NORTHWESTERN MUT. LIFE INS. Co. v. ELLIOTT and others.

(Circuit Court, D. Oregon. December 29, 1880.)

L CONTRACT, WHERE MADF-A policy was issued from the office of the plaintiff, in Milwaukee, Wisconsin, upon the life of M. E., in Portland, Oregon, and forwarded to the local agent there for delivery, containing a clause to the effect that the policy was not binding upon the company until countersigned and delivered there and the premium paid accordingly. Held, that the contract was completed in Oregon, that its validity must be determined by the laws of Oregon, and that the plaintiff being then prohibited from doing business in Oregon, the contract was null and void

2 MONEY OBTAINED BY FRAUD.-J. E., the assignee of the aforesaid policy, obtained from the plaintiff thereon the sum of $7,931.97 upon the false and fraudulent representation that the assured was dead. Held, that, nothwithstanding the illegality of the contract of insurance, the plaintiff might maintain a suit against J. E. to obtain the money so fraudulently obtained by him.

3. CITIZEN OF ANOTHER STATE-RIGHT TO SUE IN THE NATIONAL COURT. A prohibition by a state that a corporation of another state shall not do business therein, does not prevent such corporation from suing in a national court in the former state, because a state cannot prevent a foreign corporation from suing in such tribunal.

In Equity.

E. E. Shattuck and Julius Moreland, for plaintiff.

Addison C. Gibbs and Edward Bingham, for defendants. DEADY, D. J. On October 19, 1870, the plaintiff, at its office in Milwaukee, Wisconsin, issued a policy of insurance on the life of Moses Elliot for his own benefit, in the sum of $8,000, and on November 29th of the same year said Moses assigned the same to his father, Jeremiah Elliott; and afterwards, on October 1, 1873, the plaintiff, upon the representation of said Jeremiah that Moses was drowned on June 24, 1871, paid said policy to the former.

On September 30, 1879, this suit was brought to recover this money as having been obtained from the plaintiff by means of the false and fraudulent representations of the father that the son was dead, when in truth and in fact he was living, and to that end to subject certain property alleged to have been purchased by the former with the money so obtained of the plaintiff to the satisfaction of any decree v.5,no.3-15

which may be herein obtained against him, to-wit: a band of sheep containing several hundred head, and now in the possession of the defendants Jeremiah, James Madison, and Albert Elliott, and Frank Williams, alias Moses Elliott; and donation claims situate in Jackson county and numbered 62 and 83, and containing 320.10 and 319.98 acres respectively, and by said Jeremiah, on November 11, and December 22, 1873, procured to be conveyed to the defendant Arty Mesy, his wife, with intent to hinder and defraud the plaintiff, 100 acres of which was afterwards conveyed to the defendant Albert Elliott, without consideration and with the like intent.

The bill states that the defendants, except Deardoff, are citizens of Oregon, and that he has gone to parts unknown, and prays that if he comes within the jurisdiction he may be made a party if necessary; that the defendant Frank Williams is in fact Moses. Elliott, and that the plaintiff did not discover the alleged fraud until within 18 months prior to the commencement of this suit. Only Jeremiah Elliott and wife, and James Madison Elliott, were found within the jurisdiction and served with a subpoena to answer. The defendant James Madison Elliott answers, disclaiming any interest in the sheep or real property, except a leasehold interest, which will terminate on October 31, 1881, in donation No. 82, jointly with his brother Marion Elliott, for which they pay Arty Mesy one-third of the crop.

The defendant Jeremiah and his wife answer jointly, admitting that in 1870 the plaintiff, by its agent, resident in Oregon, O. B. Gibson, insured the life of their son, Moses Elliott, for $8,000, and that said Moses soon after assigned and transferred the policy therefor to the defendant Jeremiah, but aver that said policy was null and void, because the plaintiff was not then authorized or qualified to do business in Oregon; that on June 24, 1871, said Moses was drowned in the Columbia river, and that in consequence of the claim and representations to that effect, contained in the affidavits of said Jeremiah and Deardoff, the plaintiff at Portland, Oregon, on October 1, 1873, paid said Jeremiah, as the assignee of said Moses, on account of his policy and death, $7,931.97;

that no part of the property aforesaid was purchased with said money, but that said real property was purchased with the funds of said Arty Mesy derived from her father's estate 25 years ago, and the interest thereon, amounting to $2,300, and that said Albert Elliott paid about $800 for the 100 acres thereof subsequently conveyed to him.

The defence that the contract and policy of insurance is void is founded upon the statute of Oregon, (Or. Laws, 617, Oct. 24, 1864,) providing that "a foreign corporation, before transacting business in this state, must duly" appoint an attorney resident here, upon whom service of process may be made in all proceedings brought against it within the state. In re Comstock, 3 Sawy. 218, and in Semple v. The Bank of B. C. 5 Sawy. 88, this court held that a foreign corporation, before complying with this act, is not authorized to transact business in Oregon, and that any act done therein by such corporation, before the appointment of such resident attorney, is null and void; and to the same effect is the decision of the supreme court of the state in Bank of B. C. v. Page, 6 Or. 431. In reply to this the plaintiff contends that the contract of insurance was not made in Oregon, but in Wisconsin, and is therefore valid notwithstanding the Oregon statute. The facts bearing upon this question appear to be that the application for the policy was made at Portland, Oregon, on September 22, 1870, to O. B. Gibson, the agent of the plaintiff, then resident here, who then stated thereon that the "renewals" were to be made at the Portland agency, and was by him. forwarded to the plaintiff, who, on October 19, 1870, at Milwaukee, Wisconsin, forwarded the policy, signed by its president and secretary, to said Gibson at Portland, Oregon, who then delivered the same to the insured, and received from him the first quarterly premium of $26 cash, and $39.28 in his note. The policy contains this clause: "Seventh. This policy shall not take effect and become binding on the company until the premium shall be actually paid during the life-time of the person whose life is assured, to the company or some person authorized to receive it, who shall countersign the policy on receipt of the premium."

The policy is "countersigned by O. B. Gibson, agent."

Generally speaking, the validity of a contract is to be decided by the law of the place where it is made, and if valid or void there, it is valid or void everywhere. The few exceptions to this rule need not be mentioned in the application of it to this case. Story's Con. Laws, § 242 (1) et seq.; Cooley's Con. Lim. 286; Cox v. U. S. 6 Pet. 203; Hyde v. Goodnow, 3 N. Y. 269; In re Clifford, 2 Sawy. 428. Where, then, was this contract made: in Wisconsin or Oregon? The answer to this question involves the inquiry, where did the final act take place which made the transaction a contract binding upon the parties.

The premium was paid to the agent of the plaintiff at Portland, who then and there countersigned and delivered the policy. This was the consummation and completion of the contract. But, to put this beyond a doubt, the policy itself declares that it shall not be binding on the company until these acts are performed. And, until it was binding upon the company, it was not binding on the applicant; in short, it was not yet a contract, but only a proposition. Pomeroy v. Manhattan L. Ins. Co. 40 Ill. 400; Thwing v. Great Western Ins. Co. 111 Mass. 109; Wood F. Ins. 189 and n. 2; Hardie v. St. Louis M. L. Ins. Co. 26 La. An. 242; St. Louis M. L. Ins. Co. v. Kennedy, 6 Bush, 450.

The case of Hyde v. Goodnow, supra, cited by counsel for plaintiff, is not contrary to this conclusion. There the assured, living in Ohio, applied to a company in New York, through its local agent and surveyor, for insurance, sending with his application a premium note and the report of the surveyor thereon. The company accepted the application in New York and mailed the policy direct to the applicant in Ohio, which, in accordance with its by-law, contained the stipulation that it should not be binding until the application and premium note were deposited in the office of the company and approved by its directors. The contract, if made in Ohio, was illegal and void, because the company was not authorized to transact business there; but, in a suit upon the premium note against the maker in New York, the court

held that the contract was made in the latter state and therefore valid, because, when the application was approved and the policy deposited in the mail at New York, addressed to the defendant, the contract was then and thereby executed, and became binding on the parties thereto.

An offer by mail to insure certain property, and an acceptance by letter of the proposition, constitute a valid contract at and from the place and date of mailing such letter of acceptance. Tayloe v. The Merchants' F. Ins. Co. 9 How. 398. But, admitting that the contract of insurance in this case was made in Oregon and is therefore illegal and void, the plaintiff contends that it is entitled to the relief sought upon the ground that the defendant Jeremiah obtained money from it to which he was not entitled, by means of the false and fraudulent representations concerning the death of Moses Elliott. In answer to this proposition the defendant insists that this suit, if not brought directly upon the illegal contract of insurance, is brought upon an implied one, to the effect that the defendant would return the money thus obtained from the plaintiff; and that such implied contract arises immediately out of and is connected with the original illegal one, and is therefore illegal itself, citing McCausland v. Ralston, 12 Nev. 195; McBlair v. Gibbes, 17 How. 233; Armstrong v. Toler, 11 Wheat. 258; Dillon v. Allen, 46 Iowa, 299. But it is a mistake to suppose this suit is brought upon a contract actually made or attempted to be made by the parties, and within the purview or operation of the prohibition of the statute, or at all. On the contrary, it is a suit brought to recover money obtained by the defendant from the plaintiff, not upon the void contract of insurance, but the fraud of the defendant. True, the plaintiff might at common law, upon the facts, have maintained assumpsit for money had and received by the defendant to the plaintiff's use, and the law, in the interest of justice and by way of promoting the remedy, which was in form ex contractu, would have implied a promise on the part of the defendant to pay. But this would not have been a contract arising out of the void and illegal one, nor in any respect an affirmance of its validity, but only an implica