1. A judgment by default rendered against a foreign corporation
on process served on a state officer as its agent, in a state in
which it has done no business, nor otherwise consented to be so
served, is void. P. 261 U. S.
2. Upon facts stated, held:
(a) That a contract of insurance made between a mutual insurance
company and a person domiciled in another state, through acceptance
at the company's home office of an application received by mail,
was a contract made and to be performed in the the company's
(b) That the company could not be said to be doing business in
the other state merely because one or more of its members, at its
suggestion but without authority to obligate it, solicited new
members there, or because it insured persons living there, mailed
notices to them, and paid losses by checks upon its home bank,
mailed from its home office. P. 261 U. S.
149 Minn. 497 reversed.
Certiorari to a judgment of the Supreme Court of Minnesota
affirming a judgment recovered by the respondent against the
petitioner in an action based on a Montana judgment.
Page 261 U. S. 141
MR. JUSTICE McREYNOLDS delivered the opinion of the Court.
Petitioner is a mutual assessment, accident, and health
insurance company incorporated under the laws of Minnesota, with
many members scattered throughout the Union. It issued a
certificate of membership to Robert J. Benn, of Montana. He died in
1915, and his executrix -- respondent here -- instituted an action
against the association in a Montana court to recover the sum said
to be due under the rules. After service of summons and complaint
upon the Secretary of State and the Insurance Commissioner,
judgment was entered by default. Thereafter, she brought an action
in Minnesota upon the judgment and prevailed both in the trial and
Supreme Court. Benn v. Minnesota Commercial Men's Assn.,
149 Minn. 497.
Defending, the association claimed that it had never done
business in Montana or consented to service of process there; that
the insurance contract was executed and to be performed in
Minnesota; that the Montana
Page 261 U. S. 142
court was without jurisdiction, the judgment void, and
enforcement thereof would deprive petitioner of property without
due process of law contrary to the Fourteenth Amendment.
The decision here must turn upon the effect of the process
served on the Secretary of State in Montana. Did the court there
acquire jurisdiction to enter judgment?
The Supreme Court of Minnesota followed Wold v. Minnesota
Commercial Men's Association,
(1917) 136 Minn. 380, wherein
the opinion referred to Connecticut Mutual Life Insurance Co v.
Sprately, 172 U. S. 602
Commercial Mutual Accident Co. v. Davis, 213 U.
, but did not cite Hunter v. Mutual Reserve
Life Insurance Co., 218 U. S. 573
Provident Savings Society v. Kentucky, 239 U.
Section 6519, subdivision 3, Montana Revised Code of Civil
Procedure (1915), provides:
"Any corporation organized under the laws of the State of
Montana, or doing business therein, may be served with summons by
delivering a copy of the same to the president, secretary,
treasurer, or other officer of the corporation, or to the agent
designated by such corporation. . . . And if none of the persons
above named can be found in the State of Montana, and an affidavit
stating that fact shall be filed in the office of the clerk of the
court in which such action is pending, then the clerk of the court
shall make an order authorizing the service of summons to be made
upon the Secretary of State, who shall be and is hereby constituted
an agent and attorney in fact to accept service on behalf of such
corporation, and service upon said Secretary of State shall be
deemed personal service upon said corporation."
Petitioner has never maintained any office except in
Minneapolis, Minnesota; its business is transacted there; it has
never owned property or sought permission to do business in any
Page 261 U. S. 143
Applications for membership are presented on printed forms,
usually by mail. The bylaws provide that no person can secure
membership until the board of directors has accepted his
application at the home office and certificate has issued. Such
certificates are mailed as directed by the applicants.
Assessments and dues are payable at the Minneapolis office, and
notices in respect of them are mailed to members at their last
New members are procured by advertisement and through the
solicitation of older ones. The latter are urged to furnish lists
of prospects and to use their influence to increase the membership,
but no member has authority to bind the association. Although not
essential, applications frequently bear a member's recommendation.
Soliciting members receive no compensation except occasional
premiums or prizes. No paid solicitors or agents are employed.
Losses are settled by checks on Minneapolis banks mailed from
the home office. Proofs of loss must be made on the forms provided.
In case the attending physician's certificate is inadequate, the
association procures additional information through some local
physician, but no resident physicians are employed outside of
Minnesota. The right to make further investigation is reserved, but
there is no evidence to show anything has been done under this
reservation in the present case. Losses are adjusted by the
directors in Minneapolis.
The association accepted Robert J. Benn's application for health
insurance, solicited and recommended by Harry K. Hartness, a
member, November 6, 1908, and a further application for additional
protection May 3, 1911. These were sent by mail from Kalispel,
Montana, where both individuals resided. Notices were regularly
mailed to Benn at his home address, and he paid dues and
assessments in the ordinary course. It does not appear that there
Page 261 U. S. 144
unusual or irregular in the proofs of death or the report of
attending physician. Without further investigation and upon
unsolicited information received through the mail, the association
declined to pay.
Respondent claims that the facts show petitioner was doing
business in Montana and the insurance contract was made and payable
there. And it is said this contention is supported by
Connecticut Mutual Life Insurance Co. v. Spratley, supra,
and Penn Lumbermen's Insurance Co. v. Meyer, 197 U.
Considering all the circumstances, it seems sufficiently clear
that the agreement incident to membership is a Minnesota contract,
there made and to be performed.
The Montana court was without jurisdiction unless petitioner, by
doing business in the state, impliedly assented that process might
be served upon the Secretary of State as its agent.
"If an insurance corporation of another state transacts business
in Pennsylvania without complying with its provisions, it will be
deemed to have assented to any valid terms prescribed by that
commonwealth as a condition of its right to do business there, and
it will be estopped to say that it had not done what it should have
done in order that it might lawfully corporate powers."
Old Wayne Life Association v. McDonough, 204 U. S.
, 204 U. S. 21
The circumstances chiefly relied on to show that petitioner was
doing business in Montana are these: the insured was asked to send
in his application, upon a form furnished by the association, by
Hartness, one of its members and a resident of Montana, who with
other members had been requested to procure such applications. The
form was filled and signed in Montana and then sent to Minneapolis
with the requisite fee. It was accepted and certificate of
membership mailed to the applicant. After customary notices from
the association, with which blank applications for new members were
Page 261 U. S. 145
the insured sent dues and assessments from his home in Montana
to Minneapolis by mail and received receipts, all according to the
usual method. Other members of the association resided at Kalispel.
The association reserved the right to investigate all claims for
sickness, accident, or death.
Considering what this Court held in Green v. Chicago,
Burlington & Quincy Ry., 205 U. S. 531
Philadelphia & Reading Ry. v. McKibbin, 243 U.
; People's Tobacco Co. v. American Tobacco
Co., 246 U. S. 79
Rosenberg Bros. & Co. v. Curtis Brown Co.,
260 U. S. 516
think it cannot be said that the association was doing business in
Montana merely because one or more members, without authority to
obligate it, solicited new members. That is not enough
"to warrant the inference that the corporation has subjected
itself to the local jurisdiction, and is by its duly authorized
officers or agents present within the state or district where
service is attempted."
People's Tobacco Co. v. American Tobacco Co., supra,
246 U. S.
It also seems sufficiently clear from Allgeyer v.
Louisiana, 165 U. S. 578
Hunter v. Mutual Reserve Life Insurance Co., supra,
Provident Savings Society v. Kentucky, supra,
insurance corporation is not doing business within a state merely
because it insures lives of persons living therein, mails notices
addressed to beneficiaries at their homes, and pays losses by
checks from its home office. See also Pembleton v. Illinois
Commercial Men's Association,
289 Ill. 99.
We conclude that the record fails to disclose any evidence
sufficient to show that petitioner was doing business in Montana
within the proper meaning of those words, and that the court there
lacked jurisdiction to award the challenged judgment.