Aetna Cas. & Sur. Co. v. Gentry

• Decision Date: 10 November 1942
• Docket Number: Case Number: 30714
• Citation: 1942 OK 366,191 Okla. 659,132 P.2d 326
• Parties: AETNA CASUALTY & SURETY CO. v. GENTRY
• Court: Oklahoma Supreme Court

1942 OK 366

132 P.2d 326

191 Okla. 659

AETNA CASUALTY & SURETY CO. v. GENTRY

Case Number: 30714

Supreme Court of Oklahoma

Decided: November 10, 1942

Syllabus

¶0 1. INSURANCE--Action based on cause of action arising outside state by resident against domesticated foreign insurance company-Service obtained on company by service on State Insurance Commissioner.

An action based upon a cause of action which arose outside the state may be instituted and maintained by a resident of this state against a domesticated foreign insurance company and service may be obtained on the company by service on the State Insurance Commissioner by virtue of 36 O. S. 1941 § 1, subd. 4.

2. CONTRACTS--Conrtracts may be interpreted according to law of state where made but remedy for enforcement determined by law of forum.

Contracts may be interpreted according to the law of the state where they are made and their performance contemplated. The remedy available for the enforcement of the contract is determined by the law of the forum.

3. INSURANCE-- Action maintainable in state against insurance company alone for damages on policy of insurance issued in Kansas containing public liability and property damage features.

A policy of insurance issued in the State of Kansas to satisfy requirements of the Kansas law which, according to the law of Kansas, creates a direct primary and several liability to any member of the public who may receive an injury or suffer damages within the coverage of the policy may be enforced in this state by an action against the insurance company alone.

Appeal from District Court, Muskogee County; O. H. P. Brewer, Judge.

Action by Mrs. Ethel F. Gentry against the Aetna Casualty & Surety Company, of Hartford, Conn. Judgment for plaintiff, and defendant appeals. Affirmed.

W. E. Green, J. C. Farmer, and A. L. Deaton, all of Tulsa, for plaintiff in error.

Harry G. Davis and Thomas J. Wiley, both of Muskogee, for defendant in error.

DAVISON, J.

¶1 This is an action by a resident of this state against a domesticated foreign insurance company based upon a cause of action which arose in the State of Kansas. Service of summons was had upon the State Insurance Commissioner as service agent of the company. The principal question to be decided in this case is whether under our statutes such service confers jurisdiction of the person of the company for the purpose of deciding a controversy which arose outside the state.

¶2 The cause originated in the district court of Muskogee county, Okla., wherein Mrs. Ethel F. Gentry was plaintiff and the Aetna Casualty & Surety Company, Hartford, Conn., was defendant. The defendant was served by service of summons on the State Industrial Commissioner. The cause was tried to a jury, resulting in a verdict and judgment for $2,999, which the Aetna Casualty & Surety Company, as plaintiff in error, seeks to reverse on appeal. In this opinion we shall refer to the parties by their trial court designation when not otherwise. more specifically described.

¶3 A review of the record discloses the following facts: The plaintiff is a resident of Muskogee county, Okla. On August 28, 1939, she was riding in an automobile along a public highway in Kansas. At the same time the StarPeerless Brewery Company, an Illinois corporation, was operating a truck along the same highway. Both vehicles were traveling the same direction. The driver of the car in which plaintiff was riding undertook to pass the truck. The truck swerved to the left and the two vehicles collided, resulting in personal injuries to the plaintiff. The defendant company had previously issued a policy of insurance in favor of the above corporation containing public liability and property damage features. The policy was in effect at the time of the accident. It is on the contractual liability assumed under the insurance policy that this action is based.

¶4 The defendant does not challenge the sufficiency of the evidence to support the view that the driver of the beer truck was negligent. Similarly, it does not contend that its contract does not cover the act of negligence which occasioned plaintiff's injury. The necessity of discussing details covering these features of the case is thus eliminated.

¶5 The defendant first urges that service of summons upon the State Insurance Commissioner does not confer jurisdiction to try and determine a cause of action which arose outside the state. As we understand the briefs presented, it is not thought that there is any constitutional inhibition against making service of the character here involved adequate for the purpose for which it was used in this case. It is urged, however, that the legislative enactments of this state are not so drafted as to cause the service to have that effect. Indeed, the question of whether a state can, without violating federal constitutional inhibitions, enact statutes governing domesticated foreign corporations, which render them subject to the jurisdiction of the courts of this state on transitory causes of action which arose outside the state, is foreclosed by the decision of the United States Supreme Court in Pennsylvania Fire Insurance Co. v. Gold Issue Mining & Milling Co., 243 U. S. 93, 37 S. Ct. 344, 61 L. Ed. 610. Therein such service upon a designated officer of the State of Missouri was upheld to support a judgment based upon a cause of action which arose in California. The service was, of course, first upheld in the Missouri courts. That case was decided in 1917. Later (1927) the Missouri court in State ex rel. American Central Life Ins. Co. v. Landwehr, Circuit Judge, 318 Mo. 181, 300 S. W. 294, retracted their former holding with reference to the effect of their own statutes. This subsequent holding did not militate against the decision of the Supreme Court of the United States that state legislation and designation of an agent pursuant thereto construed by the state courts to be sufficient to vest jurisdiction over causes of action of extraterritorial origin is free from constitutional objections.

¶6 An examination of the decisions of the federal court with reference to the question discloses the following: (1) The power of the various states to enact valid legislation which authorizes the service of process upon an officer of the state as an agent of a domesticated corporation in connection with a cause of action which arose outside the state is recognized and approved (subject, of course, to the qualification that such service must be reasonably calculated to bring the litigation to the attention of the corporation). (2) When the legislative intent is not clear and the state court has not otherwise spoken on the subject, federal courts favor a construction which excludes from the operation of such statutes causes of action arising outside the jurisdiction of the state. (3) When the state court has spoken upon the subject its decision governs the federal court as to the meaning of the statute. Penn. Fire Ins. Co. v. Gold Issue Mining & Milling Co., supra; American Indemnity Co. v. Detroit Fidelity & Surety Co. et al., 63 F.2d 395; Louisville & N. R. Co. v. Chatters, 279 U. S. 320, 49 S. Ct. 329, 73 L. Ed. 711; Morris & Co. v. Skandinavia, 279 U. S. 405, 49 S. Ct. 360, 73 L. Ed. 762; Camp v. Cities Service Gas Co., 17 Fed. Supp. 618; Mooney v. Buford & George Mfg. Co., 72 Fed. 32.

¶7 It is thus apparent that we are confronted with a question upon which our own statutes constitute the guide and, as in other cases of statutory construction, the intent of the Legislature, when ascertained, is of controlling importance.

¶8 As a prelude to our discussion it is appropriate to observe that a somewhat analogous question has frequently been before the courts when in a transitory action which arose in another jurisdiction service has been obtained on the defendant corporation by service on an actual agent of the corporation. In such cases the decided weight of authority supports the view that jurisdiction over the person of the corporation attaches for the purpose of deciding the controversy which originated beyond the boundaries of the state. Annotation 30 A. L. R. 255, at 258; 96 A. L. R. 366; see, also, 21 R. C. L. 1345. In principle, there are many points of similarity between the situation involved in the numerous cases reviewed in the foregoing annotations and the case at bar.

¶9 While a corporation is recognized in law as a legal entity, it acts and can operate only through its officers and agents. Process cannot be served upon the corporation except by service upon some person who is designated by law or by the act of the corporation taken in conjunction with the law. 42 Am. Jur, 92.

¶10 Corporations created by one state which seek to do business in another must seek the privilege and obtain the permission of the latter jurisdiction, and it is incumbent upon them to meet and comply with such conditions as may be properly imposed. The designation of some one of the state officers as a person upon whom service may be had is frequently required as a condition to domestication. Such requirements are universally upheld when they are reasonably calculated to operate as reasonable notice to the corporation being sued. 21 R. C. L. 1347; 23 Am. Jur. 491.

¶11 Of course, the person selected in such cases is not the voluntary choice of the corporation. In a measure he may be said to be forced upon the corporation. But the manner of his selection does not indicate that it is less probable that he will notify the defendant when the litigation is based upon a cause of action which arose within the state than when the action is founded on upon occurrence without the state. Obviously, if the service is good in one it can be made good in the other. With these thoughts in mind, let us turn our attention to the statutes of this state for the purpose of determining whether they were correctly interpreted by the trial court.

¶12 Title 36 O. S. 1941 § 101 (Session Laws 1925, ch. 131, pg....