Hazeltine v. Mississippi Valley Fire Ins. Co.

• Decision Date: 14 April 1893
• Docket Number: 2,557.
• Parties: HAZELTINE v. MISSISSIPPI VAL. FIRE INS. CO.
• Court: U.S. District Court — Western District of Tennessee

55 F. 743

HAZELTINE v. MISSISSIPPI VAL. FIRE INS. CO.

No. 2,557.

United States Circuit Court, W.D. Tennessee.

April 14, 1893

Statement by HAMMOND, J.:

This action was brought in 1878 by the plaintiff, for the use of another, upon a judgment rendered against the defendant in the state of Maine in 1876. The defendant pleads-- First, nul tiel record; second, that it is and was, etc., a corporation of Tennessee, having its situs at Memphis, 'and was not served with process, and had no notice whatever of the pending of said action, (in Maine,) and that it never appeared thereto in person or by attorney;' and, third 'that neither through its officers or agents had it been a citizen of the state of Maine, nor had it, through its officers or agents, ever entered into a contract of insurance, or done or performed any act or thing whatever within the state of Maine; and at all times from its organization to the present time defendant has been a nonresident of the state of Maine, and never had an agent in said state, and had never authorized any one in the state of Maine to accept service of process for it,' etc. The record of the judgment sued on shows that the writ commanded the sheriff .to attach the goods and estate of the Mississippi Valley Insurance Company, of Memphis, Tennessee, a corporation existing by law, and having no agent in this state that can be found, to the value of two thousand dollars, and summon the said defendant (if he may be found in your precinct) to appear * * * to answer unto William Hazeltine, of Lovell, in said county of Oxford. ' The sheriff's return to the writ is as follows: 'By virtue of this writ I have summoned the Mississippi Valley Insurance Company, of Memphis, Tenn., within named, to appear at court, as within directed, by giving to Joshua Nye, insurance commissioner for the state of Maine, an attested copy of this writ, said company having no agent in this state on whom to make service. ' There was no attachment of defendant's property by the sheriff, and no appearance by or for the defendant company, and the judgment was by default. The suit was brought upon the defendant's $1,000 fire insurance policy, for one year, upon a sawmill building in the state of Maine belonging to the plaintiff, to recover thereunder its loss by fire; and the declaration alleges that, the plaintiff being the owner of the building, the defendant, 'in consideration of a premium in money then and there paid to them therefor by the plaintiff, made a policy of insurance upon the same, ' etc., 'and thereby promised the plaintiff to insure upon said property the sum of one thousand dollars, * * * to be paid sixty days after due notice and proofs of loss shall have been made by the assured, and received at the branch office of the company in New York. ' There is no allegation of the place where this contract of insurance was entered into. The policy was 'countersigned at New York city' and dated November 28, 1874, and the summons was served on the insurance commissioner May 22, 1876, and the judgment rendered September 29, 1876. The policy sued on is not exhibited in the transcript of the record.

The following provisions of the Revised Statutes of Maine, (title 4, c. 49,) relating to 'Foreign Insurance Companies and Agencies,' as amended previously to the cause of action so sued upon, are relied upon to support the service of process in the case. 'Sec. 63. Any person having a claim against any foreign insurance company may bring a suit therefor in the courts of this state, including trustee suits, and service made on any authorized agent of said company shall be valid and binding on the company, and hold it to answer to such suit; and the judgment rendered therein shall bind the company as a valid judgment in every respect whether the defendants appear or not. In case no agent of such company can be found, such notice or service served on the state insurance commissioner, who shall immediately notify said insurance company by mail, shall be valid and binding on the company as though served on their agent. Unless any such judgment is paid within thirty days after demand made upon any such agent or the insurance commissioner, the commissioner may, on notice and hearing of the parties, suspend the power of the company to do business in this state until it is paid; and if the company, or any agent thereof, issues any policy in this state during such suspension, said company and agent shall each forfeit one hundred dollars. Sec. 64. All notices and processes which, by any law, by-law, or provision of any policy, any insured or other person has occasion to give or serve on any such company, may be given or served on its agent, or on the insurance commissioner as provided in said section 63, with like effect as if given or served on the principal. Such agents, and the agents of all domestic companies, shall be regarded as in the place of the company in all respects regarding any insurance effected by them. * * * '

Foreign insurance companies are by statute prohibited from transacting any insurance business in the state of Maine without obtaining license therefor, which authorizes it to do such business 'subject to the laws of;he state.' and the agents of foreign companies so licensed must themselves be licensed by the state, as well as insurance brokers 'to negotiate contracts of insurance, and to effect insurance for others than himself for a compensation, and by virtue thereof he may place risks or effect insurance with any company of this state, or with the agents of any foreign insurance company who have been licensed to do an insurance business in this state, but with no other. ' Rev. St. Me. c. 49, Secs. 49-51.

This record does not show that the defendant company or any agent of or broker for it, was ever licensed by the state under its statute. Upon the trial of the suit here upon this record, a verdict was directed for the plaintiff, and judgment rendered thereon, under the following stipulation: 'But this judgment is rendered by the court with the distinct agreement of the parties, made in open court, that if, upon investigation by the court hereafter, the court should be of the opinion that the service of process in the suit in which the judgment here sued on was illegal and of no effect, then this verdict and judgment are to be set aside, and judgment for the defendant entered in place thereof. ' Before the trial defendant filed an amendment to his declaration, by an additional count upon the insurance policy, in the very language used in stating his cause of action in the Maine court, and made profert here of the policy there sued on. To this the defendant demurred, and its demurrer was allowed.

Miller & Gillham and R. D. Jordan, for plaintiff.

L. B. Eaton, for defendant.

HAMMOND, J., (after stating the facts.)

The policy which is the basis of the judgment here sued on, as well as the proof on the subject, showed that it was signed by the president and secretary here in Memphis, at its home office, and sent to New York city, where the company had a branch office and agent, to be countersigned there by the agent before it took effect and before delivery; that it never had an office or agency or an agent in the state of Maine; that it was never licensed to do business in that state, nor was any agent ever so licensed to do business for it, and that no broker was ever licensed in Maine, so far as the company knew, or with its authority or consent, to effect insurance with it, either directly or through its agents. In the late case of Construction Co. v. Fitzgerald, 137 U.S. 98, 106, 11 S.Ct. 36, the general doctrine of service upon a foreign corporation is thus stated:

'Where a foreign corporation is not doing business in a state, and the president, or any other officer, is not there transacting business for the corporation and representing it in the state, it cannot be said that the corporation is within the state, so that service can be made upon it. St. Clair v. Cox, 106 U.S. 350, 1 S.Ct. 354; Insurance Co. v. Woodworth, 111 U.S. 138, 4 S.Ct. 364; Ex parte Schollenberger, 96 U.S. 369.'

In St Clair v. Cox, so cited, the validity of the judgment in controversy was denied for want of proper service on the defendant foreign corporation, the same having been made on an alleged 'agent' of the company. By the laws of Michigan, service in attachment suits against a nonresident corporation could be made 'on any officer, member, clerk, or agent of such corporation within this state,' which language the supreme court construes as not 'authorizing the service of a copy of the writ, as a summons, upon the agent of a foreign corporation, unless the corporation be engaged in business in the state, and the agent be appointed to act there. ' The Maine statute here provides that service may be 'made on any authorized agent' of a foreign insurance company, and, in case judgment is not paid, the insurance commissioner may 'suspend the power of the company to do business in this state. ' It is conceded by the plaintiff that there has been no decision by the Maine supreme court construing this legislation, so far as service upon the insurance commissioner is provided for, viz. 'in case no agent of such company can be found. ' It will be observed that, in the record of the judgment sued on, the writ commands the sheriff to attach the property of the defendant, 'having no agent in this state that can be found,' and to summon the defendant, 'if he (it) may be found,' and that the officer's return shows that there was 'no agent in this state on whom to make service. ' This Maine statute, taken altogether, shows affirmatively, and not by implication merely, that its various provisions were only intended to apply to such...