Cromwell v. Royal Canadian Insurance

Miller, J., delivered the opinion of the Court. The Act of 1868, ch, 471, sec. 211, provides that suits against foreign corporations exercising franchises in this State, may be brought in any of the Courts of this State, “by a resident of this State for any cause of action; and by a plaintiff not a resident of this State, when the cause of action has arisen, or the subject of the action shall be situated, in this State.’-’ In the case of Myer vs. the Liverpool, London, and Globe Ins. Co., Garnishee of Bitlinger & Bro., 40 Md., 595 , it was decided that to bring a case within the first clause of this provision the liability sought to be enforced must be a direct liability of the corporation to the resident plaintiff, and that a resident plaintiff in an attachment against a non-resident debtor, cannot, under the second clause, subject the corporation to the process of garnishment in a Maryland Court, to affect a debt due by the corporation to the non-resident debtor on ³⁷⁴ a contract which is made, and the subject of which is situated, in another State. In the present case, the appellants, citizens of this State, having a claim against Patrick Foley, who resided in Washington City, in the District of Columbia, sued out of Baltimore City Court an attachment on warrant against him as a non-resident, and caused the same to be laid in the hands of The Royal Canadian Insurance Company as garnishee, a corporation created by the laws of Canada, exercising franchises in this State, and having a branch office in the City of Baltimore.

The purpose of the appellants was to attach a debt due by the Company to Foley for a loss, by fire, on goods of the latter in a store in Washington, under a policy of insurance issued by the company. It is conceded the case in its facts is identical with that of Myer’s, in 40 Md., 595 , unless this policy of insurance is to be considered and treated as a Maryland contract. Can it beso regarded? The printed heading of the instrument is—“ Baltimore Branch—The Royal Canadian Insurance Company—Capital $6,000,000—Fire and Marine—Montreal.” In the body of it the Company, in the usual form, professes to insure “ P. Foley, Esq., of Washington, D. C.,’’ toan amount not exceeding $5000 on his stock of goods kept for sale in a certain described store in Washington, for one year from the 4th of September, 1875, at noon, and concludes, “In witness whereof, we, two of the directors of the said company, by our attorney, have hereunto set our hands, and have caused the common seal of said company to he hereunto affixed.

Dated at Baltimore, this fourth day of September, 1875." Here follows the engraved names of two Directors, and below them:—“By their attorney, J. A. Rigby, manager Baltimore Branch." Below this is the following:—“not valid unless countersigned by the duly authorized agent of this company at Washington, D. C.," and this is signed, “ B. F. Steiger, agent.” It might, perhaps, be inferred ³⁷⁵ from the heading, the place of date, and the signing by the manager of the Baltimore Branch, appearing on the face of this policy, that it was filled up, signed, and delivered in the City of Baltimore notwithstanding the assured is described as residing in Washington, and the property insured as located in that city. But this inference is repelled by the testimony in the record. It is proved that this Baltimore Branch office was simply one of the agencies of this company whose home office was at Montreal; that Rigby was the general manager of the Baltimore Branch office, and as such was the manager of the district for the Southern States, including the District of Columbia ; that the company had also a Washington agency at Washington; that Rigby appointed the person to act as agent for the company at Washington and notified the home office thereof, and the latter had the right to reject the person he so appointed for that agency, and the right at all times to remove such agent; that the Washington agent was the agent of the home company, though in some matters he would communicate with Rigby; that at the time this policy was issued Steiger was the agent of the company at Washington ; that it was in fact countersigned by Steiger at Washington and there delivered by him as the agent of the company to Foley, who was then and has since continued to be a resident of that city ; that it was Rigby’s custom to sign policies as the general manager of the Baltimore Branch office and send them in blank to the Washington and other local agents of the company, who would fill them up, countersign and deliver them to persons idho from time to time insured in the company; that he would sometimes send as many as fifty of such blank policies to an agent of the company at a time, and that the policy in this case was so signed by him as manager of the Baltimore Branch, and sent in blank to the Washington agent. This is all the testimony the record contains, but it shows very clearly that when this paper left the City of Balti ³⁷⁶ more it was an incomplete., unexecuted instrument, forming and evidencing a'contract with no one ; that it was completed, countersigned and delivered in Washington, where the assured resided and where the property insured was situated; and that, in point of fact, the contract of insurance was there made with Foley by an agent duly authorized by the company to effect insurances in its behalf, and to fill up, countersign and deliver policies, embodying and evidencing such contract.

In view of these facts it seems to us plain that this cannot he regarded as a Maryland contract. But it is said the authorities on this subject are in conflict, that the Courts of Massachusetts have decided the question one way and those of New York another. Assuming this to be so, still the conclusion we have reached in this case is not in conflict with the decisions in either of these States. In the case of Daniels vs. Hudson River Fire Ins.

Co., 12 Cush., 416 , the insurance was effected upon property situated in Massachusetts by a New York Company which had its office and principal place of business at Waterford, in that State. The policy purported to be dated at Waterford and there signed by the President and Secretary of the company, but the negotiation was had by an agent of the company in Massachusetts, and by the terms of the instrument it was not to be valid unless countersigned by their agent at Worcester, and it was so countersigned and delivered by him, and the Court, by O. <7., Shaw, said, “ there can be no doubt that this is a contract made in Massachusetts, and to be governed and construed by the laws of this State; for though it was dated in New York, and signed by the President and Secretary there, yet it took effect as a contract from the counter-signature and delivery of the policy in Massachusetts.” This decision was followed by that of Heebner vs. Eagle Insurance Company of Cincinnati, 10 Gray, 131 , where the defendant corporation was a company created by the laws of Ohio and established at Cincinnati, but had ³⁷⁷ an agent in Boston, duly authorized to make insurance contracts, who was furnished with blank policies signed by the officers of the company, in which it was declared that they should not take effect until countersigned by said agent, and the contract was made, and the policy filled up, signed and delivered in Boston. Upon these facts, the Court said, “ the contract of insurance was finally executed and delivered in this State. It was, therefore, a contract made here, and the law of this State is to govern its construction and interpretation without any reference to the domicil of the corporation liable upon it.” This was followed by the case of Thwing vs. Great Western Ins.

Co., 111 Mass., 109 , where the Court held that as the policy was delivered and accepted and the premium note signed by the assured in Boston, the contract was, therefore, made in that State. In this last case it does not appear that the Boston agent of the foreign corporation had authority to make contracts of insurance or was entrusted with blank policies signed by the officers of the company with power to fill them up, and from what we can gather from the report of the case on this point, we assume he was not clothed with such authority. These are the Massachusetts cases, and according to them the contract in the case before us was undoubtedly made in the District of Columbia and not in Maryland. The first of the New York decisions on this subject is the case of Hyde vs. Goodnow, 3 Coms., 266.

The facts of that case are briefly these: a New York Mutual Insurance Company insured property in Ohio for a resident of that State, who made application for the insurance, through an agent of the company. This agent in Ohio received the application and the premium note signed by the applicant, forwarded them to the office of the company in New York, and the company, upon receiving the same, issued a policy from their office in that State and mailed it to the assured in Ohio. The Court held that this was a contract made in the State of New York, but upon the ³⁷⁸ express grounds stated in the opinion, that the Ohio agent was simply authorized to make surveys and receive applications for insurance, and had no power, nor did he assume, to do anything that would bind the company; that the application which he forwarded was in no sense a contract until accepted by the company, but when they received and accepted it by consenting to insure, issued their policy and put it in the mail for transmission, from that moment it became a binding and irrevocable contract between the parties; and inasmuch as the acceptance of the application, the signing, issuing and mailing of the policy all took place in New York, it was a contract made in that State and not in Ohio. These were the grounds of that decision.

In Western vs. Genesee Mutual Ins. Co., 2 Kernan, 258, the same state of facts existed except that the policy, instead of being transmitted to the assured by mail was sent to the company's agent to be delivered to him, which the Court held did not alter the rule, and said: ‘‘ When the application was received and approved by the company, and the policy executed and put in the course of transmission to the