Hodges v. Home Ins. Co. of New York

61 S.E.2d 372 (1950)

232 N.C. 475

HODGES v. HOME INS. CO. OF NEW YORK. HODGES v. GRANITE STATE FIRE INS. CO., PORTSMOUTH, N. H. HODGES v. CONNECTICUT FIRE INS. CO., HARTFORD, CONN. HODGES v. NEW HAMPSHIRE FIRE INS. CO. OF MANCHESTER, N. H.

No. 19.

Supreme Court of North Carolina.

October 11, 1950.

*373 Carter & Carter, Washington, D. D. Topping, Belhaven, for plaintiff.

Rodman & Rodman, Washington, for defendants.

WINBORNE, Justice.

On Defendants' Appeal: The question here is whether the commissioner of insurance of North Carolina is authorized to accept or waive service of summons in an action against a foreign insurance company doing business in this State. The statute, Article 17 of Chapter 58 of the General Statutes, indicates a negative answer.

Substituted service of process was unknown to common law, but depends upon statutory authorization. And a strict compliance with the provisions of such statute must be shown in order to support a judgment based on such substituted service. The inquiry must be as to whether the requisites of the statute have been complied with, and such compliance must appear on the record. 42 Am.Jur. 55, Process, Section 66. Indeed, in Propst v. Hughes Trucking Co., 223 N.C. 490, 27 S.E.2d 152, this Court in treating the subject of substituted service of process on nonresident operators of motor vehicles on the public highways of this State, G.S. § 1-105, applied the rule of strict compliance.

The statute provides that foreign insurance companies, upon complying with the conditions set forth therein, applicable to them, may be admitted to transact business in this State, etc. G.S. § 58-149, as amended by 1945 Session Laws of North Carolina, Chapter 384.

The statute also provides that such insurance company may be admitted and authorized when it, among other things, "(3) By a duly executed instrument filed in his office constitutes and appoints the commissioner and his successor its true and lawful attorney, upon whom all lawful processes in any action or legal proceeding against it may be served, and therein agrees that any *374 lawful process against it which may be served upon such attorney shall be of the same force and validity as if served on the company * * *." G.S. § 58-150, as amended by 1945 Session Laws of N. C., Chapter 384, Sec. 1.

And the statute requires that "The service of legal process upon any insurance * * * company, admitted and authorized to do business in this state under the provisions of this chapter, shall be made by leaving the same in the hands or office of the commissioner of insurance, and no service upon a company that is licensed to do business in this state is valid unless made upon the commissioner of insurance, the general agent for service, or some officer of the company", and that "as a condition precedent to a valid service of process and of the duty of the commissioner in the premises, the plaintiff shall pay to the commissioner of insurance at the time of service the sum of one dollar, which the plaintiff shall recover as taxable costs if he prevails in his action * * *." G.S. § 58-153.

And the statute also requires that "When legal process is served upon the commissioner of insurance as attorney for an insurance company under the provisions of this chapter, he shall immediately notify the company of such service by registered letter directed to its secretary and shall state whether or not complaint was served with the process, * * *." G.S. § 58-154.

Thus it appears that the commissioner of insurance is constituted and appointed the true and lawful attorney only upon whom lawful processes "may be served". The purpose is limited to this, and it is observed that no authority is given the commissioner to accept service of summons. The agency created in compliance with the provisions of the act is, quoting the Supreme Court of the State of Washington, "a passive agency". See Bennett v. Supreme Tent of the Knights of Maccabees of the World, 40 Wash. 431, 82 P. 744, 745, 2 L.R.A., N.S., 389, a case similar to the one in hand.

The wording of the statute clearly indicates that the legislature intended that process should be served in the manner other summonses are served. And, in this connection, it is noted that our statute prescribing procedure for the commencement of civil actions requires that "summons must * * * be directed to the sheriff or other proper officers of the county" in which the defendant resides or may be found, and "must be served by the sheriff to whom it is addressed". G.S. § 1-89.

Thus there is error in the ruling of the trial court in denying defendants' motion to dismiss the action on the grounds stated.

On Plaintiff's Appeal: The holding on the question presented on defendants' appeal, as above set forth, removes the basis for the question presented on this, the plaintiff's appeal.

Hence, the ruling here is:

On defendants' appealReversed.

On plaintiff's appealAffirmed.