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Schmidlapp & Company vs. La Confiance Insurance Company et al.

Supreme Court of Georgia1884-02-02
71 Ga. 246

Summary

Holding. The judgment discharging La Confiance Insurance Company from garnishment was affirmed because the company was not transacting or doing business in Georgia and therefore was not subject to attachment, garnishment, or suit in Georgia courts.

Schmidlapp & Company obtained an attachment against J. T. Seltzer & Co. and sought to garnish La Confiance Insurance Company, a French corporation, by serving J. Gadsden King, who claimed to act as the company's agent for South Carolina and Florida. King denied being the company's agent in the legal sense and asserted that the company conducted no business in Georgia and had no agency there. He acknowledged that he resided in Atlanta and handled claims approval and check distribution for the company's South Carolina and Florida operations, but stated the company had no funds or property in Georgia belonging to the defendants. The trial court granted the company's motion to discharge it from the garnishment.

The court examined whether King's presence in Georgia and his limited claims-handling duties constituted sufficient agency to subject the foreign corporation to garnishment. The court determined that King's authority was restricted to auditing and paying claims arising from policies made elsewhere by other agents. This limited role did not establish the corporation as conducting business in Georgia under state law. The court referenced statutory definitions of insurance agent activities—including soliciting insurance, taking applications, receiving premiums, and adjusting losses—and found that the company engaged in none of these activities within the state.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

  • Whether a foreign insurance company's agent handling claims in other states establishes sufficient agency to subject the company to garnishment
  • Definition of 'transacting business' for jurisdictional purposes involving foreign corporations
  • Scope of authority required to constitute a legal agency capable of subjecting a foreign corporation to suit

Procedural posture

The case was tried in Fulton Superior Court, where the trial court granted the foreign corporation's motion to discharge it from garnishment, and the plaintiff appealed that decision.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion

majority opinion

Hall, Justice.

The plaintiffs sued out an attachment returnable to Fulton superior court against J. T. Seltzer & Co., upon the ground that they resided out of the state of Georgia, to-wit, in the state of South Carolina. This attachment was levied by serving J. Gadsden King, alleged to be the agent of La Confiance Insurance Company, of Paris, France, with a summons of garnishment. In answer to this summons, King denied that he was the agent of the Insurance Company, in the legal sense of that term; he stated that he acted as agent of the company for the states of South Carolina and Florida, but that the company transacted no business in the state of Georgia, and had no agency in the same; he admitted that he resided most usually in Atlanta, that he audited and approved claims against the company arising in South Carolina and Florida, gave checks for the amounts due on account thereof, and when in funds, sometimes paid them; and he submitted that the garnishee, La Confiance Insurance Company, was not within the jurisdiction of the court to which the attachment and garnishment were returnable, and prayed judgment as to this matter.

Not waiving this plea, but insisting on the same, he answered that the company was not indebted to, and had no funds or property in hand, in said state of Georgia, belonging to the defendants in attachment or either of them. Upon the coming in of this answer, the company, by its counsel, moved to discharge it; the plaintiffs’ counsel demurred to this motion, and insisted that the facts set forth in the garnishee’s answer were not sufficient in law to authorize its discharge Upon the issue thus formed, the superior court decided in favor óf the motion, and ordered the said garnishee to be discharged, and this decision is assigned as error.

We are at a loss to see upon what legal ground a contrary decision could have been put. The defendants in attachment could have maintained no suit in our courts against the garnishee for any claim or demand it may have had against it. This is a foreign corporation, and would be liable to attachment and garnishment, if it were “transacting business within this state,” under the same rules and regulations as are prescribed by law in relation to issuing attachments and garnishments in other cases. Code, §3281. Service of ordinary process could be effected only by serving an officer or agent of the corporation, or by leaving the same at the place of transacting the usual and ordinary public business of the corporation, if any such place of business shall then be within the jurisdiction of the court in which said suit may be commenced. Code, §3369. The fact that the company’s agent for other states happened to reside in Georgia, and occasionally approved, gave checks and paid claims for his principal, did not establish an agency of this French corporation in Georgia, and charge it with the transaction of business herb; this agent’s authority did not extend so far as to enable him to issue policies for it, or to make other contracts by which it would have been bound; he wn authorized simply to audit claims growing out of policies and contracts made elsewhere and by a different class of agents. The state pays its claims at remote commercial centres, as New York, or London, but no one would suppose that by so doing it established there an agency for the transaction of the ordinary business of its public treasury. That the residence in our midst of an agent like Mr. King is not the kind of agency contemplated by our law as sufficient to subject tbe corporation to a suit in our county, is perfectly plain from sundry other provisions of the Cede, §2850 (a) to 2850 (j) both inclusive. An insurance agent is therein described as one who solicits insurance in behalf of foreign insurance companies, or takes or transmits an application for, or any policy to or from such company, for others than himself, or who advertises or otherwise gives notice that he will receive or transmit the same, or who shall receive or deliver a policy of insurance of such company, or who examines such policy, or examines or inspects any risk, or receives, collects or transmits any premium of insurance or makes or forwards any diagram of any building, or does or performs any other act or thing in the making or consummation of any contract of insurance for others than himself, with such company, or-who shall examine into or adjust or aid in adjusting any losses for or in behalf of such company, whether these acts be done at the instance or request, or by the employment of the company, or by a broker or any other person. §2850 (h). And any of these acts done for or on behalf of the company, constitutes it a company “ doing business in this state,” and subjects it to the same taxes, state, county and municipal, as other insurance companies “ doing business ” therein by agent or otherwise, Ib., §2850 (j).

This corporation, according to these provisions of law, is not “ transacting” or “doing” business in this state, and is therefore not liable to attachment, garnishment or suit in its courts. 48 Ga., 351; 60 Ib., 310, and cases cited.

Judgment affirmed.