New York Life Ins. Co. v. Head, 234 U.S. 149 (1914)

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New York Life Insurance Company v. Head


No. 254


Argued larch 10, 1914
Decided June 8, 1914
234 U.S. 149

ERROR TO THE SUPREME COURT
OF THE STATE OF MISSOURI

Syllabus

There is a clear distinction between questions concerning the operation and effect of the law of a state within its borders and upon the conduct of persons within its jurisdiction and questions concerning the right of the state to extend its authority beyond its borders with the same effect, and a decision upon the former does not constitute a ground for refusing to entertain a writ of error to review the judgment of the state court involving the latter. A state may not extend the operation of its statutes beyond its borders into the jurisdiction of other states so as to destroy and impair the right of person not its citizen to make a contract not operative within its jurisdiction and lawful in the state where made.

Under the full faith and credit clause of the Federal Constitution, the courts of one state are not bound to declare a contract, which was made in another state and modified a former contract, illegal because it would be illegal under the law of the state where the original contract was made and of which neither of the parties is a resident or citizen.

The power that a state has to license a foreign insurance company to do business within its borders and to regulate such business does not extend to regulating the business of such corporation outside of its borders and which would otherwise be beyond its authority.

The Constitution and its limitations are the safeguards of all the states preventing any and all of them, under the guise of license or otherwise, from exercising powers not possessed.

A statute of Missouri regulating loans on policies of life insurance by the company issuing the policy held not to operate to affect a modifying contract made in another State subsequent to the loan by the insured and the company, neither of whom was a resident or citizen of Missouri.

241 Mo. 403 reversed.

The facts, which involve the jurisdiction of this Court to review judgments of the state court and also the power of a state to regulate the business beyond its borders of a foreign corporation licensed to do business therein, are stated in the opinion.