58 N.Y.S. 996 | N.Y. App. Div. | 1899
The plaintiff, a mutual fire insurance company organized and existing under the laws of the State of Massachusetts and transacting business in that State, received at its office in Springfield, Mass., prior to February 15, 1894, an application signed by Tate & Cornwall, who appear to have been insurance brokers doing business in the city of New York, for a policy of insurance to insure' Henry Hilton arid Hilton, Hughes & Co., as interest may appear, upon a stock of dry goods contained in the building on Broadway and Ninth and Tenth streets in the city of New York, the date of the policy to be February 15, 1894, and the term thereof one year. That application was accepted by the plaintiff company and a policy was issued, dated Springfield, Mass., February 15,1894, whereby the plaintiff, in consideration of $145 to it paid by the insured, and the
By an act of the State of Massachusetts, proved upon the trial, it is provided that each • policyholder should “ be liable to pay his proportional part of any assessments which may be -laid by the company in accordance with law and his contract on account of losses and expenses incurred while he; was a member, provided he is notified of such assessment within two years after the expiration of his policy.” “ Whenever a mutual fire insurance company is not possessed of cash funds above its reinsurance reserve sufficient for the payment of incurred losses and expenses, it shall make an assessment for the amount needed to pay such losses and expenses upon its members liable to assessment therefor in proportion to their several liability; ” and that “ when, by means of depreciation or loss of its funds or otherwise, the cash assets of such a company, after providing for its other- debts, áre less than the required premium reserve upon its policies, it shall make good the deficiency by assessment in the mode provided in the preceding section,” before cited. It appearéd from the evidence that,- on August 1, 1894, there was an impairment of the insurance reserve for the payment of incurred losses and expenses by the plaintiff company amounting to $9,682.34, and that in each of the subsequent months to. February 15, 1895, the losses and expenses increased! that impairment. On May 23,
The complaint alleges that on February 15, 1894, these defendants entered into a contract of -insurance with the plaintiff and that the plaintiff was a foreign mutual fire insurance company organized and existing under and by virtue of the laws of the State of Massachusetts. The complaint is silent as to the place where this contract of insurance was made. The proof, however, shows that -the contract was a Massachusetts contract and that fact is conceded by the defendants.
By the acceptance of this policy the defendants became legally liable to pay to the plaintiff the amount of the premium provided for in the policy. The assessment made by the plaintiff was made in pursuance of the laws of the State of Massachusetts and appears to have been for the loss or depreciation which accrued during the time the policy was in force; and if this contract of insurance was a valid contract, it seems that the defendants were liable in the State of Massachusetts for the amount recovered by this judgment. The defendants, however, claim that this policy was void under the provisions of section 137 of the Insurance Law of this State (Chap. 690, Laws of 1892). This act is entitled “ An act in relation to insurance corporations; ” and by section 1, it is made applicable to all corporations authorized by law to make insurance. The act provides for the incorporation and control of insurance companies organized under the laws of this State; regulates foreign insurance companies doing business in this State, requiring a certificate of the Superintendent of Insurance before any foreign insurance company can transact any business of insurance in this State; provides for the taxation of such insurance companies doing business in this State; for the winding up of insolvent insurance companies; for the
It must be conceded that this contract was valid in the State of Massachusetts where it-was'made ajnd where 'it was to be performed. If a loss had occurred while this policy was in force, the plaintiff would have been liable in Massachusetts for "the loss; and it follows that these defendants would ha\te been liable for this assessment in that State, and if they had been shed for it there,"the contract would have been enforcible and the plainfiff would have-been entitled to recover. A judgment so obtained| against these defendants would have been enforcible in this State by'action,'notwithstanding-the prohibition contained in the statute of -this State. We have then to consider whether the provisions ¡of this statute affect the' validity
The section (137) under consideration prohibits insurance brokers from acting as agents to procure policies of insurance from corporations or others which are not authorized to do business in this State, except when a license is issued to them under the provisions of the section, and prohibits such agents from obtaining insurance by virtue of such license, except upon certain conditions specified in the section. The act then provides that all fire insurance policies issued to residents of this State on property located here by companies that have not complied with the requirements of the General Insurance Law shall be void, except such as shall have been procured as provided by the section.
Was it the intention of the Legislature by this statute to prohibit all citizens of this State from making contracts in another State for the insurance of property here and making all such contracts of insurance void; and if such was the intention, is- the statute in violation of the Constitution of the United States ? It must be conceded, I think, that the prohibition taken literally is capable of a construction broad enough to include all contracts whether made in this State or out of the State, and which insure property located within this State. If the Legislature had power thus to restrict the ability or right to contract of residents of this State, and has exercised the power, a contract when made in violation of the prohibitions of the statute would undoubtedly be void ab_ initio, and incapable of enforcement. There can be- no doubt of the power of the Legislature to regulate the validity and interpretation of the contracts made within this State, or to determine what foreign corporation shall do business here, and, so far as this provision declares a contract made here in violation of this statute void, it is clearly a valid exercise of legislative power. (Paul v. Virginia, 8 Wall. 168; Philadelphia Fire Assn. of Philadelphia v. New
We are thus presented with the further question whether the courts of this State are justified in refusing to enforce this valid contract, and the remedy or right of action to enforce it.. .As was said by Chief Justice Taney in Bank of Augusta v. Earle (13 Pet. 589) : “ Courts of justice have always expounded and executed them (contracts) according to the laws of the place in which they were made, provided that law was not repugnant to the laws or policy of their own country.” In Gooch v. Faucette (39 L. R. A. 835, 836) it was said: “ There is a difference between the right and the remedy. ‘The courts will look to the lex loci contracts to construe the contract, but will not look there for the remedy.” This distinction is also discussed by the Supreme Court of Massachusetts in the case of Emery v. Burbank (28 L. R. A. 57, 58) where Judge Holmes, in delivering the opinion of the court, says: “ When the law involved is a statute it is a question of. construction whether the law is addressed to the necessary constituent elements or legality of the contract on the one hand, or to the evidence by which it shall be proved on the other. In the former case the law affects contracts made within the jurisdiction wherever sued, and may affect only them. * * - In the latter it applies to all suits within the jurisdiction wherever the contracts sued upon were made, and, again, may have no other effect.” And in speaking of an oral contract made void by the statute of the State of Massachusetts, he came to. the conclusion that the statute whatever it. expresses, implies- a rule of procedure broad enough to cover the case, and that a contract to make a will, made by a testator domiciled in Massachusetts, although actually made in another State, was a contract to make an effectual will, and, therefore, a will good by the law of the domicile; that the effect of the statute in question was to dictate a rule of evidence that a contract must havé a certain form if it was to be enforced against the inhabitants of the State in its courts. In the case of Vanderpoel v. Gorman (140 N. Y. 563) the question of the power of a foreign corporation to make an assignment for the benefit of creditors and the enforcement of such assignment, valid by
We have thus defined the distinction between an act which assumes' to regulate the procedure to enforce a contract and the evidence necessary to prove it, and an act which assumes to determine its validity. In the former, the law of the State where the contract is sought to be enforced must prevail; but where the question is as to the validity or interpretation of the contract, the question is. not then as to the law of the State.in which the contract is sought to be enforced, but the law of the State where the contract was made and is to be performed./As was said by Lord Brougham in Warrender v. Warrender (2 Cl. & Fin. 488, 530), “ The courts of the country where the question arises, resort to the law of the country where the contract was made, not ex comitate but éx debito justitice.” In this action to determine the validity or the interpretation of this contract, we must resort to the laws of the State of Massachusetts, and if this contract is valid by the laws of that State, we must enforce the contract because the parties to it have entered into a valid and bona fide contract which imposes an obligation upon them, which obligation they are bound to perform.
The Legislature has no more power to deprive a party to this contract of his right under it than it had to declare the contract void. This section of the Insurance Law now under consideration does not purport to affect the remedy nor the evidence to prove the contract. It declares certain contracts made under certain conditions void, not because they are not properly evidenced by a written instrument, but because the contracting parties were not "competent to make
Patterson, O’Brien and McLaughlin, JJ., concurred.
Judgment affirmed, with costs...