Security Mutual Life Insurance Company v. Prewitt (200 U.S. 446)

The plaintiff in error seeks by this writ to review the judgment of the court of appeals of Kentucky, reversing the judgment of the court below and dismissing the petition of plaintiff in error. The trial court granted such petition, which was to cancel the revocation, by the state insurance commissioner, of the permit granted by him to the plaintiff in error to do business in the state.

The facts are as follows: The company is an insurance company, existing under the laws of the state of New York, and having its principal office in the city of Binghamton, in that state. In the year 1900 the company, pursuant to the laws of the state of Kentucky, applied to the insurance commissioner of that state for a permit to do business therein, and it was granted for one year from the date of such permit, which was annually renewed thereafter. On July 1, 1904, it was renewed for the last time, and the permit contained a statement that it was granted for one year, provided it was not sooner revoked. Section 635, Kentucky Statutes, provides that these licenses or permits must be renewed annually. At the time of the first application by the company for admission (A. D. 1900), the following statute of Kentucky was, and it ever since has been, in existence. It is known as § 631, Kentucky Statutes. The section reads as follows:

'Before authority is granted to any foreign insurance company to do business in this state it must file with the commissioner a resolution adopted by its board of directors, consenting that service of process upon any agent of such company in this state or upon the commissioner of insurance in this state, in any action brought or pending in this state, shall be a valid service upon said company; and, if process is served upon the commissioner, it shall be his duty to at once send it by mail, addressed to the company at its principal office; and if any company shall, without the consent of the other party to any suit or proceeding brought by or against it in any court of this state, remove said suit or proceeding to any Federal court, or shall institute any suit or proceeding against any citizen of this state in any Federal court, it shall be the duty of the commissioner to forthwith revoke all authority to such company and its agents to do business in this state, and to publish such revocation in some newspaper of general circulation published in the state.'

In September, 1904, certain parties, named Crain and Gayle sued the company in a state court of Kentucky, and the company, without their consent, removed the suit to the circuit court of the United States for the eastern district of Kentucky. Thereupon Crain and Gayle notified the state insurance commissioner of such removal, and demanded that the commissioner should revoke the authority of the company to do business in the state, as provided for by the above statute.

The company avers that the insurance commissioner did, on the sole ground of such removal, revoke the authority of the company to do business after September 29, 1904. The company thereupon demanded of the commissioner that he should set aside such revocation and cancel the same, which the commissioner refused to do.

The company then commenced these proceedings in the proper state court of Kentucky, asking that the insurance commissioner be required to cancel the revocation of the authority of the plaintiff and its agents to do business in the state, and that he should grant, or continue, the authority to the plaintiff and its agents, to transact the business of life insurance in the state; and that the commissioner should be required to publish in a newspaper the fact of such cancelation, and that he should be restrained and enjoined from notifying the general agents of the plaintiff of the suspension of its license. The company specially set up the claim that, under the Constitution and laws of the United States, it was entitled to remove the suit mentioned from the state court into the United States circuit court for the eastern district of Kentucky, and that any statute of the state of Kentucky in anywise restricting or affecting that right was void as a violation of the Federal Constitution.

The defendant demurred to the petition on the ground that it did not state facts sufficient to constitute a cause of action. The trial court overruled the demurrer, and the defendant commissioner declining to plead further, the prayer of the insurance company was granted, and judgment was entered (1) directing the defendant to cancel the revocation of the permit; (2) granting authority to the company to transact business in the state; (3) restraining the commissioner from notifying the general agents of the company of the suspension of its license and its right to do business in the state; (4) enjoining the commissioner from applying to any judge for an injunction restraining the company from further proceeding with its business. The defendant prayed an appeal to the court of appeals of the state, which was granted, and that court reversed the judgment of the trial court, and remanded the case, with instructions to dismiss the petition, and judgment to that effect was thereupon entered. 26 Ky. L. Rep. 1239, 83 S. W. 611.

Messrs. William Marshall Bullitt, F. W. Jenkins, Julien T. Davies, and Charles S. Grubbs for plaintiff in error.

Messrs. J. H. Hazelrigg, N. B. Hays, H. R. Prewitt, and Hazelrigg & Hazelrigg for defendant in error.

Statement by Mr. Justice Peckham:

Mr. Justice Peckham, after making the foregoing statement, delivered the opinion of the court: