Court Opinion

ID: 6412869
Source: CourtListenerOpinion
Date Created: 2022-06-25 11:54:00.062877+00
Date Added: 2024-06-11T15:51:25.826310
License: Public Domain

Hoar, J.
These are actions to recover the amount of two promissory notes given for premiums of insurance, payable to the order of the Western Insurance Company of Philadelphia, and indorsed to the plaintiff. The defence at the trial was, that the Western Insurance Company weje doing business in this commonwealth through an agent, in violation of law, not having complied with the requirements of St. 1856, c. 252. Whether the insurance for which the notes were given was effected through an agent in this commonwealth, and with citizens of this commonwealth, and whether the plaintiff was a bond fide holder of the notes, having taken them before they were due for a valuable consideration, or whether they were indorsed to him without consideration, or for a consideration which had failed, were questions which were submitted to the jury, under instructions which seem to us to have been entirely correct.
The plaintiff now objects that the facts proved at the trial did not, as a matter of law, constitute a violation of the provisions of the statute of 1856, which would make the notes invalid • and that the jury should have been so instructed. The manife? j object of the statute is to protect the citizens of this commonwealth against fraudulent or worthless contracts of insurance, made by dishonest, irresponsible or litigious corporations, not amenable to its laws or under the control of its legislature, and to prohibit such contracts from being made by agents within the commonwealth, except under conditions which shall fur nish the security to be derived from an annual retorn of the condition and business of the company, with the appointment of a known agent, whose powers shall be precisely defined, and upon whom process may be served. As the Western Insur*441anee Company was not incorporated by the legislature of Massachusetts, and had not complied with the conditions imposed by the statute, the only question of fact in issue was, whether the policies were issued through an agent resident here, within the meaning of the statute. And we think the evidence upon this point was sufficient for the consideration of the jury, and might warrant the inference which they have drawn from it. The facts that the president of the insurance company was at the office of the agent soliciting business; that the defendants were invited by the agent to go there to meet him; that the application for insurance was made by the defendants to the agent, and that he suggested the company with which it should be effected; that he had the sign bearing the name of the company put up in his office; that he informed applicants what the rates of insurance would be; that he received and forwarded applications, and received and returned policies ; that he was paid for all his services by the company; and that the notes for the premium were sent to him in blank, and filled up and executed in his office when the policies were delivered; all tended to show that he was not a mere agent to receive and forward papers, but was an agent employed to solicit and procure business for the insurance company, and to transact it for them within this commonwealth.
The next ground of exception is to the refusal of the court to rule that, if the notes were invalid in the hands of the company, the plaintiff might still recover upon them, although he took them without consideration, or upon a consideration which had failed. But the payee of the notes could maintain no action upon them, because they were contracts made for their benefit by an agent, who was prohibited by law from making them. Although the statute makes the contract of insurance valid for the protection of the insured, it expressly provides that the company making the insurance shall not recover any premium or assessment upon it. If the plaintiff took the notes without consideration, or as collateral security for a debt which had been paid, he could have no greater rights under the contract than *442those of the payee. Williams v. Cheney, 3 Gray, 215. To entitle himself to any higher protection, he must show that he took the notes before they were due, for a valuable consideration, and without notice of the illegality which attached to them. The insurance company could not recover for their own benefit, indirectly, through a mere indorsement, a debt upon which they could not sue directly.
It is further contended that a note given for a premium is not to be considered as a premium. The St. of 1856, c. 252, § 54, in terms provided that “ all payments made for policies, whether in money or note, shall be taken and deemed as premiums.” But this clause was repealed by St. 1857, c. 259. If, therefore, the defence depended upon this express provision of the statute of 1856, it would not be applicable to the second note, which was made after the statute of 1857 took effect. But we do not think the clause above recited had any reference to the previous enactment in the same statute that no premium should be recovered by a company that had not complied with the requirements of the law. A promise to pay a premium, which it was illegal for the company to receive, cannot be enforced, upon general and well settled principles of law, without a special recital to that effect in the statute. Miller v. Post, ante, 434. The action upon either of these notes, whether brought in the name of the insurance company, the ” payee, or in the name of an indorsee who has no interest in the note, and brings it for the benefit of the company, is in substance and effect an action to recover a premium of insurance; and, as such, it cannot be maintained.
The objection that the special finding of the jury, as it was put in writing at the trial, is uncertain and obscure, cannot avail the plaintiff. The verdict was a general one for the defendants, and it was rendered under proper instructions, and authorized by the evidence. The special finding does not in terms contain anything which qualifies its effect; and the bill of exceptions shows that it was put into the form in which it now appears through misapprehension and mistake, and does not show the *443real response of the jury to the specific interrogatories put to tnem by the court. Exceptions overruled.*

 A similar decision was made at the same term.
William Drinkhouse vs. Louis A. Surette & another.
Contract on a promissory note payable twelve months after date to the order of the Western Insurance Company, and indorsed to the plaintiff. At the trial in the superior court, before Allen, C. J., the facts appearing in evidence were in general quite similar to those in Roche v. Ladd, and, under similar instructions to the jury, a verdict was returned for the defendants. The plaintiff alleged exceptions.
C. F. Simmons, for the plaintiff.
J. D. Ball, for the defendants, was not called upon.
Hoar, J. All the points raised in this case have been substantially settled in the case of Roche v. Ladd.
It was held in Williams v. Cheney, 3 Gray, 215, that a party to whom notes, on which the payee could not maintain an action, are indorsed, without notice, in trust as collateral security for the payment of certain debts of the payee, can recover in a suit upon the notes only the amount of the sums actually due from the payee upon those debts.
The debt for which the plaintiff held this note as collateral security was fully paid after the commencement of the action, and he could therefore prosecute it further only in trust for the payee. After the payment, his interest as a bond fide holder for a valuable consideration was extinguished, and he no longer possessed any greater rights than the payee of the note.

Exceptions overruled