Fred Miller Brewing Co. v. Council Bluffs Ins. Co.

• Decision Date: 23 May 1895
• Citation: 95 Iowa 31,63 N.W. 565
• Parties: FRED MILLER BREWING CO. v. COUNCIL BLUFFS INS. CO.
• Court: Iowa Supreme Court

95 Iowa 31

63 N.W. 565

FRED MILLER BREWING CO.

v.COUNCIL BLUFFS INS. CO.

Supreme Court of Iowa.

May 23, 1895.

Appeal from district court, Pottawattamie county; N. W. Macy, Judge.

Action at law upon a judgment against the defendant rendered by a court of the state of Wisconsin. There was a trial by the court, without a jury, and a judgment in favor of the defendant for costs. The plaintiff appeals. Reversed.Sims & Bainbridge, for appellant.

Flickinger Bros., for appellee.

ROBINSON, J.

The defendant is a corporation of this state engaged in transacting a fire insurance business. In May, 1887, it issued a policy which insured J. W. Maier on two buildings and personal property contained therein, situated in Medford, in the state of Wisconsin, against loss or damage by fire, for the term of one year, to the amount of $1,150. The loss, if any, was made payable to Fred Miller, a mortgagee of the insured property, as his interest should appear. Miller afterwards assigned his mortgage to the plaintiff. On the 30th day of March, 1888, the property insured was destroyed by fire. The judgment on which this action is founded was rendered, without an appearance by the defendant, on the 31st day of December, 1888, by the circuit court of Milwaukee county, in the state of Wisconsin, for the amount of the loss alleged to have been covered by the policy. The summons in that case was served on one E. H. Winchester, as the agent of the defendant, in the state of Wisconsin. The defendant claims, and the district court found, that the service of the summons upon Winchester did not confer upon the Wisconsin court jurisdiction to render the judgment; that it was rendered without jurisdiction, and was void.

1. When the policy in question was issued, and when the summons in the action in Milwaukee county was served, Winchester resided in Clarke county, in the state of Wisconsin, and was engaged in the insurance and banking business. In May, 1887, he solicited of Maier the privilege of furnishing insurance upon the property which was afterwards destroyed, and agreed with him to insure it. He was unable to carry the insurance in the companies for which he was then agent, and wrote to an insurance broker of Chicago, named W. W. Caldwell, for the insurance required. Thereupon Caldwell applied to E. T. Marshall & Co., also of Chicago, for insurance. They were the general agents in that city of the defendant, and had authority to write and deliver policies on acceptable risks located anywhere in the United States, outside of the state of Illinois. They issued the policy in question, charged it to Caldwell, and gave it to him for delivery. He sent it to Winchester, in Wisconsin, and he delivered it to Maier, and collected the premium due thereon, of $76. Of that amount, Winchester retained 10 per cent. as commission, and transmitted the remainderto Caldwell. He retained an additional 5 per cent. as his commission, and paid the remainder to E. T. Marshall & Co. They did not know Winchester, in the transaction, and had no authority to appoint agents for the defendant in Wisconsin. The defendant had not complied with the laws of that state applicable to insurance companies, and was not authorized to transact business in it. Winchester did not apply for insurance by the defendant, nor did Caldwell. He applied personally for a specified amount of insurance, and E. T. Marshall & Co. filed his application by issuing the policies of such companies as they chose to select. Winchester did not know by what companies the policies would be issued, until he received them. He was never formally appointed an agent of the defendant, and had no authority to act for or represent it in any of the transactions in question, unless by virtue of what he did, and a section of the Revised Statutes of Wisconsin which is as follows: “Sec. 1977. Whoever solicits insurance on behalf of an insurance corporation or property owner or transmits an application for insurance, or a policy of insurance other than for himself, to or from any such corporation, or who makes any contract of insurance or collects any premium for insurance, or in any manner aids or assists in doing either, or in transacting any business of like nature for any insurance corporation or advertises to do any such thing, shall be held an agent of such corporation to all intents and purposes, unless it can be shown that he receives no compensation for such services.” Under the laws of Wisconsin, a civil action in a court of record is required to be commenced by the service of a summons; and when the action is against an insurance corporation not organized under the laws of that state, the summons may be served upon any agent of the corporation, within the definition of section 1977, in the state. Provision is also made for commencing actions of the character of that brought in Milwaukee county, when the defendant is a nonresident, in any county of the state which the plaintiff shall designate. It is well settled, as a general rule, that each state has the right to prescribe the terms and conditions on which foreign corporations may do business within its limits, or to exclude them wholly. It was said in Paul v. Virginia, 8 Wall. 168, that: “The corporation, being the mere creation of local law, can have no existence beyond the limits of the sovereignty where created. * * * The recognition of its existence, even, by other states, and the enforcement of its contracts made therein, depend purely upon the comity of those states,--a comity which is never extended where the existence of the corporation, or the exercise of its powers, are prejudicial to their interests, or repugnant to their policy. Having no absolute right of recognition in other states, but depending for such recognition, and the enforcement of its contracts, upon their as sent, it follows, as a matter of course, that such assent may be granted upon such terms and conditions as those states may think proper to impose. They may exclude the foreign corporation entirely, they may restrict its business to particular localities, or they may exact such security for the performance of its contracts with their citizens as in their judgment will best promote the public interest. The whole matter rests in their discretion.” This general rule was affirmed, and some exceptions to it noticed, in Hooper v. People, 15 Sup. Ct. 207. See, also, Insurance Co. v. Raymond (Mich.) 38 N. W. 482. Where a state prescribes conditions upon which a foreign corporation may do business within it, such corporation thereafter doing business in the state will be presumed to have assented to the conditions prescribed, and will be bound accordingly. Railroad Co. v. Harris, 12 Wall. 65; Ex parte Schollenberger, 96 U. S. 369. It is within the power of a state to prescribe the method by which corporations doing business within its jurisdiction may be brought into court, and to designate the officer or agent of such corporation upon whom the process necessary to commence an action may be served. Gross v. Nichols, 72 Iowa, 239, 33 N. W. 653;Childs v. Manufacturing Co., 104 N. Y. 479, 11 N. E. 50;Voorheis v. Association (Mich.) 48 N. W. 1087; 2 Cook, Stock, Stockh. & Corp. Law, § 758, note.

From an application of these rules to the facts in this case it follows that it was within the powers of the state of Wisconsin to make every person who should do the acts specified in section 1977 of the Revised Statutes an agent of the insurance corporation for whom he should act, and to provide that a service of a summons upon him, in a civil action, should have the effect of service upon the corporation. Therefore, if the facts which we have set out, and the statute we have quoted, made Winchester the agent of the defendant, service of the summons upon him was authorized.

In issuing the policy in question, did the defendant so far transact business in the state of Wisconsin as to come within the jurisdiction of its courts? As we have seen, it was not authorized to do business in the state, and had not appointed...