Rose v. Kimberly & Clark Co.

27 L.R.A. 556, 62 N.W. 526, 89 Wis. 545, 1895 Wisc. LEXIS 203

• Court: Wisconsin Supreme Court
• Decided: March 5, 1895
• Status: Published

Opinion

WiNsnow, J.

The insurance contracts in question were made outside of this state upon property within the state, by a foreign company which had not complied with the laws of Wisconsin and was thus debarred from doing business within the state. The question arising is not whether these contracts can be enforced in the courts of Illinois where they were made. It might well be that, were this action pending before an Illinois court, the contracts being Illinois contracts, and there being nothing in the statutes or policy of that state prohibiting them, they would be held valid and binding. Such, in substance, was tl^e ruling of this court in the case of Seamans v. Knapp-Stout & Co. Company, ante, p. 171, where a contract made in Wisconsin insuring property in Missouri by a Wisconsin insurance? company which had no license to transact business in Missouri was upheld. But it is obvious that that decision does not reach or control this case. The question here presented is whether the courts of this state will enforce a contract plainly and squarely opposed to the public policy and laws of the state.

Doubtless the general rule of law is that a contract valid where made is valid everywhere, but this rule is not without exception. The provisions of our statutes which prescribe the conditions upon which alone foreign insurance companies may do business within this state are very stringent and sweeping. S. & B. Ann. Stats, secs. 1915-1919. They provide, in substance, that no foreign fire insurance company shall, dAreciby or indi/rectl/y, take risks or transact am/y business of i/nsv/ranoe in this state, except upon compliance with certain specified requirements. It is unnecessary to state what these requirements are in detail, but it is sufficient to say that they include, among other things, the filing of verified statements showing investments of capital in certain specified securities and to certain amounts, or,.in lieu thereof, a deposit with the state treasurer of a certain amount of United States bonds; also, the payment of certain license fees, and the fifing of various documents intended for the benefit and protection of policy holders within the state; and only upon compliance with all these requirements is the commissioner of insurance authorized to issue the license which authorizes the doing of business within this state. The object of this statute is so plain that it cannot be mistaken. It is to protect our citizens against irresponsible and worthless foreign companies of the very kind which we have now before us. The evil to be corrected is not the writing of a policy by an unlicensed company within this state alone, but the writing of such a policy at all. Bearing in mind the object of the statute and the evil to be corrected, it is very plain that the object will be largely defeated, and the evil wifi flourish as before, if it be held that companies without license can establish their agencies just outside of the state fine and conduct their business by mail.

Now, it will be observed that the legislature was not content with providing that no unlicensed company should make \a contract of insurance within this state, but provided that no such company should, directly or indirectly, take risks or transact any business of insurance in this state. The writing of a policy of insurance upon property situated within this state would seem pretty clearly to be, in some degree at least, the transaction of insurance- business in this state, wh.eth.er the policy be written just within or just without the state line. It was said in Stanhilber v. Mut. M. Ins. Co. 76 Wis. 285, on page 291: “A contract insuring property in this state necessarily involves the doing of business in this state, and hence is subject to the laws of this state.” We regard the remark' as entirely correct, and fully as applicable to the present case as to the 8icmhilber Case. It is not meant by this that the legislation in question has extraterritorial effect, or that it will invalidate a contract made in Illinois, but simply that when that contract is a contract insuring property within, this state it is against the policy of our law and will not be enforced by the courts of Wisconsin, unless the conditions prescribed by our laws have been complied with. In no other way can the manifest purpose and intent of the statute be reached; any different construction would render the law of little effect.

Authorities as to restrictions on the business of foreign insurance companies are found in a note to State ex rel. Richards v. Ackerman, (Ohio) 24 L. R. A. 298. As to what constitutes doing business within the state by such companies, see, also, note to Cone E. & C. Co. v. Poole, (S. C.) 24 L. R. A. 289, 295.— Eep.

These views necesitate reversal of the judgment.

By the Cowrt.— Judgment reversed, and action remanded with directions to enter judgment for the defendant in accordance with this opinion.