Seamans v. Knapp-Stout & Co.

27 L.R.A. 362, 61 N.W. 757, 89 Wis. 171, 1895 Wisc. LEXIS 131

• Court: Wisconsin Supreme Court
• Decided: January 8, 1895
• Status: Published

Opinion

Cassoday, J.

Tbe insurance company and tbe defendant corporation were each created and organized under and by virtue of tbe laws of this state, and exist only by force of tbe laws of this state. Since sucb laws, of themselves, have no extra-territorial force, these corporations cannot migrate to other states, but must dwell in tbe state of their creation.. Larson v. Aultman & Taylor Co. 86 Wis. 283, 284, and cases-there cited. "While these corporations can only live and have their being in this state, jret their residence here creates no insuperable objection to their power to contract and be contracted with in other states, provided they do so in accordance with tbe laws of sucb other states. Itid. One of" tbe policies issued by tbe insurance company covered certain personal property of tbe defendant located in Iowa, and tbe other covered certain personal property of tbe defendant located in Missouri. Tbe authority of each of those states-to prescribe tbe conditions upon which each of said corporations would be allowed to make contracts and do business therein must be conceded. State v. U. S. Mut. Acc. Asso. 67 Wis. 629; Stanhilber v. Mut. M. Ins. Co. 76 Wis. 291; State ex rel. Covenant M. B. Asso. v. Root, 83 Wis. 680. No question is made as to the right of the defendant to make yalid contracts and do business in loAva or Missouri. But it is conceded that the insurance company never complied with such conditions so prescribed by those states, respectively, and that by the statutes of each of those states any contracts made by that company therein were absolutely void.

But each of the contracts for the insurance of such property against loss by fire was a mere contract for indemnity in case of loss. Darrell v. Tibbitts, 5 Q. B. Div. 560; Stanhilber v. Mut. M. Ins. Co. 76 Wis. 291. Although it related to the loss of such property, yet it in no way attached to 'or affected the title to such property. Ibid. Such being the’ nature of the contracts sued upon and the residence of the-two corporations, there would seem to be no good reason why they could not, within the state of Wisconsin, make valid contracts for indemnity against loss by fire of such properties, notwithstanding the same were located in such other states. This seems to be conceded by counsel for the defendant. The vital question in the ease, therefore, is whether these contracts were made in Wisconsin or in the respective states where the properties were located. •

The negotiation for the insurance upon the Iowa property was commenced by the Chicago brokers, who solicited insurance of the defendant’s agent in Missouri, to be written in mutual companies. The defendant thereupon consented to take insurance in acceptable companies from such brokers upon the mutual plan upon its property located at Et. Madison, Iowa. Said brokers then, by letter, requested the Milwaukee Mutual Eire Insurance Company to write a portion of such insurance. That company thereupon, at its office in Milwaukee, filled out a blank application for such insurance, with a premium note at tbe bottom, to be signed by tbe defendant, and said application contained some twenty questions for tbe defendant to answer by writing in tbe several answers. At tbe same time, at its office in Milwaukee, that company filled out a policy for sucb insurance, and such application, note, and policy were each and all dated at Milwaukee, December 3, 1888, and said policy recited that tbe application and premium note bad been given and were on file in tbe company’s office at Milwaukee; that sucb application was a part of the contract of insurance, and a warranty on the part of tbe insured; that, if certain conditions existed, tbe policy should be void; that tbe charter and bylaws of the company, and the laws of Wisconsin under which it was organized, were thereby declared to be a part of the contract of insurance, and to be resorted to in order to determine the rights and obligations of the parties thereto. Said blank application, blank note, and policy so filled out were thereupon mailed by the insurance company to the Chicago brokers, and by them mailed to the defendant at its St. Louis office. Tbe defendant thereupon accepted the policy, answered the several questions contained in the blank application, and signed the same, and signed said blank premium note, and thereupon returned the application and premium note, so signed, together with the cash premium, to tbe Chicago brokers, who receipted therefor; and thereupon said brokers mailed said application, note, and cash premium, less twenty per cent, thereof, to the insurance company. The contract to insure the property in Missouri was procured substantially in the same way, except that the brokers were located at St. Louis instead of Chicago.

We are constrained to bold that the application, premium note, and policy must be taken and construed together as ■one instrument, constituting the contract of insurance. Herbst v. Lowe, 65 Wis. 320. This being so, we must hold (that the policy, blank application, and blank premium note, so made out by tbe insurance company and mailed as mentioned, were a mere proposition by that company to insure the property in case the cash premium should be paid, the premium note should be signed by the defendant, and the seyeral questions propounded in the application should be answered to its satisfaction. Certainly it was possible that those several questions might have been answered in such a way that neither the Milwaukee company nor any other company would be justified or expected to insure the property. The trial court rightly .held that the persons so soliciting the insurance were insurance brokers, and in no sense agents of the Milwaukee company; that, in so far as they were agents for any one, they were agents of the defendant. This being so, it necessarily follows that the contract of insurance did not become complete and absolutely binding upon both parties until the note and application were filled out and signed, and submitted to, and in effect approved by, the insurance company, The contract, therefore, must be deemed to have been made at Milwaukee, where the final assent was given. Whiston v. Stodder, 8 Mart. (La.), 95, 13 Am. Dec. 281; Ford v. Buckeye S. Ins. Co. 6 Bush, 133, 99 Am. Dec. 663, and notes; Hamilton v. Lycoming Mut. Ins. Co. 5 Pa. St. 339; Mactier's Adm'r v. Frith, 6 Wend. 103; Milliken v. Pratt, 125 Mass. 374.

“When a contract is made in one country, to be performed wholly or partially in another, prima facie the contract is to be construed and enforced according to the less loci contn'actxis; but the court will look at all the circumstances, to ascertain by the law of which country the parties intended the contract to be governed, and will enforce the contract accordingly, unless it should contain stipulations contrary to morality or expressly forbidden by positive law.” In re Missouri Steamship Co. 42 Ch. Div. 321. The contract in that case was made in Massachusetts, between an American citizen and a British company, for the carriage of cattle

from Boston to England in a British ship, and contained a clause void as against public policy by the law of Massachusetts, but valid by the law of England, and it was held that the contract itself showed that the parties intended to bo governed by the law of England, giving effect to the clause mentioned. This is upen the well-established principle that when a contract is open to two constructions, the one lawful and the other unlawful, the former must be adopted. Hobbs v. McLean, 117 U. S. 567; U. S. v. Cent. Pac. R. Co. 118 U. S. 236. Much of the seeming conflict in the adjudications upon the subject of the lex looi contractus will disappear by carefully discriminating as to the precise nature of the issue and matter under consideration. Thus it was held by the supreme court of the United States that: “Matters bearing upon the execution, interpretation, and validity of a contract are determined by the law of the place where it is made. Matters connected with its performance are regulated by the law prevailing at the place of performance. Matters respecting the remedy depend upon the law of the place where the suit is brought.” Scudder v. Union Nat. Bank, 91 U. S. 406. Here the only question presented is as to the validity of the contract, and that is necessarily governed by the law of the place where it was made, which, as observed, is the law of Wisconsin.

By the Court.— The judgment of the circuit court is affirmed.