North American Union v. Oliphint

• Decision Date: 22 December 1919
• Docket Number: 79
• Parties: NORTH AMERICAN UNION v. OLIPHINT
• Court: Arkansas Supreme Court

217 S.W. 1

141 Ark. 346

NORTH AMERICAN UNION v. OLIPHINT

No. 79

Supreme Court of Arkansas

December 22, 1919

Appeal from Pulaski Circuit Court, Third Division; G. W. Hendricks Judge; affirmed.

Judgment affirmed.

Sherrill Buchanan & Mallory, for appellant.

1. Proper service was not had on appellant. Sec. 17, act 462 Acts 1917; 69 Ark. 429-396. The summons was served upon the State Insurance Commissioner and J. L. Hawkins, an alleged collector for defendant, but not an agent for service. 69 Ark. 429, 396; 251 F. 171; 251 Id. 71. The doctrine of estoppel does not apply here. 1 Herman on Estoppel, p. 14; 218 U.S. 573. Defendant was not doing business in Arkansas nor engaged in business in the State. 177 U.S. 28-45; 204 Id. 21-22; 218 Id. 573.

2. The court erred in refusing to permit defendant to introduce evidence on motion to quash service. 218 U.S. 573; 134 Am. St. 879; 197 N.Y. 279.

3 A continuance should have been granted, and it was error to refuse it. Defendant was a foreign corporation and had no witnesses present and was taken by surprise.

4. Plaintiff failed to make out a case of ratification. 166 F. 944; 78 N.J.L. 637; 76 A. 1024; 121 Cal. 55-63-4; 108 Me. 83-4; 66 Mo.App. 643-6; 32 Pa. 340, 347-8; 3 Daly (N. Y.) 98-100; 16 Cal. 591.

5. No agreement was made with plaintiff by any one to pay him a monetary commission or consideration, as the evidence shows.

6. The court erred in giving instruction No. 3 for plaintiff but should have given a directed verdict for defendant. It erred also in giving Nos. 8 and 9 and 10. The instructions are confusing and ambiguous.

Moore, Smith, Moore & Trieber and Gardner K. Oliphint, for appellee.

1. The court had jurisdiction over defendant. The motion to quash the service only stated conclusions without setting up facts to sustain it; it attacked the jurisdiction over the person of defendant and not the subject-matter and the proof showed that defendant was doing business within this State, both generally and specially, and is estopped. 219 F. 96; 104 N.W. 1054; 1 F. 471; 140 Id. 921; 95 Ark. 302, 307; 19 Okla. 115; 39 Id. 629; 60 Ark. 578; 56 Id. 539-541. Here service was had under act 462, Acts 1917.

2. The court properly refused to hear evidence on motion to quash, as the motion was not proper, and did not state facts.

3. No error in refusing a continuance. 214 S.W. 1.

4. The implied agreement to pay plaintiff for his services was ratified as soon as the parties who made the agreement obtained control of the defendant.

5. There was an implied agreement to pay plaintiff in money and there is no error in the instructions. 6 R. C. L. 587; 56 Ark. 382; 82 Id. 136.

OPINION

HUMPHREYS, J.

Appellee instituted suit against appellant in the Third Division of the Pulaski Circuit Court to recover $ 800 on account of alleged services rendered by him to appellant from September 1, 1917, to May 1, 1918, for the stipulated amount of $ 100 per month, and on a second count in the complaint claimed the same amount upon a quantum meruit for services rendered during said period.

Appellant, specially appearing, filed a motion to quash the service upon the ground, among others, that it was a foreign corporation, incorporated under the laws of Illinois, to do a fraternal insurance business, and that neither at the time service was had upon the Arkansas State Insurance Commissioner nor at any time prior thereto had it taken out a license to do business in Arkansas, nor had it done an insurance business in the State in violation of the law, by failing to appoint the Insurance Commissioner as its agent upon whom service might be had. This motion was overruled by the court, over the objection of appellant; whereupon appellant, reserving its rights raised by the motion to quash, filed an answer, denying its liability on account of service rendered, as alleged.

The cause was submitted to a jury upon the pleadings, exhibits, the evidence and depositions of witnesses and exhibits introduced and attached, and the instructions of the court, upon which a verdict was returned in favor of appellee for $ 500. A judgment was rendered in accordance with the verdict, from which an appeal has been duly prosecuted to this court.

The evidence revealed that appellant was a fraternal benefit society, organized under the laws of Illinois, and doing a fraternal insurance business in Illinois and other States, with headquarters at Chicago. The Knights and Ladies of Honor was an Indiana corporation of the same character, licensed to do business in Arkansas, and which maintained local organizations in the latter State. On or about August 1, 1916, the Knights and Ladies of Honor became insolvent, and its organizations and business were taken over by appellant. Appellant assumed the liabilities of the policies of the Knights and Ladies of Honor in Arkansas and issued riders to the members in Arkansas to be attached to their policies in the Knights and Ladies of Honor. The premiums and dues of the Knights and Ladies of Honor were thereupon forwarded to the North American Union. In the month of December, following, appellant and the Fraternal Aid Union, another organization of the same character, entered into a merger which also included the organization and business of the Knights and Ladies of Honor. At the time of the first merger, appellee was working for the Knights and Ladies of Honor at a salary of $ 100 per month, but, after the merger, was retained in the same capacity by appellant at the same salary until its union with the Fraternal Aid Union, and, after the second union, or merger, appellee was retained by the Fraternal Aid Union until the first of September, 1917, in the same capacity and at the same salary. Under the last merger, the business of the three organizations was conducted as one business under the name of the "Fraternal Aid Union." During the month of June, 1917, members, who had formerly had control of the business of the North American Union, organized themselves into the "Policy Holders' Protective Association" of the North American Union, and procured the institution of a suit in Chicago for the purpose of dissolving the merger between appellant and the Fraternal Aid Union, and reclaiming the organization known as the North American Union, together with its fund which had passed into the hands of the Fraternal Aid Union. The issues, as finally joined in the suit attacking the validity of the merger between the North American Union and the Fraternal Aid Union, also involved the validity of the merger between the Knights and Ladies of Honor and the North American Union. During the time the Policy Holders' Protective Association was aiding in the prosecution of the suit, the members which organized it secured a meeting of the Supreme Council of the North American Union, and elected Henry J. Beecher, president, C. A. Gillespie, secretary, Daniel S. Wentworth, general counsel, H. A. Correa, superintendent, and C. C. Nunemaker, committeeman of the State of Order. They began to operate the business of the North American Union under their official titles, but were restrained from conducting any business during the pendency of the suit. The same parties then opened an office in Chicago and conducted the business of the North American Union under the name of Policy Holders' Protective Association. The chief business conducted by them during that period consisted in writing letters and sending out literature concerning the great merit of and benefit to be derived from remaining with the North American Union, and advising all members and local organizations to withdraw their influence and contributions from the Fraternal Aid Union and to render both to the North American Union. The method advised and most generally adopted was to secure resolutions from local lodges, expressing allegiance to the North American Union and to send all monthly dues to it in Chicago, as well as to make voluntary donations for temporarily maintaining the organization and carrying on the litigation. On August 29, 1917, either before or just about the time the injunction against appellant, as reorganized, became effective, a letter was written to appellee by Henry J. Beecher, supreme president, on a letter-head carrying the names of the respective officers and the following inscription:

"North American Union,

"A Northwestern Reserve Fund Insurance Association."

In part the letter read: "We can assure you that, as soon as the organization is restored to its membership and is allowed to use the general funds of the order, we will not forget those who have been loyal to us, and we sincerely believe that time is not far off." After the injunction became effective and until dissolved, the letterheads were as follows:

"Policy Holders' Protective Association

North American Union

"A Northwestern Reserve Fund Insurance Association."

The general trend of the letters written to appellee by the Policy Holders' Protective Association was in the nature of approvals of work appellee had done toward holding the local organizations in Arkansas in the North American Union, and requests for continued diligence, and directions as to methods of procedure, etc. The following excerpts are taken from letters written by D. S. Wentworth, C. G. Nunemaker, H. A. Correa and Henry J. Beecher, prior to the dissolution of the injunction.

September 18, 1917. "I am sorry to say that just at the present time we could not guarantee anything, but we have constantly before us the intelligent and loyal work you are doing for the N. A. U., and when the proper time comes you need not worry about being compensated for time and trouble so nobly rendered in this cause. Keep up the good work, and, as previously stated, we will take...