
    INSURANCE.
    [Franklin Circuit Court,
    January Term, 1903.]
    Wilson, Sullivan and Summers, JJ.
    State v. Amazon Insurance Company.
    TJneaweui, Insurance by Foreign Insurance Company — Not Necessary to Insure Property in Ohio.
    A fire insurance company, organized under tlie laws of another state, that maintains an office in this state and there enters into contracts of insurance respecting property in other states, or transacts the business of insurance respecting property in other states, is engaged in this state in the transaction of the business of insurance contrary to law, notwithstanding it does not enter into contracts of insurance with citizens of this state, nor insure property in the state.
    Geo. H. Jones, assistant attorney general, for plaintiff, cited:
    What constitutes contract of fire insurance. Commonwealth v.; Wetherbee, 105 Mass. 149 ; Wilson v. Hill, 44 Mass. (3 Mete.) 66 ; Dis-brow v. Jones, Harr. Ch. (Mich.) 48; May Insurance (ed. 1873), Sec. 6; Carpenter v. Insurance Co., 41 U. S. (16 Pet.) 495.
    To have a known place of business in a state where the business oí the corporation is prosecuted, helped forward or managed, is doing business. Solomon v. Webster, 4 Colo. 353, 367; Cooper Mfg. Co. v. Ferguson, 113 U. S. 727 [5 S. Ct. Rep. 739],
    An insurance company in Ohio, aiding in the transaction of its businesss of insurance, is amenable to the laws of Ohio relating to insurance companies., State v. Ackerman, 51 Ohio St. 163, 193 [37 N. E. Rep. 838; 24 R. R.' A. 298]. ,.
    Doing business contemplates a location, having an office, and the investment of some part of its capital within the state. Vaughan v. Righthouse, 71 N. Y. Supp. 799, 801 [64 App. Div. 138]. '
    
    When the agent of an insurance company sends to the home office in another state premiums, etc., which are there examined and accepted, the contract is made in the home state and not at the residence of the agent. Ramb v. Bowser, 7 Biss. 315, 372.
    An insurance company organized in Pennsylvania had an office and agent in Maryland. This agent insured- property in Virginia. Held that the contract is made in Maryland, and could be sued upon there. 54 Md. 212.
    When an order and note for goods are made in New York for lumber in Alabama, to be accepted finally in Alabama, this is not doing business in New York, but in Alabama. Tallapoosa Rumber Co. v. Holbert, 39 N. Y. Supp. 432, 433 [5 App. Div. 559].
    A foreign corporation which establishes a business domicile here and brings its property within the jurisdiction and mingles it with the general mass of commercial capital, is taxable here. People v. Trust Co., 96 N. Y. 377; People v. Mining Co., 11 N. E. Rep.'155 [105 N. Y. 76].
    The statute meant by “ doing business within the state,” using the state as a business domicile for transacting any substantial part, even though a comparatively small part of the business, which the company was organized to carry on, and in which its capital was embarked. Southern Cotton Oil Co. v. Wemple, 44 Fed. Rep. 24; People y. Wemple, 29 N. E. Rep. 1002 [131 N. Y. 64; 27 Am. St. Rep. 542],
    Establishing a place within the state for doing some part of its corporate business is carrying on business. Judson Taxation, Sec. 181.
    Appointing an agent and sustaining an agency is doing business. Farmers’ Roan & Trust Co. v. Electric Ry. Co., 51 N. E. Rep. 55 [173 111. 439].
    One who in any manner aids in transacting the insurance business of a company within this state, is the agent of such company, even though the policy defines him as the agent of the insured only. Pierce v. People, 106 111. 11 [46 Am. Rep. 683],
    The issuing of policies, the taking of premium notes, collecting or receiving cash premiums, and adjusting and paying, losses, constitute the principal business of insurance companies. Ramb v. Ramb, 6 Biss. 420, 425.
    The statute is for the purpose of regulation as well as protecting citizens of this state. People v. Pavey, 37 N. E. Rep. 691 [151 111. 101].
    
      The collection of premiums and payment of losses is doing insurance business. Smyth v'. Life Assn. Co., 25 How. Pr. 120; Price v. Insurance Co., 3 Mo. App. 262.
    Taking a note for a premium is doing insurance business. Beneo v. Yesler, 6 West Coast Rep. 809; Hacheny v. Leary, 7 Pac. Rep. 329 [12 Ore. 40].
    In these two latter cases is a full discussion upon the question of what is doing an insurance business.
    Policies written in any state on property outside of the state are contracts of the state where written. Western Mass. Mut. Fire Ins. Co. v. Storage Co., 41 Wkly. Notes of Cases 472.
    The polices issued by the defendant company were made and signed and mailed at Lima, and as soon as mailed the contracts were binding on the insurance company. Huntley v. Merlill, 32 Barb. 628 ; Hyde v. Goodnow, 3 N. Y. 266; Western v. Insurance Co., 12 N. Y. 258 ; Lamb v. Bowser, 7 Biss. 315; May Insurance, Sec. 66.
    The making of a contract is business within the meaning of the Sunday labor acts. Thurman, J., in Bloom v. Richards, 2 Ohio St. 387, 388.
    In support of the proposition that a foreign corporation is subject entirely to the laws and polic3r of a state in which it seeks to do business, we refer to Newburg Petroleum Co. v. Weare, 27 Ohio St. 343; Western Union Telegraph Co. v. Mayer, 28 Ohio St. 521 ; Lewis v. Bank, 12 Ohio 132 [40. Am. Dec. 469]; Bank v. Jones, 16 Ohio St. 145; 6 Thompson Corporations, Sec. 7884; Paul v. Virginia, 75 U. S. (8 Wall.) 168; Hooper v. California, 155 U. S. 648 [15 S. Ct. Rep. 207]; Orient Ins. Co. v. Daggs, 172 U. S. 557 [19 S. Ct. Rep. 281].
    The power to exclude embraces the power to regulate. Hooper v. California, 155 U. S. 648, 656.
    The right of a foreign insurance company to make contracts in this state is a franchise. State v. Ackerman, 51 Ohio St. 163, 194 [37 N. E. Rep. 828 ; 24 L. R. A. 298]; Spelling Extraordinary Relief, Secs. 1807, 1808.
    As containing matters of importance and of interest to be read in connection with the foregoing citations and argument, we cite the following authorities: St. Clair v. Cox, 106 U. S. 350 [1 S. Ct. Rep. 354]; 6 Thompson Corporations, Secs. 7884, 7886, 7887, 7898, 7870, 7996, 7998; Marine Ins. Co. v. Railway Co., 41 Fed. Rep. 643; Farrior v. Security Co., 7 So. Rep. 200 [88 Ala. 275, 280; 12 L. R. A. 856] ; Clay Fire & M. Ins. Co. v. Manufacturing Co., 31 Mich. 346.
    
      Why insurance companies are required to furnish the statements provided by statute. State v. Insurance Co., 50 Ohio St. 252, 259 [33 N.E. Rep. 1056].
    How can he tell (/. e. the insurance superintendent) whether an old charter company is or is not exercising its franchises and violating its charter, if no statement is required to be made and no examination by him permitted. Chicago Life Ins. Co. v. Needles, 113 U. S. 574 [5 S. Ct. Rep. 681].
    That quo warranto is a proper proceeding in a case of this kind is demonstrated inState v. Ackerman, 51 Ohio St. 163 [37 N. E. Rep. 828; 24 L. R. A. 298],
    H. P. Williamson, for defendant, cited:
    Insurance is a contract whereby the insurer becomes bound for a definite consideration to indemnify the insured against loss or damage to a certain property named in the policy by reason of certain perils to which it may be exposed. Dover Glass Works Co. v. Insurance Co., 29 Atl. Rep. 1039 [1 Del. Rep. 32].
    Foreign corporations, artificial beings, the product of a law not our own, have no constitutional right to pass their own borders and come into ours. The federal constitution has neither granted nor secured any such right. We may exclude absolutely, and in that power is involved the right to admit upon such conditions as we please. People v. Fire Assn., 92 N. Y. Rep. 311 [44 Am. Rep. 380].
    Corporations are residents of the state under the laws of which they were created, and they cannot by engaging in business in another state acquire a residence there. Fales v. Railway Co., 32 Fed. Rep. 673.
    There is certainly no public policy which is contravened by permitting corporations such as the plaintiff here to do business in the state, because the state expressely authorizes them to do so upon compliance with its requirements. The evident purpose of these requirements of the statutes are to protect parties, dealing with foreign corporations, from imposition and to secure convenient means of obtaining jurisdiction in the local courts of the state and information such as will facilitate the service of process upon such corporations. Toledo Tie & Lumber Co. v. Thomas, 11 S. E- Rep. 37 [33 W. Va. 566; 25 Am. St. Rep. 925],
    There must be a doing of some of the works or the exercise of some of the functions for which the corporation was created. Beard v. Publishing Co., 71 Ala. 60.
    A foreign company holding its meetings for convenience in Pennsyh vania at which subscriptions to stock were made and are sued upon -in Pennsylvania, but which is engaged in the business of building a pavilion in New Jersey, is not doing business in Pennsylvania. Wildwood Pavilion Co. v. Hamilton, 15 Pa. Sup. Ct. 389.
    Where conditions are required to be complied with before a foreign insurance company shall do business in this state (Minn.), the business referred to is its ordinary business of insurance. Sullivan v. Sheehan, 89 Fed: Rep. 247.
    The law requiring foreign insurance companies to comply with the terms imposed as a condition of doing business in this state relates to the business of insurance companies as such and does not prohibit a company which has not complied therewith from loaning money on mortgage within the state and prosecuting proper proceedings for the collection thereof. Smith v. Iron Hall, 77 111. App. 469.
    A foreign mining corporation which has not engaged in mining in the state, but which owns land and rents the same, is not engaged in the business for which it was incorporated, within the state. Missouri Coal & Mining Co. v. Ladd, 61 S. W. Rep. 191 [160 Mo. 435].
    A contract of insurance on property in the state with a foreign insurance company, irrespective of where made, is an attempt to do business within the meaning of the statute. Commonwealth Mut. Fire Ins. Co. v. Sharpless, 12 Pa. Sup. Ct. 333; Swing v. Munson, 43 Atl. Rep. 342 [191 Pa. St. 582; 71 Am. St. Rep. 772],
   SUMMERS, J.

The averments of the petition, filed.May 16, 1902, are as follows:

“The relator is the duly elected, qualified and acting attorney-general of the state of Ohio. Said relator avers that Ihe defendant, The Amazon Insurance Company, is a corporation organized under the laws of the state of West Virginia; that said company is so incorporated as a stock company for the purpose of making insurance upon houses, buildings and all other kinds of property against loss or damage by fire or lightning; that said defendant corporation has exercised franchises, privileges and rights in this state in contravention of law, and especially in the following particulars, to-wit:
“1. Said defendant company has located and now has its principal office or place of business in the city of Lima, Ohio, and is now and for a long time past has been transacting its said business of insurance within this state.
“2. Said defendant has not procured from the superintendent of insurance oi this state a certificate of authority as required by Sec. '3656 Rev. Stat. of Ohio.
“3. Said defendant is not possessed of the amount of actual capital required of similar companies organized under the provisions of the laws of Ohio.
“4. Said defendant company has not filed with the superintendent of insurance of this state, a certified copy of its charter, nor has it filed a statement under the oath of its president, vice-president or other chief officer and the secretary of the company, stating the name of the company, the place where it is located, and the amount of its capital with a detailed statement of the lacts and items required from the companies organized under the laws oi this state by Secs. 3653 and 3654 Rev. Stat.
“5. Said delendant company has not complied with any. of the laws ol the state of Ohio, regulating and applying to companies organized under the laws of other states, and transacting the business of insurance in this state. ”

Wherefore the attorney-general prays that said company may be ousted from transacting such business within this state.

For amended answer, the defendant says:

“That it has never done nor attempted to do any business in the state of Ohio; that it has never solicited nor attempted to solicit any business of any kind or nature in the state of Ohio, and that it is not engaged in business in said state; that it denies the allegation first made in plaintiff's petition, to-wit, ‘That it is now and has been for a long time past transacting its said business of insurance within this state.’
“Delendant admits each and every other allegation contained in plaintiff’s petition.”

A special master was appointed to take the testimony and to report the same, together with his findings of fact and conclusions of law thereupon.

Among his findings of fact are the following:

“2. That the defendant has appointed a statutory attorney to comply with the laws ol West Virginia, and some of the records showing corporate capacity of the company are kept at Charleston, West Virginia; but that the defendant company for the purpose of transacting all business contemplated by its charter has, since its organización, been located at Lima, Ohio, and now has its principal office or place of business in the city of Lima, Ohio.
“7. That the defendant company in conducting its business is managed and controlled entirely by the secretary of the company who resides at Lima, Ohio; that this secretary receives all premiums, disburses all the money of the company, keeps all the accounts of the company, and pays all the losses of the company at Lima, Ohio.
“8. That the total number of policies issued by the defendant company is lour hundred and ninety-seven, ninety-nine of which have been issued by the secretary direct from the office of the defendant company at the city oi Lima, Ohio, and three-hundred and ninety-eight of which have been issued from brokers, to whom blank policies were delivered by the secretary trom the Lima office of the defendant company ; and the average amount of each policy issued is a risk for the sum of $300.
“10. That the defendant company never issued any policies on property of any kind situate within the state of Ohio; but its secretary in charge of its office at Lima, Ohio, received applications by mail for insurance, had authority to accept or reject the same, and in iact did accept a 1 arge number of such applications, collect the premium therelor, and deposit the policy addressed to the applicant in the post-office in the city of Lima, Ohio.”

The special master concluded as a matter of law that the defendant was engaged in the transaction of the business of insurance contrary •."*» law. The defendant excepts to each of the master’s conclusions of law, but to none of his findings of fact. ■

Section 289 Rev. Stat., as amended May 12, 1902, 95 O. L. 553, provides that it shall be unlawful for any corporation, “whether organized in -this state or elsewhere, either directly or indirectly, to engage in the business of insurance, or to enter into any contracts substantially amounting to insurance, or in any manner to aid therein, in this state, * * * unless the same is expressly authorized by the statutes of this state, and such statutes and all laws regulating the same and applicable thereto have been complied with.”

Section 3656 Rev. Stat., provides that no insurance company, other than life, organized under the laws of any other state, shall “do any such business in this state, until it procures from the superintendent a certificate of authority so to do; nor shall any person or corporation act as agent in this state for any such company, directly or indirectly, either in procuring applications for insurance, taking risks or in any manner transacting the business of insurance, until it procures from the superintendent a license so to do.”

The contention by counsel for the defendant is, that these statutes were enacted for the protection of citizens of Ohio only, and that inasmuch as it has not entered into a contract of insurance with any citizen of this state, nor into any contract of insurance respecting any property in this state, it has not, within the provisions of the statute, transacted any business of insurance within the state.

The following citations are made in support of this contention:

In the case of Commonwealth v. Long, 1 Pa. Co. Ct. 190, McPheisoh, J., says:

“The test” of doing business “is, whether the acts done were a part oi the necessary work ior effecting the object for which the association was created.”

And in case of Beard v. Publishing Co., 71 Ala. 60:

“There must be a doing of some of the works or the exercise of some of the functions for which the corporation was created.”

A foreign company holding its meetings for convenience in Pennsylvania, at which subscriptions to stock were made and are sued upon in Pennsylvania, but which is engaged in the business of building a pavilion in New Jersey, is not doing business in Pennsylvania. Pavilion Co. v. Hamilton, 15 Pa. Supr. Ct. 389.

“The Minnesota statute * * * providing for the conditions upon which foreign building and loan associations may transact business in this state and prohibiting under penalties the transaction of business by such foreign corporations unless those conditions have been complied with, I think necessarily refers to the ordinary business of such associations. The same rule applies to any foreign insurance company where similar conditions are required to be complied with before it shall do business in this state, and the business referred to is its ordinary business of insurance. * * * The prohibition of the statute is only against transacting their ordinary peculiar business in this state so long as the statutory conditions are not complied with.” Sullivan v. Sheehan, 89 Fed. Rep. 247, 249.

The law requiring foreign insurance companies to comply with the terms imposed as a condition of doing business in this state relates to the business of insurance companies as such, and does not prohibit a company which has not complied therewith from loaning money on mortgage within the state and prosecuting proper proceedings for the collection thereof. Smith v. Iron Hall, 77 Ill. App. 469.

A foreign mining corporation which has not engaged in mining in the state but which owns land and rents the same is not engaged in the business ior which it was incorporated within the state. Missouri Coal & Min. Co. v. Ladd, 61 S. W. Rep. 191 [160 Mo. 435],

These cases need not be further noticed, for none of them, so far as appears from the statement of counsel, militates against the conclusion we reach.

The contention of counsel ior the defendant ;s not sound. The fair name of the state and the good of the people of the state may be injuriously affected by the manner of transacting insurance business here, although transacted solely with non-residents of the state and wholly respecting property located outside the state.

The lottery could not escape upon such ground. Our criminal laws are enacted in the exercise of the same power that energizes laws regulating the business of insurance, and acts in violation ot the criminal laws are not excusable on the ground that the victims are nonresidents of the state. "

In State v. Ackerman, 51 Ohio St. 163, 193 [37 N. E. Rep. 828], Williams, J., speaking of the statutory provision pertaining to foreign insurance companies, says:

“They are reasonable and just, and were adopted for the laudable purpose of protecting the public against imposition by unreliable and untrustworthy companies and associations.”

Some of the statutory regulations apply only to insurance on property in this state. Section 8643a Rev. Stat. But with few exceptions they are general, and apply to the transaction here of the business of insurance, and Sec. 3641 Rev. Stat. provides that:

“A company organized under this chapter may insure houses, buildings and all other kinds of property against loss or damage by fire and lightning and tornadoes, in and out of the state, and make all kinds of insurance on goods, merchandise and other property in the course of transportation, whether on land or water, or on any vessel or boat wherever the same may be. ”

Such a company would be transacting business of insurance in this state if it did not insure any property located in the state, but in this state entered into contracts of insurance on property outside the state, and so does a company organized under the laws of any other state.

In none of the cases we have examined is a rule laid down for determining what is transacting business in the state. Many of them determine that the doing of particular things is not the transaction of insurance business, but the reasoning in each is upon the assumption that such business is done in the state where the contract is made. Hyde v. Goodnow, 3 N. Y. (3 Comst.) 266; Western v. Insurance Co., 12 N. Y. (2 Kern.) 258; Columbia Fire Ins. Co. v. Kimyon, 37 N. J. Law 33; Franklin Ins. Co. v. Packet Co., 72 Ky. (9 Bush) 590.

In some states it is held that the issuing of a policy of insurance on property within the state is transacting business of insurance in the state where the property is, irrespective of the place where the contract is made and the policy delivered.

Swing v. Munson, 43 Atl. Rep. 342 [191 Pa. St. 582; 71 Am. St. Rep. 772]; Rose v. Kimberly, 62 N. W. Rep. 526 [89 Wis. 545; 27 L. R. A. 556; 46 Am. St. Rep. 855]; but it may be doubted whether a state can make it unlawful merely to effect insurance on property in the state, the contract being made with a foreign company and made and to be performed in another state. Allgeyer v. Louisiana, 165 U. S. 578 [17 Sup. Ct. Rep. 427]. So that it is possible for the defendant company to insure property iu a state without transacting the busi'--\ss of insurance there, and if the contention of its counsel is sound that such business transacted here is not insurance business, then it is transacting the business, but not at any place.

The business of insurance is, principally, contracting. Strictly speaking, it is not insuring property. No precautions need be taken to secure or preserve the thing said to be insured.

The business is contracting with a party to indemnify him in case of loss of a particular thing, the contract is a personal contract of indemnity, and is not incidental to or transferable with the thing insured. May Insurance, Sec. 6; Carpenter v. Insurance Co., 41 U. S. (16 Pet.) 495; Clay F. & M. Ins. Co. v. Manufacturing Co., 31 Mich. 345.

It appears from the evidence and also from the findings that the defendant company enters into contracts of insurance in this state, all of its contracts are Ohio contracts and are valid here, and the company may, because they are Ohio contracts and because of the comity shown her, enforce them in the courts of every other state, the policy of whose laws is not contravened by the contract.

The facts of this case very clearly disclose the importance of regulating the manner of doing such business in this state, regardless of the situs of the property. It appears from the evidence that the defendant company was incorporated in May, 1901, under the laws of West Virginia, for the purpose of doing a fire insurance business. Its authorized capital is $1U0,000, but, less than $3,000 has been paid in. It has an attorney in West Virginia, in order to comply with the laws of that state, but no 'office. The office of the company since its organization has been at Lima, and there, so testifies its secretary, he has transacted in its name the ordinary business of fire insurance except only that no property situate in Ohio has been insured. Himself and company are the general agents for the United States for thé insurance company and he testifies that the company is a fiction. He receives all premiums and deposits them to his own credit, the company keeping no bank account, and if any losses have been paid he has paid them. The company has issued 497 policies, ninety-seven of which have been issued direct from the office of Lima by the secretary, and the average amount covered by each policy is $300. The secretary testifies that he has received about $3,000, and that he has paid it all out, so that it all of these policies aie still outstanding there is a liability of $150,000 and no assets.

It is ruled in State v. Ackerman, supra, that an insurance company carrying on its business here without obtaining permission so to‘ do is unlawfully exercising a franchise and may be ousted, and it is so ordered.  