Roomy v. Allstate Ins. Co., 593

• Decision Date: 02 February 1962
• Docket Number: No. 593,593
• Citation: 123 S.E.2d 817,256 N.C. 318
• Court: North Carolina Supreme Court
• Parties: Katherine ROOMY v. ALLSTATE INSURANCE COMPANY.

Page 817

123 S.E.2d 817

256 N.C. 318

Katherine ROOMY v. ALLSTATE INSURANCE COMPANY.

No. 593

Supreme Court of North Carolina.

Feb. 2, 1962

Stern & Rendleman, Greensboro, for plaintiff-appellant.

Smith, Moore, Smith, Schell & Hunter, Greensboro, for defendant-appellee.

WINBORNE, Chief Justice.

The pivotal question on this appeal is this: Should the automobile liability insurance contract in question be interpreted in accordance with the laws of the State of New York wherein the contract was made and delivered, in spite of the fact that the liability of the insured arose out of a collision occurring in North Carolina? The answer is Yes.

The applicable rule, as stated by Connor, J., in Cannaday v. Atlantic Coast Line R. Co., 143 N.C. 439, 55 S.E. 836, 8 L.R.A.,N.S., 939, is as follows: 'It is settled that 'matters bearing upon the execution, interpretation, and validity of a contract are determined by the law of the place where it is made.' Scudder v. Nat. Union Bank [of Chicago], 91 U.S. 406, 23 L.Ed. 245. 'The interpretation of a contract, and rights and obligations under it of the parties thereto, are to be determined in accordance with the proper law of the contract. Prima facie the proper law of the contract is to be presumed to be the law of the country where it is made.' Dicey Conf. Law, 563. Bowen, L. J., in Jacobs v. Credit Lyonnais, 12 Q.B. 589, says: 'It is generally agreed that the law of the place where the contract is made is prima facie that which the parties intended, or ought to be presumed to have adopted, as the footing upon which they dealt, and that such law ought, therefore, to prevail in the absence of circumstances indicating a different intention.' 9 Cyc. 667. ' See, to the same effect, Satterthwaite v. Doughty, 44 N.C. 314; Hall v. Western Union Tel. Co., 139 N.C. 369, 52 S.E. 50; Keesler v. Mutual Ben. Life Ins. Co., 177 N.C. 394, 99 S.E. 97; Tieffenbrun v. Flannery, 198 N.C. 397, 151 S.E. 857, 68 A.L.R. 210; Connecticut General Life Ins. Co. v. Skurkay, 204 N.C. 227, 167 S.E. 802.

In Myers v. Ocean Accident & Guaranty Corp., 99 F.2d 485 (4th Cir., 1938), the insured, a citizen and resident of North Carolina, had an automobile liability insurance policy which was countersigned and delivered in Ohio. An automobile accident involving the insured occurred in Georgia. The insurance carrier brought a declaratory judgment action in the U. S. District Court for the Middle District of North Carolina against the insured seeking to avoid liability under the policy because the automobile covered was being used to carry persons for hire in violation of an exclusionary clause in the policy. Holding that there was no coverage, the court said: 'Under the general doctrine the interpretation of an insurance contract depends on the law of the place where the policy is delivered. Mutual Life Ins. Co. [of New York] v. Johnson, 293 U.S. 335, at page 339, 55 S.Ct. 154, 156, 79 L.Ed. 398. * * * Both by the federal and North Carolina decisions it is clear that the policy should be interpreted in accordance with the law of the State of Ohio. Mutual Life Ins. Co. [of New York] v. Johnson, 293 U.S. 335, 339, 55 S.Ct. 154, 156, 79 L.Ed. 398 [supra]; Northwestern Mutual Life Ins. Co. v. McCue, 223 U.S. 234, 32 S.Ct. 220, 56 L.Ed. 419, 38 L.R.A., N.S., 57; Beale, Conflict of Laws, Vol. 2, s. 332.40; Keesler v. Mutual Life Ins. Co., 177 N.C. 394, 99 S.E. 97 (supra); Dixie Fire Ins. Co. v. American Bonding Co., 162 N.C. 384, 78 S.E. 430; Connecticut Gen. Life Ins. Co. v. Skurkay, 204 N.C. 227, 167 S.E. 802 (supra); Cannaday v. Atlantic Coast Line RR Co., 143 N.C. 439, 55 S.E. 836, L.R.A.,N.S., 939, (supra); Wilson v. Supreme Conclave, 174 N.C. 628, 94 S.E. 443.'

We see no reason, in the instant case, to depart from this well established principle. The parties agreed upon the terms of a contract of insurance in the State of New York. The insured paid a specific premium and received in return the promise of defendant to provide specific liability insurance coverage....