Cook v. State Farm Mut. Ins. Co., 41785

• Decision Date: 27 March 1961
• Docket Number: No. 41785,41785
• Citation: 128 So.2d 363,241 Miss. 371
• Parties: Mrs. Virgie COOK v. STATE FARM MUTUAL INSURANCE COMPANY.
• Court: Mississippi Supreme Court

Page 363

128 So.2d 363

241 Miss. 371

Mrs. Virgie COOK v. STATE FARM MUTUAL INSURANCE COMPANY.

No. 41785.

Supreme Court of Mississippi.

March 27, 1961.

Joseph H. Stevens, Carl E. Berry, Jr., Hattiesburg, for appellant.

M. M. Roberts, Hattiesburg, for appellee.

RODGERS, Justice.

Mrs. Virgie Cook filed her declaration in the Circuit Court of Lamar County, Mississippi, alleging that her husband John R. Cook lost his life in an automobile accident which occurred on October 23, 1959, near Bogalusa, Louisiana. Her husband was a passenger in an automobile driven by Irvin Cook which collided with an automobile operated by Kennard McConnico, a citizen of the State of Texas. The defendant, State Farm Mutual Insurance Company, was the insurer of the automobile operated by Irvin Cook, and the Allstate Insurance Company was the insurer of the car of McConnico. The plaintiff is a resident citizen of Lamar County and Irvin Cook is a resident citizen of Washington County, Mississippi. Suit was brought against the two above-named insurance companies.

The defendant Allstate Insurance Company settled the claim of the plaintiff and was properly released by order of the court. The defendant State Farm Mutual Insurance Company filed a motion asking the court to dismiss the declaration against it on the grounds that the defendant insurance company could not be sued by direct action since the law of the State of Louisiana permitting a suit against the insurance company before judgment against the insured is said to be procedural and has no extraterritorial effect. The court sustained this motion and the case was dismissed. The plaintiff made bond and the case is here on appeal. It is argued on appeal that the defendant-appellee insurance company was qualified to do business in the State of Louisiana and in the State of Mississippi; that the action is brought by the plaintiff-appellant under Act No. 55, Louisiana Laws of 1930, LSA-R.S. 22:655, The Direct Action Statute of the State of Louisiana, and that this law is a substantive law of the State of Louisiana and is not a procedural law, and, therefore, the action against the defendant, State Farm Mutual Insurance Company, could be maintained in the Circuit Court of the State of Mississippi.

The action here involves the construction of Act No. 55, Louisiana Laws of 1930, which is set out in full in the case of Burkett v. Globe Indemnity Company, 182 Miss. 423, 181 So. 316.

The Court later passed upon this question in the case of McArthur v. Maryland Casualty Co., 184 Miss. 663, 186 So. 305, 307, 120 A.L.R. 846, in which Judge McGehee, speaking for the Court, in discussing a suggestion of error in the case of Travelers' Insurance Company v. Inman, 157 Miss. 810, 126 So. 399, 128 So. 877, 878, quoted from that opinion as follows: 'In administering the laws of the State of Louisiana, of course, we are bound by the construction given such laws by the Supreme Court of Louisiana.' And in this case he said: 'Therefore, in view of the decisions of the Court of Appeals of Louisiana, hereinbefore referred to, holding that Act No. 55 of 1930 is procedural and remedial, and which we feel obligated to follow, whether we are inclined to fully agree with that interpretation of the act or not, it results that the same should be given no extraterritorial effect * * *' The plaintiff insists that the Supreme Court of the State of Louisiana in the case of West et ux. v. Monroe Bakery, Inc. et al., 217 La. 189, 46 So.2d 122, was reexamined by the Supreme Court of the State of Louisiana and that the Supreme Court held that Act No. 55 of the Laws of 1930 conferred substantive rights.

The appellant also argues that in the case of Lumbermen's Mutual Casualty Company v. Elbert, 348 U.S. 48, 75 S.Ct. 151, 99 L.Ed. 59, the United States Supreme Court upheld the right of an injured third party to bring a direct action based upon diversity of citizenship against an insurance company not in Louisiana, and that such party was not a nominal party but was the real party in interest. We do not believe this case requires us to overrule the McArthur case, supra, because of the following general rules and cases on conflicts of law.

'While the substantive rights of the parties to an action are governed by the lex loci, the law of the place where the right was acquired or the liability was incurred, see the C.J.S. title Actions Sec. 2a, the lex fori see supra Sec. 9, or law of the jurisdiction in which relief is sought, controls as to all matters pertaining to remedial, as distinguished from substantive, rights. This rule, which has been embodied by the American Law Institute in its Restatement of the Law of Conflict of Laws, obtains whether the action is on contract or for tort.

'The rule of comity extends to substantive rights only and does not in general apply to remedies. Each state regulates its own jurisprudence in its own way, and procedural statutes cannot be given extraterritorial effect. Litigants who, although nonresidents, resort to the courts of a state or are compelled to appear therein may not insist upon the trial of their rights by some other or different rules of procedure which may prevail in the state in which the cause of action arose.

'The only uncertainty which may arise concerning the rule that the lex fori regulates all remedial matters results from the conflicting views as to what matters fall within one or the other of such classes of rights, or where the same claim may, according to the surrounding conditions, fall into either class. Matter of substance, whether presented by way of an objection to the admissibility of evidence or as a point in pleading, is a matter of right, and not of remedy, but it is frequently difficult to ascertain whether a particular inquiry relates to the remedy or to a substantive right.' (Emphasis ours.) 15 C.J.S. Conflict of Laws Sec. 22, pp. 948-949.

In the case of Martin v. Talcott, 1 A.D.2d 679, 146 N.Y.S.2d 784, 785, where a suit is brought in New York for personal injuries which occurred in New Jersey where the defendants were sued as testamentary trustees and not as individuals, it is said: 'It has been held in New Jersey that, where a trustee is sued only in his representative capacity, the complaint must be dismissed, because an amendment will not be permitted to change the capacity in which a defendant is sued, Boyle v. Nolan, supra. (123 N.J.L. 365, 8 A.2d 358). However, it is the law of the forum which determines not only questions as to who may be sued but also questions as to the form and amendment of the pleadings (Restatement, Conflict of Laws, Secs. 588, 592.)'

The general law is set out in 11 Am.Jur., Conflict of Laws, Sec. 187, pp. 500-501, as follows: 'The ultimate question whether several defendants may be sued individually or must be sued collectively depends upon the question, which must be first determined, whether the obligation or the transaction out of which the claim arises is joint, or joint and several, or merely several. This is a question which goes to the legal effect of the contract or transaction, and as such is to be determined by the law of the state where the contract was made or the transaction arose. Where, according to the law of that state, the contract or the transaction is determined to be joint or joint and several, and not merely several, the question whether, upon a joint or joint and several contract or transaction the several defendants must or may be sued jointly or severally, or whether an intermediate number may be sued, is a remedial question which must be determined according to the law of the forum.'

'There may be said to be five instances wherein it is generally considered that the municipal law of the State where the question is raised (lex fori) forbids the enforcement of a foreign law. (1) Where the enforcement of the foreign law would contravene some established and important policy of the State of the forum; (2) where the enforcement of such foreign law would involve injustice and injury to the people of the forum; (3) where such enforcement would contravene the canons of morality established by civilized society; (4) where the foreign law is penal in its nature; and (5) where the question relates to real property.' Minor, Conflict of Laws, p. 9. See also 77 A.L.R. 1108, Annotation.

In a Louisiana case interpreting Mississippi law, the question of conflict of law as to procedure was discussed, as follows: 'Lynch v. Postlethwaite (1819) 7 Mart. [O.S.] (La.) 69, 12 Am.Dec. 495, was an action for breach of a contract executed in Mississippi, in which the plaintiff failed to join all the parties to the contract, who were partners. Under the law of Mississippi a partner sued alone might abate the suit on the ground of nonjoinder of his...