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Keehn v. Hi-Grade Coal and Fuel Co.

Decided: December 23, 1946.


On appeal from the Essex County Court of Common Pleas.

For the plaintiff-appellant, Samuel M. Hollander and Seymour Bodner.

For the defendant-respondent, Kristeller & Zucker (Saul J. Zucker).

Before Case, Chief Justice, and Justices Heher and Colie.


The opinion of the court was delivered by

CASE, CHIEF JUSTICE. The appeal is from a judgment for the defendant following a trial before the Essex County Court of Common Pleas, the judge sitting without a jury. Central Mutual Insurance Company of Chicago was organized as a mutual insurance corporation under the laws of the State of Illinois. It was never licensed to do business in this state. On November 18th, 1935, effective as of November 7th, 1935, it issued one of its policies to Hi-Grade Coal and Fuel Company, a New Jersey corporation, insuring that company against liability for bodily and property damage with respect to its automobile trucks. The term of the policy was one year. The amount named therein as the premium for the year was $704.76. On December 10th, 1935, the policy was canceled. The earned premium for the period from November 7th, 1935, to the date of the cancellation amounted to $162.09, and it was paid and accepted. On or about January 8th, 1937, the insurance company was decreed by the courts of Illinois to be insolvent and a receiver was appointed to administer its affairs. On March 19th, 1940, levy was made by the receiver, later confirmed by an Illinois court, on all individuals

and corporations who at any time from January 31st, 1935, to January 11th, 1937, were holders of a policy or policies issued by the company in the amount of 100 per centum of the cash premiums expressed in the respective policies. The assessment against the Hi-Grade Coal and Fuel Company was $704.76. The present suit was instituted by the receiver of the insurance company to collect that sum with interest.

The trial court held as a finding of fact that the insurance company had solicited from the defendant the policy of insurance sued upon and that it had transacted insurance business within the State of New Jersey contrary to and in violation of R.S. 17:17-10; and the court further determined, in point of law, that the solicitation of the insurance policy and the performance of the obligations mentioned in the policy of insurance constituted the transaction of insurance business within the state contrary to and in violation of R.S. 17:17-10 and 17:32-1, and that the plaintiff was thereby precluded from maintaining the action against the defendant. Upon those findings the court awarded the judgment under appeal.

The rule is that where a cause is tried by the court, without a jury, all that can be reviewed, on questions of fact, is the sufficiency of the facts found to support the judgment. City of Elizabeth v. Hill, 39 N.J.L. 555; Monahan v. Seaboard Surety Co., 126 Id. 148. The only strict finding of fact made by the court was that the insurance company had solicited the policy of insurance; and that is really a conclusion drawn from factual incidents which the court did not settle. Taking it, however, as an adequate finding, it is not of itself such a finding as will support the judgment, inasmuch as our courts have repeatedly said that a single act by a corporation within the line of its business does not constitute the transaction of business within the meaning of the corporation statute prohibiting the transacting of business here by a foreign corporation which has not first obtained authority therefor. D & H Canal Co. v. Mahlenbrock, 63 Id. 281; Wood & Selick, Inc., v. American Grocery Co., 96 Id. 218; Tennessee Products Co. v. Raritan Coal, & c ., Co., 120 Id. 138. Whether a corporation has transacted business within the state contrary

to the statute is a mixed question of law and fact. Therefore, inasmuch as the court's findings of fact are not in themselves sufficient to sustain the judgment, it becomes necessary for us to digest the proofs to ascertain whether, independently of the court's finding of fact, they support the court's finding of law and award of judgment.

The policy was negotiated by the Schechner Agency, insurance brokers of Newark, New Jersey, present at the trial in the person of Sheridan Schechner, a witness for the defendant. Mr. Schechner testified that his office had not issued the policy but had negotiated for its issuance; he identified the policy and the application made for the same on one of the insurance company's printed forms; he said that when the policy was canceled he returned the document to the insurer; he produced a ledger sheet showing the account which was carried in the name of Joseph Weisberger, treasurer of the insured company, and which included the policy item; he testified that he did not recall ever having negotiated another policy of the Central Mutual Insurance Company; he further testified that the defendant company and its principal officers had been clients of his office for some years past and in placing their business he put it in whatever companies he selected. The ledger sheet which contained the entry for the policy in question contained also numerous other entries. Most of the charges for policies, except where the cross item was a cancellation, showed payment by "check and oil bills." The earned premium on the canceled policy in question, $162.09, was marked as paid in that manner. We are unable to find in that evidence substantial proof that the Schechner Agency was acting as broker or agent for the insurance company rather than for the insured. One answer given by the witness is distinctly contra such an assumption. He was being questioned on the ...

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