U. S. Truck Co. v. Pa. Sur. Corp.

• Citation: 259 Mich. 422,243 N.W. 311
• Decision Date: 23 June 1932
• Docket Number: No. 53.,53.
• Parties: U. S. TRUCK CO. v. PENNSYLVANIA SURETY CORPORATION.
• Court: Supreme Court of Michigan

259 Mich. 422

243 N.W. 311

U. S. TRUCK CO.

v.PENNSYLVANIA SURETY CORPORATION.

No. 53.

Supreme Court of Michigan.

June 23, 1932.

Appeal from Circuit Court, Wayne County; Adolph F. Marschner, Judge.

Suit by the United States Truck Company against the Pennsylvania Surety Corporation. Judgment for plaintiff, and defendant appeals.

Reversed, without new trial.

Argued before the Entire Bench.

Edward A. Smith, of Detroit, for appellant.

Evelyn A. Greene and Maurice P. Rhodes, both of Detroit, for appellee.

FEAD, J.

January 14, 1931, plaintiff commenced suit against defendant, a Pennsylvania insurance company, and also brought garnishment proceedings. Garnishment summonses were served the same day. Service in the principal suit was made on January 17th on the commissioner of insurance of this state, under C. L. 1929, § 12315, which provides that the company ‘* * * shall likewise file with the commissioner of insurance its irrevocable written stipulation, duly authenticated by the company, stipulating and agreeing that any legal process affecting such company, served on the insurance commissioner or his deputy, shall have the same effect as if personally served on the company or its authorized attorney in this state. * * *’

January 14th, a decree of dissolution of defendant was entered in the court of common pleas of Dauphin county, Pa., upon which, by statute of that state as well as the decree, the commissioner of insurance of Pennsylvania was ‘vested by operation of law with title to all of the property, contracts, and rights of action of such company.’ Pa. L. 1921, § 506, p. 808 (40 PS § 206).

The commissioner of insurance of Pennsylvania, as statutory liquidator of the corporation, appeared specially and moved to dismiss the suit because of the dissolution decree. The motion was denied and the cause proceeded to judgment on default of defendant for failure to appear.

The record does not show the disclosures, if any, of the garnishee defendants. The judgment is in personam, in the usual form, for the amount of damages proved.

Dissolution of a corporation is governed by the laws of the state of its charter. Mills v. Anderson, 238 Mich. 643, 214 N. W. 221. The foreign laws need not be formally introduced in evidence. C. L. 1929, § 14179. Full faith and credit must be given the decree of the court of common pleas in the respects: (a) That defendant corporation was dissolved by the decree; and (b) that the insurance commissioner of Pennsylvania took and holds title to the corporate property, not as an ordinary receiver, but as a quasi assignee of the corporation by force of statute, entitled of right to defend or sue in its stead in actions in other states. Relfe v. Rundle, 103 U. S. 222, 26 L. Ed. 337;Converse v. Hamilton, 224 U. S. 243, 32 S. Ct. 415, 56 L. Ed. 749, Ann. Cas. 1913D, 1292;Lion Bonding & Surety Co. v. Karatz (C. C. A.) 280 F. 532; 14a C. J. p. 1350.

But state laws do not have extraterritorial force. Rights and remedies of property are governed by laws of the state in which it is situate. The statutory assignment will be given force in other states but on the ground of comity, not by constitutional mandate. McKey v. Swenson, 232 Mich. 505, 205 N. W. 583;Martyne v. Fire Insurance Co., 216 N. Y. 183, 110 N. E. 502; 23 L. R. A. 52, note.

‘A statutable conveyance of property cannot strictly operate beyond the local jurisdiction. Any effect which may be given to it beyond this does not depend upon international law, but the principle of comity; and national comity does not require any government to give effect to such assignment, when it shall impair the remedies or lessen the securities of its own citizens. And this is the prevailing doctrine in this country.’ Oakey v. Bennett, 11 How. 33, 44, 13 L. Ed. 593, quoted in Security Trust Co. v. Dodd, Mead & Co., 173 U. S. 624, 629, 19 S. Ct. 545, 43 L. Ed. 835.

So, it is held that, where there is property of a foreign corporation within the state, a foreign judgment dissolving the corporation will not be permitted to compel citizens of the state to undergo the expense and inconvenience of asserting their claims in the foreign jurisdiction, but the local property will be subjected to local demands. Rodgers v. Insurance Co., 148 N. Y. 34, 42 N. E. 515; Hammond v. National Life Ass'n, 58 App. Div. 453, 69 N. Y. S. 585;Shloss v. Surety Co., 149 Iowa, 382, 128 N. W. 384;Alwart Bros. Coal Co. v. Pittsburgh Fire Ins. Co., 253...