Keehn v. Laubach

• Decision Date: 15 September 1944
• Citation: 39 A.2d 73,22 N.J.Misc. 380
• Parties: ROY D. KEEHN, AS RECEIVER OF CENTRAL MUTUAL INSURANCE COMPANY OF CHICAGO, PLAINTIFF, v. CLARENCE K. LAUBACH AND WILLIAM BUCHECKER, INDIVIDUALLY AND DOING BUSINESS UNDER THE NAME AND STYLE OF LAUBACH TRANSPORTATION CO., DEFENDANTS
• Court: U.S. District Court — District of New Jersey

39 A.2d 73

22 N.J.Misc. 380

ROY D. KEEHN, AS RECEIVER OF CENTRAL MUTUAL INSURANCE COMPANY OF CHICAGO, PLAINTIFF, v. CLARENCE K. LAUBACH AND WILLIAM BUCHECKER, INDIVIDUALLY AND DOING BUSINESS UNDER THE NAME AND STYLE OF LAUBACH TRANSPORTATION CO., DEFENDANTS

District Court of the First Judicial District of the County of Warren, New Jersey

September 15, 1944

For the plaintiff, Samuel M. Hollander.

For the defendants, Lewis S. Beers.

OPINION

On action at law.

Kingfield D. C. J.

The facts in this case were stipulated as follows: A broker solicited an application for a policy of insurance covering the defendant's trucks. An application was forwarded to the company at its North Carolina office, in which state the company was admitted to do business; and the policy was issued to the defendant who received the same. Subsequently in Illinois, the state of its incorporation liquidation proceedings were instituted, wherein the defendant was served by publication; and a judgment was entered in that state requiring the defendant to pay an assessment. A demand for payment of the assessment was made; and thereafter this suit based upon the Illinois judgment was started. The defendant was a resident of New Jersey and the home terminal of his trucks which were covered by the policy of insurance, was within the State of New Jersey, although the trucks were used in both intrastate and interstate commerce. The solicitation took place within New Jersey. The broker was not a registered agent of the insurance company, and furthermore the insurance company did not comply with the laws of this state in order to do business within the state.

The defendant contends that the plaintiff should not recover, and relies upon the case of Cunningham v. Brockway Fast Motor Freight, Inc., 18 N.J.Misc. 101, 11 A.2d 422, wherein it was held that if a foreign mutual insurance company has solicited business from New Jersey residents on property located in New Jersey contrary to the New Jersey criminal laws, our courts will not permit a suit against such policy holders to collect an assessment imposed after insolvency of the foreign company.

The pertinent New Jersey statutes are R. S. 17:17-12 which makes it a misdemeanor to solicit, negotiate, or effect any contract of insurance without being authorized to do business in New Jersey, and R. S. 17:32-10 which provides that no insurance company not incorporated under the laws of this state, doing business on the mutual plan shall recover in an action in any court in this state upon any policy of insurance upon property in this state which has been or may be hereafter issued by the company, for any assessment made upon the policy unless it has previous to the issuance of the policy of insurance complied with the provision of this subtitle.

The plaintiff contends since his action is predicated upon the judgment of assessment of a sister state, it is a judgment which must be accorded full faith and credit. The assessment has been sustained by the Illinois Appellate Court in People, ex rel. Palmer, &c., v. Central Mutual, 313 Ill.App. 84, 39 N.E.2d 400. It cannot be disputed that the validity of the assessment made in connection with the liquidation of an insolvent insurance company is governed by the laws of the state where the corporation has its domicile. Broderick v. Rosner, 294 U.S. 629, 79 L.Ed. 1100, 55 S.Ct. 589.

The question in this case is simply whether the last mentioned statute bars the suit to collect the assessment levied against the defendant. It is my opinion that it does.

The distinction...