Court Opinion

ID: 4718337
Source: CourtListenerOpinion
Date Created: 2021-08-12 02:34:19.893075+00
Date Added: 2024-06-11T08:07:32.625717
License: Public Domain

Hoyt, J.
(dissenting). — The ruling upon what I deem to be the most important question in this case is founded upon the decision in the case of Neufelder v. German American Ins. Co., 6 Wash. 336 (33 Pac. 870, 36 Am. St. Rep. 166). I dissented from the opinion of the majority of the court in that case, but gave no reasons for such dissent. I therefore think it necessary at this time to say a word in regard to the question therein decided.
The ruling therein announced is one which will lead to much inconvenience and be productive of great hardship to the residents of this state who hold policies in any of the larger insurance companies and sustain a loss which makes the company liable thereon. Under the rule therein announced, the one entitled to enforce the liability flowing from the loss may be sued in any of the states of the Union *400where the company which issued the policy is doing business, and as the larger companies are doing business in all of them, he might be called upon to respond to actions brought against him in all of such states, all of which might be prosecuted at the same time. The result would be that any one having the semblance of a claim will be tempted to bring suit thereon in some state remote from the residence of the defendant, hoping that the difficulty of making a defense will lead to some compromise, or that from want of pecuniary ability, or other reason, defense will be impossible. It will often result that the entire amount of the policy will be absorbed in the payment of unjust claims or frittered away in paying the expenses incident to making a defense against them.
Besides, the inconvenience to the companies doing the business will be very great under such rule. They, of course, are not entitled to the same consideration as is the insured, for the reason that they generally have attorneys in each of the states where they transact business, and are of sufficient pecuniary ability to look after their own interests, but the result to them, taken in connection with the great injustice to the insured which will be wrought, so well establishes the fact that the rule announced is against public policy that I am unable to yield assent thereto. Such a construction as to the status of insurance companies doing business in the several states is to my mind unnecessary. When we take into consideration the fact that the almost universal weight of authority is to the effect that a corporation has its domicil only in the state under the laws of which it is organized, it seems to me it is illogical, and should not be sustained, even although no injustice would be wrought thereby, and that in view of its possible or probable results some other construction is imperative.
A simple solution of the whole question would be to hold that a corporation has only one domicil for the purposes incident to its organization ; that rights and liabilities in general must be procured by or enforced against it in the state where it has such domicil, that is, in the state under the *401laws of which, it has been incorporated ; that it has a special and limited domicil, in each of the other states in which under the laws thereof it may be allowed to do business ; that its domicil in those states is only for the purposes of the business transacted therein. The result would be that as to all of the business transacted in a state, and rights and obligations flowing therefrom, the courts of that state would have full jurisdiction of the corporation, but would have no jurisdiction whatever over it in relation to business not transacted in the state. This seems to me to logically result from the holding as to the domicil of corporations announced by the supreme court of the United States, and under this rule the hardship and injustice which will result from the other will be avoided, yet the object of every state in the enactment of laws providing for jurisdiction over such corporations will be fully subserved. The only object of such legislation is to protect the inhabitants of the state in their dealings with such corporations, and under the construction above suggested this object would be as fully accomplished by giving the courts of the state such limited jurisdiction as by holding that they had jurisdiction as to every class of business transacted by the corporation in or out of the state.
I believe the true rule to be that such corporations are within the jurisdiction of the courts of the state wherein they were incorporated for all purposes, and of the courts of the other states in which they do business only so far as necessary to protect the inhabitants thereof in relation to such business. Under this rule the courts of the state of California had no jurisdiction of the defendant corporation in the case at bar. Hence the liability of the company could be enforced here regardless of the proceedings in the courts of that state. It might follow that the company would have two judgments rendered against it for the same liability, but its remedy would be an appeal to the supreme court of the United States from one or both of them. There this-question would be finally determined, and when so determined would be binding upon the courts of all the states. *402I think the decision in the case cited was wrong, and that the one announced in this is also wrong.