The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1899-04-09
TWO IMPORTANT
COURT DECISIONS
Liability of Water Company
for Damages.
MUST KEEP UP PRESSURE
WILDCAT FOREIGN INSURANCE
COMPANIES.
THEY MAY BE SUED BUT CANNOT SUE
Justice Douglas Discusses the Insurance Laws
and the Policy of the Courts of North
Carol ma Toward Foreign
Cornna'ions.

The North Carolina Supreme court
'sGorrell VS., Greensboro Water Com
pany''-which hdids that where a water
company in It's contract with city
agrees to keep water at a certain pres
sure for the protection of property
against fire. and the property of citizen
is burnt down by failure to comply with
that requirement. t9ai owner of the prop
erty can recover damages for the breach
of the contract that though the citi-'
yeas are not individually parties to the
contract. they are beneficiarlGs under it.
and as such can maintain actions for
ITS breach.
The authorities on this point in other
States are conflicting and this peing the
fist case OF the kind in this State. the
touls held that the decisions of other
States. he;ng only of persuasive au-
thority here, they should he weighed
rot counted and the court would adopt
thai. line which was most consonant
with reason.
This decision was written by Justice
Waiter Clark.
Anfi her recent decision eff interest
10 insurance men is that of Canadian
Mutual Fire Insurance Company VS.. Ed
wards q Broughton.'
In tiilis the court holds, Justice Doug
las writing the opinion, that where a
foreign mutual insurance company thar
has failed to talks out license in North
apl IN hon.
its restrictive statutes, accepts an appli-
cait~on fer insurance made through
broker mot nominally its agent and is
sizes a policy in pursuance of the terms
thereof. and seeks thereafter to levy and
collect an assessment upon the holders
If The policy in North Carolina, the con-
tact was, III contemplation of law.
made IN North Carolina. and the broker
in taking the application for the policy,
aoed as the ag mt Of the insurance com
Iany.
Touching this point. the decision goes
en- 10 say:
Cur atter1ti0n has been called to
chGpter 3S3 Of the Law Of 1889, allow
ing any citizen of this State 10 contract
on his own account for insurance with
any company doing an insurance bust
ness outside of the State, and allowing
Ills company to he sued and to adjust the
loss without being slfbjedt to penalties
fer taxes. We do not question the right
Of any citizen to apply outside the State
for insurance. but i'll the present case
dile application was made within the
State. and therefore subject to the Act
or 1893. The Act of 1889 allows an
outside company. that is enc that has
net complied with our laws, to be sued.
tsat not to sue. Its evident purpose was
10 allow such companies to adjust tlrsir
fire losses wsshout thereby making them-
selves liable for penalties or taxes. 1t
cttsainly never intended to permit such
companies To practically nUllify our in
sTealo business to foreign corporations
w lese selveney we had no means of as
et aiming. and who not only contributed
D. hing to our revenues. burt who ignored
our Jaws and We're practically beyond our
jurisdiction
Cur insurance laWs, applicable equal
IL to domestic and to foreign corpora
tons are int nded not simply for pur-
Icses of revenue. but primarily for the
protection Of our people. Tire vast bulk
of insured property is never burned, and
these Who continue to pay their prem
ijmrs fer rhaps a long series of years
With no resulting loss or profit beyond
tie feeling of protection, have the right
10 demand the flli.est security. In the
case at bar The Plaintiff corporation adj
nstted its insolvency WITHIN less than
ton months aft it issued Its policies
to the defendants, and ii was apparently
worth S2J0,00O less than nothing. When
or how it became insclvent. if 1T We're
ever solvent we have no means of
knowing In the light OF tllsse facts.
can there be any question as to the