Standard-Toch Chemicals, Inc. v. Victor Paint Co.

Otis M. Smith, J. This is an appeal from an order of the Wayne circuit court affirming an order of the common pleas court of Detroit which dismissed appellant’s motion to remove a cause from common pleas court to circuit court. Appellee, a foreign corporation, by its attorneys, filed a declaration in replevin claiming illegal detention by appellant of a certain paint-mixing machine. In answer to the replevin suit, appellant denied that appellee had a right to return of the machine because of a separate understanding between the parties outside of the lease agreement. Appellant also filed set-off and recoupment in the amount of $5,125 based on an allegation of damages resulting from unfit, unusable and unmerchantable paint, which appellee had furnished appellant for use in connection with the paint-mixing machine. The monetary jurisdiction of common pleas court is $3,000. Appellant also filed an affidavit [642] for removal of proceedings to circuit court under PA 1915, No 314, ch 69, § 17a, as added by PA 1959, No 249 (CL 1948, § 669.17a [Stat Ann 1959 Cum Supp §27.3244(1)]). The statute in question reads as follows: “If a defendant claims an amount by way of set-off or recoupment which exceeds the monetary jurisdiction of the court, and accompanies the notice of the .claim with an affidavit stating that the claim asserted is in his belief justly due and owing him, the plea and notice of set-off or recoupment shall be recorded and the proceedings removed to the circuit court to which appeal of the cause would ordinarily lie. The justice shall forward to the circuit court the original or attested copies of all papers in the action and cause the action to be filed therein. Thereafter no proceedings shall be had before the justice, and the action shall be prosecuted in the circuit court. No removal shall occur under this section until the defendant pays the plaintiff’s costs legally incurred up to that time, together with an entry fee of $6, which entry fee the justice shall pay to the clerk of the circuit court at the time the papers are filed in the circuit court.” Appellant delivered to the plaintiff the costs incurred by appellee up to that time. At the hearing on the motion to remove the proceedings to circuit court, the common pleas judge entered an order denying said motion. He took note of the statute under which removal was sought and held that appellant’s claim of set-off and recoupment could not be asserted since neither set-off nor recoupment constitutes a defense to a replevin suit in the common pleas court. The essential question at issue involves construction of the statute above cited. This statute is a 1959 amendment to the law of set-off and recoupment in justice courts, which law governs in the common pleas court. Set-off and recoupment in justice courts [643] are treated in the following statutes, CL 1948, §§ 669-.11-669.17, and CL 1948, § 669.17a, as added by PA 1959, No 249 (Stat Ann and Stat Ann 1959 Cum Supp §§ 27.3238-27.3244[1]). CL 1948, § 669.11 (Stat Ann § 27.3238), reads in part as follows: “In the following cases, and under the following circumstances, a defendant may set off demands which he has against the plaintiff: * * * “4. It can be allowed only in actions founded on demands which could themselves be the subject of set-off according to law.” Obviously, this limitation on the right to set-off should be read in conjunction with the transfer statute above cited and upon which appellant sought to remove proceedings to the circuit court. We have consistently held that the only issue in a replevin action is right of possession and that claims by way of set-off or recoupment are not permissible defenses to the action. Dearing Water Tube Boiler Co. v. Thompson, 156 Mich 365 (24 LRA NS 748); Rubin v. Gallagher, 294 Mich 124; Multiplex Concrete Machinery Co. v. Saxer, 310 Mich 243. It is clear, therefore, that set-off can only be allowed in actions in justice court founded on demands which could themselves be the subject of set-off according to law. The cases are clear that replevin is not such an action in which set-off can be had according to law. Appellant argues, however, that the statute relied upon permits a party absolutely to remove to circuit court in a case in which set-off and recoupment alleged are in excess of the monetary jurisdiction of the justice court. No such broad construction can be read into the statute under which appellant proceeds. The statute was obviously intended to permit removal to circuit court those cases in justice court, wherein set-off and recoupment would otherwise be permissible, but when the amount claimed is in excess of the monetary jurisdiction of the justice court. [644] Appellant relies upon the Multiplex Case already cited. In Multiplex, the action in replevin was begun in circuit court and certain defenses were raised by way of set-off and recoupment. Therein, the question was whether or not the matter could be transferred from the law side of circuit court to the chancery side. We held that in order to prevent a multiplicity of suits and to grant complete relief the-transfer would be permitted. Several distinctions between Multiplex and the-instant case clearly appear. The first is that in the present proceedings removal from the court of common pleas to circuit court is sought under a statute-which sets forth the conditions under which a transfer is allowable. The right to transfer is limited and we have so indicated. Further, there is no inherent power in the common pleas court to transfer a case-to circuit court, such power being derived only from the statute. Nor can it be said that the common pleas court has the power to transfer a case to the chancery side of circuit court absent a statutory provision so-empowering it. This is not to say that the circuit court sitting in chancery may not, when its jurisdiction is properly invoked, take cognizance of a proper-case. Herein, we have merely inquired as to the-right to transfer a cause under the set-off and recoupment law pertaining to justice courts when the-monetary jurisdiction exceeds that court. This right is limited to actions founded on demands which could themselves be the subject of set-off according-to law. For the reasons set forth above, we conclude that the circuit court order affirming the common pleas court order dismissing appellant’s motion to-remove the cause to circuit court should be affirmed. Affirmed, with costs to appellees. Carr, C. J., and Dethmers, Kelly, Black, Kavanagh, Souris, and Adams, JJ., concurred.