Court Opinion

ID: 9579200
Source: CourtListenerOpinion
Date Created: 2023-08-21 21:52:25.065053+00
Date Added: 2024-06-11T13:34:33.833788
License: Public Domain

T. E. Brennan, J.
(dissenting). On or about the 28th of July, 1969, defendant employed plaintiff to do certain earth-moving work on a golf course *668located in Memphis, Michigan. This agreement was orally made, with compensation to be based upon hourly rates for the use of bulldozer and draglines owned and operated by the plaintiff.
Between July 28, 1969, and October 1,1, 1969, plaintiff performed the agreed work for the defendant for a total charge of $21,834.
The defendant has not paid the plaintiff for this work.
On April 13, 1971, plaintiff commenced an action in the Circuit Court for Oakland County. Complaint was served on defendant, which filed an answer on May 10, 1971, admitting the contract and its performance, and disputing only the amount in which the defendant was indebted to the plaintiff.
On May 18, 1971, defendant filed and served on plaintiff a series of eight interrogatories, essentially seeking particulars on the plaintiff’s claim. Defendant asked for the specific date of the oral contract, and the description and date of all services performed. These interrogatories were answered on August 2,1971.
Thereafter, on August 11,1971, defendant filed a motion for leave to amend its answer, alleging that the plaintiff’s answer to interrogatories "indicate to defendant a defense which should be raised by accelerated judgment and/or summary judgment.”
Defendant filed in circuit court a certificate of the Michigan Department of Treasury, dated May 5,1971. It was as follows:
"7b All To Whom These Presents Shall Come:

’% Allison Green, Treasurer of the State of Michigan, Do Hereby Certify That

"BEN P. FYKE & SONS, Inc., a Michigan corporation, was incorporated in this State on March 30,1954.
*669"The corporation filed all annual reports and paid the fees in connection therewith up to and including the 1970 report.
"I FURTHER CERTIFY that the 1968 annual report and fees, due May 15, 1968, were received in this office May 16, 1968 and the report was accepted for filing February 6, 1969. The 1969 report and fees, due May 15, 1969, were received January 9, 1970 and the report was accepted for filing March 18,1970.
"This certificate is in due form and made by me as the proper officer, and is entitled to have full faith and credit given it in every court and office within the United States.

"In testimony whereof, I have hereunto set my hand and affixed the Seal of the Department, in the City of Lansing, this 5th day of May, 1971.

"(s) Allison Green
"State Treasurer.”
The circuit judge refused to allow the amendment.
The Court of Appeals affirmed, saying,
"The present defendant possessed accurate knowledge that plaintiff was a corporation at the time its answer was filed. The transcript of proceedings had on its motion further reveals defendant’s admission that it either had knowledge of plaintiff’s statutory violation before its answer was filed or immediately thereafter. Defendant offers no meritorious explanation for waiting approximately three months to file its motion to amend while possessing such knowledge. A review of the trial judge’s primary basis for decision and an evaluation of his supplementary consideration fails to reveal error. Finding no abuse of discretion, we affirm the denial of defendant’s motion to amend its pleadings.
"Affirmed.”
My Brother Levin correctly points out that GCR 1963, 118.1, provides that leave to amend pleadings should be freely granted "when justice so *670requires”. He also correctly concludes that as a general proposition the effect of the amendment on the final outcome of the case, that is, the merits of the amendment are not usually to be considered by the trial judge in determining whether "justice requires” that leave to amend be granted.
Thus, the mere fact that an amendment to defendant’s answer would provide a complete defense to the plaintiff’s claim should not be ground for refusing leave to amend.
After all, every amendment is designed to improve the position of the amending party.
But, the nature of the defense may be considered by the trial court in evaluating the lateness of the proferred amendment.
The defense raised by defendant in the present case is not merely a technical or procedural advantage permitted by the law in the overall effort to do justice between the parties. The statute of limitations might be so described. The statute of frauds is similarly intended to advance the cause of justice as between contracting parties.
Even the harsh rule of MCLA 338.1516; MSA 18.86(116) prohibiting suit by unlicensed residential contractors is designed to afford a blanket of protection to consumers.
But, the defense of lack of capacity permitted by MCLA 450.87; MSA 21.87 has no such purpose.
It is more accurately a civil forfeiture, designed to enforce compliance with the filing requirements of the corporation laws.
To the extent that it enures to the benefit of individuals, such as the defendant here, it is no more than a bounty, offered by state government as a device to insure collection of corporate franchise taxes.
If the defendant had raised the defense in a timely fashion, the law would have permitted it to *671be unjustly enriched in the amount of $21,834, thus severely punishing the plaintiff for its eight month delay in filing the annual report and paying the fees due on May 15, 1969.
But, although the law permits such forfeitures, equity abhors them. The trial judge ought not be required to close his eyes to the impact of the exercise of his discretion.
Here, the certificate of the Department of Treasury was issued five days before the defendant’s answer was filed. In fact, that answer alleged that defendant was "without sufficient information to form a belief as to the identity of Plaintiff or as to the status of Plaintiff.”
The thrust of defendant’s argument was that, although the plaintiff’s delay in filing its 1969 annual report was known, the fact that the agreement was made during the period of the corporate default was not apparent until August 2, 1971, when plaintiff filed answers to the defendant’s interrogatories.
In view of the fact that the contract between the parties was admitted by defendant, it follows that defendant’s officers and agents were fully aware of the agreement.
The date of that agreement was a matter equally within the knowledge of the parties. There was no need for interrogatories to determine whether the contract was made within the period of the plaintiff’s corporate default. c
These were considerations properly before the circuit judge when called upon to exercise his discretion to allow the defendant’s belated amendment.
I would affirm the courts below.
M. S. Coleman, J., concurred with T. E. Brennan, J.