Old Wayne Mut. Life Ass'n v. Flynn

• Decision Date: 16 January 1903
• Citation: 66 N.E. 57
• Parties: OLD WAYNE MUT. LIFE ASS'N v. FLYNN.
• Court: Indiana Appellate Court

66 N.E. 57

OLD WAYNE MUT. LIFE ASS'N

v.FLYNN.^*

Appellate Court of Indiana, Division No. 2.

Jan. 16, 1903.

Appeal from superior court, Marion county; J. M. Leathers, Judge.

Action by Enos Flynn against the Old Wayne Mutual Life Association. From a judgment for plaintiff, defendant appeals. Reversed.

C. E. Averill and McBride & Denny, for appellant. Hiram Teter, Benjamin F. Watson, and H. W. Bullock, for appellee.

COMSTOCK, J.

This was a suit upon a judgment alleged to have been rendered by the common pleas court of Lackawanna county, Pa., in favor of the appellee, Enos Flynn, and against the appellant, the Old Wayne Mutual Life Association. The answer upon which the case was tried was a general denial. The court found for the plaintiff in the sum of $4,017.90, and rendered judgment accordingly. The errors upon which the appellant relies for reversal are-First, the court erred in overruling a demurrer to the second paragraph of the complaint; second, in sustaining a demurrer to the second paragraph of appellant's answer; and, third, in overruling the appellant's motion for a new trial.

The complaint was in two paragraphs. The trial court sustained a demurrer to the first. The second paragraph alleges, in substance, that the defendant was a corporation of the state of Indiana; that the defendant, by its agent, for that purpose authorized by it, in the month of May, 1893, issued its certificate of membership and policy of life insurance upon the life of one John Doyle, a citizen of Pennsylvania, for the benefit of the plaintiff, who was also at the time a citizen of Pennsylvania; that said policy was in the sum of $4,000; that the defendant was at the time doing a life insurance business in the state of Pennsylvania; that the insured, John Doyle, died April 3, 1895, while said policy of insurance was in full force; that the plaintiff had performed all the conditions of the contract by him to be performed, but that the defendant had wholly failed, etc.; that on the 5th day of September, 1895, the plaintiff commenced suit in the court of common pleas, a court of general jurisdiction in said state, and caused process to be issued out of said state against defendant; that such process was legally and personally served upon the defendant, in accordance with a certain law of the state of Pennsylvania, a copy of which is set out in the pleading, the purport of said law being that no insurance company not of the state of Pennsylvania, nor its agents, should do any business in that state, until it had filed with the insurance commissioner of that state a written stipulation, duly authenticated by the company, agreeing that legal process affecting the company should be served upon the insurance commissioner of that state, or upon some agent specified by the company to receive service of process, and that such service should have the same effect as if personally served upon the company within the state, and further providing that, if the company should cease to maintain such agent, thereafter service might be served upon the insurance commissioner, etc. The complaint, after setting out in full the provisions of this act, alleged that the process in said cause was served by giving to “S. W. McCulloch, deputy insurance commissioner of said commonwealth, at the office of the insurance commissioner of the commonwealth, at Harrisburg, Pennsylvania, a true and attested copy of said writ and statement aforesaid, and making the contents known to him”; that thereafter such proceedings were had that on the 6th day of May, 1896, a judgment was rendered in favor of plaintiff and against the defendant for the sum of $4,011.40. The judgment, the complaint avers, is wholly unpaid.

The second paragraph of answer admitted the enactment of the law set out in the complaint, but alleged that the defendant was a corporation organized and existing under and by virtue of the laws of the state of Indiana, and not of Pennsylvania, and that at no time did it ever file, nor did any agent of the defendant ever file, with the insurance commissioner of the state of Pennsylvania, the written stipulation required by said law concerning the service of process. The answer further alleges that it never, at any time, designated any agent or person within the state of Pennsylvania, and that it never had any agent, officer, or other person within the state of Pennsylvania, authorized by it to receive service of process; that the pretended service upon the defendant, by serving said writ of summons upon the deputy insurance commissioner, was void; and that by virtue thereof the court of common pleas of Lackawanna county, Pa., never acquired and never had any jurisdiction over the person of the defendant. The only evidence introduced in this cause was that which purported to be a transcript of the proceedings of the court of common pleas of Lackawanna county, Pa., including the alleged judgment sued upon; the deposition of the plaintiff, Enos Flynn; a statute of Pennsylvania relative to the entry of judgments, and attempting to authorize courts to permit judgments to be entered by the prothonotary, upon præcipe, for want of appearance, etc.; that which purported to be a rule of court of the common pleas court of Lackawanna county, Pa., under which it was claimed the judgment sued upon was rendered; and the statute of Pennsylvania pleaded in the complaint.

The question under the first specification of error is, “Did the common pleas court of Lackawanna county acquire jurisdiction of the appellee?” The complaint avers “that said defendant association, by its agents for that purpose, authorized by it in the month of May, A. D. 1893, contracted in said commonwealth of Pennsylvania with the citizens thereof, and to them issued a certificate of membership and policy of life insurance in said association.” The weight of authority sustains the general proposition that a corporation can only be sued in a jurisdiction beyond the state of its creation by virtue of statute. In Thomp. Corp. § 7995, it is said: “(1) That the foreign corporation must have entered the domestic state for the purpose of carrying on its business there; (2) that process must have been served upon an agent sustaining such a relation to it that notice to the agent might well be deemed notice to the principal, without a violation of the principles of natural justice.”

In section 7988 of said work it said: “The principle of jurisprudence remains that a corporation cannot, any more than a natural person, be sued in an action in personam in a state within whose limits it has never been found. But from what has preceded it appears that there are three leading exceptions to this rule: That a corporation can be sued in another state or country (1) when it has established a permanent agency for the prosecution of its business in such other state or country, and in many instances, by force of statute, as hereafter seen, by service of subordinate agents; (2) when it has agreed with the state into which it thus migrates for the purposes of its business that it may be sued within the state, and that process may be served upon it by service upon an officer appointed and empowered by it or designated by the state; (3) when it has agreed with the opposite party to the contract that an action may be brought against it to enforce the contract in a state or country other than that of its particular domicile, in which cases it creates by contract, and for the purposes of the particular contract, an artificial domicile different from that ascribed by the law, under the operation of the principle, ‘Modus et conventio vincunt legem.”’ The quotation is made because it concisely states the rule and the exceptions.

Conceding for the consideration of this case that, by the issuance of the single policy, appellant impliedly agreed that it would be found in the state of Pennsylvania if it became necessary to bring suit, there would still exist the necessity of service of process. In the absence of a voluntary appearance, jurisdiction of the person can only be acquired by service of process upon the party affected by it. In the case of a corporation service must be had upon some designated or proper officer of the corporation. It is not averred that there was any service upon any officer or agent of appellant. The substituted service-the service upon the insurance commissioner-is authorized when the company has complied with the statute. The complaint does not allege that the company had complied with the statute. In the absence of such averment, it will be inferred that the company had not complied with the statute. Appellant, however, had no absolute right to do business in Pennsylvania without the...