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Penton Publishing v. Markey

Michigan Court of Appeals
Aug 15, 1995
212 Mich. App. 624 (Mich. Ct. App. 1995)


Docket No. 171059.

Submitted May 9, 1995, at Grand Rapids.

Decided August 15, 1995, at 9:05 A.M. Leave to appeal sought.

Muller, Muller, Richmond, Harms, Myers Sgroi (by William R. Farran), for the plaintiff.

Warner, Norcross Judd (by Devin S. Schindler and Dale B. Black), for the defendant.

Before: SAAD, P.J., and BANDSTRA and M.G. HARRISON, JJ.

Circuit judge, sitting on the Court of Appeals by assignment.

This is a collection case. Plaintiff sued Robert A. Markey personally for payments owed to it for sales made to Markey Associates. Defendant responded that he was not personally liable to plaintiff, because plaintiff's sales actually had been to Markey Associates, Inc., a Michigan corporation doing business as Markey Associates. That corporation had ceased operations and had established a trust fund for the benefit of its creditors, including plaintiff. After both parties moved for summary disposition, the trial court granted summary disposition for plaintiff. We reverse.

Plaintiff argues that its understanding was that Markey Associates was the name under which Robert A. Markey did business and that nothing in the business relationship had put it on notice that a corporation was involved. Plaintiff further argues that it had no duty to discover that the assumed name belonged to a corporation and not to defendant Robert A. Markey. Instead, plaintiff argues that Robert A. Markey, acting as an agent, was required to disclose the existence and identity of his principal, Markey Associates, Inc., in order to avoid personal liability.

Defendant argues that any duty to disclose the existence of the corporation was satisfied because the corporation had filed an assumed-name certificate pursuant to MCL 450.1217; MSA 21.200(217), which provides in relevant part:

(1) A domestic or foreign corporation may transact its business under any assumed name or names other than its corporate name . . . by filing a certificate stating the true name of the corporation and the assumed name under which the business is to be transacted.

Under the general agency precedents that plaintiff relies upon, a principal is considered undisclosed unless a party transacting with the principal's agent has notice that the agent is acting for the principal and notice of the principal's identity. Dodge v Blood, 299 Mich. 364, 370; 300 N.W. 121 (1941). An agent contracting for an undisclosed principal is personally liable for contractual obligations. Detroit Pure Milk Co v Patterson, 138 Mich. App. 475, 478; 360 N.W.2d 221 (1984). However, none of the Michigan precedents plaintiff relies upon involved a corporation that properly had filed an assumed-named certificate as authorized by the statute. See Stevens v Graf, 358 Mich. 122; 99 N.W.2d 356 (1959); Detroit Pure Milk Co v Farnsworth, 114 Mich. App. 447; 319 N.W.2d 557 (1981); Baranowski v Strating, 72 Mich. App. 548; 250 N.W.2d 744 (1976). On the other hand, defendant did not cite, and we are unaware of, any Michigan precedents holding that an assumed-name filing provides protection to the agent of an otherwise undisclosed principal.

Some guidance is found in Bankers Trust Co v Bradfield, 324 Mich. 116, 123; 36 N.W.2d 870 (1949), where the Supreme Court considered an assumed-name statute other than that at issue here and found its purpose to be "to inform the public . . . and thereby . . . prevent imposition and fraud." Accord Maurer v Greening Nursery Co, 199 Mich. 522, 524; 165 N.W. 861 (1917). Courts from other jurisdictions have found that assumed-named statutes serve a similar public notice function. Portland Savings Loan Ass'n v Bernstein, 716 S.W.2d 532, 537-538 (Tex App, 1985); Reed v Pelley, 112 Misc.2d 382; 447 N.Y.S.2d 98 (1982); Sheraton Corp of America v Kingsford Packing Co, Inc, 162 Ind. App. 470, 480; 319 N.E.2d 852 (1974); Berg Metals Corp v Wilson, 170 Cal.App.2d 559; 339 P.2d 869 (1959); Ulick v Vibration Specialty Co, 348 Pa. 241; 35 A.2d 332 (1944).

Consistent with these precedents, we hold that the purpose of MCL 450.1217; MSA 21.200(217) is to place the public on notice regarding corporations that are doing business under an assumed name. A corporation that has complied with this statute has notified the public constructively regarding its assumed name. Accordingly, parties contracting with agents of the corporation operating under the assumed name cannot claim that they were without notice regarding the existence or identity of the corporation. In terms of agency law, a corporate principal fulfills any disclosure obligations that might exist by complying with the statute. The corporation thus provides protection to its agents from personal liability.

A contrary result would fly in the face of the language of the statute. A corporation that files a certificate "may transact its business under any assumed name," presumably without taking further steps to secure the protections from personal liability surrounding corporations under Michigan law. MCL 450.1217(1); MSA 21.200(217) (1).

The trial court improperly granted summary disposition to plaintiff. Summary disposition should have been granted to defendant.

We reverse and remand for entry of judgment for defendant. We do not retain jurisdiction.

Summaries of

Penton Publishing v. Markey

Michigan Court of Appeals
Aug 15, 1995
212 Mich. App. 624 (Mich. Ct. App. 1995)
Case details for

Penton Publishing v. Markey

Case Details


Court:Michigan Court of Appeals

Date published: Aug 15, 1995


212 Mich. App. 624 (Mich. Ct. App. 1995)
538 N.W.2d 104

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