State Mutual Fire Ins. Ass'n v. Brinkley Stave & H. Co.

• Decision Date: 18 May 1895
• Citation: 31 S.W. 157
• Parties: STATE MUTUAL FIRE INS. ASS'N v. BRINKLEY STAVE & HEADING CO.
• Court: Arkansas Supreme Court

31 S.W. 157

STATE MUTUAL FIRE INS. ASS'N v. BRINKLEY STAVE & HEADING CO.

Supreme Court of Arkansas.

May 18, 1895.

Appeal from circuit court, Monroe county; James S. Thomas, Judge.

Action by State Mutual Fire Insurance Association against the Brinkley Stave & Heading Company for an unpaid assessment. From a judgment for defendant, plaintiff appeals. Reversed.

H. A. & J. R. Parker, for appellant. C. F. Greenlee, for appellee.

HUGHES, J.

The plaintiff, appellant, a mutual fire insurance company incorporated under the laws of the state of Illinois, sued the defendant, the appellee, for an assessment of $225 for dues, losses, and liabilities incurred as a member of plaintiff company on two policies. The defendant denied the liability; set up that policies were canceled; that plaintiff owed it $125 for unearned premiums; and that plaintiff's contract on policies was void for noncompliance with foreign corporation law; and prayed judgment for $125 on counterclaim.

The court found the facts to be: (1) That the insurance for which the policy was issued was solicited in the state by an agent of the plaintiff during the course of regular business herein, and that the application was made and the policy was accepted in this state. (2) That plaintiff is a foreign corporation, and has wholly failed to comply with any of the laws of this state regulating insurance, and was not entitled to transact insurance business in this state. (3) That the insurance was on the 26th May, 1891, terminated, and defendant, on its cross complaint, is entitled to recover from plaintiff $125 unearned premiums.

The court declares the law to be: (1) No foreign corporation shall do any business in this state, except while it maintains therein one or more known places of business, and an authorized agent in the same upon whom process may be served, and they shall exercise no greater powers, nor have any greater privileges than are exercised or had by like corporations of this state. (2) Before mutual fire insurance companies are permitted to do business in this state, it is required that they shall give bond to the state of Arkansas for the use of the beneficiaries of the policy holders of such companies, with security to be approved by the secretary of state, in the sum of $20,000, conditioned for the prompt payment of all assessments to the parties or beneficiaries entitled thereto, which bond shall be filed in the office of the secretary of state, and the law requires insurance corporations doing business on the assessment plan to make return to the auditor of state annually, on or before the 1st of March, a statement of the affairs of the corporation for the year ending on the 31st of December next preceding. (3) Plaintiff was not entitled to do insurance business in this state until it had complied with Act 84 of the Acts of Arkansas for 1887, and received from the auditor of state a certificate to that effect, and if any person transacted any insurance business for plaintiff, until it had complied with the requirements of said act, he was guilty of a misdemeanor, and subject to a fine in the sum of $500. (4) Plaintiff cannot recover in this action, unless it has complied with section 3832, Mansf. Dig., and paid the taxes therein prescribed. (5) If plaintiff has wholly failed to comply with its duties, as prescribed in sections 3833, 3834, Mansf. Dig., and the act of Arkansas above mentioned, and the insurance was obtained from defendant company, and the same was solicited by an agent of plaintiff while in the course of regular business in this state, then plaintiff cannot recover in this action. (6) If defendant company or its agents requested the termination of the insurance, it is entitled to recover from the plaintiff the amount of unearned premium proved by the evidence. (7) Where an act is prohibited by statute, a contract to do the act is illegal and unenforceable, and, where a statute pronounces a penalty for an act, a contract founded on such act is void.

The appellee made application to the agent of the appellant at Brinkley, Ark., for two policies of insurance in the appellant company. The applications were forwarded to the company at Chicago, Ill., and there passed upon, accepted, dated, and signed by the proper officers of said company, which was a mutual fire insurance company, chartered under the laws of Illinois, with its domicile at the city of Chicago, in said state. The policies were then sent by the company directly to the appellee, at Brinkley, Ark., and the premiums were...