Appendix — Clay v. Sun Insurance Office Ltd.

Supreme Court brief1959

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APPENDIX “A”. /

Section 95.03, Florida Statutes, 1957. “Stipulations in

contract shortening period of limitation illegal.—-All pro-

visions and stipulations contained in any contract what-

ever entered into after May 26, 1913, fixing the period of

time in which suits may be instituted under any such con-

tract, or upon any matter growing out of the provisions of

any such contract, at a period of time less than that pro-

vided by the statute of limitations of this state, are hereby

declared to be contrary, to the public policy of this state,

and to be illegal and void. No court in this state shall give

effect to any provision or stipulation of the character

mentioned in this section.

* History.—Secs. 1, 2, Ch. 6465, 1913; R.G.S. 2391;

C.G.L. 4651.” 5 |

APPENDIX “B”. .. ss /

Tl. Rev. Stat. 1957, Ch.. 73, Section 837. “(1) After

the effective date of this code no policy of life insurance

shall be issued or delivered in this state if it contain any

of the following provisions:

(a) A provision limiting the time within. which any

action at law or in equity may be commenced to less than

three vears after the cause of action shal] accrue.” ~~ ~

APPENDIX “C”

Opinion of United States Court of Appeals for the / ?

Fifth Circuit rendered April 8, 1959. |

“4

: IN THE |

eieiatit ads «

THE FIFTH CIRCUIT.

No. 17525

SUN INSURANCE OFFICE LIMITED,

j Appellant,

JOHN \CLAY

_ Appe

aé

Appeal from the United States District Court for the

Southern District of Florida.

(April 8, 1959.)

_ Before RIVES and TUTTLE, Circuit Judges and

“SIMPSON, District Judge.

_ TUTTLE, Circuit Judge: This is a suit on a personal

property floater policy. «It was instituted in the United

States District Court for the Southern District of Florida

by the insured, John Ciay. A jury awarded recovery

in the total amount of $6,300.00s and judgment was en-

-~ tered accordingly. The insurer appeals, contending the

district court erred in holding that the stipulation in the

‘policy which forbade suit unless it was instituted within

twelve months next after discovery of the loss' was

rendered void and unenforceable. by Florida Revised

Statute 95.03 (1957), which reads as follows:

+ ° “Stipulations in contract shortening period of

limitation illegal.—All provisions and stipulations con-

tained in any contract whatever entered into after

May 26, 1913 fixing the period of time f"which suits

may be instityted under any sueh contract, or upon

.. any matter growing:out of the provisionstof any such

tontract at a period of time less thay that provided by

the statute of limitations of “this ‘state, are hereby

declared to be contrary to the public policy of this state,

~ and to be illegal and void. Né’court in this state shall

give effect «to any apt 00 or stipulation of the

character mentioned in thi? section.”

We agree with appellant’s contention as to this defense,

and therefore we do not reach its other contentions.

The policy was issued and delivered. to appéllee ori

April 22, 1952, in Chicago, Illinois. At that ‘time appellee

was a citizen of.and resided in the state of Illinois. He

paid the premium in a lump sum in-Chicago when he re-

ceived™the policy. Subsequently, in July 1952, appellee

moved to Florida. He purchased a ranch near Lake

Harbor,.. Florida, in July or August 1952 and became a

resident of Florida from that time ‘on. In December, 1954'

covery of any claim under this Policy shall be sustainable in any

rourt of law or equity unless the same be commenced within

twelve (12) months next after discovery by the Assurgd of the

occurrence which gives rise to the claim. Provided, howeyer,

that if by the laws of the state»within which this Policy is jssued

such limitation is invalid, then any such claims shall be void

nniess such jon, suit or proceeding be commenced within the

shortest limit of time permitted by the laws of such state to be

fixed herein.” .

1. “Suit Clause:-—No suit, action or proceeding for the re- —

and January, 1955, while he was living at the ranch near

Lake Harbor, certain, of his insured personal property was

destroyed by vandalism and other insured property was

stolen. Appellee notified appellant of his losses on February

1, 1955. After investigating the claim, appellant denied

liability on April 6, 1955. Suit was not instituted until

May 20, 1957. ;

Under the terms of the “Suit Clause” this suit was

- barred-because of appellee’s failure to institute it within

twelve months next after had discovered ‘the losses.

According, to the law of UWinois, such a contractual pro-

vision was and is valid and enforceable.”

This insurance policy was issued and delivered in

Illinois to a citizen of that state, and it was paid for by

him while he was present and residing in that state. It

insured the appellee’s personal property which was at that

‘time presumably in the same state. Accordirig to the law °

of Florida, it was therefore an Illinois contract, the validity

and interpretation of which would ordinarily be determined

by the law of Illinois. Connor v. Elliott, 79 Fla. 513, 85 So.

164, cert. dismissed, 254 U.S. 665. Since the law of Illinois

validates clauses limiting the time within h suit may

be brought, this clause presents a good defense to appellee’s

\ suit unless the Florida statute r rs in unenforceable in

‘\ any Florida court. ° 1a age:

\ This presents. a question which. substantially affects

- ‘he outcome of this suit,.and sinee fedegal jurisdiction in

this case is based on diversity of citizenship, we must

apply the law which the state courts of the forum would

2. Trichelle v. Sherman & Ellis, Inc., 259 Ill. App. 346:

“Hartzell v. Maryland Cas. Co., 163 Ill..App. 221; see also Smith-

tiurd Ann. St., Ch. 73, §9692(1)(k) (1958): cf Smith-Hurd Ann.

Si... Ch. 73. 8§ 837(1)(a), 903(1)(a) (1958) *

(

cue

apply (Guaranty Trust Co. v. York, 326 U.S. 99; Klaxon

Co. v. Stentor Electric Mfg. Co., 313 U.S. 487), insofar

as the state law does not violate the constitution of the

‘United States. See Sampson v. Channell, 1 Cir., 110 F.2d

754, cert. denied 310 U.S. 650.

The wording of the Florida statute is quite general and

broad, and it appears to apply-to all contracts, wherever

made or performed, which happen to be sued upon in the

courts of Florida. However, there are no reported instances

where this statute has been applied under circumstances

similar to those presénted here; and the jurisprudence of >

Florida gives us reason to believe that the Florida state

courts would construe it as being inapplicable under these

circumstances.

The following representative decisions demonstrate the

Florida‘ cdurts’ tendency, based on their interpretation

of the requirements of due process and their recognition

of the general.common law rules of comity, to refrain

from «attempting to apply Florida statutes or their own

notiorig of public policy to foreign contracts: which. are

valid where entered into: Connor v. Elligtt, supra; Sovereign

Camp, Woodmen of the World v. Mixon,\79 Fla. 420, 84 So.

171; Equitable Life Assur. Soc. of U.S.A. v. McRee, 75 Fla.

257, 78 So. 22; American Fire Ins..Co. v. King Lumber &

Mfg. Co., 74 Fla. 130, 77 So. 168, aff'd., 250 US. 2

_ ‘It is thus quite possible that the Florida state courts

_.. would reach the same conclusion that the Kentucky court

reached in Union Cent. Life Ins..Co. v. Barnes, 175 Ky.

364, 194 S.W. 339*—that the validity of a contractual

~provision Nimiting the time within which suit can be

brought is to be~determined by the lex locus contractu

3. See also Brooks v. Travelers’ Protective Ass’n of America,

K.D. N.Y., 47. F.2d 618.

vies <n ae

rather than the lex fori. This result could be expected if the

court did not fall into the Alabama Supreme Court’s error*

of assuming that the issue presented concerned the choice

‘of the applicable statute of limitations rather thafl the

choice of the substantive law gov erning the validity of the

contract itself.° 4

We at not. obliged, however, to make the difficult

guess as tO what the Florida state courts might decide

if they were ‘presented. with this issue, for we conclude

that there is-only one ‘possible decision which would be

consonant with due process of law:" to deny application

of the Florida statute to this contract. .

Examining the decisions of the Supreme Court of the

United States on this subject, we find none which in-

volves the identical circumstances presented here, but

we find several which present very similar facts and which, .

we feel, clearly and unmistakably point out the result

which must be reached in this case.

The case of Home Insurance Co. v. Dick, supra, involved

a contract of marine insurance issued and paid for in Mex-

ico and insuring a vessel which was never inside the state

f Téxas, the’State in which suit on the policy was brought.

e original insurance was payable in Mexico. After this

insurance was issued, the risk ‘was reinsured (outside of

Texas) by a New York insurer which was qualified to do

——_,—_-~~ 8

4. Galliher v. State Mutual Life Ins. Co., 150 Ala. 543, 43

So. 833.

5. See Union Central Life Ins. Co. v. Barnes, 175 Ky. 364,

“194 S.W. 339, 340; Hartford Accident & Indemnity Co. v. Delta &

. Pine Land Co., 292 U.S. 143, 149; cf. Home Insurance Co. v. Dick,

“81 U.S. 397, 406, 409, 410. ; #

6. Cf. Sampson’v. Chiiynett, 1 Cir., 110 F.2d 754, cert. denied

31Q US. 650.

~~ AT

busimess ‘in Texas. The original assured assigned the policy

to a citizen of Texas who was then in Mexico and remained

there until after the occurrence of the loss; after which he

returned to Texas and brought an in rem action in Texas

by garnishment proceedings directed against the domestic

insurance agents., The defendants pleaded a stipulation in

the policy forbidding suit except within one year next

following the loss. The Texas courts denied the de-

fendants the benefit of this stipulation. They held it was

invalidated by a Texas statute out'awing such agreements.

The Supreme Court of the United States Re gaa the

Texas gourts by a unanimous vote. In an opinion written

by Mr.. Justice Brandeis, the Court stated that the statute

as construed by the Texas courts deprived the defendants

of property without due process of law. This statute, the

Court held, increased their obligation and imposed burdens

they had not contracted for; and this, the Court held, could

not be done even in the name of the public policy of Texas.

This holding was followed by Judge Strum, of the Dis-

- trict Court for the Southern District of Florida, later a

member of this Court, in the case of Holderness v. Hamilton

. Fire Ins. Co. of New York, S.D.Fa., 54 F. Supp. 145, which

involved the Florida statute we are here considering. But,

appellee argues, in the Holderness case the plaintiff was a

resident of the state of North Carolina, the policy was

issued in North Carolina, and the building which was in- °

sured was located in North Carolina (“Holderness was

nothing more than a sojourner in the State of Florida’).

Thus, he contends, the Holderness decision, liké the Dick

decision, was dictated by a situation whicltis not.duplicated

in this case: the forum’s lack of sufficient connection with

the disputed oa to warrant the invocation of the

public policy of the forum. 7 ¢

Assuming that a state might, if its connections with

2 ~a foreign contract are sufficiently great, be permitted to

effectuate its own public policy by striking down an

agreement which was valid where made, the question

remains: are the contacts which Florida has with this

contract great enough to permit this to be done in this case?

These contacts consist of nothing more than the presence of

the insured property and the beneficiary in the state of

Florida beginning subsequent io the formation of the

contract and continuing up to the time of the suit. Nothirg

was to be done in Florida pursuant to the insurance con-

tract except the purely ministerial act of payment by ihe

insurer, and ‘that was so only becapse of the fortuitous

circumstance of the assured’s removal from Illinois io

Florida. Under strikingiy similar+ circumstances, the

Supreme Court has held that the forum state did not have

the right to deprive a defendant of a contractual provision

limiting the time within which suit could be brought.

Hartford Accident & indemnity Co. v. Delta & Pine Land

( , 292 U.S. 143, reh. den., 292 U.S. 607. é

“Te

' In the Delta & Pine Land case. the contract concerned

a fidelity bond by which the defendant, a Connecticut

corporation, qualified ,to do business in Mississippi and

Tennessee, had insured the plaintiff. a Mississippi corpora-

tion with its principal office in Tennessee, against loss re-

sulting from dishonesty of its employees “in any position

anywhere.” The policy listed twenty-one ernployees who

were then working in Mississippi.’ The contract, however,

was negotiated and executed in Tennessee. It contained a

‘condition that any clairn under the contract had to be made

‘ within fifteen months from the termination of the surety-

ship agreement. One of the employees whose acts were

insured against committed defalcations in Mississippi and

7.. Watson v. Emnloyers Liability Co., 348 U.S. 66. 77.

the insured sued the indemnitor in that state. A Mississippi

statute stated that all contracts of insurance on property,

lives or interests in Mississippi were deemed made in that

state; another stated that the Mississippi statutory periods

of limitations of actions could not altered by private

agreements. The Mississippi court, applying these statutes,

struck down the-aforementioned contractual condition and

allowed recovery on the contract despite the plaintiff's

failure to make claim within the fifteen-month period. The

Supreme Court reversed in a unanimous decision.

The following language from the Supreme Court’s opin-

ion sets forth precisely the principles we must follow and

the degision we must make in the present case:

“It is urged, however, that in this case the interest

insured was in Mississippi when the obligation, to in-

demnify the appellee matured, and it was appellant’s

duty to make payment there; and these facts justify

the state in enlarging the appellant’s obligation beyond

that stipulated in the bond to accord with local public

policy. The liability was for the payment of money

only, and was conditioned upon three events,—loss

under the policy, notice to the appellant at its home

_ office, and presentation of claim within fifteen months

of the termination of the suretyship. All of these

conditions were of,substantial importance, all were law-

ful in Tennessee, and all go to the obligation of the

contract. It is true the bond contemplated that the

employee whose faithfulness was guaranteed might be

in any state. He was in fact in Mississippi at the date

of loss, as were both obligor and obligee. The contract

being a Tennessee contract and lawful in that state,

could Mississippi, without deprivation of due process.

enlarge the appellant’s obligations by reason of the

state’s alleged interest in the transaction? We think

not. Conceding that ordinarily a state may prohibit

performance within its borders even of a contract

validly made elsewhere, if the performance would

Al0

violate ‘its laws (Home Insurance Co. v. Dick, supra, »

p. 408), i. may not on grounds of policy ignore a right

which lawfully vested elsewhere if, as here. ‘he

interest of the forum has but slight connection with the}

substance of-the contract obligations. Here perform-

ance at most invelved only the casual payment of

money in Mississippi. In such a case the question ought

to be regarded as a domestic one to be settled by the

law of tise state where the ccntract was made. A

legislative policy which attempts. to draw to the state

of the forum control over the obligations of contracts

elsewhere validly consummated and to convert them

for all purposes into contracts of the forum regardless

of the relative importance of the interests of the forum

as contrasted with those created at the place of the

contract, conflicts with the guaranties of the Fourteenth

Amendment. Aetna Life Ins. Co. v. Dunken, supra:

Home Insurance Co. v. Dick, supra. Cases may occur

in which enforcement of a contract as made outside 2

state may be<so repugnant to its vital interests as to

justify enforcement in . different manner. Compare

Bond v. Hume, 243 U.S. 15. 2°. But clearly this is not

such a case.” 292 U.S. at 149, 150. 4

In accordance with the foregoing, we hold that the pro-

vision in the subject insurance policy which limits the time

in which suit can be brought is a substantial property right .

which is protected by the Fourteenth Amendment to the

Constitution, and under the circumstances of this case a

violation of due process would result from the application

of Florida Statute 95.03 to this provision.

As the Supreme Court observed in the Delta & Pine

Land case, cur conclusion that it would violate due process

renders unnecessary a consideration of whether it would

violate the full faith and credit or the contract clauses of

the -federal constitution. Extensive research, however,

among the decisions of the Supreme Court and the lower

federal and state courts relating to control of interstate

~ .

All

relatioris by the due process and full faith and credit clauses

discloses that the Dick and Delta & Pine Land decisions

have been cited many times and have never been called

into question or limited by latér decisions /of the Supreme

Court. See e.g., Watson v. Employers Liability Corp., 348

U.S. 66, 71, 76-78; Lauritzen v. Larsen, 345 U.S. 571, 590,

591; Order of Travelers v. Wolfe, 331 U.S. 549, 608, 628;

Pink v. A.A.A. Highway Express, 314 U.S. 201, 211; cf.

Culleyf 318 U.S. 313.

The cited cases form part of a larger body of law which

has as a basic premise the principle that onlyswhere a state

has significant interests involved may it impair property

rights created in other states. See, e.g., Pink v. A.A.A. High-

way Express, 314 U.S. 201, 209-11. A secondary principle

which is also of significance here is that evéh though ihe

affected interests.of the state may be substantial enough to

justify its refusal to give affirmative help in enforcing a

foreign contract which it finds obnoxious, these interests

may, on the other hand, be insufficient to justify the state’s

rewriting the contract, enlarging the obligation of the

makers and enforcing it in a manner contrary to their

undertaking. Watson v. Employers Liability Corp., 348

U.S. 66, 76 (concurring opinigp ) ; Hartford Accident & In-

demnity Co. v. Delta;& Pine Land Co., 292 U.S. 143, 149,

150; Home Insurance Co. ¥. Dick, 281 U.S. 397, 408-10;

see also Holderness v. Hemilton Fire Ins. Co. of New York,

S.D.Fla., 54 F. Supp. 145. i

Foliowing the principles set out above, we hold that

the district court erred in failing to sustain the appellant’s

-defense to this suit.

The judgment of the district court is REVERSED and

the case is REMANDED for entry of judgment in favor of

the appellant.

Hanson} v. Deckla, 357 U.S. 235, 254; Hoopeston Co. v.

Al2

RIVES, Circuit Judge, Dissenting:

The Legislature of the State of Florida has enacted that,

“All provisions and stipulations contained in any ‘contract

whatever. . . fixing the period of time in which suits may

be instituted under any such contract ... , at a period of

time less than that provided by the statute of limitations of

this state, are hereby declared to be contrary to the public

policy of this state, and to be illegal and void. No court in

this state shall give effect to any provision or stipulation of

the character mentioned in this section.’ Florida Statutes

Annotated, §95.03. _The language of that statute seems to me

‘ to leave no room for construction; it applies to “any contract

whatever.” .

No one has attacked the validity of that statute as

applied to contracts made in Florida, or can reasonably

doso. Stipulations shortening the period of limitation result

in the same evils and abuses whether entered into in the

State of Florida or outside that State. I cannot agree that

the Florida Legislature, or the courts of that State, must

accord to such a stipulation contained in an ambulatory

contract of insurance held by a Florida resident, but entered

into in Illinois, any greater sanctity thanthey would accord

to’ such a stipulation made in Florida. I think that the

Florida Legislature can protect residents of that State

against the application in Florida courts of stipulations

shortening the period of limitation in contracts performed —

in Florida regardless of the place where the contracts are

executed. I therefore respectfully dissent.

A true copy

Test: EDWARD W. WADSWORTH

Clerk, United States Court of Appeals, Fifth Circuit

By Clara R. James

Deputy

New Orleans, Louisiana

August 12, 1959

(Seal)

Al3

Judgment.

Extract from the Minutes of April 8, 1959.

- No. 17,528.

SUN INSURANCE OFFICE LIMITED,

versus.

JOHN CLAY.

This cause came on to be heard on the transcript of,

the Record from the United States District Court for

the Southern District of Florida, and was argued by coun-

on . : .

On Consideration Whereof, It is now here ordered and

adjudged by this Court that the judgment of the said

District Court in this cause be, and the same is hereby,

reversed; and that this cause be, and it is he.cby, remanded

to the said District Court for entry of judgment in favor

of the appellant; :

It is further ordered and adjudged that the appellee,

John Clay, be condemned to pay the costs this cause

in this Court for which execution may be issued out of

the said District Court.

“Rives, Circuit Judge, dissenting.”

Order Denying Petitions for Rehearing.

Extract from the Minutes of May 28, 1959.

No. 17,525.

SUN INSURANCE OFFICE LIMITED,

versus.

JOHN. CLAY.

It is ordered by the Court that the petitions for re-

hearing filed in the above styled numbered cause be, and

the same are hereby Denied. “Rives, Circuit Judge, dis-

senting.

Al4 ‘i Le

Contract stipulation from Hartford Accident_and In-

demnity Co. v. Delta Pine Land Company, 150 So. 206:

“Any claim hereunder must be duly made upon the

surety within fifteen (15) months after the termination

of the suretyship for the defaulting employee, and no suit,

action, or proceeding shall be brought hereunder by the

employer against the surety after the expiration of twelve

(12) months after the filing of proof of loss as above re-

quired, or, in case such limitation be void under the law

of the place governing construction hereof then within

the shortest period of limitation permitted by such law.”

er COURT. U. S. S| a .c:

: SEP 25 1959

IN THE

Supreme Court of the ited oe

October Term, 1959 eh | )

No. 349 | -

JOHN CLAY,

: Petitioner,

—_—vV .—

SUN INSU RANCE OFFICE? LIMITED,

Responde nt:

(ox Peririon ror- A Writ or. CerTioRARI TO THE UNITED

Sratres:Court or Appeals For THE Firru Cincerr

BRIEF FOR RESPONDENT IN OPPOSITION

KMucene A. Lemman,

} Attorney for Responde nt,

116 John street,

New York 38, New York.

Wicker & SMITH,

Reis, Mounp & Corroy,

Bert Corron,

Leonarp S. Dome,

of Counsel.

Question Presented ........00i4s.: Pitan wiblv arise os

Constitutional Provinygyn ana Statutes Involved ...

PENNE 0a bine Srecdlg e% d 9-0:6 Stes “ff

6-90.63 SF 0. O.o be: 8.8- 86'S

ARGUMENT:

Point I—Review is nog warranted because the

‘decision below is clearly correet and is in full

accord with applicable decisions of this Court

Point’ L—Review is not warranted because the

* determination below is supportable on - other

grounds without reaching the constitutional

question posed by the petitioner .......... 05,

Pont []1—Review ts not warranted since a judg-

ment for the respondent is supportable because

of a lack of coverage under the poliey o.......

pact deine oC isc sou Popcksaw tl Kees ans aiatete a

Citations

CASES:

American Fire Ins. Co. v. King Lumber & Mtg.

Co., 74 Fla. 150, 77 Se. 16S (1917), aff'd 250

oe Ce Sawa wteS pecekweep roses eed eae

Ashwander vy. Tennessee Valley Authyaity, 297

ea OE APOE ada s Chev ACs were De sktet ese.

Connor v. Elliott, 7 Fla. 512. 85 So. 164, cert.

dismiased, 254 U.N. -GGD. (1920) ..........0c05

Equitable Life Assur. Soe. of UL S..4. v. MeRee,.

See, 2, 6 Cee ek CEDIS) oo icic ccc scccceks

r .

PAGE

‘\

CASES (Cont ‘d):

Hartford Accident & Indemnity Co. v. Delta &

Pine Land Co., 292 U.S. 123.(1934) ..........

Hartford Accident & Indemnity Co. v. Delta &

Pine Land Co., 169 Miss. Lo0, 150 So, 205 (1933)

Hartzell V. Maryland Casualty Co., 103 Lk App.

BEAU E DN Sh boas tenes cimthae pee rae teers ce

Holderness v, Hamilton Fire Ins. Co, of N. Y., 54

Y. Supp. 145. (8. D. Fla. 1944) <...vcccccvcces

“}lome Insurance Co, v. Dick, 281 U.S. 3897 (1930)

John Hancock Mutual Life Ins. Co. v. Yates, 299

SL dee ROE 4h oe LL ae Ae 6 eee Vuaees ee

New York Life Insurance Co. v. Dodge, 246 Xu.

SNE A RUEERN Ge Sica okie ei Tee ee ea eee

Siler Vv. Louisville & Nashville R. @o., 213 U.S.

CIRC Ue fo ee CT a ae

Sovereign Camp, Woodmen of the- World v. Mixon,

ray) I in. 420, St Boe. 271 C1920} 6. /0 ss vewwes

Trichelle \ Sats rman & Ellis, Inc., 259 LL. App.

346 (1930) ae Satie ae! Vignes eet Payee ee see

CONSTITUTIONAL ProvisioNs &XD STACUTES:

Constitugion of the United Stites, Amendment

XIV eee of wT ie a oe Ve a ee ee er a) oe OF vo we a ee Pee Dy gens eyes ete.

. Constitution of the United States, Article I, See-

6 ae PERE SEP Pe bs Pe ee ee FUR. fa

Constitution of the United States, Article EV, See- >

PAGE

>) FF

—Z, |

2,7

Os UA oO i maar Pom pained Gow EAS air i 2, 7-8

2,8

IN THE | :

Supreme Court of the United States.

) October Term, 1959

No. 349

‘~’

Joun Chay,

a Petitioner,

—Vi— é

saa »

Sun Insurance Orvice, Limirep,

; Respondent,

Ox Peririon vor a Wrrr or Crrrrorant ro tik Usrrep

Srates Courr’or Apreats ror tire Frerun Crrevir

——} -.-. PRE AS Oe

Pe |

BRIEF FOR RESPONDENT IN .OPPOSITION

Question Presented

Where a personal property floater insurance policy is

issued and delivered in Hlinois to a citizen of Hlinois, and,

thereafter, while the policy is in force, the insured becomes

weizen of Florida and there sustains a loss, niust a fed-

erat court sitting in Phorida uplrold a limitation contained

in the contract with reypect tothe time to sue, which is

valid under the law of Tiiineis. but would be invalid: if

governed by Florida statute?

Constitutional Provisions and Statutes Involved

The constitutional provisions involved inthe case are

as follows:

1. The due "process Clause ol the ourteogpy Amend

ment to the Constitution of the United States which pro

vides as follows:

“* * * nor shall any State Ueprive any person of

life, liberty or. property, without due process of

4 aii ts bose

2. Article. T, Seetion 10, of the Constitution of the

United States which provides:

“No Statesshall © * * pass any * * * Law impairing

the Obligation of Contracts " * 77°.

3. Article TV, Section 1, which provides as follows:

“Koll Faith and Credit shall be given in each State

tothe public Acts, Records, and judicial proceedings

7) ae ery bther State ** *”’

; ; ESOS

The statute involved in this case is. Section 95.03,

Fiorida Statutes, 157, printed in Appendix ‘*A’’, on page

Al of the Petition.

“f Statement

On April 22. 152 the respondent, Sun Insurance Office,

Limited, «a foreign corporation, through its agent in Chi-

cago, Ulineis, issued and delivered its policy of insurance

to petitioner, John Clay. At the time of issuanee and

delivery, John Clay was a citizen of the State of Illinois,

residing at 4250 Lake Shore. Drive, Chicago, Illiteis (R.

Sto 13, RL55).. The premium was paid in (see 60).

The poliey on its face is designated

ane 4

I}linois

Personal Property Floater Policy

(World Wide).

Sometime later, petitioner came to Florida and Tived

on his boat at various ports (RL 56), then moved to the

Clewiston Inn, Clewiston, Florida’ (h. 37).° Finally, in

May, PA, ho moved toa ranch near Lake Harbor, Florida

(R. 18. 37). The Josses involved in this case oceurred in

| December, 1954 and January, 1955 on the aforesaid ranch

and were caused by the deliberate acts of petitioner's wife

CR. 84, 91-94), with whom he was having marital difficullies

(R. 40). She burned his clothes CR. S84, 91-94) and inten-

tionally slashed a valuable family portrait (ft. 28). Other

property was deliberately withheld from: petitioner by his

wife (Rt. 20, 21).

The’ Personal Property Floater Policy insures

¢ **Personal property owned, used or worn by the

person in whose name this ’oliey is issued and mem-

bers of the Assured’s family of the same household,

while in all situatious, exetept as’ hereinafter pro-

vided.”’

Jn the subsequent divorce procecdings between peti-

tioner and his wile, it developed that she had tried to sell

somé of the personal property involved in this claim (R.

d+), that there was a property settlement between peti-

tioner and his wife but that the property whieh she tad

taken was not Yreturned to the petitioner im connection

therewith (R. 53-54), ;

Petitioner notified the respondent of the loss on Febru-

ary 1, 1955 (R. 54). Respondent investigated the claim

under a reservation of rights and denied liability to the

petitioner on April 6, 1955 (R.55). Suit on the policy was

filed on May 20, 1957 (R. 2).

Respondent asserted two, defenses :

1. That the policy sucd on provides that no suit

for the recovery of any claim shall be sustainable

unless commenced within twelve tionths next after

_ discovery by the assured of the occurrence whieh

—~ gives rise to the claim, and that petitioner's. suit on

May 20, 1957 was brought approximately two years

and four months after petitioner had tull knowledse

of his loss, ’

2. That deliberate damage by petitioner's wife,

and her taking property from him as an incident of

marital difficuities, would not be insured under an

all-risks polity issued in the name of petitioner but

covering property owned, used or worn by him and

members of his family of the same household.

Petitioner brought suit in the United States District

Court for the Southern District of Florida. Trial was held

before a jury on-June 4, 1958. A verdiet was rendered in

favor of petitioner (R. 14) on which ‘tinal judgment was

filed June 14, 1958 (R. 14-15).) After denial of respond-

ent’s motion for judgment wou obstante verediclo or in the

alternative, for a new trial (R. 15-16), respondent ap-

fealed to the United States Court of Appeals for the Fifth

Cirenit. On April 8, 1959, opinion was rendered yevers-:

ing the judgment of the Distriet Court and remanding

the case for entry of judgment in -favor of respondent

(Appendix, p. AIS of Petition), It was held that the pro-,,

vision in the insurance policy limiting the time in which

suit ean be brought, valid in Illinois where the contract

Was made, is a substantial pr@pé@rty right, and that a vio-

lation of the due process clause would result if the Florida

invalidating statute were applied. Rehearing was denied

by the United States Court of Appeals-on May 2, 1959-.

(Appendix, p. ALS of Petition).

ARGUMENT |

POINT I

Review is not warranted because the decision be-

low is clearly correct and is in full accord with ap-

plicable decisions of this Court.

The determination of the United States Court of Ap-

peals in the'case at bar is in strict accord with Hartford

Accident & Indemnity Co. v. Delta & Pine Land Co., 292

U.S. 143 (1934), and other decisions of this Court. There

is no conflict between the Fifth Cireuit and any other cir-

euit, nor does petitioner glaim that there is. Home Insur-

ance Co. v. Dick, 281 U.S. 397 (1930), reaches the same

result as the Hartford garyereat case, as does Holderness

v. Hamilton Fire Ins. Co, of N. ¥., 54 F. Supp. 145 (S. D.

Fla. 1944), all based on the same principle of law. Recog-

nizing that all of the eases have reached the same conclu-

sion, petitioner merely argues that J/ome Insurance Co. v

Dick, supra, and Holderness v. Hamilton Fire Ins. Co.,

supra, lacked that degree of connection between the forum

and the contract sued upon whieh is found in the ease at.

bar. Even if that were so, no contlict warranting the

granting of certiorari is suggested.

The Delta & Pine Land Co. ease is directly in point and

was so regarded by the United States Court of Appeals.

The insured, then dojng business in Tennessee, procured a

fidelity bond from the insurer through its ageney in Mem-

phis, Tennessee. The insured later moved to Mississippi.

‘A loss was sustained in Mississippi, resulting from-thefts

committed by one of the insured’s employees, said thetts

having taken place after removal from Tennessee to Mis-

sissippi. The policy outlawed any claim not presented to

the insurer within 15 months after the termination of the

suretyship.’ The Mississippi court held that provision to

be in violation of Mississippi statute. Hartford Accident

& Iudemnigyy Conv Delta & Pine Land Co, 169° Miss.

150, 150 So. 205 (1938). On appeal ta@this Court judgment

for the insured was Quanimously reversed on the ground

that the contract provision, valid where made, could not be

denied effect merely beeause the insured had removed to

another state Where such provision is illegal, and the loss

occurred in such other state.

The case at bar presents an exact parallel. The policy

is a World Wide Personal, Property Floater. Coverage

is not restricted to the residence of the insured; none of the

property insured dias a fixed \situs. A loss in Florida or

in any other state. is covered whether the insured has

‘changed his residence or. not. Notice to the insurer of

change of residence is not required and none was given.

The provision requiring that suit be brought within 12

months after discovery is valid i Tilinvis where the pol-

‘iey Was issued, delivered and paid for and of which state

petitioner was a resident at the time, To deprive respond-

ent of a contract right would cogsiftute what this Court

has disapproved of as an cnlargeawt of *the obligations

of the parties to accord with every local statutory poliey

solely upon the eround that one of the parties is its own

citizen.’ Home Lasurance Co. v. Dick, supra at 407-408.

_ Petitioner argues the inapplicability of Vlome Insurance

Co.v. Dick, supra, and Holderness vy. Hanalty, Fire Ihs. Co.

of NOY. supra. Inthe Home Lusurance casey although the

suit was brought by a resident of Texas in the courts, of

that state, the question was determined on the basis of

deprivation of defendant's contract rights without due

process of law if the Texas statute invalidating the limi- \

tation of time ror suit were applied. gdp the Molderness

case, the principle would appearsto be the same, although

it is true that the poliey there involved was issued in North

Carolina to a North Carolina resident, insuring a building

located im that state. The court held that a substantive

defense under a contract valid’ where made cannot be de- ,

oa |

nied effeet under’ the law of the forum without violating

the principles of due process, e

Even where a Missouri resident procured a poliey in

that state through the local office of the insurer loedted

there, and thereafter made a loan on the poliey by mail

under circumstances which the court hgld to be governed

by New York law, a Missouri statute providing for non-

forfeiture was denied application on consiituti@nal grounds.

New York Life Iusurance Co, vy. Dodge, 246 U. Se 357

(1918). Under the law of New York, the forfeiture aris-

ing from non-payment of the loan was valid. Under the

Missouri statute applicable to policies issued by any life

insurance company authorized tu do business in that state,

it was invalid. The court said:

‘Under the laws of New York, where the parties made

the loan agreement now before us, ‘it was valid; also ‘

it was one which the Missouri legislature could not

destroy or prevent a citizen within its borders from

‘making beyond them by direet inhibition; and apply-

ing the principles accepted and enforced in New York

L. Ins. Co. v. Head, we think thesnecessary conclusion

is that such a contract could not be indirectly brought

into subjection to statutes, of the state and rendered

ineffective through a license authorizing the insurance

company there to do business. As construed and ap-

plied by the Springfield court of appeals? section 7897

transcends the power of the state. To hold otherwise

would permit destruction of the right—often of great

value—tfreely to, borrow money tpon a poliey from

‘the issuing company at iis home office, and would,

moreover, sanction the impairment of that liberty of

contract guaranteed to all by the Fourteenth Amiend-

ment.’’? 246 U.S. at 876-77.

Although the United States Court of Appeals for the

‘Sth Cireuit rested its conclusion in the case at bar on -the

due process ground and considered it unnecessary to decide

whether the Florigy statute would vidlate the full faith

and credit or the contract clauses of the Constitution, it

commented that the Dick and Della & Pine Laud decisions

have been cited many fimes and never auestion | er

limited by later decisions of the Supreme Court) which

involved the related full faitheand credit: principle. To

refuse to apply/the law of the state In which the contract

is made is bevond the power of a sister state and constitutes

denial of full faith and credit te the laws of such state.

John Hancock Mutual Life lus. Conv. Yates, 299 U.S. 178

(1936).

POINT I!

Review is not warranted because the determina-

tion below is supportable on other grounds without

reaching the constitutional question posed by the

petitioner. o

It has beenthe long established policy of this Court to

refrain from the det@rmination of canstitutional questions

if another ground exists upon which disposition of the

Issue can he Mehievgad, Ashwauder vie Tennessee Valle 4

Authority, 297 US. 288, 547 (1950) (concurring opinion) ;

Siler ve Louisville & Nasheidle Ro Co. 218 U.S. 175, 198

(1909).

While the question of the applicability of Florida Stat-

ute 95.08 to contracts made in other states has not been

deeided in the Florida state courts, the ceurt below ob- -

served that the Florida courts have refrained from attemprt-

ing to apply Florida statutes or public policy to contracts

valid in the state where made. Connor ve Etliott, 79 Fla.

D133. SD So. 164. cert. dismissed, 254 UL S: 663 (1920); Sov-

ereiqu Camp, Woodmen of the World > Miron, 79 Fla.

420, S4- So. 171 (1920); Baquitable Lite Assur. Soc. of

Uo Soih. ve MeRee, 75 Fla. 257, 78 So, 22 (1918): American

Fire lus. Cov vy. King Lumber & Mfq, Co., 74 Fla. 180, 77

So. 168 (1917), aff'd 250 U.S. 2 (1919).

Under the law of Florida, the poliey sued on is governed

by Illinois law. The contractual linitation on the time to

sue is valid in Lilineis. Trichelle vo Sherman do Ellis, Ine..

259 LL, App. 346 (IW80): Martoell vo Maryland Casualty

Co., 163 Ill. App. 221 (1911). |

Since under the law of the forum the Florida statute

is. inapplicable, the constitutional question of whether it

may be validly applied te destroy the suit provision need

not be reached and hence this court should decline to grant

certiorari.

POINT Ill

Review is not warranted since a judgment for

“the respondent is supportable because ‘of lack of

coverage under the policy.

ay Having upheld the defense based on the limitation «f

time to sue, the court below did not reach the qhestion of

whether the insurer coul@ be held liable for deliberate

acts of the named insured’s wife. A finding of non-liability

under the policy would render it- unnecessary to determine

the constitutional questions applicable to the one year suit

clause.

Research has disclosed no previous attempt by a tits

band to impose liability on an insurer, under a poliey

insuring the property of both. for dediberate dame done

‘by the wife as an incident of marital discord. An all-risks

policy of insufAnce is designed to protect against violence

of the elements, deprivation by thieves and marauders. ated

loss or damage inadvertently eansed. To extend the con

cept of risk to include the consequences of family quar

ls between husband and wife, granting to oue insured a

right of reimbursement for damage spitefully done by a -

spouse, who is also insured, and a right to recover for

property taken by the wife in anticipation of divorce, does

*@a]

“*.

violence to every principle of piublae policy and insurance

doctrine, a

The court below did not decide “the questions It is

submitted that judgment for the rpspondent on’that ground

would be supportable and that the question posed hy peti-

tioner would not require deci ‘ision.

CONCLUSION

For the foregoing reasons it is respectfully sub-

mitted that this petition for a writ of certiorari

should be denied.

Respectfuiy submitted,

MuGeNE A, LeimMan,

Attorney for Respondent,

116 John Street,

New York 38, New York.

Wicker & SMirn,

Rein, Mounp & Corros ‘ ms

Bert Corron, :

LEONARD Ss. Domi, 4

of Counsel. tied

September 24, 1959.

——-

Uihice-Supee ne C

4 = a >

U.S.

‘ é OC! S iM 4

JAMES RL BROW AUNG, a 4

SUPREME COURT OF THE UNITED STATES

: ICTOBER TERM, 1959.

‘ .

No. 349.

JOHN CLAY. Petitioner.

VS.

SUN INSURANCE OKFICE, LIMITED, Respondent

ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES

COURT OF APPEALS FOR THE FIFTH CIRCUIT.

REPLY BRIEF OF PETITIONER TO RESPONDENT'S

BRIEF IN OPPOSITION.

W. Terry GIBSON,

"09 South Olive Avenue.

West Palm Beach, Florida,

Attorney for Petitioner 4

Grinson & GIBSON,

PASCHAL C. REESE,

209 South Olive Avenue,

West Palm Beach, Florida..

Or Counsel

- —

’ ts s ' et, Kansas City 6, Mo, HA -308

) INDEX

* Subject Matter

Question Presented

Constitutional Provisions and anaes, Skank.

Statement - 5)

‘nan 4

, Point I. Review Is Warranted Because the Deci-

sion Below Is Clearly Correct and Is Not in Full

Accord ‘with the Dacdna ives Decisions of This

Court... Kear Se Gee eM laa 18 5 Oe Pee a oo ee i

Point II. Review Is Warranted Because the Deter-

mination Below Is Materially Based on a Con-

situ. Gusto...) ri 7

Point III. Review Is Warranted Since a Judg-

ment for the Petitioner Is Supportable under the

Florida Law -... A chien .

Conclusion _— _ POR ee |

Certificate of Service .. # jl

Appendix A, Alabama Code of 1896, Paragraph 2802 _ li

Cases Cited

American Fire Ins, Co. v. King Lumber & Mfg. Co., 74

Fla. 130, 77 So. 168 (1917), aff'd 250 U.'S.2 (1919) 7

Connor v. Elliott, 79 Fla. 513, 85 So. 164, cert. dis-

missed 254 U.S. 665 (1920) 7,8

Equitable Life Assur. Soc. of U.S. A. v. McRee, 75 Fla.

257, 78 So. 22 (1918) ) 7

Gallaher v. State Mutual Life Insuvonce Company, 150 -

Ala. 543, 43 So. 833°. 5

Hartford Accident & Indemnity Company v. Delta &

Pine Land Company, 292 U’S. 143 (1943) —. .. 4, 5

2 a

II oes

Holderness vy. Hamilton Fire Insurance Company of

New York, 54 Fed. Supp. 145 (S. D. Fla. 1944) . 4

Home Insurance Company v. Dick, 281 U.S. 397 (1930) . 4

Leroy v. Crowninshield, 2 Mason (U.S. 157 Fed. Case

8269 ) on, ae

- Lincoln v. Battele, 6 Wendell 475 eee airs oe

Medbury v. Hopkins, 3 Conn. 472 a eae ua ie

Sovereign Camp, Wovudmen of the World, v. Mixon,

79 Fla. 420, 84 So. 171 (1920) SER ATI OF

State v. Herndon, 158 Fla. 115, 27 So.2d 833 ba Ab )

Union Central Life Insurance Company v. Barnes,

175 Ky. 364, 194 S.W. 339 Sens eet ot ee

/ Constitutional Provisions and Statutes Cited

Alabama Code of 1896, Paragraph 2802 ¢ fate 5, IT

Article I, Section 10, of the Constitution” of the United

States + 2

Article IV, Section 1, of the Constitution of the United

States 2

Fourteenth Amendment to pian Gonabvation my ‘ia

United States: _ - ; Siceteee ae

Section 95.03, Florida Statutes, BO a Beets gation cane 2, 7,8

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1959.

No. 349.

JOHN CLAY, Petitioner,

vs.

SUN INSURANCE OFFICE, LIMITED, Respondent.

ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES

COURT OF APPEALS FOR THE FIFTH CIRCUIT.

(.@

REPLY BRIEP*OF PETITIONER TO RESPONDENT'S

BRIEF IN OPPOSITION.

QUESTION PRESENTED. é

Where a personal property floater insurance policy is

issued end delivered in Illinois to a citizen of Illino. *, and,

thereafter, while the policy is in force, the insured becomes

a citizen of Florida and there sustains a loss, must a fed-

eral court sitting in Florida uphold 2 limitation contained

in the contract with respect to'the time to sue, which is

valid under the law of Illinois but would be invalid if gov-

erned by Florida statute?

CONSTITUTIONAL PROVISIONS AND STATUTES

The constitutional provisions involved in the case are -

as follows:

1. The due process clause of the Fourteenth Amend-

ment to the Constitution of the United States which pro-

vides as follows:

“* *.* nor shall any State deprive any person of

life, liberty or property, without due process of law,

7 — | aa

2. Article I, Section 10, of the Constitution of the

United States which provides:

“No State shall * * * pass any * * * Law impair-

ing the Obligation of Contracts * * *”

3. Article IV, Section 1, which provides as follows:

“Full Faith and Credit shall be given in each State

to the public Acts, Records, and — proceedings

of every other State * * *”

The statute involved in this case is Section 95.03, Flor-

ida Statutes, 1957, printed in Appendix “A”, on page A 1

of the Petition.

STATEMENT. 4

The statement of the case is substantially correct:

However, the respondent in its brief implies that a property

settlement was made between the petitioner and his wife,

either preceding or during the divorce proceedings. The

records do not bear out the statement of the respondent -

(R. 53-54). The only reference in the records to a prop-

erty setgjement was a question by the attorney for the de-

fendant in the lower court: “Was there actually any

property settlement whereby you were to get certain prop-

erty and she was to get certain property?” The answer

was “Yes” (R. 53). However, it should be observed that

there is no reference in the record-te the property involved

in the suit having been the object of a settlement either

between the parties or ordered by the lower court. Actually

the reférence to a settlement referred to certairi oil leases”

located in the State of Indiana (R. 56). There was no

property settlement as the term is generally used in con-

nection with divorce proceedings.

The respondent asserted the two defenses set out in the

statement of the case in the brief.

| Petitioner brought suit in the United States District

Court for the Southern District of Florida and respondent

filed its answer. Subsequent thereto a motion for judg-

ment non obstante veredicto or in the alternative for a new-

trial was filed in the District Court. The same questions

were raised in the motion (R. 15-16) as those raised in the

respondent’s brief ar? the District Court denied all post

trial motions and appeal followed (R. 17).

ARGUMENT.

POINT L.

Review Is Warranted Because the Decision Bélow Is

Clearly Correct and Is Not in Full Accord with

the Applicable Decisions of This Court.

The respondent.in argument in its reply bridf has done

-nothing more than rehash the arguments contained in the

brief of the appellant in the Circuit Court. The cases

cited, to wit: Hartford Accident & Indemnity Company v.

Delta & Pine Land Company, 292 U.S. 143 (1934), Home

Insurance Company v. Dick, 281 U.S. 397. (1930), and

Holderness v. Hamilton Fire Insurance Company of New

York, 54 Fed. Supp. 145 (S.D. Fla. 1944), are not based

on the same principle of law as the case at bar.

The Delta & Pine Land Company case being the case

most prominent in: effecting the decision of the, Fifth

Circuit is not even remotely on point with the case at bar.

The decision of the court in the Delta & Pine Land Company

case did not deal with a statute similar to the Florida

statute, making it against public policy in the State of

Florida to insert in a contract a provision which attempts

to shorten the statute of limitations of the State of Florida.

The decision of the Delta & Pine Land case was based upon

the failure of the insured to report to the insurer a loss

within 15 months after the termination of the suretyship.

There is 110 claim by the respondent that a report of losses:

under the policy sued upon was not made in accordance

with the terms of the policy. There is no law in the State

of Florida, or for that matter in the State of. Mississippi,

which declares it against public policy for a contract of

insurance to contain’a clause in reference to the time for

(

Hs)

- reporting a loss under an insurance policy. The statute

of the State of Florida which is at issue is a statute re-

ferring entirely to the shortening of the period of limita-

tions for actually commencing a suit. The same law is

applicable to the State of-Mississippi. There is nothing in

the records in the/Delta & Pine Land case which would

lead one to believe that the decision of the Court of

Appeals would have upheld the Mississippi court if the

suit had been based entirely upon that part of the contract

attempting to shorten the period of limitation under the

Mississippi law. The Delta & Pine Land case, therefore, is

not directly in point, nor could the United States Court of

Appeals consider it directly in point with the case at

bar.

«The only case directly in point with the case at

bar was before the Supreme Court of Alabama. The

State of Alabama has a law similar to that of the State

of Florida, to wit: Alabama Code of 1896, paragraph 2802

(App. A). In the case of Gallaher v. State Mutual Life

Insurance Company, 150 Ala. 543, 43 So. 833, the Supreme

Court of Alabama held that the law of the forum con-

- trolled in a suit similar to the case at bar... In the Gallaher

case the contract of insurance had been entered into in:

-the State of Georgia and the insured parties had removed

_ themselves to the State of Alabama and the question

of damages involved in the suit occurred in the State

of Alabama. The Alabama court held in the Gallaher

case that the lex loci contractu must govern as to the

validity, interpretation and construction of the contract

but the remedy to enforce it or to recover damages must

be pursued according to the law of the forum where the

suit is brought. The- Alabama court further stated that

where the law of another state is relied on as a defense

to a suit brought in this state it must be shown that ac-

cording to the lex loci contractus the contract was invalid

or, if once valid, that it has become extinguished and there-

fore: is not in legal contemplation a contract. If the

foreign ‘law does -not affect the contract itself but only

the remedy to enforce it, it cannot be regarded and all

~_remedies on contracts whether made in or out of the state —

must be governed by the laws when the suit is brought

without regard to the agmedies afforded by the laws of

other countries. _ .

dn reply to the Alabama suit the Circuit Court took

the position that the Alabama Supreme Court assumed that

the issue presented conggrned the choice of the applicable

statute of limitations rather than the choice of the sub- |

stantive law governing the validity of the contract itself

and even went so far as to say that possibly the Florida

courts would reach the same conclusion that the Kentucky

- court reached in Union Central Life Insurance Company

v. Barnes, 175 Ky. 364, 194 S.W. 339. The State of Ken-

tucky has no law similar to the law of the State of

Florida or the law of the State of Alabama. The court

seems to have gone quite far afield assuming that the

courts of the State of Florida would take a position con-

trary to the law of the State of Florida.

In the case of Leroy v. Crowninshield, 2 Mason (U.S.

157 Fed. Case 8269), J udge Story after an elaborate exami-

nation of a question similar to that of the case at bar held

that the statute of limitations of New York was no defense. °

In a suit brought in Massachusetts in the case of Medbury

v. Hopkins, 3 Conn. 472, the Court held it was well settled

.that contracts would be construed according to the law

of the place in reference to which they were made, but

that the lex loci was applicable only as in the validity and

interpretation of the contract as to time, mode, or extent

of the remedy and upon that principle, the court held -

that the statute of New York was no defense. In the

case of Lincoln v. Battele, 6 Wendell 475, in a case dealing

with the statute of limitations, Chief Justice Savage, in

delivering the opinion, said the distincton between the

lex loci and the lex fori is well settled. The laws of the

lex loci are to govern all questions affecting the validity,

nature and construction of the contract but the law of the

place where the contract is gought to be enforced must

govern as to the remedy. 3

POINT II.

Review Is Warranted Because the Determination

Below Is Materially Based on a Constitutional”

Question.

Although the applicability of Section 95.03, Florida

Statutes, to contracts made in other states, has not been

decided in the Florida courts, the court below failed to

distinguish between the pronouncements of the Florida

courts as to the application of Florida statutes or public

policy to contracts valid in the state where made which

dealt with contracts other than insurance and contracts ©

of insurance. :

The respondent cited certain cases where it claims the

Florida ‘courts have refrained from attempting to apply

Florida statutes of public policy to contracts valid in the

state where made, to wit: Connor v. Elliott, 79 Fla. 513, 85

So. 164, cert. dismissed .254 U.S. 665 (1920); Sovereign

Camp, Woodmen of the World, v. Mixon, 79 Fla. 420, 84 So.

171 (1920); Equitable Life Assur. Soc. of U.S.A. v. McRee,

75 Fla. 257, 78 So. 22 (1918); American Fire Ins, Co. v.

King Lumber & Mfg. Co., 74 Fla. 130, 77 So. 168 (1917),

aff'd 250 U.S. 2 (1919).

With the exception of Sovereign Camp, Woodmen of

the World, case, these cases deal with the substantive law.

The Sovereign Camp, Woodmen of the World, case, while

dealing with Section 95.03, Florida Statutes, is not re-

motely on point with the case at bar since it refers to a

case where the policy was written in Florida by a Florida

Agent for a Florida resident. This case simply confirms

the constitutionality of Section 95.03, Florida Statutes. In

. no part of its opinion does the Court refer to the application

of the Florida statutes to contracts valid in the state where

made.

The Connor v. Elliott case deals entirely with real

property and: the Florida court held that contracts dealing

with real estate or immovable property are subject to the

law of the location of the property.

In the case at bar the interests of the State of Florida

are superior to any other state because under the terms

of the contract, worldwide floater insurance policy, Florida

became the place of performance of the contract, the place

in which the loss occurred, and the state of the policy-

holder’s domicile at the time of the loss. The insurance

company was legally admitted to do business in the State

of Florida, was regulated in its business by Florida and

notice of loss. was filed with the insurance company in

Florida. The remedy under the policy could. only be

brought in Florida and the contract provision for the

-time of commencing suit on the contract of insurance

involved in this case relates to the procedure to be fol- |

lowed in perfecting a claim of Téss as distinguished from

the substantive contract provisions relating to the coverage

and policy limits.

Contracts of insurance are a type of commercial

transaction affected with great public interest, easily dis-

tinguished from contracts relating to property generally.

POINT III.

Review Is Warranted Since a Judgment for the

Petitioner Is Supportable under the

Florida Law.

The respondent in its brief takes the positien that the

lower court would have inevitably entered a finding of

non-liability under the policy sued upon if it had been

- unnecesary to determine the constitutional questions ap-

plicable to the one-year suit clause. *

The respondent has taken the position that a personal

property floater (worldwide insurance policy) is an “In-

land Marine Policy”. The term “Inland Marine Policy” is

a fiction of the insurance profession. The principal reason

for purchasing an insurance contract of the sort described .

in the policy upon which suit was originally brought is

to protect personal property of the insured against theft

and malicious destruction wherever the same may be lo-

cated in the World; regardless of who is guilty of the

theft or, the act of malicious destruction.

The case at bar is for the recovery of money due the

- insured under the policy for property stolen from the

insured by his wife, of property wantonly destroyed by her.

The Florida Supreme Court recognized that a husband may

steal from his wife or a wife from her husband. State v.

Herndon, 158 Fla. 115, 27 So.2d 833. The Court in the

Herndon case held: ‘“* * * it is not to be inferred from

what has been said that in every case in which one spouse

appropriates the property or funds of the other may be

classified as larceny * * * The element of intent must

be one of the controlling factors in determining larceny.

Here as elsewhere funds of one spouse used by the other

to purchase food and clothing or family necessities would

not be construed as larceny, but ‘here the charge is for

appropriating $5,000 of the wife’s money. In the state

of the law pointed out-here we think it necessarily follows

_ that even-spouses must observe the difference between

mine and thine and if they fail they do so at their peril.”

The District Court recognized in the case at bar that

under the law of Florida a wife can, in instances where

a wrongful intent is shown, steal from the husband and so

charge the jury (R. 99-100) and the jury, having taken

into consideration the charge of the court and the cir-

cumstances presented by the evidence, held that the case

at bar met the requirements to the extent that larceny

had been proven and so’ returned a verdict against the

respondent. |

In view of the above-cited case, it is submitted that

the District Court would have had to utterly disregard the

law of the State of Florida and the findings of the Florida

Supreme Court in order to have been able to support its

findings because of a lack of coverage under the policy.

CONCLUSION.

For the foregoing reasons it is respectfully submitted

that the petition for a writ of certiorari should. be granted.

Respectfully submitted,

~ <9 W. Terry Grsson,

pve | 209 South Olive Avenue,

| West Palm Beach, Florida,

Attorney for Petitioner. -

GIBSON & GIBSON, ‘

PASCHAL C. REESE,

209 South Olive Avenue,

West Palm Beach, Florida,

Of Counsel,

APPENDIX A.

(2) Alabama Code of 1896, paragraph 2802: “Any

agreement or stipulation, verbal or written, whereby. the

time for the bringing of any action is limited to a time less

than that prescribed by law for bringing of such action,

is void.”

CERTIFICATE OF SERVICE.

‘The undersigned of counsel for petitioner hereby cer-

tifies that a true and correct copy of the foregoing Reply

Brief of Petitioner to Respondentis Brief in Opposition

has been served on Joe C. Brannen, Esq., Wicker & Smith,

» 505-6 Ainsley Building, Miami, Florida, counsel for the

respondent, by depositing the same in a United States post

office, with air mail postage prepaid, in strict accordance

with Rule 33 of the Revised Rules of the Supreme Court

of the United States, effective July 1, 1954.

This 7th day of October, 1959.

W. Terry GIBSON,

Of Counsel for Petitioner.

‘crm

;

—————_=_== = =

PREME COURT OF THE UNITED STATES

OCTOBER TERM, 1959.

No. 349.

JOHN CLAY,

Petitioner,

Vs.

SUN INSURANCE OFFICE, LIMITED,

Respondent.

BRIEF OF PETITIONER AFTER GRANTING OF

WRIT OF CERTIORARL

W. Terry Grsson,

209 South Olive Avenue,

West Palm Beach, Florida,

Attorney for. Petitioner.

Grsson & Grsson,

Pascual C. REESE,

209 South Olive Avenue,

West Palm Beach, Florida,

Of Counsel.

)

E. L. Mewpenmait, Iwo., 1108 Oak Street, Kansas City 6, Mo., HArrison 1-8080

INDEX

Oninioa of the Court Below l

Constitutional Provisions and Statutes Inv oived 2

Question Presented for Review 3

Statement of the Case — ace 3

Argument oe aes m . 6.

Conclusion t 16

- Certificate of Service | 16

Appendix A fear : ie

- TABLE oF CASES

American Fire Ins. Co. v. King Lumber & Mfg. Co., 74 ©

Fla. 130, 77 So. 168-(1917), aff'd 250 U.S. 2 (1919) 9% 15

‘Asel v. Order of United Commercial Travelers, 197

S.W.2d 639 (Mo. 1946) 7

' Carbon Black Export v. The SS Monrosa, 254 F.2d 297

(5th Cir. 1958), cert. denied 359 U.S. 180 (1959) 9

Connor v. Elliott, 79 Fla. 513, 85 Sof 104 cert. dismissed

254 U.S. 665 (1920) 14-15

Equitable Life’ Assur. Soc. of U. S. A. v. McRee, 75 Fila.

257, 78 So. 22 (1918) 15

Ex rel. United Commercial Teavelers v. Wolfe, 331 U.S,

586 (1947) 11

Gallaher v. State Mutual Life Insurance Co., 150 Ala.

«___-648;-43 So. 833 (1907) 7,13

4 << Gulf Insurance Co. v. Holland Construction Co., 236

S.W.2d 1003 (Ark. 1951) 7

Hanson v. Denckla, 357 U.S. 235 (1957), rehearing de-

nied 358 U.S. 858 (1958) 12

Hartford Accident and Indemnity Company v. Delta

Pine Land Company, 292.U.S. 143 (1933) 7; 9, 10, 12

Holderness v. Hamilton Fire Insurance Company of .

New York, 54 F. Supp. 145 (S.D. Fla. 1944) 7,8

Hoopeston-Canning Co. v. Cullen, 318 U.S. 313 (1943) 12

The Kensington, 183 U.S. 263 (1901) — 10

Leroy Vv. Crowninshield, 2 Mason (U.S. 157 Fed. Case

2 et Se bc shentpdiaieeaee 15

Lincoln v. Battele, 6 Wendell 475 15

McGee Vv. International Life Insurance Company, 355

U.S. 220 (1957) _ : 12

Medbury v. Hopkins, 3 Conn. 472 noted 15

Pink v. A.A.A.- Highway Express, 314 U.S. 210 (1941),

rehearing denied 314 U:S. 716 (1942) |

Sovereign Camp, Woodmen of the World, v. Mixon, 79 i

Fla. 420, 84 So. 171 (1920) 15

Union Central Life Insurance Co. V. Barnes, 175 Ky.

364, 194 S.W..339 (1917) 7,14

Watson v. Employers Liability Assurance Corporation,

348 U.S. 66 (1954), rehearing denied 348 U.S. 921

(1955) , | ‘ 11

ConstiTUTioNAL PROVISIONS, i AND STATUTES

Alabama Code- 1896, paragraph 2802 3, 13 °

29 Am. Jur, (insurance, paragraph 1394), page 1041 6

Article I, Section 10, of the Constitution of the

United States “

Article IV, Section 1, of the Constitution of the |

United States 2

Carnahan, Conflict of Laws and Life Insurance Con-

tracts (J958), paragraph 137, page 657 6

7 Couch oni Insurance, paragraph 1629, page 5704 6

Fourteenth Amendment to the Constitution of the

United States 2

II INDEX

‘ Home Insurance Company v.-Dick, 281 U.S. 39% (1929) ~

Section 95.03, Florida Statutes 1957 2, 6, 1, 9, 14, 15

SUPREME COURT OF THE UNITED STATES -

7 ~~

OCTOBER TERM, 1959.

No. 349.

JOHN CLAY, “

Petitioner,

VS.

SUN INSURANCE OFFICE, LIMITED,

Respondent. °

. BRIEF OF PETITIONER AFTER GRANTING OF

WRIT OF CERTIORARI. .

OPINION OF THE COURT BELOW.

The opinion of the United States Court of ‘ Appeals

for the-5th-Circuit (R. 28-37) is reported in 265 F.2d 522.

Petition of petitioner for rehearing filed May 12, 1959

(R. 38-39), and petition of State of Florida for rehearing

filed May 12, 1959 (R. 40-41), waS denied by “Minute

entry of order denying petitions for rehearing May 28,

1959 (R. 42).”

The jurisdiction of this court is invoked under 28

U.S.C., Section 1254 (1), and order allowing certiorari

dated October 26, 1959 (R. 42).

CONSTITUTIONAL PROVISIONS AND STATUTES .

- The constitutional provisions inv olved i in the case are

as follows: Tt

1. The due process clause of the Keurteenth | Amend-

ment to the- Constitution of the United States which pro-_

vides as follows: ~

“* * * nor shall any State deprive any person of

life, liberty or property, without due process of law;

* * ap

Article I, Section 10, of the Constitution of the

Uni States which provides:

““No State shall * * * pass anv * * * Law impair-

ing the Obligation of Contracts * * *.”

3: Article IV, Section 1, of the Constitution of the

United States which provides as follows:

“Full Faith and Credit shall be given in each

* State to the public Acts, Records, and judicial pro-

ceedings of every other State * * *.”

The Statute involved in- this case is Section 95.03,

Florida Statutes 1957, which provides, as follows:

“Stipulations in contract shortening period of

limitation illegal—aAll provisions and_ stipulations

“contained in any contract whatever entered into after

May 26, 1913, fixing the period’ of time in which

* suits may be instituted under any such contract, or

upon any matter growing out of the provisions of

any such contract, at a period of time less than that

provided by the statute of limitations of this state,

are hereby declared to be. contrary to the public

policy of this state, and to be illegal and void. No

’ ”

—court in this state shall give effect to any provision

or stipulation of the character mentioned in this sec-

tion.”

"Alabama Code 1896, paragraph 2802. “Any agree-

* ment or stipulation verbal or written, whereby the time

_ for the bringing of any action is limited to a time less

than that prescribed by law for the bringing of such ac-

tion is void.”

! ars oe,

QUESTION PRESENTED FOR REVIEW, .

“Should a federal court sitting in Florida rec-

_ Ognize a ‘suit clause’ contained in’a personal prop-

erty insurance policy issued in Illinois but under

which loss occurred in Florida, the insured-at the

time of the loss being a resident of the State of

Florida? All of,the property for which the claim

was made having been located in the State of

Florida and the insurer being admitted t@ do busi-

»ness in Florida?”

O ; 4

rf 3s

STATEMENT OF THE CASE.

On May 20, 1957, a complaint was filed in the United

States District Court of the Southern District of Florida,

Miami Division, by the petitioner, John Clay, against the

respondent, Sun Insurance Office, Limited, seeking to

recover $13,500, claimed as damages for Joss of personal

property under personal property floater policy issued

to the petitioner by the respondent on Afril 22» 1952 (R.

1,3).

The jurisdiction of the District Court was invoked be-

cause of the diversity of citizenship of the parties to the

suit and the fact that the amount in-controversy exceedea,

: $s

exclusive of interest and cost, the sum of $3,000. Service

was had upon the respondent and answer to the complaint

was filed on June 12, 1957 (R. 2, 3, 4).

Beg: answer by way of affirmative defense the re-

=, spondent raised the question of the “suit clause” containect*

% in the policy (R. 3,4). The suit was.tried before a jury in ©

- West Palm Beach, Florida, on Jufe 4, 1958, and a verdic:

was entered in favor of the petitioner in the sum of $6,890 ~

(R. 6). The final judgment was filed June 4, 1958, in ac-

cordance with the verdict of the jury (R. 6). At the time

of the trial the original insuragce policy: was offered anc.

received in evidence as Plaint#’s Exhibit 1 (R. 5); offer

and acceptance of Exhibit in evidence (R..10). On June

12, 1958, the respondent filed motion for judgment nen

obstamte veredicto or in the alternative for a new trial (R.

7-8). Paragraph 7 of. the motion dealt with the question

presented in this petition (R. 7). The matter was heara

by the United States District Court on July 15, 1958, and ~

an order denving the motion and setting a supersedeas bond

» was entered: on the same date (R. 8). Notice of appeal

was then filed on August 8, 1958 (R. 8). Thereafter brie! s-.

were filed by the appellant and the appellee in the lowe~

court and the matter was argued before the United State.

Court of Appeals sitting in Jacksonville, Florida, March 1!,

1959. On April 8, 1959, the United States Court of Appeais

for the 5th Circuit rendered its opinion reversing the judg-

ment of the District Court and remandingé the case for

entry of judgment in favor of the appellant (R. 37-38). On

April 21, 1959, the pétitioner filed his motion for an ex-

tension of time to file for rehearing and briefs (R. 38-39)

and on April 23, 1959, an extension of 20 days was grantea

from April 29, 1959, together with an extension of time for

the Attorney General of the State of Florida to file mv-

tion for reHearing and brief as amicus curiae oh behalf of

+”

‘ Min

the State of Florida (R.\40-41). Briefs by the Attornev

General of the State of Nlorida were subsequently filed

and on May 28, 1959, the United States Court of Appeals

entered its order denying the petition for rehearing (R.

42). No opinion was rendered in connection with the

order denying rehearing. Petition for certiorari was filea

by the petitioner and on October 26, 1959,.an order was

_ entered by this court allowing the certiorari (R. 42). Judge

Rives of the Circuit Gourt of Appeals’ dissented. in the

judgment of Apri[ 8, 1959 (R. 38), atid in the refusal of the

Circuit Court to grant the petition for rehearing (R. 42).

John Clay, the petitioner, purchased the insurance ee

. policy Plaintiff's Exhtbit 1 (R. 5) through the respondent's ad

agent, Bartholomay & Clarkson of Chigégo on April 22,

1952, being. then a resident of the State’of Illinois (R. 14).

The petitioner removed himself:and family and the personal *

property covered by the policy to the State of Florida soon |

’ ‘+ alter the policy was issued in 1952 (R. 14) and at the time 3

of. the trial had ‘been a resident and citizen of Florida since / .

1952 (R. 14).

In the latter part of 1954 and thé early part of 1955.

the petitioner was living with his family on a ranch iv:

Lake Hacbor, Florida (R. 9), and certain personal effects

covered by the policy were located in the dwelling house

st the Lake Harbor address during the. latter part of 1954

and early part of a tape 10). In December, 1954,‘and’

January, 1955, articles, the value of which recovery was

sought in the original suit, disappeared from the dwellinz

at Lake Harbor, Florida (R. 10-11), and in addition ‘to the

‘personal property removed from the house, certain personal

property was destroyed (R. 11, 12, 13, 14). The Judge

charged the jury that the policy covered vandalism, mali ¢

cious mischief and losses of the type described in the testi-

‘

_ mony , and defined eeiny under the Florida law (R. 23...

The jury brought ih,its verdict granting the petitioner

damages in the sum of $6,800 based upon the evidence™

presented at the trial (R. 6). |

ARGUMENT.

' Along with many of its sister states (Carnahan, Con-

flict of Laws and Life Insurance Contracts (1958), para

graph 137, page 657, 7 Couch on Insurance, paragraph 1629,

_ ‘page 5704), the State of Florida has by statute undertaken

to forestall thé insertion in insurance policies of stipulations

for the bringing, of suit within a limited time. Florida's

Statute declares stipulations in contracts to be “illegal and

void” and provides that “No court in this state shall give

effect to any provision or stipulatiori of the character men-

tioned in this section.” (95.03, Florida Statutes 1957, See

Cofstitutiohal Provisions and Statutes Involved).

‘The respondent, Sun Insurance Office, Limited, which

does busigess in both Illinois and Florida, in an attempt to |

derive tk greatest possiblé advantage from the more lax os

laws of Illinois, placed a clause in the insurance contract —

which in effect attempts to prohibit the institution of a

suit, action or. proceedings for recovery under the policy,

unless the same be commenced within 12 months next .

after ‘discovery by .the assured of the occurrence which

gives rise to the claim-(R. 3) also (R. 5, Plaintiff's Exhibit

1). e

The gtneral rule in reference to tha inclusion in in-

surance policies of such provisions is stayed in} 29 Am. Juk. ~

(Insurance, paragraph 1394), page l@ttohs follbws: “* * *

Where the statutes of the forum make void all agreements.

whereby the time for the bringing of actions is fixed at

: ° 8 > :

a period, less than that’ prescribed by law, a contractual

‘stipulation made in another jurisdiction is not, available

as a defense.” as

This proposition is supported in various state courts

by. the following decisions: Galliher v. State Mutual

Life Insurance Co., 150 Ala. 543, 43 So. 833 (1907); Asel

y. Order of United Commercial Travelers, 197 S.W.2d 639

(Mo. 1946); Gulf Insurance Co. v. Holland Construction

Co., 236 S.W.2d 1003 (Ark. 1951); contra: Union Central ,.

Life Insurance Co. v. Barnes, 175 Ky. 364, 194. S.W. 339

(1917) (no statute involved). ecuweeies ‘ -

_ The court in its/decision of April 8, 1959, in which it

held that a violatio Re Sei would result if Sec-

tion 95.03, Florida Statu 957, were applied to the in-

‘surance contract in question relied upon Home Insurance

.~Company v. Dick, 281 U.S. 397 (1929% Holderness v. Ham-

ilton, Fire Insurance Company of New Yorky 4 F. Supp. —

(145 (S.D. Fla. 1944); Hartford Accident Indemnity

Company v.-Delta Pine Land Company, 292 U.S. 143

(1933). /

However, none of the above 3 cases take“the arbitrary .

position that the place of contracting vet and in |

all circumstances controls the validity of stipulations as

to the time within which suit must be brought. In each

of these cases the court takes the position that om the

particular facts of that case sufficient connections were

lacking between the state of the forum and the contract to

justify the forum imposing its public policy considerations

upon the contract. Each of these ‘cases is clearly distin- _

guishable from the case at bar.

* In the case of Home Insurance Compariy v. Dick, supra,

the forum had no connections whatsoever with the con-

tract. The contract was made in another jurisdiction, the

; Jeo oS

loss occurred in another jurisdiction afid the risk under

‘ the insurance policy was never. within.the jurisdiction of

- the forum. In the Holderness case, supra, the forum was

merely the place in Avhich the suit happened to have been

instituted. Holderpess was’ a sojourner in the State of

Florida and merely used the forum as a convenience. ‘The

insurance policy was entered into in’ North Carolina, the

property insured was situated in North Caren and the

loss occurred in North Carolina.

In the case at bar, however, throughout substantially

all of the contract riod, the property insured was in the

State of Florida. /The loss of the property occurred in.

Florjda and consequently the cause of action arose in mais f

state. Florida was therefore, the “natural” or “rormal’-

forum. In addition ‘the insured was a bona fide resident’

of Florida at the time the cause of action arose and at that

time the insurer was admitted té do business in PYorida.

The only ‘connection of the State of Illinois with the con-

_ tract was that the contract was issued in Illinois. If it-can

be asserted that there sare any circumstances\in which a

state, other than the state in which a contract was made,

has suffitient interest in the contract to impose its statutes . >

to nullify the contract stipulation on the basis of its public

policy, then the case at bar presents sich’ sityation., The

-insurance policy in question (R. 5;\Plaintiff’s Exhibit 1)

is designated by the respondent, Sun Insurance Office,

Limited, as an —— Personal Property Floater Policy

.(World Wide)”S By so designating the policy it is ap-

parent that the respondent fully realizes’ that the in-

dividuals insured and the property insured under the

‘ policy may be located in any jurisdiction in the world.

The citizenship of the insured is not considered and it

can be reasonably concluded tha under’: such a policy

it woutt b be impossible to limit i place of the forum

: to the State of Illinois. The State of Florida, prior to

1913, was attracting residémts. from various states of the

Union and it became apparent to the legislative authorities

that unless they established by law the policy of the.

State of Florida in reference to contracts entered into in

other States, that the situation would be so confusing

that it would be impossible for the judiciary of the State

of Florida to arrive at reasonable and uniform conclusions

in matters | presented where contracts from other states ~

were involved, and where the limitations’ were ‘not uni-

form. Consequently the Legislature in 1913 clearly stated

the policy of the State of Florida toward the attempt

by contracts to provide limitations contrary to the Stat-

ute of Limitations of the State of Florida. ..The Legisla-

.ture,apparently took the position in 1913 and ‘each suc-

ceeding Legislature thereafter has affirmed that an agree-

ment fo fix a period of limitXtions by/contract is a matter

which relates to the administration of justice and is. not

entitled to the same protection accorded: to ordinary con-

tractual provisions (Cf. Carbon Black Export v. The SS

Monrosa, 254 F.2d 297° (5th Cir. 1958), cert. denied -359

U.S. 180 (1959)). | .

¥ Apparently, the a Pine Land Company case, supra,

influenced the Dijstrict Court because of the apparent

similarity of the facts tn that case > % the facts of the case avs

bar. The State of ‘Mississippi where the suit was brought

has a statute similar to Section 95.03, Florid& Statutes of

1957, and the cause of action apparently argse in the State

of Mississippi. Howéver, other factors. in that case are

not in any way similar to the facts in the case at bar. In

the Delta, Pine Land Company case the risk was not a

risk of property loss in which there was a situs of the

property—the risk was one involving the honesty of em-

ployees which employees were located in several states.

~~.

The primary difference between the Delta Pine Land

Company case and the case at bar is that the former did

not involve a contract stipulation involving the time

within which suit must be brought; the case involved

a stipulation requiring that-a claim must be presented

to the insurer within 15 months after the termination

6f the suretyship (See Appendix A). Thus the holdin

in the Delta Pine Land Company case cannot be con-

sidered to be a holding. directly in point, as a contract

stipulation regarding the time wathin which suit must be

brought was not at issue in that case. The language in

the Delta Pine Land Company case, however, is most_

__important. The court said that the question is basically:

one of “the relative importance of—the interest--of—the—

forum as contrasted with cause created at the place of

the contract * * *.” (292 U.S. 143).

In the case at bar the property insured was lecated

‘in Florida throughout most of the policy period (R. 20-

21). The insurer was doing business in the State of *%

Florida during all of the policy period, the loss occurred

in Florida, the: investigation of the loss was made in

Florida by agents of the. insurance company.

A contract of insurance is not an ordinary bilateral

contract. There is no “meeting of the minds” between

both parties on all of the policy provisions. A contract of

insurance is a contract prepared in its entirety by the in-.

surer and is accepted by the insured. , He has no control

whatsoever over any of the terms of the policy. The only

protection an insured has against unfair, unreasonable or

improper provisions in the contract of insurance is the

fact, that as in the state of Florida, in most states regula-

tio’ is imposed on the insurer in regard to policy forms. 4

Such form contracts are subject to the public policy of the

forum (Cf..The Kensington, 183 U.S. 263 (1901)). |

The Court of Appeals in: the | case at bar’ discounted

the interest of the State/of Florida in the case at bar. It

in effect held that where a state has significant interest

involved it may impair property rights created in other

states. It is hard to understand how a state could have

more interest in a contract than the State of Florida has

in the contract of insurante upon which the case at bar

is based. The State of Florida was so involved in the case

at bar that the right of cee eee to proceed at all in

the courts of Illinois is questionable. The only forum hav-

ing proper jurisdiction was some forum within the State of

Florida, and bound by the public policy of the State of

Florida.

The respondent was at the time of the issuance of the ~

policy and at the time that the loss occurred under the

policy, qualified under the laws of the State of Florida

to transact business: within the state, and therefore, was

in the same position as a corporation whose charter had

been issued by the State of Florida. Apparently the fact

of incorporation under the laws of a given state results

in a sufficient interest on the part of that state to dictate

a choice of its laws, over those of a foreign forum in

determining the rights of those who have contracted with

the said corporation. This argument is clearly stated in

Ex rel. United Commercial Travelers v. Wolfe, 331 US.

586 (1947). While the Wolfe case deals with a fraternal

benefit society andthe rights of members of a society, the

same rule should be applied to the insured-under a policy

such as that sued upon in the case at bar.

This Court in Pink v. A.A.A. Highway Express, 314

U.S. 210 (1941), rehearing denied 314 U.S. 716 (1942),

and in Watson v. Employers Liability Assurance Corpora-

tion, 348 U.S. 66 (1954), rehearing denied 348 U.S. 921

(1955), was in favor of applying the law of the forum. Ap-

parently, the Circuit Court took little. notice that this

Court had distinguished the Hartford case and held in

favor of ‘applying the lex fori. In fact, in its opinion:the

Circuit Court notes several cases which argue convincingly °

for a decision contrary to the findings of the Court.

Hoopeston Canning Co. v. Cullen, 318 U.S. 313 (1943

considers the well established rule that the state has a par-

ticular interest in the insurance of property within its

borders, hence its power to regulate such matters is ex-

pansive. %

In Hanson v. Denckla, 357 U.S. 235 (1957), rehearing —

denied. 358 U.S. 858 (1958), a case originating in the same

jurisdiction as the case at bar, the court cast serious doubts

upon the precedent value of the Case, a.

the Denckla case it appeared that there were insufficient

contacts with the state of Florida to allow it to. assume

jurisdiction over nonresidents but unquestionably had the

contacts been sufficient to sustain jurisdiction, the law

of Florida could have been applied. In the case at bar

all of the contacts were with the state of Florida with the

exception of the delivery of the premium monies to the

agent for the respondent in Chicago (R. 20-21-22).

Ifvthe interests of the forum are sufficient, neither

the due process clause nor the full faith and credit clause

of the federal constitution require the forum to apply the

normal conflict of laws-fule. It is difficult to see how the

majority in the 'case at bar can be considered sound in

light of McGee v. International Life Insurance Company,.

355 U.S. 220 (1957). In the McGee case a policy of insur-

ance was issued in Texas and mailed to California from

whence the assured mailed premiums to an out-of-state

office relying upon the state's interest in insurance matters

and with the showing of no otheggeonnection with the

state of California. The Supreme Court held that Cali-

13 ; ‘ ;

fornia could obtain jurisdiction over the foreign corpora-

‘tion by substituted service. In the case at bar, the de-

fendant obviously did business in the state, the loss oc-

curred and was investigated in State of Florida. It

seems that the requirements of fke-McGee case have been

met. ;

b In the case at bar the inter¢sts of the State of Florida |

are superior to the interest of ‘any’ other state because —

Florida. was the place of performance of the contract; it

was the place in which the cause of action arose; it- was

the state of the policyholder’s domicile; the insurance com- —

pany was subject to the regulation of its business by

Florida, and finally because, coniracts of insurance are a

type of commercial eeseever’ tn whitchreguietion jr the —————<_

public interest is essential.

The only case directly in point with the case at bar

was before the Supreme Court of Alabama. The State

of Alabama has a law similar to that of the State of Florida,

to wit: Alabama Code of 1896, paragraph 2802 (Constitu-

tional Provisions and Statutes Involved). In the case of

Gallaher v. State Mutual Life Insurance Company, 150 ©

Ala. 543, 43 So. 833, the Supreme Court of Alabama held

that the law of the forum controlled in a suit similar to

the case at bar. In the Gallaher case the contract of in-

_ surance had been entered into in the State of Georgia and

the insured parties had removed themselves to the State

of Alabama and the question of damages involved in the

suit occurred in the State of Alabama. The Alabama court

held in the Gallaher case that the lex loci contractus must

govern as to the validity, interpretation and construction

of the contract but the remedy to @nforce it or to recover

damages must be. pursued according to the law of the

forum where the suit is brought. The Alabama court r

further stated that where the law of anothér state is re-

‘lied on as a defense to a suit brought in this state it must

‘be shown that according to the léx loci contractus the

contract was invalid or, if once valid, that it has hecome

extinguished and therefore is not in legal contemplation

a contract. If the foreign law’does not affect the contract

itself but only the remedy to enforce it, it cannot be re-

garded and all remedies on contracts whether made in

or out of the state must be governed by the laws when the

suit is brought without regard to the remedies afforded

by the laws of other countries.

In reply to the Alabama suit the Circuit Court took

the position that the Alabama Supreme Court assumed

Se ee ene

‘plicable statute of limitations rather than the choice of the . :

substantive Jaw governing the validity of @he contract it-

self and even went ¥o far as to say that possibly the Florida

courts would reach ‘the same conclusion that the Ken-

_ tucky court reached in Union Centrak Life Insurance Com-

- pany v. Barnes, 175 Ky. 364, 194 wn 339. The State of

Kentucky has no law similar to the law of the State of

Florida or the law-of the State of Alabama. The court

seems to have gone quite far afield in assuming that the

courts of the state of Florida would take a position con-

trary to the law of the state of Florida. a -

Although it would appear that the pemslieidion of Sec-

tion 95.03, Florida. Statutes, to contracts made in other ”

states has not been decided in the Florida courts, the court

below failed to distinguish between the pronouncements of

the Florida courts as to the application of Florida statutes

en public policy to contracts valid in the state where

made which dealt with contracts other than insurance

and contracts of insurance. The lower court referred to

certain cases, to-wit: Connor v. Elliott, 79 Fla. 513, 85 So.

164, cert. dismissed 254 U.S. 665 (1920); Sovereign Camp,

Woodmen of the World, v. Mixon, 79 Fla. 420, 84 So. 171 _

(1920); Equitable Life: Assur. Soc. of U.S.A. v.. McRee,

75 Fla. 257, 78 So. 22 (1918); American Fire Ins. Co. v.

King Lumber & Mfg. Co., 74 Fla. 130, 77 So. 168 (1917),

aff'd 250 U.S. 2 (1919), and accepted these cases as

demonstrating the Florida court’s tendency to refrain from

attempting to apply Florida Statutes or the court’s own

notion-of public policy to foreign contracts which are valid

where entered into. ie <i

With the exception of Sovereign Camp, Woodmen of

the World, case, these cases deal with the substantive law.

The Sovereign: Camp, Woodmen of the World, case, while

—_—-dealing-with Section-95.03, Florida Statutes, is not remotely =

. On point with the case at bar since it refers to a case where

the policy was written in Fl@rida by a Florida agent, for a .

Florida resident. This case simply confirms the constitu-~

tionality of Section 95.03, Florida Statutes.

The Connor -v. Elliott case deals entirely with real

property and in that case the Florida court held that con-

tracts dealing with real estate or immovable property are

subject to the law of the locagipn of the property.

It seems to be the general rule that the laws of the.

lex leci are to govern all questions affecting the validity,

nature and construction of the contract but the law of the

place where the contract. is sought to be enforced must

govern as to the remedy Leroy v. Crowninshield; 2 Mason

(U.S. 157 Fed. Case 8269), Medbury v. Hopkins, 3 Conn.

472, Lincoln v. Battele, 6 Wendell 475.

16 ©

CONCLUSION.

For the foregoing reasons it is respectfully submitted

that the validity of Section 95.03, Florida Statutes 1957,

should be upheld and its application to the circumstances

of this case by the United States District Court be con-

firmed; that the findings of the United States Court of Ap-

- peals for the Fifth Circuit should be reversed and the case

remanded with instructions that the judgment of the Dis-

trict Court be affirmed.

Respectfully submitted,

_W. Terry Gipson, :

209 South Olive Avenue,

: West Palm Beach, Floritia,

Attorney for Petitioner.

Gipson & Grpson,

PASCHAL C. REESE,

209 South Olive Avenue,

West Palm Beach, Florida,

Of Counsel:

* CERTIFICATE OF SERVICE.

» The undersigned of counsel for Petitioner certifies that

a true and correct copy of the foregoing Brief of Petitioner

has-been served on Eugene A. Leiman, Esq., c/o Reir,

Mound & Cotton, 116 John Street. New York 38, New

York, attorney for Respondent, by mailing Air Mail,

Special Delivery with postage prepaid, this 13th day of

January; 1960. = :

£"

APPENDIX A. ~

Contract stipulation.from Hartford Accidgnt and Ir-

~demnity Co. v. Delta Pine Land Company (190 So. 206):

“Any claim hereunder must be duly made upon

the surety within fifteen (15) months afte} the ter-

mination of the suretyship for the defaulting employee.

- and -no- suit, action, or proceeding shall be brought

‘under by the employer against the surety after tne

expiration of twelve (12) months after the filing of

® proof of loss as abové reqitired, or, in case such limita:

tion be void under the law of the place governing

struction Hereof then within the shortest oe

limitation permitted by such, law.” Pe

-~.

“ Office-Supreme Court,"U.S.

LIBRARY “oF -OFILED

SUPRE!M. COURT. U. S _ SAN 18-1950 J.

j— R. BROWNING, Cork |

- SUPREME COURT a

OF. HE ,UNITED STATES — )

Arie TERM, 1968.

} Li mat fear

L s Ne. 349

“JOHN CLAY, eae ae ce

om Petitioner,

Vs.

SUN INSURANCE OFFICE: LIMITED.

, Respondent, a

ON WRIT OF CERTIORARI TO THE -

UNITED STATES COURT QF APPEALS, .

FOR THE FIFTH CIRCUIT \

BRIEF-OF THE STATE OF FLORIDA, \

: AMICUS CURIAE b

, RICHARD W. ERVIN

: . Attorney General of

’ ‘the State of Florida |

ROBERT J. KELLY

Assistant Attorney Generali

of the State of Florida

Amicus Curiae

Capitol Building

. Tallahassee, Florida

GQ EE

L '

TOPICAL INDEX

ve bef cae | Page

STATEMENT\OF THE CASE. .u.0.......ccc0sssssssssseeeeeeee 1

_ STATEMENT OF THE FACTS....00000.....-. is Agee 2

IIE oasis. Mena: <dheteans

CONCLUSION ooo oaco-csecvsieess Se ccesuns CLEAR |

PO cia ncevceeseccceniets perce eG |

CERTIFICATE OF SERVICE. ...0....0.cc0ccccccccsssssssssseee 12

, a Z

AUTHORITIES

Cas&

Alaska*Packers Association vs. Industrial PEPEN .

Commission, 294 U.S. 532.........cssssssseacsssseesssseeeseesnee Qe

Asel vs. Order of United Commercial Travelers

CRs BOGS) TOT BW. Be GOO... cvicncccsccccceecsc0sc0 5 a5cees 4

Carbon Black Export vs. The SS Monrosa (5th Cir.)

254 Fed. 2d 297, cert. dismissed.__U.S,____.,

I saiphnavavectacivas 8

Galliher vs. State Mutual Life Ins. Co., 150 Ala. "543,

i eeaiddumabarivanscecnqess 4

Gulf Insurance Co. vs. Holland Construction Co.

(Ark. 1951) 236 S.W. 2d 1003..........000000000e ee. 4

Hartford Accident & Indemnity Co. vs. Delta Pine

Land Company, 292 U.S. 143..,........0....... PURSES IEE NEP 5, 7

Holderness vs. Hamilton Fire Insurance Co. of N.Y.,

RN I Or a TUNED, BO Reccccnceinesdecercecsssosn sess syosiveses 3, 6

Home Insurance Co. vs. Dick, 281 U.S. 397................ 5, 6

? °

ii !

: Page

McGee vs. International Life Insurance Company,

SEE RF CRONE Dias tisiceecesdiscescsveccensnsendgmsucouineackocten 5, 9

The Kensington, 183 U.S. 263...........cc.sccssweeeene veoge

Union Central Life Insurance Co. vs. Barnes, 175

Ky. 364, 194 S.W. 3339........ sc aiaasteatcobaeainad takes ie 4

Young vs. Masci, 289 US Bee eiwenthecpaate cekah

STATUTES 6

Page

Section 95.03, Florida Statutes, 1957........000000000. 7. ano

Illinois Ann. Stat., 1937, Chap. 73...........000000..... me ile ‘3

pA rm: :

| ' ha Page -

American Jurisprudence) Vol. 29, Section 1394,

NO DOGS ii cecsccstthbnish ner Heals} ental avateateneiontanbinidAcaawie ee

Carnahan, Conflict. of awe and Life Insurance

Contracts (1958) Section 137, page 657......... ssauibibi 3

Couch on Insurance, Vol. 7, Section 1629, page 5704 3

SUPREME COURT

OF THE UNITED STATES

eat No. 349 °

JOHN CLAY,

yh | Petitioner,

ae VS. pear

‘SUN INSURANCE OFFICE LIMITED, |

Respondent..

ON WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUM™

| BRIEF OF THE STATE OF FLORIDA,

AMICUS CURIAE

- | STATEMENT OF THE CASE _

' This brief is submitted on behalf,#f the State/of Flor-

ida as amicus curiae, by its Attorney General. It is the

position of the State of Florida that the United States

» Court of Appeals for the Fifth Circuit’s construction of

Section 95.03, Florida Statutes, 1957, and the said Court's

holding as to the limited applicability of said section

are seriously prejudicial to the interests of the State of

¢ . Florida in its attempts to regulate insurance on lives and

property of citizens of Florida.

‘

iin. was instituted by Petitioner on a contract of

insurafice. The respondent's defense of a policy stipu-

(

lation requiring suit within twelve months was rejected

by the District Court on the grounds that Section 95.03,

Florida Statutes, 1957, made said stipulation of no effect. —

Judgment was had by petitioner on the policy.

On appeal taken from judgment of the District Court,

The United States Court of Appeals for the Fifth Circuit

rendered its opinion reversing the judgment of the Dis-

trict Court and remanding the case for entry of judg-

ment in favor of respondent. (R. 37-38.) On petition for

rehearing briefs by petitioner and the Attorney General

of the State of Florida as amicus curiae on behallof the

State of Florida, (R. 38-41) were filed and the United

States.Court of Appeals for the Fifth Circuit entered an

order denying the petition for rehearing (R. 42). This

court on petition for certiorari filed by the petitioner on

- October 26, 1959, entered an order allowing the certi-_—

orari (R. 42). |

. STATEMENT OF THE FACTS.

In April 1952, the Petitioner purchased from an agent

the respondent in Chicago, Illinois, a policy of in-

surance covering the petitioner’s personal property

against loss during a term of three years (R. 5). The

policy was to cover loss occurring anywhere in the

world €R. 5). The petitioner in April 1952, was a resi-

dent of the State of Illinois (R. 14). The respondent,

incorporated in Great Britain, was and is admitted to

do business in the states of Illinois and Florida (R. 2).

In July 1982, petitioner moved,to Florida and became—

a resident of that staté (R. 14). The respondent’s agents

were informed of petitioner’s residence in Florida (R.

21). In November, December 1954, and January 1955,

petitioner sustained losses to his personal property (R.

15). The losses occurred in Florida (R. 10). Suit was

brought in Florida on the policy of insurance in May

1957 (R. 1). | s

: ARGUMENT as

SHOULD A FEDERAL COURT, SITTING IN

FLORIDA, RECOGNIZE A “SUIT CLAUSE” CON-

TAINED IN A PERSONAL PROPERTY INSUR-.

ANCE POLICY ISSUED IN ILLINOIS BUT UN-

DER WHICH LOSS OCCURRED IN FLORIDA,

THE INSURED THEN BEING A RESIDENT OF

FLORIDA, AND THE INSURER BEING AD-

MITTED TO DO BUSINESS IN FLORIDA?

Along with many of-its sister states,' the State of

Florida has by statute undertaken to forestall the in-

sertidn in insurance policies of stipulations for the bring-

ing of suit within a limited time. Florida’s statute de-

clares stipulations in contracts to be “illegal and void”

and provides.that “No court in this state shall give ef-

fect to any provision or stipulation of the character men-

tioned in this section.’* The Illinois statute deals only

with life insurance contracts.*

The respondent, Sun Insurance Office, Limited, which

does business.in both Illinois and Florida, in an attempt

1See Carnahan, Conflict of Laws and Life Insurance Contracts

bs Section 137, page 657; 7 Couch on Insurance, Section 1629, page

2Section 95.03, Florida Statutes, — See Appendix.

3Illinois Ann. 'Stat., 1937, Chap. 73.

to derive the greatest possible advantage from the more

lax laws of Illinois, placed in the insurance contract in

question the following clause:

“Suit Clause: No suit, action or proceeding for

the recovery of any claim under this Policy shall be

sustainable in any couryof law or equity unless the

same be commenced within twelve (12) months

next after discovery 6y the Assured of the occur-

rence which gives rise to the claim.. Provided, how-

ever, that if by the laws of the state within which

this Pelicy is issued such limitation is invalid, then

y such claims shall be void unless such action, suit

r proceeding be commenced within the shortest

limit of time permitted by the laws of such state to

be fixed herein.”

» The general rule is stated in 29Am. Jur., Insurance,

Section 1394, page 1041, as follows: ee

“. .. Where the statutes of the forum make void

all agreements whereby the time for the bringing

of actions is fixed at a period less than that pre-

scribed by law, a contractual stipulation made in an-

other jurisdiction is not available as a defense.”

F 4

This proposition is supported by the decisions in Gal-

liher vs. State Mutual Life Insurance Co., 1505Ala., 543,

43 So. 833, Asel vs. Order of United Commercial Travel-

ers (Mo. 1946) 197 S.W. 2d 639; Gulf Insurance Co. vs!

Holland Construction Co, (Ark. 1951) 236 S.W. 2d 1003;

contra Union Central Life Insurance Co. vs. Barnes, 175

Ky. 364, 194 S.W. 339 (no statute involved).

The court in its opinion of April 8, 1959 (R. 28), held

that a violation of due process would result if Section

95.03, Florida Statutes, 1957, were applied to the insur-

ance contract in question. In reaching this conclusion

the court relied upon Home Insurance Company vs. Dick,

281 U.S. 397; Holderness vs. Hamilton Fire Insurance

, Company of New York, S.D. Fla., 54 Fed. Supp. 145;

Hartford Accident and Indemnity Company vs. Delta

Pine Land Company, 292 U.S: 143. None of these three

cases takes the arbitrary position that the place of con-

tracting necessarily and in all circumstances controls

the validity of stipulations as to the time within which

suit must be brought. In each of these cases the court

takes the position that on the particular facts of that

case, sufficient connections were lacking between the

state of the forum and the contract to justify the forum

imposing its public policy considerations upon the con-

tract. Each of these cases is clearly distinguishable from

the case at bar. .

If the interests of the forum are sufficient, neither the

due process clause nor the full faith and credit clause

of the federal constitution require the forum to apply

the normafconflict of laws rule. It is difficult to see how

the majority in the case at bar can be considered sound

in light of McGee v. International Life Insurance Com-

pany, 355 U.S. 220 (1957). In the McGee case a policy of

insurance was issued in Texas and mailed to California

' from whence the assured mailed premiums to an out-of-

- state office relying upon the state’s interest in insurance

matters and with the showing of no other connection

with the state of-California. The Supreme Court held

that California could obtain jurisdiction over the foreign

corporation by substituted service. In the case at bar,

the defendant obviously did business in the state, the loss

occurred and was investigated in the State of Florida,

It seems that the requirements of the McGee case haye ©

been mét. pte

In the case/of Home Insurance Company vs. Dick,

supra, the forum had substantially no connections with

the contract /whatsoever. The contract was made in

another jurisdiction, the loss occurred in another juris-

diction, and the risk under the insurance policy. was

never within the jurisdiction of the forum. Similarly

in thé Holderness Case, supra, the forum was merely

the place in which the suit happened to have been insti-

tuted. In that case the insurance policy was entered

into in North Carolina, the property insured had its situs

in North Carolina, and the loss occurred in North Caro-

lina. In that case Florida was merely the forum and

nothing more.

In the case at bar, however, throughout substantially

all of the contract period, the property insured was in

‘the State of Florida. The loss to the property occurred

in the State of Florida and consequently the cause of

action arose in that state. Florida was therefore the

“natural” or “normal” forum. In.addition the insured

was a bona fide resident of the State of Florida at the

time the cause of action arose and at that time the in-

surer was admitted to do business in the State of Florida.

The only connection. of the State of Illinois with the con-

. tract was that the contract was issued in Illinois. If it

can be asserted that there are any circumstances in

which a state, other than the state in which a contract

was made, has sufficient interest in the contract to im-

pose its statutes_to nullify a contract stipulation on the

basis of its public policy, then the case at bar re

such situation.

The facts of the Delta Pine Land Company Case, su-

pra, are more similar to the acts of the case at bar. In

the Delta Pine Land Company Case the cause of action

apparently arose in the State of Mississippi where the

suit was brought and in which a statute similar to Sec-

tion 95.03, Florida Statutes, 1957, was in existence. Cer- -

tain other factors in that case, however, are not identical

with the case at bar. In the Delta Pine Land Company

Case, the risk was not a property loss in which there

was a situs of the property. The risk was one involving

the honesty of employees which employees were located

.in several states. In the case at bar the property insured

had a situs in the State of Florida and the risk was all

concentrated in that state. However, the primary differ-

ence between the Delta Pine Land Company Case and

the case at.bar is that the Delta Pine Land Company Case

did not involve a contract stipulation involving the time

within which suit must be brought. That case involved

a stipulation* requiring that a claim must be presented

to the insurer within fifteen months after the termination

of the suretyship.

Thus the holding in the@ Delta Pine Land Company

Case cannot be considered to be a holding directly in

point, as a contract stipulation regarding the time within

which suit must be brought was not at issue in that case.

The language of that case, however, is most important.

‘See Appendix.

; 8

The court said that the question is basically one of “the

relative importance of the interest of the forum as con-

trasted with those created at the place of the contract,

.” 292 U.S. 150.

In addition to the factors in the case at bar that the

property insured. was located in Florida throughout most.

of the policy period, that the insured was a citizen of

Florida throughout most of the policy period, that the

insurer was admitted to do business in the State of Flor-

ida during all of the policy period, and that the loss

occurred in Florida, several other factors pertaining to

this particular type of contract are relevant. A contract

of insurance is not an ordinary bilateral contract. There

‘is no “meeting of the minds” between both parties on

all of the policy provisions. A contract of insurance is

a contract prepared in its entirety by the insurer and it

is accepted by the insured. He has no control whatsoever

over any of the terms of the policy. The only protection

an insured has against unfair, unreasonable or improper

provisions in the contract of insurance is the fact that

in most states regulation is imposed on the insurer in

regard to policy forms. Such form contracts are sub-

ject to the public polie# ef the forum. Cf. The Kensing- -

ton, 183 U.S. 263.

A final consideration is that an agreement to fix a

period of limitations by contract is a matter which re-

lates to the administration of justice and is not entitled to

the same protection according to ordinary contract pro-

visions. Carbon Black Export vs. The SS Monrosa

(Sth Cir\) 254 Fed. 2d. 297, cert. dismissed, __ __U.S.

__—, 3 L. Ed. 2d: 723. °

s 9

If the interests of the forum are sufficient neither the

due process clause nor the full faith and credit clause of

the Federal Constitution require the forum to apply the

normal conflict of laws rules. Cf. Alaska Packers Asso-

‘ciation vs. Industrial Accident Commission, 294 U.S. 532; -

‘Young vs. Masci, 289 U.S: 253; McGee v. International

Life Insurance Company, 355 U.S. 220 (1957). In the

case at bar the interests of the State of Florida are supe-

rior to the interests of any other state because Florida

was the place of performance of the contract, it was the

place in which the cause of action arose, it was the state

of the policyholder’s domicile, the insurance company

was subject to regulation of its business by Florida, and,

finally, because contracts of insurance are a type of com-

mercial endeavor in which regulation in the public in-

terest is essential.

10 A

| CONCLUSION

The opinion on the appeal taken from the judgment

of the District Ceurt rendered bythe United States Court )

of Appeals for the Fifth Circuit, dated April 8, 1959, con-

_ Struing Section 95.03, Florida Statutes, 1957, in such

‘manner as to limit the applicability of said section to

contracts of insurance is seriously prejudicial to the in- :

terests of the State of Florida in its attempts to regulate

insurance on lives and property of citizens of Florida,

and should be reversed. : '

‘

‘~

~ RICHARD W. ERVIN *;

Attorney General of the

State of Florida

“ROBERT J. KELLY

Assistant Attorney General

of the State of Florida

« Amicus Curiae

Capitol on

. Tallahassee, Florida

gee

APPENDIX

(1) Section 95.03, Florida Statutes, 1957:

“Stipulations in contraet shortening period-df lim-

itation illegal.—All provisions and stipulations con- |

tained in any contract whatever entered into after: -

May 26, 1913, fixing the period of time in which

suits. may be instituted under any such tontract, or

upon any matter growing.out of the provisions of .

any such contract, at a period of time less than that

provided by the statute of limitations of this ‘state,

are hereby declared to be contrary to the public

* policy of this state, and to be illega] and void. No

. court in this state shall give effect tg any provision

or stipulation of the character mentioned in this

(2) Contract stipulation from Hartford Accident and

“Indemnity Co. v. Dette Pine Land Company (150 So.

206 ): : .

“Any claim herevmder must be duly made upon

the surety within: fifteen (15) mon after the

termination of the suretyship for the defaulting em-

ployee, and«rid suit, action, or proceeding shall be

brought hereunder by the employer against the

surety after the expiration of twelve (12) months

after ‘the filing of proof of loss as above required, or, |

in’case such limitation be vaid under the law of ‘the

place governing construction hereof then within the

shortest period of limitation permitted by such law.”’

— 12

. CERTIFICATE OF SERVICE

1, Robert J. Kelly, Assistant Attorney General of the

State of Florida, do hereby certify that I have mailed

true copies of this brief and appendix to Messrs. James |

A. Smith and Joe C. Brannen, 506 Ainsley Building,

Miami, Florida, attorneys for respondent, and to Mr.

Paschal C.-Reese, 209 South Olive Avenue, West Palm

‘Beach, Florida, attorney for petitioner, this-_____day of

January, 1960. :

ROBERT J. KELLY

Assistant Attorney General

of Counsel, Amicus Curiae

a tre. 6 | Othce-Supreme Court,

a Le FILED

RT yu .: | FEB 12 1960

z= ———

is Tonnes R. BROWNING, Clerk

IN THE :

Supreme Court of the United States

OCTOBER TERM, 1959

A vy

No. 349

JOHN CLAY,

Petitioner,

SUN - INSURANCE OFFICE, LIMITED,

Respondent.

ON WRIT OF CERTIORARI TO THE UNITED STATES

COURT OF APPEALS FOR THE FIFTH CIRCUIT

BRIEF FOR THE RESPONDENT

Evcene A. Lerman,

Attorney for Respondent,

116 John Street,

New York 38, New York.

Bert Corton, :

Leonarp S. Dome,

Horrense Mounp,

Rem, Mounp & Corron,

ant Canuneel

Cpetiomn FP VOmOmted : \i.0 65.5 cdc iedea cease cened dies

Constitutional Provisions and Statutes: Involved....

Statement ...cccececl lnk Vie Rie ads AGRE MORESO eM Oe

anes OF OR 5 on 5 cove csv wider siuhveuss

Argument:

Point 1—Under the Constitution, a ‘‘suit clause’’

\ in a personal property floater policy, issued in

Illinois to a resident of the state, which is valid

under Illinois law, may not be voided by a

Florida statute of general nature merely be-

cause the insured later becomes a resident_of

Florida and sustains a loss in that state......

~—--Porvr I1—Under the law of Florida, a general

statute voiding all provisions ‘‘contained in any

contract whatever’’, shortening the time to sue

to a period less than that provided by the statute

of limitations, does not apply to a contract of

insurance issued in Illinois to a citizen of-

BONE 4 hk kd ceca ndeacea bis eakneeueacataken

Porsr IlI—An ‘‘all risks’’ personal property

floater covering all members of the family resid-

ing in the same household does not insure one

spouse against deliberate acts of the other.....

CMe. gd citcu bus nuke ehakecks EARS Gag aa

I «siya dads tue escuues ies snnnedeasewarts

ao w tv

. Citations

Cases: ;

s ‘PAGE

Alaska Packers Ass‘n v. Industrial Accident Com-

meiesson, 294 U: S. S32 (99GS).. . ow eee cvess 15, 18

American Fire Ins. Co. v. King inate & Mfg.

Co., 74 Fla. 130, 77 So. ae, aff’d 250 U.S. 2 nd

SN ns is Cc dba ae aa one ees the Sew w Oe ees 35

Atlantic Coast Line R. R. v. Chase & Co., 109 Fla.

BE reer errr ers 25

Attorney General v. Netherlands Fire toe. Co.,

181 Mass. 522, 63 N. E. 950 (1902)...... ernie s 8, 33

Bellman v! Home Ins. Co. of N. Y., 178 Wis. 349, /

8 eS Pe ss Se eee 39

Bowers v. London Assur. Corp., 90 Pa. Super. 121

re re a tO iE ns oink Sapa Same cae wok 39

‘Bridges v. Commercial Standard Ins. -Co.; 252 8.

W. 2d 281 (Tex. Ct. Civ. App. 1952) ........ rae

Carroll v. Lanza, 349 U. S. 408 (1955) ....... a

Coderre v. Travelers Ins. Co:, 48 R. I. 152, 136

I ko os Se wines eues "9, 33

Connor v. Elliott, 79 Fla. 513, 85 So. 164, cert.

dismissed, 254 U. S.@65 (1920).............. . 32

Driscoll v. Kdison Light & Power Co., 307 U. S.

fee at ab eel cl Gada ic woes ae a0 «ye 29

Equitable Lite Assur. Soc. v. McRee, 75 Fla. 257, foes

A Ey aaa ieee deren 34

Galliher v. State Mutual Life Ins. Co.; 150 Ala. |

543, 43 So. NE ETERS FREE 20,34

Griesemer v. Mutual Life Ins. Co., 10 Wash. 202,

I I a ees uw 8, 33

_ Hanson v. Denckla, 357 U.S. 235 (1958) . Se ti eee 6,7, 27

Hartford Accident & iadeienity Co. v. Delta & Pine

Land Co., 292 U. S. 143 (1934) . .6, 7, 13, 14,16, 18, 19, 30

& Mie

. Fd PAGE

Hartzell v. Maryland Casualty Co., 163 Ill. App.

ET OT aR apap eR ah eid Cy oi 8, 32

Hess v. Pawloski, 274 U. S. 352 (1927)....:..... ieee

- Holderness v. Hamilton Fire’ Ins. Co. of N. Y.,

54 F. Supp. 145 (S. D. Fla. 1944) ............ 7, 13, 20

Homedns. Co. v. Dick, 281 U.S. 397 (1930)... .6, 8, 18, 20

Hoopeston Canning Co. v. Cullen, 318 U. S. 313 ;

SNL Soriraek Geen sees ce hekenen eee eee es 7,15, 18

Huddleston v. Dwyer, 322 U..S. 232° (1943): ..... 31

Hughes v. Fetter, 341 U. S. 609 (1951).......... 27

Illinois Life Ins. Co. v. Prentiss, 277 Ill. 383, 115

Nt eA SEO Teles Lave cca wAdlenesauweua ers |. 20

Johnson v. Mutual Life Ins. Co., 180 Mass. 407, 3

Re ye BG. 3), a et enaes f Es Ae 8, 33

Jones v. Fidelity & Guaranty Ins. Corp., 250 S. W.

9d 281\ (Tes. Ct. Civ. App. 1962) <i... 6 o50)085 39

Klemens v. Badger Mutual Ins. Co. of Milwaukee,

10 Fire & Casualty Cases 218 (Sup: Ct. Wis.

December 1, 1959). 2... cccssccecscvcsevcsses 39

Kosior v. Continental Ins. Co., 299 Mass. 601, 13

ie ae ee Ae CRO ead osc pucks ees comes ot , 8

' Langnes'v, Green, 282 U. S. 531 (1931).......... 31

- Magnusyy. Buttenmer, 11 C. B. 876 (1852)....... : 38

McGee v.: International Life Ins. Co., 355 U. S.

Mt Ea a Fee regan n he pyre Sone ete ee ete 25, 27

Mellon v. Federal Ins. Co., 14 F. 2d 997 (S. D.

She re ee) RAL ere ee eee RN ear a 9, 38

Monaghan v. Agricultural Fire Ins. Co., 53 Mich.

RS, SR Ws TE CED vs ev nies vane ceusuncva 39

Newtown Creek Towi ing Co. v. Aetna Ins. Co., 163 !

Bow 3. ROG GF i BO CBO ov ois vce es cc ce ec’ 38

. Osborn v. Ozlin, 310 US. 53 (1940). ........... 7, 15, 18.

Pacific Employers Ins. Co. v. Industrial Accident

~ Commission, 306 U. S, 493 (1939)............ 7, 15, 18

Power Mfg. Co. v. Saunders, 274 U. S.490 (1927).. 22

‘Radick v. Underwriters at Lloyals, London, 137

Pe Ge Bee a tn cvesiasabeacess - 8, 32

. Riddlesbargér v. Hartford Ins. Co., 7 Wall. (74

PAGE

MG IMI a cca 22.

Riding v. Travelers Ins. Co., 48.R. I. 433, 138 Aa.

FES; SAGER 9k knead oon open Redateslchaw ee erees 33

Ritterbusch v- Sexmith, 256 Wis. 507, 41.N. W. 2d °

GERI pk acess Cera Urrcteces Suc se Cnt ees 9, 33

Rosenthal v. New York Life Ins. Co., 304. U. Ss.

Se SE ok cb cea ce Oca bee Sa ees 31

Ruhlin v. New York Life Ins. Co., 304 U. S. 202

(1938)... eee ee cece vee e ee ceceesecscecsees He 31

Sovereign Camp Woodmen of the World v. Mixon, -

ye eS ae se) Se ne 35

Sternberg v. Merchants Fire Assur. Corp., 6 F.

Sapp. 541 (E.'D: Wis: 1994)... 5... dccaecteces 39

Storing v. National Surety Co., 56 N. D. 14, 215

Peg a ae CE Rh ko 4 hs CRP aoe A Maa ceed 34

Story Parchment Co. v. Paterson Parchment Paper’,

Os ae eB GO FIED os vs os hh eccesaceee 31.

Trichelle v. Sherman & Ellis, Ine., 259 Ill. App. :

BOO. NIDGO) ec cecanscccacs Ribak saaGbal ii¢e ae

Union Central Life Ins. Co. v. Barnes, 175 Ky. :

Sa, 198 Be. WE. ee COTE) on ha So ecicc ceeds 8, 21, 34

United Commercial Travelers v. Wolfe, 331 U. S.

toy eS Ding quta ele Re ery en yt ge 7, 28

United States v. Palmer, 3 Wheat. (16 U.S) 610.

CREE cvs caeean ven cee A eeys gee eae eure 8, 33

United States v. Ballard, 322 U. S, 78 (1943)...... 31

United States v. Delaware & Hudson Co., 213 U.S.

366 (1909) ...... PEPE ECTS ee roe fre eee 29 |

Walling v. General Sednatcten: Co., 330 U. S. 545

(NT Ae + Ren oue 31

Watson v. AEmploye rs Liability Assur. Corp., 348

AO. SAO (1954)... sees. 6,7, 15, 16, 17, 19, 21, 25, 33

Constitutional Provisions and Statutes:

Constitution of the United States, Amendment XIV 2, 13

Constitution of the United States, Article I, Sec-

ath OO ea iss cg civaakcc beeen ccdeucerenteisse 2

Constitution of the United States, Article IV, Sec-

i Bic. cs os eaensednaweene eels ace heeuee 1 2

Gal. Ins. Code, $$ 1610-1G20.... . dc. ac maseccccnens 25

Fla. Ins. Laws, § 642.03(n) (1953) (now Fla. Laws

1959, ch. 59-205, § 559, Fla. Ins. Code, § 559

(2900) } 035553 akira «ane am can eee eae ae ae

‘2 yla. Laws 1959,-ch. 59-205, § 346, Fla. Ins. Code,

SAB CRIN vc hccvcscncokanseinnesees ceca , 2

Fla. Laws 1959, ch, 59-205, § 352, Fla. Ins. Code,

T Bt | errr ey ter XA A pk es 26

~ Fla. Laws 1959, ch. 59- 205, § 592(4), Ya. Ins, Code,

GOORC4) COND) 5 co vivecac de desustcceveweees 9, 25

Fla» Rev. Stat., § 95.03 ig Daan ene 2-3, 6, 8, 10, 19, 21,

| 26, 28, 31, 32, 33, 35

Ill. Rev. Stat., ch. 73 (Ill. Ins. Code) (1959)

CBO SIG) a cn ivs} bas cavecereeceacsaaeune ee 11

§ 616; Clase 3(d) occ ccc ever evececsceeee 3, 8, 11

i ht ne ey eee pe ere rem Te 3, 8, 11

MED Srci5is ose hae Pree

See RIED ARTO Psy POR ee) Fee 12

637081 ....: Sev besbendersdgeteweneestenpes ear 12

PE oss oo iw aie Cea Geaeeen cee 3, 11

6 2006.28 i 6555 as, CUtneee awa ios acne 11-12

*§ 1OGD.38 1 Sp pee e ages ecnvesnsbocesguveceeadus 11-12

CNS G5 ks dary sad excweueen Br re ce es 8

S$ 1065.36-10G5.50 2... ccccccccceccceccvconce ‘ca 12

Ne YY. Fans tan, SIG) avs hice dcas dev vaveeess 23

PAGE

Miscellaneous:

UE Ss nc oe PENG ea eee daderdddceocees _,

‘‘Chart of Standard Forms of Fire Insurance

Policies in Use’’,-CCH Ins. L. Rep.,, Fire: &

SNE, He OUI nce cies ccstdecocccses 41

Questions and Answers for Insurance Adjusters,

Second Revision (Insurance Commissioner of

PMN MOUND 564 cvewevdsnacgcsces¥ensces 26, 27

Pierce, Development of Comprehensive Insurance

for the Household, S.S. Huebner Foundation for

Insurance Education, University of Pennsyl-

WES BO << Co kuch cansex DATS RS ie 37, 38

2 Richards on Insurance, § 212 (5th ed. 1952)..,. 9,38

The Spectator, Insurance Laws, Taxes & Fees

SRUUE vices Uxotiacavebhea tat edalguwkennawe ec.a-- @

Supreme Court of the United States

' OCTOBER TERM, 1959

No. 349

ne.

« JoHN Cray,

Petitioner,

v. .

Sun Insurance Orrice, Limrrep, Mi le

Respondent.

ON WRIT OF CERTIORARI TO THE UNITED STATES .

————— COURT OF APPEALS FOR THE FIFTH CIRCUIT

BRIEF FOR THE RESPONDENT -.-

ie Questions Presented _ aes

Where a personal property floater insurance policy

is issued and delivered by an insurer in Illinois toa citizer

of Ti inais, and thereafter the insured ‘becomes a citizen

of Florida and there sustains a loss, is a federal court,

sitting in Florida, required by the Constitution to uphold

a provision contained in the contract with respect to the

time! to sue which is valid under the law of Lknois but

which would be invalid if governed by a Florida statute

which prohibits such “imitations in general terms not

specifically applicable to foreign contracts of insurance?

»2. Under the law of Florida, does a general statute

which in all-inclusive terms declares void contract provi-

sions shortening the time to sue apply to a contract of

insurance validly issued under the law of Illinois to a citizen

of Illinois by an insurer in that state, if the insured’ there-

: *»

after changes bis residence to Florida and there sy

a loss? .

3. Doesx an ‘all risks’’ policy of insurance covering:

personal property of all members of the family of the same

household insure against deliberate acts of a wife who,

while a member of such household, as a a of marital -

diseord, removes family possessions and refuses to return

them, sets fire to the husband’s clothing, damages his sport-

‘ing equipment and slashes a family. portrait?

Constitutional Provisions and Statutes Involved

The constitutional provisions involved in the case are

as follows:

1. The due process clause of the Fourteenth Amend-

ment to. the ™ ‘gnstitution of the United States which pro-

vides as follows :

ite Ti shen shall Any State deprive any person of

® life, liberty or property, weinom due process ef

law; — . 9° *

2. Article 1, Section 10, of the Constitution of the

United States which provides:

‘‘No State shall * * * pass any * * * Law impairing

the Obligation of Contracts ** *."’

3. Article IV, Section 1, of the Constitution of the

United States which provides as follows:

“Bull Faith and Credit shall be given in each

‘ State to the public Acts, Records, and judicial pro-

. ceedings of every other State * * °.’’ |

The statute involved in this case is Fla. Rev. Stat.,

§ 95.0% (1957), which provides as follows:

‘Stipulations in contract: shortening period of

limitation illegal.—All provisions and: stipulations

contained in any contract whatever entered into

after May 26, 19135, fixing the period of time in which

suits may betigestituted under any such contract, or

upon any matter growing out of the provisions of

any such contract, at a period of time less than that

vrovided by the statute of limitations of this state,

ace hereby declared to be contrary to the~public

policy of this state, and to be illegal and void. No

court in this state shall give effect to any provision

or stipulation of the charaeter mentioned in this

section.’

Statement

Respondent Sun Insurance Office, Limited, a British

company doing business in New York, Maryland, Massa-

chusetts, Illinois, Ohio, Texas, California, Louisiana, Penn-

sylvania, Washington and Florida (Pl. Ex. 1, R. 5, fol.

11), issued and delivered its policy of. insurance to peti-

tioner John Clay on April 22, 1952 for a term of three

years, through its agents, Bartholomady & Clarkson, in

Chicago, Iinois. At thdt time Mr. Clay was a citizen of

the State of Illinois, residing at 1250 Lake Shore Drive,

Chicago (Il. Ex. 1, R. 5, fol. 8; R. 14), a hguse which was

owned by his wife (R. 21). The whole premium for the

full term was paid in Chicago (R. 21, 22). The ‘policy

(Pl. Ex. 1, R. 5j~on its face is designated,” — “

| ILLINOIS *

PERSONAL PROPERTY FLOATER POLICY

(World Wide)

A personal property floater is an inland« marine policy

_ governed by‘ the Illinois Insurance Code; Ill. Rev. Stat.,

ch. 73% § 616, Class 3(d) (1959). The form of the- policy,

as well as the rate to be applied must be filed with and

approved by the Director of Insurance of that state_,lll.

Rev. Stat., ch. 73, £§ 755(2), 1065.22 (1959). Such a policy

covers only movable property having no fixed situs.

Petitioner thereafter moved to Florieda, living at various

places in that state. In 1954 he and his family moved to

a ranch near Lake Harbor, Florida, where they lived in

the latter part of 1954 and early in 1995 (R. 9). The losses

involved jn this case occurred on the ranch in Deeember,

1954 and Junuary, 1955 and were caused hy-the deliberate

acts'of petitioner’s wife (R. 22-24) with whom he was

having marital difficulties (R. 16). She set fire to his clothes

(R. 22-24) and intentionally slashed a family portrait (R.

12). Other property such as dishes and a tea set were

taken by her and deliberately withheid from petitioner (R.

10-11). The personal property floater issued in the name

of petitioner, insures, ¢

F ‘*Personal property owned, used or worn by the

person in whose name this Policy i8 issued and mem- .

bers of the Assured’s family of the same household,

while in all situations, except as hereinafter pro-

vided.’’ (Pl. Ex. 1, R. 5, fol. 8)

In the stibsequent divorce proceedings between peti-

tioner and ‘his wife, it developed that she had tried to

sell some of the personal property involved in this claim

(R. 19), that there was a property settlement between them

but-the items-which she had taken were not returned to the

petitioner in connection therewith (R. 19).

Petitioner notified the fespondent of the loss on Feb-

ruary 1, 10 (R. 19-20). Respondent investigated the

claim under a reservation of rights (R. 20), and denied

liability to the petitioner on April 6, 1955 (R. 30, Ct. of

Appeals opinion). Suit on the policy was filed on May 20,

1957 (R. 1).

The poliey contains the following clause:

‘*Suit Clause:—No suit, action or proceeding for

the recovery of any claim under this Policy shall be

sustainable in any court of law or ae unless the

same be commenced within twelve (12) months next

after discovery by the Assured of the occurrence

. 5 ‘ 8

which gives rise to the claim. Provided, however,

that if by the laws of the state within which this

Policy is issued such limitation is invalid, then any

such claws shall be void unless such action, suit

or proceeding be commenced within the shortest limit

of time permitted by the laws of such state to be fixed

herein.’’ (Pl. Ex. 1, R. 5, fol. 10)

Respondent asserted two defenses :

1. That the policy sued on provides that no suit

for the recovery of any claim shall be sustainable

unless commenced within twelve moths next after

discovery by the assured of the occurrence which |

gives rise to the claim, and that petitioner's suit on

May 20, 1957 was brought approximately two years

and four months after petitioner had full knowledge

of his loss.

2. That deliberate damage by petitioner’s wife,

and her taking property from him as an incident

of marital difficulties, would not be insured under an

‘*all risks’’ policy issued in the name of petitioner

_ but covering property owned, used or worn by him

' and members of his family of thessame household.

Petitioner brought suit in the United. States District

Court. for the Southern District of Plorida. Trial was held

before a jury on June 4, 1958. A verdict was rendered in

favor of petitioner (R.°6) on which final judgment was

filed June 4, 1958 (R. 6)t*-After denial of respondent’s |

motion for judgment non obstante veredicto or in the

alternative, fora new trial (R.,7-8), respondent! appealed

to the United States Court of Appeals for the Fifth Cir-

cuit. On April-8, 1959, a decision was rendered reversing

the judgment of the District Court and remanding the case

for entry of judgment in favor of respondent (R. 28-37).

The Court of Appeals held fhat the provision in the

insurance policy limiting ‘the time in which suit can be

brought, valid in Illinois where the contract made, is a

substantial property right, and that a violation of the due

process clause would result if the Florida invalidating

stetute (Fla. Rev. Stat., § 95.03 (1957)) were applied. The

Court of Appeals discussed but did not decide whether the

Florida state courts would construe the invalidating statute

as applicable to this case. That court further stated that

since the defense as to timeliness of suit was upheld, it did

not reach respondent’s other contention, to wit, the question

of the applicability of the policy to the kind of loss involved

in this case. Rehearing was denied by the United States

Court of Appeals on May 28, 1959 (R. 42).

Summary of Argument

I. A suit ¢lause-in a personal property floater policy

issued in Illinois to a resident of that state which is valid

under Illinois law it not be voided by a Florida statute

of general nature merely because the insured later becomes

a resident of Flgrida and-*sustains a loss in that state.

Under the due précess clause of the Constitution, a contract

valid where mad¢ may be nullified by a statute of the forum

state only if thé following two conditions are met:

(a) The foyum state must hive a reasonable and legiti-

mate ifterest in the subject matter of the contract.

(b) The interest of the forum state ‘in the subject mat-

ter of the contract must be evinced by a clear and

unmistakable expression.of local, policy*in contra-

vention of ii terms of the contract.

»me Ins. Co. v. Dick, 281 U. S. 397 (1930) ;.

I artford| Accide nt & Indemnity Co. v. Delta dé Pine

Land Co., 292 U.S. 1438 (1934) ;.

Vatson he Employers Liability Assur. a 348

U. S./66 (1954) ;

Hanson) v. Denckla, 357 U. S. 238 (1958) ;

' : Joe) y

Pacific Employers Ins. by v. Industrial Accident

Cammission, 306 U. S. 493 (1939);

Holderness V. S ate dy Fire Ins. Co. of shite a

I’. Supp. 145 (S. D. Fla. 1944).

The Florida statute involved here fails to meet the

above*test on both counts.

On similar facts the Court in Hartford Accident & In-

demnity Co. v. Delta & Pine Land Co., supra, held that

the. forum state did not have an interest sufficient to

justify the invalidation of a contract lawful where made.

On the\authority of that case, 5 opinion below should be

affirmed,

Even-it the Court, contrary to its decision in Delta &

Pine, wére inclined to hold that under such circumstances

the forum state «does have a-sufficient interest to justify

nullifying the contract, nevertheless the statute here should

not be so applied because, unlike the statute in Delta &

Pine, it is inadequate to manifest the existence of the

requisite policy interest.. In all cases where asforum policy

was deemed of sufficient importance to Overcome constitu-

tional objections, there existed a clear expression of such

policy: there is no case where the Court undertook to con-

struct a local invalidating policy out of an amorphous

. statute not clearly demonstrative of the forum state’s objec-

tive. See the statutes upheld in Watson v. Employers Lia-

bility Assur. Corp., supra; Hoopeston Canning Co. v. Cullen,

318 U.S. 315 (1943) ; Osborn v. Ozlin, 310 U.S. 53 (1940) ;

Pacific Employers Ins. Co. v. Industrial Accident Commis-

sion, supra. Cf. Hanson v. Denckla, supra, at 252.’ See also

United Commercial Travelers v: Wolfe, 331 U, S. 586 (1947).

~The absence of a definite policy interest on, the part of

Florida is demonstrated not only by the vagueness of the

statute invélved, but also by a consideration of the statute

in relation to other laws of Florida and by the absence of

any Florida decisions: giving the statute in question_the

invalidating effect advocated. by the petitioner.

The facts of this case demonstrate the propriety of sup-

porting the contract under the law of [#nois where the

suit clause is valid. Trichelle vy. Shermm & Ellis, Inc., 259

- Ii. App. 346 (1930); Hartzell v, Maryland Casualty Co.,

163 Ill. App. 221 (15 ; hk v. Underwriters at Lloyds,

London, 137 F. 2d 21 (7th Cir. 1943). The respondent did

not select Illinois as the place of issuance. Since the insured

was a resident of Illinois, the Jaw of that state required

that the policy conform to its laws. and approved filings,

and the coverage, conditions and rate of premium were

* controlled by the Insurance Department of that state. II.

Rev. Stat., ch. 73, §§ 616, 755(2), 1065.19-1065.35 (1959).

II. Under the Jaw of Florida its invalidating statute

does not apply to this contract. The issue is whether a

contract provision recognized as valid by the law of Illinois

where the contract was made is invalidated by the law of

Florida where the loss occurred. The case does not involve

a choice with respect to which statute of limitations is

Union Central. Dike Jns. Co. v- Barnes, 175 Ky. 364, 194

S. W. 339 (1917). i.

The statute, Fla. Rev. Stat., $°95;03 (1957), is one of

the sections of the Florida statute of limitations. It pur

‘ports to declare illegal and contrary to the public policy .

of the state any provision **in any. contract whatever’’ pro-

viding for a shorter limitation than prescribed. It is silent

as to whether it applies to contracts made in Florida or to

all contracts wherever made. Construed in the light of the |

legitimate concerns of the legislature, the statute could

have been intended only to govern contracts made within

the state.. See United States v. Palmer, 3 Wheat. (16.U. 8S.)

610, 631 (1818); Griesemer v. Mutual Life Ins Co., 10

Wash. 202, 38 Pac. 1031 (1894) ; Johnson v. Mutual Life Ins.

. Co., 180 Mass. 407, 62 N. E. 733 (1902); Attorney General

e*—

. Netherlands Fire Ins. Co., 181 Mass. 522, 63 N. E. 950

(1902). If it were the intention to apply the statute to a

contract made elsewhere between citizens of another state,

- in'the event that one of the contracting parties might there-

after take up residence in Florida, such intention wou

likewise require explicit language. R&{erbusch v. Sexmith,

256 Wis? 507, 41 N. W. 2d 611 (1950) ; Coderre v. Travelers

‘Ins. Co., 48 R. I. 152, 136 Atl. 305 (1927).

The statute is in any event not a regulation of insurance

contracis. All legislation prescribing or prohibiting certain

terms in contracts of insurance is encompassed in the Flor-

ida Insurance Code. No restriction on the ‘‘suit clause’’ in a

property policy is to be found in the Code, which ’is a com-

prehensive regulation of the business of insurance. Where

restrictions are intended they are specifically set forth.

(See Fla. Ins. Laws, § 642.03(n) (1953) (now Fla. Laws 1959,

ch, 59-205, § 559, Fla. Ins. Code, § 559 (1959) ), limiting suit.

on accident and sickness insurance policies to two years

after proof of loss; Fla. Laws 1959, ch. 59-205, § 592(4), Fla.

Ins. -Code, § 592(4)° (1959), . prohibiting the inclusion in |

group disability. policies of provisions limiting the time

within which suit-must be brought to less than that per-

mitted in individual disability policies (three years) ).

Ill. The taking of household property by the insured

wife from the insured husband, and deliberate damage to

his clothing and personal possessions, is not a ‘‘risk’’ withir

the reasonable contemplation of the contracting parties and

is not insured’ under this policy. (See Mellon v. Federal

Ins. Co., 14 F. 2d 997 (S. D. N.Y. 1926) ; 2 Richards on

Insurance, §.212 (Sth ed. 1992)).

The ‘policy insures property of all members of Mr.

Clay’s family of the same household. It is family coverage

applying to personal property of Mr. Clay and Mrs. Clay,

~ aS well as to all household possessions and furnishings

loosely regarded as tamily property. The policy insures

‘‘all risks’? with certain specified exceptions. Its coverage

: 10.

is to be construed in accordance with the objects to be

accomplished, i.c., the protection of Mr. Clay and his family

against unavoidable and fortuitous events. It-is not a

‘**risk’’ within the contemplation of the parties that marital

discord may result in one spouse taking. household prop-

“erty and refusing to return it or inflicting deliberate damage

on the personal possessions of the other « or on particularly

cherished family property.

POINT I ‘

Under the Constitution a “‘suit clause” in a personal

property floater policy issued in Illinois to a resident

of that state, which is valid under Illinois law, may not

be voided by a Florida statute of general nature merely

because the insured later becomes a posigntt of Florida

and sustains a loss in that state.

The invalidation of the sifit clause. requires the exist-

ence of two conditions: (a) the policy interest of the forum

must be of sufficient weight to be accorded overriding pro-

tection; and (b) the policy imterest of the forum must be

clearly formulated and the deprivation of the contract right

in issue_clearly intended.

(a) With respect to the first condition, it is the posi-.

tion of the respondent that thy State-of Florida has insuffi-

cient interest in the poliey in suit.to justify the application

of Seetion [5.05 to void the suit clause, Every interest in

the contract was centered in Illinois and the law of that

state should govern the rights of the parties to the contract.

The Relationship of the State of Illinois

to the Insurance Contract

1. Petitioner was a resident of Hlinois when he appitied

for the policy to an [lineis agent of the respondent. The

policy was issued eed the entire premium paid in a lump

sum in Illinois.

aj. The address stated in the policy for-Mr. Clay is

1250 Lake Shore Drive, Chicago, a house owned by his

wife. Although the policy is a floater and therefore covers

the personal property of Mr. Clay and his entire family

of the same ‘household, .1io matter where the property may

be, it has certain features which give significance to the

residence address. In his declaration of values, the insured

gave the approximate values of unscheduled property

. wherever situated as $36,600, of which only $2,170. was

‘ordinarily situated throughout. the year at residences’

other than:the principal residence’? (R. 5, fol. 8). The

fine arts rider (R. 5, fol. 12) covers the six listed paint-

ings at the Lake Shore Drive address in Chicago, but

coverage elsewhere is limited to 109° of the aggregate

amount of the scheduled fine arts coverage. The insurance

on the fine arts, furs, and jewelry was issued on the basis

of appraisals by Chicago dealers (R. 5, fols. 12, 13).

3. The premium rate for the policy and the terms of

its coverage were regulated and controlled by the Illinois

Department of Insurance. Under the Hlinois Insurance

Code, the authority of an insurance company to transact

business in that state is in accordance with certain classes

into which the statute divides various types of coverage.

Ill. Rev. Stat., ch. 73, § 616, (1959). In Class 3 ‘‘ personal

property-foater risks*’ are listed in subdivision (d), to-

gether with other types of so-called inland marine insur-

ance. Every company is required to file with the Director

of Insurance its policy forms and rates (Hl. Rev. Stat.,

~ ch. 73, 66 755(2), 1065.22 (1959)) and no company may

_ make or issue a policy except in accordance with filings

approved by the Director of Insarance (Ill. Rev. Stat., ch.

73, § 1065.22(8) (1959)). The ‘Code gives to the Director

the right to disapprove filings and provides penalties for

violation of any of itS provisions .(Ill Rev. Stat., ch. 73,

§§ 1065.23, 1065.34 (1959)). Article XXXI of the Code

regulates the licensing of agents and prohibits the issuance

of a policy through anyone but an Illinois agent duly

licensed (Ill. Rev. Stat., ch. 73, $$ 1065.36-1065.59 (1959)).

The respondent, therefore, was required by law, in comply-

ing with an application by a resident of Illinois for a ‘per-

sonal property floater, to issue the policy in Illinois, through

an. Illinois agent, and in striet compliance with its filings

_ in that state. It did not ‘‘attempt.to derive the greatest

» possible advantage from the more lax laws of) Illinois”’’

(Petitioner’s Br., p. 6; Florida Attorney General’s Br.,

pp. 3-4). It had no choice as to the kind of policy or the

place of issuance.

4. The interest of Illinois doves not stop with the

coverage and rate. It, insposes’ a tax on premiums (Ill, Rév.

Stat.,-ch.g/3, ¢ 1021 (1959)). It requires all authorized in-

supers to maintain unearned premium reserves; a company

inguring risks eheompassed within Class 3 of § 616, must

maintain a reserve for unpaid loss claims of which it has

received notice, and must have an itemized record of all such

losses and claims (II). Rev. Stat., ch. 73, § 1008(1) (1959)).

The Director of Insurance is empowered to determine

whether the reserves are.adequate in the light of the com-

pany’s loss experience and may: require the maintenance

of additional loss reserves-if he deems it necessary (Ill.

Rey. Stat., ch. 73, § 1008(2) (1959)).

The Interest of the State of Florida

1, Affer the policy was issued, the insured became a

_resident ‘of Florida. No endorsement was ever applied

for or issued when the insured changed his residence, nor

were there any transactions of any nature relating to

the contract which took place in Florida.

2. The loss happened to take place int Florida. although

the coverage of the policy is world-wide and would apply

to any loss wherever it might take place. The insured and

13 >

his wife had property outside/of Florida, as well as within

‘the state (R. 20).

Home Ins. Co. v.Dick,: ie U.S. 397 (1930), and Hartford

Accident & Indemnity Co. v. Detta & Pine Land Co., rps

‘U.S. 148 (1934), throw light on what is regarded as

sufficient interest on the part of the forum to justify sie

tecting such interest as against the prohibition imposed

by the due process clause of the Fourteenth Amendment.

Home Ins. Co. v. Dick, supra, involved the application of

a Texas statute similar in content to the general Florida

statute in issue. The Court held that the forum statute

prohibiting a limitations. prevision shorter than two years

_ ‘fin any contract’? was inapplicable to a suit clause: con-

‘tained in an insurance contract made outside the state

between non-residents where the loss had: likewise occurred

outside the state. It was held immaterial that the plain-

tiil’s permanent residence was in Texas since he also

resided in Mexico at the time of the assignment of the

policy and at the time of the loss. In aecord: Holderness

v. Hamilton Fire lus. Co. of N. Y., 54 F. Supp. 145 (S. D.

Fla. 1944), in which the Court likewise refused to apply

the very Florida statute which is here in issue to a foreign

‘contract entered into between non-residents where the loss

occurred in such foreign jurisdiction.

Home Ins. Co. v. Dick, supra, leaves unanswered the

question as to-whether a foreign contract will be enforeed

where the loss occurs within the forum state and the assured

has changed his residence to that of the forum state. How-

ever, in Hartford Accident & Indemnity Co. v. Delta &

Pine Land Co., supra, this issye was determined. That case

involved aglause in a suretyship contract-requiring notice

_of claim within fifteen months from the termination of the

suretyship for the defaulting employee. At the time the

‘ contract was issued, the assured, a “Mississippi corpora-

tion, had its principal place of -business in.Tennessee and

the contract was issued in Tennessee through the insyrer’s

Tennessee agent. The contract insured against the defalea-

tions of certain employees wherever committed. The clause

in the contract requiring timely notice of claim was legal

in Tennessee. After the assured had moved its prineipal

place. of business to Mississippi, a defaleation oecurred

within that state. The assured failed to give timely notice

of claim. To ‘the defense that the assured had failed té

meet the conditions imposed by the contract, the assured

_invoked #prohibitory statute of Mississippi. That statute,

_ unlike the Florida statute in the case at bar, was specifically

made applicable to insurance and, specifically declared that

it was the policy of the state to apply the statute to extra-

territorial contracts governing risks within the state. The

Court held that the interest of the state in protecting

insured risks within its borders against the operation of

the limiting clause contaimed in the foreign contract, valid

where made,’ was not so vital as to deserve protection

against the due process clause of the Fourteenth Amend-

ment.

In upholding the contract the Court stated:

“A legislative policy which attempts to draw fo

. the state of the forum control over the obligations

of contracts elsewhere validly consummated and to

convert them for all purposes into cont acts of the

forum regardless of the relative importance of the

interests of the forum as contrasted with those

created at the place of the contract, conflicts with

the guaranties of the Fourteenth Amendment * * °,

Cases may occur in which enforcement of a contract

as made outside a state may be so repugnant to its

vital interests as to justify e nforcement in a different

manner. Compare ond v. Hume, 243 U. 8, 15, 22.

But clearl%& this is not such a case.” (292 U. S. at

150)

Phe Delta d Pine case is, on its operative facts, identical

wiih the facts in the case at issue, and on the-authority of

that case, the respondent nust,-preyail, Heéwever, it is

« desirable to consider other relevant cases ig order to

“ :

ascertain whether later pronouncements of the court have

affected its holding. The cases to be considered for this

sarong are Watson ve Employers Laability Assur. Corp.,

BAS UL S. 66 (1954); a group of workmen’s compensation

cases mah ific Employers Ins, Co, v, ludustrial Accident

Commission, 306 U.S. 493 (1939); Aluska Packers Ass'n.

v. lndustrial Accident Commission, 294 U.S. 5382 (1935);

and Carroll vy. Lanza, 349 U.S. 408 (1955)) and cases in

volving’ the regulation of foreign insurance companies

insuring risks within the borders of the. state (Osborn v.

Ozlin, 310 U.S. 58 (1940) and Hoopeston Canning Co, ve

Cullen, 818 U.S. 318 (19438)).

The leading case which upholds the local policy interest

of the forum is Watson v. Employers Liability Assur, Corp.,

supra. In that case, the manufacturer of Toni Home

Permanent preparations was insured for liability under a

policy delivered in Massaciusetts. It contained a clause pro-

viding that no action shall lie against the insurer unless a

judgment is first obtained against the insured. The product

was sold throughout the country and the plaintiff, who was

injured by its use in Louisiana, sought to sue the manu-

facturer in that state but service was contested. In suing

the insurance company, the plaintiff relied upon a Louisiana

statute which specific ally provided that whether or not an

insurance policy is delivered in Louisiana and whether

or not such policy contains a provision forbidding direct

aclion against the insurer a persen injured in Louisiana

shall have a direct action against the liability insurer pro:

vided the accident oceurs within the State of Louisiana.

The Court held that the interest of Louisiana in protecting

those injured within its borders under the circumstances

/there presented was of sufficient importance to justify the

nullification of the foreign contraet. The opinion. states

that injured persons in Louisiana may burden Louisiana

hospitals and that Louisiana was the most convenient

fortim in which to sue sinee efforts to obtain service on

the manufacturer in Louisiana were unavailing ‘and the

necessity for traveling to Massachusetts to obtain a rem-

edy was an oppressive burden on a resident of Louisiana.

The Court did not overrule Hartford Accident & In-

demnity Co. v. Delta & Pine Land Co., supra., but affirmed

the proposition there stated. It merely distinguished that

case on the ground that no vital interest of the forum state

was involved. The superior interest of the forum state

in the Watson case,.as compared with that involved in

Delta & Pine and in the case at issue is easily demonstrable.

In Watson an. unreasonable burden was imposed on an

injured party if suit had to be brought against the tort-

feasor in a distant jurisdiction, especially when the liability

insurer, the ultimate obligor, was amenable to the juris-

diction of the forum state. Moreover, in Watson, the in-

surer was, under the Louisiana statute, permitted to inter-

pose against the injured person each and every defense it

might have under the terms of its policy. The statute

merely served to bypass the insured and permit suit di-

rectly against the insurer. .

The problem of enforcing the obligations of-a liability

insurer s@ as to afford the injured party the right to pay-

ments under the policy is one of long standing. The in-

dividual states have sought to deal with it in various ways,

the most common of which is a statute creating a direct

cause of action against the insurer if a judgment against

the insured remains unsatisfied. But the effectiveness of

this remedg#epends upon the ability of the injured party

to bring suit first against the tortfeasor. If the prospective

defendant is a non-resident, the injured party is relegated

. to an action in some other jurisdiction, a proceeding which

iy cumbersome and expensive. A method devised to re-

lieve the inhabitants of a state from the necessity for —

traveling elsewhere to sue a non-resident who comes within

its borders and inflicts injury is to be found in the so-

called nonresident motorist statutes which subject a foreign

motorist to the jurisdiction of the state within which he

ee ee tae.t

causes injury. ‘The validity of such statutes was upheld

in Hess v. Pawloski, 274 U.S. 352 (1927).. The Louisiana

statute passed upon in the Watson case is an extension of

the same principle and deals with the problem of the non-

resident who remains outside of the state but commits a

tort by sending an allegedly dangerous product to its in-

habitants. The effect of the Louisiana statute, is not to

impose a liability on the insurer “which it did not already

have. Enforcement would merely have been delayed under

the ‘‘no action’’ clause in its policy. Louisiana sought to

make it possible for its residents to seek redress within the

state by proceeding directly against the insurer upon whom

the liability would have, in any event, ultimately fallen.

Whether the legislation is regarded as valid because

the interest of the state makes it immune from attack

under the due process clause, the approach taken by the

Watson majority, or because of the insurer’s express con-

sent which it was required to give as a condition to obtain-

ing a Louisiana license,-the approach adopted in the con-

curring opinion of Mr. Justice Frankfurter, the fact re-

mains that the entire membership of the Court perceived

a strong and compelling interest on the*‘part of the State

of Louisiana which would jattach to every liability policy

issued to an insured whg-gonducts widespread, businéss

activities throughout the/entire-United States, That in-

rest is not-one which atfaches at some later date by an un-

forese ‘en fortuitous cirgumstance to a polidy - Which- would

he of no concern whatever to Louisianay at thé, times of

issuance. It is a present and immediate “interest, predi-

cated on Louisiana’s/ rightful concern for the welfare’ of

its own residents which gives rise to its right to legislate

extraterritorially by excising the ‘‘no action’’ clause from

every liability policy issued to an insured engaged in a

nation-wide business or who might commit a tort. in the

State-of Louisiana.

Like the Watson case, the compensation cases afford

an example of an interest. which is recognized as a_legiti-

mate concern of the local jurisdiction. Thus in Pacific

Employers Ins. Co. v. Industrial Accident Commission,

supra, the Court said that the interest of California in

protecting employees who are injured in California and

in having their hospital bills paid justifies the application .

of California law despite the fact that the employment

contract was made in Massachusetts and was otherwise

subject to Massachusetts law. In accordance with the same

principle of recognizing the interest of the state in afford-

ing a remedy to injured employees who otherwise may

become a public charge,sare Alaska Packers Ass’n v. In-

- dustrial Accident. Commisston, supra, and Carroll v. Lanza

supra. 7

With respect to insurance, cases in which state legisla-

tion affecting insurance have been upheld against attacks

based on extraterritorial objections have invariably in-

volved forum statutes which are closely related to the

welfare of the insuring public within its borders. Among °

such statutes are licensing statutes and statutes imposing

reserve requirements on foreign insurers. See Osborn v.

Ozlin, supra, and Hoopeston Canning Co. v. Cullen, supra.

The interest expressed. by such insurance statutes is clearly

superior to that sought to be effectuated in this case.

The case‘at bar involves a contract negotiated and con-

summated in Illinois between an insured residing in that

‘state and a foreign insurer licensed to do business therein.

It insures property of the insured and no rights-of third

parties are affected. No multi-state transaction was in-

volved. Like the scope of the Hartford policy in the Delta

dé Pine case, it covered losses wherever they might take

place. ‘Phe coverage is on movable property having no

fixed situs. There was not even involved the casual con-

. heetion with Florida which the Pelta ¢ Pine policy had

with Mississippi, in that 21 employees in that state were

actually listed in the Tennessee contract. It was strictly

a contract *‘made locally, affecting nothing but local affairs

*** (Watson v. Employers Liability Assur. Aaa ae

at 71), regulated and ¢ontrolled as to conditions, premium

rate ‘and method of. issuance by the laws of Lilinois and

its Department of Insurance.

Any holding that Florida had sufficient interest to apply

its statute to respondent’s policy would imply that the

moment Mr. Clay became a resident of Florida all of his

contracts, of whatsoever nature, previously entered inte

in Illinois or elsewhere became subject to the statutes of

his new home. But if-he left some of his property in

IHinois where if Was lost or damaged, would the Florida

statute apply merely because he had become a resident

of Florida?) Suppose/ after moving to. Florida he went

on a trip and sustained & loss in.some other state, would

the Florida statute apply? If, in such, ease, Mr. Clay

sued in Florida, could ifs courts constitutionally obey the

prohibition of Section 95.03 against giving effec: to the

took place in Florida? This is a world-wide policy, giving,

“the insured the benefit of coverage anywhere in the world

while he was a resident of Lllinois and continuing the

same benefit after he became a resident of Florida. “But

if Mr. Clay spent a vacation in Florida while he was still

living in Illinois and sustained a loss of baggage during

his visit, would Florida thus acquire a safficient interest

in the contract to permit the application of its statutes?

We might go firther and assume, to create a hypothetical

parallel to the Delta & Pine situation, that Mr. Clay had

a winter residence in Florida while he was still domiciled

in Illinois. The policy would cover personal property in

the Florida home under those circumstances. Would it

‘be supposed that Florida could claim an interest in a con-

tract made in Illinois between citizens of that state suffi-

cientQo apply its own statute to a lawsuit for damage to

personal property in the Florida home? The Delta d

Pine case clearly precludes any such result,

Md _

Is it material that the suit was brought in Florida?

An insurer may be sued on a policy of insurance in any

state where it can be served with process. The eause of

action is transitory. Mr. Clay could have ‘sued in Illinois,

(Illinois Life Insy Co. v. Prentiss, 277 We 883, 115 N.E.

554 (1917)), and if he had never become a resident of —

Florida and had sustained a loss in Illinois he could have

sued in Florida (see /Zolderness ve Hamilton Fire Ins. Co.

of NOY... 54-F. Supp. 145 (S. D. Fla. 1944)). The sugges-

tion on page 11 of petitioner’s brief that the State of Flor-

ida *‘was so involygl in the case at bar that the right of

respondent [sic] to proceed at all in the courts of Illinois

is questionable?” and the positive assertion that the ‘‘only

forum having proper jurisdiction was some forum within

the State of Florida’? are without foundation.

The decision of*the constitutional question presented

by this case does not involve the simple question as to

whether the law of the forum is to be applied as against

the law of the state where the contract was made. The

mistaken notion that the: issue was simply whether the

law of the foam should be applicable led the Alabama

Supreme Court in Galliher v. Stale Mutual Life Ins. Co.,

150 Ala. 543, 48 Sq 833 (1907) into the error of merely

choosing which statute of limitations would be applicable.

Any question as to whether we are dealtyg with a matter

of rémedy which is generally governed by the law of the

foram has been put to rest by the Courtin Home Ins. Co.

v. Dick, supra. In rejecting the contention that the pro-

hibitory statute of the foruni related merely to remedy

and that the contract was therefore to be subject to the

‘law of the forum, Justice Brandeis said:

‘The statute isnot simply one of limitation.

, Ut does not-merely fix the time in which the’aid of

the Texas courts may be inveked * * * It deals with

‘ the powers and capacities of persons and corpora-

tions. It expressly prohibits the making of certain

conivacts.’’ (281 U.S. at 407)

+ woe

~ The correct rule was‘that followed by the court in Union

Central Life Ins, ¢ ‘o. v. Barnes, 175 Ky. 364, 194 SAW. 339

-(1917), wherein’ fhé law of a forum state similar to that

yexisting in Florida was held inapplicable to a limitations

- clause in a contract valid where made. In that case, the

“assured and the beneficiary under a life insurance policy

moved to thé forum state and resided there at the time

of the loss. Such facts were not deemed sufficient to

justify the application of the forum law to invalidate the

foreign contract.

im He the substantive law governing the validity

. of a contract should be the same in this case whether suit

is brought in Florida or elsewhere. If respondent were

not admitted-to do business in Florida and could not be

served with process therein can it be said that its sub-

stantive rights would be different merely because the suit

had to be brought in some other jurisdiction where service

~eould be effected? :

Much emphasis is laid by’ petitioner and by the At-

torney General of Florida on the fact that respondent is

licensed to do business in Florida. Respondent, like most

other insurers of substance, is licensed in many states and

‘from the record in this case (Pl. Ex. 1, R. 5, fol. 11), we -

ean identify eleven states in which it maintains offices.

Its Florida license is unrelated to the policy in suit which

was issued pursuant to its license in Illinois and is subject

to the regulation of that state. Its license is likewise un-

related to the fortuitous cireumstance that Mr. Clay ‘be-

came a resident of Florida. The policy would have con-

tinued in force if Mr. Clay had become a resident of any

other state whether or not respondent was licensed to-do

business therein. Respondent was not required (as was

the insurer in Louisiana in Watson), to consent to Section

95.03 of the Plorfita statutes. Absent any such factor,

respondent's Florida license has no bearing on the issues

here to be decided.

>—3

‘“‘The contention advanced by counsel for the

plaintiff that the defendant impliedly assented

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