Court Opinion

ID: 9740463
Source: CourtListenerOpinion
Date Created: 2023-08-26 20:36:03.304325+00
Date Added: 2024-06-11T07:24:16.532683
License: Public Domain

M. J. Kelly, J.
(concurring). I agree that under Michigan case law plaintiffs’ claim is governed by the three-year period of limitation provided in MCL 600.5805(8); MSA 27A.5805(8) for injuries to persons or property rather than by a six-year period of limitation.1 I do so reluctantly and write separately to discourage further reliance on my dissenting opinion in Continental Casualty Co v Huron Valley National Bank, 85 Mich App 319, 326-332; 271 NW2d 218 (1978), until such time as the Supreme Court directly addresses this issue.
Michigan case law recognizes that a conversion is within the legal concept of an injury to property. See, e.g., Probst v Jones, 262 Mich 678; 247 NW 779 (1933); Money Corp v Draggoo, 274 Mich 527; 265 NW 452 (1936).2 When a bank collects proceeds of a check which it received over the payee’s forged endorsement, however, the payee may proceed against the bank in contract rather than in conversion to recover the proceeds. For an analysis supporting the payee’s right to sue under an implied contract theory rather than in tort, see my dissenting opinion in Continental Casualty Co, which analysis I reaffirm.3 Where I deem it neces*285sary to part from my earlier views in Continental Casualty Co, is in determining which period of limitation is applicable to a payee’s implied contract theory.
In Continental Casualty Co, I relied on Abbott v Michigan State Industries, 303 Mich 575, 579; 6 NW2d 900 (1942), where the Supreme Court stated that the six-year period of limitation "applies equally to express or implied contracts”. Regrettably, however, I did not tackle the following dicta of the Supreme Court appearing in Huhtala v Travelers Ins Co, 401 Mich 118, 126-127; 257 NW2d 640 (1977):4
"Where the nature and origin of an action to recover damages for injury to persons or property is a duty imposed by law, this Court has held that it cannot be maintained on a contract theory when commenced beyond the three-year period.”
This statement by the Supreme Court is dicta, as the Court went on in Huhtala to find an express contract and applied a six-year period of limitation. Nevertheless, under the predicate cases discussed by the Supreme Court in Huhtala, it follows that under Michigan case law where the nature of an action to recover damages for injury to property is a duty imposed by law, an implied contract theory is subject to the same three-year period of limitation applicable to other actions initiated to recover damages for injury to persons or property._
*286In the instant case, the implied contract theory advanced by plaintiff arose from a duty imposed by law, not by agreement. Since under Michigan law the conversion of a payee’s check results in an injury to property, the payee’s implied contract theory. is governed by the three-year period of limitation generally applicable only to tort actions.
Such a result, of course, puts Michigan at odds with other jurisdictions. As noted by the majority in Continental Casualty Co, supra, p 324:
"A major purpose of the Uniform Commercial Code is to 'make uniform the law among the various jurisdictions’. MCL 440.1102(2)(c); MSA 19.1102(2)(c). In this day of sophisticated interstate commercial transactions, a major purpose of the Code would be undermined if identical conversion actions were subject to widely varying statutes of limitation from state to state.”
Yet in Hechter v New York Life Ins Co, 46 NY2d 34; 385 NE2d 551 (1978), New York’s highest court held that a payee suing a collecting bank under an implied contract theory is entitled to the benefit of the six-year period of limitation governing contracts rather than the three-year limitation period applicable to torts. Thus, contrary to a goal of the Uniform Commercial Code, Michigan’s common law compels a result different from that found in one of the banking centers of America.
I suggest that the Supreme Court review this issue. It seems absurd that Michigan applies a statute of limitations intended to be applicable to torts, see the committee’s comments to MCL 600.5805; MSA 27A.5805, to actions brought for breach of contract. Nevertheless, the Supreme Court’s analysis in Huhtala is applicable to the instant facts and we must abide by that analysis unless and until the Supreme Court addresses the issue further.

A six-year period of limitation for a payee’s implied contract action against a collecting bank can be drawn from both MCL 600.5807(8); MSA 27A.5807(8) and MCL 600.5813; MSA 27A.5813.

 As I noted in Continental Casualty Co, other jurisdictions differ as to whether a conversion is an injury to property. Compare, e.g., Side v Thompson, 205 NYS2d 240, 241 (1960), with Spangenberg v Spangenberg, 123 Cal App 387; 11 P2d 408, 409 (1932).

 Subsequent to my decision in Continental Casualty Co, New York’s highest state court decided in accord that a payee may disregard his tort remedies and sue a collecting bank in contract for collecting funds on a check over the payee’s forged endorsement. See Hechter v New York Life Ins Co, 46 NY2d 34; 385 NE2d 551 (1978).

 My failure to distinguish Huhtala was subsequently flagged by Professor Harris at Harris, Commercial Transactions, 1979 Annual Survey of Michigan Law, 26 Wayne L Rev 469, 496, fn 163 (1980). Professor Harris expressly declined, however, to comment on whether a six- or a three-year period of limitations should be applied to a payee’s implied contract action against a bank which collected the proceeds of a check over the payee’s forged endorsement.