United States Supreme Court
281 U.S. 397 (1930)
Compania General Anglo-Mexicana de Seguros, S.A. (Compania General) (defendant), a Mexican corporation, issued a fire insurance policy covering a tugboat while it was located in certain Mexican waters. The policy was assigned to Dick (plaintiff), a resident of Texas who lived in Mexico. The Home Insurance Company (Home Ins.) and Franklin Fire Insurance Company (Franklin Fire) (defendants), both based in New York, executed reinsurance contracts with Compania General relating to the tug’s coverage. Dick’s policy with Compania General expressly prohibited him from seeking to collect thereunder unless a claim was filed within one year of damage to the vessel. The contractual limitation was in accordance with Mexican law, which expressly governed the policy. Dick filed suit against Compania General in a Texas court, seeking to recover for the total loss of the tug. In rem jurisdiction was established against Home Ins. and Franklin Fire through garnishment. As a defense, the garnishees argued that Dick had failed to file suit within the one-year limitations period set forth in the original policy. Dick demurred, citing application of Article 5545 of the Texas Revised Civil Statutes (1925). Article 5545 prohibited the making of contracts that provided less than two years in which to sue, and it rendered invalid contracts containing shorter limitations periods. The court agreed with Dick and entered judgment in his favor. The judgment was upheld on appeal, in the face of the garnishees’ argument that Article 5545 violated due process under the Fourteenth Amendment. The garnishees petitioned the United States Supreme Court for certiorari.
Rule of Law
Holding and Reasoning (Brandeis, J.)
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