Woodward v. Mut. Reserve Life Ins. Co.

• Decision Date: 31 May 1904
• Citation: 71 N.E. 10,178 N.Y. 485
• Parties: WOODWARD v. MUTUAL RESERVE LIFE INS. CO.
• Court: New York Court of Appeals Court of Appeals

178 N.Y. 485

71 N.E. 10

WOODWARD

v.MUTUAL RESERVE LIFE INS. CO.

Court of Appeals of New York.

May 31, 1904.

Appeal from Supreme Court, Appellate Division, First Department.

Action by George W. Woodward against Mutual Reserve Life Insurance Company. From a judgment of the Appellate Division (82 N. Y. Supp. 908) entered in favor of defendant on the submission of controversy, plaintiff appeals. Reversed.

O'Brien, J., dissenting.

Richard H. Mitchell and Rollin M. Morgan, for appellant.

Frank R. Lawrence, George Burnham, Jr., and Gordon T. Hughes, for respondent.

PARKER, C. J.

This cause was submitted to the Appellate Division on an agreed statement Civ. Proc. Plaintiff, a resident of North Civ. Proc. Plaintiff, a resident of Norht Carolina, claims a personal Judgment against defendant, an insurance corporation of this state, for a sum exceeding $300. Plaintiff claims under a judgment entered by a court of general jurisdiction of North Carolina August 20, 1900. The federal Constitution provides that ‘full faith and cerdit shall be given in each state to the public acts, records and judicial proceedings of every other state; and the Congress may, by general laws, prescribe the manner in which such acts, records and proceedings shall be proved, and the effect thereof’ (Const. U. S. art. 4, § 1); and Congress has prescribed that they shall have the same effect in every court within the United States as they have by law or usage in the courts of the state in which they originate. (Rev. St. U. S. p. 170, § 905 [U. S. Comp. St. 1901, p. 177]). It is well settled by our decisions that, although a judgment of a court of general jurisdiction of a sister state is entitled to the benefit of the presumption of jurisdiction which exists in favor of judgments of our own courts, yet want of jurisdiction may be shown by extrinsic evidence, and even a recital in the judgment record that defendant was served, or appeared by attorney, or of any other jurisdictional fact, is not conclusive, and may be contradicted by extrinsic evidence. Ferguson v. Crawford, 70 N. Y. 253, 257, 26, am. Rep. 589; Hunt v. Hunt, 72 N. Y. 217, 28 Am. Rep. 120. Defendant attacks the North Carolina judgment on the ground that jurisdiction of defendant was not acquired by service of process upon it. The action was for breach of a contract of insurance made between plaintiff and defendant while the latter was lawfully engaged in the business of insurance in that state. Defendant, as required by the statutes of the state, had appointed an attorney upon whom process could be served. After defendant had been in business in the state a number of years, such legislation was passed regulating the conduct of insurance corporations as to cause defendant to withdraw from the state. It discontinued its agencies, and attempted to revoke its designation of the Insurance Commissioner of the State as the person upon whom process could be served. In the North Carolina action the process was served upon the Insurance Commissioner after this attempted revocation, and we are to inquire whether that service gave that court jurisdiction of defendant.

Defendant commenced doing business in North Carolina under a statute passed in 1883. One section of that statute provides that the Secretary of State may issue licenses to do insurance business, but that the applicant shall file a certificate appointing a general agent and stipulating ‘that so long as there may be any liability on the part of the applicant, under any contract entered into in pursuance of any law concerning insurance, any legal process affecting the applicant may be served in his absence on such general agent, or on the Secretary of State, and when so served shall have the same effect as if served personally on such applicant in this state.’ Now, the state of North Carolina had the right to exclude defendant fron doing business in that state. It had the right to permit it, as it did, to transact business with its citizens, and to fix the terms and conditions upon which it should be done. This court, speaking upon that subject, in People v. Fire Association of Philadelphia, 92 N. Y. 311, 327, 44 Am. Rep. 380, says: ‘Foreign corporations, artificial beings, the product of a law not our own, have no constitutional right to pass their own borders and come into ours. The federal Constitution has neither guarded nor secured any such right. We may exclude absolutely, and in that power is involved the right to admit upon such conditions as we please. * * * While they stand at the door bargaining for the right to come within, they may decline to come, but cannot question our conditions if they do.’

As we have seen, the Legislature of North Carolina provided that, as a condition of doing business in the state, an insurance company must stipulate that any legal process affecting the applicant might be served upon its general agent or upon the Secretary of State, with the same effect as if served personally; and this provision was not limited to the period during which the company should continue to do business within the state, but was to be effectual so long as there should remain ‘any liability on the part of the applicant under any contract entered into in pursuance of any law concerning insurance.’ When defendant commenced issuing policies in that state after having complied with the conditions of the statute, its obligations toward its policy holders in that regard were preciselythe same as if its promises to the state had been incorporated in the policies; and thereafter, whether the company continued to do business in the state or not, policy holders could commence actions by service of process upon the Secretary of State. Process was not served on the Secretary of State, however, owing to an amendment of the statute, and action taken thereunder by defendant; and it is argued that the action of the Legislature was without authority to affect the contract existing between plaintiff and defendant, which, as we have seen, when read in connection with the statute and defendant's action thereunder, provided that an action could be brought on the contract against defendant by serving the Secretary of State. In March, 1899, a new department of the state government of North...