355 U.S. 220 (1957), 50, McGee v. International Life Ins. Co.

Docket Nº:No. 50
Citation:355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223
Party Name:McGee v. International Life Ins. Co.
Case Date:December 16, 1957
Court:United States Supreme Court
 
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355 U.S. 220 (1957)

78 S.Ct. 199, 2 L.Ed.2d 223

McGee

v.

International Life Ins. Co.

No. 50

United States Supreme Court

Dec. 16, 1957

Argued November 20, 1957

CERTIORARI TO THE COURT OF CIVIL APPEALS OF TEXAS,

FIRST SUPREME JUDICIAL DISTRICT

Syllabus

Petitioner's son, a resident of California, bought a life insurance policy from an Arizona corporation, naming petitioner as beneficiary. Later, respondent, a Texas corporation, agreed to assume the insurance obligations of the Arizona corporation, and mailed a reinsurance certificate to petitioner's son in California, offering to insure him in accordance with his policy. He accepted this offer, and paid premiums by mail from his California home to respondent's office in Texas. Neither corporation has ever had any office or agent in California or done any other business in that State. Petitioner sent proofs of her son's death to respondent, but it refused to pay the claim. Under a California statute subjecting foreign corporations to suit in California on insurance contracts with residents of California, even though such corporations cannot be served with process within the State, petitioner sued respondent and obtained judgment in a California court, process being served only by registered mail to respondent's principal place of business in Texas.

Held:

1. The Due Process Clause of the Fourteenth Amendment did not preclude the California court from entering a judgment binding on respondent, since the suit was based on a contract which had a substantial connection with California. Pp. 223-224.

2. Respondent's insurance contract was not unconstitutionally impaired by the fact that the California statute here involved did not become effective until after respondent had assumed the obligation of the insurance policy. P. 224.

288 S.W.2d 579, reversed and remanded.

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BLACK, J., lead opinion

Opinion of the Court by MR. JUSTICE BLACK, announced by MR. JUSTICE DOUGLAS.

Petitioner, Lulu B. McGee, recovered a judgment in a California state court against respondent, International Life Insurance Company, on a contract of insurance. Respondent was not served with process in California, but by registered mail at its principal place of business in Texas. The California court based its jurisdiction on a state statute which subjects foreign corporations to suit in California on insurance contracts with residents of that State even though such corporations cannot be served with process within its borders.1

Unable to collect the judgment in California petitioner went to Texas, where she filed suit on the judgment in a Texas court. But the Texas courts refused to enforce her judgment, holding it was void under the Fourteenth Amendment because service of process outside California could not give the courts of that State jurisdiction over respondent. 288 S.W.2d 579. Since the case raised important questions not only to California, but to other States which have similar laws, we granted certiorari. 352 U.S. 924. It is not controverted that, if the California court properly exercised jurisdiction over respondent, the Texas courts erred in refusing to give its judgment full faith and credit. 28 U.S.C. § 1738.

The material facts are relatively simple. In 1944, Lowell Franklin, a resident of California, purchased a life insurance policy from the Empire Mutual Insurance Company, an Arizona corporation. In 1948, the respondent agreed with Empire Mutual to assume its insurance obligations. Respondent then mailed a reinsurance certificate to Franklin in California offering to insure him in accordance with the terms of the policy he held with Empire Mutual. He accepted this offer, and, from that

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time until his death in 1950, paid premiums by mail from his California home to respondent's Texas office. Petitioner, Franklin's mother, was the beneficiary under the policy. She sent proofs of his death to the respondent, but it refused to pay, claiming that he had committed suicide. It appears that neither Empire Mutual nor respondent has ever had any office or agent in California. And, so far as the record before us shows, respondent has never solicited or done any insurance...

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