Shearer v. The Farmers Life Insurance Company

• Court: Kansas Supreme Court
• Writing for the Court: MASON, J.:
• Citation: Shearer v. The Farmers Life Insurance Company, 189 P. 648, 106 Kan. 574 (Kan. 1920)
• Decision Date: 10 April 1920
• Docket Number: 22,427
• Parties: FRANK SHEARER, Appellee, v. THE FARMERS LIFE INSURANCE COMPANY, Appellant

189 P. 648

106 Kan. 574

FRANK SHEARER, Appellee, v. THE FARMERS LIFE INSURANCE COMPANY, Appellant

No. 22,427

Supreme Court of Kansas

April 10, 1920

Decided January, 1920.

Appeal from Wyandotte district court, division No. 1; EDWARD L FISCHER, judge.

Judgment reversed and cause remanded.

SYLLABUS

SYLLABUS BY THE COURT.

1. FOREIGN INSURANCE COMPANY--Jurisdiction--Conditions Under Which Service May Be Made on Superintendent of Insurance. Inasmuch as the statute provides that it is only in the county in which the plaintiff resides, or in which the cause of action arose, that a suit against a foreign corporation may be begun in this state by the service of summons on the superintendent of insurance, where neither of such conditions exists service made in that manner is ineffective.

2. SAME--Contract for Services--Place "Where Cause of Action Arose." Where a written contract to pay an agreed compensation for certain services, a part of which are to be performed in Kansas, is executed in another state between a resident thereof and a corporation of a third state, a cause of action against the corporation, based upon its failure to pay for the plaintiff's services according to the agreement, cannot be regarded as having arisen in a county of this state by virtue of the fact that a part of the services were to be performed therein.

3. SAME--No General Appearance Effected. A general appearance is not effected by the insertion, in a motion to set aside the service of summons, of allegations concerning some of the facts on which the plaintiff's claim is founded, which are made because of their bearing upon the validity of the service, and which are material to that question.

4. SAME--Plea in Abatement--Special Appearance--No Submission to Court's Jurisdiction. Where a defendant upon a special appearance objects to the service, he does not lose the right to have the overruling of his objection reviewed on appeal by afterward filing a plea in abatement in which jurisdictional and nonjurisdictional matters are united, or by contesting the plaintiff's claim on its merits.

5. SAME--Allegations of Answer--No General Appearance. A defendant who has properly preserved for review the question of the validity of the service is not to be deemed to have waived the point, by seeking affirmative relief, in consequence of inserting in his answer a prayer that he be allowed to go hence without day, with such relief as the facts may entitle him to, and that he recover his costs, although the allegations of the answer might support a money judgment in his behalf, where the pleading as a whole discloses no purpose to ask such a recovery.

6. SAME--Motion to Quash Summons--Reviewable on Appeal. The overruling of a motion to set aside the service of summons does not require to be submitted to the reexamination of the trial court in a motion for a new trial in order to be reviewable on appeal.

A. J. Herrod, and H. S. Roberts, both of Kansas City, W. F. Zumbrunn, of Kansas City, Mo., and H. A. Hicks, of Denver, Colo., for the appellant.

William G. Holt, James K. Cubbison, Amos Townsend, and J. Herbert Smith, all of Kansas City, Mo., for the appellee.

OPINION

MASON, J.:

On June 20, 1918, Frank Shearer brought an action in the district court of Wyandotte county against the Farmers Life Insurance Company, a Colorado corporation, for a balance of $ 2,500 due under a written contract on account of his services in assisting it to acquire the stock of the Anchor Life Insurance Company, of Kansas. He recovered judgment, and the defendant appeals.

1. The summons was served on the state superintendent of insurance, and the defendant, by a motion to quash, made upon a special appearance limited to the purpose thereof, objected to the jurisdiction of the court on the ground that no proper service of summons had been made upon it, and now complains of the adverse ruling thereon. The motion, which was verified by affidavit, contained allegations to this effect:

The defendant was licensed by the insurance department in September, 1915, to do business in Kansas, but the license was canceled February 1, 1918. Before that time the defendant canceled its agency contracts, withdrew from the state, and revoked the authority it had given for process against it to be served on the insurance superintendent. Thereafter it did no business here beyond the collection of premiums upon policies previously written. The contract sued upon was executed in Missouri, of which state the plaintiff was then and at all times thereafter a resident.

An affidavit of the insurance superintendent, filed by the plaintiff, set out these facts:

In December, 1914, the defendant reinsured all policies theretofore issued by the Anchor Life Insurance Company, a Kansas Corporation. After that time and until March 1, 1918, it did all necessary business with reference thereto and wrote policies in its own name in this state. Its license to do business here expired February 28, 1918, and no application for a renewal had been made, pending investigation as to its solvency, but the superintendent agreed that it might issue policies on applications then pending. Thereafter it collected premiums and did business in Kansas with respect to policies already issued, but wrote no new ones except upon applications received prior to March 1, 1918.

The consent given by a foreign insurance corporation, as a condition of its being allowed to do business in this state, that actions against it may be begun by the service of process on the insurance superintendent, is in terms made "irrevocable." (Gen. Stat. 1915, § 5213.) Nevertheless, after the corporation has withdrawn or been expelled from the state and ceased to do business here it is not subject to suit in that manner, except under special circumstances, as for instance where the action is based upon a policy held by a resident of Kansas, written while the company was still transacting business here. (Life Association v. Boyer, 62 Kan. 31, 61 P. 387; Hunter v. Mut. Reserve Life Ins. Co., 218 U.S. 573, 54 L.Ed. 1155, 31 S.Ct. 127. See, also, 12 R. C. L. 107-114; 21 R. C. L. 1341-1346.) Whether or not under the showing here made the defendant should be deemed to have withdrawn from the state and ceased to do business there in such sense as to make effective as against the plaintiff its attempted revocation of the insurance superintendent's authority to receive service need not be determined, because of considerations which will be hereinafter stated.

It has been said that statutes providing for the service of summons upon a foreign corporation by the delivery of a copy to a public officer are intended for the benefit of residents of the state and are not available to nonresidents (12 R. C. L. 113; 21 R. C. L. 1345), and also that in order for effective service to be had in such manner the cause of action must have arisen in the state. (Simon v. Southern Railway, 236 U.S. 115, 59 L.Ed. 492, 35 S.Ct. 255; 12 R. C. L. 115; 21 R. C. L. 1345. To the contrary see 21

R. C L. 1345-1346.) The defendant challenges the power of the legislature to authorize the kind of service here relied upon under the conditions shown to exist. The question so raised need not be entered upon, unless it is first determined that the legislature has undertaken to do so. The sufficiency of the service must first be tested according to the terms of our own statute. It provides that an insurance company as a condition precedent to obtaining authority to do business in the state "shall file in the insurance department its written consent, irrevocable, that actions may be commenced against such company in the proper court of any county in this state in which the cause of action shall arise or in which the plaintiff may reside by the service of process on the superintendent of insurance"; and that "actions against any such insurance company may be brought in any county where the cause of action arose or in which the plaintiff may reside." (Gen. Stat. 1915, § 5213.) Substantially the same language is used in other similar acts. (Gen. Stat. 1915, §§ 2137, 5219.) Manifestly, therefore, in order for a plaintiff to avail himself of this statute one of two conditions must exist; either he must be a resident of the state and of the county where the action is brought, or the cause of action must have arisen in that county. Here the plaintiff was a resident of Missouri, and although the action in its nature was transitory and not local, he could bring it only in...