Opinion
No. 29348.
October 19, 1931.
1. INSURANCE.
Statute requiring foreign insurance companies to appoint insurance commmissioner as agent for service of process does not subject such insurance companies to jurisdiction of state courts in controversies growing out of transactions wholly without state (Code 1930, section 5165).
2. APPEAL AND ERROR.
Constitutional provision respecting reversal of decision for mistake as to whether cause was of equity or common-law jurisdiction held inapplicable, where court sustained demurrer to cross-bill (Const. 1890, section 147).
APPEAL from chancery court of Hinds county; HON. V.J. STRICKER, Chancellor.
Green, Green Jackson, of Jackson, and S.C. Mize, of Gulfport, for appellant.
Appellant may sue appellee insurance company, upon this transitory cause of action in Mississippi.
N.O.J. G.R.R. Co. v. Wallace, 50 Miss. 244; Pullman Co. v. Lawrence, 74 Miss. 800, 22 So. 53; Vicksburg Shreveport Pacific R.R. Co. v. Forcheimer, 74 So. 419, 113 Miss. 531.
Under Mississippi practice, the dismissal of the original bill does not carry the cross-bill.
Griffith's Chancery Practice, sec. 384; Sigman v. Lundy, 66 Miss. 523, at page 526; Dewees v. Dewees, 55 Miss. 315; Jackson v. Lemler, 83 Miss. 37, at page 42; 21 C.J. 514.
If the insurance company was not subject to suit in Mississippi and no process on this cross-bill could be lawfully served upon defendant insurance company when that service was effected, an election was given to the insurance company (a) of relying upon the invalidity of the service when and after a decree had been thereon taken, or (b) voluntarily appearing and questioning.
York v. Texas, 137 U.S. 19, 34 L.Ed. 604; Kauffman v. Wooters, 138 U.S. 285, 34 L.Ed. 962; Cain v. Commercial Pub. Co., 232 U.S. 124, 58 L.Ed. 534.
That herein sought is the enforcement of an obligation against that so thus deposited under a precise contract with the state of Mississippi, that the deposit would be in trust for this cross-defendant.
Shields v. Thomas, 71 Miss. 260; Woodruff v. State, 77 Miss. 109; Blake v. McClung, 172 U.S. 239, 43 L.Ed. 432; National Mercantile Co. v. Mattson, 45 Utah 163; People v. Granite State Prov. Assn., 55 N.E. 1054; Fowert v. Blank, 205 Pa. St. Rep. 299, p. 302.
Section 147 of the Constitution 1890, substantially abolishes the difference between jurisdiction at law and in equity.
When an action is erroneously begun in equity the same should not be dismissed but should if a cause of action is stated, be transferred to the law side of the docket and there prosecuted to conclusion.
22 Equity Rule, sec. 274 of the Judicial Code, Title 28, sec. 397; Mills v. Rutherford County, 281 U.S. 120, 74 L.Ed. 737; White v. Sparkhill Realty Corp., 280 U.S. 500, 74 L.Ed. 578; Twist v. Prairie Oil Gas Co., 274 U.S. 684, 71 L.Ed. 1297; Liberty Warehouse Co. v. Grannis, 273 U.S. 70, 71 L.Ed. 541; Liberty Oil Co. v. Condon, 260 U.S. 235, 67 L.Ed. 232.
Equity always has jurisdiction for relief where the defendant was beyond the seas.
Dollman v. Moore, 70 Miss. 267; Farrar v. Haselden, 9 Rich. Eq. 331.
Hemingway's Code, section 3157, filing a demurrer to the jurisdiction gave jurisdiction of the person.
Fisher v. Pacific Mut. Life Ins. Co., 112 Miss. 30, 72 So. 846; New Orleans, Jackson Great Northern Railroad v. Wallace, 50 Miss. 244, p. 248; L. N.R.R. Co. v. Poole, 72 Miss. 487, 16 So. 753; Railroad Co. v. Fortenberry, 107 Miss. 79, 65 So. 507; Miss. Central R. Co. v. May, 149 Miss. 334, 115 So. 561.
Wainwright v. Atkins, 61 So. 454, 104 Miss. 438; Standard Oil Co. v. State, 65 So. 468, 107 Miss. 377; 34 C.J. 835; St. Louis San Francisco v. McBridge, 141 U.S. 128, 35 L.Ed. 659; Western Loan Savings Co. v. Bute, 210 U.S. 368, 52 L.Ed. 1101; Frisby v. Harrison, 30 Miss. 452, at page 465; Graves v. Fulton, 7 Howard (Miss.) 592; Stevens v. Richer, 1 Howard (Miss.) 522; Young v. Rankin, 4 Howard (Miss.) 27; Henderson v. Cramer, 5 Howard (Miss.) 525; Benedict v. Seiberling, 17 F.2d 841; Hammond v. District Court, 39 A.L.R. 1497; McLean Lumber Co. v. United States, 237 Fed. 460; Bester v. Inter-County Fair, 135 Wis. 341; State ex rel. Hopman v. Superior Court, 153 P. 317; Teater v. King, 35 Wn. 138, 76 P. 688; Fulton v. Ramsey, 67 W. Va. 321; McKillip v. Harvey, 80 Neb. 266; State v. Grimm, 143 S.W. 484; Winter v. Union Bldg. Co., 93 P. 931; Cloise v. Justice's Court of First Judicial Township, 103 P. 319; Merchants Heat Light Co. v. Clow, 204 U.S. 286, 51 L.Ed. 488; Big Vein Coal Co. v. Read, 229 U.S. 38, 57 L.Ed. 1056; Western Loan Sav. Co. v. Butte B. Consol. Min. Co., 210 U.S. 368, 52 L.Ed. 1101, 28 Sup. Ct. Rep. 720.
The decree should have been at all events a dismissal as to Morris Company without prejudice.
Weathersby v. Lumber Co., 88 Miss. 538, 41 So. 65; Shaw v. Laurel Oil Fertilizer Co., 45 So. 878, 92 Miss. 340, p. 348; Twist v. Prairie Oil Gas Co., 274 U.S. 864, 71 L.Ed. 1297.
F.B. Jackson, Assistant Attorney-General, of Jackson, for the state.
When the insurance company qualified in Mississippi, it became thereby subject to suit in Mississippi, not only on causes of action arising within Mississippi, but those arising without Mississippi, and this has been consistently the law in Mississippi.
N.O.J. G.R.R. Co. v. Wallace, 50 Miss. 244; Pullman Co. v. Lawrence, 74 Miss. 800, 22 So. 53; Vicksburg, etc., R. Co. v. Forcheimer, 113 Miss. 531, 74 So. 419; Secs. 4088, 4093, Hemingway's Code 1917; secs. 4165, 4166, Code 1930.
The construction of the local statute as to service of process is a local question, whereas to the Supreme Court of the United States is bound by the decisions of this court, and where as to this court must express its independent judgment.
Pennsylvania Fire Ins. Co. v. Gold Issue Mining, etc., Co., 243 U.S. 93, 61 L.Ed. 610, at p. 615; Becker v. Columbia Bank, 112 Miss. 819, 73 So. 798; Dresser v. Hathorn, 144 Miss. 24, 109 So. 23; Edward Hines Yellow Pine Trustees v. Martin, 268 U.S. 459, 45 S.Ct. 543, 69 L.Ed. 1050; Brien v. Williamson, 7 How. 16; Deans v. McLendon, 30 Miss. 343; Doe v. Hamilton, 23 Miss. 498; Bailey v. Fitzgerald, 56 Miss. 578.
This court in pursuance of plenary power has continuously held foreign corporation, when qualifying to do business by appointing a local agent for service of process, is suable in Mississippi, especially insurance companies, and in declaring that this court had not so held the Federal Supreme Court erred.
State v. Alley, 96 Miss. 720, 51 So. 467; Fikes v. State, 87 Miss. 251, 39 So. 783; Tyson v. Banton, 273 U.S. 418, 71 L.Ed. 718; Aetna Ins. Co. v. Hyde, 275 U.S. 440, 72 L.Ed. 357; Piedmont v. Wallin, 58 Miss. 1; Fireman's Ins. Co. v. Hemingway's, Federal Case No. 4797.
A foreign corporation is amenable to process to enforce a personal liability in the absence of consent, only if it is doing business within the state in such manner and to such extent as to warrant the inference that it is present there. And even if it is doing business within the state, the process will be valid only if served upon some authorized agent.
St. Louis Southwestern R. Co. v. Alexander, 227 U.S. 218, 226, 57 L.Ed. 486, 488; Philadelphia Reading Ry. Co. v. McKibbon, 243 U.S. 264, 61 L.Ed. 710.
Where there is a consent the appellee is liable to suit, irrespective of whether business be done or not.
Robert Mitchell Furniture Co. v. Selden Brec. Constr. Co., 257 U.S. 213, 66 L.Ed. 201; Pennsylvania F. Ins. Co. v. Gold Issue Min. Mill. Co., 243 U.S. 93, 61 L.Ed. 610, 37 Sup. Ct. Rep. 344; Hess v. Pawloski, 71 L.Ed. 1091, 274 U.S. 352; Code 1930, secs. 4165 and 4166.
A foreign corporation which obtained a certificate entitling it to do business in this state and had paid the appropriate fees and taxes involved in that act, was doing business within the state.
Bloom v. Iron Novelty Corporation, 219 N.Y.S. 93; State ex rel. Goldwyn Distributing Co. v. Gehrx, 194 N.W. 418, 181 Wis. 238; Reeves v. Southern Railway Co., 121 Ga. 561; Lipe v. Railway Co., 116 S.E. 101, Dragon Motor Car Co., Ltd., v. Storrow et al., 205 N.W. 694; Rishmiller v. R.R. Co., 134 Minn. 262.
Appellee Skandinavia Insurance Company estopped from claiming no business done by instruments executed.
Pennoyer v. Neff, 95 U.S. 714, 24 L.Ed. 565.
Appellee's qualification constitutes it a local corporation.
State ex rel. Grimm, 239 Mo. 135, 143 S.W. 432; Comey v. United Surety Co., 217 N.Y. 268, 111 N.E. 832.
Reinsurance of property in Mississippi is doing of business of Mississippi.
Secs. 5070, 5071, 5028, 5059, 5119, 5144, 5145, Hemingway's Code 1927; State ex rel. European Accident Insurance Co. v. Tomlinson, 129 N.E. 684, 101 Ohio St. 459.
Suits defended equivalent to business done.
Cowan v. Assurance Corporation, 73 Miss. 327, 19 So. 298; Fire Ins. Co. v. King, 77 So. 168.
Palmer Pillans (of Pillans, Cowley Gresham, of Mobile, Ala.) and J.A. Leathers (of Leathers Greaves) for appellees.
It is not competent for a state court to set aside and modify the Federal courts judgments where it has jurisdiction of the subject matter and power to adjudicate the questions covered by its decrees.
Griffith v. Vicksburg Water Works Co., 40 So. 1011; G.M. N.R.R. Co. v. Manufacturing Co., 90 So. 358; McKim v. Voorhies, 7 Cranch 279; Riggs v. Johnson County, 6 Wall. 166; Mayor v. Lord, 9 Wall. 409; Amy v. Supervisors, 11 Wall. 136; Duncan v. Darst, 1 How. U.S. 301; Supervisors v. Durant, 9 Wall. 415; Moran v. Sturges, 154 U.S. Opin. at 267, et seq.; Peck v. Jenness, 7 How. U.S. 612; Orton v. Smith, 18 How. U.S. 263; C. O. Ry. Co. v. McCabe, 213 U.S. 207, 219; Central Bank v. Stevens, 169 U.S. 432, at 459; Randall v. Howard, 2 Black U.S. 585.
The deposit in New York is a trust fund for the benefit of only those policy holders whose polices were written within the United States. Policyholders, though residents of the United States, whose policies were written without the United States, have no interest in the trust set up by the deposit in New York.
In re Norske Lloyd Insurance Company, Ltd., 242 N.Y. 148.
There cannot be entertained in equity a litigation over a trust fund in a suit to which the custodian of the fund is not a party.
Pomeroy's Eq. (3 Ed.), sec. 171, at p. 202, and sec. 219 at pp. 303, 304; Perry on Trusts (6 Ed.), sec. 732 at p. 1215; Lancashire Ins. Co. v. Maxwell (N.Y.), 30 N.E. 192; German Ins. Co. v. Virginia Ins. Co. (Va.), 61 S.E. 870; Northwestern Ins. Co. v. Fishback Commissioner, 188 P. 469, at 470-71; Texas F. B. Co. v. Austin (Tex.), 246 S.W. 1026; Vandiver v. Poe (Md.), Ann. Cas. 1914 D, 435.
The cross-bill was a mere branch from the parent trunk of the original bill. When the parent trunk was cut down, the cross-bill branch must of necessity fall with it.
Gilmer v. Felhour, 45 Miss. 627; Dill v. Shahan, 25 Ala. 694; Continental Life Ins. Co. v. Webb, 54 Ala. 688.
Reinsurance involves no transaction or privity between the reinsurers, and those originally insured. The lower courts rightly held that the making of the reinsurance compacts in New York between respondent and insurers of property in Mississippi was not the doing of business in that state. The purpose of the state statutes requiring the appointment by foreign corporations of agents upon whom process may be served, is primarily to subject them to the jurisdiction of local courts in controversies growing out of transactions in the state. The language of the appointment and of the statute under which it is made plainly implies that the scope of the agency is intended to be so limited. By the terms of both, the authority continues only so long as any liability of the company remains outstanding in Mississippi. Such a statute ought not to be construed to impose upon the courts of the state a duty, or give them power, to take cases arising out of transactions so foreign to its interest.
Morris Co. v. Ins. Co., 279 U.S. 405, 408-409.
This is an appeal from a decree sustaining demurrers to, and dismissing, an original bill and a cross-bill. The original bill was filed by the state of Mississippi on the relation of J.H. Howie, district attorney, against the Skandinavia Insurance Company and Morris Company. The statutes pertinent thereto, as they now appear in the Mississippi Code 1930, are sections 5165, 5166, and 5210. The reporter will set out the introductory statement and paragraph 4 of section 5165, and all of section 5166. Section 5210, Code 1930, prohibits an insurance company from reinsuring "any risk taken by it on any property located in Mississippi in any company not duly authorized to transact business herein."
It appears from the original bill and the supplement or amendment thereto that the appellee is an insurance company organized under the laws of Denmark, is licensed to do business in the state of New York, and has made a deposit with the treasurer thereof that complies with the requirement of section 5166, Mississippi Code 1930, and that it has complied with the requirements of section 5165, Mississippi Code 1930, but has confined its Mississippi business to insuring other insurance companies against insurance risks assumed by them in Mississippi.
Morris Company, a Louisiana corporation, sued the appellee in the circuit court of Harrison county on an insurance policy on property which was issued, delivered, and the loss thereunder occurred in a foreign county, service of process in which suit was accepted by the insurance commissioner. This suit, on motion of the appellant, was transferred to the federal district court, where the appellant filed a motion to quash the process and dismiss the suit.
The prayer of the bill is, in substance, that the appellee be enjoined from prosecuting its motion to quash the process in the suit against it by Morris Company; that Morris Company be required to propound its claim against the appellee; and that the appellee be directed to pay any money adjudged to be due by it to Morris Company out of the deposit made by it with the treasurer of the state of New York, which, the bill alleges, constitutes a trust fund, under section 5166, Mississippi Code 1930, for the benefit of all of its policyholders and creditors in the United States. The insurance commissioner accepted service of process on this bill of complaint, and Morris Company appeared and propounded its claim, a purely legal one, against the appellee on the insurance policy, hereinbefore referred to. Demurrers filed by the appellee to the bill and cross-bill were sustained, and both were dismissed.
It appears from the case of Morris Co. v. Skandinavia Ins. Co., 279 U.S. 405, 49 S.Ct. 360, 73 L.Ed. 762, that the action at law of Morris Company against the appellee, which was removed to the federal court, finally reached the Supreme Court of the United States, where the judgments of the courts below quashing the process and dismissing the action were affirmed, on the ground that the statute requiring a foreign insurance company to appoint the insurance commissioner as its agent, upon whom process may be served, does not subject such insurance companies to the jurisdiction of the state courts in controversies growing out of transactions wholly without the state. This interpretation of the statute and the reason given therefor meets with our approval, from which it follows that the original bill filed by the state herein is without merit.
The dismissal of an original bill does not always necessarily carry with it the dismissal of a cross-bill filed in the same cause, Griffith Chan. Prac., sec. 384; but that rule without regard to its other limitations, cannot in equity and good conscience be applied here. The appellee was compelled to come into court and submit itself to the jurisdiction thereof in response to the state's wrongly filed bill of complaint, and, when Morris Company appeared and filed its cross-bill pursuant to the prayer of the original bill, the appellee had only two courses open to it — to submit to a decree pro confesso thereon, or to appear and contest the right of Morris Company to any decree at all. Had the court below overruled the demurrer to the cross-bill, the effect of section 147 of the Constitution, if any, on the right of this court to reverse its decree would have been presented; but, as it sustained the demurrer and declined to grant the relief prayed for, that section of the Constitution can have no application here.
Affirmed.