Bankers Life & Cas. Co. v. Watson, 414

• Decision Date: 12 December 1968
• Docket Number: No. 414,414
• Citation: 436 S.W.2d 404
• Parties: BANKERS LIFE AND CASUALTY COMPANY, Appellant, v. James H. WATSON, Appellee. . Tyler
• Court: Texas Court of Appeals

Page 404

436 S.W.2d 404

BANKERS LIFE AND CASUALTY COMPANY, Appellant, v. James H. WATSON, Appellee.

No. 414.

Court of Civil Appeals of Texas.

Tyler.

Dec. 12, 1968.

Rehearing Denied Jan. 9, 1969.

Spruiell, Lowry, Potter, Lasater & Guinn, Clarence V. Bray, Tyler, for appellant.

H. M. Harrington, Jr., Longview, for appellee.

DUNAGAN, Chief Justice.

This is an appeal by writ of error by the defendant, Bankers Life and Casualty Company, from a default judgment entered in the 124th Judicial District Court of Gregg County, Texas, in favor of the plaintiff who sued for payment of benefits under an insurance policy .

On May 1, 1968, plaintiff (appellee) filed his petition against the defendant (appellant) seeking damages for the nonpayment of benefits under an insurance policy issued to him by the defendant. The plaintiff's petition alleges 'Defendant, Bankers Life and Casualty Company, is a foreign corporation with its principal office in Chicago, Illinois, conducting business in Texas under a permit to do so issued by the Secretary of State, and with an agent and representative, Everett Hall, a resident of Tyler, Smith County, Texas, upon whom service of citation may be had in this cause at 1800 E. Houston.' The sheriff's return upon the citation shows that service was had on May 6, 1968, upon 'Bankers Life and Casualty Co. by serving its agent, Everett Hall.'

No answer was filed by the defendant and on May 28, 1968, the trial court rendered a judgment in the absence of the defendant and granted recovery to the plaintiff in the principal amount of $1,779.97.

Upon learning of the judgment more than 30 days after its rendition, but within six months, appellant-defendant now seeks relief by prosecuting writ of error to the Court of Civil Appeals.

There is no statement of facts in this case and the entire record consists of the Transcript and Supplemental Transcript.

The appellant by its sole point of error asserts that: 'The trial court erred in rendering the default judgment against the appellant for the reason that the appellant was never legally brought under the jurisdiction of the court due to the failure to properly serve the appellant by any prescribed method of service of process.'

Since Bankers Life's mode of review by way of writ of error constitutes a direct attack on the default judgment, the question to be decided is whether there is a lack of jurisdiction apparent on the face of the record which would vitiate the trial court's judgment. Texaco, Inc. v. McEwen, 356 S.W.2d 809 (Tex.Civ.App., Dallas, 1962, writ ref., n.r.e.); McKanna v. Edgar, 388 S.W.2d 927 (Tex.Sup., 1965).

The law is well settled that in order to obtain jurisdiction over a foreign corporation, the record must show strict compliance with the provided method of service of process. McKanna v. Edgar, supra; Angelo Mexicana de Seguros v. Elizondo, 405 S.W.2d 722 (Tex.Civ.App., Corpus Christi, 1966, writ ref., n.r.e.). It is also settled that 'Whether the person served was in fact the agent for service of process must be affirmatively established before default judgment can be proper.' White Motor Company v. Loden, 373 S.W.2d 863 (Tex.Civ.App., Dallas, 1964, n.w.h.); Anglo Mexicana de Seguros v. Elizondo, supra; see also Roberts v. Stockslager, 4 Tex. 307 (1841).

Although there are apparently several provided methods of service of process for serving the defendant to which the above principles may be applied, it is the appellant's position that the record fails to show it was properly served under any of such methods.

By alleging the defendant to be a 'foreign corporation,' it would appear that the plaintiff has thereby alleged jurisdictional facts sufficient only to bring the defendant under Articles 2031 and 2031a, ¹ being the only statutes which provide for service on foreign corporations which are not related to the business of such corporation. Articles under Business Corporation Act, V.A.T.S. are not applicable because the Act by Article 9.14 does not apply to insurance companies that operate under the laws of this state.

At this point we should state the rule of law that 'Unless the record first affirmatively shows that the foreign corporation defendant is one upon whom the Legislature of Texas has authorized service of process, it cannot affirmatively show strict compliance with the statutory mode of service provided for such a defendant.' Aetna Casualty and Surety Company v. Dobbs, 416 S.W.2d 869 (Tex.Civ.App., Eastland, 1967, writ ref., n.r.e.).

Article 2031 provides for service in suits against foreign corporations by serving the 'President, Vice-President, Secretary, Treasurer, General Manager, or upon any local or travelling agent or travelling salesman of such corporation. Upon its face, the record in this case does not comply with this Article as nowhere is it alleged that Everett Hall is one of the designated officers of the corporation or a local or travelling agent or travelling salesman. This precise point was considered by the court in National Cereal Company, Ltd. v. Earnest, 87 S.W. 734 (Tex.Civ.App., 1905, n.w.h.) in which service was attempted on the defendant corporation by delivery of the citation to 'S. G. Banks, agent' and the sheriff's return recited delivery to 'S. G. Banks, agent, in person.' The court held the service insufficient and stated:

'* * * The description of Banks both in the citation and the return is insufficient to show that he was local agent within the state. In both he is described generally as agent. What kind of agent is not stated in either, and service on one who is agent is not authorized. He must be a local agent within the state, and this must affirmatively appear, before judgment by default would be proper. In the petition Banks is described as defendant's agent in the state of Texas, who resides at Dallas. If the allegation would be permitted to aid the citation and return, it does not show that Banks was local agent of defendant in Texas. * * * What kind of agent--general or local--or whether his authority covered a district of the state, or extended throughout the state, is not alleged. The fact that he resided in Dallas would throw no light on the question. * * * The statute is plain and easily complied with. To authorize a judgment by default, the service should be in conformity with its terms. And on appeal the record, * * * should...