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McGee v. International Life Insurance Company - 355 U.S. 220, 78 S. Ct. 199 (1957)

Rule:

When a state court's jurisdiction is based on a contract that has a substantial connection with another state, due process is satisfied. In other words, a state court can enforce a judgment from another state, if there are "minimum contacts" with their own state.

Facts:

In 1948, Lowell Franklin, a resident of California, purchased a life insurance policy from the Empire Mutual Insurance Company, an Arizona corporation ("Empire"). Franklin's mother, petitioner Lulu B. McGee, was the named beneficiary on the policy. Later, respondent International Life Insurance Company ("International"), a Texas corporation, assumed Empire's insurance obligations. International then mailed a reinsurance certificate to Franklin in California offering to insure him in accordance with the terms of the policy he held with Empire. He accepted this offer and from that time until his death in 1950 paid premiums by mail from his California home to International's Texas office. Upon Franklin's death, McGee sent proofs of his death to International, but it refused to pay on the ground that Franklin allegedly committed suicide. McGee filed a lawsuit against International in California state court; process was served only by registered mail to International's principal place of business in Texas. McGee obtained a judgment against International. Unable to collect the judgment in California, McGee filed suit on the judgment in Texas state court. The Texas trial court refused to enforce her judgment, holding it was void under the Fourteenth Amendment because service of process outside California could not give the courts of that state jurisdiction over International. A Texas court of civil appeals affirmed. McGee was granted a writ of certiorari.

Issue:

Did the Due Process Clause of the Fourteenth Amendment preclude the California court from entering a judgment binding on International?

Answer:

No.

Conclusion:

The Supreme Court of the United States reversed the judgment of the Texas court of civil appeals and remanded the case for further proceedings. The Court ruled that the Due Process Clause of the Fourteenth Amendment did not preclude the California court from entering a judgment binding on International because McGee's suit was based on a contract that had a substantial connection with California. The insurance policy was delivered in California, the premiums were mailed from there, and Franklin, the insured, was a resident of California when he died. There was no contention that International did not have adequate notice of the suit or sufficient time to prepare its defenses and appear.

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