Murray v. Sovereign Camp, W. O. W.
| Decision Date | 13 November 1939 |
| Docket Number | 14965. |
| Citation | 5 S.E.2d 560,192 S.C. 101 |
| Parties | MURRAY v. SOVEREIGN CAMP, W. O. W. |
| Court | South Carolina Supreme Court |
Perrin & Tinsley and Horace L. Bomar, Jr., all of Spartanburg for appellant.
Whiteside & Taylor, of Spartanburg, for respondent.
The defendant in this case, as appears from the record, is incorporated under the laws of the State of Nebraska, and is a fraternal benefit society, with certain local camps in South Carolina, one of which is located at Glendale. On March 11, 1939, this action was brought in the County Court of Spartanburg for the collection of a policy of life insurance the summons being served upon A. W. Pruitt, the local financial secretary of the Glendale Camp; no service was made upon the State Insurance Commissioner, as provided by Section 8056 of the Code of 1932. In due time thereafter, counsel for the defendant specially appeared before the county Judge for the purpose of objecting to the jurisdiction of the Court and moved that service of the summons be set aside and declared to be of no force and effect, on the ground that it was not made in conformity with the section of the Code above named. Judge Merchant refused the motion, holding that service on Pruitt, an agent of the association, was sufficient to acquire jurisdiction of the defendant, and that service on the insurance commissioner under the statute was not exclusive. The only question presented by the appeal is whether he was correct in this.
No case has been cited involving a construction by this Court of Section 8056, and we apprehend that no such case can be found. The county Judge based his order upon a decision construing Section 7964 of the Code of 1932, providing for service on foreign insurance companies as distinguished from fraternal benefit associations, the wording of the two sections being practically the same. The case referred to is Lucas v. N. C. Mutual Life Ins. Co., 184 S.C. 119 191 S.E. 711, in which it was held that service on the State Insurance Commissioner, as provided by the Statute, was not exclusive. Counsel for the appellant asked and received permission of the Court to review the Lucas case with regard to its holding thereabout, with a view to having same modified or overruled.
In 1908 the Legislature passed an act (25 Stat. at Large, 999) "to Establish the Insurance Department of South Carolina, and to Provide for the Conduct of Same". No specific mention was made therein to fraternal benefit associations as such; and there was no provision specifically relating to the method of serving or acquiring jurisdiction of a foreign insurance company. In 1910, however, another act was passed (26 Stat. at Large, 772) enlarging somewhat the general insurance law, and providing (Section 17) for service upon the insurance commissioner as follows: "Each foreign company, before being licensed to do business in South Carolina, shall appoint the Insurance Commissioner as its attorney to accept service, and such appointment shall continue in full force and effect so long as such company shall have outstanding policies in this State and until all claims of every character held by citizens of this State, or by the State against such company, shall have been settled. ***" This section of the act appeared in the Code of 1912 as Section 2705.
In 1910 the General Assembly also enacted a statute (26 Stat. at Large, 554) "for the Regulation and Control of Fraternal Benefit Associations", Section 13 thereof now appearing as Section 8056 of the Code of 1932, to which reference has been made above. We quote here a part of it: "Every association, whether domestic or foreign, hereafter applying for admission, shall before being licensed, appoint in writing the insurance commissioner and his successors in office to be its true and lawful attorney upon whom all legal process in any action or proceeding against it shall be served, and in such writing shall agree that any lawful process against it which is served upon such attorney shall be of the same legal force and validity as if served upon the association, and that the authority shall continue in force so long as any liability remains outstanding in this State. ***" Upon examination it will be found that this Section of the Code is exactly the same as Section 13 of the original act.
Section 17 of the act of 1910 (26 Stat. at Large, 772) was construed by this Court in Montgomery v. United States Fidelity & Guaranty Co., 90 S.C. 283, 71 S.E. 1084, 1085, 73 S.E. 182, in an opinion filed January 4, 1912. It was contended in that case that the Florida Home Insurance Company, a foreign corporation, against whom the plaintiff had theretofore obtained a judgment which the guaranty company, the defendant in the Montgomery case, had given a bond conditioned to pay, had not been served according to law, although the judgment roll showed that service of the summons had been made upon Wallace, an agent of the insurance company. Mr. Justice Woods, speaking for the Court, said:
In 1917 the Legislature repealed (30 Stat. at Large 38) Section 2705 of the Code of 1912, construed in the Montgomery case, and substituted therefor what is now Section 7964 of the Code of 1932, a part of which we here set out: "Every foreign insurance company shall, before being licensed, appoint in writing the insurance commissioner and his successors in office to be its true and lawful attorney upon whom all legal process in any action or proceeding against it shall be served, and in such writing shall agree that any lawful process against it which is served upon such attorney shall be of the same legal force and validity as if served upon the company, and that the authority shall continue in force so long as any liability remains outstanding in the State ***" This Section, as we have already said, was referred to by the Court in Lucas v. N. C. Mutual Life Insurance Company, supra. In that case service was made upon one of defendant's local agents in this State. The district manager, to whom the papers were sent, returned them to plaintiff's attorney, advising him that the defendant was a foreign insurance company, and that legal service of the summons and complaint could be made upon it only through the State Insurance Commissioner of South Carolina. Counsel for plaintiff, however, did not act upon the suggestion made, but took judgment by default against the defendant a few months thereafter. The company then sought to have the judgment opened on the ground of mistake and excusable neglect, the district manager stating in an affidavit filed by him in the matter that his mistake was an honest one as he entertained the opinion that the summons could not be legally served upon the company except through the office of the State Insurance Commissioner. The only question presented by the appeal was whether the defendant, in view of the admitted facts, was entitled to the relief sought by it. The Court held that the mistake made by the district manager was one of law and not one of fact, and that, therefore, the motion to open the judgment was properly refused. It did say, however, in passing...
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