State ex rel. Mitchell v. Ancient Order of United Workmen

168 P.2d 522, 161 Kan. 437, 1946 Kan. LEXIS 248
CourtSupreme Court of Kansas
DecidedMay 4, 1946
DocketNo. 36,583
StatusPublished
Cited by1 cases

This text of 168 P.2d 522 (State ex rel. Mitchell v. Ancient Order of United Workmen) is published on Counsel Stack Legal Research, covering Supreme Court of Kansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State ex rel. Mitchell v. Ancient Order of United Workmen, 168 P.2d 522, 161 Kan. 437, 1946 Kan. LEXIS 248 (kan 1946).

Opinion

The opinion of the court was delivered by

Wedell, J.:

This was an action by the state on the relation of [438]*438the attorney general to enjoin defendant, The Ancient Order of United Workmen of Kansas, from soliciting new insurance business in this state, or, in the alternative, to enjoin it until it complied with the requirements of the state commissioner of insurance.

The action was filed in the district court of Shawnee county and service of summons was had on the state commissioner of insurance at his official residence in Topeka, Shawnee county. The return of the commissioner showed there was no general agent of the defendant insurance company residing in the state to whom a certified copy of the summons could be sent. He forwarded such copy to the secretary of the defendant at its home office in Newton, Harvey county. The defendant filed a motion which reads:

“Comes now The Ancient Order of United Workmen of Kansas, the defendant above named, appearing specially and for the purposes of this motion and fox-no other purposes and moves the court to set aside the service of summons attempted to have been had upon it by serving the same upon Chas. F. Hobbs, as Commissioner of Insurance of the State of Kansas, ¡or the reason that no consent has been filed by the defendant herein that service of summons upon the Commissioner of Insurance of the State of Kansas shall be binding upon it in the instant case.” (Our italics.)

The district court sustained the motion on the theory G. S. 1935, 40-218, commonly known as the “service consent” statute, was not intended to apply to an action of this character and that the action was not filed in the proper court.

From that order plaintiff appeals. The question now, of course, is not whether the petition states a cause of action. The sole issue presented is whether this action may be filed and maintained in the district court of Shawnee county. That depends upon the validity of the service. In view of the order of the trial court it may be helpful to briefly observe the nature of the instant action. It was primarily an injunction suit. The petition, in substance, alleged:

The office of the relator, the attorney general of the state of Kansas, is in Topeka, Shawnee county; defendant is a fraternal benefit society; it was insolvent and its liabilities exceeded its assets by $262,369.07; defendant has used its mortuary fund for expense purposes contrary to G. S. 1935, 40-705; defendant has conducted its business fraudulently with respect to reports to the Veterans’ administration concerning insurance certificates; defendant has continued to solicit applications for and to issue certificates of insurance without authority from the commissioner of insurance; [439]*439defendant has failed to make reports to the insurance commissioner in Shawnee county within sixty days concerning amendments of its bylaws as required by G. S. 1935, 40-708; defendant’s officers and directors have violated the bylaws of the society (stating the alleged violations); an investigation of defendant’s books and records by the commissioner of insurance in his office in Shawnee county revealed the insolvency of the defendant and certain irregularities; the commissioner made findings and requirements for defendant to meet within sixty days, but the defendant has failed to meet the requirements and has failed to make a report of any kind to the insurance department with reference to such findings and requirements; the insurance commissioner, as required by G. S. 1935, 40-713, gave written notice to the attorney general of defendant’s acts and failure to comply with his requirements; although the commissioner of insurance withdrew all authority from defendant to conduct a business of insurance in the state on August 29, 1945, and although the defendant is without a license to conduct such business it has continued to solicit applications for and to issue certificates of insurance and will continue to do so unless enjoined; if defendant continues conducting business as an insurance company in its insolvent condition great and irreparable damage will be done to its members and to the public; plaintiff has no adequate remedy at law to prevent such damage.

The pertinent provisions of G. S. 1935, 40-713, are:

“Any society authorized to do business under the provisions of this article refusing or neglecting to make the reports provided in this code, or which shall exceed its powers, or shall conduct its business fraudulently ... or which shall fail to> comply with any of the provisions of this act, shall be excluded from, doing business within this state. Whenever it shall come to the knowledge of the commissioner of insurance that any society authorized to do business under the provisions of this article has so conducted its business as to render it liable to exclusion as herein provided, and if, on reasonable notice, such society does not comply with the requirements of such notice, he shall give notice in writing to the attorney general, who shall immediately commence an action in one of the district courts of this state to enjoin such society from soliciting any new business within this state. . . In case of a perpetual injunction allo.wed, under the provisions of this section, against a society incorporated under the provisions of this article or other law of this state, such injunction shall be sufficient cause for the appointment of a receiver by any court of competent jurisdiction, to wind up the affairs of such society. . .” (Our italics.)

The pertinent provisions of G. S. 1935, 40-218, are:

“Every insurance company, or fraternal benefit society, on applying for [440]*440authority to transact business in this state, and as a condition precedent to obtaining such authority, shall file in the insurance department its written consent, irrevocable, that actions may be commenced against such company or fraternal benefit society in the proper court of any county in this state in which the cause of action shall arise or in which the plaintiff •may reside by the service of process on the commissioner of insurance of this state, and stipulating and agreeing that such service shall be taken and held in all courts to be as valid and binding as if due service had been made upon the president or chief officer of such corporation. . (Our italics.)

On the hearing of appellee’s motion to set aside the service of summons appellant produced a certified copy of defendant’s letter of consent to be served as provided by the consent statute, the original of which was filed in the office of the state commissioner of insurance in 1924. The written consent followed the language of the consent statute. Appellee admitted it filed the consent with the commissioner of insurance.

In view of the ground of appellee’s motion to set aside the service the only question present is whether its consent to acknowledge service on the commissioner of insurance was binding “in the instant case.” It will be observed-the provisions of G. S. 1935, 40-713, clearly authorize the instant action for at least some of the alleged acts and derelictions of appellee. It likewise will be noted the service consent statute, in conformity with which appellee filed its consent to be served and agreed to acknowledge service so obtained, is in nowise limited or restricted to actions of any particular nature or character. It says that, . . actions may be commenced against such company or fraternal benefit society. .

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Bluebook (online)
168 P.2d 522, 161 Kan. 437, 1946 Kan. LEXIS 248, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-ex-rel-mitchell-v-ancient-order-of-united-workmen-kan-1946.