Lunceford v. Commercial Travelers' Mut. Acc. Ass'n Of Am.

• Citation: 129 S.E. 805
• Decision Date: 21 October 1925
• Docket Number: (No. 226.)
• Court: United States State Supreme Court of North Carolina
• Parties: LUNCEFORD . v. COMMERCIAL TRAVELERS' MUT. ACC. ASS'N OF AMERICA.

129 S.E. 805

(190 N. C. 314)

LUNCEFORD .

v.COMMERCIAL TRAVELERS' MUT. ACC. ASS'N OF AMERICA.

(No. 226.)

Supreme Court of North Carolina.

Oct. 21, 1925.

[Ed. Note.—For other definitions, see Words and Phrases, First and Second Series, Doing Business.]

[Ed. Note.—For other definitions, see Words and Phrases, First and Second Series, Commerce.]

Appeal from Superior Court, Duplin County; Barnhill, Judge.

Civil action by Mary Newton Lunceford, administratrix of the estate of A. P. Lunceford, against the Commercial Travelers' Mutual Accident Association of America, to recover the amount of an insurance policy. From an order overruling a motion on defendant's special appearance to dismiss the action for want of proper service, defendant excepts and appeals. Affirmed.

Gavin & Boney, of Kenansville, for appellant.

Oscar B. Turner, of Rose Hill, for appellee.

STACY, C. J. [1] It is conceded that the defendant is a foreign corporation, without process agent, property, or license to do business in this state. Service of summons is sought to be obtained under C. S. § 1137, by leaving a true copy thereof with the secretary of state and having him mail the copy to the president, secretary, or other officer of the corporation, upon whom, if residing in this state, service could be made; it being alleged that the defendant is doing business in this state without complying with the provisions of said section.

The statute provides that every corporation having property or doing business in this state, whether incorporated under its laws or not, shall have an officer or agent in the state upon whom process in all actions or proceedings against it can be served. A corporation failing to comply with the provisions of this section is liable to a forfeiture of its charter, or to the revocation of its license to do business in the state. In the latter event (failing to comply with the provision requiring the presence of a process officer or agent in this state), process in an action or proceeding against the cor-poration may be served upon the secretary of state by leaving a true copy thereof with, him, and he shall mail a copy to the president, secretary, or other officer of the corporation upon whom, if residing in this state, service could be made; and, in case of foreign corporations doing business in this state without complying with the provisions of said section, we have held that valid service of process may be had under this statute in the manner indicated, as well as on officers and agents of such corporations under the general provisions of C. S. § 483, construed in Whitehurst v. Kerr, 153 N. C. 76, 6S S. E. 913, and other cases. See Anderson v. Fidelity Co., 174 N. C. 417, 93 S. E. 948; Currie v. Mining Co., 157 N. C. 209, 72 S. E. 980; Fisher v. Ins. Co., 136 N. C. 217, 48 S. E. 667.

The reason for such legislation is cogently stated in Corbett v. Physicians' Casualty Ass'n, 135 Wis. 505, 115 N. W. 365, 16 L. R. A. (N. S.) 177, where the court, in dealing with a different but somewhat similar statute, said:

"The dominant purpose of such a statute is to protect residents of the state from being imposed upon by foreign insurance companies. In case any such company offers to do business with one within such protection, it holds itself out as having qualified to do such business, and the resident, in the absence of knowledge, actual or constructive, to the contrary, may safely act upon the faith thereof."

The defendant controverts neither the law nor our decisions on the subject, but says that it is not doing business in this state, and therefore it is not subject to any of our statutes relating to service of process.

Touching the question as to whether the defendant is "doing business in this state;" within the meaning of the statute now before us the following facts were found by the trial court and embodied in its judgment:

" (b) Section 3 of article 1 of defendant's bylaws reads as follows: 'Sec. 3. The object of this association is to secure for its members, upon a co-operative basis, the very best accident insurance at the least possible cost.' And section 6 of article 13 of said by-laws reads as follows: 'Sec. 6. Every member of this association shall be entitled to one vote at ail elections of officers and upon all questions that may be voted upon at any and all regular or special meetings of the association or adjournments thereof, and to cast the same either in person or by proxy.' In its application blanks, to be used when application is made for insurance, defendant describes itself as 'a mutual organization—No branch offices—No stockholders —No agents.' In the affidavit of Russell H. Wicks, president of defendant, it is said that defendant never has had, and it does not now have any paid agents, servants, or employees to solicit membership or insurance anywhere. * * *

"(c) Defendant issues and delivers contracts of insurance to residents of this state and col lects from those insured by it in this state the annual dues and assessments agreed to be paid by the insured. An application of a resident of this state to defendant for insurance is dated at the post office address of the resident applicant, is also signed by the resident applicant, and the applicant is recommended by a resident already insured by defendant and called a member of defendant's association. The application is signed by the member who recommended the applicant and the acceptance of the application., also shows the post office address of such recommending member, and if and when a certificate or contract of insurance is issued and delivered to the applicant upon such application the contract of insurance so issued and delivered makes the application therefor a part of the said contract of insurance.

"(d) In September, 1914, defendant issued and delivered to A. P. Lunceford, plaintiff's intestate, the contract of insurance sued on in this action. At that time the said A. P. Lunceford was a resident of Duplin county, N. C, residing at Rose Hill, N. C, where he continued to reside until he died, in April, 1925."

Upon the foregoing findings, the court concluded and adjudged that the defendant was doing business in this state, within the meaning of the statute above mentioned, and that summons duly served on the secretary of state and mailed by him to the president, secretary, or other officer of the corporation, as provided in said section, was sufficient to bring the defendant into court. In this we think there was no error.

Speaking generally to the question in Anderson v. Fidelity Co., 174 N. C. 419, 93 S. E. 919, Hoke, J. (later Chief Justice), said:

"Authoritative cases on the subject are to the effect, further, that when a state by its statutes has established and provided a method of personal service of process on foreign corporations doing business therein, one that is reasonably calculated to give full notice to such companies of the pendency of suits against them, these provisions are to be regarded as conditions on which they are allowed to do business within the state,...