Minnesota Commercial Men Ass v. Benn

• Decision Date: 19 February 1923
• Docket Number: No. 103,103
• Citation: 261 U.S. 140,67 L.Ed. 573,43 S.Ct. 293
• Parties: MINNESOTA COMMERCIAL MEN'S ASS'N v. BENN
• Court: U.S. Supreme Court

261 U.S. 140

43 S.Ct. 293

67 L.Ed. 573

MINNESOTA COMMERCIAL MEN'S ASS'N

v BENN.

No. 103.

Argued Jan. 12, 1923.

Decided Feb. 19, 1923.

Messrs. David F. Simpson and A. V. Rieke, both of Minneapolis, Minn., for petitioner.

Mr. A. A. Tenner, of Minneapolis, Minn., for respondent.

Mr. Justice McREYNOLDS delivered the opinion of the Court.

Petitioner is a mutual assessment, accident, and health insurance company, incorporated under the laws of Minnesota, with many members scattered throughout the Union. It issued a certificate of membership to Robert J. Benn, of Montana. He died in 1915, and his executrix—respondent here—instituted an action against the association in a Montana court to recover the sum said to be due under the rules. After service of summons and complaint upon the secretary of state and the insurance commissioner, judgment was entered by default. Thereafter she brought an action in Minnesota upon the judgment and prevailed both in the trial and Supreme Court. Benn v. Minnesota Commercial Men's Ass'n, 149 Minn. 497, 182 N. W. 999.

Defending, the association claimed that it had never done business in Montana or consented to service of process there; that the insurance contract was executed and to be performed in Minnesota; that the Montana court was without jurisdiction, the judgment void, and enforcement thereof would deprive petitioner of property without due process of law contrary to the Fourteenth Amendment.

The decision here must turn upon the effect of the process served on the secretary of state in Montana. Did the court there acquire jurisdiction to enter judgment?

The Supreme Court of Minnesota followed Wold v. Minnesota Commercial Men's Association (1917) 136 Minn. 380, 162 N. W. 461, wherein the opinion referred to Connecticut Mutual Life Insurance Co v. Sprately, 172 U. S. 602, 19 Sup. Ct. 308, 43 L. Ed. 569, and Commercial Mutual Accident Co. v. Davis, 213 U. S. 245, 29 Sup. Ct. 445, 53 L. Ed. 782, but did not cite Hunter v. Mutual Reserve Life Insurance Co., 218 U. S. 573, 31 Sup. Ct. 127, 54 L. Ed. 1155, 30 L. R. A. (N. S.) 686, or Provident Savings Society v. Kentucky, 239 U. S. 103, 36 Sup. Ct. 34, 60 L. Ed. 167, L. R. A. 1916C, 572.

Section 6519, subd. 3, Montana Revised Code of Civil Procedure (1915), provides:

'Any corporation organized under the laws of the state of Montana, or doing business therein, may be served with summons by delivering a copy of the same to the persident, secretary, treasurer, or other officer of the corporation, or to the agent designated by such corporation. * * * And if none of the persons above named can be found in the state of Montana, and an affidavit stating that fact shall be filed in the office of the clerk of the court in which such action is pending, then the clerk of the court shall make an order authorizing the service of summons to be made upon the secretary of state, who shall be and is hereby constituted an agent and attorney in fact to accept service on behalf of such corporation, and service upon said secretary of state shall be deemed personal service upon said corporation.'

Petitioner has never maintained any office except in Minneapolis, Minn.; its business is transacted there; it has never owned property or sought permission to do business in any other state.

Applications for membership are presented on printed forms, usually by mail. The bylaws provide that no person can secure membership until the board of directors has accepted his application at the home office and certificate has issued. Such certificates are mailed as directed by the applicants.

Assessments and dues are payable at the Minneapolis office and notices in respect of them are mailed to members at their last known addresses.

New members are procured by advertisement and through the solicitation of older ones. The latter are urged to furnish lists of prospects and to use their influence to increase the membership; but no member has authority to bind the association. Although not essential, applications frequently bear a member's recommendation. Soliciting members receive no compensation except occasional premiums or prizes. No paid solicitors or agents are employed.

Losses are settled by checks on Minneapolis banks mailed from the home office. Proofs of loss must be made on the forms provided. In case the attending physician's certificate is inadequate, the association procures additional information through some local physician, but no resident physicians are employed outside of Minnesota. The right to make further investigation is reserved; but there is no evidence to show anything has been done under this reservation in the present case. Losses are adjusted by the directors in Minneapolis.

The association accepted Robert J. Benn's application for health insurance, solicited and recommended by Harry K. Hartness, a member, November 6, 1908, and a further application for additional protection May 3, 1911. These were sent by mail from Kalispel, Mont., where both individuals resided....