Judgment
The Court ruled to uphold the application of the Missouri statute, saying:
| “ | We take it, then, that the statute, if enforced, cuts off any defense by a life insurance company, based upon false and fraudulent statements in the application, unless the matter misrepresented actually contributed to the death of the insured. Is the statute, therefore, to be held repugnant to the 14th Amendment? Does it, in such case, deprive the insurance company of its 'liberty' or property without due process of law, or deny to it the equal protection of the laws? Although the statute in some degree restricts the company's power of contracting, and is so worded that the beneficiaries of its policy may sometimes reap the fruits of fraud practised upon it by the insured, we cannot, for that reason, hold that the state may not, so far as the Constitution of the United States is concerned, regulate the business of life insurance to the extent indicated. ... ife insurance companies doing business in that state often secured contracts under which they could defeat all recovery upon a policy, and retain all premiums paid by the insured, if it appeared in proof that the application for insurance contained an inaccurate or untrue statement, however innocently made, as to matters having no real or substantial connection whatever with the death of the insured, and which were in no sense material to the risk. This was deemed an evil practice, to be remedied by legislation. ... Surely the state could make such a regulation in relation to its own corporations; for a corporation cannot exert any power, nor make any contract, forbidden by the law of its being. ... That Missouri could forbid life insurance companies of other states from doing any business whatever within its limits, except upon the terms prescribed by the statute in question, cannot be doubted, in view of the decisions of this court. If it could go that far, why may it not declare, as it has in effect done, by this statute, that its provisions shall apply to foreign life insurance companies doing business in Missouri under its license? It would, indeed, be extraordinary if the state could compel its own life insurance companies to respect this statute, but could not enforce its provisions against a foreign corporation doing business within its limits, with its consent, express or implied—-especially against one which, as is the case here, came into the state for purposes of business after such statutory provisions were enacted. | ” |
Read more about this topic: Northwestern National Life Insurance Co. V. Riggs
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