Courier Democrat. (Langdon, N.D.) 1891-1920, 1900-01-18
IMPORTANT DECISION .
Rendered by Judge Fisk in a Case
Involving a Foreign Cor
poration.
FOUND FOR THE PLAINTIFF
In Suit Brought by Third Party on a
Note Purchased From Company Trans
acting an Insurance Business, which Had
Not Complied with Statutes.

From the Grand Forks Herald, Jan. 13, 1907
Judge Fisk has just filed decision in the
case of w. j. Mooney and L. S. Champine, of
Langdon VS.. Owen Williams, of Arvila. The
case is of general interest as it involves ques-
tions relative to foreign corporations doing
business in the state. The facts in the case are
given briefly below.
The Realty Revenue Guaranty Company, of
Minneapolis fled articles of incorporation with
| the secretary of state of North Dakota, but
| failed to comply with the statutes requiring
| foreign insurance companies to file certain data
| with the insurance commissioner. Agents of
| the concern we're sent through several counties
| of the state, who closed contracts with the far
| mers, which we're, in effect crop insurance poll
| cies, but were SO worded as to convey the idea
| that the instrument was simply contract in
| which the farmer was given the option of sell
| ling his crops to the company any time before
September 15 1T he so desired, paying certain
| amount for the privilege. One of the agents
| was arrested last summer for selling insurance
| without a license, and was convicted as charged,
| thus establishing the fact that in the eyes of
| the law the company was doing an insurance
| business.
In the case decided by Judge Fisk, Mooney
| and Champine sued on note given by Williams
| to the Realty Revenue Guaranty company in
payment for the contract Tor crop insurance
policy which plaintiffs had purchased of the
| company. Defendant contended that the note
was void, as the Guaranty company had not
| complied with the insurance laws of the state,
and that the third parties were not innocent
| purchasers, as the name of the company and its
place of business on the face of the note was
sufficient to put the purchasers of the note on
inquiry.
Judge Fisk, on finding for the plaintiff, held
| that it was not the intention of the legislature
to have the effect of the law extend so far as
to injure third party, where there VS. not
sufficient evidence on the face of the note to
satisfy the purchasers of the instrument that
the company doing an insurance business.
Had the words "for insurance appeared on the
face of the note there would be no doubt of the
invalidity of the instrument, as that would have
been sufficient to put the purchasers on inquiry
and they would have purchased the note at
their own risk.
Tho company did but little business in Grand
Forks county, but in the counties farther south
the decision will be of great interest, as hun
dreds of just such notes we're given. The con-
tract simply gave the farmer the privilege of
selling his crops to the company for $500 per
acre till Sept. 49, which, of course, no farmer
would do unless he was hailed out, consequently
the instrument was in effect, an insurance pol
icy. AS far as the company itself was concern
ed it could not enforce any of its rights from
the fact that it had not complied with the laws,
but the notes having been sold to third party,
were held to be valid.