U.S. Supreme Court
Nutting v. Massachusetts, 183 U.S. 553 (1902)
Nutting v. Massachusetts
Argued November 20-21, 1901
Decided January 13, 1902
183 U.S. 553
The statute of Massachusetts of 1894, c. 322, § 98, imposing a fine on
"any person who shall act in any manner in the negotiation or transaction of unlawful insurance with a foreign insurance company not admitted to do business in this Commonwealth,"
is not contrary to the Constitution of the United States as applied to an insurance broker who, in Massachusetts, solicits from a resident thereof the business of procuring insurance on his vessel therein, and as agent of a firm in New York having an office in Massachusetts, secures the authority of such resident to the placing of a contract of insurance for a certain sum in pounds sterling upon the vessel and transmits an order for that insurance to the New York firm, whereupon that firm, acting according to the usual course of business of the broker, of itself, and of its agents in Liverpool obtains from an insurance company in London, which has not been admitted to do business in Massachusetts, a policy of insurance for that sum upon the vessel, and the broker afterwards, in Massachusetts, receives that policy from the New York firm, and sends it by mail to the owner of the vessel in Massachusetts.
This was an indictment on the statute of Massachusetts of 1894, c. 522, § 98, for negotiating and transacting unlawful insurance with a foreign insurance company not admitted to do business in Massachusetts.
Section 98 of that act is as follows:
"Any person who shall assume to act as an insurance agent or insurance broker without license therefor as herein provided, or who shall act in any manner in the negotiation or transaction of unlawful insurance with a foreign insurance company not admitted to do business in this commonwealth, or who as principal or agent shall violate any provision of this act in regard to the negotiation or effecting of contracts of insurance, shall be punished by fine of not less than one hundred dollars nor more than five hundred dollars for each offense."
The act, in section 3, provides that
"it shall be unlawful for any company to make any contract of insurance upon or concerning
any property or interests or lives in this commonwealth, or with any resident thereof, or for any person as insurance agent or insurance broker to make, negotiate, solicit, of in any manner aid in the transaction of such insurance, unless and except as authorized under the provisions of this act,"
and that "all contracts of insurance on property, lives, or interests in this commonwealth shall be deemed to be made therein." And in sections 77-82, it prescribes the conditions with which foreign insurance companies must comply before they can do business in Massachusetts, requiring each company, among other things, to appoint the insurance commissioner its attorney, upon whom process in any suit against it may be served, to appoint some resident of Massachusetts as its agent, to obtain from the insurance commissioner a certificate that it has complied with the laws of Massachusetts and is authorized to make contracts of insurance, and, if incorporated or associated under the laws of any government other than the United States or one of the states, to deposit with the Treasurer of Massachusetts or the financial officer of some other state a sum equal to the capital required of like companies, to be held in trust for the benefit of all the company's policyholders and creditors in the United States.
At the trial in the superior court, the parties agreed upon the following facts: the defendant was a citizen of Massachusetts and a licensed insurance broker in Boston, and at some time prior to November 18, 1898, solicited from one William McKie, a shipbuilder in Boston, and likewise a citizen of Massachusetts, the business of procuring insurance upon a vessel then in process of construction in his Boston shipyard, and, as agent for Johnson & Higgins, average adjusters and insurance brokers having an office in Boston in charge of the defendant, and their principal place of business in New York, secured the authority of McKie to the placing of a contract of insurance for £4,124 upon the vessel. Thereupon the defendant transmitted an order for the insurance to Johnson & Higgins in New York, and they at once wrote to their Liverpool agents, John D. Tyson & Company, to procure the aforesaid insurance. Accordingly, Tyson & Company procured a policy from the London Lloyds, to be delivered chanroblesvirtualawlibrary
to Tyson & Company, in Liverpool, dated November 18, 1898, for a year from November 16, 1898, on the aforesaid vessel, for the sum of £4,124, the policy running in favor of Johnson & Higgins
"on account of whom it may concern, as well in their own name as for and in the name and names of all and every other person or persons to whom the same doth, may, or shall appertain."
Tyson & Company, at the time of receiving the policy, paid the premiums thereon for account of Johnson & Higgins, and received a commission upon the insurance from Lloyds for themselves and for Johnson & Higgins. Tyson & Company sent the policy to Johnson & Higgins in New York; they, after endorsing it, forwarded it by mail to the defendant in Boston, and he, on November 18, 1898, sent it by mail to McKie. The policy was procured from the London Lloyds in the usual course of the business of the defendant, of Johnson & Higgins, and of Tyson & Company. None of them were agents of the London Lloyds except insofar as the facts agreed constituted them agents. The London Lloyds were individual insurers, citizens of England, associated as principals in the business of insurance under and by authority of the government of the United Kingdom of Great Britain and Ireland, and carrying on the business in England on the Lloyds' plan, by which each associate underwriter becomes liable for a proportionate part of the whole amount insured by a policy. The London Lloyds had not complied with any of the requirements imposed by the laws of Massachusetts upon foreign insurance companies, and had not been admitted to do insurance business in the commonwealth according to law.
The defendant requested the court to instruct the jury that so much of the Massachusetts statute as purported to make illegal such acts as were done by the defendant was contrary to the Fourteenth Amendment of the Constitution of the United States, and as such was unconstitutional and void. The request was refused, and the court instructed the jury that, upon the facts above stated, they would be warranted in finding the defendant guilty. To all of this the defendant duly excepted, and, being found guilty, his exceptions were overruled by the Supreme Judicial Court of Massachusetts. 175 Mass. 154. He chanroblesvirtualawlibrary
was thereupon sentenced in the superior court, and sued out this writ of error.