Mutual Reserve Fund Life Ass'n v. Tuchfeld

• Decision Date: 23 March 1908
• Docket Number: 1,731.
• Parties: MUTUAL RESERVE FUND LIFE ASS'N v. TUCHFELD.
• Court: U.S. Court of Appeals — Sixth Circuit

159 F. 833

MUTUAL RESERVE FUND LIFE ASS'N v. TUCHFELD.

No. 1,731.

United States Court of Appeals, Sixth Circuit.

March 23, 1908

C. G Bond and T. B. Turley, for plaintiff in error.

W. H Biggs, for defendant in error.

Before SEVERENS and RICHARDS, Circuit Judges, and COCHRAN, District judge.

COCHRAN District Judge.

This is an action by the defendant in error against the plaintiff in error on a life insurance policy issued by the latter upon the life of the former's intestate. The policy was issued September 9, 1890, and was for the sum of $10,000, but was reduced September 9, 1901, to the sum of $5,000. The insured died on October 14, 1905, and the action was brought September 11, 1906. It was brought in the Circuit Court of Madison county, Tenn., and thence removed to the lower court, where judgment was recovered, not only for the face of the policy and interest thereon, but for 20 per cent. penalty under the act of April, 1901 (Acts 1901, p. 141, c. 141), the whole amount recovered being the sum of $6,354.15.

Several errors are assigned for reversal. One is that the court erred in overruling the defendant's plea in abatement to its jurisdiction. The claim was that it was without jurisdiction because the state court did not have jurisdiction thereof. The defendant entered the state of Tennessee prior to or in the year 1889, and continued to do business therein until November 15, 1901, when it withdrew therefrom. At the time the action was brought, and for several years prior thereto it had no voluntary agent in the state. In 1887 and in 1892 and again on May 11, 1897, it filed a written instrument in the office of the Insurance Commissioner at Nashville in Davidson county, constituting, in case of the 1887 writing, the Secretary of State, and in case of the other two, the Insurance Commissioner, its agent for service of process, and containing an agreement that process might be served on him so long as any liability remained outstanding against it in the state. The first writing was filed under the act of 1875 which related to insurance companies generally. Acts 1875, p. 79, c. 66.

Our attention has been called to no legislation under which it can be said that the writing of 1892 was filed. It could not have been under the act of 1875 as that provided for constituting the Secretary of State as agent for service of process. Prior to the filing of the last writing, two acts were passed, each of which provided for constituting the Insurance Commissioner as such agent. The act of 1895 related to insurance companies other than those engaged in life and casualty insurance on the assessment plan. Acts 1895, p. 322, c. 160. The act of 1897, which took effect April 3, 1897, related to insurance companies engaged in such insurance on the assessment plan. Acts 1897, p. 300, c. 127. The act then under which the last writing may be said to have been filed depends on whether it did business on the assessment plan or not. The execution thereof was required as a condition of its continuing to do business in the state. In the act of 1895 there was a provision in these words:

'Any process issued by any courts of record in this state and served upon such commissioner (Insurance Commissioner) by the proper officer of the county in which the said commissioner may have his office, shall be deemed a sufficient process on said company.'

The act of 1897 contains no such provision. The process by which the defendant was attempted to be brought before the state court was a summons directed to said Davidson county in which the Insurance Commissioner had his office and there accepted by him, and also by the Secretary of State. It is claimed that the acceptance by the Secretary of State was of no validity as the act of 1875 had been repealed entirely, if not by the act of 1895, by it and that of 1897 together. We do not find it necessary to determine this question.

The principal ground upon which it is urged here that the state court did not acquire jurisdiction by the acceptance of said summons by the Insurance Commissioner is that said process could not legally be directed to Davidson county, a county other than that in which the action was brought. It is claimed that it is a cardinal principle that the process of a court cannot extend beyond the territorial jurisdiction thereof, unless authorized by statute-- that the plaintiff in error did business on the assessment plan, and hence was covered by the act of 1897 and not by that of 1895-- and that as the act of 1897 did not contain any such provision as that above quoted there was no statute of Tennessee authorizing the issuance of process against it from the Madison circuit court directed to Davidson county. Whether, if that statutory provision has no application to this case, jurisdiction of the action on the part of the state court can be worked out, we do not find it necessary to determine. As bearing thereon these cases have been cited, to wit: People v. Justices of City Court, 25 Abb.N.C. (N.Y.) 403, 11 N.Y.Supp. 773; Fink v. Lancaster Ins. Co., 60 Mo.App. 673.

It is sufficient to say that, so far as the record before us goes, it was not made to appear on the hearing of the plea in abatement that the defendant was a life insurance company on the assessment plan. The sole allegation concerning its character in the plea was that it was a New York corporation. The declaration went further than this, and alleged that it was a New York insurance corporation. The plea was heard by the court, and it made findings of fact and law. The finding as to the character of the defendant was simply that it was a New York insurance corporation. The evidence heard upon the plea was not preserved by a bill of exceptions, and it cannot, therefore, be said that it established that defendant was a life insurance company on the assessment plan. Indeed, inasmuch as there was no finding as to the plan on which the defendant did business, it is not likely that any evidence was introduced bearing on this subject. As then, by concession, the state court would have had jurisdiction if defendant was an insurance company not on the assessment plan, and the record does not show that it was made to appear on the hearing of the plea of abatement that it was such on that plan, it cannot be said that the lower court was in error in not sustaining the plea on this ground. In the case of Patton v. Continental Casualty Co. (Tenn.) 104 S.W. 305, jurisdiction of the circuit court of Washington county, Tenn., of a suit against a foreign accident insurance company was upheld upon summons issued therefrom to Davidson county, and there accepted by the Insurance Commissioner.

It is urged, further, that said statutory provision authorized the service of process issued thereunder, and not the acceptance of service thereof, and as the summons here was not served, but service thereof was accepted, the state court was without jurisdiction. The writing itself authorized the Insurance Commissioner, not simply to receive service, but to accept it. This, however, is not important. In the Patton Case, Judge Neil said: 'In the present case, the service of process was acknowledged by the Insurance Commissioner, and, on the principles already stated, we are of the opinion that this service was properly made, and the company was brought before the court.'

Neither of those two grounds of lack of jurisdiction in the state court seems to have been relied on in the lower court. The theory of the plea seems to have been that lack thereof was due to the fact that defendant had no voluntary agent in the state, and the officers who had accepted service were without authority so to do by reason of defendant's withdrawal from the state in 1901. This position is feebly urged here and these cases, to wit, Swann v. Mutual R.F.L. Association (C.C.) 100 F. 922, Friedman v. Insurance Co. (C.C.) 101 F. 535, are cited in support of it. But these cases were overthrown by that of Mutual R.F.L. Association v. Phelps, 190 U.S. 147, 23 Sup.Ct. 707, 47 L.Ed. 987. To the same effect are Youmans v. Minn. Life Insurance Co. (C.C.) 67 F. 282; Collier v. Mutual R.F.L. association (C.C.) 119 F. 617; Magoffin v. Mutual R.F.L. Association, 87 Minn. 260, 91 N.W. 1115, 94 Am.St.Rep. 699; Biggs v. Mutual R.F.L. Association, 128 N.C. 5, 37 S.E. 955; Moore v. Mutual R.F.L. Association, 129 N.C. 31, 39 S.E. 637; Woodward v. Mutual R.F.L. Association, 178 N.Y. 485, 71 N.E. 10, 102 Am.St.Rep. 519. This assignment of error, therefore, is not well taken.

The other assignments of error, with one exception, relate to certain portions of the charge to the jury, and the refusal of certain requests made by defendant. Before referring to any of these assignments, a preliminary statement of certain facts should be made. The policy called for the payment of bimonthly mortuary premiums. They were payable within 30 days from the first week day of the months of December, February April, June, August, and October. It was provided that, if any of said payments were not made on or before the date when due at the home office of the association in the city of New York, the policy should expire and become null and void, and all payments thereon should be forfeited to the association. In the course of time the mortuary premium due within 30 days after the first week day of December, 1904-- i.e., by December 31, 1904-- for $24.45, known as 'Call 137,' had to be met. According to evidence introduced by plaintiff, on December 24, 1904, the insured at Jackson, Tenn., where he lived, purchased a New York draft for the sum of $24.45 of that date, and deposited in the mail an envelope containing it addressed to defendant at its home office. For eight or ten years previous thereto the insured had...