General Ben. Ass'n v. Bell

• Decision Date: 16 October 1939
• Docket Number: 14447.
• Citation: 95 P.2d 816,105 Colo. 133
• Parties: GENERAL BEN. ASS'N v. BELL.
• Court: Colorado Supreme Court

95 P.2d 816

105 Colo. 133

GENERAL BEN. ASS'N v. BELL.

No. 14447.

Supreme Court of Colorado, En Banc.

October 16, 1939

Rehearing Denied Nov. 13, 1939.

Error to District Court, City and County of Denver; Henry S Lindsley, Judge.

Action to enforce a foreign judgment by Fred R. Bell against General Benefit Association, a corporation. To review a judgment for the plaintiff, the defendant brings error.

Reversed and remanded with directions.

Clarence Eynon, of Denver, for plaintiff in error.

Samuel M. January and Ronald V. Yegge, both of Denver (Ernst &amp Williams, of Albany, Mo., of counsel), for defendant in error.

OTTO BOCK, Justice.

This controversy relates to the enforcement in this state of a foreign judgment obtained by default in the state of Missouri against plaintiff in error, which was organized under the non-profit corporation laws of Colorado, and to which reference is hereinafter made as the association. Defendant in error, to whom we shall refer as plaintiff, was named as beneficiary in two death benefit certificates issued by the association to his father, George W. Bell, who died April 26 1936. Judgment was in favor of plaintiff, to which the association assigned error and seeks reversal. One of the defenses to the suit in the instant case challenges the validity of the service of process necessary to give jurisdiction on a judgment in personam in the Missouri courts.

The association, for a second defense in its answer, alleges:

'That said purported and pretended Missouri judgment, among other things, does recite: 'and the court doth find that at the time of the institution of this suit, and for a long time prior thereto and ever since that date one James Canaday, of Stanberry, Gentry County, Missouri, has been and now is the agent of the defendant, General Benefit Association, an insurance corporation, and has his office and place of business for said company at Stanberry, Gentry County, Missouri, and has been and now is soliciting insurance business within Gentry County, Missouri, on behalf of the defendant herein, and has been and now is aiding and assisting said defendant company herein in making contracts of insurance, collecting and receiving premiums for insurance on behalf of said defendant company herein, and who was duly served with process as the law directs, and the court doth further find from the evidence adduced that the said written contracts of insurance sued upon in the several counts of plaintiff's petition herein were applied for, made and delivered in the county of Gentry and state of Missouri.' That as to the foregoing allegations, defendant alleges that in truth and fact the said James Canaday, upon whom plaintiff caused a copy of the petition and summons to be served at Stanberry, Missouri, on November 6th, 1936, was not then, and never had been an agent of the defendant. That as to whether or not he had an office and place of business, this defendant does not know; but defendant alleges that if such an office and place of business existed, this defendant had absolutely nothing to do with it, either directly, or indirectly. That at the time of the alleged service of process aforesaid, the same James Canaday had not been and was not soliciting insurance business, or any other kind of business within Gentry county, Missouri, or anywhere else, for and on behalf of the defendant herein; nor had he been, or was he then, aiding and assisting said defendant in making contracts of insurance, collecting and receiving premiums for insurance on behalf of defendant, or aiding and assisting said defendant in any way whatsoever. That the said defendant never entered into a written contract of insurance with the said George W. Bell, aforesaid, nor represented to him that it was so doing. That the said George W. Bell made a written application to the defendant at its office in Denver, Colorado, for membership in the defendant association, and that pursuant to said application, said defendant issued the two membership certificates aforesaid at Denver, Colorado, and mailed the same to the said George W. Bell. That the said James Canaday, upon whom service was attempted to be made herein, nor any other alleged agent, or representative of this defendant in the state of Missouri, had anything whatsoever to do with the solicitation of said application, the application itself, or the membership of the said George W. Bell aforesaid. That the defendant alleges that the said attempted and purported service of process on the said James Canaday as an alleged agent of this defendant was, and is null and void, and invalid as to this defendant; and defendant further alleges that said purported and pretended Missouri judgment aforesaid is likewise null and void, and invalid as to this defendant.'

In view of our conclusions, only two of the assignments of error require our consideration: First, that the judgment is contrary to the evidence, in that the service of summons on the alleged plaintiff in error, in Missouri, was invalid because the said alleged agent had not been so employed by plaintiff in error for more than three years prior to the date of service; and second, that the judgment is contrary to the law and the evidence, in that it deprived the association of its property without due process of law, in violation of the Fourteenth Amendment to the federal Constitution, U.S. C.A. Stated in another way, the question is whether the service upon Canaday as agent of the association, under the circumstances, gave the Missouri court jurisdiction to enter a judgment in personam, and whether such service of process violated the due-process-of-law clause. The facts perinent to the issue of validity of the service of process are that Canaday, the alleged agent, a man over the age of seventy years, a holder of a benefit certificate, solicited memberships in the association, commencing in 1932 and continuing until November 15, 1933. He obtained seven memberships during that period and was paid a commission for his services. In some of these instances he collected the initial premium, assisted in filling out the applications and sent them to the association. After the applicant became a member, Canaday collected no more dues or money; he delivered no membership certificates, they being sent direct by the association to the prospective member; he did not solicit, nor was he at any time acquainted with, George W. Bell or the beneficiary, Fred R. Bell; he made no contracts, settled no claims; never made or attempted to make and did not assist in making any adjustments of losses; he did not like the way the association did things, and his last solicitation of business was in 1933. In 1935 he was dropped as a solicitor from the records of the association. Service of process was made on Canaday November 6, 1936. He retained the copy of the summons and never forwarded it to the association. Default judgment was entered December 15, 1936. The first notice the association had that default judgment had been entered against it was February 18, 1937, through a letter which it received from counsel for plaintiff. The evidence as to the service of summons on Canaday by the sheriff is in part as follows:

'Q. Will you state whether the petition and summons in said cause was served on you as the alleged agent of the defendant association? A. No, it wasn't served on me. The sheriff came and asked me if I was the agent of this company and I said, 'No, I haven't been for some time.' He says, 'You aren't?' He left and came back after awhile and left a copy with me. I asked him what was in it and he says, 'You can read it at your leisure.' That's all there was to that. I didn't think he was serving it, I just kept it.'

The statute upon which plaintiff primarily relies for the effectuality of the service of process herein is section 5897, chapter 37, article X, Revised Statutes of Missouri 1929, Mo.St.Ann. § 5897, p. 4499, which reads: 'Service of summons in any action against an insurance company, not incorporated under and by virtue of the laws of this state, and not authorized to do business in this state by the superintendent of insurance, shall, in addition to the mode prescribed in section 5894, be valid and legal and of the same force and effect as personal service on a private individual, if made by delivering a copy of the summons and complaint to any person within this state who shall solicit insurance on behalf of any such insurance corporation, or make any contract of insurance, or collect or receive any premium for insurance, or who adjusts or settles a loss or pays the same for such insurance corporation, or in any manner aids or assists in doing either.'

Counsel for plaintiff contend that the sheriff's return of service is conclusive and cite in support of the contention Fraternal Bankers of America v. Wire, 150 Mo.App. 89, 95, 129 S.W. 765. We do not think that case so holds.

In the case of State ex rel. Mills Automatic Merchandising Corp v. Hogan, 232 Mo.App. 291, 103 S.W.2d 495, 498, decided April 6, 1937, the court said: 'We know of no case where the question of whether a foreign corporation is subject to service of process in this state has not been held to be one of jurisdiction to be determined by the court, and not by the officer, upon the interposition of some appropriate plea to the jurisdiction upon which evidence might be adduced and a judicial hearing had. Indeed, such very procedure was followed in Nathan v. Planters' Cotton Oil Co., 187 Mo.App. 560, 174 S.W. 126, and Bauch v. Weber Flour Mills Co., 210 Mo.App. 666, 238 S.W. 581, * * *.' See, also, St. Clair v. Cox, 106 U.S. 350, 1 S.Ct. 354, 27 L.Ed. 222; 34 C.J., sections 1616 and 1627. The service of process was jurisdictional, the return...