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Massachusetts Protective Association, Inc. v. Freund

Decided: December 11, 1935.


On writ of certiorari.

For the prosecutor, McCarter & English and Gerald M. McLaughlin.

For the respondents, Joseph E. Cohn.

Before Justices Case and Bodine.


The opinion of the court was delivered by

CASE, J. The writ brings up an order made by Judge Freund of the Second District Court of the city of Newark denying the motion of the present prosecutor, defendant in the District Court action, to set aside the service of summons and state of demand.

Michael Silver carried a health and accident policy issued by the Massachusetts Protective Association, Incorporated, on January 16th, 1922. The state of demand alleged that an

illness began February 17th, 1935, resulting in both temporary and total disability under the policy and that the insurer, after paying some installments of compensation, refused to pay the remainder.

The proofs submitted upon the motion to set aside the service would sustain the following findings of fact: Samuel K. Spalding, with the knowledge, consent and authority of the Massachusetts Protective Association, Incorporated, is and has been during the period in question held out to the public as the general agent of that corporation. Under like auspices Mr. Spalding's office at 207 Market street, Newark, is and has been held out as the office of the company, through its general agent, in this state. Every policy issued by the association for delivery within this state comes to Mr. Spalding's office and there, in addition to such signatures as are already thereon, receives the signature of Mr. Spalding or, if the policy had been solicited by one of his subagents, by such; whereupon delivery to the assured is made by Mr. Spalding or under his direction. All premiums from within this state are paid at his office and receipts are there delivered. The specific instructions sent over the signature of the insured's secretary, printed upon the notices of premiums due, are "make payment to the M.P.A., Inc., 207 Market St., Rm. 1002, Newark, N.J." -- Spalding's office. During the period of the policy coverage Silver has made numerous claims thereunder, and the checks in payment have invariably come to him from Mr. Spalding's office. With respect to the liability alleged in the present case, Silver had filed his notice of illness with Mr. Spalding, and all correspondence relating thereto had come from that office, as had also the disability checks until stoppage at the time of the insurer's denial of further liability.

From such facts the trial court spelled an agency sufficiently comprehensive to support service of the summons and the state of demand.

The jurisdiction of the District Court to entertain the action is under attack, and procedure by certiorari is therefore appropriate. Dorman v. Usbe Building and Loan Association, 115 N.J.L. 337; Degenring v. Kimble, 115 Id. 379.

Prosecutor contends that the only method of lawful service upon a foreign insurance company which is authorized to do business within this state and which has, in accordance with section 59 of the Insurance Company act, chapter 134, Pamph. L. 1902; 2 Comp. Stat., p. 2838 (at p. 2855), amended chapter 299, Pamph. L. 1927; ch. 85, Pamph. L. 1935, constituted the commissioner of banking and insurance its attorney for the service of process is to make the service upon the commissioner in the manner described in that statute. Such service must be effected at the office of the commissioner, in the city of Trenton and county of Mercer. It has been held that the process of a District Court outside of the county of Mercer does not run into that county. Valentine v. Franklin Surety Co., Inc., 11 N.J. Mis. R. 822. See, also, Makohon v. Millers National Insurance Co., 12 Id. 282. Prosecutor's contention, therefore, put into operation, would mean that if an insurance company maintained a general agency in the city of Newark and actively engaged in business there, and in the course of its regular business made an insurance contract with a resident of that city, the insured, if he thereafter had cause to sue at law for no matter how small a sum, would either have to bring his action in the Supreme Court or journey to the ...

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