Relief Ass'n of Union Works, Carnegie Steel Co. v. Equitable Life Assur. Soc. of United States
Decision Date | 10 June 1942 |
Docket Number | 28966. |
Citation | 140 Ohio St. 68,42 N.E.2d 653 |
Parties | RELIEF ASSN. OF UNION WORKS, CARNEGIE STEEL CO. v. EQUITABLE LIFE ASSUR. SOC. OF UNITED STATES. |
Court | Ohio Supreme Court |
Syllabus by the Court.
1. Comity and the necessity for uniformity of decision require that the courts of one state shall not exercise visitorial powers over a corporation created by or domiciled in another state.
2. Courts of Ohio are without jurisdiction to entertain an action against a foreign corporation where the result of granting the relief asked would be to interfere with the management of such corporation or the exercise by the board of directors of such corporation of a discretion vested in them by the laws of the state of creation or domicile of the corporation.
Appeal from Court of Appeals, Mahoning County.
Appellee (plaintiff below) is an unincorporated association of the Union Works, Carnegie Steel Company of Youngstown, Ohio.
Appellant (defendant below) is a mutual life insurance company incorporated under the laws of New York.
The policy, which was the subject of the action, is admittedly a New York contract.
In its amended petition, appellee alleged that on the 14th day of May, 1926, appellant issued to appellee a certain policy of group insurance which remained in force until July 1 1935, and that the policy provided in part as follows:
Appellee alleged that appellant arbitrarily and without justification computed the divisible surplus accruing on said policy on the basis of the term and life of the policy instead of annually that by reason thereof appellant was indebted to appellee in the sum of $41,297.23 with interest. Appellee then prayed for an accounting, judgment and that appellant be required to answer the interrogatories attached to the amended petition.
Appellant by answer set up various sections of the insurance law of New York and alleged compliance therewith.
Trial was had, resulting in a judgment for appellee in the amount of $22,890. A motion for new trial was overruled. Among the grounds assigned for new trial was: '(1) The court has no jurisdiction of the subject-matter of this action.'
The trial court's judgment was affirmed by the Court of Appeals.
The cause is before this court following the allowance of a motion to certify the record.
Further facts appear in the opinion.
Garfield Daoust, Baldwin & Vrooman, of Cleveland, Alexander & Green, of New York City, Morgan & Powers, of Youngstown, Francis J. Amer, of Cleveland, and James D. Ewing, of New York City, for appellant.
W. P. Barnum and J. N. Higley, Jr., both of Youngstown, for appellee.
The policy sued upon is a New York contract. Appellant is a mutual life insurance company domiciled in New York and appellee was a member of such mutual society.
The question at issue is whether under the policy and Section 83 of the New York Insurance Law appellant apportioned what is called the 'divisible surplus' equitably during the term or terms of appellee's policy.
The first question for us to decide is whether the issues in this case require the exercise of visitorial powers over a foreign corporation. In other words, is the judgment in this case an interference with the management of appellant's internal affairs or an attempted control of the judgment or discretion of appellant's officers? See Hartford Life Ins. Co. v. Douds, 103 Ohio St. 398, 136 N.E. 274, affirmed Hartford Life Ins. Co. v. Douds, 261 U.S. 476, 43 S.Ct. 409, 67 L.Ed. 754.
In the case of Hartford Life Ins. Co. v. Douds, supra, this court and the Supreme Court of the United States had before them a cause in which an accounting was had and money judgment obtained for all sums of money wrongfully obtained under color of an insurance contract. The insurance company claimed that exclusive jurisdiction over the subject-matter of the action was with the courts of the company's domicile and that the exercise of jurisdiction by the Ohio courts violated the company's rights under the Fourteenth Amendment to the Constitution of the United States. In passing upon this question, Judge Robinson said, at page 424 of 103 Ohio St., at page 280 of 136 N.E.:
Both this court and the Supreme Court of the United States treated the Douds action as one merely to recover excess payments wrongfully collected.
In the instant case, there is no claim that any money was wrongfully obtained. Appellee, as plaintiff below, based its claim on the following provision of the policy:
After setting up this provision of the policy, appellee alleged in its amended petition: 'but that defendant company, instead of ascertaining annually the amount of divisible surplus, if any, accruing upon said policy, has arbitrarily and without justification computed the divisible surplus accruing upon said policy upon the basis of the term and life of the policy, to wit: from the date of its issuance until July 1, 1935.'
It was the claim of the appellee that the term of the policy was one year but that the appellant had treated the policy as a nine-year term.
Appellee alleged that appellant was indebted to it in the sum of $41,297.23 and closed its amended petition with the following prayer:
'Wherefore, plaintiff prays that an accounting be had as between this plaintiff and said defendant upon the aforesaid cause of action; that plaintiff recover from defendant such sums of money as shall be found due plaintiff by reason of said accounting; that defendant be required to answer, under oath, the interrogatories hereto attached and made a part of this amended petition; and for such other and further equitable relief as in the premises plaintiff may be entitled to.'
At the outset of the trial, counsel for appellee made the following statement to the court:
'If your Honor please, in the case called for trial, the Relief Association of The Union Works of the Carnegie Steel Company of Youngstown vs. The Equitable Assurrance Society of the United States, cause 96953, counsel for both plaintiff and defendant are somewhat in doubt as to whether or not the cause of action is in the nature of an action at law or an action in equity, but in either event counsel for both plaintiff and defendant now stipulate the cause may be tried to the court without the intervention of a jury.'
Manifestly, the instant case differs radically from the Douds case, supra. No assessments are involved here. There is no claim of money wrongfully obtained. There is, however, the claim of inequitable treatment by the appellant in the allocation of the 'divisible surplus.' On the face of the amended petition, the instant case clearly involves the internal management of appellant.
If there were any doubt left from the reading of the amended petition itself, a glance at the 24 interrogatories attached to appellee's amended petition should remove it.
These interrogatories sought the formula or method of computation used by appellant in computing the proportion of divisible surplus allocated during the years appellee's policy was in effect.
The answers to these interrogatories were offered in evidence.
To maintain the issues on its part to be maintained, appellee (plaintiff below) called an actuarial assistant in the actuary's department of appellant, who happened to...
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