Mutual Motor Ins. Co. v. Clark , 277 Mich. 633 ( 1936 )

May 7, 1935, plaintiff, Wolverine Mutual Motor Insurance Company, filed a petition in the circuit court for Cass county in chancery for a declaration of its liability under an automobile insurance policy issued to Loron R. Clark. The policy carried a clause that it "shall not be effective when the insured car is driven by or is under the control of Loron G. Clark, son of the named assured."

December 6, 1934, defendant George Schaffner was injured in a collision with the insured car while it was being driven by Loron G. Clark, in Hillsdale, Michigan, and Schaffner made claim for damages against Clark and threatened suit for such injury. Both the insured and Schaffner claim the insurance company is liable under the policy. The insurance company claims it is not liable.

After service of process herein upon defendants there was appearance and motion to dismiss plaintiff's petition for the reason the trial court did not have jurisdiction; Schaffner was a resident of Hillsdale county and Loron R. Clark, the insured, was a resident of Branch county, and the circuit court for Cass county in chancery was without jurisdiction; the proceeding was not properly brought in chancery but the dispute between the parties should be determined by a court at law; the circuit court of Cass county obtained no jurisdiction over Schaffner and Loron R. Clark; no proper service could be had upon defendants because in reality the case was a law case and one of the defendants was served in the city of Battle Creek, Calhoun county, Michigan, and the other in the city of Coldwater, Branch county, Michigan; plaintiff could not maintain suit against George Schaffner in relation to the insurance policy because George Schaffner was not a necessary party to that proceeding and could not be restrained by the circuit court for Cass county in chancery from instituting or prosecuting an action at law against the proper defendant, Loron G. Clark, to recover damages for injuries sustained in Hillsdale county; the provisions of the insurance policy limiting its liability were void; and the determination of the construction of the policy could not properly be declared by the circuit court of Cass county in chancery. This motion, having been brought on to be heard, was overruled by the trial court, the trial judge filing a memorandum opinion in which he said:

"The principal place of business of plaintiff is Dowagiac, Cass county, Michigan. Suit in chancery may be filed in the county where one of the parties in interest resides. 3 Comp. Laws 1929, § 13997, subd. 12. When process is issued out of chancery it may be served anywhere within the State where the party upon whom service is to be made may be found. 3 Comp. Laws 1929, § 14090, subd. 1. Declaration of rights may be obtained at law or equity as the nature of the case requires. This petition presents a question for the determination of liability under the policy and such question can be tried only in equity. (3 Comp. Laws 1929, § 13904.) It is applicable although a question of fact is involved. 3 Comp. Laws 1929, § 13906, is available when proceedings are taken at law when the granting of relief 'shall involve the determination of issues of fact triable by a jury.' 'Parties may make such a contract for insurance as they see fit provided it does not contravene any provisions of law.' Jackson v. State MutualRodded Fire Ins. Co., 217 Mich. 301. A clause of a policy exempting the insurer for operation by any person prohibited by law from driving has been sustained and construed not to cover liability incurred while car was operated without driver's license required by Act No. 91, Pub. Acts 1931. Zabonick v.Ralston, 272 Mich. 247.

"An examination of the record in Indemnity Ins. Co. of NorthAmerica v. Geist, 270 Mich. 510, relied on by plaintiff, shows answers were filed admitting all material allegations of the petition and not raising any question of the availability or application of the declaratory statute."

Defendant Schaffner appeals. He contends the circuit court for Cass county in chancery did not have jurisdiction to make a binding declaration of rights between plaintiff, a resident of Cass county, and Loron R. Clark, a resident of Branch county, and George Schaffner, a resident of Hillsdale county, defendants, both defendants having been served with process in the county of their residence; the circuit court of Cass county in chancery had no jurisdiction under the circumstances of residence and service if a disputed question of fact was involved, such issue being whether at the time and place of the alleged automobile accident an insured car was driven by or under the control of Loron G. Clark, son of the insured defendant, Loron R. Clark; that George Schaffner was not required to submit the disputed issue of fact to a jury in Cass county for determination; that the facts presented by the petition for a declaration of rights presented such a question relative to the liability of the insurance company as could be tried only in a court of law; and defendant George Schaffner was not required to submit the disputed question of fact to the determination of a jury in Cass county in advance of a contemplated action between himself and the defendant Loron R. Clark in Branch county involving the same disputed question. Appellee accepts the statement of questions involved set forth in appellant's brief.

A declaration of rights and determination of questions of construction may be obtained by proceedings at law or in equity. 3 Comp. Laws 1929, § 13904; 3 Searl, Michigan Pleading Practice, § 1319.

If defendants were proper parties to a suit in equity brought for the purpose of obtaining a declaration of rights, service could be made upon the defendants, or either of them, anywhere in the State of Michigan. 3 Comp. Laws 1929, §§ 13997, 14090.

The questions raised were properly raised by a motion to dismiss which takes the place of demurrer in chancery. 3 Comp. Laws 1929, § 14120.

The practice herein is warranted by Lawrence v. AmericanSurety Co. of New York, 263 Mich. 586 (88 A.L.R. 535);Indemnity Ins. Co. of North America v. Geist, 270 Mich. 510; Borchard, Declaratory Judgments, pp. 490-497.

Decree of the trial court should be affirmed, with costs.