Claflin v. U.S. Credit System Co.

• Decision Date: 01 April 1896
• Parties: CLAFLIN et al. v. UNITED STATES CREDIT SYSTEM CO.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

165 Mass. 501

43 N.E. 293

CLAFLIN et al. v. UNITED STATES CREDIT SYSTEM CO.

Supreme Judicial Court of Massachusetts, Suffolk.

April 1, 1896

COUNSEL

Perry & Perry, for plaintiffs.

Shepard & Hagar, for defendant.

OPINION

BARKER J.

The contract in suit, although signed and sealed by the officers of the defendant in the state of New Jersey, was sent by the defendant to its agent in this commonwealth, and was here delivered. It was made on April 6, 1891, and purports to bind the defendant, in consideration of a sum paid, to purchase at a fixed price, the accounts which, during one year, a certain business firm should have against ascertained insolvent debtors, or judgment debtors against whom execution should be returned unsatisfied. It is a contract of insurance, within the meaning of the Massachusetts insurance act of 1887, then in force. By that act (St.1887, c. 214, § 3), which adopted the definition given in Com. v Wetherbee, 105 Mass. 149, 160, "a contract of insurance is an agreement by which one party, for a consideration, promises to pay money or its equivalent, or to do some act of value to the assured upon the destruction or injury of something in which the other party has an interest." By the same section it was made "unlawful for any company to make any contract of insurance upon or concerning any property or interests or lives in this commonwealth or with any resident thereof," unless and except as authorized under the provisions of the act.

The defendant is a foreign corporation domiciled in the state of New Jersey. By the act cited, no foreign insurance company shall be admitted to transact here any class of insurance until it does certain acts, and obtains from the insurance commissioner a certificate that it has complied with the laws of the commonwealth and is authorized to make contracts of insurance. Before the enactment of St.1887, c. 214, if insurance was made by a foreign company without complying with the requisitions of the statute, the contract was declared valid by statute, while a penalty was imposed upon the making of the contract. Pub.St. c. 119, § 200; Gen.St. c 58, § 72. No authority is given by St.1887, c. 214, to any insurer, domestic or foreign, to insure mercantile credits or accounts. So far as the record before us shows, the defendant has not been admitted to transact insurance in this commonwealth. The contract sued on seems to be made unlawful by the...