Court Opinion

ID: 3877361
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:09:59.824806+00
Date Added: 2024-06-11T07:41:48.378321
License: Public Domain

June 30, 1942. The opinion of the Court was delivered by
About the 8th day of July, 1941, the plaintiff, Sherwood Mobley, was the owner of a truck which was being operated by his agent along a public highway in the State of North Carolina. At the same time and place, two trucks, the property of Howard Bland, a resident of Georgia, were being driven by the servants and employees of the said Howard Bland. The plaintiff alleges certain acts of negligence by the operators of the two trucks belonging to Bland, which resulted in one of the said trucks coming into collision with the truck of the plaintiff. Mobley was then, and is now, a resident of the County of Dillon, State of South Carolina. He brought action in the Court of Common Pleas for Dillon County and attached one of Bland's trucks while it was in that county.
The complaint contains the following allegations: "That the defendant Pennsylvania Casualty Company is a corporation organized and operated under the laws of one of the States of the United States and as such is engaged in the writing and issuance of liability insurance * * *. That the defendant Pennsylvania Casualty Company issued and now has outstanding its policy or policies of insurance insuring its co-defendant Howard Bland against loss from any liability imposed by law on the said defendant Howard Bland for damages resulting through the operation of said *Page 451 
trucks or either of them, and under said policy or policies the said defendant Pennsylvania Casualty Company is liable to this plaintiff along with its co-defendant Howard Bland for the damages sustained by the plaintiff * * *."
Under this allegation, the Pennsylvania Casualty Company was made a party defendant, and service was attempted to be had upon it by serving the summons and complaint upon the Insurance Commissioner of this State, and thereafter, by serving the summons and complaint upon an agent of the Casualty Company in the County of Dillon, in the State of South Carolina.
The Pennsylvania Casualty Company, appearing solely for that purpose, made a motion before the Honorable E.C. Dennis, presiding Judge, to set aside the service and to dismiss the complaint in the action for want of jurisdiction upon the grounds:
"1. That the cause of action did not arise in South Carolina nor is the subject of the action situate within this State, and the defendant is a foreign corporation.
"2. That it appears from the complaint that the subject of the action is an alleged tort committed in the State of North Carolina.
"3. * * * The said Insurance Commissioner has no power to bind the defendant with respect to the service of process upon a cause of action of the character described in the complaint based upon a tort committed outside of the State of South Carolina and to hold otherwise would deprive this defendant of its property without due process of law in violation of the Fifth Amendment to the Constitution of the United States, and deny to this defendant the equal protection of the laws and deprive it of its property without due process of law in violation of the Fourteenth Amendment to the Constitution of the United States."
The defendant Casualty Company also demurred to the complaint upon the following grounds:
"1. That the complaint shows that the cause of action did not arise in the State of South Carolina; that the subject *Page 452 
of the action is not situate within this State; that it does not appear that defendant is a corporation organized under the laws of this State, and since it appears from the complaint that the alleged delict occurred outside of the State of South Carolina this Court has no jurisdiction over this defendant.
"2. That there is a misjoinder of causes of action in the complaint, in that it appears that the plaintiff is undertaking to assert a cause of action against the defendant Howard Bland arising out of an alleged tort committed in the State of North Carolina and against this defendant upon an alleged contract whereby it insured the said Howard Bland against loss from liability imposed by law on the said Howard Bland for damages resulting from the operation of the automobile trucks referred to in the complaint.
"3. That the complaint fails to state any cause of action against the defendant, in that it does not appear that plaintiff has any rights under the policy of insurance issued by this defendant to the defendant Howard Bland insuring him against loss from any liability imposed by law."
The motions to set aside the service upon the insurance commissioner of the State, and upon an agent of the defendant casualty company in Dillon County, South Carolina, were denied by Judge Dennis, and the demurrer was overruled.
From the orders refusing to set aside the service and overruling the demurrer, the defendant, Pennsylvania Casualty Company, alone appealed upon seven exceptions, which counsel for appellant have grouped under the three following questions:
"1. Is a foreign, domesticated insurance company, on a cause of action arising out of the state, properly served by delivering a copy of the summons to one of its local agents in the state?
"2. Does the complaint set forth a cause of action on a contract of indemnity against liability? (Exception 7.) *Page 453 
"3. Can a suit in tort and one in contract arising in another state be joined in South Carolina in the face of foreign statute to the contrary?"
The issue made by the first question was held by Judge Dennis, in his decree, to be governed by the decision of this Court in the case of Lipe v. Carolina, C.  O. RailwayCompany, 123 S.C. 515, on page 523, 116 S.E., 101, on page 103, 30 A.L.R., 248, in which it was held:
"The conclusive answer to that question is found in Section 461 of the Code of Civil Procedure of 1912 [Section 826 of the Code of 1932], providing that —
"`An action against a corporation created by or under the laws of any other state, government, or country, may be brought in the Circuit Court (1) by any resident of this state, for any cause of action, (2) by a plaintiff not a resident of this state, when the cause of action shall have arisen, or the subject of the action shall be situated, within this state.'
"The language of the statute, conferring the right upon any resident to bring an action in the Circuit Court against a foreign corporation `for any cause of action', and limiting the right of action of a non-resident, is too clear to require interpretative comment. The plaintiff, a resident of the state, was entitled to sue upon her transitory cause of action arising in the state of North Carolina, and the Circuit Court was invested with jurisdiction to try the cause. Obviously, if the service of process was otherwise sufficient to give the Circuit Court jurisdiction of the person of the defendant, the service was not invalidated or rendered nugatory by reason of the fact that the plaintiff's cause of action arose without the state."
It is true that the Lipe case, supra, involved "an action against a corporation created by or under the laws of" another State, and that case, which was concerned with a Virginia railroad corporation, properly fell within the terms of Section 826 of the Code of Laws for 1932. *Page 454 
In the case at bar, we are concerned with a "foreign insurance company," under Section 7964 of the Code of Laws of South Carolina for 1932, from which we quote: "Every foreign insurance company shall, before being licensed, appoint in writing the insurance commissioner and his successors in office to be its true and lawful attorney upon whom all legal process in any action or proceeding against it shall be served, and in such writing shall agree that any lawful process against it which is served upon such attorney shall be of the same legal force and validity as if served upon the company, and that the authority shall continue in force so long as any liability remains outstanding in the State. * * * Service shall only be made upon such attorney, must be in duplicate and shall be deemed sufficient service upon such company. * * *"
The Lipe case, which did not involve a foreign insurance company, was, in our opinion, quite properly governed by Section 826 of our Code, for it dealt with a foreign corporation which was other than a foreign insurance company, and therefore is entirely distinguishable from the case now under consideration. Furthermore, theLipe case was decided in the year 1923. Even if it should contain any implication that the manner of service, proper in that case, should apply here, such implication is overcome by the far more recent case of Murray v. Sovereign Camp, W.O.W., 192 S.C. 101, 5 S.E.2d 560, which was decided by this Court sixteen years thereafter in the year 1939. We quote from page 108 of that opinion in 192 S.C. page 562 of 5 S.E.2d: "We hold, therefore * * * that service on foreign insurance companies as provided for in Section 7964 of the Code of 1932 is exclusive, and that service made in any other way upon such corporations is invalid. Any holding or ruling of the Court in the case of Lucas v.North Carolina Mutual Life Insurance Company, supra
[184 S.C. 119, 191 S.E., 711], to the contrary is hereby expressly overruled." *Page 455 
And on page 109 of the same opinion in 192 S.C. on page 563 of 5 S.E.2d, we find: "* * *, the Courts are practically uniform in holding in such cases that the method of service designated in the Statute is exclusive, and that service may not be had upon any other agent of the corporation."
In view of the disposition which we shall make herein of other questions raised by the appeal, it is not necessary to take up and decide the question of service in this case, but it is well to remark, in passing, that the Murray case, whose authority is more recent by so many years, and which, so far as foreign insurance corporations are concerned, is directly contrary to the Lipe case, governs the method, under Section 7964 of the 1932 Code, by which foreign insurance corporations are to be exclusively served.
In our judgment, the question of prime importance for disposition in this case is whether his Honor erred in his interpretation of the North Carolina case of Williams v. FredericksonMotor Express Lines, Inc., et al., 195 N.C. 682,143 S.E., 256. After citing the North Carolina case ofBrown v. Brevard Auto Service Company et al., 195 N.C. 647,143 S.E., 258, and after stating in his supplementary order that the Brown case "leaves no doubt that the rule in that state is as contended by defendants," Judge Dennis makes the following statement: "However, in a similar case which seems to have been filed at the same time as the Browncase (referring to the case of Williams v. Frederickson MotorExpress Lines, supra) that Court held that the statute upon which the ruling in the Brown case was based is in its nature merely remedial. Hence it would not be controlling in an action brought in another state on a cause arising in North Carolina."
We cannot agree with his Honor in his interpretation of the Williams case, from which we quote on page 257 of 143 S.E.: "The defendant demurred on the ground that this joinder was prohibited by section 6 of chapter 136 of the Public Laws of 1927, the court below overruled the demurrer, *Page 456 
and the defendants appealed to this Court. We think the demurrer should have been sustained."
And again, on the same page, the North Carolina Court held in that case: "Under the facts and circumstances of this case, we must hold that the statute prohibits the joinder of the assurer and the assured."
Public Laws 1927 (North Carolina), c. 136, Section 6, provide: "In any action in the Courts arising out of damage to person or property, the assurer shall not be joined in the action against the assured; but upon final judgment against the assured, the assurer shall be liable within the limitations of the policy for the amount recovered and all court costs."
The foregoing section of the North Carolina statute is cited with approval in the Williams case, supra.
We cannot agree with his Honor in his conclusion that the ruling of the North Carolina Court is in its nature merely remedial. We think it clear, under the North Carolina statute, and under the Williams case, and under the Brown case, that the assured and the assurer cannot be joined in the same action in a case of this kind. In the latter case the North Carolina Court said, at page 258 of 143 S.E.: "The several defendants also demurred for misjoinder of both parties and causes of action. The demurrers were overruled. In this we think the court below erred."
We think that the Brown case, and the North Carolina statute, supra, establish the North Carolina law on this question.
Proceeding further, the Circuit Judge stated in his supplementary order: "In any event our own Supreme Court in the case of Andrews v. Poole, 182 S.C. 206,188 S.E., 860, cited in the previous order, seems to have settled the matter in favor of a joinder. It is true that this case has since been modified in certain particulars, yet there is no indication that its authority on this particular point has been disturbed." *Page 457 
In our opinion, the Andrews case has no application here. In that case the trial Judge, whose ruling was affirmed by this Court, stated (quoting from page 211 of 182 S.C. page 862 of 188 S.E.): "Gentlemen, I am going to let the case go to the jury, and I think I will state my ruling right here now. I am not going to put it on any grounds that I think are doubtful; in the first place I am satisfied that the statutory provisions of this state have no application, no force and effect in this suit, because this is a suit for damages sustained by the plaintiffs, who are not only nonresidents of the state, but have a cause of action which arose beyond the limits of the state; and therefore, the plaintiffs have no protection under the statute law of this state. However, the policy which is in evidence in writing must be construed by the court; * * *."
The Circuit Judge then proceeded to construe the policy which, in that case, had been placed in evidence. In the instant case, the policy does not form a part of the record now before the Court. It is not in evidence, was not before the trial Court, and is not before this Court, and it is impossible for the Court to determine, as was done in the Andrewscase, whether it is a "liability insurance policy" or "merely a policy of indemnity against loss." Furthermore, in the Andrewscase, his Honor, Judge Gaston, expressly stated that he was not relying on the statute, but that he was relying solely on the contract of insurance, which was before him for interpretation.
The cause of action in the present case arose in North Carolina, and even if it should be admitted that it can be tried in this State, we think that it must be tried in accordance with the law of North Carolina, whose object is that the jury should not be influenced by the fact that the defendant has insurance. Our own Court has repeatedly refused to permit it to be shown that the defendant carries insurance, lest the jury be influenced thereby.
The fact that this action is governed by the lex loci, rather than by the law of the forum, is well supported by the case *Page 458 
of Ophuls  Hill, Inc., v. Carolina Ice  Fuel Company,160 S.C. 441, on page 450, 158 S.E., 824, on page 827, in which this Court said:
"Many attempts to differentiate the meaning of the terms `cause of action' and `subject of action' occur in the law books. None of them more clearly states that difference than does Bliss on Code Pleading (3rd Ed.), 214, quoted with approval in our case of Columbia National Bank v.Rizer, 153 S.C. [43], at page 55, 150 S.E., 316, 320, 68 A.L.R., 443:
"`The cause of action has been described as being a legal wrong threatened or committed against the complaining party; and the object of the action is to prevent or redress the wrong by obtaining some legal relief. The subject of the action is, clearly, neither of these; it is not the wrong which gives the plaintiff the right to ask the interposition of the court, nor is it that which the Court is asked to do for him, but it must be the matter or thing, differing, both from the wrong and the relief, in regard to which the controversy has arisen, concerning which the wrong has been done; and this, is ordinarily, the property, or the contract and its subject-matter, or other thing involved in the dispute.' * * *
"Another clear and succinct definition of the words `subject of the action' is found in the case of Humbert v. Brisbane,25 S.C. 506; we quote:
"`Exactly what is meant by the words, "subject of the action," as used in the code does not seem to be very clearly defined in any judicial decision which has come under our notice. Mr. Pomeroy, who is regarded as a standard authority in the construction of the Code, in his valuable work on Remedies, at page 800, Section 775, after stating some of the different constructions which have been placed upon these words, uses this language:
"`"It would, as it seems to me, be correct to say in all cases legal or equitable, that the `subject of action' is the plaintiff's main primary right which has been broken, and by means of whose breach a remedial right arises."'" *Page 459 
In the case of Hodges v. Lake Summit Company, 155 S.C. 436,152 S.E., 658, the plaintiff, a resident of South Carolina, sued the defendant, a North Carolina corporation, situated in that State, on the notes made payable to another North Carolina corporation, also situate in that State. The notes had been assigned to plaintiff as trustee. The question of jurisdiction arose in the trial of the case. This Court said thereabout, 155 S.C. on page 444, 152 S.E., on page 661: "It does not follow as a matter of course that the court had jurisdiction of the subject-matter of the controversy for the reason simply that it had jurisdiction of the person of the defendant. In order to accord to the court jurisdiction of the entire case, it must appear that its jurisdiction of both the person of the defendant and the subject-matter cannot be questioned."
See, also, the case of Knight et al. v. Fidelity  CasualtyCompany of New York, 184 S.C. 362, 192 S.E., 558, in which the Ophuls and the Hodges cases are both discussed with approval by this Court.
In the case of Thompson v. Queen City Coach Company,Inc., et al., 169 S.C. 231, on page 240, 168 S.E., 693, on page 697, this Court said: "In the case here there is no cause of action against the sureties except that arising out of the delict of the bus companies. As we have already shown, the court has no jurisdiction of the subject of the action in so far as the bus companies are concerned; it follows that it can have no jurisdiction of the case, and hence cannot entertain the action against the sureties."
In the case of Salway v. Maryland Casualty Company, 176 S.C. 215, on page 223, 179 S.E., 787, on page 791, this court said: "The cause of action in this case did not arise in this state, nor is the subject of the action situated within this state. It follows that the court never acquired jurisdiction of the defendant, and erred in overruling defendant's motion to dismiss the complaint, and erred in assuming jurisdiction and trying the case." *Page 460 
This Court has also held, in the case of Cox v. EmployersLiability Assurance Corporation, Limited, London, England,et al., 191 S.C. 233, at page 235, 196 S.E., 549, at page 550: "We hold that one who alleges injury due to the negligent operation of a motor vehicle which is privately owned and privately used, and not used as a common carrier, may not unite in his complaint a cause of action in tort against the owner and operator of the motor vehicle with a cause of action on a contract of liability insurance carried by the owner of the motor vehicle."
In the present case it is not known what kind of insurance contract was issued by the insurer to the owner of the trucks, nor is it ascertainable from the complaint in the case whether or not the defendant, Bland, was operating as a common carrier.
We think that the Pennsylvania Casualty Company was improperly joined as a party defendant, and that its demurrer should have been sustained. The exceptions in that respect are sustained, and the judgment reversed.
MR. ASSOCIATE JUSTICE BAKER and CIRCUIT JUDGE WM. H. GRIMBALL, ACTING ASSOCIATE JUSTICE, concur.
MESSRS. ASSOCIATE JUSTICES FISHBURNE and STUKES dissent.