Pennsylvanit Lumbermen Mutual Fire Insurance Company v. Charles Meyer

• Decision Date: 03 April 1905
• Docket Number: No. 182,182
• Citation: 197 U.S. 407,25 S.Ct. 483,49 L.Ed. 810
• Parties: PENNSYLVANIT LUMBERMEN'S MUTUAL FIRE INSURANCE COMPANY v. CHARLES C. MEYER
• Court: U.S. Supreme Court

197 U.S. 407

25 S.Ct. 483

49 L.Ed. 810

PENNSYLVANIT LUMBERMEN'S MUTUAL FIRE INSURANCE COMPANY

v CHARLES C. MEYER.

No. 182.

Argued March 14, 15, 1905.

Decided April 3, 1905.

Meyer, the plaintiff below, recovered judgment in the United States circuit court for the western district of New York, against the corporation defendant, for five thousand and some odd dollars, upon policies of fire insurance issued by it upon certain buildings (and the machinery therein) in the city of Rochester, in the state of New York. The corporation sought to obtain a review of the judgment, and to that end sued out a writ of error, and the case was brought before the court of appeals for the second circuit, which has certified certain facts upon which it desires the opinion of this court. These facts are as follows:

The action was commenced in the supreme court of the state of New York by service of the summons on Samuel H. Beach, at the city of Rome, New York, a director of the company, who resided in that city, and, on application of the company, appearing specially, the case was removed into the United States circuit court for the western district of New York, because of diverse citizenship of the parties. By motion, on special appearance, to set aside the service, by plea, exception, and assignment of error, the question as to whether jurisdiction of the company had been obtained by such service has been properly raised.

The defendant in error is, and at the time of the commencement of this action was, a citizen and resident of the state of New The plaintiff in error is a fire-insurance corporation, organized under the laws of the state of Pennsylvania, and its office is in Philadelphia. Written applications were duly made to it for the issuance of the policies in suit, and were mailed from Rochester, New York, to the company, at Philadelphia, Pennsylvania. The policies were made out and executed by it at Philadelphia, and were sent to the insured at Rochester, New York, where he received the same. All transactions between the company and said insured, subsequent to the issuance of said policies, and until after the destruction of said property by fire, were by correspondence, in writing from Philadelphia to him, at Rochester, and he, writing from Rochester, to it, in Philadephia.

Three of the said company's thirteen directors reside in the state of New York, but the only act done by them for it is to attend, from time to time, the meetings of the board of directors, which are held in the city of Philadelphia, and there to give such advice and take such action in connection with its business as may seem to them proper. They perform no duties and do no acts for the company in the state of New York, and never have. The company has no agents or officers within that state, and has not had at any time. It has no office within that state, has never been authorized or licensed by the insurance department thereof to do business therein, and has not taken the steps required by law for that purpose. At the date of the service of the summons, as aforesaid, the said company had and now has about nine hundred thousnad dollars ($900,000) outstanding insurance on property within the state of New York, which is something less than one third of its total risks. The applications therefore were made by mail, addressed to it at Philadelphia, and the policies were executed and issued at that city, and sent by mail from there to the insured within the state of New York.

Ever since the plaintiff in error was incorporated it has been engaged in the business of insuring property located in the state of New York and other states against loss by fire, and has sent by mail circulars from Philadelphia into said state, soliciting business. In the prosecution of its business, and for the purpose of increasing it, the company sends its general manager to the different conventions of lumbermen held in the state of New York, for the purpose of urging upon those attending upon such conventions the advantages of insuring with it. It sends its adjusters into the state of New York when a loss by fire occurs there to property insured by it, for the purpose of adjusting the amount of such loss. It originally placed insurance upon the property covered by the policies in question after its manager had pointed out the advantage of insuring in the company, the conversation being had at the city of Rochester, in that state.

Mr. Frank P. Prichard for the insurance company.

[Argument of Counsel from pages 409-411 intentionally omitted] Mr.Heman W. Morris for Meyer.

Mr. Justice Peckham, after making the foregoing statement, delivered the opinion of the court:

Upon the facts thus certified the circuit court of appeals asks the question: 'Had the circuit court jurisdiction of the plaintiff in error?'

In addition to the facts contained in the foregoing certificate, the counsel for the respective parties stipulated upon the argument in this case before this court that a copy of one of the policies on which suit was brought in this case was correctly set out in the printed record in the circuit court of appeals, and that this court might consider and decide the case with the same effect as if, in the statement of facts accompanying the question certified by the circuit court of appeals, that court had found and certified the additional fact that the record in the circuit court of appeals contained a true copy of one of the policies, and that the others sued upon were in the same form and language as the one set out in that record.

The policies in suit were issued upon a two-story frame sawmill building and additions, and also upon engines and boilers and other machinery placed in that building, situated on Monroe avenue, in the city of Rochester, state of New York. The policies provide that the company shall not be liable beyond the actual cash value of the property at the time any loss or damage occurs, and that such loss or damage is to be ascertained or estimated according to such actual cash value, with proper deduction for depreciation, however caused, and shall in no event exceed what it would then cost the insured to repair or replace the same with material of like kind and quality; the assessment or estimate is to be made by the in- sured and the company; if they differ as to the amount of loss, the same is to be ascertained by two competent and disinterested appraisers, the insured and the company each selecting one, and the two so chosen are to select a competent and disinterested umpire; the appraisers together are to estimate and appraise the loss, stating separately sound value and damage, and, failing to agree, they are to submit their differences to the umpire; and the award in writing of any two shall determine the amount of the loss. After the amount of the loss or damage has been thus determined, the sum for which the company is liable is payable in sixty days. It is optional with the company to repair, rebuild, or replace the property lost or damaged with other of like kind and quality, within a reasonable time, as provided for in the policy.

In order that a Federal court may obtain jurisdiction over a foreign corporation, the corporation must, among other things, be doing business within the state. St. Clair v. Cox, 106 U. S. 350, 27 L. ed. 222, 1 Sup. Ct. Rep. 354; Goldey v. Morning News, 156 U. S. 518, 39 L. ed. 517, 15 Sup. Ct. Rep. 559; Barrow S. S. Co. v. Kane, 170 U. S. 100, 42 L. ed. 964, 18 Sup. Ct. Rep. 526; Connecticut Mut. L. Ins. Co. v. Spratley, 172 U. S. 602, 43 L. ed. 569, 19 Sup. Ct. Rep. 308.

To obtain jurisdiction of a foreign corporation under the Code of New York, personal service of the summons upon and a delivery to the defendant must be made in the manner designated by § 432 of the Code of Civil Procedure of that state. Subdivision 1 of that section provides for the service of the summons on and its delivery to the president, treasurer, or secretary; subdivision 2 provides for like service upon and delivery to a person designated for the purpose by the corporation. The service was made in this case under subdivision 3 of that section, which reads as follows:

3. 'If such a designation is not in force, or if neither the person designated nor an officer specified in subdivision first of this section can be found with due diligence, and the corporation has property within the state, or the cause of action arose therein, to the cashier, a director, or a managing agent of the corporation within the state.'

It does not appear that the company had any property within the state, and therefore, in order to come within subdivision (3) of the...