190 U.S. 147 (1903), 283, Mutual Reserve Fund Life Association v. Phelps
| Citation | 190 U.S. 147, 23 S.Ct. 707, 47 L.Ed. 987 |
| Party Name | Mutual Reserve Fund Life Association v. Phelps |
| Case Date | May 18, 1903 |
| Court | U.S. Supreme Court |
Page 147
Argued April 24, 27, 1903
APPEAL FROM THE CIRCUIT COURT OF
APPEALS FOR THE SIXTH CIRCUIT
Syllabus
Under the statutes of Kentucky, service of a summons upon the insurance commissioner in an action against an insurance company doing business in the state is sufficient to bring the company into court. This applies to a company whose license has been cancelled by the commissioner but which after such cancellation has continued to collect premiums and assessments on policies remaining in force. A judgment based upon such service is, in the absence of anything else to impeach it, valid.
A proceeding, based upon a judgment so obtained, for the appointment of a receiver, is not a new and independent suit, but a mere continuation of the action already passed into judgment, and in aid of the execution thereof, and can be initiated by the filing of an amended or supplementary petition. When such an amended petition is filed, the action cannot be removed to the federal courts, as the time prescribed therefor by the statute has already passed. Nor has the federal court jurisdiction in an equity action to enjoin proceedings under the supplementary petition, as it is a mere continuation of an action at law. Where a proceeding is not warranted by the law of a state, relief must be sought by review in the appellate court of the state, and not by collateral attack in the federal courts.
Page 148
Section 631, Kentucky Statutes 1899 (Laws 1893, c. 171, sec. 94), reads as follows:
SEC. 631. Before authority is granted to any foreign insurance company to do business in this state, it must file with the commissioner a resolution adopted by its board of directors consenting that service of process upon any agent of such company in this state, or upon the commissioner of insurance of this state, in any action brought or pending in this state, shall be a valid service upon said company, and if process is served upon the commissioner it shall be his duty to at once send it by mail, addressed to the company at its principal office, and if any company shall, without the consent of the other party to any suit or proceeding brought by or against it in any court of this state, remove said suit or proceeding to any federal court, or shall institute any suit or proceeding against any citizen of this state in any federal court, it shall be the duty of the commissioner to forthwith revoke all authority to such company and its agents to do business in this state, and to publish such revocation in some newspaper of general circulation published in the state.
On May 10, 1893, the appellant, the Mutual Reserve Fund Life Association, hereinafter called the association, acting under said section, by resolution of its board of directors, consented that the Insurance Commissioner of Kentucky should be authorized to receive service of process in any action brought or pending in Kentucky, and also that like valid service of process might be made upon every agent then or thereafter acting for it in Kentucky.
On October 10, 1899, the Insurance Commissioner cancelled the license which had theretofore been issued to the association, and gave it notice that from and after that date all authority granted by his department to it, and all licenses issued to the agents of the association to do business in the State of Kentucky, were revoked. And from and after that date, the association had no agent or agents in the State of Kentucky and did no new business whatever in the state, but at one time, for the convenience of the holders of certificates residing in Jefferson County, permitted them to remit dues and assessments through the Western Bank, located in the City of Louisville.
Page 149
On February 28, 1900, James S. Phelps commenced an action in the circuit court of Jefferson County, Kentucky, against the association, alleging that, on July 8, 1885, he had made application for membership in it, and that, on July 16, 1885, his application had been approved and certificate of policy of insurance issued to him. Breaches of the agreement on the part of the defendant were alleged, and a judgment asked for $1,994.20. A summons was issued and served on the Insurance Commissioner, and an alias summons was also issued and served upon Ben Frese, as the managing agent and chief officer and agent of the association in Jefferson County. The defendant appeared specially and moved to quash the service on each summons. The motion was heard on affidavits, and overruled. The defendant taking no further action, judgment was rendered on May 19, 1900, in favor of the plaintiff and against it for $1,994 with interest.
On August 4, 1900, the plaintiff filed an amended and supplemental petition, in which he alleged the filing of the original petition, the judgment, the issue of execution, a return of nulla bona; that the defendant had a large number of policyholders in the state who at stated times and regular intervals became indebted to it for premiums and assessments upon its policies of insurance, and prayed for a general attachment, or in lieu thereof the appointment of a receiver to take charge of the business and property of the defendant in Kentucky, and that all revenues and income accruing to it from...
To continue reading
Request your trial