State ex rel. Phoenix Mut. Life Ins. Co. of Hartford, Conn. v. Harris

• Decision Date: 16 November 1938
• Docket Number: 35907
• Citation: 121 S.W.2d 141,343 Mo. 252
• Parties: State of Missouri at the relation of the Phoenix Mutual Life Insurance Company of Hartford, Connecticut, a Corporation, Petitioner, v. Brown Harris, Judge of the Circuit Court of Jackson County
• Court: Missouri Supreme Court

121 S.W.2d 141

343 Mo. 252

State of Missouri at the relation of the Phoenix Mutual Life Insurance Company of Hartford, Connecticut, a Corporation, Petitioner, v. Brown Harris, Judge of the Circuit Court of Jackson County

No. 35907

Supreme Court of Missouri

November 16, 1938

Provisional rule in prohibition quashed.

William C. Michaels, Charles M. Blackmar and Kenneth E Midgley for relator; Albert H. Yost, Benjamin L Holland and Michaels, Blackmar, Newkirk, Eager & Swanson of counsel.

(1) Neither the service in August on the Deputy Superintendent of Insurance nor the service in October on the Superintendent conferred jurisdiction in the circuit court over the person of relator. State ex rel. Am. Cent. Life Ins. Co. v Landwehr, 318 Mo. 181, 300 S.W. 294; State ex rel. Liberty Life Ins. Co. v. Masterson, 95 S.W.2d 864; Woelfe v. Conn. Mut. Life Ins. Co., 112 S.W.2d 865; Crabtree v. Aetna Life Ins. Co., 111 S.W.2d 103; 13 C. J. 239; So. Railroad Co. v. Huntsville Lbr. Co., 191 Ala. 333, 67 So. 695; Sec. 5894, R. S. 1929; Farmers Loan & Trust Co. v. Minnesota, 28 U.S. 204; Guerney v. Moore, 131 Mo. 650, 32 S.W. 1132; Harttman v. Owens, 293 Mo. 508, 240 S.W. 113; Keeley v. Indemnity Ins. Co., 7 S.W.2d 434; Schepman v. Mutual Benefit, 104 S.W.2d 777; Wilson & Co. v. Hartford Fire Ins. Co., 254 S.W. 266; Prange v. International Life Ins. Co., 46 S.W.2d 523, 329 Mo. 651. (2) The purported service on a local agent in charge of an office in Jackson County was invalid for lack of authority of such agent to accept service for relator, and conferred no jurisdiction in the circuit court over the person of relator. Art. 4, Chap. 5, R. S. 1929; Secs. 728, 5894, R. S. 1929; State ex rel. v. Grimm, 239 Mo. 135; Baile v. Equitable Fire Ins. Co., 68 Mo. 617; Mining & Milling Co. v. Fire Ins. Co., 267 Mo. 575; Thompson v. Natl. Life Ins. Co., 28 F.2d 877; State ex rel. Am. Cent. Life Ins. Co. v. Landwehr, 300 S.W. 294; State ex rel. Modern Woodmen v. Wilcox, 84 S.W.2d 678; Laws 1835, pp. 125-127, 450; Secs. 728, 734-738, R. S. 1929; Chap. 87, R. S. 1844-5; Sec. 22, R. S. 1845; Sec. 3489, R. S. 1879; Laws 1891, pp. 75-77; Secs. 4596-4600, 5894, R. S. 1929. (3) The clerk had no authority to issue either summons purportedly issued by him in October, hence for this additional reason both alleged services and returns thereof are void and conferred on the circuit court no jurisdiction over the person of relator. Sec. 756, R. S. 1929.

Charno & Drummond, John A. McGuire and Ira B. Burns for respondent.

(1) The service upon the officials of the Missouri Insurance Department was sufficient to confer jurisdiction over the person of relator. Sec. 5894, R. S. 1929; State ex rel. v. Landwehr, 318 Mo. 181, 300 S.W. 294; State ex rel. v. Grimm, 239 Mo. 135, 143 S.W. 483; Gold Issue Mining & Milling Co. v. Penn. Fire Ins. Co., 267 Mo. 524, 184 S.W. 999; State ex rel. v. State Board of Health, 334 Mo. 220, 65 S.W.2d 943; New England Life Ins. Co. v. Woodworth, 111 U.S. 138; 6 C. J. S. 1061. (2) Service on the local agent in charge of relator's office at Kansas City, Jackson County, Missouri, was valid under Section 728, Revised Statutes 1929. Sec. 728, R. S. 1929; Bailee v. Equitable Fire Ins. Co., 68 Mo. 617; Middough v. Railroad Co., 51 Mo. 520; Sec. 26, p. 294, chap. 37, Art. 1, Wagner's Statutes 1872; Sec. 3489, Wagner's Statutes 1879, p. 596; Sec. 4597, R. S. 1929; Tevis v. Foley, 30 S.W.2d 68; Fraternal Bankers of Am. v. Wire, 129 S.W. 765; State ex inf. Barrett v. Imhoff, 238 S.W. 122; Bishop v. Music Plating Works, 3 S.W.2d 256; 30 A. L. R. 255; Lober v. Kansas City, 74 S.W.2d 815; State ex inf. McKittrick v. Am. Colony Ins. Co., 80 S.W.2d 876. (3) The court had inherent power to issue summons in October on amended petition. Issuance thereof constituted abandonment of first summons and service. U.S. Blowpipe Co. v. Spencer, 33 S.E. 342; Pacific Mut. Life Ins. Co. v. Mansur, 118 S.W. 1193; Sec. 1, Art. VI, Mo. Const.; In re Richards, 63 S.W.2d 672. (4) Sec. 10, Art. II, Mo. Const.; Sec. 2, Art. IV, U.S. Const.; Sec. 1, Amend. 14, U.S. Const.

OPINION

Ellison, J.

Original writ of prohibition to Hon. Brown Harris, Judge of the Jackson County Circuit Court. The sole question involved is the validity of the service of summons in an action brought in respondent's court against the relator, The Phoenix Mutual Life Insurance Co., to recover on two insurance policies. If the service is invalid, respondent has no jurisdiction over the person of the relator-defendant. We issued our provisional rule because the amount involved is nearly $ 20,000, and the case turns on the construction of the service statutes of this State -- a question of great public interest.

The relator is a Connecticut life insurance corporation, duly licensed as such in the State of Missouri. It issued the two policies in Missouri on the life of Robert J. England of Kansas City, Missouri, said policies also providing that if the insured should become totally disabled through sickness or accident he would be paid $ 70.43 per month under one policy and $ 35.21 per month under the other. England became insane and thereby permanently incapacitated. His wife, Mary E. England, was appointed his guardian and curatrix. She assigned her causes of action under the two policies to Harry Bernblum, a resident of Connecticut, the State in which the relator is incorporated. Bernblum, as assignee, brought the aforesaid action thereon. During the oral argument here counsel for respondent virtually admitted the purpose of the assignment was to exclude any question of diversity of citizenship and prevent a removal of the case to the Federal Court. Resort to this device seems to be frequent lately. We have several such prohibition proceedings pending here.

Summons was issued and served on the Superintendent of the Insurance Department at the State Capitol, under Section 5894, Revised Statutes 1929 (Mo. Stat. Ann., p. 4495). The relator, appearing specially, moved to quash the summons and return on the ground that the two policies were not "outstanding in this State" within the requirement of that statute. The motion was overruled by respondent. Thereupon, on relator's application we issued our provisional rule in prohibition. Respondent's return and relator's motion for judgment on the pleadings raise only questions of law turning on the proper construction of said statute and others to be mentioned later.

Section 5894 appears in Article 10, Chapter 37, Revised Statutes 1929 (Mo. Stat. Ann., p. 4492), which contains general provisions applicable to all kinds of insurance companies, life, fire, accident, etc. It provides:

"Any insurance company not incorporated by or organized under the laws of this state, desiring to transact any business by any agent or agents in this state, shall first file with the superintendent of the insurance department a written instrument or power of attorney, duly signed and sealed, appointing and authorizing said superintendent to acknowledge or receive service of process issued from any court of record, justice of the peace, or other inferior court, and upon whom such process may be served for and in behalf of such company, in all proceedings that may be instituted against such company, in any court of this state or in any court of the United States in this state, and consenting that service of process upon said superintendent shall be taken and held to be as valid as if served upon the company, according to the laws of this or any other state. Service of process as aforesaid, issued by any such court, as aforesaid, upon the superintendent, shall be valid and binding, and be deemed personal service upon such company, so long as it shall have any policies or liabilities outstanding in this state, although such company may have withdrawn, been excluded from or ceased to do business in this state; . . . and if any such company shall fail, neglect or refuse to appoint and maintain, within the state, an attorney or agent, in the manner hereinbefore described, it shall forfeit the right to do or continue business in this state." (Italics ours.)

Relator contends that a claim under a policy must belong to a resident of this State to make the policy "outstanding in this state" within the meaning of the phrase italicized above. And since the plaintiff assignee, Bernblum, is not a resident of Missouri but lives in Connecticut, relator asserts the statute does not apply to his action. The respondent maintains the quoted words cover not only policy claims held by residents but also policies issued in Missouri, regardless of where the claimant lives. The two policies in suit were issued in this State and respondent therefore says the statute applies, notwithstanding Bernblum is a nonresident. The section has been construed in three cases decided by this court en banc: State ex rel. Pacific Mutual Life Ins. Co. v. Grimm (1912), 239 Mo. 135, 143 S.W. 483; The Gold Issue Mining & Milling Co. v. Pennsylvania Fire Ins. Co. (1916), 267 Mo. 524, 184 S.W. 999, affirmed in Penna. Fire Ins. Co. v. Gold Issue Mining Co. (1917), 243 U.S. 93, 61 L. Ed. 610, 37 S.Ct. 344; State ex rel. American Central Life Ins. Co. v. Landwehr (1927), 318 Mo. 181, 300 S.W. 294.

The majority opinions in the Pacific Mutual and Gold Issue cases both ruled that under Section 5894, supra, service of process on the Superintendent of the Insurance Department would be valid in all suits or proceedings brought in the State or Federal courts in this State against a licensed foreign insurance company, without regard to where the cause of action originated or the residence of the owner. There were dissenting opinions in both cases holding that the statute covers only suits on policies issued or liabilities incurred in this State. Th...