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Mutual Reserve Fund Life Assn. v. Phelps
190 U.S. 147
SCOTUS
1903
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Mr. Justice Brewer,

аfter making the foregoing statement, delivered the opinion of the court.

Many questions were elaborately discussed by counsel both оrally and in brief, but we are of the opinion that the decisions of two or three will dispose of the case. First, the service of ; summons on thе insurance commissioner, was sufficient to bring *157 the association into the state eourtjis party defendant. It was stipulated between the - parties t,hat the outstanding policies existing between the association and citizens of Kentucky were continued in force after the action ‍‌‌‌​​‌​‌‌‌​‌​‌​‌‌‌‌‌​​‌​​‌‌‌‌​‌‌​‌‌‌‌​​​‌‌​​‌​‌‌‍of the insurance commissioner on October 10, 1899, and that on said, policies the association had collected аnd was collecting, dues, premiums and assessments. It was, therefore, doiiig_ business within the State. Mutual Life Insurance Company v. Spratley, 172 U. S. 602. The plaintiff was a citizen of Kentucky, and the cause of action arose out of transactions had between the plaintiff and defendant while the latter was carrying on business in the State оf Kentucky under license from the State. Under those circumstances the authority of the insurance commissioner to receive summons in bеhalf of the association was sufficient. Such was the ruling of the Court of Appeals of Kentucky. Home Benefit Society of New York v. Muehl, 22 Ky. Law Rep. 1378; 59 S. W. Rep. 520. In that case the society while doing business in thе State issued the policy sued on, but in April, 1894, before the action was brought, ceased ,to do business and withdrew, all of its agents. Service on the commissioner was held good. The court, in its opinion, after referring to a statute of 1870 and the change made by section 631, under which this serviсe was made, said (p. 1379):

“ It is sufficient to say that the agency created by the act of 1893 is, in its terms, broader than that created by the act of 1870. The words of the later statute express no limitation. Whatever limitation shall be applied to it must be by implication. And when- we consider thе purpose of the act it becomes clear that it would be frustrated by the construction contended for. There is no need of the right tó .serve ‍‌‌‌​​‌​‌‌‌​‌​‌​‌‌‌‌‌​​‌​​‌‌‌‌​‌‌​‌‌‌‌​​​‌‌​​‌​‌‌‍process upon the insurance commissioner so long as the company has agents in the State, and we think the purposе of the' section was to provide a means of obtaining service of process upon foreign companies which no longеr had agents in the State upon whom process might be served in suits upon- contracts made in this State, whatever may be held as to suits upon сontracts entered - into elsewhere.” See also Germania Ins. Co. v. Ashby, 23 Ky. Law Rep. 1564.

*158 Such decision of tbe highest court of Kentucky-, construing one of its own statutes, if not сontrolling upon this court, is very persuasive, and it certainly is controlling unless it be held to be merely an interpretation of a contraсt created by the statute. As an original question, and independently of any' expression on the part of the Court of Appeals, we are of the opinion that sucb is the true construction. This-and other kindred statutes enacted in various States indicate the purpose of the State that foreign corporations engaging in business within its limits shall submit the controversies' growing out of that, business to its courts, and not compel а citizen having such a controversy to seek for the purpose of enforcing his claims the State in which the corporation has its home. Many of those statutes simply provided that the foreign corporation should name some person or persons upon whom service of process could- be made. The insufficiency of such provision is evident, for the death or removal of the agent from thе State leaves the corporation without any person upon whom process can be served. In order to remedy this defeсt some States, •Kentucky, among the number, have passed statutes, like the one before us, providing that the corporation shall cоnsent that service may be made upon a permanent official of the State, so that the death, removal or change of оfficer .will not put the corporation beyond the reach of the process of the courts. It would obviously thwart this purpose if this association, having made, as the testimony shows it had made, a multitude of contracts with citizens of Kentucky, should be enabled, by simply withdrawing the authority it hаd given .to the insurance commissioner, to compel all these parties to seek the courts of New York for the. enforcemеnt of their claims. It is true in this case the association did not voluntarily withdraw - from the State, but was in effect by the State prevented from engaging in any new business. Why this was done is not shown. It must be presumed to have'been for some good and sufficient reason, and it would be a harsh construction оf the statute that, because the State had been constrained to compel the as-. sociation to desist from engaging in any further businеss, it also deprived its citizens who had'dealt with the association of *159 the right to obtain relief in its courts. We conclude, therefore, that thе service of summons on the insurance commissioner was sufficient to bring the association into the state court, and there being nothing elsе to impeach the judgment it must be considered as valid.

Again, the proceeding for the appointment of a receiver was not a new and independent suit. It was not in the strictest sense of the term a creditor’s bill. It did not purport to be for the benefit of ‍‌‌‌​​‌​‌‌‌​‌​‌​‌‌‌‌‌​​‌​​‌‌‌‌​‌‌​‌‌‌‌​​​‌‌​​‌​‌‌‍all creditors, but simply a proceeding to enable the plaintiff in the judgment to obtain satisfaction thereof, satisfaction by execution at law having been shown .to be impossible by the return of nulla bona. It is what is known as a supplementary proceeding, one known to the jurisprudence of many States, аnd one whose validity in those States has been recognized by this court. Williams v. Hill, 19 How. 246; Atlantic & Pacific Railroad Company v. Hopkins, 94 U. S. 11; Ex parte Boyd, 105 U. S. 647; Street Railroad Company v. Hart, 114 U. S. 654. It is recognized in some cases in Kentucky. Caldwell v. Bank of Eminence, 18 Ky. Law Rep. 156; Caldwell v. Deposit Bank, 22 Ky. Law Rep. 684. This proceeding was treated by the state court as one merеly supplemental in its character. It was initiated by the filing of- an amended and supplementary'petition. It was a mere continuation of the action already passed into judgment, and in aid of the execution' of such judgment... As such it was not subject to removal to the Federal court, the time therefor prescribed by the statute having passed. 24 Stat. 554; Martin v. Baltimore & Ohio Railroad, 151 U. S. 673-684. Being a mere continuation of the action at law, and not rеmovable to the Federal court, the latter had no jurisdiction to enjoin the proceedings under it. It is'contended-that such a supplementary proceeding is not warranted by ‍‌‌‌​​‌​‌‌‌​‌​‌​‌‌‌‌‌​​‌​​‌‌‌‌​‌‌​‌‌‌‌​​​‌‌​​‌​‌‌‍the laws of Kentucky; that there is no.statute of that State justifying it. But it has been sanctioned by the judgment of thе court in which the -proceeding was had, and cannot be .treated by the Federal courts as unauthorized. Laing v. Rigney, 160 U. S. 531. See also Leadville Coal Co. v. McCreery, 141 U. S. 475, 478. If not warranted by the'law of thе State relief must be sought byre- *160 view in the appellate court of the State, and not by collateral attack in the Federal court.

For these reasons we think the decision of the Court ‍‌‌‌​​‌​‌‌‌​‌​‌​‌‌‌‌‌​​‌​​‌‌‌‌​‌‌​‌‌‌‌​​​‌‌​​‌​‌‌‍of Appeals of the Sixth Circuit was right, and it is

Affirmed.

Case Details

Case Name: Mutual Reserve Fund Life Assn. v. Phelps
Court Name: Supreme Court of the United States
Date Published: May 18, 1903
Citation: 190 U.S. 147
Docket Number: 263
Court Abbreviation: SCOTUS
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