Woodward v. Mutual Reserve Life Insurance

| N.Y. App. Div. | Jul 1, 1903

Van Brunt, P. J.:

In this action a recovery is sought to be had upon a judgment entered in the Superior Court of Durham county in the State of North Carolina against the defendant. The question to be determined is whether the said court acquired any jurisdiction to render the "said judgment against the defendant.

The Mutual Reserve Fund Life Association was prior to the 17th of April, 1902, a corporation organized under the laws of the State of New York for and transacting the business of life insurance upon the co-operative or assessment plan. On the 17th of April, 1902, the said Mutual Reserve Fund Life Association duly amended its charter and ■ reincorporated as a1 mutual life insurance company under the name of the Mutual Reserve Life Insurance Company under and pursuant to and in compliance with the Insurance Law of the State of New York.

. In 1883 the Legislature of North Carolina passed an act which •was then and thereafter in force until repealed as hereinafter stated, by section 3062 of which the Secretary of State was authorized to issue licenses to do insurance business, but before the issue of any license the applicant Was required to “ appoint a general agent, who shall be a citizen and á resident of this State, and file a certificate of • such appointment, under the seal of the applicant, together with the written acceptance thereof by such appointee with the Secretary of State,” etc. It further provided that such certificate should contain •a stipulation agreeing 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 upon such general agent, or upon the Secretary of State, and when so served, shall have the same effect .as if served personally on such applicant in that State.

Prior to the 26th of September, 1889, the said Mutual Reserve Fund Life Association had duly complied with such section and was duly admitted to transact business in said State, and on that day made a contract of insurance with and on' the life of George W. Woodward (the plaintiff), a citizen of North Carolina, and issued its certain certificate of membership or policy of insurance as evidence thereof. . -

On the.6th of March, 1899, a statute was duly adopted by the Legislature of the State of North Carolina, and which took effect ■ and was then and thereafter in force, wherein and whereby a new department of the State government was established, to be known as the Insurance Department of said State, and a new office, namely, that of Insurance Commissioner of said State, was created, and the supervision and control of insurance companies, domestic and foreign, was thereby transferred to said department and the act of 1883 before referred to was repealed. By said • act, among other conditions to be complied with before any life insurance company should be admitted and authorized to do business in said State, such company was required, by a duly executed instrument filed in the office of the Insurance Commissioner, to constitute and appoint the Insurance Commissioner, or his successor, its true and lawful attorney upon whom all lawful processes in any action or legal proceeding against it might be served, and that this power should continue so long as any liability of the company remained outstanding in the said State.

On the 13th of April, 1899, pursuant to this statute, the Mutual Reserve Fund Life Association executed an instrument duly constituting the Insurance Commissioner its true and lawful attorney in and for the said State upon whom all lawful processes in any action or legal proceeding against it might be served, which instrument, with this authority, should continue in force and irrevocable so long as any liability of said company remained outstanding in said State.

On the 17th of May, 1899, the said Mutual Reserve Fund Life Association, by its board of directors, duly canceled, revoked and annulled the appointment of said Insurance Commissioner as its -attorney upon whom all lawful processes in any action or legal proceeding against said association might be served, assigning as a reason therefor the enactment by the Legislature of that State of an act known as the Craig Bill, which was to. go into effect on the 1st of June, 1899, and which required, among other things, that insurance •corporations created and organized under and by virtue of the laws of any State or government other than that of North Carolina desiring to own property or to carry on business, or to exercise any corporate franchise within the State, should become a domestic corporation of said State of North Carolina; and that it was the sense -of the board that it was neither wise nor prudent for the association to comply with the provisions of said law, and it thereupon withdrew from business within said State and closed each and all of its •offices therein, and since that time has had no agent or agency in ¿said State, nor any office or offices therein, and since said date said ¿association and the defendant have received premiums, dues and ¿assessments at the home office of the company where the same were payable, transmitted it only by mail from the certificate or policyholders of said Mutual Reserve Fund Life Association in North: Carolina, who became such prior to the 17th of May, 1899.

On the 20th of August, 1900, a summons was issued out of said Superior Court for the county of Durham in the State of North-Carolina, said court .being a court of general jurisdiction, to the sheriff of Wake county for service at the instance and in favor of Ueorge W. Woodward, who was a resident and citizen of the county of Durham in the State of North Carolina. . Thereafter and within.the time required by law the said sheriff served said summons upon the Insurance Commissioner of North Carolina, which commissioner complied with the law of March, 1899, in reference to notice of such service to the defendant named in said summons, the Mutual Reserve Fund Life Association. Such proceedings were thereupon had, no answer- or appearances being made on behalf of said association, that on the 3d of- September, 1900, a judgment by default was rendered in such Superior Court of Durham county in favor of said Woodward, the plaintiff, against the Mutual Reserve Fund Life Association, the predecessor of the defendant;'

The foregoing -facts having been agreed upon by the parties-pursuant to the provisions of our Code, the question is submitted to this court whether upon this state of facts the plaintiff is. entitled to recover judgment in - our courts upon the judgment entered in-the Superior Court of the county of Durham in the State of North Carolina as above mentioned. This question depends, as already stated, upon whether the North Carolina; court acquired jurisdiction over the defendant by the service of the summons in the manner above stated. . ' ' .

It is urged that because of the words in the statute of March, 1899, and those contained in the power of attorney of April, 1899, that the appointment therein contained should continue in force and irrevocable so long as any liability of the company remained outstanding in that State, the Mutual Reserve Fund Life -Association had no power to revoke the appointment of the Insurance Commissioner, so far as contracts were concerned, which had theretofore been entered into between it and residents of the' State of North Carolina. There would be no question but that this point would be well taken had the policy of insurance upon which the judgment in North Carolina was obtained been entered into during the -period when the power of attorney in question remained in force. But it. is difficult to see how any contractual rights which had been derived by the plaintiff from the defendant’s predecessor were in any way-affected by the revocation of this power of attorney. The policy of insurance in question had not been issued in contemplation of' this power of attorney. There is no evidence that the plaintiff parted with anything because of the existence of this power of attorney or that he had in any way acquired any valuable interest in its maintenance, and it has- been a rule which has obtained ever since the existence of such instruments were recognized in the law that they should be revocable no matter what their terms might be* unless some interest had been acquired in connection with the existence of the power, the rule being that a power of attorney coupled, with an interest was irrevocable—the contrary of the proposition, being equally true.

A .different question would have been presented had the summons; in this case been served upon the Secretary of State pursuant to the; certificate of appointment made pursuant to the act of 1883, which was in force at the time of the issuance of the policy. This Certificate of appointment contained a stipulation agreeing that so long as; there might be any liability on the part of the applicant under any contract entered into in pursuance of any law concerning insurance,, that service of summons might be made upon the Secretary of State. It might well be claimed upon the part of the plaintiff that this certificate became and was part and parcel of his contract of insurance,, and that he had a right to rely upon it, and that it could not be-abrogated, either by the Legislature of Rorth Carolina or by the; predecessor of the defendant, thereby impairing the obligations of: his contract. The repeal contained in the act of 1899 could not affect the contracts already entered into upon the faith of the act of 1883, and while it might take away the authority of the defendant to do business within the State, it could not impair the obligation of contracts which had been entered into upon the faith of the old act.

Under these circumstances, the plaintiff, having parted with nothing upon the faith of the act of 1899, does not seem to have acquired any such interest in anything which was done under that act by the association that such association had authority to cancel and’revoke the power of attorney, at least" so far as the plain tifE was concerned. It is true that the courts of North' Carolina have held that the powers conferred under the act of 1899 were" irrevocable, - but they do not seem to have considered the point that calling a power irrevocable does not by any means make it such.

Upon the whole case, we-are of opinion that the defendant is entitled to judgment, with costs.

O’Brien, Ingraham and McLaughlin, JJ., concurred; Patterson, J., dissented. . .

Judgment ordered for defendant, with costs.