Postal Ben. Ins. Co. v. Johnson

• Decision Date: 07 January 1946
• Docket Number: 4772
• Citation: 165 P.2d 173,64 Ariz. 25
• Parties: POSTAL BEN. INS. CO. v. JOHNSON
• Court: Arizona Supreme Court

165 P.2d 173

64 Ariz. 25

POSTAL BEN. INS. CO. v. JOHNSON

No. 4772

Supreme Court of Arizona

January 7, 1946

Appeal from Superior Court, Pima County; Evo De Concini, Judge.

Affirmed.

Bilby &amp Shoenhair, of Tucson, for appellant.

Harry O. Juliani, of Tucson, for appellee.

Stanford Chief Justice. La Prade and Morgan, JJ., concur.

OPINION

Stanford Chief Justice.

On September 31, 1931, Harriet Johnson, a colored woman of Tucson, Arizona, had her life insured with the United Mutual Benefit Association, which had been organized under the provisions of Sections 608, 609 and 610 of the Revised Code of Arizona, 1928. The certificate of insurance was for $ 1,000 to be paid to her beneficiary at the time of her death, her beneficiary being her son, the appellee herein. The premium to be paid was $ 3.30 per month.

Harriet Johnson passed away at Tucson on July 29, 1943.

The said sections mentioned of our Code of 1928 were amended by Chapter 36, Laws of 1937, and later repealed and superseded by an act known as "The Benefit Insurance Corporation Law of 1943," as now set forth in Chapter 95, Session Laws 1943.

The complaint alleges that in 1938 the defendant assumed all assets and liabilities of the United Mutual Insurance Company and on September 17, 1938, issued an assumption rider covering the policy of the deceased, containing a certain paragraph reading as follows:

"The retention of this Rider or payment by or in behalf of the insured of the October 1, 1938 stipulated premium or any other stipulated premium hereon shall constitute the acceptance hereof by the insured."

The insured, Harriet Johnson, did nothing about the rider but continued to make her monthly payments as above stated, but made the payments to this defendant. Upon the death of insured proof of loss was duly submitted demanding the payment of the $ 1,000 due under the certificate originally issued. The defendant in turn advised the beneficiary that the sum due was only $ 165.00. Suit to collect the full amount was commenced on November 18, 1943. Service was made by the sheriff of Maricopa County, the county in which the capitol of our state is located, on the Arizona Corporation Commission, on November 24, 1943. On December 3, 1943, the sheriff made his return of service as follows

"I hereby certify that I received the within Summons Nov. 24, 1943, and personally served the same on the within named Postal Benefit Insurance Company, a corporation, being the defendants named in said summons, by leaving with Amos A. Betts, in person, Chairman of the Arizona Corporation Commission, Phoenix, Arizona, at -- M. Nov. 24, 1943, in the County of Maricopa, two copies of said Summons, to which was attached a true copy of the complaint mentioned in said Summons."

The following two letters were transmitted in regard to this matter:

"Postal Benefit Insurance Company

Incorporated under the laws of Arizona and supervised by the Insurance Department of Arizona.

"Second Floor, First National Bank Bldg., Phoenix, Arizona.

"December 1, 1943

"Mr. Harry O. Juliani

"315 Valley Bank Building

"Tucson, Arizona

"Re: Harriet Johnson, Deceased

"Dear Sir:

"Your letter to the Company, together with letter from the Valley National Bank returning the check which we tendered in payment of the above Death claim, have come to the writer's attention.

"The position of the Company has been thoroughly explained to you in a letter from Mr. Hughes of the Company under date of Oct. 23. It appears that you apparently have not figured the benefits in accordance with all of the provisions of both the policy and the rider attached.

"The writer expects to be in Tucson within the next two weeks and will be glad to discuss this matter with you.

"Yours very truly,

"(Signed)

"Arnold D. Krieger

"A. D. Krieger

Claim Superintendent

Postal Benefit Insurance Company."

"December 3, 1943

"Mr. Arnold D. Krieger

"Postal Benefit Insurance Co.

"P. O. Box 4095

"Phoenix, Arizona

"Re: Harriet Johnson, deceased.

"Dear Sir:

"This is in reply to your letter of December first regarding the above entitled matter.

"You should know by this time that I have all the files of suit against your company for the collection of the insurance. The matter is now in court and is no longer in the talking stages. Of course, you can always pay without trial if you wish.

"Mr. Hughes' letters were very unsatisfactory, and consequently we had nothing to do but to resort to court action.

"Very sincerely yours,

"Harry O. Juliani."

On January 24, 1944, default was taken against defendant and the trial court took the matter of granting judgment under advisement until March 22, 1944, when judgment was entered against the defendant for $ 1,000 and costs. From that date until June 22, 1944, nothing appears on the record. On June 22, 1944, defendant filed a motion supported by affidavits to vacate and set aside the judgment, "upon the ground and for the reason that the court was wholly without jurisdiction over the defendant so as to authorize or entitle the court to render said judgment, or any judgment against the defendant." The defendant also has filed a motion to set aside default, vacate judgment and permit the defendant to answer and submitted defendant's answer. The motion last mentioned alleges that

"* * * its failure to answer herein was the result of mistake, inadvertence, surprise, or excusable neglect, as shown by the affidavits of Amos A. Betts and H. J. Hughes filed herein as Exhibits 'A' and 'B' to the motion heretofore made herein to vacate and set aside said judgment.

"Defendant further alleges, in support of said motion, that it has a good and meritorious defense to the action filed by plaintiff herein, as is shown by the affidavit of the said H. J. Hughes, and by the verified answer filed herewith, which defendant proposes to file herein in the event said default is set aside and said judgment vacated, and the defendant permitted to answer herein."

The two motions made by the defendant were on August 9, 1944, denied by the trial court.

From the judgment entered herein by the trial court in favor of plaintiff and from the order by the trial court made and entered on August 9, 1944, denying the motion of defendant to vacate and set aside such judgment and from the order of the above named court made and entered on August 9, 1944, denying motion of defendant to set aside default entered in said cause, vacate said judgment and permit defendant to answer, the defendant on September 5, 1944 gave its notice of appeal to this court.

Defendant assigns as error made by the trial court the following:

"The court erred in denying appellant's motion to vacate and set aside the judgment rendered against appellant, for the reason that no summons or process of any kind has been served upon appellant, and the court was, therefore, wholly without jurisdiction over appellant, and hence had no power or authority to render judgment against appellant, and the judgment rendered was void.

"The court erred in denying appellant's motion to set aside the default, vacate the judgment and permit appellant to answer, for the following reasons:

"(a) It appeared from the uncontroverted affidavits filed in support of said motion that appellant's failure to answer was due entirely to failure to receive any notice of the pendency of the suit and the service of the summons and was, therefore, the result of mistake, inadvertence, surprise or excusable neglect.

"(b) It appeared from the verified answer filed with said motion that appellant had a good and meritorious defense to the action.

"(c) It appeared from the evidence introduced by appellee, at the time the cause was tried, that appellee was not legally entitled to the judgment rendered."

It is the claim of the defendant that "where a statute provides that service of process may be made upon a corporation by serving a designated state official and further requires such official to notify such corporation of such service in a specified manner, the service is not complete until the state official served had notified the corporation sued."

Section 61-1004, A.C.A.1939, provides:

"(b) Any corporation operating under the Benefit Corporation Law of 1939 (1937) shall be given a certificate of authority upon * * *, and, 2. appointing, in writing filed with the commission, each member of the commission its attorney upon whom all lawful processes in any action or proceeding against the corporation may be served."

Section 61-1005, A.C.A.1939, provides:

"Service of summons -- Notification. -- Service of summons in any civil action upon a member of the commission shall be deemed personal service upon the company within the county where the action is brought. Immediately upon service of any process, the corporation commission shall notify the corporation by registered mail of such service."

The following cases are submitted to us as supporting defendant's views: Wuchter v. Pizzutti, 276 U.S. 13, 48 S.Ct. 259, 262, 72 L.Ed. 446, 57 A.L.R. 1230.

Under the law of New Jersey provision was made for the registering and licensing of automobiles owned by nonresidents who used the highways of that state. They are required to agree that original process against the owner made by leaving it at the office of the Secretary of State shall have the same effect as if served on the owner within the state. The statute provides that the commissioner of motor vehicles shall notify the owner of such motor vehicle by letter directed to him at the post office stated in his application for registration and license. The holding of the case is that in such a case against a nonresident for injury by the use of a motor vehicle on the highway the law must...