Attorney Gen. v. Netherlands Fire Ins. Co.

• Decision Date: 22 May 1902
• Citation: 63 N.E. 950,181 Mass. 522
• Parties: ATTORNEY GENERAL v. NETHERLANDS FIRE INS. CO.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

181 Mass. 522

63 N.E. 950

ATTORNEY GENERAL

v.NETHERLANDS FIRE INS. CO.

Supreme Judicial Court of Massachusetts, Suffolk.

May 22, 1902.

Information by the attorney general against the Netherlands Fire Insurance Company to collect a penalty for insuring in a single risk a larger amount than one-tenth of its net assets. Information dismissed.

Frederick H. Nash, for plaintiff.

Robert F. Herrick and Albert M. Lyon, for defendant.

HOLMES, C. J.

This is an information brought under Rev. Laws, c. 118 § 112 (see St. 1894, c. 522, § 111; Rev. Laws, c. 226, § 2), to collect a penalty alleged to have been incurred under St. 1894, c. 522, §§ 20, 103 (Rev. Laws, c. 118, §§ 20, 103). The defendant is a foreign insurance company incorporated under the laws of Holland and authorized to do business in this state. In California it insured ‘in a single risk a larger amount than one-tenth of its net assets,’ and the question is whether the prohibition in section 20 against so doing extends to insurance by a foreign company outside the State.

In the recent case of Johnson v. Insurance Co. (Mass.) 62 N. E. 733, it is intimated that it is beyond the power of the legislature to invalidate contracts made in another jurisdiction by a foreign corporation, even though that corporation has submitted itself to our laws so far as it is necessary in order to enable it to do business here. The doubt as to the power was regarded as an argument for construing the statute as not making the attempt. The same argument applies here, and of course, if, for that or any other reason, section 20 is read as confined in its direct operation to Massachusetts contracts, the penalty imposed by section 103 does not apply. The statute does not purport to impose the penalty upon acts which it cannot and does not attempt to prohibit. Therefore we have not to consider the question whether it might punish what it could not prevent. See Carnahan v. Telegraph Co., 89 Ind. 526, 46 Am. Rep. 175;Com. v. Macloon, 101 Mass. 1, 100 Am. Dec. 89.

The construction which a court naturally would be disposed to give the statute is soomewhat confirmed by the history of our legislation, appealed to by both sides. The ten per cent. limit upon risks after having been applied to domestic companies (St. 1817, c. 120, § 7; Rev. St. c. 37, § 21) was next applied to foreign companies in a different way by making it unlawful to act or contract as agent in this state for such companies unless they were restricted in like manner by their charters of otherwise. St. 1826, c. 141, § 3; Rev. St. c. 37, § 42. This went on through St. 1854, c. 453, § 31; St. 1856, c. 252, § 44; Gen. St. c. 58, § 66; Pub. St. c. 119, § 197; and there was added a specific prohibition of making contracts in this Commonwealth by which a risk of more than ten per cent. of the capital or the securities specified was incurred. St. 1870, c. 349, § 1; Pub. St. c. 119, § 224. These local provisions stood alongside of the seemingly universal limitation set upon domestic companies. Pub. St. c. 119, § 56.

The trouble is due to an attempt at condensation in the condification of 1887. There, under the head of ‘Provisions common to all Companies,’ after forbidding any company authorized to do business in this Commonwealth to reinsure its Massachusetts risks with any company not so authorized, it goes on: ‘And no such company shall insure in a single hazard a larger sum than one-tenth of its net assets.’ St. 1887, c. 214, § 20. This obviously was intended, as is indicated by the margin of the section to consolidate the sections concerning domestic and foreign insurance companies in the Public Statutes. Pub. St. c. 119, §§ 56, 197. See section 224. The act of 1887 was a continuation of existing laws, so far as it was the same (section 112), and it is plain that with regard to the question before us no alteration was intended. But it is plain also that without a good deal of straining it must be construed either as narrower than the possible meaning of section 56 for domestic companies or broader than the expressed intent of sections 197 and 224 for...