Guthrie v. Connecticut Indem. Ass'n

• Decision Date: 14 January 1899
• Citation: 49 S.W. 829,101 Tenn. 643
• Parties: GUTHRIE et ux. v. CONNECTICUT INDEMNITY ASS'N.
• Court: Tennessee Supreme Court

49 S.W. 829

101 Tenn. 643

GUTHRIE et ux. v. CONNECTICUT INDEMNITY ASS'N.

Supreme Court of Tennessee.

January 14, 1899

Appeal from circuit court, Davidson county; J. W. Bonner, Judge.

Action by Nathan L. Guthrie and wife against the Connecticut Indemnity Association. There was a judgment for defendant and plaintiffs appeal. Affirmed.

Estes & Estes, for appellants.

Champion Head & Brown, for appellee.

McALISTER J.

This suit was instituted in the circuit court of Davidson county to collect a policy of life insurance amounting to $1,000. The policy was issued June 30, 1894, by the Connecticut Indemnity Association, on the life of Allen B. Guthrie payable to his mother, Adaline Guthrie. The insured executed his note to the company for the sum of $26.27, covering the first year's premium. This note was not paid at maturity nor has it ever been paid. The insured, Allen B. Guthrie, died on the 1st of January, 1895, and on the 4th of November, 1895, suit was brought to collect the amount of the policy. The summons was served November 27, 1895, on E. B. Craig, insurance commissioner of the state. To this suit the company filed a plea in abatement, viz. defendant, a foreign corporation, had been doing business regularly in the state of Tennessee prior to December 31, 1894, at which date it formally withdrew its agents from the state, and ceased to do business therein. It did no business in the state of Tennessee during the year 1895. Defendant had no office, agent, or representative in said state of Tennessee during said year of 1895, nor had it complied with the laws relative to foreign corporations transacting business in Tennessee during that period, nor had it filed with the commissioner of insurance a written instrument, duly signed and sealed, authorizing him to acknowledge service of process for and in its behalf in said state of Tennessee; nor did it consent that service of process mesne or final upon such commissioner should be taken and held as valid, as if served upon this company according to the laws of this state or any other state. Defendant gave no one the right or power to acknowledge service of process for it in the state of Tennessee during the year 1895, or at any other time. The summons in this cause was served upon E. B. Craig, insurance commissioner of Tennessee, November 27, 1895. Said process was not served upon defendant, nor any officer or agent of defendant, nor upon any one authorized to acknowledge service of same in its behalf. This plea in abatement was sustained by the circuit judge, and at the December term, 1896, of this court the judgment of the circuit court was affirmed, and plaintiffs' suit dismissed. Thereafter, on the 18th of May, 1897, the present suit was commenced. The validity of the service of summons is not questioned in the present suit.

This case was tried before the Honorable J. W. Bonner without the intervention of a jury, and upon a stipulation of agreed facts. The defense of the company is rested exclusively upon the seventh condition of the policy, which is as follows: "It is expressly understood and agreed that no action shall be maintained nor recovery had for any claim upon or by virtue of this policy after the lapse of one year from the death of said insured, and, if said suit or proceedings for such recovery be not commenced within one year from the date of the death of said insured, it shall be deemed a waiver on the part of all parties concerned of all rights or claims under or by virtue of this policy, and as conclusive evidence against the validity of such claim; and this policy shall be null and void and of no effect, and no person shall be entitled to damages, or the recovery of any money paid thereon." It is not controverted by the plaintiff that such a contractual limitation contained in a policy of insurance is valid and enforceable. In Riddlesbarger v. Insurance Co., 7 Wall. 386, the court, in passing on this question, said, viz.: "The contract of insurance is a voluntary one, and the insurers have a right to designate the terms upon which they will be responsible for losses, and it is not an unreasonable term that, in case of a controversy upon a loss, resort shall be had by the assured to the proper tribunal whilst the transaction is recent, and the proofs respecting it are accessible. *** The validity of the limitations stipulated in conditions similar to the one in the case at bar has been elaborately considered in the highest courts of several of the states, and has been sustained in all of them except in the supreme court of Indiana. We have no doubt of its validity." "The rule is that, while the parties to a contract cannot, by anything contained therein, oust the jurisdiction of the courts, yet they may lawfully contract to limit the time within which an action upon such contract shall be brought, and the limitation so imposed is binding on the parties." 1 Wood, Lim. Act. § 42, and authorities cited. It is insisted, however, by the plaintiff, that the suit is not barred by the contractual limitation of one year, but is saved by the original suit, which was commenced November 4, 1895. That suit, as already stated, was dismissed in January, 1897, by this court, on defendant's plea in abatement for want of sufficient service of summons. This suit was commenced within one year thereafter, to wit, on the 18th of May, 1897.

Plaintiff's first insistence is that his present suit is protected by section 4446, Shannon's Code, viz.: "If the action is commenced within the time limited, but the judgment or decree is rendered against the plaintiff upon any ground not concluding his right of action, or where the judgment or decree is rendered in favor of the plaintiff, and is arrested, or reversed on appeal, the plaintiff, or his representatives and privies, as the case may be, may, from time to time, commence a new action within one year after the reversal or arrest." While it is true the original suit was dismissed for insufficient service of process, and not for any cause concluding plaintiff's right of action, we are of opinion the statute is wholly inapplicable in the present instance. It clearly refers to statutory, and not to contractual, limitations, for otherwise a statute could be made utterly subversive of contracts executed by parties upon the most deliberate consideration. It was held by the United States supreme court in Riddlesbarger v. Insurance Co., 7 Wall. 386, that the contractual limitation is not affected by the fact that a previous action which was dismissed had been commenced within that period, and that the statute of a state "which allows a party who suffers a nonsuit in an action to bring a new action for the same cause within one year afterwards, does not affect the rights of the parties in such a case." This must be true, for, if the contractual limitation is valid, the parties are not bound by the general limitation of the statute; and for a like reason they are not bound by the savings of the statute. The question is purely one of contract, and is not regulated by the terms of the statute. "The rights of the parties," says Field, J., "flow from the contract. That relieves them from the general limitations of the statute, and, as a consequence, from its exceptions also." In Riddlesbarger v. Insurance Co., 7 Wall. 386, the court said: "The action mentioned which must be commenced within the twelve months is the one which is prosecuted to judgment. The failure of a previous action from any cause cannot alter the case. The contract declares that an action shall not be sustained unless such action, not some previous action, shall be commenced within the period designated. It makes no provision for any exception in the event of the failure of an action commenced, and the court cannot insert one without changing the contract." This view is supported by the cases of Wilkinson v. Insurance Co., 72 N.Y. 499; Arthur v. Insurance Co., 78 N.Y. 462; Brown v. Insurance Co., 7 R. I. 301; Insurance Co. v. Barr, 94 Pa. St. 345; Insurance Co. v. Brown, 128 Pa. St. 386, 18 A. 389; Hocking v. Insurance Co., 130 Pa. St. 170, 18 A. 614; Ostr. Ins. §§ 410, 411; 2 Beach, Ins. §§ 1258-1265...