The sun. [volume] (New York [N.Y.]) 1833-1916, 1899-06-17
IMPORTANT INSURANCE DECISION.
Contract Made In This state with an Un-
licensed Foreign Company Valid.


A decision which upscts an important part OF
the general insurance law OF this State. enacted
in 1892, and which will have a material effect
on the insurance business here. was rem
dered by the Appellate Division Of the Supreme
Court yesterday in q small case brought by the
Western Massachusetts, Mutual Fire Insurance
Company to recover an assessment from Henry
Hilton. or Hilton. Hughes & Co.
The defendants took out a $4,000 policy In
the plaintiff company on Feb. Is, 1894. for one
year. on their property in the store at Broad
way and Tenth street. A premium OF S145 was
paid. and it was agreed also to pay any ASSESS
ments which might lie imposed under the laws
OF Massachusetts,. The reserve fund OF the
plaintiff company became impaired through
losses during the year the defendants were
insured. and an assessment was levied on the
defendants amounting to S127.74. which the
defendants refused to pay Action was brought
In the Supreme Court and Judgment was rem
dercd for the full amount OF the assessment.
Tho defendants appealed. contending that
their contract Of insurance was void because
the company had not complied with the pro-
visions of the Insurance law referring to
foreign companies. 1t was this appeal that
II was conceded that the plaintiff company
had not complied with the provision OF the in
surance law recurring certificate from the
Superintendent OF Insurance of this State. and
that the agents who procured the insurance
were not licensed as it required in tho case OF
foreign insurance companies doing business
in this 81 ate. by the superintendent OF 1nsur-
ance: Because Of non com pliance with the
law In these respects. 1t was urged by the de-
PENDANTS that their contract was void under the
following provision:
All fire insurance policies 'sued TO residents
OF this state on property located herein by
companies that have not compiled with the re-
Ouirements Of the general insurance laws OF
this state shall be void"
After determining that this contract was
made unlor the laws OF Massachusetts. al
though with residents here and affecting prop
erty here, the decision Ofthe Appellate Division,
which Is written by Justice lngraham. says:
The parties had perfect right to make
this contract in the State Of Massachusetts,
is no law Of this State which either expressly
or by Implication prevents n valid contract
from being enforced between these parties by
the courts OF this state. and there is nothing TO
show that II would be against the nu bile policy
OF this state to enforce such a valid contract
when made, The Legislature has ATTEMPTED
70 regulate the insurance busi within this
state. and that it has a perfect right to do
But there is no legal declaration or public
policy which would Justify the courts in refus-
ing to enforce Il contract which is valid because
the party against whom the contract is sought
to he ntorcod Is resident and the party in
whose favor the contract is sought to be en-
forced Is foreign corporation"
The decision. II upheld by the Court OF APP
peals. where 1t will probably 90. will give some
foreign companies great advantages over resi-
dent companies which ,lunder the provisions OF
the general insurance law of 1892. are held to
sharp account In many respects, such as TO
amount OF capital. deposits to secure policy
holders. fees TO the Insurance Department and
inspection by that department.