Higgins v. Hampshire Products, Inc. , 319 Mich. 674 ( 1948 )

This is an appeal from an order of the Washtenaw circuit court dismissing plaintiffs' declaration for claimed lack of jurisdiction.

The material facts are not in dispute. Plaintiffs, as a copartnership and residents of Wayne county, instituted the present action in Washtenaw county by filing a declaration with rule to plead indorsed thereon. On the same day a deputy sheriff of Washtenaw county served the declaration with rule to plead upon LeRoy Briggs, an accountant of defendant corporation, at its office at 495 Redmond road, Milan, Michigan. Thereafter, the deputy sheriff filed a return certifying that he had served the defendant corporation in Washtenaw county.

Subsequently, the principal defendant entered a special appearance and filed a motion to dismiss and quash the service of process on the ground that the court had obtained no jurisdiction of the cause for the reason that neither the plaintiffs nor principal defendant were residents of Washtenaw county; and that no service was obtained upon defendant in Washtenaw county. Testimony was taken upon this motion and the following facts were established. Defendant company was incorporated in 1941. In its articles of incorporation, the city of Milan, Washtenaw county, was designated as the location of the corporation with annual reports filed with the county clerk of Washtenaw county. It is also an established fact that the Monroe-Washtenaw county line runs through the city of Milan; that 495 Redmond road is in Monroe county; that the principal defendant's office and place of business has not been changed since incorporation; and that service of process was in fact made in Monroe county.

The trial court entered an order quashing the service of process and dismissing plaintiffs' declaration with rule to plead for the reason that service of process was made in Monroe county and, therefore, the circuit court of Washtenaw county had obtained no jurisdiction over defendant corporation.

Plaintiffs appeal and urge:

"1. The trial court should have ruled that defendant is a resident of Washtenaw county in point of law and fact, estopped by its conduct from asserting any contrary claim.

"2. Although, as the court of the county of defendant's residence in which suit was brought, its process can be served on the defendant any place where defendant can be found in the State of Michigan (3 Comp. Laws 1929, § 14090 [Stat. Ann. § 27.757]), the court should have ruled that defendant was estopped to assert or testify that service of process at its registered office was not made in Washtenaw county.

"3. Although, if the return of service of process was false, the trial court could properly, at the most, have quashed service and issued new process directed to the sheriff of any county of Michigan, the trial court should have ruled that, let alone clear and convincing proof, there was utterly no evidence whatever to impeach the return of service of process."

We shall first discuss the question of whether defendant corporation is estopped from denying that it is a resident of Washtenaw county.

In Orloff v. Morehead Manfg. Co., 273 Mich. 62, a suit by a minority of stockholders was started in Washtenaw county to dissolve the corporation. Its place of business was located in Wayne county. Plaintiffs lived in Washtenaw county. Service of process was obtained upon defendants in Wayne county. We there said:

"It is settled that a corporation in this State does have a ``local habitation.' Detroit Transportation Co. v. Board ofAssessors of Detroit, 91 Mich. 382.

"``Its residence depends not on the habitation of the stockholders in interest, but on the official exhibition of legal and local existence. Angell and Ames on Corporations (11th Ed.), § 107.' Republic Motor Truck Co. v. The Buda Co., 212 Mich. 55,65.

"``It is a familiar doctrine that a private corporation must be held to reside in the town where its principal office is, as a local inhabitant.' People, ex rel. Detroit Fire Marine Ins.Co., v. Saginaw Circuit Judge, 23 Mich. 492."

In Flewelling v. Prima Oil Co., 291 Mich. 281, the defendant company had its registered office and was conducting its business in Wayne county. Plaintiffs began an action in Jackson county and service of process was made upon defendant officer and registered agent of the corporation in Wayne county. Defendant corporation had abandoned its registered office and was conducting its business from the private residences of its officers, all of whom resided in Wayne county. We there said:

"The corporation may have violated the provisions of Act No. 327, § 38, Pub. Acts 1931, as amended by Act No. 194, Pub. Acts 1935 (Comp. Laws Supp. 1935, § 10135-38, Stat. Ann. § 21.38), in abandoning and failing to maintain its registered office, but this did not subject it to service of process anywhere within the State. Although neglecting this duty, it should, nevertheless, be deemed to have a place of residence in the county where it exercises its corporate powers and transacts its business. SeeState, ex rel. Oakland Motor Car Co., v. District Court ofWaseca County, 176 Minn. 78 (222 N.W. 524); Hildebrand v.United Artisans, 46 Or. 134 (79 P. 347, 114 Am. St. Rep. 852); Connecticut Passumpsic Rivers R. Co. v. Cooper,30 Vt. 476 (73 Am. Dec. 319). Plaintiffs elected to institute their action in Jackson county rather than the county of residence of the defendant corporation, and process could be served only in the county in which the suit was instituted. No valid service having been had in the county of Jackson on any of the defendants, no authority existed for serving any of them in Wayne county under the provisions of 3 Comp. Laws 1929, § 14090 (Stat. Ann. § 27.757)."

In 19 C.J.S. p. 976, it is said:

"It has been held that in the absence of any law defining the residence of a corporation, such residence is not necessarily where its principal place of business is, yet, when it is necessary to determine the venue of an action to which a corporation is a party by its residence, the county in which it has its principal place of business or its principal office is generally considered as its residence, although it may not be the county wherein the certificate of incorporation is filed, and although its actual business is carried on, and its officers reside, in some other county, or its charter permits it to maintain an office outside of the State."

In the case at bar, defendant corporation has always had its office and place of business in Monroe county. The fact that the original articles of incorporation designated Washtenaw county rather than Monroe county as its corporate residence does not estop defendant corporation from asserting that its residence and place of business is in Monroe county. In Dewey v. Central Car Manfg. Co., 42 Mich. 399, we held that service of process upon a corporation can be made only within the county where its business office is fixed. In Whitehead v. Van Buren CircuitJudge, 220 Mich. 504, we held that a sheriff is a county officer and has no jurisdiction to serve process outside the limits of his own county unless specially authorized to do so. It follows that service of process by a deputy sheriff of Washtenaw county upon defendant corporation in Monroe county is a nullity and the trial court was right in quashing such service. Moreover, the general policy of our laws requires all suits to be brought in the county where one or the other of the parties resides. SeeGreacen v. Buckley Douglas Lumber Co., 167 Mich. 569.

Defendant corporation, being a resident of Monroe county, must be sued in that county. It also follows that the trial court was right in dismissing plaintiffs' declaration filed against defendant corporation in Washtenaw county. The judgment should be affirmed, with costs to defendant.

BUSHNELL, C.J., concurred with SHARPE, J.