (1970), with People v Bedford, 78 Mich App 696; 260 NW2d 864 (1977), and People v Stanford, 68 Mich App 168; 242 NW2d 56 (1976). In that context this Court has even upheld a general verdict of guilty by a court sitting without a jury. People v Jackson, supra.

There is no purpose in remanding this case for further findings of fact. Some of the arguments made by defendant have no evidentiary predicate. In reviewing the other issues raised by defendant which are supported by the evidence, we have not reached a point in our analysis where there is considerable doubt about the law applied by the trial court.

Defendant’s Conviction for Securities Fraud in Connection with the Offer and Sale of a Security

The Michigan Uniform Securities Act is based upon the Uniform Securities Act. Section 101 of the statute provides in pertinent part:

"It is unlawful for any person, in connection with the offer, sale or purchase of any security, directly or indirectly:
"(2) To make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading.
"(3) To engage in any act, practice or course of business which operates or would operate as a fraud or deceit upon any person.” MCL 451.501; MSA 19.776(101).

Section 409 of the act makes criminal any wilfull violation of §101. See MCL 451.809; MSA 19.776(409).

Defendant claims his conviction under § 101 must be reversed for two reasons. First, he argues there was no duty to disclose the markup on Puerto Rican bonds sold Mrs. LaFever. He further contends that the trial court’s conclusory findings do not disclose a finding of specific intent to defraud, which is necessary to a finding of "wilfullness”. We find no reversible error on either ground.

Duty

Section 101 of the securities act imposes a duty of full disclosure and fair dealing in the context of security transactions. Cf., Mathews & Sullivan, Criminal Liability for Violations of the Federal Securities Laws: The National Commission’s Proposed Federal Criminal Code, S. 1 and S. 1400, 11 American Criminal L Rev 883, 894-895 (1973), quoting, H R Rep, No 85, 73d Cong, First Sess, p 2 (1933) (purpose of analogous Federal securities regulations). The act should be construed liberally to effectuate this purpose. People v Dempster, 396 Mich 700; 242 NW2d 381 (1976).

The duties imposed by § 101 are analogous to duties imposed by Rule 10b-5 of the Federal securities regulations. 17 CFR, § 240.10b-5. Some Federal courts have held that the "scope” of the duty imposed by rule 10b-5 depends on the relationship between the victim and the defendant, their relative access to information, the benefit the defendant derives from the transaction, and the activity of the defendant in encouraging the transaction. See e.g., First Virginia Bankshares v Benson, 559 F2d 1307, 1314 (CA 5, 1977), White v Abrams, 495 F2d 724, 731 (CA 9, 1974). Under this so-called duty analysis approach, the appropriate duty imposed varies as a matter of law from case to case. White v Abrams, supra at 734.

As we read § 101 of the Michigan act, the duties imposed arise "in connection with the offer, sale or purchase of any security” and remain constant. Subsection 101(2) imposes a duty to disclose all material facts necessary to make other statements not misleading under the circumstances. Subsection 101(3) imposes a duty to refrain from any act, practice, or course of business which operates or would operate as a fraud. The determination that a particular omission is material and misleading and that a particular course of conduct operates as a fraud will vary from case to case. These are questions of fact to be determined in the first instance at trial. As stated previously, nonjury findings of fact cannot be set aside on appeal unless they are clearly erroneous. GCR 1963, 517.1.

The legal or "duty” question involved in any prosecution under § 101 is whether the defendant should have to refrain from the particular omission found to be material and misleading under subsection 101(2) or to refrain from the course of conduct found to operate as a fraud under 101(3). That question has been resolved by our Legislature.

It is unquestionable that the complained-of conduct of the present defendant arose "in connection with the offer, sale or purchase of any security”.

The essential omission alleged was defendant’s failure to disclose the market price of the bonds and his markup. The trial court did not clearly err in finding the alleged omission to be "material”. A material fact is one that a reasonable investor might have considered important to his investment decision. Mills v Electric Auto-Lite Co, 396 US 375, 384; 90 S Ct 616; 24 L Ed 2d 593 (1970). Mrs. LaFever, as a reasonable bond purchaser, might have considered it important that her seller was charging far in excess of what others were charging for the same bond.

Further, the court did not clearly err in finding the alleged omission to be misleading under the circumstances. There is some evidence defendant characterized the size of his fee to be a small amount. Mrs. LaFever testified defendant told her the $750 difference between face value and purchase price of the bond was based on paper work and difficulty in obtaining the bond. Experts testified the markup was excessive and arbitrary. Mrs. LaFever was not a sophisticated buyer. There is evidence to support a finding defendant had gained her confidence and she relied on his special knowledge. Under analogous Federal securities provisions, the United States Court of Appeals has found failure to reveal the markup on securities to be material and misleading. See Charles Hughes & Co, Inc v Securities & Exchange Comm, 139 F2d 434 (CA 2, 1943) (failure to disclose under § 17[a] of Federal securities law).

Finally, on this record the trial court did not clearly err in finding defendant’s conduct operated as a fraud. Cf., id.

In support of his contention that he owed no duty in this case, defendant cites Hafner v Forest Laboratories, Inc, 345 F2d 167 (CA 2, 1975), and Arber v Essex Wire Corp, 490 F2d 414 (CA 6, 1974). The Court in Hafner held a corporation breached no duty under Rule 10b-5 by failing to give the current market price of its securities upon request by a buyer. The Court reasoned the information was equally available to both parties in daily national quotation sheets and no fiduciary relationship existed between the parties. Arber held a buyer (insider) has no duty to direct its seller’s (outsider) attention to routine data commonly found in a company’s books, at least when the information is readily available and the outsider knows it is available and makes no inquiry.

Both cases are distinguishable from this case. These cases present a situation where the omission subject to complaint was not misleading or where reliance was not reasonable.

Scienter

"Wilfullness” is a word of many meanings, depending upon the context in which it is used. Zimberg v United States, 142 F2d 132, 137-138 (CA 1, 1944). A review of the case law does not reveal a clearly consistent use of the word in the context of securities fraud. See Anno: Element of Scienter as Affecting Criminal Prosecutions for Violation of Federal Securities Law, 20 ALR Fed 227. We find the term wilfullness as used in the Michigan act differs essentially from negligence.

To wilfully violate subsection 101(2) this defendant must have intended the omission which was found to be material and misleading. To wilfully offend subsection 101(3) he must have intended to engage in the course of conduct found to operate as a fraud. In addition, this defendant must have known or recklessly failed to discover facts that rendered his conduct violative of those subsections. It is insufficient that he could have discovered the facts by due care. On the other hand, he need not have acted with the conscious purpose to mislead or defraud. It is also unnecessary that he know his conduct violated the law. Like any element of a crime, knowledge and intent can be inferred.

The trial court’s finding of wilfullness in this case is not clearly erroneous. Defendant’s knowledge and intent can be inferred from the entire evidence. Nothing in the record suggests the trial court applied a negligence standard.

Defendant’s Conviction for Securities Fraud as an Investment Advisor

Relevant to this case, subsection 102(a) of the Michigan Uniform Securities Act provides:

"(a) It is unlawful for any person who receives any consideration from another person primarily for advising the other person as to the value of securities or their purchase or sale, whether through the issuance of analyses or reports or otherwise:
"(1) To employ any device, scheme or artifice to defraud the other person.
"(2) To engage in any act, practice or course of business which operates or would operate as a fraud or deceit upon the other person.” MCL 451.502(a); MSA 19.776(102)(a).

Defendant’s conviction under this antifraud provision cannot stand. The trial court clearly erred in finding defendant received consideration primarily for advising Mrs. LaFever as to the value of securities or their purchase or sale.

Subsection 102(a) was intended to reach persons who are specially compensated for rendition of investment advice. "The essential distinction to be borne in mind in [applying this provision to] borderline cases * * * is the distinction between compensation for advice itself and compensation for services of another character to which advice is merely incidental.” Uniform Securities Act, § 401(f), Official Comment, reprinted in Loss & Cowett, Blue Sky Law, p 339.

It is undisputed that defendant advised Mrs. LaFever to liquidate a portion of her stock portfolio and purchase a Puerto Rican municipal bond. As a result, she bought five Puerto Rican municipal bonds from defendant for $5,750. It does not follow, because defendant received consideration "as a result of’ investment advice, that he received consideration "primarily for” the advice.

There is no direct evidence defendant received consideration primarily for investment counsel. He never billed Mrs. LaFever for advice, and she did not earmark any part of the $5,750 purchase price as payment for advice. There was no testimony that any part of the payment was for advice. Defendant’s expert said none of defendant’s conduct brought him within the category of an investment advisor.

Although it might be inferred that some part of the excessive markup was primarily for investment advice, we are not obliged under the "clearly erroneous” standard to uphold any finding of fact supported by some evidence. " 'A finding is "clearly erroneous” when although there is evidence to support it, the reviewing court on the entire evidence is left with the firm and definite conviction that a mistake has been committed.’ ” 2 Honigman & Hawkins, Michigan Court Rules Annotated (2d ed), p 597, quoting United States v United States Gypsum Co, 333 US 364, 395; 68 S Ct 525; 92 L Ed 746 (1948). Here, the direct evidence and inferences that defendant did not receive any compensation for investment advice itself clearly preponderate over the contrary inference that might be drawn from the size of the markup.

Defendant’s Conviction for Obtaining Money Under False Pretenses

In attacking his conviction for obtaining money under false pretenses, defendant claims trial court error in holding his conduct constituted a false pretense. Defendant contends the essence of the claim against him is the charging of an excessive markup, and this is not a "false pretense”. We disagree.

In determining what constitutes a false pretense, this Court has drawn a distinction between false statements of opinion and false statements of fact. Compare People v Marks, 12 Mich App 690; 163 NW2d 506 (1968), with People v Wilde, 42 Mich App 514; 202 NW2d 542 (1972). In People v Wilde, we stated a false opinion is not a false pretense within the meaning of the statute because persons can be expected to protect themselves from false opinions. They know such statements are subject to distortion and deceit. The Legislature only intended to provide criminal sanctions for misrepresentations of fact. Overcharges, even gross and indefensible overcharges, fall into the category of false opinion. They are inflated opinions of value.

Notwithstanding the general distinction between opinion and fact in this area of criminal law, a dishonest statement of opinion may be a false pretense if the relationship between defendant and the victim is such that the victim cannot be expected to protect himself. Thus, "a dishonest expression of opinion may be a misrepresentation of fact suitable for false pretenses, especially where the opinion relates to a matter peculiarly within the knowledge of the one who expresses the opinion”. LaFave & Scott, Criminal Law, § 90, pp 658-659. Regarding opinions of value specifically, Judge Learned Hand has spoken:

"True, the law still recognizes that in bargaining parties will puff their wares in terms which neither side means seriously, and which either so takes at his peril (Vulcan Co. v. Simmons, 248 F. 853 [C.C.A. 2]); but it is no longer law that declarations of value can never be a fraud. Like other words, they get their color from their setting, and mean one thing when exchanged between traders, and another when uttered by a broker to his customer. Values are facts as much as anything else; they forecast the present opinions of possible buyers and sellers, and concern existing, though inaccessible, facts. Such latitude as the law accords utterances about them, depends upon the hearer’s knowledge that the utterer expects him to use his own wits * * United States v Rowe, 56 F2d 747, 749 (CA 2, 1932).

Even though defendant and Mrs. LaFever dealt in form as dealer and principal, their relationship was such that she could not be expected to protect herself from defendant’s misrepresentations and omissions regarding the excessive and arbitrary nature of his markup.

Affirmed in part, reversed in part. Remanded for resentencing.

       The witness was Richard W. Hamilton, Vice President and National Manager of Harris-Upham’s Municipal Bond Department during the period July through August, 1974. He testified Harris-Up-ham’s "markup” on such bonds was one-half to two percent and the National Association of Securities Dealers guideline for markups was five percent.

       Reference here is to guidelines established by the National Association of Securities Dealers. See also note 1, supra.

       The court stated:
      "As to count 3 [the charge under § 101], the Court finds that the People have proven beyond a reasonable doubt that C. Eugene Cook named in said count is one and the same as the defendant in this case; that from on or about the last week of July, 1974, to the first week of August, 1974, in the City of South Haven, County of Van Burén, and State of Michigan, that the defendant did directly and indirectly in connection with the offer to sell and the sale by him of securities, a Puerto Rican Telephone Authority bond, A-8075, to one Winifred G. LaFever; that he did wilfully, knowingly engage in a practice and course of business which would and did operate as a fraud and a deceit upon said Winifred G. LaFever. Further, that the defendant did knowingly and wilfully omit to state certain material facts necessary in order to make the statement made in the light of the circumstances under which they were made not misleading; that the defendant did as a result of said unlawful conduct unlawfully obtain money upon the property from said Winifred G. LaFever in connection with said sale of said bond; that this is contrary to the provisions of M.S.A. 19.776(101) as charged by the People in this court. It is the verdict of the Court that the defendant C. Eugene Cook is guilty beyond a reasonable doubt of the crime as charged in count 3, and this verdict is ordered to be entered upon the record of this Court.”
      "As to count 7, the Court finds that the People have proven beyond a reasonable doubt that the C. Eugene Cook named in this count is one and the same as the defendant in this case; that from on or about the last week of July, 1974, to the first week of August, 1974, in the City of South Haven, County of Van Burén, State of Michigan, that the said defendant received consideration from one Winifred G. LaFever primarily for advising her as to the purchase of a security, a Puerto Rican Telephone Authority bond, number A-8075, later selling the same to her, he acting as an investment advisor; and the said defendant did unlawfully, knowingly, and wilfully and intentionally engage in transaction practices and a course of business which would and did operate as a fraud and a deceit upon said Winifred G. LaFever, causing her to unlawfully pay monies in connection with said bond transaction as charged by the People in this Court; and that in connection with this count, the conduct of the defendant is contrary to the provisions of M.S.A. 19.776(102) as charged. It is the verdict of the Court that the defendant C. Eugene Cook is guilty beyond a reasonable doubt of the crime as charged in count 7, and this verdict is ordered to be entered upon the record of. this Court.”

       The Zimberg Court noted a distinction generally between use of the word wilfull as it applies to acts bad in themselves, in which context it connotes evil purpose, and as it applies to acts not involving moral turpitude, in which context the word has no such connotation.

       In comparison, to be criminally liable for a violation of §404 of the securities act, which proscribes false and misleading statements in documents filed and proceedings brought under the act, the defendant must wilfully violate the section, "knowing the statement made to be false or misleading in any material respect”. MCL 451.809; MSA 19.776(409); see United States v Peltz, 433 F2d 48, 54-55 (CA 2, 1970).

       Subsection 401(f) of the act defines "investment advisor”. The term "investment advisor” does not appear in subsection 102(a). Nevertheless, the official comment to subsection 401(f) is persuasive authority for interpreting the "consideration principally for investment advice” language of subsection 102(a). The general description of an investment advisor in subsection 401(f) is substantially the same as the description of persons to be reached by subsection 102(a). The term "investment advisor” does not appear in subsection 102(a) because its formal definition also includes several express exceptions, which the drafters did not wish to incorporate into the antifraud provision. See Uniform Securities Act, § 102(a), Official Comment, reprinted in Loss & Cowett, Blue Sky Law, p 252.

       "It seems sound too, that where the finding is based upon inferences drawn from admitted facts or uncontradicted evidence, the appellate court is free to draw its own inferences. But this proposition has been subject to considerable dispute. See Barron and Holtzoff, Federal Practice and Procedure § 1132.” 2 Honigman & Hawkins, Michigan Court Rules Annotated (2d ed), p 597.


source: Caselaw Access Project

author: M. F. Cavanagh, J.

license: Public Domain

text:
    GERARDI v BUCKEYE UNION INSURANCE COMPANY
    Docket No. 77-3480.
    Submitted June 23, 1978, at Detroit.
    Decided March 19, 1979.
    Plaintiff Catherine M. Gerardi was injured in an automobile accident while driving her father’s car with permission. She brought an action for damages against the driver of the other car and later amended her complaint to join Buckeye Union Insurance Company, her father’s no-fault insurer. The parties stipulated to the dismissal of the defendant driver. Plaintiff’s action against Buckeye was for work-loss benefits under the work-loss section of the no-fault statute. Plaintiff alleged that she had been a full-time student enrolled in Wayne State University’s registered nursing program at the time of the accident and because of the accident she had to delay her studies one year and lost approximately $13,500 in income and fringe benefits that she would have earned as a registered nurse within the three years following the accident. Defendant asserts that it has no duty to pay work-loss benefits to plaintiff on the grounds that the work-loss section of the no-fault statute retroactively amended the no-fault act to require payment only to those persons who were employed or had been employed at the time of an accident and because plaintiff did not allege actual employment, her complaint fails to state a cause of action. Defendant’s motion for summary judgment was denied, Wayne Circuit Court, William L. Cahalan, J. Defendant appeals. Held:

    The amendment to the work-loss section of the no-fault act is retroactive to the effective date of the statute and this section, as amended, provides benefits for actual work loss only and not for future earning capacity or earning possibilities. A plaintiff is required to allege actual loss of income that would have been earned but for the accident. There must be previous earnings upon which work loss may be calculated; therefore, a claim for wages which could have been earned in the future is a claim for loss of earning capacity and is not recoverable under the act.

      References for Points in Headnotes

       New Topic Service Am Jur 2d, No-Fault Insurance § 29.

       New Topic Service Am Jur 2d, No-Fault Insurance § 1.

      Reversed.
    1. Automobiles — Insurance — No-Fault Act — Work Loss — Loss of Earning Capacity — Statutes.
    The Legislature intended to provide benefits for actual work loss only and not for earning capacity in enacting the work-loss section of the no-fault act (MCL 500.3107, 500.3107a; MSA 24.13107, 24.13107[1]).
    2. Automobiles — Insurance — No-Fault Act — Work Loss — Benefits — Unemployed Workers — Past Wages — Earning Capacity — Insurers — Resolution of Claims — Statutes.
    The work-loss section of the no-fault act provides a method to compute work-loss benefits for workers unemployed at the time of their injury by adopting actual past wages as the appropriate standard; the thrust of this legislation is to calculate loss based on actual earnings, not future possibilities, and it facilitates resolution of claims against an insurer through the use of a quantifiable standard of loss to avoid the delays under the former "fault” system (MCL 500.3107a; MSA 24.13107[1]).
    3. Automobiles — Insurance — No-Fault Act — Purpose — Economic Losses — Prompt Compensation.
    The purpose of the no-fault act is to insure prompt compensation for economic losses incurred by persons injured in automobile accidents.
    4. Automobiles — Insurance — No-Fault Act — Work Loss — Retroactive Application — Statutes.
    An amendement to the work-loss section of the no-fault act is retroactive to the effective date of the statute (MCL 500.3107a; MSA 24.13107[1]).
    5. Automobiles — Insurance — No-Fault Act — Work Loss — Benefits — Loss of Earned Income —• Future Income.
    Recovery of benefits under the work-loss section of the no-fault act requires a plaintiff to allege actual loss of income that would have been earned but for an accident; there must be previous earnings upon which work loss may be calculated; a claim for wages which could have been earned in the future is a claim for loss of earning capacity and is not recoverable under the act.

      Harvey, Kruse & Western, P.C. (by Ronald E. Westen and Thomas R. Bowen), for plaintiff.

      Kerr, Wattles & Russell (by Patrick McLain), for defendant.
    Before: D. C. Riley, P.J., and M. F. Cavanagh and B. M. Hensick, JJ.

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

   M. F. Cavanagh, J.

Defendant, Buckeye Union Insurance Company, appeals from the trial court’s denial of its motion for summary judgment under GCR 1963, 117.2(1).

The parties have stipulated to the underlying facts. Plaintiff was injured in an automobile accident on October 1, 1973, while she was driving her father’s car with his permission. In September, 1975, she filed suit against the driver of the other car. Plaintiff later amended her complaint to join the defendant-appellant, her father’s no-fault insurer, for failure to pay work-loss benefits owing under his policy. As the basis for her claim for work-loss benefits from the defendant, pursuant to MCL 500.3107; MSA 24.13107, plaintiff alleged that she had been a full-time student enrolled in Wayne State University’s registered nursing program at the time of the accident. As the result of her injuries, plaintiff claimed she had to delay her studies one year and "lost approximately $13,500 in income and fringe benefits * * * she would have earned as a registered nurse within 3 years” following the accident. Defendant asserts that it has no duty to pay work-loss benefits to plaintiff on the grounds that MCL 500.3107a; MSA 24.13107(1) retroactively amended the no-fault act to require payment only to those persons who were employed or had been employed at the time of the accident. Because plaintiff did not allege actual employment, defendant argues that her complaint fails to state a cause of action. Therefore, defendant contends that the trial court erred in denying its motion for summary judgment.

In framing the issues on appeal, the parties have focused on whether MCL 500.3107a; MSA 24.13107(1), enacted in 1975, is retroactive to the original effective date of the no-fault act, thereby amending the original work-loss provision, MCL 500.3107; MSA 24.13107. Defendant argues that the amendment constitutes only a procedural change in the law regarding the manner in which work-loss benefits are to be computed, and as such, is retroactive. Plaintiff asserts that MCL 500.3107a; MSA 24.13107(1) works a substantive change in the no-fault act, and should therefore be applied prospectively.

The nature of the relationship between MCL 500.3107; MSA 24.13107, the original work-loss provision of the no-fault act, and MCL 500.3107a; MSA 24.13107(1) which supplemented it, appears to have been settled. First, two recent decisions of this Court, Struble v Detroit Automobile Inter-Insurance Exchange, 86 Mich App 245; 272 NW2d 617 (1978), and Nawrocki v Hawkeye Security Ins Co, 83 Mich App 135; 268 NW2d 317 (1978), have relied upon the legislative history of MCL 500.3107a; MSA 24.13107(1) to construe the term "work loss” as used in the original work-loss provision. These decisions concluded that the Legislature intended to provide work-loss benefits for actual loss, but excluded recovery for loss of earning capacity. In addition to illuminating the legislative intent regarding work-loss recovery in general, MCL 500.3107a; MSA 24.13107(1) also provided a method to compute work-loss benefits for workers unemployed at the time of their injury. By adopting actual past wages as the appropriate standard for unemployed workers, the Legislature merely emphasized that the thrust of the work-loss provision in all cases was to calculate loss based on actual earnings, not on future possibilities. Kennedy v Auto-Owners Ins Co, 87 Mich App 93; 273 NW2d 599 (1978). This interpretation is consistent with the purpose of the no-fault act to insure prompt compensation for economic loss incurred by persons injured in automobile accidents, Shavers v Attorney General, 402 Mich 554, 622-623; 267 NW2d 72 (1978). It facilitates resolution of claims against an insurer through use of a quantifiable standard of loss to avoid the delays inherent under the former "fault” system.

Secondly, the Court in Harper v Progressive Casualty Ins Co, 79 Mich App 764; 263 NW2d 1 (1977), has concluded that MCL 500.3107a; MSA 24.13107(1) is retroactive to the effective date of the no-fault act. There, the reviewing Court also examined the legislative history of the amendment to determine that the purpose of this section was to rectify an oversight in the original work-loss provision. The opinion pointed to the prompt legislative response to the dilemma of unemployed workers who appeared to be outside the scope of MCL 500.3107; MSA 24.13107 because they could show no actual wages lost due to injury. The Harper Court concluded that the amendment may be viewed "as a legislative interpretation of the original act rather than as a substantial change of it” and was to be applied retroactively. Harper, supra, at 769.

Therefore, under either analysis, plaintiff must allege an actual loss of income that she would have earned but for the accident. At the time of her injury the plaintiff still had one year remaining before completion of her nursing studies. Obviously, plaintiff would not have been able to work as a registered nurse prior to her accident; she thus has no previous earnings as a nurse upon which work loss may be calculated. Neither can plaintiff demonstrate that during the year lost as a result of the accident, she would have received income working as a registered nurse. Presumably, plaintiff would have spent that year completing the necessary academic requirements.

A fair reading of the complaint reveals that the plaintiff is in fact alleging a loss of wages she could have earned in the future as a registered nurse, but for the delay in her studies. As pointed out in Nawrocki, supra, such an allegation states a claim for recovery of loss of earning capacity, a tort recovery eliminated by the no-fault act.

We therefore find that the trial court erred in denying defendant’s motion for summary judgment and reverse.

       The parties have stipulated as to the dismissal of the complaint as to the defendant driver.


author: V. J. Brennan, J.

text:
    PEOPLE v BIONDO
    Docket No. 77-3767.
    Submitted November 14, 1978, at Detroit.
    Decided March 19, 1979.
    Defendant, Salvatore Biondo, was convicted of receiving stolen property over the value of $100 in Recorder’s Court of Detroit, Thomas L. Poindexter, J. Defendant appeals. Held:

    1. A post-trial hearing concerning the nonproduction of a res gestae witness in a criminal trial would be superfluous and is not required prior to an appeal where the trial judge has ruled that the missing witness is not a res gestae witness or that the prosecution was sufficiently diligent in its efforts to produce.
    2. It is the obligation of the prosecution, when an indorsed res gestae witness is outside the state and the prosecution knows what court of record, if any, in the involved state has jurisdiction to compel attendance, to present to a judge of that court process comporting in form and substance with the requirements of the Uniform Act to Secure Attendance of Witnesses from Without a State in Criminal Proceedings; failure to do so precludes a finding that the prosecution acted with due diligence in attempting to produce the witness.
    3. A criminal defendant is presumed to have been prejudiced by the prosecution’s lack of due diligence in efforts to produce an indorsed res gestae witness but that presumption can be overcome by the prosecution by establishing that the missing testimony would have been of no assistance to the defendant, that it merely constituted cumulative evidence, that its absence constituted harmless error or that the witness could not have been produced at trial.
    Remanded for further proceedings.
    References for Points in Headnotes

       21 Am Jur 2d, Criminal Law § 227.

       81 Am Jur 2d, Witnesses §§ 2, 8.
    Uniform Act to secure attendance of witnesses from without a state in criminal proceedings. 44 ALR2d 732.

       58 Am Jur 2d, New Trial §§ 40, 41.

       29 Am Jur 2d, Evidence § 186.

      1. Witnesses — Criminal Law — Res Gestae Witnesses — Production — Evidentiary Hearing.
    A post-trial hearing concerning the nonproduction of a res gestae witness in a criminal trial would be superfluous and is not required prior to an appeal where the trial judge has ruled that the missing witness is not a res gestae witness or that the prosecution was sufficiently diligent in its efforts to produce.
    2. Witnesses — Criminal Law — Absentee Witnesses — Uniform Statute — Prosecutor’s Duty.
    It is the obligation of the prosecution, when an indorsed res gestae witness is outside the state and the prosecution knows what court of record, if any, in the involved state has jurisdiction to compel attendance, to present to a judge of that court process comporting in form and substance with the requirements of the Uniform Act to Secure Attendance of Witnesses from Without a State in Criminal Proceedings; failure to do so precludes a finding that the prosecution acted with due diligence in attempting to produce the witness (MCL 767.91 et seq.; MSA 28.1023[191] et seq.).

    3. Witnesses — Criminal Law — Res Gestae Witnesses — Production — Due Diligence — New Trial.
    A new trial is not automatically warranted simply because the prosecution has failed to exercise due diligence in the production of a missing res gestae witness; the key issue in determining the proper remedy for the defendant where the prosecution has failed to fulfill its responsibilities is whether the defendant is prejudiced.
    4. Witnesses — Criminal Law — Res Gestae Witnesses — Production — Prejudice — Rebuttable Presumption.
    A criminal defendant is presumed to have been prejudiced by the prosecution’s lack of due diligence in efforts to produce an indorsed res gestae witness but that presumption can be overcome by the prosecution by establishing that the missing testimony would have been of no assistance to the defendant, that it merely constituted cumulative evidence, that its absence constituted harmless error or that the witness could not have been produced at trial.

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

      Pitts, Mann & Patrick, P.C., for defendant on appeal.
    Before: N. J. Kaufman, P.J., and V. J. Brennan and Bashara, JJ.
   V. J. Brennan, J.

The defendant, Salvatore Stephen Biondo, was convicted of receiving stolen property (a certain late model automobile) over the value of $100, MCL 750.535; MSA 28.803, by a Recorder’s Court jury on June 23, 1977. Defendant was sentenced to one to five years in prison and appeals by right under GCR 1963, 806.1. Defendant raises three issues, only two of which merit discussion here.

Defendant first contends that there was insufficient evidence on the element of guilty knowledge to sustain his conviction.

We find the defendant’s contention without merit. A review of the arresting officer’s testimony shows that when the key to the car was taken from the defendant and placed in the ignition the switch operated; then when the officer attempted to pull the key out of the ignition the entire ignition switch was pulled out of the housing. Upon further inspection the officer noted that the housing was damaged. Given the fact that the tampered-with ignition switch was readily detectable, People v Salata, 79 Mich App 415, 423; 262 NW2d 844 (1977), we find sufficient evidence from which the jury could infer the element of guilty knowledge. See People v Palmer, 392 Mich 370, 375-376; 220 NW2d 393 (1974).

Defendant next contends that the trial court erred reversibly in finding that due diligence had been exercised by the prosecution in attempting to secure the presence of an indorsed witness. The defendant had challenged the prosecution’s failure to produce and a hearing was held on the issue. However, the defendant failed to move for a new trial based upon the nonproduction as set forth in People v Robinson, 390 Mich 629; 213 NW2d 106 (1973).

A split of authority had developed in this Court on the question of whether a hearing during trial on the prosecution’s failure to produce an indorsed res gestae witness obviates the Robinson motion requirement. Cf., People v Jones, 65 Mich App 619; 237 NW2d 584 (1975), People v Blacksmith, 66 Mich App 216, 220; 238 NW2d 810 (1975), with People v Niswonger, 87 Mich App 57; 273 NW2d 586 (1978), People v Allen, 76 Mich App 585; 257 NW2d 263 (1977).

The Supreme Court in the recent case of People v Willie Pearson, 404 Mich 698, 715; 273 NW2d 856 (1979), specifically addressed this question and held:

"In cases where the trial court has ruled that a missing witness is not a res gestae witness or that the prosecution was sufficiently diligent in its efforts to produce * * * a Robinson hearing would be superfluous and is not required prior to an appeal.”

In the present case since a hearing was held and due diligence was found, the issue is preserved for appeal even absent the post-trial Robinson motion.

Initially it must be pointed out that the witness’s testimony would have been material to the defendant’s claim that he lacked the requisite guilty knowledge. Defendant contended that he borrowed the car from the witness, that the witness had represented that he had just purchased the car and was still using the dealer plate without need for the car registration. The witness’s testimony most certainly would have shed light on the defendant’s contention.

Upon review of the record it is found that the prosecutor on the day of trial knew that the missing indorsed witness was on probation to the court in Broward County, Florida. The prosecutor learned of the witness’s whereabouts the day before the trial through a suggestion by defense counsel to employ a computer readout. A Detroit police officer testified that he attempted to subpoena the witness the week before trial but was told by the witness’s mother and father that the witness went to Florida. The day before trial the officer obtained the witness’s Florida address.

Although the prosecutor made every effort to locate the witness the week before trial, a finding of due diligence is precluded by the fact that the witness’s address was found the day before trial and no further effort was made to produce. In addition this Court in People v Gaffney, 51 Mich App 526, 531; 215 NW2d 587 (1974), lv den 392 Mich 806 (1974), held that "where an indorsed res gestae witness is without this state and the prosecution knows what court of record, if any, in the involved state has jurisdiction to compel attendance” the prosecution’s failure to employ the uniform act to secure attendance of witnesses, MCL 767.91, et seq.; MSA 28.1023(191), et seq., precludes a finding of due diligence. Accordingly, the trial court’s finding of due diligence was erroneous.

We next must determine the proper disposition of the case at bar. The Supreme Court in People v Willie Pearson, supra, p 724, stated:

"A new trial is not automatically warranted simply because the prosecution has failed to exercise due diligence in the production of a missing res gestae witness. The key issue in determining the proper remedy for the defendant when the prosecution has failed to fulfill its responsibilities is whether the defendant is prejudiced.”

The Court then prescribed a post-remand (from the Court of Appeals) hearing to determine whether the failure to exercise due diligence:

"* * * did not adversely affect the defendant’s right to a fair trial (i.e., the defendant is presumed prejudiced until the contrary is established). 404 Mich 698, 725.

The Court set forth what the prosecution must establish in order to overcome the presumption of prejudice as follows:

"If the prosecution can establish that the missing testimony would have been of no assistance to the defendant, that it merely constitutes cumulative evidence, that its absence constitutes harmless error or that the witness could not have been produced at trial, then this burden has been met and the conviction should be affirmed.” (Footnotes omitted.) 404 Mich 698, 725.

In accordance with Pearson we remand the cause to the trial court in order to give the prosecution the opportunity to rebut the presumption of prejudice as per the criteria set forth above. If the prosecution cannot rebut the presumption, the matter shall be remanded for a new trial.

We retain no further jurisdiction.


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

text:
    KOENIG v VAN REKEN
    Docket No. 77-4176.
    Submitted October 4, 1978, at Lansing.
    Decided March 19, 1979.
    Helen Koenig brought an action against Stanley R. Van Reken, Harriett E. Van Reken and Michigan National Bank seeking a judgment declaring a deed executed by her to defendants Van Reken to be an equitable mortgage, or money damages for unjust enrichment. Plaintiff alleged that she was delinquent in her real estate taxes and was facing foreclosure on one of the three mortgages encumbering her home. Plaintiff further alleged that she executed the warranty deed to the home, along with a lease-repurchase option, in the belief that Stanley Van Reken would, for a fee of 10%, "service” the mortgages and pay the delinquent taxes. In 1972, plaintiff defaulted in the monthly rental payment due under the lease, and she was evicted from the home by defendants.
    In response to plaintiffs complaint, defendants Van Reken moved for summary judgment on the ground that plaintiff had failed to state a claim upon which relief could be granted. The Oakland Circuit Court, James S. Thorburn, J., granted the motion. Plaintiff appeals only the dismissal of the equitable mortgage count. Held:

    1. A motion for summary judgment on the ground that plaintiff failed to state a cause of action upon which relief can be granted tests the legal sufficiency of the pleadings alone, and should be granted only where, accepting all well-pleaded facts as true, the claim is unenforceable as a matter of law.
    2. The facts pled in plaintiffs complaint were sufficient, as a matter of law, to establish the claim that the deed was intended to be an equitable mortgage.
    Reversed and remanded for trial.
    1. Motions — Summary Judgment — Failure to State a Claim — Sufficiency of Pleadings — Court Rules.
    A motion for summary judgment on the ground that plaintiff failed to state a claim upon which relief can be granted challenges the legal sufficiency of the pleadings alone, and is to be tested by whether, accepting all well-pleaded facts as true, the claim is so clearly unenforceable as a matter of law that no factual development can possibly justify a right to recovery (GCR 1963,117.2[1]).

      References for Points in Headnotes

       73 Am Jur 2d, Summary Judgment § 29.

       55 Am Jur 2d, Mortgages § 181.

       55 Am Jur 2d, Mortgages §§ 11, 32, 33.

      2. Mortgages — Equitable Mortgages — Deeds — Equity.
    A court of equity, when determining whether a deed absolute on its face is a mortgage, looks to the intention of the parties.
    3. Mortgages — Equitable Mortgages — Deeds — Equity.
    The financial condition of the grantor, coupled with the inadequacy of the purchase price of the property, is sufficient to establish a deed absolute on its face to be an equitable mortgage.

      Hampton, Snavely, Ranno, Lightbody & Girard, for plaintiff.

      Glazer & Cotton, for defendant.
    Before: V. J. Brennan, P.J., and Allen and P. F. O’Connell, JJ.

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

   V. J. Brennan, P.J.

In October of 1974, plaintiff Helen Koenig brought suit in Oakland County Circuit Court to have a warranty deed executed by her to defendants Van Reken declared an equitable mortgage. The original complaint was later supplemented to add a count against the defendants for unjust enrichment. The defendants moved for a summary judgment under GCR 1963, 117.2(1) claiming that the plaintiff failed to state a claim upon which relief could be granted. The plaintiff appeals by right the lower court’s granting of the defendants’ motion, but contests only the dismissal of the equitable mortgage count. Our review is thus limited to the question of whether the trial court under GCR 1963, 117.2(1) properly dismissed the action regarding the imposition of an equitable mortgage.

A motion based on GCR 1963, 117.2(1) challenges the legal sufficiency of a plaintiffs complaint and is to be considered by an examination of the pleadings alone. It is the duty of the reviewing court to accept as true the well-pleaded facts in the plaintiffs complaint and determine whether those claims are so clearly unenforceable as a matter of law that no factual development can possibly justify a right to recovery. Merit Electric Co, Inc v J Boyle, Inc, 77 Mich App 503; 258 NW2d 539 (1977), Three Lakes Ass’n v Whiting, 75 Mich App 564; 255 NW2d 686 (1977), Stewart v Troutt, 73 Mich App 378; 251 NW2d 594 (1977).

Accordingly, the factual situation comprising the subject matter of the present appeal is derived from the various allegations in the plaintiffs complaint.

In 1970, plaintiff owned a home in Oakland County with a market value of $60,000 that was encumbered by three mortgages totaling $25,933.26. The real estate taxes on plaintiffs home had become delinquent and foreclosure proceedings had begun on one of the mortgages. Plaintiff was then approached by defendant, Stanley Van Reken, who proposed that for a fee of 10% he would "service” the mortgages and pay the delinquent taxes. Subsequently, on June 16, 1970, plaintiff and defendant Stanley Van Reken executed three documents that form the basis of this action.

The first of these documents, entitled "AGREEMENT”, stated that plaintiff desired to prevent the loss of her home and provided that defendant Stanley Van Reken purchase the property, redeem it from tax sale and mortgage foreclosure, and give plaintiff an exclusive right to repurchase according to the terms of a lease-option agreement that was also executed between the parties.

The second document was a warranty deed which conveyed the property from plaintiff to defendants for a stated consideration of $28,600. Plaintiff alleges that the deed was silent as to consideration when she signed it, that the figure of $28,600 was added subsequently, and that she never received any such consideration.

The third document provided that Stanley Van Reken was to lease the premises to plaintiff for a 3-year period at a fixed monthly rent of $300. Plaintiff was also to receive an exclusive option to repurchase the premises during the term of the lease for a price of $32,318.79, with a downpayment of $3,500 and monthly payments of $300 which were to include taxes, insurance, principal and interest.

At no time during the negotiations that led to the execution of these documents was plaintiff represented by an attorney, and all three documents were prepared by Stanley Van Reken.

The parties operated under the lease from June 16, 1970, to February, 1972, and during this time plaintiff made total payments of $5,800. In February, 1972, plaintiff defaulted in a monthly rental payment. Plaintiff was thereupon evicted from the home.

The defendants argue on appeal that the subject transaction cannot be deemed to create an equitable mortgage since it has not been alleged that the deed was given to secure an obligation owed by the plaintiff to the defendants. The defendants contend that the "obligation owed” is a necessary requisite to establish an equitable mortgage "as a matter of law”.

The defendants’ argument not only shows a lack of understanding of the nature and purpose of equitable relief but overlooks well-established Michigan case law on point. The court of equity protects the necessitous by looking through form to the substance of the transaction. Although no set criterion has been established, the controlling factor in determining whether a deed absolute on its face should be deemed a mortgage is the intention of the parties. Sheets v Huben, 354 Mich 536; 93 NW2d 168 (1958), Miskinis v Bement, 301 Mich 365; 3 NW2d 307 (1942). Such intention may be gathered from the circumstances attending the transaction including the conduct and relative economic positions of the parties and the value of the property in relation to the price fixed in the alleged sale. 59 CJS, Mortgages, §§ 35, 36, pp 69-73. Under Michigan law, it is well settled that the adverse financial condition of the grantor, coupled with the inadequacy of the purchase price for the property, is sufficient to establish a deed absolute on its face to be a mortgage. Ellis v Wayne Real Estate Co, 357 Mich 115; 97 NW2d 758 (1959), McLaughlen v Majestic Development Corp, 247 Mich 498; 226 NW 256 (1929).

In Ellis, supra, the plaintiffs initially sought a loan from defendant to save their home from forfeiture. After hurried negotiations, the plaintiffs executed a quit claim deed to defendant and simultaneously entered into a land contract under which the plaintiffs were to repurchase the property. The defendant then satisfied a default and paid the delinquent taxes. In noting the discrepancy between the price paid by the defendant and the value of the property, the Court held that the transaction constituted a loan by defendant secured by a mortgage on the property.

In taking the plaintiffs well-pleaded facts in the present case as true, there is a close parallel with Ellis, supra. Here the plaintiff, while in financial distress, sought help from the defendants in saving her home from foreclosure. Although plaintiff was not desirous of selling her home, she entered into a transaction which conveyed her equity worth over $30,000 for less than $4,000. While financial embarrassment of the grantor and inadequacy of consideration do not provide an infallible test, they are an indication that the parties did not consider the conveyance to be absolute. Grant v Van Reken, 71 Mich App 121; 246 NW2d 348 (1976). We note that the lease-back arrangement entered into by the parties effectively circumvented the right to redeem, which is designed to protect purchasers such as plaintiff in times of financial crisis. In applying these facts to the aforementioned case law, it could be found without difficulty that the subject transaction constituted a mortgage to secure a loan in the amount of defendants’ initial expenditure.

We reverse the order granting summary judgment in favor of the defendant on the equitable mortgage count and remand for trial on this issue.

       In Grant (a case involving Stanley Van Reken, the same defendant herein), the Court found an equitable mortgage based on a transaction strikingly similar to the one presented in the case ac bar.


author: Beasley, J.

text:
    CITY OF DETROIT v DETROIT GRAY IRON & STEEL FOUNDRIES, INC
    Docket No. 77-4248.
    Submitted February 7, 1979, at Detroit.
    Decided March 19, 1979.
    The City of Detroit and Dennis O. Green, the city’s controller, brought an action against Detroit Gray Iron & Steel Foundries, Inc., and several individuals connected with the corporation, to recover sums withheld by the corporation from its employees’ wages for payment of Detroit’s city income tax but which were not paid to the city. The action was dismissed as to all the individual defendants except Louis S. Heyman and Edward. Antulis, both of whom are officers and directors of the corporation. Defendants Heyman and Antulis moved for and were granted summary judgment, Wayne Circuit Court, Myron H. Wahls, J., on the ground that they were not liable for payment of the taxes under the Uniform City Income Tax Ordinance in effect in Detroit. Plaintiffs appeal by leave granted. Held:

    The Uniform City Income Tax Ordinance requires an employer to pay amounts withheld from employees’ wages to the city, but the ordinance’s definition of "employer” does not include individuals who are corporate officers or directors. The trial court correctly found that the ordinance did not specifically establish the personal liability of the individual defendants.
    Affirmed.
    Taxation — Municipal Corporations — City Income Tax — Corporations — Corporate Officers and Directors — Withholding from Wages — Statutes.
    Corporate officers or corporate directors are not specifically held personally liable under the Uniform City Income Tax Ordinance in effect in a city for a corporation’s failure to pay over to the city the taxes withheld from employees’ wages (MCL 141.606; MSA 5.3194[16]).
    Reference for Points in Headnote
    71 Am Jur 2d, State and Local Taxation § 602.

      Roger E. Craig, Corporation Counsel, George G.

      Matish, Deputy Corporation Counsel, and Marion R. Jenkins, Assistant Corporation Counsel, for plaintiffs.

      Richard C. Tripp, for defendant Edward Antulis.

      Lewis Daniels, for defendant Louis S. Heyman.
    Before: Danhof, P.J., and Bronson and Beasley, JJ.
   Beasley, J.

Plaintiffs brought suit against defendant, Detroit Gray Iron & Steel Foundries, Inc., and various individuals connected with the company to recover sums withheld by defendant corporation from the wages of its employees for payment of plaintiff city’s income tax, but never paid to plaintiff city. Plaintiffs consented to dismissal of suit as to all defendants, except defendant corporation, defendant Heyman, the president and a director of defendant corporation, and defendant Antulis, the treasurer and a director of defendant corporation.

Defendants Heyman and Antulis moved for summary judgment on the ground that they were not liable under the Uniform City Income Tax Ordinance in effect in plaintiff city (hereinafter referred to as UCITO), which motion was granted by the trial court on rehearing. Plaintiffs appeal as of right.

MCL 141.660; MSA 5.3194(70) requires the employer to pay to the city quarterly amounts withheld from employees’ wages for payment of city income tax. The definition of employer in MCL 141.606; MSA 5.3194(16) does not include individuals who are corporate officers or corporate directors. Consequently, the trial court did not err in concluding UCITO did not specifically establish personal liability on the part of corporate officers and directors for a corporation’s failure to pay over to the city taxes withheld from employees’ wages.

We note that during oral argument in the trial court, the trial judge raised the question of whether plaintiffs were claiming recovery on a common-law theory. We interpret the response of counsel for defendants as negativing any claim on a common-law theory; to the contrary, defendants’ motion for summary judgment looked directly to and only to the statute. Our ruling here relates only to the statute. We affirm the trial court’s grant of summary judgment to defendants only with respect to plaintiffs’ claim under the statute. What we decide here does not affect any rights plaintiffs may have against these defendants on a common-law basis of conversion of money or property held in trust by individual defendants for the benefit of plaintiff city.

Affirmed, with costs.


author: R. B. Burns, J. M. B. Breighner, J.

text:
    MINISTRELLI CONSTRUCTION CO, INC v SULLIVAN BROTHERS EXCAVATING, INC
    Docket No. 77-4466.
    Submitted November 3, 1978, at Grand Rapids.—
    Decided March 19, 1979.
    Leave to appeal denied, 406 Mich 1013.
    Plaintiff, Ministrelli Construction Co., Inc., general contractor on a Michigan State Highway Department construction project, sued defendant, Sullivan Brothers Excavating, Inc., a subcontractor on the project, which counterclaimed for money due and unpaid. Pursuant to the terms of the subcontract, the matter was submitted to arbitration, which resulted in an award to defendant. Defendant moved to affirm the award and plaintiff moved to vacate the award. The basis for plaintiff’s motion to vacate was that, subsequent to the arbitration hearing but prior to the award, each of the three arbitrators had an ex parte telephone conversation with a witness, and, in one case, the witness answered questions outside his field of expertise concerning calculation of damages. The Ingham Circuit Court, Thomas L. Brown, J., ruled that the motion to vacate was timely filed and ordered the award vacated and the cause remanded for arbitration before a new panel. Defendant appeals by leave granted. Held:

    1. An application to the circuit courts to set aside an arbitration award predicated upon corruption, fraud or other undue means must be made within 20 days after such grounds are known or should have been known.
    2. An arbitration award should be vacated for arbitrator misconduct where each of the three arbitrators made an ex parte telephone contact with a witness, one of whom answered questions outside his field of expertise regarding calculation of damages.
    Affirmed.
    M. B. Breighner, J., dissented. He would hold that a party seeking to vacate an arbitration award based on misconduct of an arbitrator must show by clear and convincing evidence both misconduct and prejudice. He would hold that, when the reviewing court fails to make specific findings as to these two issues, the Court of Appeals should remand to the reviewing court for specific findings.

      References for Points in Headnotes

       5 Am Jur 2d, Arbitration and Award §§ 168, 185.
    Time for impeaching arbitration award. 85 ALR2d 779.

       5 Am Jur 2d, Arbitration and Award §§ 177, 179.

       5 Am Jur 2d, Arbitration and Award § 186.

      Opinion of the Court
    1. Arbitration and Award — Vacation of Award — Timeliness of Application — Court Rules.
    An application to the circuit court to set aside an arbitration award predicated upon corruption, fraud or other undue means must be made within 20 days after such grounds are known or should have been known (GCR 1963, 769.9[2]).
    2. Arbitration and Award — Vacation of Award — Arbitrator Misconduct.
    An arbitration award may be vacated for arbitrator misconduct where each of the three arbitrators made an ex parte telephone contact with a witness, one of whom answered questions outside his field of expertise regarding calculation of damages.
    Dissent by M. B. Breighner, J.
    3. Arbitration and Award — Vacation of Award — Arbitrator Misconduct — Burden of Proof — Public Policy Favoring Arbitration Award Finality.

      Public policy favors the finality of arbitration awards; a party seeking to vacate an arbitration award based on misconduct of the arbitrator must show by clear and convincing evidence both misconduct and prejudice.

    4. Arbitration and Award — Vacation of Award — Burden of Proof — Findings of Fact — Appeal and Error.

      A court, in reviewing an arbitration award for arbitrator misconduct, should make a specific finding of fact as to the existence or nonexistence of misconduct and prejudice, applying the appropriate clear and convincing standard to the proofs, and the Court of Appeals should remand for specific findings where the lower court failed to make such specific findings.

      Doyle, Carruthers & Hess, P.C., for plaintiff.

      John R. Perry, for defendant.

      Before: Cynar, P.J., and R. B. Burns and M. B. Breighner, JJ.

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

   R. B. Burns, J.

An arbitration panel awarded Sullivan Brothers Excavating, Inc. (hereinafter Sullivan) $214,000 against Ministrelli Construction Co., Inc. (hereinafter Ministrelli). Upon Ministrelli’s application, the trial court vacated the award and ordered the matter be rearbitrated before a new panel. Sullivan appeals. We affirm.

Ministrelli, general contractor on a Michigan State Highway Department construction project, brought suit in circuit court against Sullivan, a subcontractor on the project. Sullivan counterclaimed for money earned but not paid. Pursuant to the terms of the subcontract, the matter was submitted to arbitration. Hearings before the arbitrators were concluded June 3, 1976, the award was made June 30, 1976, and the parties were promptly notified of the award. Sullivan made a motion to affirm the award in circuit court on July 21, 1976. On August 4, 1976, Ministrelli answered and made a motion to vacate the award.

Facts established in circuit court indicate that between June 3, 1976, and June 30, 1976, each arbitrator made an ex parte telephone contact with a witness. One arbitrator called Ministrelli’s office, another arbitrator called Sullivan’s office, and the third arbitrator called the Michigan State Highway Department. The arbitrator who called Ministrelli’s office spoke to a Ministrelli employee, who answered questions outside his field of expertise concerning calculation of damages. The employee did not inform his employer until one or two weeks after the third week of July, 1976.

The circuit court judge determined that Ministrelli had timely raised an issue of misconduct by the arbitrators, inferred that the ex parte contracts were of a prejudicial nature, and ruled that the award must be vacated.

An arbitration award may be vacated upon the grounds stated in GCR 1963, 769.9(1), which provides in part:

"Upon application of a party, the court shall vacate an award where:
"(a) The award was procured by corruption, fraud or other undue means;
"(b) There was evident partiality by an arbitrator appointed as a neutral or corruption in any of the arbitrators or misconduct prejudicing the rights of any party;
"(c) The arbitrators exceeded their powers; or
"(d) The arbitrators refused to postpone the hearing upon sufficient cause being shown therefor or refused to hear evidence material to the controversy or otherwise so conducted the hearing as to prejudice substantially the rights of a party.”

The time within which the application may be brought is limited by GCR 1963, 769.9(2), which provides:

"An application under this Rule shall be made within 20 days after delivery of a copy of the award to the applicant, except that, if predicated upon corruption, fraud or other undue means, it shall be made within 20 days after such grounds are known or should have been known.”

5 Honigman & Hawkins, Michigan Court Rules Annotated (2d ed), p 449, states:

"A party seeking to vacate an award must apply by motion within twenty days after delivery to him of a copy of the award if the grounds he advances in support of his motion appear on the face of the award, or occurred overtly in the proceeding (i.e., the arbitrators exceeded their powers, sub-rule 769.9(1)(c); or refused postponement for good cause, refused material evidence, or otherwise indulged in prejudicial conduct, sub-rule 769.9(1)(d); or showed evident partiality, sub-rule 769.9(1)(b)). Applications to vacate awards for the other causes listed in the sub-rule (fraud, corruption, or other misconduct) must be made within twenty days after such grounds become known, or should have been known. Sub-rule 769.9(2).” (Emphasis supplied.)

We agree that the actions of the arbitrators constituted misconduct. Ministrelli applied to vacate the award within 20 days of the date such conduct became known and therefore applied in a timely manner.

Affirmed. Costs to plaintiff.

Cynar, P.J., concurred.

M. B. Breighner, J.

(dissenting). I respectfully dissent.

Application Was Timely Filed

I agree that plaintiff’s application was timely filed because the alleged arbitrator misconduct did not occur on the face of the award nor overtly in the proceedings. 5 Honigman & Hawkins, Michigan Court Rules Annotated (2d ed), p 449.

Application States Adequate Grounds To Vacate

In addition to filing a timely application, a party seeking to vacate an arbitration award must state grounds under GCR 1963, 769.9(1). That subsection states the sole grounds for vacating an arbitration award. Detroit Automobile Inter-Insurance Exchange v Ayvazian, 62 Mich App 94, 98; 233 NW2d 200 (1975).

Plaintiffs allegation of arbitrator misconduct does not state grounds to vacate under subsection 769.9(1)(a). That subsection was intended to apply only to the conduct of the opposing parties or third parties, other than the arbitrators themselves. Cf., Persig, Some Comments on Arbitration Legislation and the Uniform Act, 10 Vand L Rev, 685, 704 (1957) (drafter’s interpretation of identical language in the Uniform Arbitration Act). Plaintiffs application does raise a substantial issue of "misconduct prejudicing the rights of any party”, which is a ground for vacating an arbitration award under subsection 769.9(1)(b). The phrase "undue means” as used in subsection 769.9(2) is broad enough to cover misconduct by an arbitrator that prejudices the rights of any party.

Decision To Vacate Not Supported By The Record

There exists strong public policy favoring finality of arbitration awards. The party seeking to vacate such an award bears a heavy burden of proof by clear and convincing evidence. Brush v Fisher, 70 Mich 469; 38 NW 446 (1888).

To support a finding of prejudicial arbitrator misconduct, there must be positive evidence of both misconduct and prejudice. Misconduct by a juror may be sufficient to set aside a jury verdict without showing such misconduct influenced the verdict. By contrast, a showing of arbitrator misconduct, other than corruption or fraud, must be coupled by positive proof of prejudice before an arbitrator’s award will be set aside. The court rules so require. Also, arbitration proceedings are not governed by the same standards as judicial proceedings. Port Huron & N R Co v Callanan, 61 Mich 22; 34 NW 678 (1887).

On appeal from a judgment confirming or vacating an arbitration award this Court exercises a limited scope of review. Werner v The Travelers Indemnity Co, 55 Mich App 390, 394; 222 NW2d 254 (1974).

Although there is evidence on the record of this case to support findings of arbitrator misconduct and prejudice, the record does not establish that the trial court found prejudice, or, if it did find prejudice, that it applied the appropriate standard of proof.

Testimony of Ministrelli’s employee was sufficient to establish the fact and the nature of the ex parte communication. It is generally agreed that outside consultation regarding the subject matter of an arbitration award is misconduct, warranting the setting aside of the award, where such misconduct had an influence on the decision reached. Anno: Arbitrator's consultation with outsider or outsiders as misconduct justifying vacation of award, 47 ALR2d 1362.

It is possible to infer prejudice from other facts in this case. Information revealed by Ministrelli’s employee during the ex parte communication was actively solicited by one of the arbitrators. This communication was at the behest of all of the arbitrators. This evidences that all thought it was important to their decision. Information gathered went to the heart of the damage issue.

However, the trial court did not deal directly with the issue of prejudice. At the original hearing on plaintiff’s motion to vacate, the trial court indicated it did not specifically find prejudice. On the other hand, at the rehearing, the trial court found "It was * * * highly probable that the information gathered influenced the ultimate decision”. That finding was based on "the fact that the calls were made” and the fact that the information gathered went to "the heart of the issue” of damages. Further on, the court again suggested that positive proof of prejudice was not essential or that such proof need not be clear and convincing. It analogized the situation with a judicial proceeding and concluded that the arbitrators’ misconduct, "under these very touchy situations, could result in at least the appearance of impropriety, the possibility of prejudice, and * * * that is highly likely under these circumstances”.

I would remand for a hearing in which the issue of prejudice should be determined under the appropriate standard of proof.


text:
    CARTER v BRAUNSTEIN
    Docket No. 77-4559.
    Submitted February 6, 1979, at Detroit.
    Decided March 19, 1979.
    Plaintiff, Samuel Carter, a black man, was injured in a four-car collision on the Lodge Expressway. He sued defendant, Joseph Braunstein, a white man, and was granted judgment. The Wayne Circuit Court, Horace W. Gilmore, J., denied plaintiff’s motion for a new trial. Plaintiff appeals alleging that the trial court erred in denying his request to inquire of prospective jurors concerning racial prejudice and erred in admitting an "ability to work” report in which the company doctor noted that no work restrictions were required. Held:

    1. A litigant in a civil action is entitled, upon request, to ask or have asked on voir dire special questions dealing with the subject of racial prejudice where it appears that race is an issue; the mere fact that the parties are of different races, of itself, does not indicate an issue of race.
    2. The doctor’s notation in the report was not a diagnosis but was merely a general description of plaintiff’s physical condition and, as such, the report was admissible under the business entry rule.
    Affirmed.
    1. Trial — Jurors — Veniremen — Voir Dire.
    The purpose of voir dire examination of veniremen is to provide counsel an opportunity to elicit sufficient information to develop a rational basis for excluding prospective jurors either for cause or peremptorily.
    2. Trial — Veniremen — Voir Dire — Questions Concerning Racial Prejudice.
    A litigant in a civil action is entitled, upon request, to ask or have asked on voir dire special questions dealing with the subject of racial prejudice where it appears that race is an issue; the mere fact that the parties are of different races, of itself, does not indicate an issue of race.
    Reference for Points in Headnotes

       47 Am Jur 2d, Jury § 195.

      Zeff & Zeff (Harry A. Mayer and Edward Grebs, of counsel), for plaintiff.

      Sullivan, Ranger, Ward & Bone (by Maureen Holahan), for defendant.
    Before: Danhof, C.J., and Bronson and Beasley, JJ.
   Beasley, J.

On October 6, 1961, while a passenger, plaintiff was injured in a four-car collision on the Lodge Expressway. After the car in which plaintiff was a passenger struck the suddenly-stopping car in front of it, defendant drove his car into the rear end of the car in which plaintiff was a passenger.

After a trial, which started on May 31, 1977, a jury awarded plaintiff judgment against defendant in the sum of $2,000. After denial of a motion for new trial, plaintiff appeals as of right, raising two issues.

First, plaintiff claims it was error to deny his request that the trial judge inquire of the jurors whether they harbored prejudice or feeling against blacks. In this case, plaintiff is black and defendant is white. The trial judge denied plaintiff’s request, pointing out that the jurors indicated they had no reservations about deciding the case from the testimony. In support of his claim, plaintiff cites a criminal case, People v Wray.

The purpose of voir dire is to provide counsel an opportunity to elicit sufficient information to develop a rational basis for excluding prospective jurors whether for cause or by peremptory challenge.

Part of the problem for trial judges in conducting voir dire of prospective jurors to determine the presence of undue prejudice is that the questioning of necessity places emphasis on race which, of course, is just what a trial judge wants to avoid, namely, injection of race. For example, in Harrell, defense counsel requested the trial judge to propound 120 questions to each prospective juror. One inevitable effect of putting 120 such questions to a prospective juror would, of necessity, place undue emphasis on differing races in the trial.

In Ham v South Carolina, the Supreme Court held:

"The State having created this statutory framework [voir dire examination] for the selection of juries, the essential fairness required by the Due Process Clause of the Fourteenth Amendment requires under the facts shown by this record the petitioner be permitted to have the jurors interrogated on the issue of racial bias.”

In Ristaino v Ross, Ross, a black, was convicted of crimes of violence against a white security guard. The Supreme Court held that his Federal constitutional rights secured through the Fourteenth Amendment were not violated by a refusal to ask questions directed to racial prejudice. "The mere fact that the victim of the crimes alleged was a white man and the defendants were Negroes was less likely to distort the trial than were the special factors involved in Ham ” where racial issues "were inextricably bound up with the conduct of the trial”.

In People v Wray, the trial court said:

"Even though the Court noted that there was no requirement for the trial court to ask the defendant’s requested questions verbatim, it was reversible error not to ask specific questions dealing with the particular subject of racial prejudice.”

Although the cited cases are all criminal cases, we subscribe to the proposition that in a civil jury trial where it appears that race is an issue, a litigant is entitled, upon request, to ask or have asked special questions dealing with the particular subject of racial prejudice. While we unqualifiedly embrace this doctrine, we do not find that there was any bona fide issue of race within the civil suit for damages. The mere fact that a plaintiff is black and a defendant white does not indicate that there is necessarily an issue of race. Consequently, under these circumstances, we decline to find that it was error for the trial judge to refuse to ask specific questions of the jury relating to racial prejudice. Furthermore, the record in this case indicates that counsel for plaintiff failed to make specific written requests regarding the exact inquiries of prospective jurors that he wanted made. Counsel’s oral request on the record for such an inquiry lacked specificity and was stated in an indefinite fashion. Consequently, we find no error in the conduct of the voir dire in this case.

Next, plaintiff alleges that the trial court erred in admitting into evidence an "Ability to Work” report as part of plaintiffs employment record at Ford Motor Company. In the report, the company doctor noted that no work restrictions were required. This was not a diagnosis but was merely a general description of plaintiffs physical condition. As such, it was admissible under the business entry rule.

Affirmed, with costs.

       49 Mich App 344; 212 NW2d 78 (1973).

        People v Harrell, 398 Mich 384, 388, 393; 247 NW2d 829 (1976).

       See fn 2, supra.

       409 US 524, 527; 93 S Ct 848; 35 L Ed 2d 46 (1973).

       424 US 589, 597; 96 S Ct 1017; 47 L Ed 2d 258 (1976).

        People v Wray, supra, p 346.

       The record indicates as follows:
      "MR. MEYER: [Counsel for plaintiff] Yes, Your Honor. I would like to know — I realize this is a difficult thing perhaps for some jurors, I don’t know about this jury — but I would like to know if any of the jurors have any feelings against people of the black race, whether or not—
      "THE COURT (Interposing): No, I don’t think we need to get into the racial matter.
      "Anything else?
      "MR. MEYER: I think the jury should be committed to the proposition—
      "THE COURT (Interposing): They have indicated they have no reservation about deciding the case solely and completely from the sworn testimony.”

       The "Ability to Work” report was dated some eight years after the accident.

       MCL 600.2146; MSA 27A.2146. Bond v Greenwood, 34 Mich App 41; 190 NW2d 731 (1971), Cacavas v Bennett, 37 Mich App 599; 194 NW2d 924 (1972).