RESPONDENT: International Life Ins. Company
LOCATION: Hazlehurst Manufacturing Company
DOCKET NO.: 50
DECIDED BY: Warren Court (1957-1958)
LOWER COURT: State appellate court
CITATION: 355 US 220 (1957)
ARGUED: Nov 20, 1957
DECIDED: Dec 16, 1957
Facts of the case
Media for McGee v. International Life Ins. Company
Audio Transcription for Oral Argument - November 20, 1957 in McGee v. International Life Ins. Company
-- McGee, Petitioner, versus International Life Insurance Company.
Mr. Mandell, you may proceed.
Arthur J. Mandell:
Mr. Chief Justice, may it please the Court.
The genesis of this case began on April 4, 1944 when the Empire Mutual Insurance Company of Arizona issued a policy on the life of Lowell Step Franklin insuring his life for $5000.
He named as his beneficiary his mother Lulu B.McGee.
A policy was mailed by the Empire Company to the insurer within California, and he continued making payments of premiums to Empire until September 1st, 1948 when the Empire Company of Arizona reinsured its risks with the International Life Insurance Company of Austin, Texas.
Based upon this reassurance agreement approved by both governmental agencies of Arizona in Texas, the International Company issued its certificate of reinsurance and mailed it to the insured in California.
On September 1st, 1948 until some time to December of 1950, the insured Franklin received notices by mail of the premiums due and mailed his premiums from California to Texas and was fully paid-up when, on December 11, 1950, he died.
Subsequent thereto, a claim was made on behalf of Lulu B.McGee, his mother, the beneficiary, and the claim was denied.
On June 11, 1951, Lulu B.McGee, through her California attorneys, file a suit -- filed a suit in San Francisco against the International.
And the International, not having qualified to do business in California as required by the California statute and not having designated anyone to accept service, the California attorney proceeded under the Unauthorized Insurers Practice Act which was passed on October 1, 1949.
Therefore, after the passage of the Act on October 1st, 1949, throughout the rest of the life of Franklin, through December 1950, the International Insurance Company from Texas mailed notices of premiums to California to Franklin and -- and reply to such notices received by mail, the premiums in Texas.
The -- the petitioner here, and plaintiff below, complied fully with the Unauthorized Insurers Practice Act as required by the California statute.
No attack has been made and is made now on the proposition that the statute was not followed with reference to service.
Judgment by default in accordance with the California practice was rendered in October 1951.
The judgment was forwarded to the Texas attorneys who filed the suit in the District Court of Harris County, Texas to collect upon the California judgment.
The District Court denied recovery on the judgment.
An appeal was made to the Court of Civil Appeals in Texas who affirmed the denial of recovery by the District Judge on the authority of (Inaudible) case from the Fifth Circuit.
Most important hearing and application for writ of error to the Supreme Court followed and was denied, an application for the writ was filed and this Court didn't grant it.
The question for decision here is whether California had the right to pass the Unauthorized Insurer's Practice Act and set out therein the Act which if an insurance company does within the State subjects it -- itself to the jurisdiction of the State of California under the Unauthorized Practice Act.
Some of the conditions set out in the Unauthorized Practice Act, which the California legislature, in its own wisdom, saw fit to include as making that -- insure such insurance company subject to its process in accordance with the rules laid down included the mailing of notices or the collection of premiums from one State into the State of California and the receiving of premium payments from California and any other act or transaction with the policyholders in the State of California.
By stipulation, it is, of course, conceded that Section 3 and 4 of the Unauthorized Practice Act, which deals with the mailing of notices or notices by mail, has been complied with.
Secondly, a claim was made in California mailed to Texas, the claim was denied.
The Fifth Circuit in the (Inaudible) case held a statute similar to this constitutional but stated there that it would not apply if the contracts of insurance were issued prior to the time that the Unauthorized Insurers Practice Act was passed.
And in subsequent cases on 206 F.2d and 207 F.2d denied recovery on that ground, it's because of these decisions that it got us from Court of Civil Appeals refused recovery in this case.
It is petitioner's position here that the decision of this Court and the Travelers Health Insurance Company -- Virginia versus Travelers Health Insurance Company in 70 Supreme Court, 339 U.S.643, is authority for our proposition that all the act done by the International in California under the California statute subject to her to the jurisdiction of that court.
That statute complies with all the requirements of due process because in it, not only does it appoint a person to receive process but also requires that a copy of the pleading in the process being mailed by registered mail to the defendant, the insurance company, and in order to protect the insurance company further, the statute provides that in the event the respondent feels that it is not subject to the jurisdiction, it may come to California, file a motion to quash the service on the ground that they didn't do any of the four acts which the State of California provides constituting sufficient grant to subject itself to the jurisdiction of California.
And if sustained, it will not consider that as an appearance in court.
International didn't do any of these things.
It sent back and let the case proceed.