Watertown Fire Insurance v. Bust

Mr. Justice Scholfield delivered the opinion of the Court: f The statute in relation to insurance provides, among other things, that “it shall not he lawful for any insurance company organized under the laws of any other State, * * * directly or indirectly to take risks or transact any business of insurance in this State,” except upon complying with conditions therein prescribed. (Rev. Stat. 1887, chap. 73, secs. 22, 112-116, 124.) Appellant was incorporated under the law of Dakota, and having complied with the requirements of the statute supra, in May, 1887, it was duly licensed to do business in this State. In the following July it appointed an agent at Decatur, who received the proposed certificate of his authority to act as such. This was renewed for the year 1888, but not for the year 1889. Having determined to withdraw from the State, appellant failed to furnish the statement and evidence of its condition, which the statute supra requires should have been furnished in January, 1889, to have entitled it to the privilege of continuing to do business in this State, but no other notice of such determination was given to its agent, to appellee or to the public. Twelve days after the authority of the agent had thus expired the agent issued the policy here in suit, and received in cash from appellee the full amount of the premium. He advised appellant of that fact early in March, whereupon, by letter of the date of the 5th of that month, it directed him to cancel and return the policy, but nothing further was done about it by him or the company until after May 17, when the loss occurred. There is no evidence tending to prove that appellee had actual notice, at the time the policy was issued to her, that appellant had failed to qualify itself, under the statute, to transact business in this State during that year, and it is therefore to be presumed that she acted in good faith. The question then is, appellee having acted in good faith in obtaining the policy, and without actual notice that appellant had failed to do what the statute required it should do to qualify itself to transact business here, does the prohibition of the statute extend to appellee, and render void the policy as to her. The opinion of the Appellate Court discusses the question very thoroughly, and, as we think, exhaustively, and reaches a conclusion in the negative. We deem it unnecessary to re-discuss the question at length, and are content to rest our judgment upon the argument in that opinion, (Watertown Fire Ins. Co. v. Rust, 40 Ill. App. 119,) merely stating here the principles which, as we believe, control. Our statute was manifestly enacted for the protection of the public against the acts of irresponsible foreign insurance companies. The duties it enjoins and the penalties it imposes are upon the insurance'companies, and not upon those who-in good faith contract with them. The insurance company knows whether it has complied with the law, but the public do not, and they have the right, in the absence of bad faith and of actual knowledge to the contrary, to presume that a foreign insurance company assuming to act in this State is acting lawfully, and the company, when sued upon a policy issued under such circumstances, is estopped to allege that it had no lawful authority to issue the policy. 7 Am. and Eng. Ency. of Law, 29, and cases cited; Clay Ins. Co. v. Huron Salt Co. 31 Mich. 346. The instructions of appellant to its agent in regard to the-return of the policy being unknown to appellee, did not affect her. (Rockford Ins. Co. v. Nelson, 65 Ill. 415; Hartford Fire Ins. Co. v. Wilcox, 57 id. 180.) The agent having been lawfully appointed to act for the company in the first instance, the burden was upon appellant to bring notice to those who should thereafter transact business with him, of the termination of his agency, (Story on Agency, sec. 470,) which was not here done. The judgment is affirmed. Judgment affirmed.