The daily gazette., 1883-02-20

very much alike, was Pennsylvania asso
eiation, and It had set forth in its statement
among other Objectionable features, tha
the maximum, minimum and average age
Of the members Of each Of its classes wer,
A IS, 20, go. In announcing to It my opinion
! stated that, after carefully examining IT.
statement, / was forced to the conclusion
i that q system of insurance-ifit it might bt
90 called-that insures life at an average q
90 years and to an extent of IS years, was II
| Its character speculative, II not fraudulent
and would prove to the parties insured de
lusion and q snare. 1t had assumed sucl
proportions in the State under whose laws
the association was incorporated as to create
general and almost universal alarm. It had
been condemned by the Insurance Depart
ment of that State, and by the courts, which
had called upon the grand j1ries to take
| action against it. 1t had been denounced BY
both the pulpit and the press In the strong
est terms, and the Governor had recently
declared that he would issue no more char
ters to companies of this kind, for the reason
| that he believed the business to be unlaW.
| fully conducted. Such being the character
| -at home, where they are best known-oi
| the companies or associations which pursue
| such system OF insurance, Il could not con-
sent TO their admission into this State, and,
therefore, refused to issue TO the association
/ my certificate of authority. This decision |
caused to be published as a warning 10
others, aud am happy to say that 1t had The
desired effect The State has been no fur
ther troubled by such associations.
1t is cause for congratulation that the
State of Pennsylvania has at length put an
end to the evil practices Of many Of these
associations which, creatures of her own,
have cast such dscredit upon that State
Her laws seemed for time insufficient to
check or restrain them. But her able and
efficient insurance commissioner resolved to
test the virtue Of these laws and, by insti-
tuting proceedings against the associations
at last succeeded through the courts in
efIectually suppressing them. cheerfully
Join In the hope expressed by Governor
Hoyt In his last message, "that this impress
sive lesson will not be lost or forgotten, and
that 1t will in the future deter the public
from placing their trust In methods of life
insurance, or specious substitutes therefor,
which are without solid foundation in
morals or mathematics"
UNAUTHORIZED INSURANCE.
have good reason to believe that some of
our business men have their mills, factories
and other business establishments largely
Insured in companies not authorized to do
business in this State. This seems TO be
scarcely consistent with their well-known
reputation for intelligence and sagacity.
They have been misled probably by the mis-
representations of persons interested In such
Illegal business, as they appear to be labor
ing under the delusion that all insurance,
wherever obtained, is valid everywhere; that
the prohibitory clauses of our law apply
merely to agents, and that an action for the
recovery of any loss that may occur can be
maintained on the policies they hold, in the
State where the company is located. 1t
would be wise in them to examine carefully
the character OF the ground on which they
stand and satisfy themselves whether the in
surance they have thus obtained is such in
surance as does really insure. A little
knowledge of the principles of law and de-
cisions of courts IN relation to contracts and
to corporations and their right to exercise
their powers beyond the limits of the State
which created them would show them that
they have been building on quicksand and
that it is questionable whether their policies
are worth the paper on which they are
printed.
This report is not the place for an ex-
tended argument upon the law as applica-
Bile to the case. A summary statement Of
| the rulings of the highest court In the land
in regard to the rights and powers of cofpo-
| rations, which could readily be supple
mented by the rulings OF many of our State
courts, will be sufficient for my purpose. 1t
has been decided by the Supreme Court Of
| the United States that corporation can
have no legal existence out of the bound
| cries of the sovereignty by which 1t is
| enacted. II exists only in contemplation OF
law and by force OF the law; and where that
law ceases to operate aud Is no longer obli-
/ gatory, the corporation can have no exist
| ence. 1t must dwell in the place of Its
| creation and cannot migrate to another
| sovereignty. Every power which a corpor
| ration exercises in another State depends
for its validity upon the laws of the sover-
eighty in which It is exercised, and corpo-
| ration can make no valid contract without
their sanction, express, or implied. A cor
| poration OF one State can have no operation
in any other State, except by special per-
mission of that other State, If prohibited,
| The recognition of its existence even by
| other States and the enforcement of it's con-
| tracts made therein, depend purely upon the
/ comfy of those States--a comfy which is
| never extended where the existence of the
corporation or the exercise of its powers are
| prejudicial to their interests or repugnant
| to their policy. Having no absolute right
| of recognition in other States, but depend
| ing for such recognition and the enforce
ment of its contracts upon their assent, Il
| follows, as a matter of course, that such
-
conditions as those States may think proper
to impose. They may exclude the foreign
| corporations entirely; they may exact such
| security for the performance of its contracts
| with their citizens as in their judgment will
best promote the public interest. The
| whole matter rests In their discretion
| Bank of Augusta VS.. Earls, 13 Peters
| Reports, $40. Heed 81 Armory vs.. The
Providence Insurance Company, 2 Crouch,
| 1877. Dartmouth College VS.. Woodward,
\ Woodward, BIS. Covington Drawbridge
Company vs.. Sheppard, 20 Howard, s27.
Paul vs.. Virginia, Wallace, 1Sl.
| Our 'Eaet In Relation to Insurance Com-
panies," in section z, declares that no cor
poration shall be engaged in, prosecute or
transact any insurance within the limits of
this State without having first obtained au-
thority therefor, agreeable to the provisions OF
this act" "And person or persons shall
| procure or solicit any citizen or resident OF
| of this State to take out a policy of insur-
ance In any insurance company or corpora
tion not authorized to transact business
within this State. 1t shall not be lawful for
any person to act within this State as agent
or otherwise in receiving or procuring appli.
cations in any manner, directly or indi-
reetly, to aid In transacting the business OF
insurance permits by the laws Of this State,
| without first obtaining from the Insurance
| Commissioner certificate of authority"
| And i'm section o. II further declares that
"any corporation or person otherwise viola
ting this act will be guilty of a misdemeAnor
| and upon conviction thereof by indictment
and upon conviction shall be subject to i'm
prisoDment not exceeding one year, or fine