State Ins. v. Granger

Seevers, J. On May loth, 1880, one Shaffer was the plaintiff’s agent at Colo, Story county. He took an applica-^on í originad víeeon agent tk>n”statute construed. on day ^rora ^e defendant, Granger, and forwarded the same to the plaintiff at Des Moines, who issued a policy of insurance thereon, on -¡^g judgment was recovered which the plaintiff asks to have set aside. Shaffer was a soliciting agent only, and he continued to act in that capacity until after the 15th day of September, 1880. In fact, Shaffer con-tinned to act as such agent until in the “ spring of 1881.” On the 15th day of September, 1880, D. E. Bishop was appointed by plaintiff as its soliciting and recording agent at Colo. A recording agent has power to issue policies, but a soliciting agent has not. In August, 1881, an action on [274] tlie policy was commenced in Story county, and the original notice thereof was served on Bisliop as the plaintiff’s agent. No other service was made. No appearance was made to the action by the plaintiff, and a judgment was rendered against, it for the amount of the policy. The plaintiff is a resident of Polk county, but, as the loss occurred in'Story county, the district'court of that county had jurisdiction of the subject matter. Code, § 2584. The only question to be determined, therefore, is whether the court obtained jurisdiction over the plaintiff by the service of notice on Bishop. I. The Code provides that in suits against corporations service may be made on any agent employed in the general management of its business. § 2612. ' It is- not claimed that Bishop was such an agent. . Section 2613. of the Code is as follows: “.’Where a corporation, company or individual has, for the transaction of any business, an office or agency in any county other than that in which the principal resides, service may.be made on any agent or clerk employed in such office or agency, in all actions growing out of or connected with .the' business, of that office or agency.” It will be observed that tlie service must be made on some one “ employed in such office or agency, in all actions growing out of, or connected with, the business of that, office or agency.” As we understand, service could be made on Bishop, and the plaintiff bound thereby, in all actions growing out of or connected with his {that) office or agency. Beyond this the statute does not go. • Suppose there were two agents’ or agencies in the same county, legal service could not be' made on any person employed in one office or agency, when-the business out of which the action grew was transacted in the other office or agency. Again, suppose an agent is removed, or ceases to act, and the agency is for a time closed/ and afterward' another agent is appointed, and thereafter there is such an office or agency, can a- person employed in the [275] latter be legally served with notice in an action growing out of business done by the former agent, and would the principal be bound thereby? ¥e think not. The action must have grown out of, or been connected with, the business or agency in which the person served is employed. The reason for this is obvious. The statutory thought is that, if service on the principal is dispensed with, it should be made upon some one connected with the business out of which it grew-. And this is reasonable.. Such a person would be much more likely to inform his principal of the pendency of the action than one who knew nothing about the business, and was not, interested therein. In the case before us, for a time at least, both Shaffer and Bishop were acting as agents for the plaintiff. Both, therefore, had an office or agency. Now, suppose the notice had been served on Bishop while Shaffer was still acting, could it be said that Bishop was employed in the-office or agency of Shaffer? Clearly not, we think. There’ is no evidence which so tends, and the two offices or agencies, were distinct and separate. Bishop had greater powers than Shaffer, because he could issue policies. Bisliojo had nothing’ to do with the application or policy of insurance on which the defendant’s action was based. It was not connected with, his office or agency. Nor did the action grow out of anything done by him, or by any one connected with his office or agency. As bearing on this question, see Upton Manf. Co. v. Stuart Bros., 61 Iowa, 209. The plaintiff, therefore, is not bound by the notice served on Bishop. Such a service has no more force and effect than if made on a stranger. It is not a defective service, but must be regarded as no service. There cannot be any great hardship if a party is required to serve the principal, or some’ agent, or other person, as provided by statute. It -was held in Newcomb v. Dewey, 27 Iowa, 381, that, if the defe7idant in an action did not have notice of the pend-ency thereof as required and prescribed by statute, the judgment obtained by default should be set aside in a proceeding [276] of this character. Following that case, the judgment in controversy in this action must be set aside. II. Counsel for the .appellee insist that the plaintiff had knowledge of the pendency of the action, and therefore is now estopped from insisting that it is invalid for want of notice. But we think the clear preponderance of the competent evidence is that the plaintiff did not have any knowledge of the action until after the judgment was rendered. III. It is also insisted that the plaintiff has failed to show that it has a meritorious defense to the action on the policy. 2ÍKBWTEIA1,: meritorious1: defense. ^ne defenses relied on is that, by the terms ^ policy, it was to be void if the incum-brances on the property were not truly stated in the policy. As we understand, it is conceded that the amount of incumbrances is not truly stated in the application; but it is claimed that the'plaintiff’s agent, who filled up the application, was notified of the incumbrances, and that he failed to state the same in the application. Conceding this to be so, we think the plaintiff is entitled to have the question determined by a jury. Nor are we prepared to say that the evidence is so clear as to leave no doubt which theory is correct. Indeed, we think it would be improper to express an opinion as to the weight of the evidence contained in the record supporting the defense. Bowen v. Troy Mill Co., 31 Iowa, 460. The judgment of the district court is Reversed.