Mutual Reserve Fund Life Association v. Boyer

• Decision Date: 09 June 1900
• Docket Number: 11,592
• Citation: 61 P. 387,62 Kan. 31
• Parties: MUTUAL RESERVE FUND LIFE ASSOCIATION v. HARRY E. BOYER
• Court: Kansas Supreme Court

61 P. 387

62 Kan. 31

MUTUAL RESERVE FUND LIFE ASSOCIATION v. HARRY E. BOYER

No. 11,592

Supreme Court of Kansas

June 9, 1900

Decided July, 1900.

Error from Wyandotte court of common pleas; W. G. HOLT, judge.

Judgment reversed.

Miller Buchan & Morris, Warner, Dean, McLeod & Holden, and Geo. Burnham, jr., for plaintiff in error.

McGrew Watson & Watson, W. H. McCamish, and J. O. Fife, for defendant in error.

OPINION

DOSTER, C. J.:

This was an action on a policy of life insurance. The insurance was taken on the life of Mrs. Clara A. Boyer in favor of her husband Harry E. Boyer. Judgment was rendered in favor of the plaintiff, from which the defendant company has prosecuted error to this court. Before pleading to the merits the insurance company made a motion to set aside the service on it because of lack of jurisdiction in the court to compel it to respond to the summons issued against it. This motion was overruled. It then filed a plea in abatement to the jurisdiction of the court, based on the same reasons as those set out in the motion. A demurrer to this plea was interposed by the plaintiff and sustained. The matters averred in the plea and the evidence adduced in support of the motion were the same and the two will be considered together.

The allegations of fact contained in the plea were of course admitted by the demurrer. These allegations and the evidence submitted under the motion were that the defendant was a foreign life insurance company, and had been at one time authorized to do business in this state, but about two years prior to the taking out of the policy in suit its license had been revoked by the superintendent of insurance, since which time it had not maintained any agency or transacted any business of any character whatever in the state; that application was made for the policy in Kansas City, Mo., through an agent whose office was in that city; that the medical examination of the applicant was made in Kansas City, Mo., by a resident physician there; that the policy was executed at the home office of the company in New York and delivered to the insured in Kansas City, Mo.; that the first premium was paid in that city; that the residence of the insured as stated by her in her application was in Kansas City, Kan. This last-mentioned fact, although proved under the motion, was not set out in the plea in abatement. All the others were. However, for the purpose of a consideration of the question of law involved, it will be treated as though set out in the plea. The summons to the defendant was served on the state superintendent of insurance, in accordance with section 104, chapter 74, General Statutes of 1897. (Gen. Stat. 1899, § 3283.) The material portion of this section reads as follows:

"Every such company, on applying for admission and authority to transact business in this state, and as a condition precedent to obtaining any such authority, shall file in the insurance department its written consent, irrevocable, that actions may be commenced against such company in the proper court of any county in this state in which the cause of action shall arise, or in which the plaintiff may reside, by the service of process on the superintendent of insurance of this state, and stipulating and agreeing that such service shall be taken and held in all courts to be as valid and binding as if due service had been made upon the president or chief officer of such corporation. Such consent shall be executed by the president and secretary of the company, authenticated by the seal of the corporation, and shall be accompanied by a duly certified copy of the order or resolution of the board of directors, trustees, or managers, authorizing the said president and secretary to execute the same. Actions against any such insurance company may be brought in any county where the cause of action arose, or in which the plaintiff may reside. The summons shall be directed to the superintendent of insurance, and shall require the defendant to answer by a certain day not less than forty days from its date."

We think the motion to set aside the service should have been sustained, and that the demurrer to the plea in abatement should have been overruled. By the rules of comity between states, corporations chartered in one of them may be admitted to do business in the others, but unless so admitted they are not subject in personam to the jurisdiction of the courts outside the domicile of their creation. The rules of obligation resting on corporations, under the doctrine of interstate comity, to respond to the demands of suitors in the courts of the states where they may be doing business, and their exemption from the obligation, are quite well stated in St. Clair v. Cox, 106 U.S. 350, 1 S.Ct. 354, 27 L.Ed. 222:

"Whilst the theoretical and legal view, that the domicile of a corporation is only in the state where it is created, was admitted, it was perceived that when a foreign corporation sent its officers and agents into other states and opened offices, and carried on its business there, it was, in effect, as much represented by them there as in the state of its creation. As it was protected by the laws of those states, allowed to carry on its business within their borders, and to sue in their courts, it seemed only right that it should be held responsible in those courts to obligations and liabilities there incurred. . . . Without considering whether authorizing service of a copy of a writ of attachment as a summons on some of the persons named in the statute -- a member, for instance, of the foreign corporation; that is, a mere stockholder -- is not a departure from the principle of natural justice mentioned in The Lafayette Ins. Co. v. French et al., 59 U.S. 404, 18 HOW 404, 15 L.Ed. 451, which forbids condemnation without citation, it is sufficient to observe that we are of opinion that when service is made within the state upon an agent of a foreign corporation it is essential, in order to support the jurisdiction of the court to render a personal judgment, that it should appear somewhere in the record -- either in the application for the writ or accompanying its service, or in the pleadings or the finding of the court -- that the corporation was engaged in business in the state. The transaction of business by the corporation in the state, general or special, appearing from a certificate by the proper officer or a person who is its agent, there would, in our opinion, be sufficient prima facie evidence that the agent represented the company in the business. It would then be open, when the record is offered as evidence in another state, to show that the agent stood in no representative character to the company; that his duties were limited to those of a subordinate employe, or to a particular transaction, or that his agency had ceased when the matter in suit arose."

In Morawetz on Corporations, section 980, it is said:

"If a corporation is not engaged in trade and makes no contracts in a foreign state, justice seems to demand that it should not be subjected to suits in that jurisdiction; and it has been held, therefore, that under these circumstances the agents of the company have no authority to represent it in receiving service of writs, or entering a voluntary appearance. Service of process upon the president or other managing agent of a corporation, while merely casually present in the jurisdiction of another state, does not constitute personal service upon the corporation itself."

The cases in which the question has oftenest arisen have been those where service of summons was made on an officer or agent of a foreign company casually outside the jurisdiction of his own state. In such cases the courts have held almost uniformly that the service was bad. In The Camden Rolling Mill Co. v. The Swede Iron Co., 32 N.J.L. 15, the court said:

"Upon general principles, and in the absence of statutory innovations, it is to be regarded as settled, in this state at least, that if a foreign corporation at the time of the commencement of suit, does not do business, and has not any office or place of business in this state, the contract sued on, not having been entered into in this state, such corporation, except by its own consent, cannot be brought within the jurisdiction of this or any court of this state. Under such circumstances, the officers or agents of such foreign corporation, when they come into this jurisdiction, do not bring with them their official character or functions, and are not to be esteemed, out of the sovereignty by the laws of which the corporate body exists, the representatives for the purpose of responding to suits of law of such corporate body."

In this and other like cases the...