Pembleton v. Illinois Commercial Men's Ass'n

• Decision Date: 10 October 1919
• Docket Number: No. 12681.,12681.
• Citation: 289 Ill. 99,124 N.E. 355
• Parties: PEMBLETON v. ILLINOIS COMMERCIAL MEN'S ASS'N.
• Court: Illinois Supreme Court

289 Ill. 99

124 N.E. 355

PEMBLETON

v.ILLINOIS COMMERCIAL MEN'S ASS'N.

No. 12681.

Supreme Court of Illinois.

June 18, 1919.

Rehearing Denied Oct. 10, 1919.

Appeal from Circuit Court, Cook County; George F. Barrett, Judge.

Action by Lillian B. Pembleton against the Illinois Commercial Men's Association. From judgment for plaintiff, defendant appeals. Reversed.Ryan, Condon & Livingston, of Chicago (James G. Condon and Irvin I. Livingston, both of Chicago, of counsel), for appellant.

Musgrave, Oppenheim & Lee, of Chicago, for appellee.

CARTER, J.

This was an action of debt in the circuit court of Cook county, brought on a foreign judgment entered in Nebraska, by appellee against the Illinois Commercial Men's Association, an Illinois mutual assessment accident insurance company, in reference to payment of an insurance policy taken out by appellee's husband. On the hearing in the circuit court judgment was entered against appellant, and this appeal followed.

The foreign judgment was entered by default on September 23, 1916, in the district court of Nebraska. Service of process in the Nebraska court on the appellant association was attempted to be made by serving, at Omaha, H. S. Weller, a policy holder of said association. It was argued in the circuit court as it is here, that the judgment was entered without jurisdiction having been lawfully obtained over the appellant association, and therefore without due process of law, and in violation of the Fourteenth Amendment of the federal Constitution.

The alleged cause of action upon which judgment was recovered in Nebraska arose out of, and was based on, a contract of accident insurance entered into between appellant, an Illinois corporation, and George G. Pembleton, a resident of Nebraska. It appears from the evidence that appellant has its principal place of business in Chicago, and it is contended by its counsel that it conducted its business wholly in that city, largely by correspondence; that any male white person between the ages of 19 and 55 years, engaged in certain occupations not of a hazardous nature, might make application for membership in said association; that such application was mailed to the office of the association located in Chicago; that the directors of the association passed upon the statements contained in the application at the office in Chicago, and if the application was accepted a certificate of membership was issued to the applicant, being mailed to him from the office in Chicago or delivered to him personally at said office; that appellant had never engaged any agent or other person to give his time to representing it in seeking business in the state of Nebraska, or, for that matter, in any other state; that it never paid any person any sum as commission fee, or emolument for or on its behalf in securing applications for membership or collecting assessments in Nebraska; that it has never solicited insurance in Nebraska except through its own members; that it has not made any contracts in Nebraska, collected premiums, or adjusted, settled, and paid losses in Nebraska, or in any place except at the office of the association in Chicago; that it never had or maintained any office or agent for the transaction of business in Nebraska, or in any other place except Chicago; that its method of doing business is to receive applications from various states in the Union by mail; that its plan for securing these applications is that when appellant forwards notices from Chicago to its members as to the payment of dues it incloses blank applications, with a request to the members to solicit others to make application, and forward the sum of $2 as a membership fee; that, when these applications are so made through its members in various sections of the country, such applications, with the membership fee inclosed, are forwarded by mail and received in Chicago, and thereafter all notices of dues, with like requests for members to secure applicants, are forwarded by mail to the member at his home, and the dues are paid by the member sending the money through the mails to the Chicago office; that whenever an accident happens or a member dies, and a claim is made against the association, if any question is raised by the association as to its liability an investigator or adjuster is sent to the place where the accident or death occurred; that he makes his report to the board of directors at Chicago, and if a proposition of settlement is made by the claimant such proposition is reported to the board for action; that all transactions between the member and the association are conducted by mail, except in the case of an adjustment, which is carried on as just stated. It further appears that the application of deceased, George G. Pembleton, of Nebraska, was received in the same manner all other applications for membership were usually received; that he was recommended for membership by Phil S. Easterday, a member of the association, and was accepted by the board of directors at Chicago on September 15, 1906, upon which date the policy was issued at Chicago, and deposited in the mails at Chicago, addressed to Pembleton at his home address. It appears from the record that Weller, upon whom service of process was made as to the litigation in Nebraska, was a member of the association; that he has never been an officer, employé, or regularly constituted agent of such association, and never received or became entitled to any compensation for what he did; that some time before this litigation was instituted Weller transmitted to the association the applications of two persons, viz. a Mr. Williams and a Mr. Reinhardt, along with the membership fee in each case; that these applications were accepted and acted upon by the association, and the certificates of membership forwarded to Williams and Reinhardt, respectively; that before sending in these two applications Weller had received the application blanks urging the members to make use of the same to induce others to join the association; that Weller was a resident of Omaha, Neb., was president of two Nebraska assessment companies, with which he was actively engaged and was also vice president of a wholesale drug company in Omaha; that he maintained an office with the drug company and had at the same place an office for the two Nebraska assessment companies, but was never a paid solicitor for any insurance company; that the two applications sent to appellant were made through him in April and July of 1916, respectively, and that the membership fee of $2 in each case was remitted by him in the form of checks of the Richardson Drug Company, drawn by Weller as vice president of that company.

[3] It appears to be suggested that the provision of the federal Constitution requiring that full faith and credit shall be given in each state to the judicial proceedings of every other state, and the act of Congress passed in pursuance thereof, prevent an inquiry into the jurisdiction of the court by which the judgment offered in evidence was rendered. It has been held by the federal courts that the record of a judgment rendered in another state may be contradicted as to the facts necessary to give the court jurisdiction, and, if it be shown that such facts did not exist, the record will be a nullity, notwithstanding it may recite that they did exist; that want of jurisdiction may be shown either as to the subject-matter or the person. Thompson v. Whitman, 18 Wall. 457, 21 L. Ed. 897;Simmons v. Saul, 138 U. S. 439, 11 Sup. Ct. 369, 34 L. Ed. 1054;National Exchange Bank v. Wiley, 195 U. S. 257, 25 Sup. Ct. 70, 49 L. Ed. 184. This court has laid down a similar rule that the courts of this state may inquire into the proceedings, judgments, or decrees of a sister state to determine whether the court had jurisdiction of the subject-matter or the parties. Field v. Field, 215 Ill. 496, 74 N. E. 443;Forsyth v. Barnes, 228 Ill. 326, 81 N. E. 1028,10 Ann. Cas. 710. It has also been settled by the federal decisions that three conditions are necessary to give a court jurisdiction in personam over a foreign corporation: First, it must appear that the corporation was carrying on its business in the state where process was served on its agent; second, that the business was transacted or managed by some agent or officer appointed by or representing the corporation in such state; third, the existence of some local law making such corporation amenable to suit there as a condition, express or implied, of doing business in the state. 21 R. C. L. 1340; Connecticut Mutual Life Ins. Co. v. Spratley, 172 U. S. 602, 19 Sup. Ct. 308, 43 L. Ed. 569;Armstrong Co. v. New York Central & Hudson River Railroad Co., 129 Minn. 104, 151 N. W. 917, L. R. A. 1916E, 232, Ann. Cas. 1916E, 335. It is also established that in order to render a corporation amenable to service of process in a foreign jurisdiction it must appear that the corporation is transacting business in that district to such an extent as to subject it to the jurisdiction and laws thereof. St. Clair v. Cox, 106 U. S. 350, 1 Sup. Ct. 354, 27 L. Ed. 222;Commercial Mutual Accident Co. v. Davis, 213 U. S. 245, 29 Sup. Ct. 445, 53 L. Ed. 782, and cases there cited.

[4] The courts have laid down no allembracing rule by which it may be determined what constitutes the doing of business by a foreign corporation in such manner as to make it subject to jurisdiction. In general it may be said that the business must be of such a character and extent as to warrant the inference that the corporation has subjected itself to the jurisdiction and laws of the district in which it is served and in which it is bound to appear when a proper agent has been served with process. 21 R. C. L. 1341; Green v. Chicago, Burlington & Quincy Railway Co., 205 U. S. 530, 27 Sup. Ct. 595, 51 L. Ed. 916;St. Louis Southwestern Railway Co. v. Alexander, 227 U. S. 218, 33 Sup. Ct. 245, 57 L. Ed. 486, Ann. Cas. 1915B, 77. The...