Case Name: CORPORATION & SECURITIES COMMISSION v. AMERICAN MOTORS CORPORATION. APPEAL re DETROIT EDISON COMPANY
Court: Michigan Supreme Court
Jurisdiction: Michigan
Decision Date: 1967-10-02
Citations: 379 Mich. 531
Docket Number: Calendar No. 12, Docket No. 51,612
Parties: CORPORATION & SECURITIES COMMISSION v. AMERICAN MOTORS CORPORATION. APPEAL re DETROIT EDISON COMPANY.
Judges: Dethmers, C. J., and Kelly, T. M. Kavanagh, Souris, Adams, and Brennan, JJ., concurred with O’Hara, J.
Reporter: Michigan Reports
Volume: 379
Pages: 531–551

Head Matter:
CORPORATION & SECURITIES COMMISSION v. AMERICAN MOTORS CORPORATION. APPEAL re DETROIT EDISON COMPANY.
Opinion of the Court.
1. Judgment — Estoppel by Judgment — Matters Determined.
A judgment in an action between 2 parties is conclusive as to the entire matter involved, that is, as to the case presented, and not simply as to the particular question in regard to which the parties are in controversy, so that in a subsequent action between the same parties where the causes of action are the same, the judgment in the prior action is conclusive as to every matter of law or faet involved in the claim whether argued or not.
2. Same — Prior Judgment — Estoppel—Annual Franchise Pee.
Decision and judgment in prior ease between corporate taxpayer and corporation and securities commission that “reserve for deferred Pederal income taxes” is not ineludible in corporate taxpayer’s surplus for the purpose of computing its annual franchise fee held, binding precedent as to that issue in subsequent litigation between the same parties over computation of the annual franchise fee for different years than those involved in prior determination (PA 1921, No 85, § 4, as last amended by PA 1963, No 63).
References for Points in Headnotes
[1, 2] 30A Am Jur, Judgments §§ 324-327, 363, 371, 372.
41 Am Jur, Pleading §§ 340-342.
20 Am Jur 2d, Costs §§ 10, 14.
7 Am Jur 2d, Attorney General § 7.
30A Am Jur, Judgments §§ 336, 337, 340, 341.
30A Am Jur, Judgments §§ 324-327, 336, 337, .340, 341, 363, 371, 372.
5 Am Jur 2d, Appeal and Error § 934.
3. Same — Summary Judgment — Prior Adjudication — Beserve for Deferred Federal Income Taxes.
Summary judgment in favor of defendant taxpayer in action by corporation and securities commission for declaratory judgment as to proper accounting method for handling “reserve for deferred Federal income taxes”, held, properly granted in case where defendant corporate taxpayer had prevailed in prior litigation where the issue of method of handling such reserve was the same, but tax was for a different year.
4. Costs- — Res Judicata.
Costs in circuit eourt, Court of Appeals, and Supreme Court are ordered paid to appellee taxpayer which had been subjected to litigation on issues decided in previous eases.
Separate Opinion.
Black, J.
5. Attorney General — Administrative Law and Procedure — Corporation and Securities Commission — Taxation—Bedetermination of Corporate Franchise Fee.
No attorney general is either duty hound or possessed of legal or moral right to suspend for years a statutory command that the corporation and securities commission give prompt consideration to the timely written request of a corporate taxpayer for redetermination of its timely paid annual franchise fee and to redetermine that fee promptly (PA 1921, No 85, § 4, as last amended hy PA 1963, No 63; CLS 1956, §§ 450-.309, 450.810).
6. Appeal and Error- — Affirmance—Judgment—Effect.
Judgment rendered in the court of claims against the State and in favor of corporate taxpayer for refund of overpayment of corporation franchise fee, and not the order of affirmance entered hy the Supreme Court upon appeal, is the operative judgment upon which an estoppel hy adjudication against the State and in favor of the corporate taxpayer stands.
7. Judgment — Estoppel by Judgment — Matters and Parties Concluded.
Points of law decided hy judge in court of claims hind the parties to his judgment, and they are not free to relitigate such 'points of law anew, where his judgment was affirmed hy the Supreme Coiirt, hy a vote of 3 to 2, with one of the Justices yoting to affirm without opinion.
8. Appeal and Error — Affirmance—Supreme Court — Effect.
Affirmance by the Supreme Court of a judgment of the court of claims, decided by a vote of S Justices in favor of affirmance and % opposed, with S not participating, is nonetheless a decision of the court, and not simply a decision of the Justices voting to affirm.
9. Judgment — Question Determined.
Opinion and judgment of court of claims, affirmed by Supreme Court, that corporation and securities commission is bound by an accounting proceckire set up by public service commission with respect to public utility corporation taxpayer, in determining the annual franchise fee of such taxpayer, is binding both on the taxpayer and on the State until the statutory law or administrative orders upon which such decision toas based should come to alteration or repeal.
10. Costs — Res Judicata — Public Question.
Costs in circuit court, Court of Appeals, and Supreme Court are ordered paid to appellee taxpayer which had been subjected to litigation on issues decided in previous case, no public question being involved.
Appeal from Court of Appeals, Division 1; J. II. Gillis, P. J., and Holbrook and McGregor, JJ., affirming Ingham, Coash (Louis E.), J.
Submitted June 8, 1967.
(Calendar No. 12, Docket No. 51,612.)
Decided October 2, 1967.
4 Mich App 65, affirmed.
Complaint by Corporation & Securities Commission, and its commissioner, Lenton G. Sculthorp, against American Motors Corporation, a Maryland corporation, Detroit Edison Company, a New York corporation, and other corporations, for a declaratory judgment as to the proper accounting treatment of balance sheet item captioned “reserve for Federal income taxes”. Summary judgment for defendant Detroit Edison Company. Plaintiffs appealed to Court of Appeals. Affirmed. Plaintiffs appeal.
Affirmed.
Frank J. Kelley, Attorney General, Robert A. Derengoshi, Solicitor General, and T. Carl Holbrook and William D. Dexter, Assistants Attorney General, for plaintiffs.
Fischer, Sprague, Franklin & Ford (Harvey A. Fischer, Gerald C. Simon, and Francis E. Bentley, of counsel), for defendant Detroit Edison Company.

Opinion:
O'Hara, J.
Leave was granted in this case to appeal an order of the Court of Appeals. The order affirmed the grant of summary judgment in the Ingham county circuit court. We affirm.
The litigation is in the nature of a suit for declaratory judgment against some 13 defendants. The plaintiff-appellant is the commissioner of the corporation and securities commission. Thirteen corporations were named as defendants. Decision in this case is limited to Detroit Edison Company, appellee herein.
Appellee's legal posture is distinguishable from the other named defendants in that it is a public utility and thus subject to accounting procedures prescribed by the Michigan public service commission. It is further distinguishable by reason of prior litigation which reached this Court and was decided by a 3-2 vote, 3 Justices not participating.
The subject matter of this suit is the annual franchise fee of appellee corporation for the years 1957, and 1959 through 1966, both inclusive. The franchise fee for 1958 was the vehicle for the determination of appellee's legal rights in the prior action. The question here presented is the extent to which the decision of this Court in Detroit Edison Com pany v. Corporation & Securities Commission, 367 Mich 104, renders the issues in the suit against 13 corporations instituted February 10, 1964, res judicata as to this defendant-appellee.
It is of little worth to bench and bar to recite again a long and detailed factual background. In simple substance, the issue is whether amounts designated "reserve for deferred Federal income taxes" can be included in this corporation's "surplus" for the computation of its annual franchise fee. The fee is computed by multiplying the corporation's paid-up capital and surplus by the statutory millage rate (at the time involved in the prior case, 4 mills).
Originally, appellee included the reserve item above mentioned in its surplus. The Michigan public service commission by an order which is set out in the Court of Appeals opinion, provided in part:
" 'The current Federal income tax reductions of the Detroit Edison Company resulting from such special amortization are subject to liability for the larger future Federal income taxes and are not available for addition to surplus.' " (Emphasis supplied.)
Obediently, appellee omitted the item from its "surplus." The corporation and securities commission, however, did not deem itself bound by this determination. It withheld the requisite authority of appellee to exercise its corporate rights and. privileges in this State, for failure to include the reserve in surplus.
The Ingham county circuit court in granting the summary judgment followed the holding in Detroit Edison Company v. Corporation & Securities Commission, 367 Mich 104. The Court of Appeals affirmed.
We rest our decision in this case on the doctrine' of estoppel by judgment. We quote with approval the statement and supporting authority therefor in the reply brief of appellee:
"It is the prior adjudication (judgment) between the same parties on this same question which binds the parties.
"'2 Freeman on Judgments (5th ed), § 708, pp 1494-1496, discusses this question as follows:
" ' "Estoppel includes both law and fact. — The estoppel of a judgment is not confined to matters purely of fact or of mixed law and fact, but extends to a decision of the legal rights of the parties on a state of facts common to both suits, although the causes of action are different. 'The claim that a mere conclusion of law announced by one court with reference to a matter before it is not binding in a subsequent suit between the same parties involving the same matter is plausible only under a superficial conception of the principle of res judicata. It is not the finding of facts which constitutes an adjudication, but it is the conclusion of the court as to the effect of those facts determined as matter of law. It is the determination of the issues presented which constitutes the adjudication. That determination may consist principally of findings of fact which lead to the result reached on rules of law which are not disputed as between the parties, or it may consist of conclusions as to disputed questions of law as 'applied to facts about which there is no controversy leading to the result announced. Every judgment necessarily involves the application of principles of law to the facts of the case. The dispute between the parties may he as to the facts, or as to the law, or as to both, but the judgment is conclusive as to the entire matter involved, that is, as to the case pre-¡ sented, and not simply as to the particular question ill regard to which the parties are in controversy.' Where the causes of action are the same the judgment is conclusive as to every matter of law or fact involved in the claim whether urged or not.
" ' "An adjudication in a proceeding appropriate for that purpose, such as a taxpayer's suit, as to the validity of municipal bonds, is conclusive that the city has the legal right to incur a debt of the amount and for the purpose indicated, that the assent ,of the qualified voters has been obtained as required by law, and as to all other questions which the constitution and laws require to be determined before authority is conferred on a municipality to incur a debt. So a judgment against a municipal corporation and a writ of mandamus directing the levy of a tax to satisfy it conclusively determines that the levy is not in excess of the limits imposed by statute." ' " (Citation and footnotes omitted.)
We would make abidingly clear that absent an express overruling of Detroit Edison Company v. Corporation & Securities Commission, supra, it is binding precedent as to issue decided therein, namely, the reserve for deferred Federal income taxes is not includible in this corporation's surplus for the computation of its annual franchise fee. Nor should it be necessary for appellee to seek our writ of superintending control to enforce the holding. We have reviewed appellant's plethora of authority and the rationale of his argument seeking to include appellee within the ambit of whatever decision may ultimately result in the cases of other named defendants in the instant suit and find it inapposite. As to any other party individually or the balance of the parties collectively, we express no opinion.
The order of the Court of Appeals affirming the order for summary judgment of the circuit court for Ingham county is affirmed.
Under the circumstances of this case, appellee is authorized to tax the costs of all courts.
Dethmers, C. J., and Kelly, T. M. Kavanagh, Souris, Adams, and Brennan, JJ., concurred with O'Hara, J.
Corporation & Securities Commission v. American Motors Corporation (Appeal re Detroit Edison Company), 4 Mich App 65. — Reporter.
PA 1921, No 85, § 4, as amended by PA 1954, No 144 (CLS 1956, § 450.304 [Stat Ann 1959 Cum Supp .§ 21.205]). Currently PA 1963, No 63, § 4 (Stat Ann 1965 Cum Supp § 21.205).
4 Mich App 65, 67.