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

Schaffner, a resident of Hillsdale county, has a claim for personal injuries against Clark, a resident of Branch county, for negligent operation of a motor vehicle, upon which he intends to begin, but has not yet commenced, action. Plaintiff, whose principal place of business is in Cass county, is insurer of Clark on a public liability policy which provides that the coverage shall not be effective when the car is driven by or is under control of Clark's son.

Plaintiff filed petition in chancery in Cass county for declaratory judgment that it has no liability to Clark or Schaffner on account of the injuries and prayed injunction to restrain Schaffner from bringing action for damages. The petition alleged that the car was being driven by or under control of Clark's son and, therefore, plaintiff denies liability. It does not allege that Schaffner claims or admits that the car was being driven by Clark's son. Chancery summons was issued in Cass county and served on Clark in Branch county and on Schaffner in Calhoun county.

Clark did not appear. Schaffner appeared specially and moved to dismiss the proceedings as against him for want of jurisdiction because (1) the action was brought in the wrong county, (2) a court of chancery is the wrong forum, (3) chancery summons is the wrong process, and (4) the proceeding will not lie against Schaffner. In connection with his motion Schaffner filed affidavit averring, on information and belief, that the car was being driven by one Konjola, with the consent of Clark. The court denied the motion to dismiss but also denied injunction against action for damages by Schaffner against Clark.

The questions here presented were not raised in IndemnityIns. Co. of North America v. Geist, 270 Mich. 510, nor have they been passed upon by this court.

The statute provides for declaration of rights (1) at the instance of an "interested" person, (2) in case of "actual controversy," 3 Comp. Laws 1929, §§ 13903-13909;Washington-Detroit Theatre Co. v. Moore, 249 Mich. 673 (68 A.L.R. 105), (3) "by means of ordinary proceedings at law or in equity, or by means of a petition on either the law or equity side of the court as the nature of the case may require," (4) with trial by jury when the declaration or relief "shall involve the determination of issues of fact triable by a jury," (5) with costs following the practice in ordinary cases at law or in equity wherever applicable and in the absence of special rules by the Supreme Court or stipulation of parties, and (6) the declaration of rights to have the effect of a final judgment.

We will assume, but not decide, that there is an actual controversy" between plaintiff and Clark and that Schaffner is a proper party to the proceeding because he may be adversely affected by a declaration of rights, Nashville, Chattanooga St. Louis R. Co. v. Wallace, 288 U.S. 249 (53 Sup. Ct. 345, 87 A.L.R. 1191), although Schaffner has not yet commenced action against Clark, there is no direct relationship, legal or equitable, between plaintiff and Schaffner, and Schaffner is "interested" only if and because he is a creditor of Clark and Clark is a creditor of plaintiff, Iden v. Huber, 259 Mich. 3;Rogers v. Detroit Automobile Inter-Insurance Exchange,275 Mich. 374; Schudlich v. Yankee, 272 Mich. 482; Flanagan v.Harder, 270 Mich. 288.

Is plaintiff in the proper forum? It is plain from the whole statute that the remedy must be sought in the appropriate court and "the nature of the case," not the pleasure of the petitioner, is the test of the forum. It would require clear language to support a holding that the legislature intended so unjust a proceeding as that a party, having a purely legal right of action or defense, may bring a proceeding for declaratory judgment in chancery, at his will, serve process anywhere in the State, and deprive a defendant of his right of trial in his own locality and by a jury of his vicinage. If any doubt exists as to the construction of the statute (and I have none), such practice should be condemned or at least vigorously discouraged under the discretionary power of the court. Washington-DetroitTheatre Co. v. Moore, supra; 87 A.L.R. 1212.

As presented by the petition, the question of plaintiff's liability on the policy depends upon a single issue of fact, whether Clark's son was driving or in control of the car which hurt Schaffner. Its liability to pay cannot accrue until Schaffner has judgment against Clark. Then, if Clark pays the judgment, his remedy against plaintiff will be an original action on the policy. If Clark does not pay, Schaffner's remedy against plaintiff will be in garnishment. Both remedies are at law, with right to trial by jury. Plaintiff's defense is legal, has no equitable features, and may be made in either law action as completely as it could be made in the present proceeding.

Consequently, this proceeding is not well laid in chancery because "the nature of the case requires" that it be on the law side of the court and also because it "involves the determination of issues of fact triable by a jury." An advisory finding of a jury in equity does not substitute or compensate for the binding verdict of a jury at law.

And, in any event, this proceeding for declaratory judgment will not lie in either court because the petition sets up no grounds of necessity for present declaratory judgment as a guide to plaintiff's future conduct in order to preserve its legal rights and because, in the ordinary and regular law action, whether by Clark on the policy or by Schaffner in garnishment, plaintiff has an adequate remedy.Miller v. Siden, 259 Mich. 19; 87 A.L.R. 1219; State FarmMutual Auto Ins. Co. v. Wise, post, 643.

Also, no certainly final judgment, which would be resjudicata of the rights of the parties, 87 A.L.R. 1213, can be rendered. The most the court could do would be to enter a prophetic judgment, i. e., that plaintiff will or will not be liable to Clark and Schaffner if Schaffner obtains judgment against Clark. Even such a judgment would be contingent because necessarily it would be based upon the existing state of facts, whereas plaintiff's liability does not accrue until the future uncertain event of judgment for Schaffner against Clark, and as to Schaffner until service of his writ of garnishment, Zabonick v. Ralston, 272 Mich. 247, and, in the meantime, the liability situation could be changed by reason of estoppel. Kipkey v.Casualty Ass'n of America, 255 Mich. 408; Peters v. Sturmer,263 Mich. 494; Beals v. Central Mutual Auto Ins. Co.,269 Mich. 477; Michaelson v. Simula, 264 Mich. 457. Judgments whose force may be affected by future events will not be declared. 87 A.L.R. 1215.

Other reasons suggest themselves for denial of jurisdiction in the discretion of the court but they need not be discussed.

We hold that plaintiff may not maintain the proceeding in equity because its claim is legal, that the proceeding will not lie in either law or equity because plaintiff has an adequate remedy of defense in the regular law actions to which it may be subjected, and because no final judgment may be rendered.

Lest there be misunderstanding, it may be said that as Clark has not appeared nor appealed, we do not pass upon the obligation of plaintiff to defend him in an action for damages. Under some policies the obligation to defend is wholly severable from the final duty to pay the judgment.

Reversed, and the proceeding will be dismissed as to Schaffner, with costs.

NORTH, C.J., and WIEST, BUTZEL, BUSHNELL, SHARPE and Toy, JJ., concurred with FEAD, J.