Morton v. Hart Bros.

88 Tenn. 427

• Court: Tennessee Supreme Court
• Decided: January 28, 1890
• Status: Published

Opinion

Turney, C1t. J.

Plaintiff applied to defendants, insurance, agents, for a policy on Ms stock of goods. He directed them, if they could not give Mm a good company, to send Ms money back. Tkey sent Mm a policy in “Louisiana Insurance Company of New Orleans” for five hundred dollars. That company had not complied with the law of the State making it unlawful “for any insurance company not organized under or incorporated by the laws of this State to transact any business of insurance in this State, through agents or otherwise, unless possessed of at least two hundred thousand dollars of paid-up, actual cash capital, of which at least one hundred thousand dollars shall be invested in bonds of the United States, or some one or more of the States, reckoning the same at their current market value; nor until such company, in addition to the other requirements of this article, shall have filed with the Commissioner of Insurance a written instrument, duly signed and sealed, authorizing said Commissioner to acknowledge service,” etc. Code (M. & V.), § 2565. Nor with other provisions touching foreign insurance companies doing business in this State.

The goods were lost by fire and the insurance company is insolvent, so that it follows the defendants were undertaking to do an unlawful and prohibited business. In such undertaking they must be held to guarantee the solvency of the concern they represent to the extent of the requirements of our statutes, as cited, and that losses will be paid here. That law was intended to protect the citizen policy-holder and give him redress in the Courts of the State. If the company was not worth two hundred thousand dollars in actual, paid-up cash capital, the undertaking of tbe agent supplies that want for tbe benefit of tbe insured; and if a loss occurs, tbe agent must respond to the assured and look to bis principal for indemnity. His wrongful act ' bas brought about tbe loss, and be must sustain it.

Tbe charge of tbe Court, on second trial, “that if defendants knowingly insured plaintiff in a company which bad not complied with tbe laws of tbe State, this fact might be considered by tbe jury in determining defendant’s negligence,” was error.

Tbe charge on tbe first trial was in substantial compliance with tbe law as stated in this' opinion, and it was error to set aside tbe verdict and judgment for tbe plaintiff.

Tbe last judgment is- reversed and tbe first affirmed, with interest and all costs.