Noble v. Mitchell

• Decision Date: 30 November 1896
• Docket Number: No. 101,101
• Citation: 41 L.Ed. 472,17 S.Ct. 110,164 U.S. 367
• Parties: NOBLE et al. v. MITCHELL
• Court: U.S. Supreme Court

164 U.S. 367

17 S.Ct. 110

41 L.Ed. 472

NOBLE et al.

v MITCHELL.

No. 101.

November 30, 1896.

J. M. Chilton and A. A. Wiley, for plaintiffs in error.

Charles Wilkinson, for defendant in error.

Mr. Justice WHITE delivered the opinion of the court.

Article 2, c. 5, tit. 12, Code Ala., regulates the subject of fire and marine insurance within the state by companies not incorporated therein. It is required by section 1199 that such companies shall pay annually into the treasury the sum of $100. Section 1200 directs that each of such corporations must file with the state auditor a certified copy of its charter, and a statement setting forth certain items in relation to its business condition on the 31st day of December next preceding; and by section 1201 such corporations are required to possess a cash capital of at least $150,000, and are obliged to file a written instrument consenting to service of process upon any agent of such company within the state. Upon complance with all the requirements of the article, the auditor, if satisfied that the affairs of such company are in sound condition, if required to issue to it a license to transact the business of insurance within the state until the 15th day of January next ensuing.

Sections 1205, and 1207 of the same article read as follows:

'Sec. 1205. Any person who solicits insurance on behalf of an insurance company, not incorporated by the laws of this state, or who, other than for himself, takes or transmits an application for insurance, a premium of insurance or a policy of insurance to or from such company, or in any way gives notice that he will receive or transmit the same, or receives or delivers a policy of insurance of such company, or who in- spects any risk, or makes or forwards a diagram of any building, or does any other thing in the making of a contract of insurance, for or with such company, other than for himself, or examines into, adjusts or aids in examining into or adjusting any loss for such company, whether such acts are done at the instance of such company, or any broker, or other person, shall be held to be the agent of the company for which the act is done, and such company held to be doing business in this state.

'Sec. 1206. Any person acting as agent of any foreign insurance company which has not received the license from the auditor above provided for, or shall so act after its expiration, is liable personally to the holder of any policy of insurance in respect to which he so acted as agent for any loss covered by it; and shall forfeit, for each offense, the sum of five hundred dollars, to be sued for in the circuit court where the delinquency occurs, by the solicitor, in the name of the state and paid into the state treasury, less twenty-five per cent retained by the solicitor for his services.

'Sec. 1207. The term 'insurance company,' as used in this article, includes every company, corporation, association or partnership organized for the purpose of transacting the business of insurance.'

The action below was originally instituted in a circuit court of Alabama by Mitchell, a citizen of Alabama, to recover from the defendants, a firm of insurance agents doing business in the city of Montgomery, the amount of a loss under a policy of insurance covering a stock of merchandise owned by the plaintiff, which policy was procured by the defendants from a corporation known as the Fairmount Insurance Association of Philadelphia, Pa. The corporation in question was not incorporated under the laws of Alabama, and at the time of the issue of the policy had not been licensed to do an insurance business within that state. From a verdict and judgment against them, the defendants prosecuted error. The supreme court of the state affirmed the judgment. 100 Ala. 519, 14 South. 581.

The highest court of the state having affirmed the validity of the state statute, and enforced its provisions against the plaintiff in error, despite his objection duly made that such statute was repugnant to the constitution of the United States, a writ of error was allowed, and the cause is here for review.

In Hooper v. California, 155 U. S. 648, 15 Sup. Ct. 207, this court held that a statute of the state of California which made it a misdemeanor for a person in that state to procure insurance for a resident in the state from an insurance company not incorporated under its laws, and which company had not filed the bond required by the laws of the state, was not a regulation of commerce, and did not conflict with the constitution of the United States. The doctrine of earlier decisions of this court with reference to contracts of insurance—namely, that the business of insurance is not commerce, and that a contract of insurance is not, in the constitutional sense of the words, an instrumentality of commerce was reiterated, and held applicable to a marine policy. This court said (page 655, 155 U. S., and page 210, 15 Sup. Ct.):

'The state of California has the power to exclude foreign insurance companies altogether from her territory, whether they were formed for the purpose of doing a fire or a marine business. She has the power, if she allows any such companies to enter her confines, to determine the conditions on which the entry shall be made. And, as the necessary consequence of her possession of these powers, she has the right to enforce any conditions imposed by her laws as preliminary to the transaction of business within her confines by a foreign corporation, whether the business is to be carried on through officers or through ordinary agents of the company; and she has also the further right to prohibit a citizen from contracting within her jurisdiction with any foreign company which has not acquired the privilege of engaging in business therein, either in his own behalf or through an agent empowered to that end. The power to exclude embraces the power to regulate, to enact and enforce all legislation in regard to things done within the territory of the state which may be directly or incidentally requisite in order...