Southwestern Mut. Ben. Ass'n of Marshalltown v. Swenson

• Decision Date: 08 July 1892
• Citation: 30 P. 405,49 Kan. 449
• Parties: THE SOUTHWESTERN MUTUAL BENEFIT ASSOCIATION v. NANCY SWENSON
• Court: Kansas Supreme Court

30 P. 405

49 Kan. 449

THE SOUTHWESTERN MUTUAL BENEFIT ASSOCIATION v. NANCY SWENSON

Supreme Court of Kansas

July 8, 1892

Error from Butler District Court.

ACTION by Nancy Swenson against the Association, to recover on a benefit certificate. Judgment for plaintiff, at the March term, 1889. New trial denied. Defendant brings error.

Judgment affirmed.

Alfred McCaskey, H. C. Henderson, and Shinn & Yeager, for plaintiff in error:

1. The court had no jurisdiction over the plaintiff in error, and erred in overruling the motion to set aside the service of the summons. We think that § 68 of art. 6 of ch. 80 of the Compiled Laws is intended to apply only to such corporations as are regularly doing business in this state. It seems to have been the policy of our legislature to make special provisions for service on the various kinds of corporations under various circumstances, and it has specially provided how service may be had on life-insurance corporations authorized to do business within this state (Laws of 1885, ch. 131, § 139,) and we think, as the plaintiff in error had no office or officers within this state, and had not complied with the provisions of the statute last referred to, and had no agent soliciting or doing business for it within the state, that no service could properly be had upon it within this state; and certainly the evidence on the motion to set aside the service shows that under the decision of this court in Chambers v. Bridge Manufactory, 16 Kan. 270, V. Brown, upon whom the service was had in this case, was not a clerk, managing agent or officer upon whom a legal service could be made which would bind the plaintiff in error, and give the court jurisdiction to try the cause. See, also, U. P. Rly. Co. v. Pillsbury, 29 Kan 652.

It is a principle of the common law, that courts of one state or county have no jurisdiction over non-residents, or nonresident or foreign corporations. Clark v. Navigation Co., 1 Story, 531. The manner of service on foreign corporations must be confined strictly to the statutes of the state. Hubel v. Insurance Co., 33 Mich. 400; also, 30 id. 431. See, also, Sadler v. Life Insurance Co., 60 Miss. 251; Moore v. National Bank, 92 N.C. 590.

In Chambers v. Bridge Manufactory, 16 Kan. 270, we have the principle laid down which it seems to us will govern this case. The court there says: "Service of a summons on a corporation cannot be made on every person who may in some remote sense be styled a clerk of the corporation."

If it be claimed that the plaintiff in error has waived its right to question, at this time, the jurisdiction of the court below, by filing answer and contesting cause on its merits, we cite Bentz v. Eubanks, 32 Kan. 321, wherein, the same as in this case, a special appearance was made to the jurisdiction, by motion to set aside the service, the motion overruled, and leave given to answer, and trial had, and, on appeal, the court said: "In view of the special appearance to set aside the service, and the objections and exceptions taken to the ruling of the court, the subsequent proceedings did not cure the irregularities attending the issuance of the summons in the case." See, also, Brenner v. Egly, 23 Kan. 123. See, also, Kingkade v. Myers, 21 P. 557; Lyman v. Milton, 44 Cal. 635; Kent v. West, 50 id. 185; Bentz v. Eubanks, 32 Kan. 321.

2. The testimony in this case was positive and undisputed that there had been two assessments regularly made, Nos. 28 and 29, upon the death of two members of the association, upon which the insured was in default in the payment of one-half of assessment No. 28 and the whole of No. 29, and, by the terms of the policy and laws of the association, failure to pay said assessments in full, when due, relieved the association from all liability on the policy.

3. The third reason for a reversal of the case is found in the jury having ignored the instruction of the court as to the burden of the issues and the measure of damages. It is not necessary to inquire whether or not the instructions of the court were altogether accurate upon these points. It seems to be a well-established principle of law that the jury is bound by the law as laid down by the courts. Davis v. McCarthy, 40 Kan. 18; same case, 19 P. 356, where the court says: "This instruction and the explanation or illustration was given to the jury without objection. It thus became the law of the case, whether the instructions were correct or not, and it was the duty of the jury to obey it, and, under the evidence, uncontradicted, and this instruction, it was the manifest duty of the jury to have returned a verdict for the defendant." The propriety of such a rule is apparent.

E. N. Smith, and G. P. Aikman, for defendant in error:

The court had jurisdiction of the case for any one of these reasons: First. The service on state superintendent was good, as the company was doing business in violation of law. Second. The local secretary, V. Brown, was then the only agent in this county, and no general agent in the state, as record shows. Third. The general appearance and answer waived any objection to service.

V. Brown had authority to collect money for the company, and was "local secretary," as shown by the printed notices furnished by the company. He was surely the chief officer of such agency. See 69, Civil Procedure; also, § 70. So far as the evidence shows, he was managing agent of all business done here. Collins was the general agent for Kansas. The evidence shows that McCaskey was next in charge, and V. Brown next. He performed the same duties and was held out to the public as the local secretary. While Halbert denies that Brown was general agent, he does not deny that he was the chief officer in this county. Collins was the general agent for Kansas; he virtually appointed Brown, the company ratified his appointment and sent him the lists for collection, and signed "Vincent Brown, local secretary."

The claim of plaintiff in error that the policy was forfeited before death is not well founded, for the reasons that it was "increased to $ 2,000, July 9, 1887," and the evidence shows this was delivered to Collins, general agent, and not to Swenson. Collins, company agent, demanded $ 5 more before delivering the policy. The money was sent, and the money was accepted by Collins, the agent for Kansas and Iowa. The policy was delivered the last week in August, and Swenson died September 7; he could not be in default after he received the policy, and the claim that assessments Nos. 28 and 29 were not paid will not avail, for the reason that the $ 5 demanded by Collins, and paid before the delivery, was more than the amount of the assessments. It must be held that the company is bound by the acts of Collins. The court will observe that the $ 10 paid first and the $ 5 paid before delivery of policy was very much in excess of the legal demands. The company, through Collins, demanded and collected this money, held the policy till the last of August, and now complains because compelled to pay, and if any one is at fault it was the company and not Swenson.

The last objection in plaintiff's brief, that the evidence did not sustain the verdict, is answered by this statement: The court instructed the jury on measure of damage. The evidence shows the company was solvent; if solvent, then able to pay its obligations. The judgment is not in excess of the policy and interest.

The equity in this case is all with the defendant in error. The company came into Kansas, did business in violation of law, and with Collins as its general agent.

STRANG, C. All the Justices concurring.

OPINION

STRANG, C.:

Action on a benefit certificate issued by the defendant company to Charles Swenson, whereby the said company agreed to pay to Nancy Swenson, wife of the assured, 75 per cent. of one full assessment collected from all the members of the association. Summons was first issued and directed to the superintendent of insurance, and by him returned. A second summons was issued and served on V. Brown, a person who in the record is designated both as local collector and as local secretary. A motion was made to set aside the service, upon the grounds, first, that the service upon the superintendent of insurance was unavailing, because the company had not complied with the insurance law of Kansas in relation to non-resident companies, and was not eligible to do business in the state of Kansas at the time of the service, and was not soliciting any new business in the state at that time; and, second, that service of summons upon V. Brown was not binding upon the company because he was not an agent of the company, and held no such relation to the company as justified service upon him. Upon the hearing of this motion a large amount of testimony was introduced, but after hearing the evidence and arguments of counsel the motion was overruled. An answer and reply were then filed, and the case went to trial before the court and a jury. A verdict was returned for the plaintiff for $ 2,215.44, the full amount named in the certificate, with interest. Motion for new trial was overruled.

May 7 1887, a certificate for $ 1,000 was issued by the company to Swenson, the defendant in error being named as beneficiary therein. This certificate was afterward surrendered, and a new one issued in lieu of it for $ 2,000, under a provision in the by-laws of the company whereby a person holding a certificate may have it increased from $ 1,000 to $ 2,000. The company says that there are two methods of making such change: First, by a surrender of the existing certificate, and making a new application; second, by surrendering the existing certificate, and paying the fees and dues from the date of such certificate on the basis of a...