Adler-Weinberger S. S. Co. v. Rothschild & Co.

• Decision Date: 08 June 1903
• Docket Number: 92.
• Citation: 123 F. 145
• Parties: ADLER-WEINBERGER S.S. CO. v. ROTHSCHILD & CO.
• Court: U.S. District Court — Eastern District of Pennsylvania

123 F. 145

ADLER-WEINBERGER S.S. CO. v. ROTHSCHILD & CO.

No. 92.

United States Circuit Court, E.D. Pennsylvania.

June 8, 1903

Horace L. Cheyney and John F. Lewis, for plaintiff.

James C. Sellers, for defendants.

J. B McPHERSON, District Judge.

This action is based upon section 48 of the Pennsylvania statute of May 1, 1876 (P.L. 53, 66) which is as follows:

'The agent of any insurance company of any other state or government, which does not comply with the laws of this commonwealth, shall be personally liable on all contracts of insurance made by or through him, directly or indirectly, for or in behalf of any such company.'

The undisputed facts are-- I take them substantially from the brief of defendants' counsel-- that the plaintiff, a citizen of Louisiana, in March, 1900, obtained the three marine policies in question through a firm of shipbrokers in New Orleans. The vessel traded between New Orleans, Mobile and Honduras, and was at the first-named port when the policies were written. The New Orleans brokers applied for the insurance to another firm of brokers in Tampa, Fla., who in turn applied by mail to the defendants, Rothschild & Co. The application was received at the defendants' office, 411 Walnut street, Philadelphia, and two of the policies were afterwards mailed by them from Philadelphia to the Tampa brokers, by whom they were forwarded to New Orleans. In August following the New Orleans brokers wrote to the defendants at Philadelphia for a third policy, and this was mailed directly to New Orleans. The premiums were sent by mail to the defendants at Philadelphia, and were there received. Later several slips, or permits, were obtained from them, also by mail, to be attached to the policies. On these slips the defendants described themselves as agents for the respective companies. The policies were all issued by companies foreign to Pennsylvania, and none of them had complied with the laws of that state. There was evidence that the written portion of two of the policies was in the handwriting of the defendants' bookkeeper, and had been filled in at their office in Philadelphia. It did not appear where or by whom the other policy had been filled in; but the defendants did not deny that they had prepared and mailed it in Philadelphia, nor did they deny at the trial that they were agents of the respective companies by whom the policies were issued. The loss occurred in September, 1900, and this suit was brought by the insured on February 1, 1902, under the foregoing section, to recover from the defendants the amount of the loss. A verdict for the plaintiff was directed by the court, no fact being in dispute, and the legal questions are now to be considered under the customary reserved point:

'Whether there is any evidence to go to the jury in support of the plaintiff's claim.'

The first position taken by the defendants is that section 48 does not apply to policies of insurance upon property that is not within the state of Pennsylvania at the time the contract is made. I agree with the argument of defendants' counsel that the section referred to creates a liability that did not exist at common law, and imposes a penalty for disobedience. Being a penal state, no doubt it must be construed strictly, and should not be extended beyond the evident intent of the Legislature as appears upon its face. Both the appellate courts of the state have decided that the penal provisions of the insurance laws are to be strictly construed, and that their penal intent shall be shown in clear and unambiguous words. Com. v. Biddle, 139 Pa. 605, 21 A. 134, 11 L.R.A. 561; Com. v. Hammer, 11 Pa.Super.Ct.Rep. 138. And this rule of strict construction has been applied to the act of 1876 itself in Com. v. Reinoehl, 163 Pa. 287, 29 A. 896, 25 L.R.A. 247. Nevertheless, I am unable to follow the defendants to their conclusion, that, if the rule of strict construction be applied to the section now under consideration, the result will be to find in its language a sufficiently plain declaration that it does not apply to insurance upon property not within the state. On the contrary, it says nothing whatever, and in my opinion it implies nothing whatever, concerning the location of the property to which the contracts of insurance apply, and apparently has in mind merely the making of such contracts; that is to say, the subject of the section is the business of insurance, the carrying on of such business within the state, and does not regard the position in space occupied by the property insured. This appears more clearly if the preceding section of the act is taken into account. Section 47 declares that

'Any person transacting business within this commonwealth as the agent of an insurance company of any other state or government, without a certificate of authority, as required by the act to which this is a supplement (viz., act of 1873) shall be guilty of a misdemeanor,' etc.

Here, too, nothing whatever is said concerning the location of the property insured. It is the transaction of business that is made a misdemeanor and is to be punished by a specified penalty. The conclusion urged upon the court by the defendants rests almost wholly upon the act of 1887 (P.L. 61) which (like the act of 1876) is also a supplement to the original act of 1873, and supplies section 14 of that statute. The relevant part of the act of 1887 is as follows:

'Any person or persons, or any agent, officer or member of any corporation, paying, or receiving or forwarding any premiums, applications for insurance, or in any manner securing, helping or aiding in the placing of any insurance, or effecting any contract of insurance upon property within this commonwealth, directly or indirectly, with any insurance company or association not of this state, and which has not been authorized to do business in this state under the terms of this act, shall be guilty of a misdemeanor,' etc.

It is argued that, because this act is by its terms confined to contracts of insurance upon property within the state, it must therefore be supposed that the act of 1876 has a scope no wider and should also be confined to policies upon property found within the commonwealth at the time of insuring. It seems to me, however, that to assent to this conclusion would involve a violation of the well-known rule of statutory construction that forbids a court to limit or impair the clear and unambiguous language of a constitutional statu...