Daggs v. Orient Ins. Co.

• Decision Date: 15 December 1896
• Citation: 136 Mo. 382,38 S.W. 85
• Parties: DAGGS v. ORIENT INS. CO. OF HARTFORD, CONN.
• Court: Missouri Supreme Court

38 S.W. 85

136 Mo. 382

DAGGS v. ORIENT INS. CO. OF HARTFORD, CONN.

Supreme Court of Missouri.

December 15, 1896.

CONSTITUTIONAL LAW — RIGHTS OF CITIZENS — RULES OF EVIDENCE — RETROSPECTIVE LAWS — POWERS OF FOREIGN CORPORATIONS.

1. Rev. St. 1889, § 5897, providing that, in all suits upon fire policies "hereafter issued or renewed the defendant shall not be permitted to deny that the property insured thereby was worth at the time of the issuing of the policy the full amount insured therein on said policy," is not in violation of Const. U. S. Amend. 14, § 1, declaring that no state shall make or enforce any law which shall abridge the privileges or immunities of the citizens of the United States.

2. Nor is such statute within the provisions of Const. art. 4, § 53, prohibiting the passage of local or special laws changing the rules of evidence in any judicial proceeding or inquiry before the courts.

3. In view of the proviso limiting the operation of the law to policies "hereafter issued," the statute cannot be construed as a violation of Const. art. 2, § 15, prohibiting the passage of retrospective laws, or laws impairing the obligation of contracts.

4. The provisions of Const. art. 2, § 4, declaring that all persons have a natural right to life, liberty, and the gains of their own industry, etc., do not prohibit the passage of laws limiting the powers of foreign corporations doing business in the state.

5. A corporation is not a citizen within the meaning of Const. U. S. art. 4, § 2, declaring that the citizens of each state shall be entitled to all the privileges and immunities of citizens of the several states.

In banc. Appeal from circuit court, Scotland county; Benjamin E. Turner, Judge.

Action by Robert E. Daggs against the Orient Insurance Company of Hartford, Connecticut. There was judgment for the plaintiff, and defendant appeals. Affirmed.

McVey & Cheshire, for appellant. A. J. Daggs and N. M. Pettingill, for respondent.

GANTT, P. J.

Action upon a fire insurance policy issued upon a barn belonging to respondent in Scotland county, Mo., on the 3d day of June, 1893, for $800, by a corporation organized in Connecticut. The policy contained a clause limiting the company's liability "in case of loss to the actual cash value of the property at the time of the loss," and this stipulation was pleaded together with an averment that at the time said property was insured said barn did not exceed $100 in value. No fraud was charged, or any subsequent depreciation in the property prior to the fire. It is apparent from the foregoing dates that the policy was written and delivered after sections 5897, 5898, Rev. St. 1889, had been enacted by the general assembly of this state. Those sections provide that: "In all suits upon policies of insurance against loss or damage by fire hereafter issued or renewed, the defendant shall not be permitted to deny that the property insured thereby was worth at the time of the issuing of the policy the full amount insured therein on said property; and in case of total loss of the property insured, the measure of damage shall be the amount for which the same was insured, less whatever depreciation in value, below the amount for which the property is insured, the property may have sustained between the time of issuing the policy and the time of the loss, and the burden of proving such depreciation shall be upon the defendant; and in case of partial loss, the measure of damage shall be that portion of the value of the whole property insured, ascertained in the manner hereinafter prescribed, which the part injured or destroyed bears to the whole property insured." Section 5898: "That no condition of any policy of insurance contrary to the provisions of this article [meaning thereby article four] shall be legal or valid." The defendant, in its answer, averred that these two sections were unconstitutional, and were in contravention of the constitution of Missouri and the constitution of the United States. To this plea the circuit court sustained a demurrer, and, defendant declining to plead further, judgment was rendered for the amount of the policy. All other questions were settled in favor of plaintiff by the admissions of defendant.

A statute similar in principle to the statute above quoted was construed by this court in banc in Haven v. Insurance Co., 123 Mo. 403, 27 S. W. 718, and full effect given to its provisions. Section 6009, Rev. St. 1879. It was pointed out in that case that laws of this character had been enacted in many of the states of the Union, and uniformly sustained, as entering into and molding insurance contracts thereafter written in said states. Insurance Co. v. Leslie (Ohio Sup.) 24 N. E. 1072; Chamberlain v. Insurance Co., 55 N. H. 249; Reilly v. Insurance Co. 43 Wis. 449; Emery v. Insurance Co., 52 Me. 322. In those cases, it is true, the constitutionality of the several statutes was not directly passed upon; but the fact that so many courts of last resort have uniformly sustained such enactments is a most cogent reason why this court should proceed with the utmost care in the determination of their validity with reference to the charge that they conflict with the constitution of the United States and of this state. If sections 5897, 5898, Rev. St. 1889, are not unconstitutional, they must be held, according to the great weight of authority, to enter into and form a part of the contract of insurance as fully as if written into it; and, if any of the stipulations of the policy conflict with the statute, such stipulations must yield to the law. Havens v. Insurance Co., 123 Mo. 403, 27 S. W. 718, and authorities there cited. By the terms of the two sections under consideration they only apply to contracts of insurance "issued or renewed" after the said sections went into effect. They are, then, wholly prospective in their operation, and the insurance in this case was written long after said sections became the law of Missouri. So that, when the defendant insurance company entered into this contract, it was apprised of the law of this state which prohibited a stipulation in its policies that it would only be liable for the actual value of the property destroyed, and that the statute, by its terms, annulled this provision of the policy. The defendant assails this statute on the ground that it violates section 1 of the fourteenth amendment of the constitution of the United States. As a predicate for this position defendant argues at length, and cites authorities to show that "a corporation" is "a person," within the meaning of the constitution of the United States. Railway Co. v. Mackey, 127 U. S. 205, 8 Sup. Ct. 1161; Santa Clara Co. v. Southern Pac. Ry. Co., 118 U. S. 394, 6 Sup. Ct. 1132. But, granting that a corporation is a person, within the meaning of the constitution, for certain purposes, surely no proposition is better settled than that the constitution of the United States nowhere deprives this state of the power and right to prescribe the conditions upon which it will permit foreign corporations to do business within its boundaries. Paul v. Virginia, 8 Wall. 168; Philadelphia Fire Ass'n v. People, 119 U. S. 110, 7 Sup. Ct. 108; Doyle v. Insurance Co., 94 U. S. 535; Bank v. Earle, 13 Pet. 519. Again and again it has been held that the whole matter of admitting foreign corporations to do business in the state rested absolutely in the discretion of the legislature of the state. The terms it imposes may be reasonable or unreasonable. The comity ordinarily extended is accompanied by no legal sanction. The state, having extended it, may at any time revoke it. This is the doctrine steadily maintained alike by state and federal decisions. Doyle v. Wisconsin, 94 U. S. 50, 535; Ducat v. City of Chicago, 10 Wall. 415; Insurance Co. v. French, 18 How. 404; Railroad Co. v. Koontz, 104 U. S. 11; Carroll v. City of East St. Louis, 67 Ill. 568; Insurance Co. v. Davis, 29 Mich. 238; Noble v. Mitchell (Ala.) 14 South. 581; State v. Root, 83 Wis. 667, 54 N. W. 33; Dugger v. Insurance Co. (Tenn. Sup.) 32 S. W. 5. The state has the power to prevent the making of contracts within its borders by foreign corporations altogether, or it may impose such terms as it may deem expedient, provided they do not conflict with the exclusive powers of congress. In the case of List v. Com., 118 Pa. St. 322, 12 Atl. 277, it was held that the state has power to prescribe conditions under which foreign corporations shall do business in that state, the court saying: "We cannot regard the questions presented by this record as open questions in any sense. They are all settled emphatically and decisively by the decision of the supreme court of the United States in Paul v. Virginia, 8 Wall. 168." In Paul v. Virginia, supra, the facts, briefly stated, were that Paul, a citizen of Virginia, had been appointed agent of several insurance companies organized and chartered by the state of New York. He filed his authority to act as their agent, and complied, or offered to comply, with all the laws of Virginia prerequisite to a license to solicit and write insurance in said state, excepting the provisions requiring a deposit of bonds with the treasurer of the state, and the production to the licensing officer of the treasurer's receipt for said bonds. A license was refused him. He thereupon undertook to do business without such license, and was indicted and convicted. On writ of error to the supreme court of the United States his conviction was affirmed. It was contended in his behalf that the Virginia statute was in conflict with that clause of the constitution which declares "that the citizens of each state shall be entitled to all the privileges and immunities of citizens in the several states," and the clause which vests in congress "the exclusive power to regulate commerce with foreign nations and among the several states." It was held by the supreme court that issuing policies of...