State ex rel. Attorney Gen. v. Fid. & Cas. Ins. Co.

• Decision Date: 27 December 1888
• Citation: 41 N.W. 108,39 Minn. 538
• Court: Minnesota Supreme Court
• Parties: STATE EX REL. ATTORNEY GENERAL v FIDELITY & CASUALTY INS. CO.

39 Minn. 538

41 N.W. 108

STATE EX REL. ATTORNEY GENERALvFIDELITY & CASUALTY INS. CO.

Supreme Court of Minnesota.

Dec. 27, 1888.

(Syllabus by the Court.)

1. Quo warranto held to be a proper proceeding to try the right of a foreign corporation to carry on its corporate business in this state.

2. The legal propriety and effect of the action of officers of the executive department of the state may be determined by the courts when the same are brought in question in causes requiring judicial action.

3. The insurance commissioner, in issuing certificates allowing foreign corporations to do business in this state, acts in a ministerial capacity. His determination is not judicial and final.

4. In accordance with the policy of our state, and of the interstate law of comity, foreign insurance corporations are allowed to carry on business in this state. A foreign corporation, which has complied with our laws, should not, as a measure of retaliation, by force of our retaliatory statute, (section 269, c. 34, Gen. St. 1878,) be excluded from doing business here, upon the ground that the laws of the state where such foreign corporation was created would exclude corporations of this state from doing business there, unless it is clearly apparent that such is the effect of the foreign law. The proper effect of the statutes of New York in this particular being considered doubtful, and the manner of their practical administration being undisclosed, a judgment of ouster against the respondent, a New York corporation, refused.

Quo warranto.

John B. & W. H. Sanborn, for the State.

Davis, Kellogg & Severance, (Thos. S. Moore, of counsel,) for respondent.

DICKINSON, J.

This is a proceeding upon information in the nature of quo warranto to try the right of the above-named respondent, a corporation of the state of New York, to carry on within this state the business of insurance against these three classes of risks, viz., injury or death of persons caused by accident, breach of trust by persons holding places of public or private trust, and the breakage of plate-glass. The case is presented for decision upon the relator's demurrer to the answer of the respondent. It is contended on the part of the respondent that this is not an appropriate method of procedure. We hold the contrary. A state has the power of a sovereign to prohibit foreign corporations from exercising their franchises, carrying on their ordinary corporate business, within its borders; and when, in defiance of such prohibition, and contrary to our law, a foreign coporation does assume to exercise corporate franchises in a manner affecting the public interests, quo warranto will lie for the purposes of determining the right in question, and of applying a remedy, although it is true that the courts of a state have no power to affect by their judgments the corporate existence of foreign corporations. We can restrain the exercise, within our own jurisdiction, of corporate franchises inconsistent with our own sovereignty, whether the corporation whose acts are in question be domestic or foreign. State v. Railroad Co., 25 Vt. 433. And see People v. College, 5 Wend. 211. It is said on the part of the respondent that we ought not to entertain the proceeding because the determination of the question whether it should be licensed and admitted to transact its business in this state is committed by law to a branch of the executive department of the state, and that the judicial department of the state has no constitutional control over the action of the executive department. In this the counsel for respondent fail to distinguish between the authority of the judicial department to control the action of executive officers, and the power and duty of the courts to determine, in causes before them, the rights of parties, although the legal propriety and effect of the action of executive state officers may necessarily be thus brought in question. We have assumed, without so deciding, that the in insurancecommissioner, in respect to the discharge of his duties, is exempt from judicial control.

The insurance commissioner, in granting certificates or licenses to foreign corporations to do business here, acts in a ministerial capacity. His determination and action are not judicial and final. If our statute, to be hereafter recited, prohibits foreign corporations, under certain circumstances, to do business in this state, the authority or license of the commissioner in disregard of that statute would be unavailing. The respondent became incorporated in 1875, in the state of New York. The statute of that state then in force, and under which the incorporation was effected, (chapter 463, Laws 1853, as subsequently amended,) authorized the incorporation of individuals for the purposes of carrying on either one (only) of the two classes or “departments” of insurance therein specified. The “first department” related to what may be briefly referred to as ordinary life insurance. The “second department,” or specification of the purposes for which such incorporation was allowed, embraced, among others, the three kinds of risks against which, as is above stated, this company was organized to insure. In 1879, after the incorporation of this respondent, a statute was enacted amending the prior law above referred to. This amendatory act also authorized corporations to be organized for the purposes of insurance, as specified in two “departments” of the act, the first of which we may again refer to as embracing ordinary life insurance. The “second department” consisted of seven specified kinds or classes of risks, among which, designated as the second, third, and fifth classes, respectively, were the three kinds of risks above stated, which this respondent had been authorized to insure against, and in which business it is engaged in New York and in this state. Section 2 of this act declares that “no company organized under this act for the purposes named in the first department shall undertake either of the risks named in the second department, and no company organized under this act for either of the purposes mentioned in the second department shall undertake any business mentioned in the first department, nor shall any such company hereafter organized undertake or do more than one of the several kinds of insurance mentioned in said second department; and no company organized under this act shall undertake any business or risk except as herein provided: provided, that nothing herein contained shall affect the business of any company heretofore duly organized under the second department of this act.” Section 6 forbids the organization of companies under this act with a less capital than $100,000; and further provides that “no company organized for the purposes named in the second department shall commence business until they have deposited with the superintendent of the insurance department of this state at least the sum of $100,000,” invested in a manner specified. Section 14 forbids any company or association incorporated by or organized under the laws of any other state government to do business unless it has the amount of capital required by the sixth section, and invested in a manner specified. A statute of the state of New York enacted in 1881, amending a prior law, enacted in 1877, required that every corporation or association, organized under the laws of that state or of any foreign country, to insure against damage to plate-glass, shall deposit $100,000 in securities with the insurance department of that state; and that no corporation or association existing under the laws of any other state of the United States with authority to insure...