Case Name: POTTER v. WAYNE COUNTY
Court: Michigan Court of Appeals
Jurisdiction: Michigan
Decision Date: 1973-04-19
Citations: 46 Mich. App. 174
Docket Number: Docket No. 11305
Parties: POTTER v WAYNE COUNTY
Judges: Before: Lesinski, C. J., and Levin and O’Hara, JJ.
Reporter: Michigan appeals reports; cases decided in the Michigan Court of Appeals.
Volume: 46
Pages: 174–194

Head Matter:
POTTER v WAYNE COUNTY
Opinion op the Court
1. Appeal and Error — Record on Appeal.
The Court of Appeals cannot exercise its appellate function on issues not reached by the trial court, upon which the record is silent.
Dissent by Levin, J.
2. Trusts — Ownership—Profits.
Any profit obtained by a fiduciary belongs to the trust estate without regard to whether an injury was done to the estate or the profit was gained rightfully.
3. Trusts — Trust Funds — Investment—Interest.
A trustee is accountable for the interest received on invested trust funds even though he had no duty to make the funds productive.
4. Parties — Class Action.
A kind of claim expected to be asserted as a class action is one wherein the persons constituting the class are so numerous as to make it impractical to bring them all before the court, a party can fairly insure the adequate representation of all, and the right sought to be enforced presents common questions of law and of fact and a common relief is sought (GCR 1963, 208.1).
5. Counties — Claims Against Counties — Actions.
A claim against a county in which the county’s liability arises by operation of law, as where a county or one of its officers has improperly obtained, exacted, or withheld money and the liabil ity to return the money arises under the principles of the common law, is left to common law remedies in courts having jurisdiction of common law actions and is not subject to a statutory provision requiring presentation of claims to the county board of supervisors or board of auditors before commencement of an action (MCLA 46.71).
References for Points in Headnotes
5 Am Jur 2d, Appeal and Error § 545 et seq.
53 Am Jur, Trusts § 370 et seq.
'59 Am Jur 2d, Parties § 47 et seq.
56 Am Jur 2d, Municipal Corporations, Counties, and Other Political Subdivisions § 680 et seq.
Appeal from Wayne, Thomas Roumell, J.
Submitted Division 1 December 8, 1972, at Detroit.
(Docket No. 11305.)
Decided April 19, 1973.
Complaint by Ellen A. Potter and others similarly situated against Wayne County and Edgar M. Branigin, Clerk of Wayne County, for an accounting for interest earned on money held by the county pursuant to the orders of the circuit court. Summary judgment for defendants. Plaintiffs appeal.
Reversed and remanded for further proceedings.
Louis Wechsler and Saul Levin, for plaintiffs.
William L. Cahalan, Prosecuting Attorney, and Aloysius J. Suchy and Rheo G Marchand, Assistant Prosecuting Attorneys, for defendants.
Before: Lesinski, C. J., and Levin and O’Hara, JJ.
Former Supreme Court Justice, sitting on the Court of Appeals by assignment pursuant to Const 1963, art 6, § 23 as amended in 1968.

Opinion:
O'Hara, J.
This is an appeal of right from the grant of a summary judgment. The claim asserted is in the nature of a class action on behalf of the named plaintiff and all others (if any) similarly situated.
The common fact situation said to support the class action is that funds deposited with the clerk of the court of the Third Judicial Circuit were invested in interest-bearing accounts or securities and that the profit thereon was retained by the county rather than given to the "ultimate" owners of the funds. The common legal question is the claimed illegality of an order of the judges of the Third Circuit directing the investments and the payment of the interest into the general fund of Wayne County. The basis of relief seems to be, in general terms, that the questioned order is a revenue-raising measure which is beyond the judicial supervisory power of the judges over the administration of the courts of the county; a due-process question under the Fourteenth Amendment to the Federal Constitution, and though it is not specifically stated the complaint appears to sound in a theory of unjust enrichment, or possible breach of a custodial trust. We examine the issues.
Logically, we must first examine the viability of the asserted class action.
It is simply impossible to do this at appellate judicial level. In all but rare instances appellate courts are courts of review upon a record made in the court below. In this case we cannot properly exercise our appellate function because this first ground was not reached by the trial judge. We quote from his opinion.
"In view of the contents of this opinion, the question of whether a class action being appropriate or whether this suit as such for all other persons, if any, similarly situated is not reached."
Patently, if there is no trial court holding and nothing but pleadings and briefs to aid us, it would be most ill-considered to speak to the issue decisionally.
We look now to the basis upon which the trial judge did pass, and upon which he founded his decision. Without lengthy excerpts from the opin ion, we think it fair to say that the trial court, quoting certain statutory authority, held that the asserted judicial remedy and the relief sought thereby was premature. In effect he said, "until you demonstrate to me that you have made a demand upon the governmental entity involved to furnish you an accounting of the funds said to have been illegally acquired, and demonstrate refusal to pay you what you claim is yours voluntarily the issue is not justiciable before me". The position of the trial judge is not without merit. Plaintiff-appellant's two first stated "Questions Involved" assert that she has the right to proceed immediately judically. This question is as difficult to pass upon at appellate level as the one immediately hereinbefore discussed. The record is totally inadequate. This will have to await disposition until we can discuss the Third Circuit order mentioned later herein. For as far as the record shows, there is no money "ultimately" belonging to the plaintiff that even got into an interest-bearing account or security and thus that the county was illegally (or legally) withholding from plaintiff or anyone else interest earned thereon. We eschew appellate speculation.
We turn now to the claimed constitutional infirmity of the Third Circuit's order. It was entered on April 21, 1965. Again we decline to elongate this opinion either by including the order verbatim or by liberal direct quotation therefrom. We will set out some background that gave rise to its entry and the essence of its legal effect.
For some time, how long we do not know, monies deposited in court in Wayne County were kept in three accounts entitled: Register in Chancery Account; County Clerk Bond Account; and Clerk of the Circuit Court Account.
By the order of the Third Circuit judges all of the accounts were consolidated into one designated The Circuit Court Account, Edward N. Branigin, County Clerk.
Additionally, the order directed the clerk, in his discretion, to invest and reinvest $150,000 from the total of the consolidated account into interest-bearing certificates of deposit and United States Treasury Bills. The order further provided that:
"[a]ll income realized on account of the investment made by the County Clerk pursuant to the terms hereof shall, when realized, be turned over and deposited to the General Fund of the County of Wayne."
We are well aware of the administrative convenience of such an arrangement, but we must at least arch an appellate eyebrow at the scope of the order.
We find ourselves in an anomalous position as far as speaking directly to the claimed illegality of the order. This is because it is this very order that generated the funds that plaintiff and those said to be similarly circumstanced seek accounting for and payment from. As to amounts deposited for bond or bail a specific statute provides that:
"cash or securities received by any clerk shall be deposited in a special fund, . Any interest accumulating upon such fund shall be paid into the general fund of the county." MCLA 765.17; MSA 28.904.
Except for this statute there is no obligation upon the county clerk to invest any custodial funds in interest-bearing securities or accounts. This is why we said earlier the asserted cause of action seems to rest upon the theory, at least in part, of unjust enrichment. To put it simply, the situation would seem to be that the clerk, absent order of the judges, need not have invested any custodial funds in interest-bearing accounts or securities, but since he did (legally or illegally) plaintiff claims the county cannot enrich itself unjustly by retaining the interest earned.
Since we must vacate the summary judgment as to the first two issues discussed — viz., the viability of the claimed class action, and the failure to make demand upon the county in the manner provided by statute, and the refusal pursuant thereto — we think it not amiss to add some comment, non-decisional, but mayhap very relevant.
We call the attention of the Third Circuit judges to a statute which may have been overlooked or not sufficiently distinguished as to its applicability to the matter under consideration.
"For any and all services relative to the receipt, safekeeping, putting out money, or purchasing, taking or transferring any security therefor, or collecting interest thereon, under the direction of the court, not herein specifically provided for, the clerk shall receive such allowance and compensation, and from such of the parties as the court may consider just and shall direct by an order, after notice to the parties to be charged therewith." MCLA 600.2529(8); MSA 27A.2529(8).
We note that retention of interest in some cases might well exceed or be far less than the court might consider "just". We think it not untoward that the Third Circuit bench reexamine promptly the order of 1965 which is under attack.
Gratuitously we add yet another comment. The class action so-called is a much needed tool to be employed in the interest of the individual litigant who by reason of his mini-size claim may be unable to retain counsel to press his cause. Per contra, the class action, real or spurious, is not a device to be employed to create a bonanza when a simple, easily assertable, alternate remedy is available. We hardly need add that we intimate no evaluation in this regard of the case at bar.
If our opinion herein, like some of the teachings of Socrates, asks more questions than it answers, we ascribe it to the nature of the problem posed, the order giving rise to the litigation, the conflicting statutes involved, and the absence of a reviewable record.
For the reasons herein discussed, we vacate the summary judgment and remand for further proceedings. No costs, neither party having decisively prevailed.
Lesinski, C. J., concurred.
Now Joseph B. Sullivan.