Court Opinion

ID: 3503044
Source: CourtListenerOpinion
Date Created: 2016-07-05 22:09:51.208739+00
Date Added: 2024-06-11T13:39:49.629256
License: Public Domain

Lloyds Insurance Company of America, Inc., is a New York corporation. *Page 611 
It was authorized to continue to do business within the State of Michigan. It had assets in this State. A judgment was rendered upon its contract liability within the State of Michigan. It became insolvent and a New York receiver was appointed and a receiver was appointed in the State of Michigan.
A foreign insurance company may be permitted to do business in the State of Michigan upon compliance with the laws of this State, providing it receives the approval of the commissioner of insurance of this State. It has no right to do business within the State without compliance with the laws of the State. Whether it shall be permitted to do business within Michigan or not depends upon the comity existing as a part of the public policy of this State in relation to foreign insurance companies.
The property of a foreign insurance company located within the State of Michigan is primarily a trust fund for the benefit of the creditors of that company within the State in case it becomes insolvent. The comity existing between States should not be extended so far by judicial construction by the courts of this State as to sacrifice the rights of creditors in this State to have their claims satisfied against the funds and property of the company within this State to the rights of creditors outside the State. Suppose, under the facts which may be developed in this case, the assets of the Lloyds Insurance Company of America, Inc., within this State are sufficient to satisfy the creditors of such corporation within this State in full. If the courts of this State direct the surrender of this property to the receiver of the foreign corporation appointed in the State of its creation and compel such creditors to present their claims in such general receivership and *Page 612 
upon liquidation the company in the State of its creation can pay but 10 cents on a dollar, then by judicial comity the rights of creditors within this State have been sacrificed for the benefit of creditors outside the State.
I am in favor of protecting the interests of Michigan creditors, satisfying the claims of such creditors, duly proved, out of the assets of the company within the State of Michigan, in pursuance of the laws of this State, and I am not in favor of sacrificing the rights of the creditors of the corporation within this State to the rights of creditors outside of the State in pursuance of any rule or pretended rules of comity.
It makes no difference whether the claimed liability of the defendant insurance company arose prior to its organization by the consolidation of the companies from which it was formed or not. The defendant insurance company took the assets and assumed the liabilities of the corporations consolidated. It is immaterial, in my opinion, whether there is any specific statute regulating this question or not. When a foreign insurance company comes into this State, it may come here and do business only with the approval of State authorities. It must subject its assets within this State to the jurisdiction of the State, to be governed by the local law; and when it becomes insolvent, its assets within this State should be properly administered in accordance with the local law and the creditors of the company within the State of Michigan should have their rights protected in pursuance of the local law. Comity as an abstract proposition is entitled to consideration, but it should not be used as an instrument to sacrifice *Page 613 
the rights of the creditors of the company within this State.
For that reason, I concur with the opinion of Mr. Justice SHARPE.
BUSHNELL, SHARPE, CHANDLER, and NORTH, JJ., concurred with POTTER, J.