Union Guaranty & Trust Co. v. Craddock

• Decision Date: 17 November 1894
• Citation: 28 S.W. 424,59 Ark. 593
• Parties: UNION GUARANTY & TRUST CO. v. CRADDOCK
• Court: Arkansas Supreme Court

28 S.W. 424

59 Ark. 593

UNION GUARANTY & TRUST CO. v. CRADDOCK

Supreme Court of Arkansas

November 17, 1894

Appeal from Sebastian Circuit Court, Fort Smith District, EDGAR E BRYANT, Judge.

STATEMENT BY THE COURT.

The St Paul German Insurance Company, being a foreign corporation and doing business under the laws of Minnesota, with its home office or domicil at the city of St. Paul, in that State desiring to transact business in this State, fully complied with the statutes in respect to the appointment of an agent and other things required in the laws regulating insurance in this State, and filed its bond, as required by the provisions of the act approved March 6, 1891, and previous acts regulating the same, with its co-defendant, the Union Guaranty & Trust Company, a domestic corporation, as one of its sureties, and thereby qualified itself to transact business in the State, for one year beginning June 4, 1891 and ending June 4, 1892.

The defendant insurance company then appointed Messrs. Adams & Boyle, of Little Rock, as its general agents in the State, Mr. Sam B. Adams of that firm having been the agent designated as the person upon whom service of process should be had to give jurisdiction of the person of the company in the courts of the State. Messrs. Adams & Boyle then appointed, in the name of the company, Messrs. Boyd & Shelby as local agents at Fort Smith, who, during the year, made a contract to insure the property of appellee, a resident and citizen of the Indian Territory, where also the property was and continued to be until destroyed by fire. The policy was actually executed, and the premium paid, in the city of Fort Smith, this State.

On the 14th day of April, 1892, the insurance company became insolvent, made an assignment of its effects for the benefit of its creditors to J. F. Frazen of St. Paul, who immediately discharged its general agents, Adams & Boyle, in Arkansas, and directed them to transact no further business for the company, but to act for the assignee in matters necessary to the winding up of the business. Adams & Boyle immediately revoked the agency of Boyd & Shelby, giving them authority in their own name to arrange with policy holders as to cancellations and transfers to other companies, they (Adams & Boyle) assuming to pay the necessary expenses of the same for the accommodation and convenience of said policy holders. The proof tended to show that the issuance of insurance policies and cancellation of the same is part of the ordinary business of an insurance company.

The appellee, Craddock, claiming to have suffered a loss of his property insured in the defendant insurance company in the year it was authorized to do business in this State, as aforesaid, instituted this action against said insurance company with the defendant trust company, one of the sureties on its bond, in the Sebastian circuit court, Fort Smith district, on the 3d day of June, 1892, and summons was issued and served, on the same or the next day, on Boyd, Shelby & Hall at Fort Smith, as agents of the insurance company, and on the sixth day of June, 1892, summons was served on L. B. Leigh at Little Rock, Pulaski county, as the president of the trust company.

The defendant insurance company made no appearance, but the appellant trust company appeared specially by leave of the court to file its motion to quash the summons and set aside the service of same, which is as follows: "Now comes the defendant, the Union Guaranty & Trust Company, and by permission of the court, previously had and obtained, to appear specially and file this motion to quash the summons herein and for no other purpose, and moves the court to quash and set aside service of summons herein for the following reasons: First. The St. Paul German Insurance Company is a foreign corporation, and the plaintiff is a non-resident of Arkansas, and the alleged loss occurred in the Indian Territory. That heretofore, to-wit, on the 14th day of April, 1892, said insurance company, at St. Paul, Minnesota, made a general assignment to J. F. Frazen of said city, and on that day the authority of all its agents in this State was revoked, and especially was the agency of Boyd & Shelby, their local agents at Fort Smith, revoked on that day. Second. That the pretended service in this case on the St. Paul German Insurance Company was had on the said Boyd & Shelby on the 4th of June, 1892, at Fort Smith, Arkansas, and the pretended service on this defendant was made at Little Rock, in Pulaski county, Arkansas, on the 6th day of June, 1892, long after their respective agencies had been revoked. Wherefore the defendant prays the court to vacate and annul and set aside the service of the summons herein as to this defendant."

This motion was heard on evidence, and overruled by the court, and exceptions thereto were duly saved.

After the motion to quash was overruled, the defendant trust company filed its separate answer, which is as follows, to-wit:

1. "And now on this day comes the defendant, the Union Guaranty & Trust Company, and without entering its appearance herein, says, by way of abatement of the writ in this behalf, that neither Milton P. Boyd, Edwin Shelby or Chas. Hall were, on the 3d day of June, 1892, nor have they, or either of them, been, since that day, the agents of the said St. Paul German Insurance Company at any place in the State of Arkansas, or elsewhere. That the only agents of the St. Paul German Insurance Company, upon whom service could be lawfully had in this State on the 3d of June, 1892, or since that time, were W. S. Dunlop and Samuel B. Adams, both of Little Rock, in Pulaski county, Arkansas, both of whom were on the 13th day of September, 1889, by written stipulation filed by the said St. Paul German Insurance Company in the office of the Auditor of this State, designated, as required by law, as agents for said company upon whom any legal process might be served, and wherein it is also provided that, in case the said St. Paul German Insurance Company should cease to do business in this State, or to maintain the agent therein designated, that process might in that event be served thereafter on the Auditor of the said State of Arkansas, in any action against said company upon any policy or liability issued or contracted during the time said company transacted business in said State of Arkansas, which service so made should have the same effect as if personally served on said company within the State of Arkansas, a copy of which said written stipulation, duly certified, is filed herewith, marked exhibit "A," and made a part of this answer. That the said St. Paul German Insurance Company was not, on the 3d day of June, 1892, engaged in any business in this State, and has not been since the writ in this case against this defendant, the Union Guaranty & Trust Company, was served on the president of this company at Little Rock, in Pulaski county, Arkansas, and no service was ever made either upon Samuel B. Adams, or the Auditor of this State, as agent of said St. Paul German Insurance Company, in Sebastian county, Arkansas, or elsewhere, nor has any service ever been made upon any officer of said St. Paul German Insurance Company anywhere. Nor has the said St. Paul German Insurance Company pleaded or entered its appearance to this suit. And for an answer to the merits of both counts or paragraphs of plaintiff's complaint, this defendant says:

2. That, in pursuance of the act of the general assembly of the State of Arkansas, entitled "An act requiring insurance companies to execute a bond before doing business in this State, and to facilitate the collection of claims against such companies," approved March 6th, 1891, and not otherwise, or for any other object or purpose, it entered into bond unto the State of Arkansas, in the sum of $ 20,000, as surety for the said St. Paul German Insurance Company, conditioned that the said insurance company should promptly pay all claims arising or accruing to any person or persons during the period of one year ending June 4, 1892, whenever the same should become due, a copy of which said bond is attached to plaintiff's complaint, marked exhibit "A." That this defendant alleges that while the policy of insurance sued on herein was written in the State of Arkansas, the plaintiff was not then and is not now a resident or citizen of the State of Arkansas, and it was written to cover loss on property not situated or being in the State of Arkansas, either at the time of the issuance of the policy or at any time thereafter, or at the time of the alleged loss, and therefore this defendant denies that it is liable for any loss that may be due from said insurance company to the plaintiff."

To the second paragraph of this answer a demurrer in short upon the record was interposed by the plaintiff, and the same was sustained by the court, and the defendant trust company excepted, and declined to plead over. And, as the record states, "thereupon came the aforesaid parties by their respective attorneys, and by consent a jury was waived, and the cause submitted to the court sitting as a jury. And the court, after hearing the evidence and argument of counsel, doth find that Shelby & Boyd were agents of the defendant, St. Paul German Insurance Company, at the time the service herein was had, capable of receiving service for said defendant insurance company which would be binding upon it."

The court, after finding of facts as to the liability of defendant on the policy of insurance and the bond, further finds "that the St. Paul German Insurance Company has been duly summoned to answer herein more than ten days before the first day of the term of court, and has wholly failed to appear, answer or demur, and has made default." On said...