Palmetto Fire Ins Co v. Conn Chrysler Sales Corporation v. Spencer Co v. Same Clark Motor Co v. Johnson Chrysler Sales Corporation v. Same
| Decision Date | 25 October 1926 |
| Docket Number | 273,286,287,UTTERBACK-GLEASON,Nos. 255,274,s. 255 |
| Citation | 272 U.S. 295,71 L.Ed. 243,47 S.Ct. 88 |
| Parties | PALMETTO FIRE INS. CO. v. CONN, Superintendent of Insurance of Ohio. CHRYSLER SALES CORPORATION v. SPENCER, Insurance Com'r of Maine.CO. v. SAME. CLARK MOTOR CO. v. JOHNSON, Com'r of Insurance of Wisconsin. CHRYSLER SALES CORPORATION v. SAME |
| Court | U.S. Supreme Court |
Messrs. Hartwell Cabell, of New York City, and Wm. O. Henderson, of Columbus, Ohio, for appellant Palmetto Fire Ins. Co.
[Argument of Counsel from pages 296-298 intentionally omitted] Messrs. Duane R. Dills and Nicholas Kelley, both of New York City, for appellants Chrysler Sales Corporation and Utterback-Gleason Co.
Messrs. Ralph W. Jackman, of Madison, Wis., and Duane R. Dills, of New York City, for appellants Clark Motor Co. and Chrysler Sales Corporation.
[Argument of Counsel from pages 299-301 intentionally omitted] Mr. C. S. Younger, of Celina, Ohio, for appellee Conn.
[Argument of Counsel from pages 301-303 intentionally omitted] Messrs. Raymond Fellows and Joseph F. Gould, both of Bangor, Me., for appellee Spencer.
Mr. T. L. McIntosh, of Madison, Wis., for appellee Johnson.
These cases all raise the same question. The first, Palmetto Fire Insurance Company v. Conn, is a suit to enjoin the Ohio Superintendent of Insurance from revoking the license of the plaintiff, a corporation of South Carolina, to do business in Ohio, on the ground that it has violated statutes of the latter State. These statutes forbid the insurance of property in the State except by a legally authorized agent, resident in Ohio, and tax the business lawfully done there. They provide also that any one who procures an application for insurance shall be held to be the agent of the party thereafter issuing the policy. The plaintiff says that if the statutes are held to apply to what it has done they are invalid under the Fourteenth Amendment of the Constitution of the United States. The case was tried before a statutory court of three judges and an injunction was refused. 9 F.(2d) 202.
The facts are simple. The plaintiff made a contract of insurance in Michigan with the Chrysler Sales Corporation, a Michigan corporation which sells all the automobiles made by the Chrysler Corporation. This contract purported to insure purchasers of Chrysler cars against fire and theft, and to become automatically effective from the date on which the purchaser took delivery or a bill of sale of the car; the Chrysler Company to send a monthly report to the plaintiff of all cars for which insurance was thus provided and to pay premiums accordingly at Detroit. If any one bought a car he got the insurance whether he wished it or not as part of his bargain, and a certificate was sent to him by the plaintiff. The question is whether this transaction brought the plaintiff within the taxing power of Ohio. If it did not, the power of the State to exclude the Company altogether could not be used as means to accomplish a result beyond the State's constitutional power. Fidelity & Deposit Co. of Maryland v. Tafoya, 270 U. S. 426, 46 S. Ct. 331, 70 L. Ed. 664, March 15, 1926.
Manifestly there was nothing in the contract between the plaintiff and the Chrysler Sales Corporation, without more, that Ohio could lay hold of, even if it insured property in Ohio. But the contract contemplated and provided for a benefit to third persons if, when, and where they complied with its conditions. When a man bought a car in Ohio, by that act he made effective the agreement of the Company to insure future purchasers, and imposed upon it an obligation that did not exist before. It is true that the obligation arose from a contract made under the law of another State, but the act was done in Ohio and the capacity to do it came from the law of Ohio, so that the cooperation of that law was necessary to the obligation imposed. It would be held in some jurisdiction that the purchaser became party to a contract with the insurance company. By universal consent he at least would become the beneficiary of a contract for his benefit. Whatever technical form may be...
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