Ben Franklin Insurance v. Gillett

Robinson, J., delivered the opinion of the Court. The defendant is a foreign corporation, but was at the time of issuing the policy now in controversy, doing business in this State, and H. G-. Stewart & Co. were their general agents for the transaction of-insurance business. The plaintiff is a citizen of Virginia, and the property insured is situate in that State.

The policy was issued in the City of Baltimore on the 20th of June, 1877, and mailed to the plaintiff at Norfolk, Virginia, and the property was destroyed by fire on the 24th March, 1878. In January, 1878, more than two months before the loss under this policy, the defendant corporation withdrew its •agency from this State, and from that time ceased to do business in the State. Process was served on Jesse K. Hines, Insurance Commissioner for this State, and also on H. G-. Stewart, the former agent of the company.

The question presented by the demurrer, is whether the defendant under these circumstances can be sued in this State ? And this depends upon the construction of secs. 209 and 211 of ch. 471, Act of 1868, and ch. 358, sec. 33, of the Act of 1872. The Act of 1868 provides, that any foreign corporation doing business in this State shall be deemed to hold and ■exercise franchises in this State, and shall he liable to suit in any Courts of the State on any dealing or transaction therein, and that process may be served upon the president, director, manager or other officer of such corporation. Secs. 209 and 210.

Sec. 211 provides that any person not a resident of the State may sue any foreign corporation doing business in this State, where the cause of action has arisen or the subject of the action shall be situated in this State, and that process may be served as above stated. The privilege to sue foreign corporations doing business in this State upon policies issued in the State, is thus ex ²¹⁶ pressly conferred upon non-residents by the statute. And had the defendant corporation continued to do business here, the right of the plaintiff to bring this action could not be questioned. The question, however, in this case is-whether this right exists after the company has ceased to do business in this State, and after it has withdrawn its agency.

The Act of 1868 provided, as we have seen, that a nonresident might sue a foreign corporation doing business in this State upon policies issued here, and it provided, also, how and upon whom process should be served. No provision, however, was made for the service of process in the event of the withdrawal by the company of its agency, and it was to meet this contingency that sec. 30 of chap. 106 of the Act of 1816 was passed. It provides that no-foreign insurance company shall do business in this State until it has filed with the Insurance Commissioner, a written stipulation, agreeing that any legal process affecting the company served on the Insurance Commissioner, or the party designated by him, or the agent specified by the company, shall have the same effect as if served on the company within the State, and if the company shall cease to maintain such agent in this State so designated, such process may be served on the Insurance Commissioner. Here, then is an express provision in the first place that the company shall agree that process should be served upon either of certain parties therein specially designated, and should the company withdraw its agency, then in that event process should be served on the Insurance Commissioner.

No distinction is made between residents and nonresidents. And had the section stopped here, no question could have arisen, we think, as to the right of the plaintiff to sue the defendant after the withdrawal of its agency, but it is supposed that this right cannot exist consistently with the remaining part of the section which says that so long as any liability of the stipulating com ²¹⁷ pany to any resident of this State continues, such stipulation cannot he revoked or modified, except that a new one may he substituted, &c. Here is no doubt an