Jay Dee Contractors, Inc. v. Fattore Construction Co.

Michigan Court of Appeals

Jay Dee Contractors, Inc. v. Fattore Construction Co.

293 N.W.2d 620, 96 Mich. App. 519, 1980 Mich. App. LEXIS 2581

CourtMichigan Court of Appeals

DecidedApril 2, 1980

DocketDocket No. 43015

StatusPublished

Cited by2 cases

This text of 293 N.W.2d 620 (Jay Dee Contractors, Inc. v. Fattore Construction Co.) is published on Counsel Stack Legal Research, covering Michigan Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Jay Dee Contractors, Inc. v. Fattore Construction Co., 293 N.W.2d 620, 96 Mich. App. 519, 1980 Mich. App. LEXIS 2581 (Mich. Ct. App. 1980).

Pincite

Opinion

T. M. Burns, P.J.

Defendant Fattore Construction Company appeals of right a December 15, 1978, judgment on its counterclaim awarding it custody of property that had been unlawfully detained by plaintiff but denying its request for damages that accrued as a result of the unlawful detention.

At the time that this cause of action arose, the defendant corporation was required under the provisions of the corporation fees, taxes and charges act, MCL 450.301 et seq.; MSA 21.201 et seq., to file an annual report and to pay a yearly franchise fee tax.¹ Section 87 of the franchise fee tax, MCL 450.87; MSA 21.87,² provided that the failure of a corporation to pay this yearly tax or to file an annual report pertaining to its Michigan business activity suspended the corporation’s right to do business in Michigan. It further stated that until the corporation paid the delinquent tax it could not maintain "any action or suit in any court of this state upon any contract entered into during the time of such default”.

It is undisputed that in 1969 and in 1970, when the defendant corporation leased property to the [522]*522plaintiff, the corporation did not file its annual report or pay its franchise fee tax. Sometime after the lease had been executed, plaintiff sued the defendant corporation, its officers and another corporation owned by one of the officers for money due on a promissory note. Defendants counterclaimed for amounts allegedly due under the lease. Plaintiff moved for, and was granted, summary judgment on the counterclaim on the ground that § 87 of the franchise fee act prevented a suit on the lease. Plaintiff was also granted summary judgment on defendant construction company’s first amended counterclaim.

On December 22, 1976, defendant construction company filed a second amended counterclaim in which it alleged that it waS entitled either to a return of the property held by plaintiff under the unenforceable lease or to the fair value of the property. Defendant construction company also sought damages accruing from plaintiff’s detention of the property. On December 15, 1978, the lower court held that defendant construction company was entitled to a return of the property but that, by virtue of § 87 of the franchise fee act, it could not recover any damages for plaintiff’s Unlawful detention of it. We reverse.

Defendant’s counterclaim was premised on MCL 600.2920; MSA 27A.2920, which permits recovery of personal property unlawfully taken or detained. See also, GCR 1963, 757. Actions brought under this statute sound in tort and not contract. The failure of the defendant corporation to pay its franchise fee taxes in 1969 and 1970 only precludes it from bringing contract actions, not tort actions. John J Gamalski Hardware, Inc v Wayne County Sheriff, 298 Mich 662; 299 NW 757; 136 ALR 1155 (1941). The fact that defendant’s tort [523]*523cause of action arose out of a void contract makes no difference. Rex Beach Pictures Co v Harry I Garson Productions, 209 Mich 692; 177 NW 254 (1920).

We hold, therefore, that defendant is entitled not only to a return of the unlawfully detained property but also to any damages that arose as a direct consequence of the unlawful detention of its property. Of course, defendant is not entitled to any recovery for sums due on the lease or to any recovery on the quasi-contract theory of quantum meruit. We are not persuaded by plaintiff’s arguments that the judgment of the lower court is not appealable and that this Court does not have jurisdiction over this controversy.

Reversed and remanded for further proceedings consistent with this opinion.

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T. M. Burns, P.J.

Defendant Fattore Construction Company appeals of right a December 15, 1978, judgment on its counterclaim awarding it custody of property that had been unlawfully detained by plaintiff but denying its request for damages that accrued as a result of the unlawful detention.

At the time that this cause of action arose, the defendant corporation was required under the provisions of the corporation fees, taxes and charges act, MCL 450.301 et seq.; MSA 21.201 et seq., to file an annual report and to pay a yearly franchise fee tax.¹ Section 87 of the franchise fee tax, MCL 450.87; MSA 21.87,² provided that the failure of a corporation to pay this yearly tax or to file an annual report pertaining to its Michigan business activity suspended the corporation’s right to do business in Michigan. It further stated that until the corporation paid the delinquent tax it could not maintain "any action or suit in any court of this state upon any contract entered into during the time of such default”.

It is undisputed that in 1969 and in 1970, when the defendant corporation leased property to the [522]*522plaintiff, the corporation did not file its annual report or pay its franchise fee tax. Sometime after the lease had been executed, plaintiff sued the defendant corporation, its officers and another corporation owned by one of the officers for money due on a promissory note. Defendants counterclaimed for amounts allegedly due under the lease. Plaintiff moved for, and was granted, summary judgment on the counterclaim on the ground that § 87 of the franchise fee act prevented a suit on the lease. Plaintiff was also granted summary judgment on defendant construction company’s first amended counterclaim.

On December 22, 1976, defendant construction company filed a second amended counterclaim in which it alleged that it waS entitled either to a return of the property held by plaintiff under the unenforceable lease or to the fair value of the property. Defendant construction company also sought damages accruing from plaintiff’s detention of the property. On December 15, 1978, the lower court held that defendant construction company was entitled to a return of the property but that, by virtue of § 87 of the franchise fee act, it could not recover any damages for plaintiff’s Unlawful detention of it. We reverse.

Defendant’s counterclaim was premised on MCL 600.2920; MSA 27A.2920, which permits recovery of personal property unlawfully taken or detained. See also, GCR 1963, 757. Actions brought under this statute sound in tort and not contract. The failure of the defendant corporation to pay its franchise fee taxes in 1969 and 1970 only precludes it from bringing contract actions, not tort actions. John J Gamalski Hardware, Inc v Wayne County Sheriff, 298 Mich 662; 299 NW 757; 136 ALR 1155 (1941). The fact that defendant’s tort [523]*523cause of action arose out of a void contract makes no difference. Rex Beach Pictures Co v Harry I Garson Productions, 209 Mich 692; 177 NW 254 (1920).

We hold, therefore, that defendant is entitled not only to a return of the unlawfully detained property but also to any damages that arose as a direct consequence of the unlawful detention of its property. Of course, defendant is not entitled to any recovery for sums due on the lease or to any recovery on the quasi-contract theory of quantum meruit. We are not persuaded by plaintiff’s arguments that the judgment of the lower court is not appealable and that this Court does not have jurisdiction over this controversy.

Reversed and remanded for further proceedings consistent with this opinion.

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Bluebook (online)

293 N.W.2d 620, 96 Mich. App. 519, 1980 Mich. App. LEXIS 2581, Counsel Stack Legal Research, https://law.counselstack.com/opinion/jay-dee-contractors-inc-v-fattore-construction-co-michctapp-1980.

Opinion

T. M. Burns, P.J.

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