#### Barnes v. Union Central Life Insurance Company.

(Decided February 2, 1916.)

Appeal from Franklin Circuit Court."

1. Insurance — Foreign Insurance Company — Contract With in Another State — Action on bySÍNTon-resident Beneficiary — May be Brought in This State. — An action on a contract of insurance, made in another State, may be maintained by a non-resident beneficiary against a foreign insurance company, doing business in this State.

2. Insurance — Foreign Insurance Company — Action Against on Contract Made in. Another State — Venue of — ¡How Determined. — In an action brought in the Franklin circuit court of this State by a non-resident beneficiary against a foreign insurance company doing business in this State, upon a contract made in another State, as by section 631, Kentucky Statutes, a foreign insurance company is required to file with the Insurance Commissioner of this State a “resolution adopted by its board of directors, consenting that service of process upon any agent of such company in this State or upon the Commissioner of Insurance of this State, in any action brought or pending in this State shall be a valid service upon said company,” and compliance by a defendant foreign insurance company with this requirement of the statute is a condition precedent to its right to do business in this State, its admission, when sued, that it has no principal office or place of business in this State, that the transaction out of which the action arose did not take place with its agent in any county of the State, but was made in another State, together with the service of summons upon the Insurance Commissioner of this State, gave .the Franklin circuit court jurisdiction of the action and parties. In such a state of case the action is not localized by section 71, Civil Code, but is governed by the provisions of section 78, Civil Code, applicable to transitory actions.

O’REAR *&*WILLIAMS for appellant.

T. L. EDELEN for appellee.

*254OuiNioN op the CouRT by

Judge Settle

Reversing.

This action was brought by tbe appellant, Jennie P. Barnes, widow of Clinton J. Barnes, deceased, to recover of tbe appellee, Union Central Life Insurance Company, $5,000.0Q claimed to be due on a policy of insurance on tbe decedent’s life, issued-by it, payable to ber. It is alleged in tbe petition that appellee was incorporated under tbe laws of Ohio; that tbe contract of insurance, evidenced by tbe policy, was made in Virginia, in which State appellee was then doing business and tbe decedent then, and until bis death, resided; and that appellee is now and was at tbe time of tbe institution of the action, doing business in Kentucky. . Though not so alleged in tbe petition, it seems to be admitted by tbe appellant that she is a non-resident of' Kentucky. Tbe summons issued upon tbe filing of.tbe petition was served by tbe sheriff of Franklin county on appellee by' delivering to' M. C. Clay, Insurance Commissioner for the State of Kentucky, a true copy thereof.

Appellee by counsel appeared in tbe Franklin circuit court, and entered a motion to quash tbe summons, and return, which motion was overruled, to which it excepted. It then'filed a special demurrer to tbe petition, on tbe ground that it showed that the court bad no jurisdiction of tbe case. The . demurrer was. overruled, to ■wbicb appellee excepted.. It thereupon, without waiving its objection t© jurisdiction, filed an answer, alleging by way of plea to tbe jurisdiction, “that this defendant is an incorporated insurance ■ company; that Franklin county, is not tbe"county in wbicb its principal office or place of business is situated; nor did tbe transaction sued on in tbe plaintiff.’s petition arise out óf a transaction with an. agent ..of., such corporation in Franklin county./ Tbe defendant’s principal .office, or place of business is situated in the city of Cincinnati, Obio, and the contract sued on took place in tbe .State of Virginia and not in tbe State of Kentucky.”' •

Appellant filed a demurrer to tbe answer, wbicb was, by tbe court, carried, back to tbe petition and sustained. Appellant excepted to this-ruling .and upon her declining to plead further, the court dismissed ber petition. From tbe judgment manifesting' tbe above'‘rulings she has appealed.

*255Appellee’s' demurrer to the jurisdiction of the circuit court admits the allegation of the petition thát it was at the time of the institution of this 'action, and is now doing business in' this State, -and its -plea in abatement fails' to deny that this is so. It is insisted for appellee, and such'was the conclusion of'the circuit court, that section 71, Civil Code, fixes the venue of an action-against an incorporated insurance company either in the county in which its principal office or place of'business is situated, or in-the county where the transaction arose, if such transaction was with an agentánd that as appellee has not a chief office. or place of business in Franklin county, and .the transaction out of which appellant’s action arose did not take place with an .agent of appellee in that county, the, circuit court thereof has, no jurisdiction of appellee or of the action. On the other hand, it is insisted for appellant: (1) That an, action on. a contract of insurance made in another pítate, can.be .maintained by -the beneficiary in this State against a foreign insurance company doing business.in this.State; (2) that such action is not localized by section 71, Civil Code, but is transitory and therefore-maintainable.under• section 78 of the Civil Code; (3) that,-if .it. could properly be held that such action is localized-by Section 71 of -the Code, and must, by reason thereof,-be brought in-the county in which is situated thé principal office- or place of business of such foreign insurance' company, and the latter has no known or principal office or place of business in this State, then the insurance 'coüámissiotier is by statute made its chief officer iii this State, and the county in which his official domicile t>r residence is required by the statute to "be- maintained, ’ is'in'law the county'in which is'situated the-foreign insurance' company’s principal office and place of business. It is shown by the uncontroverted affidavit ■ of’ B. G-. Williams, one ■of appellant’s' attorneys, that appellee has no principal ■office or place -of business in this State, unless the -in-surande commissioner is its-principal--officer and-Fr'ank-lin county, the county of - his-' official residence, is1 its principal place of business; and 'it- is not alleged by ap-pellee ’s plea in abatement- either that- it has-or -has-not a principal office or place of business' in-this' State', but only alleged* that Franklin county - is not the county in which its principal bffi'ce or :plac'e 'of business is situa'ted *256and that its principal office or place of business is situated in the city of Cincinnati, Ohio.

As to the proposition first advanced by appellant’s counsel, it is sufficient to say that the mere non-residence of appellant does not prevent her from maintaining an action in this State against a foreign insurance company doing business in the State. Such right of a nonresident was declared in N. W. Mutual Life Ins. Co. v. Lowry, 14 R., 600, and Cleary v. Union Central Life Ins. Co., 143 Ky., 540, although in neither of these cases was the question involved that is here raised. In the first case it was held that, notwithstanding the statute of limitations of the State of Alabama, where the contract of insurance was made, did not bar the action, the laches of the plaintiff in delaying for more than ten years to bring the action in this State, should be regarded as equivalent to a waiver or abandonment of her claim, consequently a judgment in her favor could not be rendered without permitting her to take advantage of her own gross negligence, to the prejudice of other policy holders of the insurance company. In the second case it was held that as the foreign insurance company was a resident of Wisconsin and the contract of insurance was made in Ohio, and the action was brared by the statute of limitations of the' latter State, it could not be maintained in this State. But in N. W. Mutual Life Ins. Co. v. Lowry, *supra,*we in the opinion said: “It has been more than once held by this court that an action may be maintained in this State on policies of life insurance, by service of process on an agent here, although the principal office of the company may be in another State. ’ ’

As already stated, it is admitted by the pleadings that when this action was instituted appellee was authorized to do, and was doing, business in this State. Section 571, Kentucky Statutes, provides:

> “All corporations except foreign insurance companies formed under the law of this or any other State, and carrying on any business in this State, shall at all times have one or more ■ known places of business in this State, and an authorized agent or agents thereat, upon whom process can be served; and it shall not be lawful for any corporation to carry on any business in this State until it shall have filed in the office of the Secretary of State a statement, signed -by its president or *257secretary, giving the location of its office or offices in this State, and the name or names of its agent or agents thereat upon whom process can he served; and when any change is made in the location of its office or offices, or in its agent or agents, it shall at once file with the Secretary of State a statement of such change; and the former agent shall remain agent for the purpose of service until statement of appointment of the new agent is filed; and if any corporation fails to comply with the requirements ‘of this section, such corporation, and any agent or employe of such corporation, who shall transact, carry on or conduct any business in this State, for it, shall be severally guilty of a misdemeanor, and fined not less than one hundred nor more than one thousand dollars for each offense.”

It will be observed that foreign insurance companies are excluded from the operation of the statute *supra,*but this is because they come under the provisions of section 631, Kentucky Statutes, which declares:

> “Before authority is granted to any foreign insurance company to do business in this State, it must file with the commissioner a resolution adopted by its board of directors, consenting that service of process upon any agent of such company in this-State, or upon the commissioner of insurance of this State, in any action brought or pending in this State, shall be a valid service upon said company; and if process is served upon the commissioner it shall be his duty to at once send it by mail, addressed to the company at its principal office; and if any company shall, without the consent of the other party to any suit or proceeding brought by or against it in any court of this State, remove said suit or proceeding to any Federal court, or shall institute any suit or proceeding against any citizen of this State in any Federal court, it shall be the duty of the commissioner to forthwith revoke all authority to such company and its agents to do business in this State, and to publish such revocation in some newspaper of general circulation published in this State.”

Section 71 of the Code provides:

> “Excepting the actions mentioned in sections 62 to 66, both inclusive, and in sections 70 and 75, an action against an incorporated bank or insurance company may be brought in the county in which its principal office or place of business is situated; or, if it arise out of a *258transaction with an agent of such corporation, it may be brought .in the county in which such transaction toCk place. ” '' ' ' '

■ This' section applies to foreign as well as domestic insurance companies that have in this State' a principal office or place of business, for we so held in Employers’ Indemnity Co. v. Duncan, 159 Ky., 460. In the "opinion it is.said: '

> “It is argued that as the defendant' company is a foreign corporation, section 71 has no ‘application to it. The section, however, does not appear to limit its application to either domestic or foreign banks or insurance companies. It applies to all, whether domestic or foreign, *that have in this State a 'principal office'or place of business.*If the bank or insurance company,' whether domestic or foreign, has not in this State any principal office or place of business, then of course the action must be brought in the county'in which the transaction arose that is the basis of the action *if the contract was made in this State; *** *”

But suppose the contract is not made in this State and the foreign insurance company has not a principal office or place of business in this State, which is the state of case here presented, will such a situation altogether prevent the bringing of the action in this State by the non-residént plaintiff?- or is the venue fixed by section 78 of the Code, applying to transitory actions, which provides: ''

> “An action which is not required by the foregoing sections of this article to be ] brought in some other county, may be brought in any county in which the defendant, or in which one of several defendants who may be properly joined as such in the action, resides or' is summoned. ” . '

The only preceding section that could interfere with the application of section 78 would'be section 71, the localizing effect of which is applicable only in cases where the transaction took place in some county in the State, or where the defendant has a principal office or place of business in the State. It is patent, that appellant could not have brought this action -in any of the counties of this State designated in section 71 to localize the action; therefore, it would seem that it may he brought in'any county in'Which “the defendant * ** *•*is summoned, ”■ as provided by section 78.

*259In C. & O. Ry. Co. v. Cowherd, 16 R., 373, the action was for an injury received by the plaintiff in the State of West Virginia. He was a citizen of Shelby county, Kentucky, and brought his action in Jefferson county, to recover damages for the injuries sustained. Objection was made by the railroad company to the jurisdiction of the court, it being its contention that the venue of the action was fixed by section 73 of the Code, which provides that “an action against a common carrier, * * * for an injury to a passenger, or to other person or his property, must be brought in the county in which the defendant ** '* **resides or in which the plaintiff or his property is injured, or in which he resides, if he resides in a county into which the carrier passes;” and further, that as the defendant did not reside in Jefferson county and the plaintiff did not suffer his injury in that county, and defendant did not pass into or through the county of his residence, jurisdiction in the Jefferson court was wanting.

Section 51, subsection 4, of the Civil Code, then, as now, provides that, “In an action against a private corporation the summons may be served in any county upon the defendant’s chief officer or agent who may be found in this State; or it may be served in the county wherein the action is brought, upon the defendant’s chief officer or agent who may be found therein.”

Service of summons in the case *supra*was had upon the chief agent of the railroad. company in Jefferson county. Section 78 of the Code, applicable to transitory actions, with its present provisions, was then in force. The railroad company’s chief office and place of business was not in this State. In the opinion it is said:

> “Applying this section (73) to the case at hand, the Jefferson Court of Common- Pleas had no jurisdiction, because Jefferson county was not the county of the defendant’s residence, or that in which the plaintiff was injured, or that in which he resided and into which the carrier passed. Moreover, if this section is to control, the plaintiff is wholly without remedy so, far as the courts of his State are concerned. The corporation has established itself in business within the jurisdiction of the courts of the State, but because the injury was inflicted beyond her territorial limits the plaintiff is not allowed to sue in any of her courts; and so long as the carrier fails to run its road through Shelby county or *260fails to establish its chief office or place of business in Kentucky, the complainant is without remedy so far as this statute gives him relief, even though the managing agents of the carrier might be found doing business in «every county in the State.

> “We do not believe this construction of the law to "be sound. No attempt was made to localize actions where the jurisdictional facts contemplated in the statute were wholly wanting. In the very nature of things it would seem impossible to localize an action for a personal injury inflicted by a non-resident beyond the limits of the State. The existence of the localizing facts can be only accidental, and in most cases would be wanting, as they are here. It seems to us the law was intended to apply only in cases where the defendant, or one of them, resides in the State, or when the plaintiff is injured in the State, or resides in a county in the State into which the carrier passes. In the absence of these jurisdiqtional facts in any given case we must conclude, not that the plaintiff is without remedy, but that the localizing statute is not applicable. The state of fact which would limit or confine the plaintiff to certain designated counties in the institution of his action does not exist in the case at hand. It was impossible for the plaintiff to bring this action in any of the counties designated in the section relied on to localize the action, hence section *78*of the Code applies, and this provides that ‘an action which is not required by the foregoing sections of this article to be brought in some other county may be brought in the county in which the defendant, or in which one of several defendants, who may be prop-erly joined as such in the action, resides or is summoned.’ ”

> “It seems to.us that the application of this section to this case is entirely free from objection. The nonresident common carrier is thus put on the same footing with other non-resident litigants. When found doing business in the State it is presumably with the consent of the State, and that consent must be assumed to have been on the condition that it subject itself to the same legal environments that encompass other litigants, and it may, therefore, be sued as other litigants when properly summoned. ’ ’

■ The conclusion expressed in the opinion, *supra,*seems to us to control the decision of the question of jurisdic*261tion involved in the instant ease. Application of. the-provisions of section 71. of the Code, as contended by appellee, would make it impossible for appellant, or even a resident plaintiff, to bring this action in any of the counties to which that section would confine the venue. Under section 78, however, the right'of a non-resident to maintain a transitory action in this State, on.a contract made in another State, is the same as that of a citizen thereof. Its only requirement applicable here is that the action shall be brought in the county in which the defendant resides or is summoned, and it makes no distinction between a resident and non-resident plaintiff. Bishop v. Jackson, 28 R, 1136.

As by section 631, Kentucky Statutes, foreign insurance companies are' required to file with the commissioner a “resolution adopted by its board of directors, consenting that service of process upon any agent of such.company in this State, or upon the commissioner of insurance of this State, in any action brought or pending in this State, shall be a valid service upon said company,” and compliance-by appellee with this .requirement of the statute was a condition precedent to its right to do business in this State, its admission that it has no principal office or place of business in this State and that the transaction. out of which the action arose did not take place with-its agent in any county of the State, together with the service upon the commissioner, its designated agent, of summons on the petition, in our opinion, brings the case within the provisions of section 78, Civil Code. Therefore the circuit court should have taken jurisdiction of the case.

This conclusion renders unnecessary consideration of the third proposition urged by appellant, hence it is not passed on. For the reasons indicated, the judgment is reversed and cause remanded, with direction to the circuit court to overrule appellee’s demurrer to the petition, sustain appellant’s demurrer to appellee’s answer, and for further proceedings consistent.with the opinion.