Oland v. Agricultural Insurance , 69 Md. 248 ( 1888 )

Alvey, C. J.,

delivered the opinion of the Court.

This action was brought by a citizen of this State against the appellee, an insurance company incorporated under the law of the State of New York, hut licensed and doing business in this State. The case has never been brought to trial in the Court below; hut upon a summons issued out of the Circuit Court, and directed to the sheriff of the county, that officer made this return: “Served on Edgar B. Freeman, agent of the Agricultural Insurance Company, of Watertown, New York. Luther C. Derr, sh’ff ”; and which return was quashed by the Court. A summons was also directed and sent by mail to the general agent or attorney of the company, residing in the City of Baltimore, specially appointed to receive service of process against the company; but whether such summons was ever received by such agent or attorney was a controverted fact in the case. The appellee, by its attorney, entered a special appearance in the case for the purpose of objecting to the sufficiency of the service of process; and it was upon objection, made under such appearance, that the sheriffs return was quashed. It is from the order of Court quashing the return that this appeal is taken.

On the part of the appellant it is insisted, that the service of the summons by the sheriff on Freeman, the local agent, was a sufficient service of process to bind the appellee, under the general incorporation law of this State, of 1868, chap. 411, sec. 211, which provides for service of process on corporations not incorporated by the laws of this State, but which do business in this State. This general incorporation law authorizes the service of process upon any agent of a foreign corporation ; and in case of service of process on an agent, not an officer of the corporation, “notice of such process shall be left at the principal office of said corporation, if there be such office in this State,” etc. It does not appear that there was any such principal office of the company in the State; and if this provision of the general incorporation law applies to the case of a foreign insurance company, Licensed by, and actually doing business in, this State, then the service of process on Freeman, the local agent, would seem to have been sufficient. But it is confidently insisted on tlie part of the appellee that this provision of the general incorporation law does not apply to a_ foreign insurance company licensed to do business in this State; as the whole subject-matter of the regulation of, and mode of serving process on, foreign insurance companies, doing business in this State, is specially and exclusively provided for by the Act of 1878, chap. 106. By that Act the Insurance Department of the State is established, and certain terms and conditions are prescribed upon which foreign insurance companies are allowed to do business in this State. They are required topaylieavy license fees for the privilege of doing business here; and among the conditions precedent prescribed, by section 30 of the- Act, is one that they shall file with the Insurance Commissioner “a power of attorney appointing a citizen of this State, resident within this State, the agent or attorney for the company upon whom process of law can be served: there must also be filed with the Insurance Commissioner a certified copy of the vote or resolution of the directors appointing such attorney, which appointment shall continue until another attorney be substituted. And said writing or power of attorney shall stipulate and agree on the part of the company making the same, that any lawful process against said conrpany which is served on such agent, shall be of the same legal force and validity as if served on such company within this State; and also, that in case of the death or absence of the attorney so appointed, service of process may be made -upon the Insurance Commissioner of this State; and such power of attorney cannot he revoked or modified (except that a new one may be substituted), so long as any policy or liability remains outstanding against such company.in this State. The term 'process/ used herein, shall be held and deemed to include any writ, summons or order whereby any action, suit or proceeding shall he commenced, or which shall he issued in or upon any action, suit or proceeding hy any Court, officer, or magistrate.” And, hy section 36 of the Act, a penalty is imposed for the non-compliance with, or violation of, any of the provisions of the Act; and then it is declared, that “any Act or part of an Act inconsistent with the provisions of this Act, he and the same is hereby repealed.”

It is shown that the appellee, before the institution of this action, had fully complied with the terms and conditions of the statute, and by power of attorney, duly executed and filed with the Insurance Commissioner, had appointed D. A. Clarke, Esq., of Baltimore City, its agent or attorney, upon whom all legal process might be served, as provided by the statute; and that power remains unrevoked, and Mr. Clarke continues to be the agent or attorney of the company specially appointed to receive service of process against the company, as required by law. Mr. Freeman, upon whom the summons was served by tlie sheriff, was a mere local soliciting agent, and was never authorized to receive service of process to hind the company.

It is clear, we think, that the provision in the Act of 1818, ch. 106, to which wc have referred, regirlates the whole subject-matter of the service of process on foreign insurance companies licensed to do business in this State, when sued in our Courts; and that such provision is exclusive in its nature, as no foreign iusurance'company is allowed to do business in this State, except upon compliance with the terms of the statute. The appointment of the agent or attorney to receive service of process is one of the essential and important terms and conditions upon which such companies are allowed to do business here; and good faith requires that the attorney thus selected and appointed for the purpose shall he served, and not a mere local agent who would likely know little or nothing of the matter of the suit. In the absence of the agent or attorney to receive service of process, the statute provides that such process may be served on the Insurance Commissioner to bind the company; and thus provision is made to meet all contingencies. We are therefore of opinion that the Court below was quite right in quashing the return of service upon the local agent.

(Decided 13th June, 1888.)

We have thus exjuessed our opinion upon this subject to remove the doubt that seems to have existed in regard to an important matter of practice ; but there has been no such judgment rendered in this case as would justify an appeal. The case against the appellee is-still pending in the Court below, and the process may be renewed and properly served in accordance with the provision of the statute to which we have referred. The appeal must therefore be dismissed.

Appeal dismissed.