Lieberthal v. Glens Falls Indem. Co. of Glens Falls, N. Y., 39.

CourtSupreme Court of Michigan
Citation24 N.W.2d 547,316 Mich. 37
Docket NumberNo. 39.,39.
Decision Date07 October 1946


Appeal from Circuit Court, Gogebic County; Thomas J. Landers, Circuit judge.

Action by Lewis J. Lieberthal against Glens Falls Indemnity Company of Glens Falls, New York, a corporation engaged in and carrying on an automobile insurance business in the State of Wisconsin and in the State of Michigan, to recover damages for personal injuries allegedly sustained in an automobile accident in Wisconsin. From the judgment, the plaintiff appeals.


BUTZEL, C. J., and REID, J., dissenting.

Before the Entire Bench.

S. W. Patek, of Ironwood (Quarles, Spence & Quarles, of Milwaukee, Wis., of counsel), for appellant.

Charles M. Humphrey and Charles M. Humphrey, Jr., both of Ironwood, for defendant.

NORTH, Justice.

Plaintiff, a resident of Gogebic county, Michigan, brought suit at law in the circuit court of Gogebic county to recover damages for his personal injuries sustained in an automobile accident which happened in Wisconsin. The sole defendant, a New York corporation, is the insurer of the owner of an automobile involved in the accident. Defendant's policy was delivered in Wisconsin to the insured. The validity of the service of the court's process on the defendant insurance company is not questioned. Defendant entered a special appearance. Subsequent to defendant's appearance plaintiff's declaration and an amendment thereto were filed. Defendant thereafter made a motion to dismiss. The reasons in support of defendant's motion are confined solely to challenging the court's jurisdiction of the subject matter of the suit. Defendant's motion to dismiss was granted by the circuit judge, and plaintiff has appealed.

The purport of defendant's motion appears from the following reasons which, among others, were assigned in support of the motion to dismiss.

‘No cause of action exists in Michigan against this defendant.

‘The situs of the cause of action alleged in plaintiff's Declaration exists only in the State of Wisconsin.

‘If, as plaintiff claims in his Declaration, substantive rights are created by the Statutes of Wisconsin, then those rights and any and all claims of the plaintiff that he is entitled to maintain this suit in this Court, are contrary to the public policy of the laws of the State of Michigan and particularly Section 24.296, Michigan Statutes Annotated, Section 12460 of the Compiled Laws of 1929.’

The parties agree that plaintiff could prosecute his suit in Wisconsin against the insurer as a sole defendant notwithstanding judgment has not been obtained against the insured. Such is the case because of statutory provisions in Wisconsin and under decisions of the Supreme Court of that State. Since there is no controversy between the parties in this respect, we forego citation of the applicable statutory provisions and decisions in that State.

While there is some controversy between plaintiff and defendant as to whether the Wisconsin law, affording plaintiff the right in that state to bring his suit against the insurance company as sole defendant, is procedural in character or substantive law, we deem it unnecessary to pass upon that question because we are of the opinion that decision herein is controlled by another principle of law applicable to the instant case, even though it be assumed that the phase of the Wisconsin law above noted is substantive in character rather than procedural. However, an interesting decision bearing upon the question as to whether the law is procedural or substantive in character will be found in McArthur v. Maryland Casualty Company, 184 Miss. 663, 186 So. 305, 120 A.L.R. 846.

Even though, as plaintiff asserts, the provision of the Wisconsin statute authorizing suit against the insurer as a sole defendant in this type of case vested plaintiff with a substantive right, and therefore normally should be recognized as a matter of comity in Michigan, nonetheless if such provision of law is contrary to the public policy of this State it will not be recognized or enforced in the courts of this State.

‘Much has been written on the enforcement of transitory actions and the theory underlying decisions in such matters has been variously explained on the grounds of ‘comity’ and ‘vested rights.’ (Citing numerous authorities.)

‘Under any theory of enforcement there is the well-established exception that the foreign law will not be recognized if contrary to the public policy of the forum.’ Eskovitz v. Berger, 276 Mich. 536, 540, 268 N.W. 883, 885.

‘By comity, citizens of Illinois may sue in the courts of Michigan, but the law of Illinois has no extra-territorial force. The courts of this state may not be used to prosecute to effect a cause of action in a manner contrary to the laws of Michigan.’ Walton School of Commerce v. Stroud, 248 Mich. 85, 89, 226 N.W. 883, 884.

‘While the general rule is that a contract valid where made is valid in the courts of any other country or state where it is sought to be enforced, there are exceptions to the rule, and one of them is where the contract violates the public policy of the state of the forum. 3 Cyc. 674; Seaman's Receiver, etc., v. Temple Co., 105 Mich. 400, 63 N.W. 408,28 L.R.A. 430, 55 Am.St.Rep. 457.’ Curtis v. Mueller, 184 Mich. 148, 152, 150 N.W. 847, 848.

Notwithstanding plaintiff could prosecute his suit in Wisconsin, the question arises-Is it contrary to public policy in Michigan that a suit of this character should be prosecuted against the tortfeasor's insurer as a sole defendant? Public policy of a state is fixed by its Constitution, its statutory law, and the decisions of its courts; and when the Legislature enacts a law within the limits of the Constitution, the enactment in so far as it bears upon the matter of public policy is conclusive. See In re McKee's Estate, 71 N.D. 545, 3 N.W.2d 797, 798, wherein, quoting from an earlier case (Chaffee v. Farmers' Co-Operative Elevator Co., 39 N.D. 585, 168 N.W. 616), it is said: ‘Public policy is but the manifest will of the state * * *. And when the Legislature has spoken and enacted a law embodying a certain principle, the policy is determined.’ Michigan's public policy touching the phase of the law under consideration has been definitely fixed by statute. As to bringing an insurance company into a suit of this character as a defendant, the following is provided in our statutory law. ‘In such original action (including personal injuries caused by a motor vehicle), such insurance company (authorized to do business in Michigan), or other insurer, shall not be made, or joined as a party defendant, nor shall any reference whatever be made to such an insurance company, or other insurer, or to the question of carrying of such insurance during the course of trial.’ Comp.Laws 1929, § 12460, Stat.Ann. § 24.296.

In accord with the above provision, we have repeatedly held in substance: ‘There was prejudicial error in bringing berore the jury, in the subtle method employed, the suggestion that defendant carried liability insurance * * *.’ Janse v. Haywood, 270 Mich. 632, 259 N.W. 347, 348.

‘It is a fact of which we cannot but take judicial notice that, in cases where jurors obtain information that the damages as fixed by them will be paid by insurance companies, the amount thereof is usually greatly enhanced.’ Holman v. Cole, 242 Mich. 402, 218 N.W. 795, 796.

We do not condone what appears to have been a studied effort to get the matter of insurance before the jury.’ Nicewander v. Diamond, 302 Mich. 239, 4 N.W.2d 533, 534.

See also Kerr v. National Fulton Brass Manufacturing Co., 155 Mich. 191, 118 N.W. 925; and Dewey v. Perkins, 295 Mich. 611, 295 N.W. 333.

The public policy sought to be sustained in this State by the statute and judicial decisions is that a plaintiff shall not be permitted to inject into his suit the element of insurance and thereby obtain an excessive and unjust verdict.

We are not in accord with appellant's contention that: ‘If the above statute does declare a public policy for Michigan the letter of the declaration (statute) limits it to such suits on a policy ‘issued or delivered in this State.’' We think the statute prohibiting a plaintiff from making the insurer a party defendant or referring to the insurer in the course of the trial, as a matter of public policy is not only applicable to the insurers who issue or deliver policies in this State but likewise to the insurer who delivered a policy in another state and is sued in a court in this State. Twice in the quoted portion of the statute the expression ‘or other insurer’ is used, and evidently means an insurer other than one authorized to do business in Michigan. And further, it may be noted that the defendant in the instant case was authorized to do business in Michigan and to deliver its policies in this State.

We cannot escape the conclusion that plaintiff's attempt to prosecute his suit in Michigan against the insurer as a sole defendant is contrary to Michigan law, and for that reason a Michigan court may not assume jurisdiction as a matter of comity. The instant case does not fall within Kaiser v. North, 292 Mich. 49, 289 N.W. 325, 328, wherein we said: ‘The fact Michigan statutory regulations of the rights of a motor vehicle guest passenger may differ from Ontario statutory provisions or even the provisions of the common law governing like rights, is not a reason for holding the statute of the foreign jurisdiction contravenes public policy here.’

In effect the above is only a holding that a mere difference in statutory provisions of a foreign jurisdiction and those of this State is not sufficient alone to result in contravention of our public policy. Instead of being comparable to the Kaiser case, the case at bar falls within the same field of law as Walton School of Commerce v. Stroud and Curtis v. Mueller, supra. And in point of law the instant case...

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