Appeal from order of Court of Common Pleas of Cambria County, Sept. T., 1964, No. 12, in case of Crown Construction Company v. Newfoundland American Insurance Company, Ltd.
John F. Naulty, with him George M. Spence, and Spence, Custer, Saylor, Wolfe & Rose, for appellant.
Norman A. Krumenacker, Jr., with him Gleason & Krumenacker, for appellee.
Bell, C. J., Musmanno, Jones, Cohen, Eagen, O'Brien and Roberts, JJ. Opinion by Mr. Justice Jones. Mr. Justice Cohen dissents.
On June 1, 1964, Crown Construction Company (Crown), instituted an assumpsit action against Newfoundland
American Insurance Company, Ltd. (Newfoundland), in the Court of Common Pleas of Cambria County. Service of process was made upon the Insurance Commissioner of the Commonwealth on June 3, 1964.*fn1
On June 18, 1964, Newfoundland petitioned for removal of this action to the U. S. District Court for the Eastern District of Pennsylvania*fn2 and, on the same day, mailed a copy of the removal petition to Crown's counsel. On June 22, 1964, Newfoundland's counsel mailed a copy of the removal petition to the Prothonotary of Cambria County which was received on June 24, 1964. On June 23, 1964 -- the 20th day after service of the complaint in the state action -- Newfoundland filed its answer to Crown's complaint in the U. S. District Court.
On June 25, 1964 -- 23 days after service of the complaint in the state action -- Crown filed a praecipe for a default judgment in the state court because of Newfoundland's failure to file an answer in the state court to Crown's complaint*fn3 and, on the following day, Crown obtained a rule on the Prothonotary of Cambria County to show cause why Newfoundland's removal petition should not be refused for filing.*fn4 On July 6, 1964 -- 18
days after filing the removal petition in the federal court -- Newfoundland, through resident counsel, paid the necessary fee and delivered to the Prothonotary a certified copy of the removal petition which was then filed in the state court. On August 3, 1964, Newfoundland filed in the state court an answer, containing new matter, to Crown's complaint.*fn5
Meanwhile, in the federal court Crown filed a motion to remand the action to the state court. On December 14, 1964, the U. S. District Court remanded the action to the state court.*fn6 The basis upon which the court directed the remand was that Newfoundland had failed to follow the statutory mandate*fn7 that a copy of the removal petition must be filed promptly with the clerk [prothonotary] of the state court. The court stated, inter alia, ". . . [Newfoundland] has asserted no facts of record from which I can find that removal was validly effected."
On February 8, 1965 -- 7 1/2 months after the entry of the default judgment -- Newfoundland petitioned the state court to open the judgment and, thereafter, moved to strike off the judgment. The Court of Common Pleas of Cambria County entered an order refusing
either to strike off or to open the judgment. From that order Newfoundland now appeals.
In refusing to strike off the judgment, the court below found that the action had never been effectively removed from the state court and, therefore, when the default judgment was entered, the state court still retained its jurisdiction. In dismissing the petition to open judgment, the court below found that such petition had not been filed promptly and its delay had not been reasonably explained or excused.
On the reargument of this appeal, Newfoundland raised several issues: (1) at the time of entry of the default judgment, did the state court, in view of the removal proceedings, have jurisdiction to entertain a proceeding such as a praecipe for the entry of the default judgment; (2) was Newfoundland improperly denied an opportunity to present evidence that certain entries which appear in the state court docket were erroneous?
At the original argument of this appeal, another issue was presented. Newfoundland challenged the propriety of the entry of the default judgment on the ground that, if service of process had been made under the terms of the Unauthorized Insurers Process Act, supra, § 2b, then this judgment was prematurely entered since, under that statute a judgment could not be taken until 30 days had elapsed after service of the complaint whereas the instant judgment was entered 23 days after service of the complaint. Responding to this contention, Crown took the position that service had not been effected under the authority of the statute but rather under express authority contained in Newfoundland's insurance policy which designated the Insurance Commissioner as ...