Sexton v. Ryder Truck Rental, Inc.

320 N.W.2d 843, 413 Mich. 406

• Court: Michigan Supreme Court
• Decided: June 14, 1982
• Docket: Docket Nos. 61606, 63362. (Calendar Nos. 1, 2)
• Status: Published

Opinions

Williams, J.

These companion cases challenge us to decide whether this Court should continue to follow the doctrine of lex loci delicti, which was upheld more than a decade ago in Abendschein v Farrell, 382 Mich 510; 170 NW2d 137 (1969). This Court, in granting leave to appeal, said:

"The parties are directed to include among the issues to be briefed: (1) whether the doctrine of lex loci delicti should be abandoned in favor of the dominant or substantial contacts test for determining the law to be applied in a conflict of laws context; or whether, in lieu of abandoning the doctrine of lex loci delicti, the public policy of this state mandates application of Michigan law under the facts of this case, and (2) whether the Michigan owners’ liability statutes have extra-territorial application.” 407 Mich 897, 908 (1979).

Review of these matters convinces us that not only has there been a major retreat from the doctrine of lex loci delicti among scholars and the state courts, but that in Michigan itself the doctrine is at least as much honored in the breach as observed. Furthermore, both Abendschein and Kaiser v North, 292 Mich 49; 289 NW 325 (1939), on which Abendschein so strongly relied, have been seriously eroded, and Kaiser has in effect been overruled.

As a consequence, not following lex loci delicti in these cases does not flout stare decisis. Furthermore, Abendschein is not on all fours with the facts of these cases. Abendschein dealt with a Michigan plaintiff and a New York defendant with a third-state accident. Here both the plaintiffs and defendants are Michigan residents, or corporations doing business in Michigan, with a foreign accident.

Upon consideration of all the arguments for lex loci and the alternate choice-of-law methodologies as well as the Michigan precedents, we presently adopt no extant methodology outright but hold that when two residents, or two corporations doing business in the state, or any combination thereof, are involved in an accident in another state, the forum will apply its own law.

Nor are we persuaded that the application of the owners’ liability statutes under these facts results in an extraterritorial application of Michigan law. The cause of action arising under the statutes is not founded so much on defendants’ conduct as it is on the relationship between the owner and the operator. In both cases the owner-operator relationship took place exclusively in Michigan. Therefore, the application of the owners’ liability statutes under these facts is not an extraterritorial application. Sexton is reversed, and Storie is affirmed.

I. Facts

A. Sexton v Ryder Truck Rental, Inc

On March 29, 1976, plaintiff and a co-employee, Michigan residents and employees of a Michigan corporation, were operating a truck leased from defendant during the course of their employment. The truck was titled and registered in the name of defendant Ryder Truck Rental, Inc., a Florida corporation authorized to do business in Michigan, and leased from defendant’s offices in Grand Rapids, Michigan, where it had been principally garaged and, presumably, insured.

Plaintiff had embarked on a business trip to an unspecified location outside of Michigan. The journey originated and was to have terminated in Kalamazoo, Michigan, at the employer’s place of business. Early in the morning of March 29, however, the truck overturned in Wytheville, Virginia. Plaintiff, who occupied the sleeper portion of the vehicle at the time of the accident, suffered serious injury. The record does not indicate that any other person was injured or that other property damage was sustained.

Plaintiff and his wife instituted a tort action for personal injuries against the Michigan defendant-owner in Kalamazoo Circuit Court pursuant to the Michigan motor vehicle owners’ liability statute which provides in pertinent part that "[t]he owner of a motor vehicle shall be liable for* any injury occasioned by the negligent operation of such motor vehicle”. MCL 257.401; MSA 9.2101.

Defendant moved for summary judgment on the ground that since both the accident and injury occurred in Virginia, pursuant to the lex loci rule, the law of Virginia rather than the Michigan law should control disposition of plaintiff’s asserted owners’ liability claim. Since Virginia had not provided for such owners’ liability actions by statute or at common law, Virginia law should be applied to disallow plaintiff’s suit.

Because the accident occurred in Virginia, which had made no provision for owner’s liability, Judge Borsos granted defendant’s motion for summary judgment. In so ruling, Judge Borsos remarked:

"Since Michigan is the forum, this court will apply Michigan’s choice of law rule. There is no doubt that traditionally Michigan, like all other states, has applied the common-law rule — 'the place of the wrong’ — when confronted with a conflict of state laws. But while Michigan has clung to this rule, many other states have shifted to a new approach, the dominant contacts method. Although this method has its difficulties, there is much to be said for it; under the signiñcant contacts rule, cases such as this one appear to reach a more reasonable result. In this case, it is clear that Virginia really has no interest at stake at all. The parties and property involved are all from Michigan, and there is nothing in this case that would affect the safety of Virginia highways or the burden on its hospitals or social service rolls. By contrast, Michigan has much at stake. The Legislature has decided for policy reasons that those who own automobiles have such powerful instruments at their disposal that when they turn over the keys to someone else, they are still responsible. This is important not only for the security of Michigan roads, but for the security of Michigan citizens.

"Unfortunately (as this court believes), the court is precluded from using this more equitable approach. In 1969, the Michigan Supreme Court considered the relative merits of the two rules and held that Michigan would retain lex loci delicti unless the Legislature changed the rule. Abendschein v Farrell, 382 Mich 510 (1969). There is no need for legislative sanction of any change, however, since choice-of-law rules are fundamentally judge-made guidelines that direct a forum court which laws to use. And while the Court clearly examined the policies behind both methods eight years ago, this court believes that since 1969, scholars and sister states have further shown that the modern, better-reasoned approach is that we apply the law of the state that has a greater interest — not the law of the state where the accident just happened to occur.

"Despite all this, however, this court remains mindful of its duty to stare decisis. Given the opportunity, this court would hasten to use any exception it could ñnd to the lex loci delicti precedent, simply because it is particularly unfair and extreme to apply it in this case. But the court concludes that this is just what Abendschein and the cases before it demand.” (Emphasis supplied.)

On appeal, Judge J. H. Gillis felt "bound to follow the mandate of the Supreme Court [in Abendschein, supra] and apply the outmoded doctrine of lex loci delicti to this case”. Sexton v Ryder Truck Rental, Inc, 84 Mich App 69, 70; 269 NW2d 308 (1978). Applying that doctrine, Judge Gillis "reluctantly” affirmed the trial court, id., 74, but stated:

"In doing so, this writer reaches what he perceives to be an inequitable result, and urges plaintiffs to appeal this case to the Supreme Court, who will hopefully abandon the lex loci delicti doctrine and adopt the more equitable 'dominant contacts’ approach.” Id., 70.

We granted plaintiffs application for leave to appeal on October 31, 1979. 407 Mich 897 (1979).

B. Storie v Southfield Leasing, Inc

On January 17, 1974, plaintiffs decedent was the sole passenger in a leased 1968 Beechcraft "Bonanza” aircraft piloted by the president of Lebow Associates, the Michigan corporation for which both worked. During the course of their round-trip business journey from Michigan to visit business accounts in the Cleveland-Akron area of Ohio, both Michigan residents were killed when the aircraft crashed near Akron, Ohio. No other fatalities or injuries to residents or property were reported in the record. Decedent is survived by plaintiff widow and the couple’s two sons, all of whom reside in Michigan.

The aircraft was owned and registered by defendant Southfield Leasing, Inc., a Michigan corporation having its principal place of business in Southfield, Michigan. Defendant had leased the aircraft to Lebow Associates. The aircraft was purchased from Production Automation Corporation with financing secured from the Detroit Bank and Trust Company, both Michigan corporations; it was presumably insured in Michigan. At all pertinent times, the aircraft had been stationed and maintained at Grand Prix Airport located in Troy, Michigan.

Approximately eight months after the crash, plaintiff instituted a wrongful death action against the Michigan defendant-owner in Wayne Circuit Court; defendant, in turn, lodged a third-party complaint against Lebow Associates pursuant to an indemnity provision in the parties’ lease agreement. Subsequent to a transfer of venue to Oakland Circuit Court, plaintiff stipulated that its sole claim against the Michigan defendant-owner was pursuant to the Michigan aircraft owner’s liability statute which provides in pertinent part that "[t]he owner * * * of an aircraft shall be liable for any injury occasioned by the negligent operation of the aircraft”. MCL 259.180a; MSA 10.280(1).

Defendant Southfield Leasing moved for summary judgment alleging that the question of an owner’s liability for aircraft injury or death "on the surface of the earth” was controlled by 49 USC 1404;¹ accordingly, this federal legislation preempted the Michigan aircraft owner’s liability statute. Third-party defendant Lebow Associates filed a brief in support of defendant’s motion urging that summary judgment was additionally proper for the reason that, pursuant to the lex loci delicti doctrine, plaintiff’s action arising from an Ohio accident and fatality was foreclosed by Ohio law which did not provide for aircraft ownership liability.

Applying the lex loci delicti doctrine, the trial court granted summary judgment on the ground that since death occurred in Ohio, Ohio rather than Michigan law governed disposition of the Michigan plaintiff’s suit and thereby precluded the Michigan owner’s liability. The pre-emption argument was rejected.

The Court of Appeals, D. C. Riley, J., dissenting, reversed the trial court’s lex loci ruling on the ground that application of Ohio law to preclude the Michigan plaintiffs recovery against the Michigan aircraft owner would contravene Michigan public policy as codified in the aircraft owner’s liability statute. Storie v Southfield Leasing, Inc, 90 Mich App 612; 282 NW2d 417 (1979). Application of the law of Ohio would undermine prevailing Michigan policy "by permitting owners of airplanes to escape liability on the basis of the mere fortuity that the injury did not occur within the boundaries of this state”. Id., 620. The majority also ruled that the federal statute did not preempt the Michigan aircraft owner’s liability statute and remanded the matter for further proceedings.²

We granted leave to appeal on November 8, 1979. 407 Mich 908 (1979).

II. Pros and Cons of Lex Loci Delicti

For a great many years, Michigan embraced the Bealeian conflict-of-laws notion that when a cause of action is maintained for injury sustained in a foreign jurisdiction, the substantive rights of the parties are to be automatically fixed and governed by the law of the place where the wrong occurred³ —the lex loci delicti.⁴ support of this rule,⁵ courts in Michigan as well as other jurisdictions have largely relied on the teachings of the original Restatement Conflict of Laws, and particularly § 378 of that treatise which states: "The law of the place of wrong determines whether a person has sustained a legal injury.” "The place of wrong is in the state where the last event necessary to make an actor liable for an alleged tort takes place.” Id., § 377.⁶

The traditional advantages advanced on behalf of the lex loci rule have included discouraging forum shopping⁷ and furthering the goals of certainty and predictability⁸ through its ease of application, thus simplifying the task of both lawyers and the courts.

Despite these reputed advantages, modern scholars⁹ and about half or more of the states¹⁰ have rejected its rigidity since the rule often produced obvious rather than just results through its failure to consider the interests of other jurisdictions in the litigated matter.

Judge Fuld criticized continued application of the lex loci delicti rule in the seminal case of Babcock v Jackson, 12 NY2d 473, 478; 240 NYS2d 743; 191 NE2d 279, 281 (1963):

"Although espoused by such great figures as Justice Holmes and Professor Beale, the vested rights doctrine has long since been discredited because it fails to take account of underlying policy considerations in evaluating the signiñcance to be ascribed to the circumstance that an act had a foreign situs in determining the rights and liabilities which arise out of that act. ’The vice of the vested rights theory’, it has been aptly stated, ’is that it affects to decide concrete cases upon generalities which do not state the practical considerations involved’. More particularly, as applied to torts, the theory ignores the interest which jurisdictions other than that where the tort occurred may have in the resolution of particular issues. It is for this very reason that, despite the advantages of certainty, ease of application and predictability which it affords, there has in recent years been increasing criticism of the traditional rule by commentators and a judicial trend towards its abandonment or modification.” (Footnotes and citations omitted, emphasis supplied.)

Chief Justice Traynor had this to add in his equally significant opinion in Reich v Purcell, 67 Cal 2d 551, 555; 63 Cal Rptr 31; 432 P2d 727, 730 (1967):

"Ease of determining applicable law and uniformity of rules of decision, however, must be subordinated to the objective of proper choice of law in conflict cases, i.e., to determine the law that most appropriately applies to the issue involved. Moreover, as jurisdiction after jurisdiction has departed from the law of the place of the wrong as the controlling law in tort cases, regardless of the issue involved, that law no longer affords even a semblance of the general application that was once thought to be its great virtue.” (Citations omitted.)

In a recent opinion, the Supreme Court of Texas abandoned the traditional lex loci doctrine. Gutierrez v Collins, 583 SW2d 312, 317 (Tex, 1979). Justice Johnson disposed of the principal arguments favoring the traditional approach as follows:

"The short answer to the first argument [that the lex loci delicti doctrine provides a uniform, consistent, and predictable rule of law] is that the traditional rule in its search for uniformity of result and ease of application, ignored the very substantial interests of the forum state in applying its own law. The results reached were most often arbitrary and unjust. To avoid these results, courts engrafted exceptions to the rule or circumvented its operation by strained characterizations of the facts. This led to an undermining of uniformity and predictability which were the supposed virtues of lex loci delicti. 'The result was an unworkable irrational system.’ 3 Dooley, Modern Tort Law, § 46.02 (1977). Even without this judicial maneuvering, certainty and predictability were irrelevant considerations in the case of unintentional torts such as presented in the instant case.

"Secondly [addressing the argument that alternative theories would lead to varying, inconsistent and unpredictable results], while the alternative theories to lex loci delicti admittedly have experienced some growing pains, the need to take into account factors other than the geographical location of the tort justifies this added burden. As with any new rule of law, it is to be anticipated that there will be some refinement and adjustment; but this is inherent in the judicial process. Ease of administration alone is a wholly inadequate reason for retention of an unjust rule. Further, it is open to question whether lex loci delicti truly was easy to administer * * *.

"Finally [addressing the argument that stare decisis precludes abandonment of lex loci delicti], the doctrine of stare decisis does not stand as an insurmountable bar to overruling precedent. Stare decisis prevents change for the sake of change; it does not prevent any change at all. It creates a strong presumption in favor of the established law; it does not render that law immutable. Indeed, the genius of the common law rests in its ability to change, to recognize when a timeworn rule no longer serves the needs of society, and to modify the rule accordingly. Lex loci delicti had its origins in the days when travels across state lines [were] relatively rare and perhaps it served a useful purpose in that time. In today’s highly mobile society, however, its continued application most commonly produces harsh and inequitable results. It is in recognition of this fact that courts and commentators are seeking to fashion a new rule more attuned to the demands of modern society.”

Ill

Review of the arguments for lex loci and the alternate choice-of-law methodologies convinces us that slavish devotion to the rigidities of lex loci no longer is either the reasonable policy to follow or the generally accepted law in the United States.¹¹ As a matter of fact, the courts of Michigan have frequently departed from lex loci in individual instances. For example, Professor Sedler of the Wayne State University Law School comments:¹²

”The place of the wrong rule simply has not been followed consistently by the Michigan Court of Appeals and by the federal courts in Michigan called upon to apply Michigan conñicts law in diversity cases. These courts have not hesitated to employ all of the classic 'escape devices’ and 'manipulative techniques’ in order to avoid the operation of the place of the wrong rule and to bring about the application of Michigan law. In practice, the place of the wrong rule has been honored more in the breach than in the observance.”

Going a step further the federal District Court for the Northern District of Illinois opined for what it is worth:

"Michigan, like California, has abandoned the traditional lex loci delicti approach to conflicts questions in favor of the 'interests analysis’ approach.” In re Air Crash Disaster Near Chicago, 500 F Supp 1044, 1052 (ND Ill, 1980).

When our Abendschein opinion was issued in 1969, the doctrine of lex loci retained substantial currency in the industrialized states. Although a multiplicity of alternatives had been presented in the academic literature, there was considerable hesitation to vary the ancient system by which most jurisdictions handled choice-of-law problems. More comfortable than adoption of new and potentially unfortunate approaches was the practice of employing manipulative techniques to avoid the strictures of lex loci. Two very effective techniques were "procedural characterization” — the law of the forum governing on all matters which could be denominated procedural — and "public policy” of the forum state. Indeed, the Court of Appeals in Storie relied upon the legislative judgment expressed in the aircraft owner’s liability statute as sufficiently compelling public policy for asserting jurisdiction.

In the period following Abendschein, a significant development occurred. In evaluating the nine appellate and federal cases brought in Michigan between 1969 and 1978, Professor Sedler notes:

"The most 'universal’ rule of choice of law is that when two residents of the forum are involved in an accident in another state, the forum will apply its own law. This rule of choice of law embodies the interest solution that when the forum has a real interest in applying its own law, it should do so. The application of this rule of choice of law in Michigan would cover Branyan, Tucker, Sweeney, Papizzo, Shamie, DeVito and Wilson."13

This departure from the traditional rule by intermediate and federal courts presaged the pronouncement of this Court in Sweeney v Sweeney, 402 Mich 234; 262 NW2d 625 (1978). In that case a Michigan daughter sued a Michigan father driving a Michigan-insured and -registered car for injuries received in Ohio in a one-car accident. The Michigan Supreme Court, of course, had overruled intrafamily immunity, but Ohio retained it. Sweeney considered Rick v Saginaw Bay Towing Co, 132 ; 93 NW 632 (1903); Eskovitz v Berger, 276 Mich 536; 268 NW 883 (1936); and Kaiser v North, 292 Mich 49; 289 NW 325 (1939), but recognized a court decision overruling intra-family immunity as public policy sufficient to mandate use of the lex fori. Present Chief Justice Coleman, writing for a unanimous Supreme Court, rejected the Court of Appeals application of the doctrine of lex loci and said:

"Automatic application of lex loci delicti in this daughter against father suit would frustrate an announced Michigan public policy. Whether lex loci delicti should be applied in other situations is not decided here.” 402 Mich 242.

In other words, we rejected lex loci in that case and indicated that the future application of lex loci would be decided in each case as it came up.

The early statement of this deference to the public policy of the lex fori was in such restricted terms as that used in 16 Am Jur 2d, Conflict of Laws, § 101, p 168: "contrary to an extraordinarily strong public policy of the forum state”. This test was exemplified by three earlier Michigan cases.

All three cases involved Michigan parties but out-of-state accidents. In all three, Michigan public policy was urged to defeat application of lex loci but rejected. The test for public policy used in Rick (132 Mich 237, 240) and Eskovitz (276 Mich 536, 541) was "against good morals or natural justice”. In Kaiser this Court said:

"The fact Michigan statutory regulations of the rights of a motor vehicle guest passenger may differ from Ontario statutory provisions, or even the provisions of the common law governing like rights, is not a reason for holding the statute of the foreign jurisdiction contravenes public policy here.” 292 Mich 49, 57. The other two cases likewise refused to consider Michigan legislation as declaring a public policy sufficient to defeat lex loci. 132 Mich 237, 240; 276 Mich 536, 541.

This restrictive definition of public policy was departed from in Lieberthal v Glens Falls Indemnity Co, 316 Mich 37, 40; 24 NW2d 547 (1946). There a Michigan resident sued a New York auto liability insurer in Michigan because of an accident in Wisconsin. Wisconsin law permitted suit against an auto liability insurer but Michigan statutes did not. This Court barred use of the Wisconsin law on the basis of the Michigan statute. Justice North, for three justices, said:

"Public policy of a State is fixed by its Constitution, its statutory law, and the decisions of its courts; and when the legislature enacts a law within the limits of the Constitution, the enactment insofar as it bears upon the matter of public policy, is conclusive. See In re McKee’s Estate, 71 ND 545; 3 NW2d 797 [1942], wherein, quoting from an earlier case, it is said: 'Public policy is but the manifest will of the State. * * * And when the legislature has spoken and enacted a law embodying a certain principle, the policy is determined.’ Michigan’s public policy touching the phase of the law under consideration has been definitely fixed by statute.” 316 Mich 40-41.

While the plurality of the Court recognized the contrary rule in Kaiser, it purported to distinguish it. 316 Mich 37, 42-43.

Lieberthal, then, is authority for a public policy exception to lex loci based on a Michigan statute, and Sweeney is similar authority based on case law.

A more recent case following Lieberthal, Branyan v Alpena Flying Service, Inc, 65 Mich App 1; 236 NW2d 739 (1975), involved Michigan citizens in a Virginia aircrash. The Court of Appeals recognized Abendschein, distinguished it as being self-limiting to " 'motor car (not airplane) accidents’ ”, id., 5, stated "that the strict lex loci delicti rule should be abandoned”, id., 7, and decided Michigan law should be used because the Virginia law was contrary to a Michigan statute. Id., 8-9. It quoted Lieberthal, supra, as follows:

"Public policy of a State is fixed by its Constitution, its statutory law, and the decisions of its courts; and when the legislature enacts a law within the limits of the Constitution, the enactment insofar as it bears upon the matter of public policy, is conclusive.” Id., 8.

It also weighed the relative contacts and interests of Michigan and Virginia in favor of Michigan.

A Court of Appeals case subsequent to Professor Sedler’s article, Shaheen v Schoenberger, 92 Mich App 491, 494; 285 NW2d 343 (1979), is very interesting in that it considers Abendschein and rejects its strictures, deriving support from both Sweeney and Branyan. The question involved was whether the limitation of damages of the lex loci delicti state, Florida, should apply where all the parties were Michigan residents. The Court of Appeals said:

"[I]n Sweeney v Sweeney, 402 Mich 234; 262 NW2d 625 (1978), the Supreme Court took a second look at the 'hard and fast’ rule of Abendschein. After careful analysis the Court held that application of the lex loci delicti (Ohio) which bars suit between a parent and child (based on an automobile accident) would frustrate announced Michigan public policy where the litigants were Michigan residents. Clearly the approach set forth in Branyan was impliedly approved in Sweeney in determining any individual exceptions to the lex loci delicti rule. Thus both Branyan and Sweeney are applicable to the question presented herein. See Storie v Southfield Leasing, Inc, 90 Mich App 612; 282 NW2d 417 (1979).

"* * * The statute embodies the state’s public policy in this regard. This policy, coupled with Michigan’s interest in the survivors’ well-being, operates under the facts in this case to except the elements of damages from the lex loci delicti rule.”

It is clear that the Court of Appeals in Shaheen, as in Branyan and Lieberthal, treats any legislative enactment as a sufficient public policy to transfer choice of law from the lex loci delicti to the forum state.

On the other hand, there have been six other Court of Appeals conflicts-of-laws decisions citing Abendschein with approval and two Michigan federal decisions.¹⁴ All but two of the cases were routine acceptance of stare decisis. Three cases were controlled by the Michigan borrowing statute.

Turner v Ford Motor Co, 81 Mich App 521; 265 NW2d 400 (1978), was actually controlled by the Michigan borrowing statute on the basis of the applicable statute of limitations. However, the Court relied on Rick, Eskovitz, and Kaiser to reject a public policy exception. In Hill v Clark Equipment Co, 85 Mich App 1; 270 NW2d 722 (1978), lv den 405 Mich 805 (1979), Abendschein was cited as controlling. A public policy exception was rejected on the basis that plaintiff was not a Michigan resident to whom a public policy would apply.

IV

Having examined what law Michigan and other jurisdictions have applied where forum citizens have been involved as both injuring and injured parties in accidents in other states, we are convinced that the state of the law is in such flux that there is no overwhelming pressure of stare decisis to compel us to follow the traditional rule of lex loci delicti unless we have reason to believe that that rule would be in the best interest of the people of our state. After careful consideration, we perceive no reason why the rule of lex loci delicti would generally benefit citizens of Michigan.

The principal argument for following lex loci delicti has always been that it would provide certainty and predictability. As Chief Justice Traynor said in Reich v Purcell, 67 Cal 2d 555, supra, the rule of lex loci delicti "no longer affords even a semblance of the general application that was once thought to be its great virtue”. Both Judge Field and Justice Johnson made similar observations in their opinions. Professor Sedler in commenting on following lex loci delicti in Michigan observed the "rule simply has not been followed consistently by the Michigan Court of Appeals and by the federal courts in Michigan”. Sedler, supra, 24 Wayne L Rev 839. We are thus confronted with the proposition that in the real world the argument of certainty, the chief argument in favor of lex loci delicti, no longer is tenable.

The other argument in favor of lex loci delicti, avoidance of forum shopping, is not a strong argument as against citizens of the forum state who presumably have every reason of convenience and economy to be entitled to service in their own state. To this, of course, can be added the fact that the forum state generally has an interest in seeing that its injured citizens are well-served and that its citizen defendants are afforded every protection that such citizens would have in their own state. Additionally, where both the plaintiff and the defendant are citizens of the forum state, the state where the wrong took place will normally have no interest in the litigation.

The upshot of all of this is that there appears to be no real reason to retain the rule of lex loci delicti, on the one hand, while, on the other hand, there seems to be good reason and practical pressure in Michigan for the forum state to apply its own law. Furthermore, as we have developed, there are numerous precedents in other states to apply the lex fori.

As a consequence of these premises, in the normal common-law tradition, we hold that where Michigan residents or corporations doing business in Michigan are involved in accidents in another state and appear as plaintiffs and defendants in Michigan courts, the courts will apply the lex fori, not the lex loci delicti, and we do so without reference to any particular state policy. We reach this conclusion on the facts and reasoning herein developed. We do not here adopt the law of dominant contacts or any other particular methodology, although any such reasoning may, of course, be argued where persuasive and appropriate.¹⁵

V

Having held that the doctrine of lex loci delicti does not apply to cases where all of the parties are either Michigan residents or doing business within this state, we next turn to the second issue upon which this Court granted leave: "whether the Michigan owners’ liability statutes have extra-territorial application”. 407 Mich 897, 908 (1979).

The general rule of law is "that no state or nation can, by its laws, directly affect, bind, or operate upon property or persons beyond its territorial jurisdiction”. 73 Am Jur 2d, Statutes, § 357, p 491. This extraterritoriality rule has a long history in international and common law. See 15A CJS, Conflict of Laws, § 6, p 411. However, as populations and technology progressed and travel between countries and among the states increased to an everyday occurrence, exceptions to the general rule of extraterritoriality were created so that it is now recognized that "a state may have the power to legislate concerning the rights and obligations of its citizens with regard to transactions occurring beyond its boundaries”. 73 Am Jur 2d, Statutes, § 357, p 491. See, e.g., United States v Curtiss-Wright Export Corp, 299 US 304; 57 S Ct 216; 81 L Ed 2d 255 (1936) (presidential proclamation authorized by joint congressional resolution prohibiting sale of arms to South American countries upheld); North Alaska Salmon Co v Pillsbury, 174 Cal 1; 162 P 93 (1916); Tattis v Karthans, 215 So 2d 685 (Miss, 1968) (defamation statute).

In order for a statute to have extraterritorial application, there must be clear legislative intent.

"Unless the intention to have a statute operate beyond the limits of the state or country is clearly expressed or indicated by its language, purpose, subject matter, or history, no legislation is presumed to be intended to operate outside the territorial jurisdiction of the state or country enacting it. To the contrary, the presumption is that the statute is intended to have no extraterritorial effect, but to apply only within the territorial jurisdiction of the state or country enacting it. Thus, an extraterritorial effect is not to be given statutes by implication. Accordingly, a statute is prima facie operative only as to persons or things within the territorial jurisdiction of the lawmaking power which enacted it. These rules apply to a statute using general words, such as 'any’ or 'all,’ in describing the persons or acts to which the statute applies.” 73 Am Jur 2d, Statutes, § 359, p 492.

Therefore, we now turn to the controlling Michigan statutes.

The motor vehicle owners’ liability statute, first enacted in 1909,¹⁶ states:

"The owner of a motor vehicle shall be liable for any injury occasioned by the negligent operation of such motor vehicle whether such negligence consists of a violation of the provisions of the statutes of the state or in the failure to observe such ordinary care in such operation as the rules of the common law requires. The owner shall not be liable, however, unless said motor vehicle is being driven with his or her express or implied consent or knowledge. It shall be presumed that such motor vehicle is being driven with the knowledge and consent of the owner if it is driven at the time of said injury by his or her father, mother, brother, sister, son, daughter, or other immediate member of the family”. MCL 257.401; MSA 9.2101,_

The aircraft owner’s liability statute, first enacted in 1958, is very similar:

"The owner or operator or the person or organization responsible for the maintenance or use of an aircraft shall be liable for any injury occasioned by the negligent operation of the aircraft, whether the negligence consists of a violation of the provisions of the statutes of the state, or in the failure to observe ordinary care in the operation, as the rules of the common law require.” MCL 259.180a; MSA 10.280(1).

Except for the motor vehicle statute’s added provision requiring the owner to have "express or implied consent or knowledge”, the two statutes are basically identical.

We are not convinced that the application of the owners’ liability statutes under these facts results in an extraterritorial application of Michigan law. The Legislature is not regulating the tortious conduct of the operators of the vehicles, but rather the relationship between the owner and the operator.

"The purpose of the [motor vehicle owners’ liability] statute is to place the risk of damage or injury upon the person who has the ultimate control of the vehicle.

"The owner who gives his keys to another, and permits that person to move several thousand pounds of steel upon the public highway, has begun the chain of events which leads to damage or injury.

"The statute makes the owner liable, not because he caused the injury, but because he permitted the driver to be in a position to cause the injury.” Roberts v Posey, 386 Mich 656, 662; 194 NW2d 310 (1972) (emphasis added).

In the two cases before us the owner-operator relationship took place exclusively in Michigan. In both instances, plaintiffs’ employers contracted for and received possession of the leased vehicles from defendants in Michigan for use by their employees. "[T]he chain of events which leads to damage or injury” was forged in this state.

The cause of action giving rise to the law suits now before us is not based on any tortious action by defendants but rather on strict statutory liability. As this Court noted in Geib v Slater, 320 Mich 316, 321; 31 NW2d 65 (1948), "Defendant is guilty of no tortious act; he did not participate in the commission of the tort; and his liability arises only by operation of law.”

This "quasi” tort, Black’s Law Dictionary (4th ed), pp 1660-1661, did not arise in Ohio of Virginia but in Michigan. Although one or more operators may have been negligent in the operation of their vehicles outside this state, this cause of action is not founded on their conduct but on the relationship between Michigan owners and Michigan operators. Therefore, we find that under the facts of this case MCL 257.401; MSA 9.2101 and MCL 259.180a; MSA 10.280(1) are not given extraterritorial application.

In order to achieve the legislative purpose of the owners’ liability statutes, the owners’ liability statutes must be given uniform application.

The purpose of the owners’ liability statutes is "to place the risk of damage or injury upon the person who has ultimate control of the vehicle”, Roberts, supra, 662, and thereby promote safety in transportation. However, this purpose cannot be fully effectuated unless the owners’ liability statutes are given uniform application to residents of this state traveling outside of Michigan as well as persons within our state.

In order to successfully modify conduct, the regulating force, whether it be criminal or civil, must be quickly, consistently and assuredly applied to the undesirable conduct. To enforce the owners’ liability statutes on the basis of where the accident occurred would undermine the effectiveness of these important statutes. The public safety promoted by MCL 257.401; MSA 9.2101 and MCL 259.180a; MSA 10.280(1) can only be realized where owners are certain that they will incur liability whenever they entrust their vehicles to negligent operators. Any narrower application of these statutes would encourage irrational conduct by the owners in their entrustment. Therefore, there is good reason for this Court to apply the owners’ liability statutes uniformly.

We have now decided that where two parties to an accident in another state are both Michigan citizens or are doing business in Michigan, the lex fori controls. Thus, if there were a one-car accident in another state and both occupants were from Michigan, particularly if the trips began in Michigan, an injured passenger could sue the negligent driver in Michigan and Michigan law would be employed. However, suppose that the driver of the car was not the owner, and that the owner who had turned over the car to him also lived in Michigan. Would it not be anomalous if the injured Michigan party, who could sue the Michigan driver who was negligent in another state in a Michigan court under Michigan law, could not sue the Michigan owner whose obligation to the injured Michigan party arose out of his entrusting his car in Michigan to a Michigan driver who subsequently injured a Michigan person in that car? It would seem particularly anomalous given the fact the Michigan owners’ liability statute is triggered by the absolute liability created by the entrustment which occurred in Michigan. We believe this line of inquiry further corroborates our view that the operation of the Michigan owners’ liability statute involves an intraterritorial impact rather than an extraterritorial impact.

To conclude, we hold that the owners’ liability statutes are not given extraterritorial application where the owner and operator relationship arises in Michigan. However, even if we were to hold otherwise, it would be proper to give MCL 257.401; MSA 9.2101 and MCL 259.180a; MSA 10.280(1) uniform application and apply them extraterritorially.

VI. Conclusion

The doctrine of lex loci delicti has come under both academic and judicial attack throughout the United States. Michigan case law reflects the increasing strain between the old and obsolescent common-law rule and the many exceptions used to get around it. In Sweeney, we refused to permit the "[automatic application of lex loci delicti * * * [to] frustrate an announced Michigan public policy”. We go further today. Finding that the rationale behind the doctrine of the universality and conformity of lex loci delicti is no longer tenable and recognizing that there seems to be good reason and precedent in Michigan for the forum state to apply its own law, we hold that where Michigan residents or corporations doing business in Michigan are involved in accidents in another state and where they appear as plaintiffs and defendants in Michigan courts in a tort action, the courts will apply the lex fori, not the lex loci delicti.

We further hold that the two owners’ liability statutes are not given extraterritorial application where the owner and operator relationship arises in Michigan. Yet even were we to hold otherwise, legislative intent and public policy require that the owners’ liability statutes be given uniform application to all Michigan motor vehicle and aircraft owners. Therefore, Sexton is reversed and Storie is affirmed.

Levin and Blair Moody, Jr., JJ., concurred with Williams, J.

Kavanagh, J.

We agree that Sexton should be reversed and Storie affirmed and so concur in the result reached by Justice Williams.

We have followed the doctrine of lex loci delicti in Michigan tort law with some consistency for approximately 100 years, although in no case has this Court explained why the law of the place of the wrong should determine the rights of the parties.

In the cases before us, we are asked to give effect to two Michigan statutes providing for owners’ liability for damages caused by accidents involving use with the owners’ consent of an automobile in one case and an airplane in the other.

The reason urged for not giving effect to these statutes in each instance is that the accident occurred beyond the boundaries of the State of Michigan. We no longer consider that fact controlling or even of great significance.

The power of a state to effect legal consequences is not limited to occurrences within the state if it has control over the status which gives rise to those consequences. Alaska Packers Ass'n v Industrial Accident Comm of California, 294 US 532, 541; 55 S Ct 518; 79 L Ed 1044 (1935).

The status of ownership giving rise to the legal consequence of liability has been regulated in Michigan by MCL 257.401; MSA 9.2101 and MCL 259.180a; MSA 10.280(1) and so the occurrence of the accident beyond Michigan’s boundaries is not controlling under these Michigan laws.

Levin and Fitzgerald, JJ., concurred with Kavanagh, J.

1 "No person having a security interest in, or security title to, any civil aircraft, aircraft engine, or propeller under a contract of conditional sale, equipment trust, chattel or corporate mortgage, or other instrument of similar nature, and no lessor of any such aircraft, aircraft engine, or propeller under a bona fide lease of thirty days or more, shall be liable by reason of such interest or title, or by reason of his interest as lessor or owner of the aircraft, aircraft engine, or propeller so leased, for any injury to or death of persons, or damage to or loss of property, on the surface of the earth (whether on land or water) caused by such aircraft, aircraft engine, or propeller or by the ascent, descent, or flight of such aircraft, aircraft engine, or propeller or by the dropping or falling of an object therefrom, unless such aircraft, aircraft engine, or propeller is in the actual possession or control of such person at the time of such injury, death, damage, or loss.”

2 Defendant in Storie has additionally argued that even if this Court chooses to either abandon the lex loci delicti doctrine or carve out a public-policy exception to that doctrine on the facts of the case, application of either the Michigan aircraft owner’s liability statute, MCL 259.180a; MSA 10.280(1), or Ohio law is nonetheless pre-empted by operation of 49 USC 1404 which would preclude suit. Like the Court of Appeals in Storie, we reject defendant’s argument and find that plaintiff’s action is governed by the applicable Michigan statute. See Storie v Southfield Leasing, Inc, 90 Mich App 612, 620-623; 282 NW2d 417 (1979). And for interpretation of language similar to the federal statutory language in a New Jersey statute see Prentiss v National Airlines, Inc, 112 F Supp 306 (D NJ, 1953).

3 Application of the substantive law of the jurisdiction where the tort occurred has been the unanimously accepted rule in Michigan from 1894 to 1969, beginning with Wingert v Wayne Circuit Judge, 101 Mich 395; 59 NW 662 (1894). It was applied in 1897 (Turner v St Clair Tunnel Co, 111 Mich 578, 584; 70 NW 146 [1897]); 1927 (Petrusha v Korinek, 237 Mich 583, 589-590; 213 NW 188 [1927]); 1933 (Perkins v Great Central Transport Corp, 262 Mich 616, 619-620; 247 NW 759 [1933]); 1935 (Hazard v Great Central Transport Corp, 270 Mich 60, 71; 258 NW 210 [1935]); 1936 (Eskovitz v Berger, 276 Mich 536, 540; 268 NW 883 [1936]); 1939 (Kaiser v North, 292 Mich 49, 54; 289 NW 325 [1939]); 1945 (Summar v Besser Mfg Co, 310 Mich 347, 352; 17 NW2d 209 [1945]); 1949 (Bostrom v Jennings, 326 Mich 146, 151; 40 NW2d 97 [1949]); 1962 (Goldberg v Koppy Tool & Die Co, 365 Mich 469, 472; 113 NW2d 770 [1962]); 1965 (Griggs v Griggs, 374 Mich 268, 270; 132 NW2d 163 [1965]); and, most significantly, 1969 (Abendschein v Farrell, 382 Mich 510, 516; 170 NW2d 137 [1969]).

4 For a detailed treatment of the lex loci delicti rule and its relationship to modern choice-of-law methodologies, see Westbrook, A Survey & Evaluation of Competing Choice-of-Law Methodologies: The Case for Eclecticism, 40 Mo L Rev 407 (1975) (hereinafter cited as Westbrook).

5 The term "jurisdiction-selecting” has been coined by Professor Cavers to describe the effect of the lex loci rule. Cavers, A Critique of the Choice-of-Law Problem, 47 Harv L Rev 173, 198 (1933). Professor Cavers used this phrase to describe rules which locate the state whose law is to be applied without consideration of the substantive content of that law. Presaging the contemporary methodologies, Cavers emphasized that the Restatement Conflict of Laws approach resulted in an often unjust choice between two specific substantive rules of law, thus wholly ignoring the special facts of the case as well as the purposes of the conflicting laws. Akin to Cavers, modern scholars urge an examination of the policies embodied in the conflicting rules and a weighing of other values at stake in a choice-of-law problem, rather than a conceptual analysis of rules emerging only from the sphere of the wrong. See Leflar, Conflicts Law: More on Choice-Influencing Considerations, 54 Cal L Rev 1584, 1598 (1966).

6 In Comment, Babcock v Jackson: The Transition From the Lex Loci Delicti Rule to the Dominant Contacts Approach, 62 Mich L Rev 1358-1359 (1964), the operation of the lex loci delicti doctrine was succinctly summarized:

"The traditional rule for choice of tort law has been that the lex loci delicti, the law of the place of the wrong, determines all questions of substantive law in tort suits, unless that law is contrary to a strong public policy of the forum. The rule has been associated historically with the vested rights theory, under which rights and obligations defined by the law of a particular jurisdiction vest in. the parties and follow them into any other jurisdiction where suit may be brought. The vested rights theory presupposes that there is a single jurisdiction in which rights vest, even though the important aspects of the transaction may have occurred in more than one jurisdiction. The theory consequently requires a jurisdiction-selecting rule to determine which law defines the rights which have vested, and the lex loci delicti principle has served as this jurisdiction-selecting rule in suits for torts. It selects the law of the place of injury to govern all issues that arise.” (Footnotes omitted.)

The lex loci rule was engineered to effect the "vested rights” doctrine. This doctrine was described in Slater v Mexican National R Co, 194 US 120, 126; 24 S Ct 581; 48 L Ed 900 (1904):

"The theory of the foreign suit is that although the act complained of was subject to no law having force in the forum, it gave rise to an obligation, an obligatio, which, like other obligations, follows the person, and may be enforced wherever the person may be found.” See 2 Beale, Conflict of Laws, pp 1286-1292; Restatement Conflict of Laws, §§ 377-392.

7 Cramton, Currie & Kay, Conflict of Law (2d ed), p 7; Cheatham & Reese, Choice of Applicable Law, 52 Colum L Rev 959, 969, 977 (1952).

8 Id.; Comment, Selection of Law Governing Measure of Damages for Wrongful Death, 61 Colum L Rev 1497, 1508 (1961); Comment, Babcock v Jackson: The Transition From the Lex Loci Delicti Rule to the Dominant Contacts Approach, 62 Mich L Rev 1358, 1359 (1964).

9 The lex loci delicti rule has come under increasing attack from the writers. See, e.g., in chronological order, Lorenzen, Territoriality, Public Policy and the Conflict of Laws, 33 Yale L J 736 (1924); Yntema, The Hornbook Method and the Conflict of Laws, 37 Yale L J 468 (1928); Lorenzen, Tort Liability and the Conflict of Laws, 47 L Quarterly Rev 483 (1931); Cook, Tort Liability and the Conflict of Laws, 35 Colum L Rev 202 (1935); Rheinstein, The Place of Wrong: A Study in the Method of Case Law, 19 Tulane L Rev 4, 165 (1944); Cheatham, American Theories of Conflict of Laws: Their Role and Utility, 58 Harv L Rev 361 (1945); Morris, The Proper Law of a Tort, 64 Harv L Rev 881 (1951); Currie, Survival of Actions: Adjudication Versus Automation in the Conñict of Laws, 10 Stanford L Rev 205 (1958); Stumberg, "The Place of the Wrong” Torts and the Conflict of Laws, 34 Wash L Rev 388 (1959); Ehrenzweig, The Lex Fori—Basic Rule in the Conflict of Laws, 58 Mich L Rev 637 (1960); Currie, Conflict, Crisis and Confusion in New York, 1963 Duke L J 1; Reese, Choice of Law: Rules or Approach, 57 Cornell L Rev 315 (1972); Westbrook, fn 4, supra.

10 Those courts which have rejected the lex loci delicti rule are included in the following non-exhaustive list:

Arizona: Moore v Montes, 22 Ariz App 562; 529 P2d 716 (1974);

California: Reich v Purcell, 67 Cal 2d 551, 555; 63 Cal Rptr 31; 432 P2d 727, 729 (1967);

Colorado: First National Bank in Fort Collins v Rostek, 182 Colo 437; 514 P2d 314 (1973);

Illinois: Wartell v Formusa, 34 Ill 2d 57, 59-60; 213 NE2d 544, 545-546 (1966);

Iowa: Zeman v Canton State Bank, 211 NW2d 346 (Iowa, 1973);

Kentucky: Wessling v Paris, 417 SW2d 259, 260 (Ky, 1967);

Louisiana: Jagers v Royal Indemnity Co, 276 So 2d 309 (La, 1973);

Maine: Beaulieu v Beaulieu, 265 A2d 610 (Me, 1970);

Massachusetts: Pevoski v Pevoski, 371 Mass 358; 358 NE2d 416 (1976);

Minnesota: Balts v Balts, 273 Minn 419, 424-426; 142 NW2d 66, 70 (1966);

Mississippi: Mitchell v Craft, 211 So 2d 509 (Miss, 1968);

Missouri: Kennedy v Dixon, 439 SW2d 173 (Mo, 1969);

New Hampshire: Clark v Clark, 107 NH 351, 352-353; 222 A2d 205, 207 (1966);

New Jersey: Mellk v Sarahson, 49 NJ 226, 234-235; 229 A2d 625 (1967);

New York: Babcock v Jackson, 12 NY2d 473, 477-478; 240 NYS2d 743; 191 NE2d 279, 280-283 (1963);

North Dakota: Issendorf v Olson, 194 NW2d 750 (ND, 1972);

Oklahoma: Brickner v Gooden, 525 P2d 632, 637 (Okla, 1974);

Oregon: Casey v Manson Construction & Engineering Co, 247 Or 274, 277; 428 P2d 898 (1967);

Pennsylvania: Griffith v United Air Lines, Inc, 416 Pa 1, 20-21; 203 A2d 796, 805 (1964);

Rhode Island: Busby v Perini Corp, 110 RI 49; 290 A2d 210 (1972);

Texas: Gutierrez v Collins, 583 SW2d 312, 318 (Tex, 1979);

Washington: Johnson v Spider Staging Corp, 87 Wash 2d 577; 555 P2d 997 (1976);

Wisconsin: Wilcox v Wilcox, 26 Wis 2d 617, 621; 133 NW2d 408 (1965);

Federal Courts: Merchants National Bank & Trust of Fargo v United States, 272 F Supp 409, 420 (D ND, 1967); Williams v Rawlings Truck Line, Inc, 123 US App DC 121, 124; 357 F2d 581, 584 (1965).

Professor Robert A. Sedler offers the following table: "Among the 50 states and the District of Columbia, the breakdown is as follows: abandoned the place of the wrong rule — 27; adhered to the place of the wrong rule — 18; have not yet passed on the question — 6”. Sedler, Choice of Law in Michigan: A Time to Go Modern, 24 Wayne L Rev 829, fn 12, p 831 (1978).

11 See fn 10 supra.

12 Sedler, Choice of Law in Michigan: A Time to Go Modern, 24 Wayne L Rev 829, 839-840 (1978).

13 Sedler, supra, 849. All the following cases involve Michigan plaintiffs and defendants except Papizzo where the defendant was an Ontario corporation. Tucker v Norfolk & WR Co, 403 F Supp 1372 (ED Mich, 1975), refused to apply Abendschein because of self-limiting language in Abendschein regarding intra-family litigation. In Papizzo v O Robertson Transport, Ltd, 401 F Supp 540 (ED Mich, 1975), Abendschein was applied for substantive law but not for recoverable elements of damage. DeVito v Blenc, 47 Mich App 524, 528; 209 NW2d 728 (1973), with two Michigan residents and accident in Ontario, defeated the Ontario statute of limitations with the Michigan tolling statute, which "reflects a policy of protecting the rights of those under disability”. In Wilson v Eubanks, 36 Mich App 287; 193 NW2d 353 (1971), with two Michigan residents and Ontario accident, defendant failed to timely plead the Ontario statute of limitations and was denied amendment of pleadings. In Shamie v Shamie, 45 Mich App 384; 206 NW2d 463 (1973), the foreign statute Of limitations was used because of the Michigan borrowing statute. Branyan and Sweeney are discussed in the text.

14 Hill v Clark Equipment Co, 85 Mich App 1; 270 NW2d 722 (1978), lv den 405 Mich 805 (1979); Turner v Ford Motor Co, 81 Mich App 521; 265 NW2d 400 (1978); Vermont Mutual Ins Co v Dalzell, 52 Mich App 686; 218 NW2d 52 (1974), lv den 392 Mich 803 (1974); Hill v Clark Equipment Co, 42 Mich App 405; 202 NW2d 530 (1972), lv den 388 Mich 801 (1972); Pusquilian v Cedar Point, Inc, 41 Mich App 399; 200 NW2d 489 (1972), lv den 388 Mich 776 (1972); Olsen v Larson, 26 Mich App 73; 182 NW2d 50 (1970), lv den 384 Mich 797 (1971); Parets v Eaton Corp, 479 F Supp 512 (ED Mich, 1979); Korzetz v Amsted Industries, Inc, 472 F Supp 136 (ED Mich, 1979).

15 This decision does not overrule Anderson v Great Lakes Dredge & Dock Co, 411 Mich 619; 309 NW2d 539 (1981), concerning instances where the doctrine of forum non conveniens may be appropriate.

16 1909 PA 318, § 10, subds 2 & 3. The 1909 predecessor to today’s motor vehicle liability act was declared unconstitutional in Daugherty v Thomas, 174 Mich 371, 390; 140 NW 615 (1913). The Legislature subsequently modified and re-enacted the statute, 1915 PA 302, § 29, and this Court upheld the legislation in Bowerman v Sheehan, 242 Mich 94, 101-102; 219 NW 69 (1928).