Mr. Justice House
delivered the opinion of the court:
This is an appeal from an order of the circuit court of Cook County dismissing the complaint of plaintiff, Christine Marchlik, against two Illinois insurance companies, Coronet Insurance Company and State Farm Mutual Automobile Insurance Company. Constitutional questions are raised.
Plaintiff, a resident of Wisconsin, was injured when the automobile of Henry Tapio, in which she was riding, was involved in a collision with one driven by Edward Trombley on U.S. Highway 51 in Iron County, Wisconsin. She received hospital and medical care in Wisconsin. Tapio was a resident of Bessemer, Michigan, Trombley was a Wisconsin resident, and the automobile driven by him bore Wisconsin registration. Tapio’s liability policy was issued by Coronet and Trombley’s by State Farm. Each policy was issued in Illinois, and they contained practically identical “no action” clauses prohibiting direct action against the carrier until final judgment had been entered against the insured.
The action was commenced under the Wisconsin “Direct Action” statutes (Wise. Stat. 1965, sec. 204.30(4) and sec. 260.11 (1),) which authorize original suits against insurance companies provided the injuries are sustained in Wisconsin.
We note at the outset that application of the doctrine of forum non conveniens is not an issue. It was raised only obliquely in the motion to dismiss, the trial court specifically refused to make a finding with respect to, or pass upon, application of the doctrine and none of the parties argue it in the briefs.
The issues as stated by the parties are whether the public policy of Illinois precludes direct action against an insurer for tort liability of the insured where the policy has a “no action” clause and when the statutory law of the place where the tort occurs allows direct action and, if so, does the full-faith-and-credit clause of the constitution of the United States force a State to enforce a foreign statute.
The preliminary approach to these issues is whether Wisconsin’s direct action statutes are procedural or substantive. If procedural or remedial, it is well settled that the lex fori, or law of the jurisdiction in which relief is sought, will govern. (15A C.J.S. Conflict of Laws, sec. 9; 16 Am. Jur. 2d, Conflict of Laws, sec. 76.) On the other hand, the lex loci delictus or law of the place of wrong generally governs where the substantive rights of the parties will be affected. But, even this is an over-simplification for, if entertaining a foreign cause (such as this direct action suit against casualty insurers) is contrary to the public policy of the forum, its courts may bar enforcement of the foreign remedy, provided, of course, such a bar is not in contravention of the full-faith-and-credit clause of the Federal constitution.
Section 260.11(1) of the Wisconsin statutes (Wise. Stat. 1963, sec. 260.11(1),) in pertinent part reads: “A plaintiff may join as defendants * * * any insurer of motor vehicles * * * in any action brought by plaintiff in this state on account of any claim against the insured. The right of direct action herein given * * * shall exist whether the policy of insurance sued upon was issued or delivered in the state of Wisconsin or not and whether or not the policy or contract of insurance contains a provision forbidding such direct action, provided the accident or injury occurred in the state of Wisconsin.” Prior to its amendment in 1959 the section was held by the Wisconsin Supreme Court to be procedural. (Oertel v. Williams, 214 Wis. 68, 251 N.W. 465 ; Ritterbusch v. Sexsmith, 256 Wis. 507, 41 N.W.2d 611.) However, we read cases subsequent to the amendment, in which the right of direct action was limited to accidents occurring in Wisconsin, to hold that both sections of the direct action statutes be considered together and that the statutes create a substantive rather than a procedural right. See Snorek v. Boyle, 18 Wis.2d 202, 118 N.W.2d 132; Frye v. Angst, 28 Wis.2d 575, 137 N.W.2d 430; Koss v. Hartford Accident and Indemnity Co. (7th cir.), 341 F.2d 472.
The other section (204.30(4)) reads in part: “Any bond or policy of insurance covering liability to others by reason of the operation of a motor vehicle shall be deemed and construed to contain the following conditions: that the insurer shall be liable to the persons entitled to recover for the death of any person, or for injury to personal property, irrespective of whether such liability be in praesenti or contingent to become fixed or certain by final judgment against the insured, when caused by negligent operation, maintenance, use or defective construction of the vehicle described therein, such liability not to exceed the amount named in said bond or policy.”
In commenting on the two sections the Wisconsin court said: “Sec. 204.30(4) is substantive and creates direct liability between the injured third person and the insurer while sec. 260.11 (1) is procedural and determines when the insurer can be made a party to the action despite the presence of a no-action clause in the policy.” (Miller v. Wadkins, 31 Wis.2d 281, 283, 142 N.W.2d 855.) While passing on the question of the effect of no-action provisions the Supreme Court of Minnesota in Kertson v. Johnson, 185 Minn. 591, 242 N.W. 329, held the Wisconsin direct action statute (now sec. 204 — 30(4)) to be substantive. In Oltarsh v. Aetna Insurance Co., (1965) 15 N.Y.2d 111, 204 N.E.2d 622, it was said that the Puerto Rican direct action statute, which resembled section 260.11 (1) of the Wisconsin statute, was substantive in character and even though New York had no similar statute the insured injured in Puerto Rico could maintain her action directly against the insurance carrier. Mr. Justice Traynor, speaking for the California court in Grant v. McAuliffe, 41 Cal.2d 859, 264 P.2d 944, recognized that the courts of that State determine substantive matters by adopting as their law the law of the place where the tortious acts occurred, unless contrary to the public policy of the State. The question of first impression there was whether survival of causes of action was procedural or substantive for confiict-of-laws purposes. It was carefully pointed out that survival statutes do not create a new cause of action and are analogous to statutes of limitations, whereas the wrongful death statutes do create new causes of action and are substantive.
We adopt the view that this direct action statute is substantive and, as such, is entitled to comity, provided there is no compelling public policy of this State to the contrary.
Public policy has been defined as “Judicial decisions, legislation and constitutions as well as customs, morals and notions of justice which may prevail in a state.” (Speidel, “Extra-territorial Assertion of the Direct Action Statute: Due process, Full Faith and Credit and the Search for Government Interest, 53 Northwestern U.
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Mr. Justice House
delivered the opinion of the court:
This is an appeal from an order of the circuit court of Cook County dismissing the complaint of plaintiff, Christine Marchlik, against two Illinois insurance companies, Coronet Insurance Company and State Farm Mutual Automobile Insurance Company. Constitutional questions are raised.
Plaintiff, a resident of Wisconsin, was injured when the automobile of Henry Tapio, in which she was riding, was involved in a collision with one driven by Edward Trombley on U.S. Highway 51 in Iron County, Wisconsin. She received hospital and medical care in Wisconsin. Tapio was a resident of Bessemer, Michigan, Trombley was a Wisconsin resident, and the automobile driven by him bore Wisconsin registration. Tapio’s liability policy was issued by Coronet and Trombley’s by State Farm. Each policy was issued in Illinois, and they contained practically identical “no action” clauses prohibiting direct action against the carrier until final judgment had been entered against the insured.
The action was commenced under the Wisconsin “Direct Action” statutes (Wise. Stat. 1965, sec. 204.30(4) and sec. 260.11 (1),) which authorize original suits against insurance companies provided the injuries are sustained in Wisconsin.
We note at the outset that application of the doctrine of forum non conveniens is not an issue. It was raised only obliquely in the motion to dismiss, the trial court specifically refused to make a finding with respect to, or pass upon, application of the doctrine and none of the parties argue it in the briefs.
The issues as stated by the parties are whether the public policy of Illinois precludes direct action against an insurer for tort liability of the insured where the policy has a “no action” clause and when the statutory law of the place where the tort occurs allows direct action and, if so, does the full-faith-and-credit clause of the constitution of the United States force a State to enforce a foreign statute.
The preliminary approach to these issues is whether Wisconsin’s direct action statutes are procedural or substantive. If procedural or remedial, it is well settled that the lex fori, or law of the jurisdiction in which relief is sought, will govern. (15A C.J.S. Conflict of Laws, sec. 9; 16 Am. Jur. 2d, Conflict of Laws, sec. 76.) On the other hand, the lex loci delictus or law of the place of wrong generally governs where the substantive rights of the parties will be affected. But, even this is an over-simplification for, if entertaining a foreign cause (such as this direct action suit against casualty insurers) is contrary to the public policy of the forum, its courts may bar enforcement of the foreign remedy, provided, of course, such a bar is not in contravention of the full-faith-and-credit clause of the Federal constitution.
Section 260.11(1) of the Wisconsin statutes (Wise. Stat. 1963, sec. 260.11(1),) in pertinent part reads: “A plaintiff may join as defendants * * * any insurer of motor vehicles * * * in any action brought by plaintiff in this state on account of any claim against the insured. The right of direct action herein given * * * shall exist whether the policy of insurance sued upon was issued or delivered in the state of Wisconsin or not and whether or not the policy or contract of insurance contains a provision forbidding such direct action, provided the accident or injury occurred in the state of Wisconsin.” Prior to its amendment in 1959 the section was held by the Wisconsin Supreme Court to be procedural. (Oertel v. Williams, 214 Wis. 68, 251 N.W. 465 ; Ritterbusch v. Sexsmith, 256 Wis. 507, 41 N.W.2d 611.) However, we read cases subsequent to the amendment, in which the right of direct action was limited to accidents occurring in Wisconsin, to hold that both sections of the direct action statutes be considered together and that the statutes create a substantive rather than a procedural right. See Snorek v. Boyle, 18 Wis.2d 202, 118 N.W.2d 132; Frye v. Angst, 28 Wis.2d 575, 137 N.W.2d 430; Koss v. Hartford Accident and Indemnity Co. (7th cir.), 341 F.2d 472.
The other section (204.30(4)) reads in part: “Any bond or policy of insurance covering liability to others by reason of the operation of a motor vehicle shall be deemed and construed to contain the following conditions: that the insurer shall be liable to the persons entitled to recover for the death of any person, or for injury to personal property, irrespective of whether such liability be in praesenti or contingent to become fixed or certain by final judgment against the insured, when caused by negligent operation, maintenance, use or defective construction of the vehicle described therein, such liability not to exceed the amount named in said bond or policy.”
In commenting on the two sections the Wisconsin court said: “Sec. 204.30(4) is substantive and creates direct liability between the injured third person and the insurer while sec. 260.11 (1) is procedural and determines when the insurer can be made a party to the action despite the presence of a no-action clause in the policy.” (Miller v. Wadkins, 31 Wis.2d 281, 283, 142 N.W.2d 855.) While passing on the question of the effect of no-action provisions the Supreme Court of Minnesota in Kertson v. Johnson, 185 Minn. 591, 242 N.W. 329, held the Wisconsin direct action statute (now sec. 204 — 30(4)) to be substantive. In Oltarsh v. Aetna Insurance Co., (1965) 15 N.Y.2d 111, 204 N.E.2d 622, it was said that the Puerto Rican direct action statute, which resembled section 260.11 (1) of the Wisconsin statute, was substantive in character and even though New York had no similar statute the insured injured in Puerto Rico could maintain her action directly against the insurance carrier. Mr. Justice Traynor, speaking for the California court in Grant v. McAuliffe, 41 Cal.2d 859, 264 P.2d 944, recognized that the courts of that State determine substantive matters by adopting as their law the law of the place where the tortious acts occurred, unless contrary to the public policy of the State. The question of first impression there was whether survival of causes of action was procedural or substantive for confiict-of-laws purposes. It was carefully pointed out that survival statutes do not create a new cause of action and are analogous to statutes of limitations, whereas the wrongful death statutes do create new causes of action and are substantive.
We adopt the view that this direct action statute is substantive and, as such, is entitled to comity, provided there is no compelling public policy of this State to the contrary.
Public policy has been defined as “Judicial decisions, legislation and constitutions as well as customs, morals and notions of justice which may prevail in a state.” (Speidel, “Extra-territorial Assertion of the Direct Action Statute: Due process, Full Faith and Credit and the Search for Government Interest, 53 Northwestern U. Law Review 179, 200.) The author in developing the thesis that the direct action statute contravenes Illinois public policy said: “An exclusionary policy which is directed at the nature of the right sought to be enforced and is predicated upon protecting the outcome of litigation from prejudice and error reflects a peculiar local interest * * *. This argument becomes even more compelling when it is realized that' the direct action statute is an innovation which has been adopted by only three states [Wisconsin, Louisiana and Rhode Island]. While uniform enforcement in general may be a desirable goal, it should not foist the experimental whims of other states upon the place of trial.” (P. 203.) An examination of Illinois law and customs will, we believe, demonstrate that entertaining direct action suits is contrary to a firmly-fixed public policy.
First, while there is no direct legislation prohibiting such actions as in Michigan (Lieberthal v. Glens Falls Indemnity Co., 316 Mich. 37, 24 N.W.2d 547), section 25 of the Civil Practice Act (111. Rev. Stat. 1967, chap, no, par. 25(2),) which provided for the filing of a third party complaint, expresses a legislative policy by adding the admonition: “Nothing herein applies to liability insurers or creates any substantive right to contribution among tortfeasors or against any insurer or other person which has not heretofore existed.” Section 388 of the Insurance Code (Ill. Rev. Stat. 1967, chap. 73, par. 1000) provides that policies shall contain a privilege for suit against an insurer where the insured becomes insolvent or bankrupt and execution has been returned unsatisfied. These statutory provisions definitely indicate to us a legislative policy against direct actions against insurers before judgment.
In Pohlman v. Universal Mutual Casualty Co., 12 Ill. App. 2d 153, section 388 was interpreted as expressing a legislative policy against direct action against insurers until after liability had been established and judgment rendered against an insured. In Mutual Service Casualty Insurance Co. v. Prudence Mutual Casualty Co., 25 Ill. App. 2d 429, the appellate court refused to permit the plaintiff company to maintain an action to enforce a repayment of the amount it had to pay under Wisconsin’s comparative negligence statute. The decision was based squarely upon the theory that public policy of this State prohibited direct actions against insurers. Plaintiff argues that the Mutual Service case was overruled by Millsap v. Central Wisconsin Motor Transport Co., 41 Ill. App. 2d 1. It may be noteworthy that the case did not involve an insurer defendant, but in any event the anomalous position taken by one of the parties that public policy rendered unenforceable one Wisconsin statute while seeking enforcement of another could have caused the court to think “a plague on both your houses.” Disclosure of liability coverage at a trial against an insured for injuries resulting from his negligence constitutes prejudicial error in this State, contrary to the rule prevailing in Wisconsin. (Kavanaugh v. Parrett, 379 Ill. 273.) The Wisconsin direct action statute is in direct contravention of no action clauses in policies which are recognized in this State. Piper v. State Farm Mutual Automobile Insurance Co., 1 Ill. App. 2d 1.
Foreign substantive law is not, of course, unenforceable as being contrary to public policy just because it differs from our own law, but the differences here are such as to be against our public policy. Our courts and juries would be hard put to cope with the complex problems posed by other aspects of Wisconsin law if these direct actions are permitted. Wisconsin’s lack of a guest statute such as we have, and its interpretation of policy language, would result in confusion and possibly injustice. If this case is entertained by our courts, many more will follow with their attendant appeals. Eventually two bodies of law would be built up, one relating to domestic cases and the other based on our interpretation of Wisconsin law.
Public policy of Illinois precludes the use of our courts as the forum for cases under the Wisconsin direct action statutes and application of the exclusionary rule does not violate the full-faith-and-credit provisions of the Federal constitution.
The judgment of the circuit court of Cook County is affirmed.
Judgment affirmed.