State ex rel. Clapp v. Fidelity & Casualty Insurance Company
| Decision Date | 27 December 1888 |
| Citation | 41 N.W. 108,39 Minn. 538 |
| Parties | State of Minnesota ex rel. Moses E. Clapp, Attorney General, v. Fidelity & Casualty Insurance Company |
| Court | Minnesota Supreme Court |
Writ quashed.
Moses E. Clapp, Attorney General, and John B. Sanborn, for relator.
Davis Kellogg & Severance and Thomas S. Moore, for respondent.
Quo warranto.
This is a proceeding upon information in the nature of quo warranto, to try the right of the above-named respondent, a corporation of the state of New York, to carry on within this state the business of insurance against these three classes of risks, viz., injury or death of persons caused by accident, breach of trust by persons holding places of public or private trust, and the breakage of plate-glass. The case is presented for decision upon the relator's demurrer to the answer of the respondent.
It is contended on the part of the respondent that this is not an appropriate method of procedure. We hold the contrary. A state has the power of a sovereign to prohibit foreign corporations from exercising their franchises, carrying on their ordinary corporate business, within its borders; and when, in defiance of such prohibition, and contrary to our law, a foreign corporation does assume to exercise corporate franchises in a manner affecting the public interests quo warranto will lie for the purposes of determining the right in question, and of applying a remedy. Although it is true that the courts of a state have no power to affect by their judgments the corporate existence of foreign corporations, we can restrain the exercise, within our own jurisdiction, of corporate franchises inconsistent with our own sovereignty, whether the corporation whose acts are in question be domestic or foreign. State v Boston, Concord & Montreal R. Co., 25 Vt. 433. And see People v. Trustees of Geneva College, 5 Wend. 211.
It is said on the part of the respondent that we ought not to entertain the proceeding, because the determination of the question whether it should be licensed and permitted to transact its business in this state is committed by law to a branch of the executive department of the state, and that the judicial department of the state has no constitutional control over the action of the executive department. In this the counsel for respondent fail to distinguish between the authority of the judicial department to control the action of executive officers, and the power and duty of the courts to determine, in causes before them, the rights of parties, although the legal propriety and effect of the action of executive state officers may necessarily be thus brought in question. We have assumed, without so deciding, that the insurance commissioner, in respect to the discharge of his duties, is exempt from judicial control. The insurance commissioner, in granting certificates or licenses to foreign corporations to do business here, acts in a ministerial capacity. His determination and action are not judicial and final. If our statute, to be hereafter recited, prohibits foreign corporations, under certain circumstances, to do business in this state, the authority or license of the commissioner in disregard of that statute would be unavailing.
The respondent became incorporated in 1875, in the state of New York. The statute of that state then in force, and under which the incorporation was effected, (chapter 463, Laws 1853, as subsequently amended,) authorized the incorporation of individuals for the purposes of carrying on either one (only) of the two classes or "departments" of insurance therein specified. The "first department" related to what may be briefly referred to as ordinary life insurance. The "second department," or specification of the purposes for which such incorporation was allowed, embraced, among others, the three kinds of risks against which, as is above stated, this company was organized to insure. In 1879, after the incorporation of this respondent, a statute was enacted amending the prior law above referred to. This amendatory act also authorized corporations to be organized for the purposes of insurance, as specified in two "departments" of the act, the first of which we may again refer to as embracing ordinary life insurance. The "second department" consisted of seven specified kinds or classes of risks, among which, designated as the second, third, and fifth classes, respectively, were the three kinds of risks above stated, which this respondent had been authorized to insure against, and in which business it is engaged in New York and in this state. Section 2 of this act declares that "no company organized under this act for the purposes named in the first department shall undertake either of the risks named in the second department, and no company organized under this act for either of the purposes mentioned in the second department shall undertake any business mentioned in the first department, nor shall any such company hereafter organized undertake or do more than one of the several kinds of insurance mentioned in said second department; and no company organized under this act shall undertake any business or risk except as herein provided: provided, that nothing herein contained shall affect the business of any company heretofore duly organized under the second department of this act." Section 6 forbids the organization of companies under this act with a less capital than $ 100,000; and further provides that "no company organized for the purposes named in the second department shall commence business until they have deposited with the superintendent of the insurance department of this state at least the sum of $ 100,000," invested in a manner specified. Section 14 forbids any company or association incorporated by or organized under the laws of any other state government to do business unless it has the amount of capital required by the sixth section, and invested in a manner specified. A statute of the state of New York enacted in 1881, amending a prior law, enacted in 1877, required that every corporation or association, organized under the laws of that state or of any foreign country to insure against damage to plate-glass, shall deposit $ 100,000 in securities with the insurance department of that state; and that no corporation or association existing under the laws of any other state of the United States, with authority to insure against damage to plateglass, should be permitted to transact business without having made a deposit of securities of the same amount with an officer of the state wherein such corporation or association may have been organized. In 1884 a statute was enacted in the state of New York, providing that insurance companies incorporated under the laws of any other state should not transact business in that state until they had complied with the insurance laws thereof, having first appointed the superintendent of the insurance department their attorney, upon whom process against them might be served.
In our statute law is embodied this provision (Gen. St. 1878, c. 34, § 269:) "When, by the laws of any other state or nation, any taxes, fines, penalties, licenses, fees, deposits of money or of securities, or other obligations or prohibitions, are imposed on insurance companies of this state doing business in such other state or nation, or upon their agents therein, so long as such laws continue in force the same obligations and prohibitions, of whatever kind, shall be imposed upon all...
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