Banker's Mut. Cas. Co. v. First Nat. Bank of Council Bluffs
| Decision Date | 24 September 1906 |
| Citation | 131 Iowa 456,108 N.W. 1046 |
| Parties | BANKER'S MUT. CASUALTY CO. v. FIRST NAT. BANK OF COUNCIL BLUFFS. |
| Court | Iowa Supreme Court |
OPINION TEXT STARTS HERE
Appeal from District Court, Polk County; James A. Howe, Judge.
The opinion states the case. Reversed.George W. Bowen and Sullivan & Sullivan, for appellant.
N. T. Guernsey, for appellee.
The plaintiff corporation was organized December 25, 1895. By its articles of incorporation, the nature of the business it proposed to transact was stated as follows: Thereafter on December 1, 1896, after an examination into the business of the company, the auditor of the state of Iowa issued to said corporation a certificate to the effect that it had filed with said officer a sworn statement of its condition in accordance with the provisions of chapter 4, tit. 9, of the Code of 1873, regulating burglary insurance, that said statement showed that the company had complied with the laws of the state relating to insurance, and was therefore authorized to transact its appropriate business of burglary insurance in accordance with law until January 31, 1897. During the period covered by this certificate the plaintiffs issued to the defendant bank a policy of insurance against loss by burglary, in consideration of which policy and contract of insurance said bank executed and delivered to plaintiff its promissory note for the sum of $300 payable at such times and in such installments as might be assessed by the company's board of directors without interest--the assessments not to exceed $60 in any one year. On this note defendant paid December 22, 1896, the sum of $60, and on December 31, 1897, the sum of $60, and on January 27, 1899, the note was further credited and indorsed by “rebate” in the sum of $97.50. Since the last-mentioned date assessments have been duly made for the remainder of $82.50 represented by said note, but the defendant has neglected and refused to pay the same. Action at law having been brought to cover the last-named sum and petition being filed alleging the facts aforesaid the defendant demurred thereto on the following grounds: (1) Because at the time the policy of insurance was issued the plaintiff had no power or authority to insure against loss by burglary. (2) Because the note sued upon is without consideration and void, the plaintiff having no authority to issue the policy for which the note was given; and because the policy was null and void and was incapable of enforcement should any loss occur thereunder. The demurrer was sustained by the trial court, and the plaintiff electing to stand upon its petition and refusing further to plead or amend, judgment was entered upon the demurrer, and plaintiff appeals.
The appeal as discussed by counsel presents the following questions for our consideration:
1. Did the statutes of this state at the date of the policy issued to the appellee permit a domestic corporation to engage in the business of insurance against loss of burglary? The trial court seems to have answered this inquiry in the negative, and that position is maintained by counsel for appellee. At the time in question, the statute (McClain's Code, § 1695) authorized compaies organized under the laws of this state to make insurance contracts as follows: (1) To insure houses, buildings, and all other kinds of property against loss or damage by fire or other casualty, and to make all kinds of insurance on goods, merchandise, or other property in the course of transportation, whether on land or on water or any vessel or boat, wherever the same may be. (2) To make insurance on the health of individuals, and against the personal injury, disablement, and death, resulting from traveling, or general accidents by land or water. (3) To insure the fidelity of persons holding places of private or public trust. (4) To receive on deposit and insure the safekeeping of books, papers, moneys, stocks, bonds, and all kinds of personal property. (5) To insure horses, cattle, and other live stock against loss, or damage by accident, theft, or any unknown or contingent event whatever which may be the subject of legal insurance; to lend money on bottomry or respondentia, and to cause itself to be insured against any loss or risk it may have incurred in the course of its business, and upon the interest which it may have in any property, by means of any loan which it may have made on mortgage, bottomry or respondentia, and generally to do and perform all other matters and things proper to promote these objects. But no company shall be organized to issue policies of insurance for more than one of the above five mentioned purposes, and no company that shall have been organized for either one of said purposes, shall issue policies of insurance for any other; and no company organized under this chapter, or transacting business in this state, shall expose itself to loss on any one risk or hazard to an amount exceeding 10 per cent. on its paid-up capital, unless the excess shall be reinsured by the same in some other good and reliable company. But the restrictions as to the amount of risk any company shall assume shall not apply to any companies organized to guaranty the fidelity of persons in places of public or private trust, nor to companies that receive on deposit and guaranty the safekeeping of books, papers, moneys, and other personal property. This section was amended by chapter 29, p. 38, Acts of the 24th General Assembly authorizing casualty insurance for the benefit of employers of labor. By chapter 32, p. 43, of the Acts of the 25th General Assembly, the act of the 24th General Assembly above mentioned was repealed and substituted and made to include insurance against personal injuries generally as well as indemnity against the liability of employers on account of the acts or omissions of their employês. Later, and after the issuance of the policy in controversy, chapter 60, p. 44, of the Acts of the 28th General Assembly, was enacted amending Code, § 1709 (which corresponds with McClain's Code, § 1695), and authorizing, in express words, insurance against loss by burglary. The last-mentioned amendment having been enacted since the date of the note in suit is of no material bearing upon the issue here presented except as it may be regarded in the nature of a legislative recognition of the need of the authority there given for this class of insurance. It is to be admitted that the insurance statutes which we have cited as being in force at the date of the organization of the appellant company contain no provision which expressly and in so many words authorized insurance against loss by burglary, and if such authority then existed it must be drawn or inferred from the general terms and provisions embodied in those enactments. For the purposes of this case we may also admit the entire correctness of the appellee's contention (1) that a corporation may lawfully exercise only such powers as are expressly or impliedly granted by statute; and (2) that as between a corporation and the public any reasonable doubt as to the granting of a corporate power will be resolved in favor of the public, but these propositions being granted and given due weight in reaching our conclusion we have still to ask whether the power to carry on the business of burglary insurance is not fairly to be implied from the statute as it stood in the year 1896? It is to be observed that there is no express prohibition of such business. The title of the act is broad enough to cover insurance of any kind. The opening section (McClain's Code, § 1685), which is the keynote or introduction to the provisions which follow, prescribes how “any number of persons” (may) “associate themselves together for the purpose of forming an insurance company or for any other purpose than life insurance.” Section 1695, already quoted, undertakes to prescribe five different classes or kinds of insurance in which such associations may engage. If this chapter is broad enough to permit burglary insurance, it must be found in subdivision 1 of this section when read in the light of the entire insurance statute of which it forms a part. The subdivision authorizes the insurance of houses, buildings, and all other kinds of property against loss by fire or other casualty. As will be noticed the effect of the statute, as applied to this case, will be determined very largely on the scope of the meaning we may give to the words “other casualty.” “Casualty” and “casualty insurance” are words of quite frequent use, yet it cannot be said that their definition has been very accurately settled by the courts. Strictly and literally “casualty” is perhaps to be limited to injuries which arise solely from accident without any element of conscious human design or intentional human agency; or as it is sometimes expressed, inevitable accident, something not to be foreseen or guarded against. Standard Dictionary. But in ordinary usage, “casualty” like “accident” is quite commonly applied to losses and injuries which happen suddenly, unexpectedly, not in the usual course of events, and without any design on part of the person suffering from the injury. Nor does the fact that the conscious or intended act of some other person produces it take from such injury its character as an accident or casualty. Richards v. Ins. Co., 89 Cal. 170, 26 Pac. 762, 23...
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