Harrigan v. Home Life Insurance Co.

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] Action on an insurance policy. The defendant is a New York corporation. A nonsuit was granted in the court below, and judgment went for defendant, from which, and from an order denying a new trial, plaintiff appeals. The motion for a nonsuit was upon these grounds: 1. That it does not appear that any premiums were paid after the first annual premium; 2. That it appears affirmatively that no such premiums were ever tendered; and 3. That the action is barred by the statute of limitations of this state, and particularly by subdivision 1 of section 339 of the Code of Civil Procedure. The policy was made in 1888, and the insured, Hope, died in 1891; he gave a note for the first premium, although it does not appear whether or not he ever paid it; but it clearly appears that he never paid any part of either of the other three premiums which became due before his death. Nearly four years after his death this action was commenced, upon the theory that, as a certain notice required by a New York statute had not been given by respondent, the failure to pay premiums did not affect its obligations in the policy.

The appeal was first heard in Department, and the judgment was there affirmed, on the ground that the action was barred by subdivision 1 of section 339 of the Code of Civil Procedure. In the opinion of the Department, delivered by Temple, J., all the main points in the case were discussed and passed upon; and we are satisfied with that opinion, and that the case, as then presented, was correctly determined, and said opinion is hereby adopted. The arguments as to the statute of limitations were there wholly directed to the question whether or not the policy was to be considered as a "writing executed out of this state." But on a petition for hearing in Bank appellant for the first time called attention to an act of the legislature, approved April 1, 1872, entitled, "An act in relation to foreign corporations" (Stats 1871-72, p. 826), and contended that under this act respondent was entirely precluded from pleading any part whatever of the statutes of limitation. Thereupon a hearing in Bank was granted, and the case was subsequently argued and submitted in Bank.

After full consideration of the question, we are of the opinion that the act of 1872 does not prevent respondent from availing itself of the statute of limitations. Waiving the question whether the subject of the act is expressed in the title, it must be construed in connection with other legislation on the subject of foreign insurance corporations. The act refers to foreign corporations generally, and provides that every such corporation doing business in this state must "designate some person residing in the county in which the principal place of business of such corporation is, upon whom process issued by authority of or under any law of this state may be served," and "shall file such designation in the office of the secretary of state." Section 2 provides that a corporation failing to comply with the act shall be denied the benefit of the statute of limitations. The Political Code, from section 594 to section 634, inclusive, deals specifically with insurance corporations, both domestic and foreign, and prescribes conditions upon which the latter may do business in this state, and particularly provides in great detail how foreign insurance corporations must put themselves in position to be served with process in this state, by appointing agents, entering into certain contracts, etc. Section 616 contains an elaborate scheme on the subject. Its main provisions are that a foreign insurance corporation, as conditions precedent to doing business in this state, must file in the office of the insurance commissioner the name of an agent and his place of residence in this state, upon whom process may be served; that process so served gives jurisdiction of the corporation; that "the agent so appointed and designated" shall be deemed a general agent, and "must be the principal agent or chief manager of the business of such corporation or company in this state." It is also further provided that the foreign insurance corporation must make and file with the commissioner an agreement or stipulation in writing, which is set forth in detail with the form of the agreement given, by which it is stipulated, in substance, that if at any time the corporation shall be without an agent on whom process may be served, service thereof may be made on the insurance commissioner, who must within a certain time transmit to the corporation a copy of the process. When this section was first enacted it merely provided generally that the name of the agent should be filed with the insurance commissioner; all the other parts of the section were added by amendment in 1878, several years after the date of said act of 1872. These various enactments are all statutes in pari materia — all being on the subject of the appointment by foreign corporations of an agent resident here upon whose process may be served; they must therefore be construed together, and the intention of the legislature on the subject must be gathered by consideration of them all. This rule is well established. In Frandzen v. SanDiego, 101 Cal. 321, this court, quoting from a text-book, said: "Where there are in an act [and where several acts on the same subject are involved the rule is the same] specific provisions relating to a particular subject, they must govern in respect to that subject, as against general provisions in other parts of the statute, although the latter, standing alone, would be broad enough to include the subject to which the more particular provisions relate." The rule is aptly illustrated and expressed in the case of Sloop Elizabeth, 1 Paine, 11. In that case it was contended that the "Elizabeth," although engaged in the coasting trade, was forfeited under a general act of Congress which provided that "if any ship or vessel shall depart from any port of the United States without a clearance or permit, such vessel, etc., shall be wholly forfeited"; but the court held that as under another act a vessel licensed for the coasting trade was compelled to give bonds that she would not proceed to any foreign port, it was not the intent to subject such a vessel to the necessity of taking permits or clearances every time it sailed. The court said: "From the very general and comprehensive phraseology here used, it is contended on behalf of the United States that the court cannot except vessels of any description whatever. It is very certain that this section, taken by itself, and without reference to other parts of this and other acts madein pari materia, would include the case of the ``Elizabeth.' But it is the duty of a court in construing a law in doubtful cases to compare all its parts, in order to discover the intention of the legislature; and, however broad some of its expressions may be, yet if, on examination, it shall clearly appear that they are and were intended to be limited by other provisions of the same or other acts on the same subject, it cannot be improper to restrain them accordingly." And so, with respect to the case at bar, the legislature having provided with great detail how a foreign insurance corporation must submit itself to the jurisdiction of our courts, it could hardly have been intended to subject them to the additional necessity of filing another appointment of an agent with the secretary of state. Section 616 of the Political Code modifies the act of 1872. The former, dealing specifically with insurance companies, supersedes the general provisions of the latter. Moreover, the two are to a great extent inconsistent, and can be harmonized only by holding that the provisions of the code alone apply to insurance corporations. By the act of 1872 the named agent must be a resident of the county where the principal place of business of the corporation is, and any kind of an agent so residing could be named; while under the code he must be "the principal agent or chief manager of the business of such corporation or company in this state," without reference to his residence in any county, and he "must be deemed in law a general agent." One appointment of an agent would not, therefore, be a compliance with both the act of 1872 and the code. Again, in accordance with the code the corporation enters into a contract with the state by which, "in consideration of the permission granted by the state of California to it to transact insurance business in this state," it make certain covenants as to how it may be served with process; and it is not to be supposed that the legislature intended to violate that contract. Our conclusion is that the act of 1872 does not apply to foreign insurance corporations, but that their rights and duties, with respect to the appointment of agents for the service of process, are prescribed and regulated by the said provisions of the code, and that if they comply with the code they incur no penalty by not complying with the act of 1872.

Section 595 of the Political Code provides that the insurance commissioner must issue a certificate of authority to transact business in this state to any persons who are solvent, not in arrears of taxes, etc., and "who have fully complied with the laws of this state." In the case at bar, the plaintiff herself introduced without objection such a certificate issued by the insurance commissioner in 1888 to respondent. In that document the commissioner, after reciting that respondent had "in all respects fully complied with the laws of California regulating and governing the transaction of insurance business in this state," and had "appointed and commissioned William H. Dunphy of the city and county of San Francisco as his attorney and agent in this state, as required by section 616 of the Political Code of this state," certifies, "by virtue of the authority conferred upon me by section 595 of said code," that "said Home Life Insurance Company and its agent are duly authorized to transact the business of life insurance in this state." This certificate was sufficient prima facie evidence of the compliance by respondent with the provisions of the code above mentioned.

The respondent having accepted the invitation of the state to do business here on the conditions imposed by our laws, and having submitted itself to the jurisdiction of our courts and expressly provided the means by which it might be served with process here, and the state having granted its permission to do business here on these conditions, it is within the state for all purposes of suit with respect to matters growing out of such business, and it has all the ordinary rights of litigants here, including the right to rely on the statute of limitations — that right not having been by law denied it. It was so held inLawrence v. Ballou, 50 Cal. 258. In that case a foreign corporation had pleaded the statute of limitations as a defense, and it was strenuously argued by counsel that such plea could not be maintained by such a corporation, and cases were cited to that point — particularly the case much relied on of Olcutt v. TiogaR.R. Co., 20 N.Y. 210; 75 Am. Dec. 393; but the court held otherwise, and said: "We are of opinion that when a foreign corporation has a managing agent in this state (exercising openly his authority as such, and without fraudulent concealment) the corporation is within the state within the intent of the statute of limitations." (See, also, King v. National etc. Co., 4 Mont. 1, where Lawrence v. Ballou, supra, is approved, and other authorities cited.) And Lawrence v. Ballou, supra, cannot be held to have been overruled or affected by a certain dictum in the opinion in Pierce v. Southern Pac. Co., 120 Cal. 163; it was unnecessary to the decision of the case, and Lawrence v. Ballou,supra, was not called to the attention of the court, nor alluded to in the opinion. Olcott v. Tioga R.R. Co., supra, and a few other cases like it, are founded on the notion that a foreign corporation being "out of the state" is within the saving clause as to absent parties, and that as they cannot be sued in the state the statute of limitations does not run in their favor. Of course, the statute does not run against a cause of action while there is an impediment to bringing a suit on it which is made by the act or status of the party to be charged; but when there is no such impediment, and an action may be commenced and jurisdiction of the defendant obtained as soon as the cause of action accrues, the statute then begins to run. In the cases relied on by appellant no consideration appears to have been given to statutes like those of this state above mentioned, or to contracts like those in the case at bar, in which foreign corporations agree to do business in the state upon the conditions that they will submit to the jurisdiction of our courts, and appoint persons and furnish means by which process may be served on them in the state. It would be a manifest legal inconsistency to say that for the purpose of bringing an action against it here, and serving process on it here, the respondent is within the state, but for the purpose of making a common and legitimate defense to such action it is "out of the state."

The judgment and order appealed from are affirmed.

Temple, J., Garoutte, J., Van Dyke, J., Harrison, J., and Henshaw, J., concurred.

The following is the opinion rendered in Department Two, August 14, 1899, approved and adopted in the foregoing decision of the court in Bank: