Petitioners Brief — Chattanooga Nat. Building and Loan Assn. v. Denson

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IN THE SUPREME COURT OF THE UNITED STATES.

OCTOBER TERM, 1901.

cee

§x Parte CHATTANOOGA NATIONAL BUILDING

‘ AND LOAN ASSOCIATION,

Petitioner.

BRIEF FOR PETITIONER,

- ‘That the contract sued on in the original bill was made in

"the State of Tennessee, and not in the State of Alabama, is 4

a ition as to which, it is respectfully submitted, there

- ¢an be no reasonable doubt. Denson made a written applica-

ion for a loan from petitioner; and while he wrote and

signed this application in the State of Alabama, it did not

gonstitute a contract until his proposition was accepted ; and

this acceptance took place in the State of Tennessee.

“Where the transaction consists in a proposition from one

and an acceptance from the other, the law «4 «2 «» «#

_ is that of the place to which the proposition is sent and from

sy sg oso ee owl oe his ne ye It is at this

. es of t rties for ret time coalesce.

Wharton on Conflict Piao Sec. 421.

_ The principle is involved and settled in the cases of:

Tayloe v. Merchants’ Fire Ins. Oo., 9 How. 390;

Holder v. Aultman, 169 U.S. 81;

Western v. Genessee Mut. Ins. Co., 12 N. Y. 258;

Allgeyer v. Louisiana, 165 U.S. 578.

In Holder v. Aultman, supra, this Court said that it was “at

Akron, in the State of Ohio, that the contract was —

rd the at secretary at its principal office, and then and

or the first time, became a valid and binding contract

between the parties. It cannot, therefore, be considered as

d within the statute in question, at any earlier time, or

‘ayloe v. Merchant's Fire Ins. Oo., supra, the Court said

st “on acceptance of the terms proposed, transmitted by

@ course of mail to the company, the minds of both parties

¢ met on the subject, in the mode contemplated at the time

entering upon the negotiation, and the contract becomes

9 How. 400.

It istrue that the question directly involved in that case

was not the place where, but the time when the contract was

made; but if it was made when the proposition of the one

party was accepted by the other, then necessarily it was made

where that acceptance took place.

Ia Western v. The Genessee Mutual Ins. Co., supra, the

Court said:

“ When the application was received and approved by the

company, and the policy executed and put in course of trans.

mission to the insured, the contract was complete and both

parties became bound. * * * *

“The contract was consummated by the final assent on the

part of the company.”

II.

The State of Alabama had no right to forbid the making by

its citizens of contracts outside the State, and with citizens of

other States, or to interfere with or prohibit the performance

of such contracts.

“ Has not a citizen of a State, under the provisions of the

provisions of the Federal Constitution above mentioned, a

right to contract outside of the State for insurance” (or for a

loan] “on his property—a right of which State legislation can-

not deprive him? We are not alluding to acts done within

the State by an insurance company or its agents doing business

therein, which are in violation of the State statutes. * * *

When we speak of the liberty to contract for insurance or to

do an act to effectuate such a contract already existing, we

refer to and have in mind the facts of this case, where the

contract was made outside the State, and as such was a valid

and onwed. © © © 8 * © ;

“ Phe mere fact that a citizen may be within the limits ofa

particular State, does not prevent his making a contract out-

side its limits, while he himself remains within it.”

Allgeyer v. Louisiana, 165 U. S. 578, 590, 591, 592.

It follows, we think, that the State of Alabama had no

power to prevent Mr. Denson from subscribing for stock and

becoming a stockholder in the petitioner ; and it is very clear

that the provisions of the constitution and statutes of

bama, quoted in the petition and in the opinion of the Cir-

cuit Court of Appeals, have no application whatever to the

transaction by which Mr. Denson became a stockholder in

petitioner.

IIl.

The petitioner is chartered and organized under the public

statutes of Tennessee authorizing the creation of co é

for carrying on the business of building and loan

and the loan in controversy was made in accordance

power conferred on petitioner by its charter, and in the man-

ner prescribed by its by-laws.

Stipulation, Record p. 75.

The statutes under which petitioner was chartered and or-

. ized provide that the money in the treasury shall be of-

ery loan at stated meetings of the board of directors

and that “the stockholder who shall bid the highest premium

for the preference or priority shall be entitled to receive a

loan of two hundred dollars for each share held by such

stockholder.”

Shannon’s Code of Tennessee, Secs. 2136, 2151, 2177;

Tennessee Acts 1875, Ch. 142, Sec. 14;

Tennessee Acts 1889, Ch. 267, Sec. 1;

Tennessee Acts 1893, Ch. 12, Sec. 1.

The bid of Mr. Denson was the highest that was offered for

the sum of money which he desired, at the meeting at which

his application was presented, and the security offered by

him was satisfactory.

Record, p. 24.

_ He therefore became entitled, by virtue of his contract of

membership, to obtain the loan; he acquired a vested right

to it, which he could have enforced against the association by

suit; and being a right which could have been enforced by

suit, the association properly yielded to it without suit, and

the State of Alabama had no power or right to interfere with

the performance of such a contract.

hile the power of the States to impose conditions upon

foreign corporations doing business within their limits is

ized and undisputed, “ manifestly it cannot be exer-

cised to discharge the citizens of the State from their contract

obligations.”

We submit that the case is directly within the principle

decided by this court in Bedford v. Eastern Building and

Loan Association, 181 U.S. 227.

IV.

Even if the taking of the note and mortgage and payment

of the money loaned to Denson could be held to constitute

doing business by the Association in Alabama, the Associa-

tion would still be entitled to collect the indebtedness sued

on, under the doctrine of the Bedford case, supra. But it is

submitted that neither the taking of the note and mortgage

or the payment of the money, constituted a transaction of

by the Association in Alabama.

_ The note and mortgage were drawn in Tennessee, and by

their express terme were — there. The note is dated

in its face at Chattanooga, Tennessee, and expressly stipulates

that it “is made with reference to and under the laws of the

State of Tennessee.”

Record p. 8.

The money was paid by a check drawn in favor of Mr

Denson on a bank in Chattanooga, Tennessee; and while Mr.

Denson got the money on it from a Gadsden bank, it was not

paid by the Association until presented at the Chattanooga

bank on which it was drawn.

Record, p. 24.

The petitioner's part of all these transactions was per.

formed in the State of Tennessee; and only those acts which

the borrower was required to do as a condition precedent to

the 1oan of the money to him, were performed in Alabama.

The place of the note itself was the State of Tennessee,

where it was to be paid, and by the laws of which the parties

agreed it should be construed and governed.

Wharton on Conflict of Laws, Secs. 389, 399 ;

Andrews vs. Pond, 13 Peters, 65, 78 ;

Pritchard vs. Norton, 106 U.S. 124;

London Assurance vs. Companhia De Moagens. 167 U.

S. 149, 160.

The mortgage is a mere incident to the debt, and its situs is

that of the debt which it secures although it may cover prop-

erty located elsewhere.

Lauter v. Jarvis-Conklin Mortgage Trust Co., 85 Fed.

Rep. 894, 896 ;

Pioneer Bldg. & Loan Asso. v. Cannon, 96 Tenn. 599;

Sullivan v. Sheehan, 89 Fed. Rep 247;

Electric Lighting Co. of Mobile v. Rust, 117 Ala. 680;

U. S Savings and Loan Association v. Shain, 8 North

Dakota, 136.

The only representative the petitioner had in Alabama at

the time this loan was made was a traveling soliciting agent

beak was employed to solicit subscriptions to petitioner's

stock. ;

It is submitted that the case of Beard v. The Union &

American Publishing Oo., 71 Ala. 60, is direct authority in

mere of the proposition that the transactions of this agent

did not constitate a doing of business in Alabama by the

petitioner within the meaning and inhibition of the laws

relied on.

But if we are mistaken in this, it is fully shown that the

contracts involved in this suit were not made by this solicit-

ing agept, and that he had no part in the transactions

nating in the loan except to transmit the — r

forth. It is insisted, therefore, that even if the Association —

infringed the laws of Alabama by sending this soliciting —

agent into the State, and thereby made itself amendable to

the penalties prescribed for violation of the laws, it did not

on that account forfeit the right to enforce contracts which it

made in the State of Tennessee, with citizens of Alabama.

The utmost extent to which the Alabama courts have gone in

construing these laws is to hold that contracts made in Ala-

bama by non-resident or foreign corporations, without com-

pliance with the laws, are anenforcible.

VI.

The Circuit Court of Appeals says in its opinion that “it is

perfectly clear that all the business of loaning money to Den-

son, with the single exception that the Association in Tennessee

said ‘ Yes, was transacted in Alabama.”

Record, p. 64.

Conceding that this view of the case is correct, it is respect-

fully submitted that it sustains our contention that the con-

tract sued on was made in Tennessee, and therefore was not

a doing of business in Alabama. For there was no contract

until the association said “yes” to Denson’s application ; and

when and where it said “yes,” then and there was the contract

made. We think the proposition is fully sustained by the

authorities cited under paragraph I. of this brief.

With all deference to the opinion of the learned Court of

Appeals, it is respectfully submitted that it has been misled

to the conclusion that this contract is unenforcible by over-

looking the point suggested in paragraph V. of this brief;

namely, that it is immaterial, so far as this case is concerned,

if the association was illegally doing business in Alabama

when this loan was made, unless the very contract here sued on

was made in that State. The State of Alabama has not un-

dertaken to prohibit the enforcement by the association of its ’

contracts lawfully made in the State of Tennessee, as a pen-

alty for the illegal transaction by it of business in the State

of Alabama; nor could it do so.

It is further submitted that the Court of Appeals is mis-

taken in the statement that the payment of the money loaned

took place in Alabama. The undisputed evidence is that the

association had no money in the State of Alabama at the time

the check in favor of Denson, for the amount loaned him,

was drawn; aad that the money was paid by the Chattanoo-

bank on which it was drawn, out of funds on deposit there-

in belonging to the association.

Record, p. 24.

It is true the cashier of the Gadsden bank, by which the

check was cashed for Denson, says that his best recollection

is that he paid the money on the check “under an under-

standing with the said building and loan association, and that

the Chattanooga National Bank, on which the check was

drawn, would pay the same on resentation.” He further

says that he “transmitted the check to our Chattanooga cor-

respondent and the same was paid”; and that he paid the

money to Denson on this check “as on any other negotiable

exchange.”

"Decerd, pp. 58, 59.

But this evidence, instead of in any way contradicting, di-

rectly sustains and corroborates the contention that the asso-

ciation paid over the sum of money which it had agreed to

lend Denson, in the State of Tennessee. ‘The Gadsden bank,

understanding from the association, or the Chattanooga bank,

or both, that the check would be paid on presentation, was

willing to, and did, take it and advance the money on it “as

on any other negotiable exchange”; and the check was then

forwarded to Chattanooga and paid to the person by whom it

was presented, in accordance with the order of Denson, the

original payee.

It is further submitted that the apprehension, expressed by

the Court of Appeals, that this and other foreign corporations

of the same kind “may safely flood the State of Alabamia with

soliciting agents, make all the negotiations for loans, take

real estate securities therefor and fully transact all other

business pertaining to their corporate functions as though in-

corporated therein” without complying with the requirements

of the Alabama laws, should not be of controlling force in the

determination of this case. The penalties imposed for viola-

tion of the laws in question are ample and stringent; and no

_ reason is apparent why the courts should seek to add to the

severity of the laws by reading into them additiona! penal-

ties. But if the Courts have power in their discretion to im-

pose additional penalties to those prescribed by the statutes, _

yit is submitted that the fact that the violation of the laws, if ,

they have been violated, shown in the present case was not

wanton or wilful, but was due wholly to the ignorance on the

part of the officers of the association of the laws of a foreign

State, is a sufficient reason, especially in a court of equity,

why that discretion should not be exercised.

Respectfully submitted,

ROBERT PRITCHARD,

J. B. SIZER,

Of Counsel for Petitioner.

In the Supreme Court of the United States.

OCTOBER TERM, 1902.

No, 206.

JHE CHATTANOOGA NATIONAL BUILDING AND LOAN

a ASSOCIATION, PETITIONER,

v8.

WILLIAM H. DENSON AND ROSA E. DENSON.

| STATEMENT, ASSIGNMENT OF ERRORS AND BRIEF OF

x COUNSEL FOR PETITIONER.

STATEMENT OF CASE.

The original bill in this cause was filed in the Circuit Court of

‘the United States for the Southern Division of the Northern Dis-

trict of Alabama to collect an alleged indebtedness of defendants

complainant and to foreclose a deed of trust or mortgage given

secure payment of said indebtedness.

& Record, pp. 1-10.

' The defendants in their answer denied most of the allegations of

» the bill and set up various matters of defense, but the only defense

insisted on, and the only one involved in this Court, is the one set

in the ninth paragraph of the answer; namely, that the com-

ahioat was a foreign corporation, not organized under the laws

Alabama, that the transaction sued on involved a doing of busi-

fess by it in the State of Alabama, that it had not complied with

prtain requirements prescribed by the constitution and statutes

- of Alabama for foreign corporations doing business in that State,

» #nd that therefore the loan and mortgage sued on were void and

nenforceable.

Record, pp. 18-19.

Circuit Court rendered decree in favor of complainant for

me sum of $2,841.15, which it adjudged to be'the balance due from

Mendants on the note sued on, and $200 attorney’s fee, and

ed sale in foreclosure of the mortgage given to secure the note

2 THE CHATTANOOGA NATIONAL BUILDING AND LOAN

unless the amount adjudged in favor of complainant, with interest

and costs, should be paid within ninety days from entry of the

decree.

Record, pp. 53-56.

The defendants filed a petition for appeal, and in support thereof

assigned twenty-one errors in the decree of the Circuit Court, all

of which, except the twenty-first, were predicated on the proposi-

tion that the loan, note and mortgage sued on were void because

they involved a doing of business in the State of Alabama without

compliance with the constitutional and statutory requirements of

that State. The twenty-first error assigned is that the Court erred

in decreeing sale in bar of the dower right of Mrs. Rosa E. Denson.

Record, pp. 56-60.

The Circuit Court of Appeals held that the note and mortgage

sued on were illegal and unenforceable because of the failure of

complainant to comply with the Alabama laws, and reversed the

decree of the Circuit Court and remanded the case with instruc.

tions to dismiss the bill.

Opinion Circuit Court of Appeals, record pp. 68, 73.

Decree Circuit Court of Appeals, record p. 65.

Complainant thereupon filed a petition in this Court fora writ

of certiorari under the sixth section of the Circuit Court of Ap-

peals act, which petition was granted.

Record, p. 74.

The petitioner is a corporation organized under the statutes of

the State of Tennessee, authorizing the creation of corporations for

carrying on the business of building and loan associations. Its

principal office and place of business was at the time the Joan in

controversy was made and at the time the suit was brought, and

continuously between those dates, in the city of Chattanooga,

Tennessee. The loan in controversy was made “in accordance with

the power and authority conferred on complainant by its charter

and in the manner prescribed by its by-laws.”

Stipulation, record, p. 64.

The defendants were at the time the loan was made and at the

time the suit was brought, and continuously between those dates,

citizens and residents of the State of Alabama.

Petitioner, at the time the loan was made, had no local office or

agent in Alabama, but it had in its employ a traveling agent named

Kennedy, whose business it was to solicit subscriptions to stock,

and submit applications for loans.

On April 25th, 1895, defendant, W. H. Denson, at Gadsden,

Alabama, signed a written application for fifty shares of stock in

petitioner, which application was forwarded by the petitioner's

traveling agent, Mr. Kennedy, to petitioner’s home office in Chatta-

nooga, Tennessee, where the stock was issued on May 23rd, 1895,

in accordance with the application, and was returned to Mr. Ken-

nedy to be by him delivered to said Denson.

Ex. Nos. 2 and 3 to Denson’s dep., Rec. pp. 45, 46.

Stipulation, Rec. p. 20.

On the same day on which he applied for his stock, Mr. Denson

also signed a written application, addressed to the president and |

board of directors of petitioner at Chattanooga, Tennessee, 10F8.

ASSOCIATION V. WILLIAM H. DENSON, ET AL. 3

Joan of $2500 on the fifty shares of stock he had applied for. He

offered a premium of $2500 for the loan, and proposed to secure

the loan and premium, if his application should be granted, on

certain real estate in Gadsden, Alabama, which he represented in

the application was of the value, in all, of about $9000. This ap-

plication was accompanied by the report of two disinterested

parties, fixing the value of the property which Denson proposed to

mortgage at $8000, and the certificate of a local attorney with ref-

erence to the condition of the title.

Ex. No. 4 to Denson’s dep., record, pp. 48-51.

This application, with the other papers accompanying it, was

submitted to petitioner’s board of directors in Chattanooga, Ten-

nessee, at a stated meeting, along with other applications of a

similar nature, whereupon said application was duly considered

and granted and the loan was directed to be made. The note and

deed of trust in question were then prepared at Chattanooga,

Tennessee, and forwarded to the agent, Kennedy, through whom

the application had been submitted, and at the same time a check

for the amount of the loan was drawn by petitioner on the Chatta-

nooga National Bank, of Chattanooga, Tennessee, in favor of de-

fendant W. H. Denson, and was sent to a man named Goodhue, in

Gadsden, Alabama, with instructions to him to deliver the check

to Mr. Denson when he and his wife should have executed the note

and deed of trust. Petitioner had no money on deposit in the State

of Alabama at this time; and the check to defendant Denson,

having been delivered to him on the execution of the note and

mortgage, was subsequently presented, with his endorsement, at

the bank on which it was drawn, and was there paid out of funds

on deposit in said bank belonging to petitioner.

Rec. pp. 20-21.

Ex. No. 1, dep. of W. H. Denson, Ree. p. 45.

Certain deductions were made from the $2500 borrowed by Mr.

Denson and the check was for $2367.50, the net amount to which

he was entitled. The propriety of these deductions was not seri-

ously controverted in the Circuit Court, and was not challenged by

the assignment of errors filed by defendants with their petition for

pepenl and it is not deemed necessary to discuss that question

ere.

With reference to payment of the check, it further appears that

Mr. Denson cashed it at the First National Bank of Gadsden, Ala-

bama. The cashier of that bank says that his best recollection is

that he “paid the money on the check under an understanding

with the said building and loan association, and that the Chatta-

nooga National Bank, on which the check was drawn, would pay

the same on presentation.” He further says that the money was

paid by his bank to Mr. Denson on this check, “as on any other

negotiable exchange.”

Rec. p. 51

In other words, Mr. Denson transferred the check by endorse-

ment to the First National Bank of Gadsden, and received from

that bank the amount of money the check called for; and then this

bank, as the holder and owner of the check, forwarded it to Chat-

anooga and collected it from the bank on which it was drawn.

4 THE CHATTANOOGA NATIONAL BUILDING AND LOAN

At the time the loan here in controversy was made the com.

plainant association had been for some time soliciting subscriptions

to its stock in the State of Alabama, through traveling agents, and

had received, through such agents, several other applications for

loans from residents of Alabama, which applications had been sub-

mitted and acted on in the same manner as the Denson loan, and

several others had been granted, and loans made on them, prior to

the date of this transaction. Complainant had paid the tax or

license fee required by the laws of -Alabama from foreign corpara-

tions doing or proposing to do business in that State, and its officers

supposed and understood that the payment of this fee or tax en.

titled them to do business in Alabama, without more. Subse.

quently, and some months after the loan to Denson was made,com.

plainant’s officers were informed by an Alabama attorney of the

other statutory and constitutional requirements invoked by the

defendants in this case, and thereupon it promptly complied with

them.

Rec. pp. 21-22.

These requirements or provisions are as follows:

“4. No foreign corporation shall do any business in this State

without having at least one known place of business and an author-

ized agent or agents therein ; and such corporation may be sued in

any county where it does business by service of process upon any

agent anywhere in this State.” Const. Ala., Art. XIV.

“1316. Foreign corporations must file instrument of writing

designating agent and place of business in this State. Every cor-

poration not organized under the laws of this State, shall, before

engaging in or transacting any business in this State, file an instra-

ment of writing, under the seal of the corporation and signed offi-

cially by the president and secretary thereof, designating at least

one known place of business in this State and an authorized agent

or agents residing thereat; and when any such corporation shall

abandon or change its place of business as designated in such in-

strument, or shall substitute another agent or agents for the agent

or agents designated in such instrument of writing, such corpora-

tion shall file a new instrament of writing as herein provided, be-

— transacting any further business in this State.” Code Ala.,

18 .

“1318. Unlawful for foreign corporation to transact business in

this State before declaration filed; penalty. It is unlawful for any

foreign corporation to engage in or transact any business in this

State before filing the written instrument provided for in the two

preceding sections; and any such corporation that engages in or

transacts any business in this State without complying with the

provisions of the two preceding sections shall, for each offense, for-

feit and pay to the State the sum of one thousand dollars.” Ib.

“1319. Unlawful to act as agent of foreign corporation before

such declaration is filed; penalty. It is unlawful for any person to

act as agent or transact any business directly or indirectly, in this

State, for or on behalf of any foreign corporation which has not

designated a known place of business in this State and an author-

ized agent or agents residing thereat, as required in this article;

and any person eo doing shall, for each offense, forfeit and pay _

fer =

ASSOCIATION V. WIDLIAM H. DENSON, ET AL. 5

State the sum of five hundred dollars.” Ib.

” Record, pp. 68-69.

ASSIGNMENT OF ERROR.

1. The Circuit Court of Appeals erred in holding that the loan

to defendant Denson sued on in this case involved a doing or

transacting of business in the State of Alabama by the petitioner,

within the spirit and intent of the Alabama laws relied on.

9. If the joan did involve the transaction of business in the State

of Alabama by petitioner, it was nothing more than the carrying

out of a contract lawfully made in the State of Tennessee; there-

fore the Circuit Court of Appeals should have held that petitioner

was bound to comply with the terms of this contract, even if it had

to go into the State of Alabama to do so, and that the State of Ala-

bama had no right or power to interfere with the performance of

such contract.

8. The Circuit Court of Appeals should not have held the note

and mortgage unenforcible, and directed the dismissal of the bill,

even ii the transaction was in violation of the Alabama laws and

the State of Alabama had the power to forbid it.

BRIEF.

THE CONTRACT FOR THIS LOAN WAS MADE IN TEN-

NESSEE.

The petitioner’s agent, to whom Mr. Denson submitted his appli-

cation for the Joan, had no authority to grant the application and

make the loan, and did not assume to do so. He forwarded the

application to Chattanooga, Tennessee, and it was there acted on

and granted. Where, then, was the place of the contract?

Manifestly not in Alabama, for the making of the application did

not constitute a contract; nor did the delivery of it to petitioner’s

traveling agent ; or the mailing of it by that agent to Chattanooga.

It would seem clear, then, that until this application was granted

there was no contract, for there was no meeting of minds. There

was a mere proposition, which might have been withdrawn at any

ume before its acceptance, and which might be either accepted or

rejected by the association. And inasmuch as it took this accept-

ance of defendant’s proposition to make the contract, it must be that

the contract is made where that acceptance takes place ; and so the

authorities hold.

“Supposing that the parties to an alleged contract are living, at

the time of the contract, in different places, and that they negoti-

ate by letter, the question arises which place, in case of conflict, is

to be regarded as giving the applicatory law. Where the transac-

tion consists in a proposition from one party and an acceptance

from the other, the law, Savigny answers, is that of the place to

’ the proposition is sent, and from which the receiver forwards

6 THE CHATTANOOGA NATIONAL BUILDING AND LOAN

his assenting reply. Jt is at this place that the purposes of the

parties for the first time coalesce.”

Wharton on Conflict of Laws, § 421.

In Aligeyer v. Louisiana, 165 U.S. 578, the plaintiff in error, a

resident of Louisiana, while in that state made a contract for in.

surance with a New York corporation, which issued him what is

known as an open policy, covering generally cotton in bales pur.

chased and shipped by him, etc. The policy provided that ship.

ments applicable to it must be reported to the insurance company

by letter addressed to its president, stating the name of the vessel,

particulars of the shipment, etc., and that until such letter should

be deposited in the post office no risk should attach. On each risk

a new and separate policy was to be issued and delivered to thein.

sured at New Orleans. The insured in Louisiana mailed this letter

of notification addressed to the company in New York, the prop-

erty insured being at the time in Louisiana. It was conceded in

the case that the contract of insurance was made in the State of

New York, where the policy was issued and the premiums paid.

In Holder v. Auliman, 169 U.S. 81, a written contract was signed

by the plaintiff and by the agent of the defendant, in the State of

Michigan. lt contained a proviso, however, that it was not tobe

valid unless countersigned by the manager of defendant at Lansing,

Michigan, and approved at Akron, Ohio. The paper was subse-

quently countersigned and approved as required by this proviso;

and it was held that the contract was not made in Michigan, but in

Ohio. The court says that it was “at Akron, in the State of Ohio,

that the contract was approved by the plaintiff’s secretary at its

principal office, and then and there, for the first time, becamea

valid and binding contract between the parties. It cannot there-

fore be considered as ‘made’ within the meaning of the statute in

question, at any earlier time, or other place.”

In Western v. The Genesee Mutual Insurance Co., 12 N. Y. 258,

certain residents of Bellville, Canada, executed and delivered at

that place to one Patterson, an agent for the defendant insurance

company, an application for a policy of insurance on certain prop-

erty located in Bellville, and at the same time paid to Patterson

the cash premium for the insurance which they desired to obtain,

and also executed and delivered to him a premium note, payable

to defendant. The application, cash and note were forwarded to

the home office of defendant in the State of New York, where the

policy was executed and forwarded to Patterson, who delivered it

to the assured. It was held that the contract was made in the State

of New York.

“When the application was received and approved by the com-

pany, and the policy executed and put in course of transmission to

the insured, the contract was complete and both parties became

bound. * * * * * * * * * *

“The contract was consumated by the final assent on the partof

the company.”

In Tayloe v Merchants’ Fire Ins. Co., 9 How. 390, a written ap

plication was made by the plaintiff through a local agent at

ericksburg, Virginia, of an insurance company whose home office

was in Baltimore, Maryland, for a policy of insurance on certalt |

ASSOCIATION V. WILLIAM H. DENSON, ET AL. q

rty in Virginia. The application was forwarded by the local

agent to the office of the company at Baltimore, and a few days

Jater the secretary of the company wrote a letter to the local agent

acknowledging receipt of the application and stating that “Mr.

Tayloe’s risk will be taken at the same rate as Mr. Bernard’s,” &c.

Before the premium was paid or the policy was delivered, the

rty was burned; and the company resisted payment on the

nd that there was no completed contract of insurance. The

court held, however, that “on the acceptance of the terms proposed,

transmitted by due course of mail to the company, the minds of

hoth parties have met on the subject, in the mode contemplated at

the time of entering upon the negotiation, and the contract becomes

lete.”

es 9 How. 400.

It is true that the question directly involved in that case was not

the place where, but the time when the contract was made; but if

it was made when the proposition of the one party was accepted by

the other, then necessarily, it was made where that acceptance took

lace.

: In the case of Glover v. Equitable Mortgage Co., 87 Fed. Rep. 518,

the contract for the loan was made in the State of Mississippi,

where the loan company was located, although the note and mort-

gage were executed in Tennessee, where the borrower resided.

This court held in an opinion delivered by Judge Pardee that the

loan was made in the State of Mississippi.

“The agreement to make the loan on the security offered—the

meeting of minds—was in the State of Mississippi, and it is clear

from the evidence that the parties intended it should be a Missis-

sippi contract.”