Ivy River Land & Timber Co. v. National Fire & Marine Ins. Co. of Elizabeth, N.J.

• Decision Date: 09 June 1926
• Docket Number: 560.
• Citation: 133 S.E. 424,192 N.C. 115
• Parties: IVY RIVER LAND & TIMBER CO. et al. v. NATIONAL FIRE & MARINE INS. CO. OF ELIZABETH, N. J.
• Court: North Carolina Supreme Court

133 S.E. 424

192 N.C. 115

IVY RIVER LAND & TIMBER CO. et al. v. NATIONAL FIRE & MARINE INS. CO. OF ELIZABETH, N. J.

No. 560.

Supreme Court of North Carolina

June 9, 1926

Appeal from Superior Court, Buncombe County; McElroy, Judge.

Action by the Ivy River Land & Timber Company and others against the National Fire & Marine Insurance Company of Elizabeth, N. J. From an order dismissing action for want of proper service of summons, plaintiffs appeal. Affirmed.

Summons in this action, issued on November 21, 1925, by the clerk of the superior court of Buncombe county, was returned indorsed by the sheriff of Wake county, as follows:

"Received Nov. 24, 1925. Served Nov. 24, 1925, by leaving a true copy of this summons with W. N. Everett, secretary of state, for the state of North Carolina."

The secretary of state transmitted, by mail, the said copy to defendant, at Elizabeth, N. J.

Plaintiffs are corporations, created and existing under the laws of North Carolina, each having its principal office and place of business in the city of Asheville, in said state; defendant is a corporation, created and existing under the law of New Jersey, having its principal office and place of business in city of Elizabeth, in said state.

On November 7, 1924, defendant issued a policy of insurance, by which it insured plaintiffs against loss or damage by fire to certain property located in Buncombe county, N.C. Said policy was applied for, on behalf of plaintiffs, by Perry & Parker Company, Inc., New York brokers. It was executed and delivered in the state of New Jersey. The premium on said policy was paid to defendant in said state. The property insured by said policy was destroyed by fire on December 19 1924, and this action was begun to recover the value of said property, in accordance with the provisions of said policy.

Defendant has sent no adjusters into the state of North Carolina. It has not designated or appointed any agent, or other person within the state of North Carolina, upon whom process may be served. Defendant has never been admitted or licensed to do business in the state of North Carolina; it has no office or property of any kind in said state; nor has it any officers directors, agents, or adjusters therein.

On May 5, 1924, defendant issued a policy of insurance by which it insured the French Broad Flooring Company, then engaged in operating a flooring plant in Buncombe county, N. C., against loss or damage by fire to its property located in said county and state. Said company paid, and defendant received, the premium on said policy, which remained in force and effect, according to its terms, for one year; at the expiration of said policy, defendant offered to renew it, but said company refused to accept such renewal.

On December 31, 1925, defendant issued a policy of insurance, by which it insured the Williams-Brownell Planing Mill Company, then engaged in operating a planing mill in Buncombe county, N. C., against loss or damage by fire to its property located in said county and state; said policy is now, according to its terms, in full force and effect.

The above-recited facts having been made to appear to the court by affidavits, upon the hearing of defendant's motion, made upon its special appearance for that purpose, that the court strike out the return of the service of the summons in this action, and thereupon dismiss the action, and the court, upon consideration of all the affidavits, and the complaint filed in the cause, having found as a fact that defendant was not doing business in the state of North Carolina, it was ordered and adjudged that the return of the service of the summons in the action be stricken out, and that the action be dismissed for want of proper service of summons. From this order, plaintiffs appealed.

Merrick, Barnard & Heazel and Mark W. Brown, all of Asheville, for appellants.

Jones, Williams & Jones, of Asheville, for appellee.

CONNOR J.

Defendant is a foreign insurance company, engaged in the fire insurance business. It has not been admitted or authorized to do business in this state, according to the laws thereof. Service of summons or other legal process cannot, therefore, be made upon defendant, as provided in C. S. §§ 6414 and 6415. No summons in this action has been served upon the insurance commissioner of this state, for the reason that plaintiffs do not contend that defendant has been admitted or authorized to do business in the state, under the provisions of article 16, c. 106, Cons. Stat. of 1919.

Defendant is, however, a corporation, incorporated under the laws of another state. It has no property in this state; it has no officer or agent in the state, upon whom process against it may be served. Plaintiffs contend, however, that it was doing business in this state, and therefore that, under C. S. § 1137, summons in this action against defendant may be served upon the secretary of state by leaving a true copy thereof with him. Defendant admits that a copy of the summons, served on the secretary of state was mailed to it, at its office in the city of Elizabeth, N. J., and there received by it, but denies that it was doing business in the state of North Carolina, on the date of the issuance of the summons, or on the date of the issuance of the policy upon which this action is founded.

The insured are citizens of North Carolina; the property insured against loss or damage by fire was located in North Carolina at the time the policy was issued, and also at the time it was destroyed by fire. The application for the policy, however, was made by a broker, engaged in business in New York, to the defendant, at its home office, in the state of New Jersey; the policy was issued, and the premium was paid, in said state. The policy was not procured through any officer or agent of defendant in North Carolina or through any person in said state acting in its behalf. Defendant did not negotiate with insured, with respect to said policy through any person in this state. It has sent no adjuster or other agent into this state, since the destruction of the property insured by fire. Defendant has never expressly consented to be sued in the courts of North Carolina; there is no evidence of conduct, on its part, either before or since the issuance of the policy, from which such consent may be implied, unless it appears from the evidence submitted to the court, upon the hearing of defendant's motion, that defendant was doing business in the state within the meaning of C. S. § 1137. The court found as a fact that defendant was not doing business in the state, and therefore held that the court had not acquired jurisdiction of defendant in this action by service of the summons upon the secretary of state for North Carolina, and dismissed the action. In this we find no error.

The validity of the service of summons in an action, instituted in the courts of this state against a foreign, or nonresident, corporation, upon the secretary of state, where it was contended that such corporation was doing business in this state, and that therefore the service upon the secretary of state was valid, has been considered recently by this court in Lunceford v. Commercial Travelers' Mut. Association, 190 N.C. 314, 129 S.E. 805, and in Railways v. Cobb, 190 N.C. 375, 129 S.E. 828. Upon the facts in each of these cases it was held that the nonresident corporation was doing business in the state, and that the service was valid.

In the former case it was found as a fact by the trial court, and embodied in the judgment that:

"Defendant issues and delivers contracts of insurance to residents of this

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