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(197 U. S. 407) PENNSYLVANIA LUMBERMEN'S MU- | city of Rome, New York, a director of the TUAL FIRE INSURANCE COMPANY company, who resided in that city, and, on v.

application of the company, appearing speCHARLES C. MEYER.

cially, the case was removed into the United

States circuit court for the western disFederal courts jurisdiction of action trict of New York, because of diverse citi

against foreign corporation validity of zenship of the parties. By motion, on speservice of summons on resident director. cial appearance, to set aside the service, by

plea, exception, and assignment of error, the 1. A foreign insurance company is doing busi- question as to whether jurisdiction of the

ness within the state, so far as the question
of the power of a Federal court, sitting in has been properly raised.

company had been obtained by such service that state, to obtain jurisdiction over such corporation, is concerned, where, under the

The defendant in error is, and at the time terms of its policies covering property in that of the commencement of this action was, a state, it sends its agents there to adjust citizen and resident of the state of New losses.

York. The plaintiff in error is a fire-in2. A cause of action founded on a loss of sutance corporation, organized under the

the property covered by a policy of insurance issued by a foreign corporation arises laws of the state of Pennsylvania, and its within the state, within the meaning of the office is in Philadelphia. Written applicaprovision for service of summons on foreign tions were duly made to it for the issuance corporations contained in N. Y. Code Civ. of the policies in suit, and were mailed from Proc. $ 432, subd. 3. where the property Rochester, New York, to the company, at insured was situated in that state, the loss was to be adjusted there, and the company,

Philadelphia, Pennsylvania. The policies in case of loss, was given the option of were made out and executed by it at Phila

payment or of repairing or rebuilding. delphia, and were sent to the insured at 8. Service of summons within the state on a Rochester, New York, where he received the resident director of a foreign insurance com

All transactions between the company, as provided by N. Y. Code Civ. Proc. $ 432, subd. 3, when the cause of action pany and said insured, subsequent to the isarises therein, is a valid service if the com

suance of said policies, and until after the pany is doing business in the state, and con- destruction of said property by fire, were fers jurisdiction on a Federal court sitting by correspondence, in writing from Philain that state.

delphia to him, at Rochester, and he, writ(No. 182.]

ing from Rochester, to it, in Philadephia.

Three of the said company's thirteen di

rectors reside in the state of New York, but Argued March 14, 15, 1905. Decided April the only act done by them for it is to at

,
3, 1905.

tend, from time to time, the meetings of the A CERTIFICATE from the United board of directors, which are held in the city States Circuit Court of Appeals for the

of Philadelphia, and there to give such adSecond Circuit, presenting a question as to vice and take such action in connection with the validity of the service of summons on

its business as may seem to them proper. a resident director of a foreign insurance They perform no duties and do no acts for company. Answered in the affirmative.

the company in the state of New York, and

never have. The company has no agents or Statement by Mr. Justice Peckham:

officers within that state, and has not had Meyer, the plaintiff below, recovered judg.

at any time. It has no office within that ment in the United States circuit court for state, has never been authorized or licensed the western district of New York, against | by the insurance department thereof to do the corporation defendant, for five thousand business therein, and has not taken the steps and some odd dollars, upon policies of fire required by law for that purpose. At the insurance issued by it upon certain build- date of the service of the summons, as aforeings (and the machinery therein in the said, the said company had and now has city of Rochester, in the state of New York. about nine hundred thousand dollars ($900,The corporation sought to obtain a review 000) outstanding insurance on property of the judgment, and to that end sued out within the state of New York, which is a writ of error, and the case was brought something less than one third of its total before the court of appeals for the second risks. The applications therefor were made circuit, which has certified certain facts by mail, addressed to it at Philadelphia, and upon which it desires the opinion of this the policies were executed and issued at court. These facts are as follows:

that city, and sent by mail from there to The action was commenced in the supreme the insured within the state of New York. court of the state of New York by service Ever since the plaintiff in error was inof the summons on Samuel H. Beach, at the corporated it has been engaged in the busi- .

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ness of insuring property located in the tion for depreciation, however caused, and state of New York and other states against shall in no event exceed what it would then loss by fire, and has sent by mail circu- cost the insured to repair or replace the lars from Philadelphia into said state, so- same with material of like kind and qualliciting business. In the prosecution of its ity; the assessment or estimate is to be business, and for the purpose of increasing made by the insured and the company; if it, the company sends its general manager they differ as to the amount of loss, the to the different conventions of lumbermen same is to be ascertained by two competent held in the state of New York, for the pur- and disinterested appraisers, the insured pose of urging upon those attending upon and the company each selecting one, and such conventions the advantages of insuring the two so chosen are to select a competent with it. It sends its adjusters into the state and disinterested umpire; the appraisers toof New York when a loss by fire occurs there gether are to estimate and appraise the loss, to property insured by it, for the purpose of stating separately sound value and damage, adjusting the amount of such loss. It orig-and, failing to agree, they are to submit inally placed insurance upon the property their differences to the umpire; and the covered by the policies in question after its award in writing of any two shall determine manager had pointed out the advantage of the amount of the loss. After the amount insuring in the company, the conversation of the loss or damage has been thus deterbeing had at the city of Rochester, in that mined, the sum for which the company is state.

liable is payable in sixty days. It is op

tional with the company to repair, rebuild, Mr. Frank P. Prichard for the insur- or replace the property lost or damaged ance company.

with other of like kind and quality, within Mr. Heman W. Morris for Meyer. a reasonable time, as provided for in the

policy. Mr. Justice Peckham, after making the

In order that a Federal court may obforegoing statement, delivered the opinion tain jurisdiction over a foreign corporation, of the court:

the corporation must, among other things, Upon the facts thus certified the circuit be doing business within the state. St. court of appeals asks the question: "Had Clair v. Cox, 106 U. S. 350, 27 L. ed. 222, 1 the circuit court jurisdiction of the plain- Sup. Ct. Rep. 354; Goldey v. Morning News, tiff in error?

156 U. S. 518, 39 L. ed. 517, 15 Sup. Ct. In addition to the facts contained in the Rep. 559; Barrow $. 8. Co. v. Kane, 170 foregoing certificate, the counsel for the re- 526; Connecticut Mut. L. Ins. Co. v. Sprat

U. S. 100, 42 L. ed. 964, 18 Sup. Ct. Rep. spective parties stipulated upon the argument in this case before this court that a ley, 172 U. S. 602, 43 L. ed. 569, 19 Sup. Ct. copy of one of the policies on which suit Rep. 308. was brought in this case was correctly set

To obtain jurisdiction of a foreign corout in the printed record in the circuit court poration under the Code of New York, perof appeals, and that this court might con

sonal service of the summons upon and a desider and decide the case with the same ef-livery to the defendant must be made in the foct as if, in the statement of facts accom

manner designated by § 432 of the Code of panying the question certified by the cir. Civil Procedure of that state. Subdivision cuit court of appeals, that court had found 1 of that section provides for the service of and certified the additional fact that the the summons on and its delivery to the record in the circuit court of appeals con- president, treasurer, or secretary; subdivitained a true copy of one of the policies, sion 2 provides for like service upon and deand that the others sued upon were in the livery to a person designated for the pursame form and language as the one set out pose by the corporation. The service was in that record.

made in this case under subdivision 3 of The policies in suit were issued upon a

that section, which reads as follows: two-story frame sawmill building and addi

3. "If such a designation is not in force, tions, and also upon engines and boilers or if neither the person designated nor an and other machinery placed in that build- officer specified in subdivision first of this ing, situated on Monroe avenue, in the city section can be found with due diligence, and of Rochester, state of New York. The poli- the corporation has property within the cies provide that the company shall not state, or the cause of action arose therein, be liable beyond the actual cash value of to the cashier, a director, or a managing the property at the time any loss or damage agent of the corporation within the state.” occurs, and that such loss or damage is to It does not appear that the company had be ascertained or estimated according to any property within the state, and therefore, such actual cash value, with proper deduc- l in order to come within subdivision (3) of the section, the cause of action must have order to carry out its provisions, and it arisen therein, and the summons must have could not properly be carried out without been served within the state upon one of the this act being done; and the contract itself officers nained in that subdivision; viz., the is the very kind of contract which constitucashier, a director, or a managing agent of ted the legal business of the company, and the corporation.

for the purpose of doing which it was in(1) Was the company doing business in corporated. This is not a sporadic case, nor

1 New York state? Nearly one third of the the contracts in suit the only ones of their amount of its total fire risks was in that kind issued upon property within the state state when these policies were issued and of New York. Many contracts of the nature when the loss occurred. If it be conceded of the one in suit were entered into by the that the contract was made in Philadelphia, company, covering property within the state. it does not follow that all its business was We think it would be somewhat difficult for therefore done in the state of Pennsylvania. the defendant to describe what it was doing The contract was an insurance policy issued in New York, if it was not doing business upon real estate and machinery in a building therein, when sending its agents into that situated in the city of Rochester, in New state to perforin the various acts of adjustYork. The contract was to pay the amount ment provided for by its contracts, and made of loss which might be sustained by fire, as necessary to carry them out. specified in the policy. The policy provides We have no difficulty in concluding that for the manner of determining the amount the defendant was doing business in the of this loss, either by agreement between state of New York during all the time of the company and the owner, or, in case of the existence of these policies. disagreement, then by the appraisers, as al- (2) Did the cause of action arise within ready stated. The provisions of the con- that state? Although the contract may have tract clearly contemplate the presence of an been a Pennsylvania contract, yet it does not agent of the company at the place of the follow that all its provisions were to be carloss after it has occurred, for the purpose ried out in that state. The policy of insurof determining its extent, and adjusting, if ance was, as we have said, upon real estate possible, the amount payable by the com- within the state of New York, and upon mapany to the owner. If no such adjustment chinery contained in the buildings insured. can be made, the policy provides in terms After the defendant and the owner had for the appointment of appraisers, one by either agreed upon the amount of loss, or the company and one by the owner, and that the same had been estimated and determined they disagreeing, an umpire shall be ap- upon by the appraisers, as provided for in pointed, and the agreement by any two shall the policy, the defendant, by the terms of be binding. After that, the loss is payable that instrument, promised to pay to the to the owner by the company within sixty owner the amount thus arrived at, within days. As the policy insures against loss, it sixty days. The policy does not state in of course contemplates that such loss may so many words where such payment is to occur; and it also conteinplates that the be made, but it is a general rule that, in company shall send to the place where the the absence of any such provision, or of loss occurred, that is, to New York, its agent, any language from which a different inferfor the purpose stated. When, under the ence may be inferred, the right of the credterms of the contract, the company sends its itor to demand payment at his own domicil agent into the state where the property was exists, and it is the duty of the debtor to insured, and where the loss occurred, for the pay his debt to the creditor in that way. It purpose of adjustment, it would seem plain is stated in the opinion of this court, by that it was then doing the business contem- Mr. Justice Field, in State Tax on Foreignplated by its contract, within the state. A held Bonds (Cleveland, P. & A. R. Co. v. fire-insurance company which issues its poli- | Pennsylvonia), 15 Wall. 300, 320, 21 L. ed. cies upon real estate and personal property 179, 187: “All the property there can be in situated in another state is as much engaged the nature of things in debts of corporain its business when its agents are there un- tions belongs to the creditors, to whom they der its authority, adjusting the losses cov- are payable, and follows their domicil, ered by its policies, as it is when engaged wherever that may be. Their debts can have in making contracts to take such risks. If no locality separate from the parties to not doing business in such case, what is it whom they are due. This principle might doing? It is doing the act provided for in be stated in many different ways, and supits contract, at the very place where, in ported by citations from numerous adjudicase a loss occurred, the company contem- cations, but no number of authorities, and plated the act should be done; and it does no forms of expression, could add anything it in furtherance of the contract, and in 'to its obvious truth, which is recognized upon its simple statement.” It is stated in make payment, and has also failed to avail 2 Parsons on Contracts, 8th ed. 702, as fol. itself of its option to rebuild. The payment, lows: "All debts are payable everywhere, we think, was to be made at the same place unless there be some special limitation or where the rebuilding was to be done, in case provision in respect to the payment; the the defendant availed itself of its right to rule being that debts as such have no locus rebuild; that is, within the state of New or situs, but accompany the creditor every-York, where the loss occurred. Failing to where, and authorize a demand upon the make payment, or failing to build or repair, debtor everywhere.” See also Chicago, R. I. it failed to comply with the terms of its & P. R. Co. v. Sturm, 174 U. S. 710, 43 L. contract, and out of that failure the cause ed. 1144, 19 Sup. Ct. Rep. 797. In Hale v. of action arose in the state of New York. Patton, 60 N. Y. 233, 236, 19 Am. Rep. 168, (3) We think the service of the summons Andrews, J., in delivering the opinion of the within the state of New York upon a dicourt, said: "In general, a debtor who is rector residing in that state was, under the indebted on a money obligation is bound, if facts of this case, a good service. As is no place of payment is specified in the con- seen, the company was doing business withtract, to seek the creditor, and make pay in the state, and the cause of action arose ment to him personally. But this rule is therein, and, in such a case, service upon a subject to the exception that if the creditor director residing in the state was sufficient. is out of the state when payment is to be There is nothing in the cases of Conley v. made, the debtor is not obliged to follow Mathieson Alkali Works, 190 U. S. 406, 47 him, but readiness to pay within the state in L. ed. 1113, 23 Sup. Ct. Rep. 728, and Geer that case will be as effectual as actual pay- v. Mathieson Alkali Works, 190 U. S. 428, ment to save a forfeiture. Co. Litt. 304, 2; 47 L. ed. 1122, 23 Sup. Ct. Rep. 807, to the Smith v. Smith, 25 Wend. 405; Allshouse contrary. The first of the above-cited cases v. Ramsay, 6 Whart. 331, 37 Am. Dec. 417; seems rather to assume that if the company Southworth v. Smith, 7 Cush. 391; Tasker were doing business in the state, the service V. Bartlett, 5 Cush. 359."

And the same on a resident director would have been good. views in Dockhan v. Smith, 113 Mass. 320, Although it is stated in the case at bar that 18 Am. Rep. 495. The exception as to the the duties of a director of this defendant creditor being out of the state, spoken of were to be performed at Philadelphia, where by Judge Andrews, refers to the subsequent the board of directors met, yet that fact absence of the creditor from the state which is not material in this case. A foreign firewas his domicil when the contract was there insurance corporation doing business within made.

another state, and voluntarily electing a In some other of the cases above cited, it part of its directors from among those who is said the debtor need not follow the cred- are residents of such state, may be said, itor out of the state where the contract was from that very fact, to add to the confidence made in order to pay or make tender of pay- of possible insurers with the company in ment of the debt. That depends upon the that state, and in that way to secure more contract, and what inference of the place of business therein than would otherwise be the payment may be drawn from its contents, case. Although doing no particular act in the when it does not state in so many words state for this company, such directors are, where payment is to be made. Where the nevertheless, members of and policy hold. debtor is a fire-insurance company, and ers therein, and are a part of the governing makes such a contract as the policies in body of the company, and are, by their posisuit, and it is engaged in doing business by tion, so far representative thereof as, in our insuring property outside the state of its judgment, to render service of process upon creation, and makes provision such as is them in the state of their residence, when made in this case for payment or for re- the company is doing business therein, a building or repairing, we think the place, good service upon the company itself. Serv. of payment in contemplation of the parties, ice upon them, it may be assumed, would and to be inferred from the facts set forth, certainly result in notice to the company itis at the domicil of the creditor, in the self, which is at least one of the reasons for state where the property insured was sit-holding a service on an agent good. uated.

It would be most unwise to hold, upon Instead of making payment for the loss the facts herein stated, that a person who sustained by fire, the defendant had the op- suffered loss under a policy of insurance tion of repairing or rebuilding. If it availed could only obtain redress, when refused by itself of that right, of course it would have the company, in the courts of the state to rebuild at the place where the loss oc- where the company was incorporated. It is curred. So far as appears from the state- not unreasonable for the state, under such ment of facts, the defendant has failed to 'facts, to endeavor to secure to its citizens

0.

a remedy in the domestic forum upon this preme Court of the District, and to remand very important class of contracts. Lafayette the cause for further proceedings. Ins. Co. v. French, 18 How. 404, 407, 15 L. See same case below, 24 App. D. C. 143. ed. 451, 452. And we have no doubt that The facts are stated in the opinion. if it were generally understood by policy Assistant Attorney General McReynolds holders in states other than the state where and Mr. William R. Harr for petitioner. the company was created that resort for

Mr. H. Prescott Gatley for respondents. the enforcement of their rights must, in all cases, be had to the courts of the state of Mr. Justice Day delivered the opinion of the creation of the company, even though the court: the company did business in such other The respondents were indicted for constates, the number of policy holders in the spiracy in the supreme court of the District other states would seriously fall off.

of Columbia on March 31, 1902. On April The service of the summons was, in our 4, 1902, Cadarr, Keating, and Myers were judgment, a good service on the company, arraigned, and entered pleas of not guilty. and we therefore answer the question of the On April 7, 1902, Parker entered a plea of Circuit Court of Appeals in the affirmative; not guilty; on May 1, 1902, he withdrew this and it is so ordered.

plea, and filed a motion to quash. The

ground of this motion was that the indictMr. Justice Harlan took no part in the ment was not returned to the court within decision of this case.

nine months from the 25th day of April, 1901, on which day the defendants were held

to bail to await the action of the grand (197 U. S. 475) UNITED STATES, Petitioner,

jury on the charge of conspiracy, the time for taking action in the case not having been

extended by the court or any judge thereof, GEORGE E. CADARR, Edward Parker, as provided in § 939 of the act to establish a John J. Keating, and John N. Myers.

code for the District of Columbia, approved Criminal law-limitation of actionsfailure and it was directed that Parker's bail be

March 3, 1901. The motion was sustained, of grand jury to act-repeal of statute by discharged, and all the defendants were alimplication.

lowed to go without day. The further prosecution of a criminal offense is

Upon appeal by the United States, the not barred by the failure of the grand jury court of appeals affirmed this judgment. to act within nine months from the date when Thereupon this writ of certiorari

was the accused were held to bail to await such granted. action, although it is provided by D. C.

This case raises the question whether s Code, $ 939 (31 Stat. at L, 1189, 1342), that under such circumstances, unless the court 939 of the Code of the District of Columenlarges the time, “the prosecution of such | bia is intended to bar further prosecution of charge shall be deemed to have been aban-crimes and offenses where the grand jury doned, and the accused shall be set free, or has failed to act thereon within the period his bail discharged, as the case may be," named in the statute, or whether the fail. but this section must be deemed to operate merely as ending the pending prosecution, ure to take such action is intended to and and not as repealing pro tanto the general does end further prosecution, so as to disstatute of limitations contained in U. S. charge the accused from bail, or from imRev. Stat. § 1044 (U. S. Comp. Stat. 1901, prisonment, in cases of commitment. The p. 725), prescribing three years as the limitation for all offenses not capital.

supreme court, whose judgment was sus.

tained by the court of appeals, construed the [No. 438.]

statute as one of limitations, and held that

failure to take action within the period limArgued February 28, Alarch 1, 1905. De

ited was a final bar to further prosecution.

The section directly involved is number 939 cided April 3, 1905.

of the District of Columbia Code, and is as N WRIT of Certiorari to the Court of Ap

follows: 0 peals of the District of Columbia to re

"Sec. 939. Abandonment of prosecution.view a judgment which affirmed a judgment If any person charged with a criminal ofof the Supreme Court of the District, sus-fense shall have been committed or held to taining a motion to quash an indictment be bail to await the action of the grand jury, cause it was not returned within nine and within nine months thereafter the grand months of the day when the accused were jury shall not have taken action on the held to bail to await the action of the grand case, either by ignoring the charge or by rejury. Reversed and remanded with direc- turning an indictment into the proper court, tions to reverse the judgment of the Su-l the prosecution of such charge shall be

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