Daggs v. The Orient Insurance Company of Hartford, Connecticut

• Citation: 38 S.W. 85,136 Mo. 382
• Parties: Daggs v. The Orient Insurance Company of Hartford, Connecticut, Appellant
• Decision Date: 15 December 1896
• Court: United States State Supreme Court of Missouri

38 S.W. 85

136 Mo. 382

Daggs v. The Orient Insurance Company of Hartford, Connecticut, Appellant

Supreme Court of Missouri

December 15, 1896

Appeal from Scotland Circuit Court. -- Hon. Ben. E. Turner, Judge.

Affirmed.

McVey & Cheshire for appellant.

(1) The defendant corporation is a person. People v. Budd, 117 Ill. 1; Railway Co. v. Beckwith, 129 U.S. 26; Bank v. Billings, 4 Peter, 514; Northwestern F Co. v. Town, 3 Biss. 480; Cooley, Const. Lim. [6 Ed.] 484; Leep v. Railway Co., 58 Ark. 407; Railway Tax Cases, 13 F. 722; Santa Clara Co. v. Railroad, 118 U.S. 394. (2) The statute violates the most fundamental principle of insurance, which principle is that the contract of insurance is one purely of indemnity; and enacts in its place a wager policy, which policy so enacted is contrary to the principles of insurance, which have always been construed to the effect that the insured will not be allowed to reap profits on account of casualty insured against. May on Insurance, sec. 2; Emerigon on Insurance, p. 13; Insurance Co. v. Hughes, 10 Lea, 461. (3) The statute is contrary to public policy, promotes crime, and offers a premium for fraud and arson, and endangers private property, which would otherwise be safe, by offering premiums for setting fire to private property covered by insurance and in all its tendencies is immoral. (4) The statute changes the rules of evidence within the meaning of the constitution of this state, and contrary to the course of the common law, in that the statute provides that regardless of the extent of the loss, and regardless of the common law rules of evidence, that no person shall recover except upon proof of damages sustained, and enacts in its place that the plaintiff shall not be required to prove the extent of his damages, neither shall the defendant be allowed to disprove the amount of his damages claimed, but by operation of the statute alone, the amount to be recovered in the case is adjudged, regardless of the damages sustained, the evidence, and the contract of the parties. Tiedeman on Limts. Police Power, p. 519; Tift v. Griffin, 5 Ga. 185; Railroad v. Payne, 33 Ark. 816; Abbot v. Lindenbower, 42 Mo. 162; Young v. Beardley, 11 Paige, 93; East Kingston v. Towle, 48 N.H. 57; Allen v. Armstrong, 16 Iowa 508; Conway v. Cable, 37 Ill. 82; White v. Flinn, 23 Ind. 46; Groesbeck v. Seeley, 13 Mich. 329; Lenz v. Charlton, 23 Wis. 478; Taylor v. Miles, 5 Kan. 498; Wright v. Ceadlebaugh, 3 Nev. 341; Constitution, sec. 53, art. 4; Constitution, sec. 28, art. 2; Cooley on Const. Limt., p. 208; Railway Co. v. Payne, 33 Ark. 816. (5) The statute violates the first and most fundamental principle of the law of contracts, viz.: That there can, in fact, be no contract between parties unless the minds of the parties meet, and acquiesce in the thing contracted about. The statute makes the contract, without the meeting of the minds of the parties, regardless of the fact that the parties have agreed to a contract in terms directly opposite to what the statute compels. (6) The statute prevents parties from making their own contract in reference to a private matter of business, deprives the defendant of its property without due process of law and takes private property and funds held in trust and gives it to a private individual without consideration and contrary to the written contract deliberately entered into between the parties, and is not uniform in its operation. Ins. Co. v. Morse, 20 Wall. 485; Leep v. Railway Co., 25 S.W. 75; State v. Loomis, 22 S.W. 350. (7) It is clearly the duty of courts to hold every infringement of constitutional rights, and all constitutional provisions for the security of persons and property should be liberally construed. Boyd v. United States, 116 U.S. 616; Ah Kow v. Neuman, 5 Sawyer, 562; Ordronaux on Const. Leg., p. 418; Sedgwick, Stat. and Const. Law, p. 182; Marbury v. Madison, 1 Cranch, 137, 1 Kent, 448; Bonham's case, 6 Rep. 118; Cooley, Const. Lim., 44; Muglar v. Kansas, 123 U.S. 661. (8) There is no power in the legislature to regulate private contract and prescribe the conditions under which it shall conduct its business, although the business be that of a corporation, unless such contracts pertain to a public use, or are injurious to the morals, health, safety, or comfort of the people. Ins. Co. v. Morse, 20 Wall. 445; People v. Budd, 117 N.Y. 1; Commonwealth v. Perry, 14 L. R. A. 325; Butchers, etc., v. Cresent City, etc., 111 U.S. 746; New Orleans Gas Co. v. Louisiana Light Co., 115 U.S. 650; Railroad v. McClure, 10 Wall. 511; Ins. Co. v. Debolt, 16 Howard, 416; Sedgwick's Stat. and Const. Law, 637. (9) The effect of the statute is to deprive the defendant of its property without due process of law, within the meaning of the constitution of this state and of the United States, and the decisions in interpretation thereof. Story on Const. [5 Ed.], sec. 1943; Cooley on Const. Lim. [6 Ed.], 430; Railway Co. v. Humes, 115 U.S. 512; Bank v. Okley, 4 Wheat. 235; Wally's Heirs v. Kennedy, 2 Yerg. 554; Story, Const. [5 Ed.], sec. 1590; State v. Loomis, 22 S.W. 351; Strong on Const. [5 Ed.], 1590, 1943; Cooley, Const. Lim. [6 Ed.], 430, 356. (10) The statute is in derogation of the right of contract and the legislature had no power to enact the statute under the police power of the state, and it violates the fundamental constitutional provisions. State v. Loomis, 22 S.W. 350; State v. Julow, 31 S.W. 781; Shaver v. Pennsylvania Co., 71 F. 931; Cooley on Const. Lim. 575; Low v. Printing Co., 41 Neb. 127; Millett v. People, 117 Ill. 294; Forer v. People, 141 Ill. 171; Ex parte Kuback, 85 Cal. 274; Application of Jacobs, 98 N.Y. 106; People v. Gillson, 109 N.Y. 389; State ex rel. v. Laclede, etc., 102 Mo. 472; Tiedeman on Police Power, 210; New Orleans Gas Co. v. Louisiana Light Co., 115 U.S. 650; Ex parte Whitwell, 19 L. R. A. 727; Ex parte Tuttle, 91 Cal. 589. (11) Even if the legislature had power to regulate and control insurance companies, yet the act is unreasonable and consequently void. Railroad v. Minn., 134 U.S. 458; Reagan v. Co., 154 U.S. 162; Ames v. Railroad, 64 F. 165.

A. J. Daggs for respondent.

(1) The statutes involved in this case should be held good on the ground of public policy. And similar statutes have been held constitutional in other states on this ground. Reily v. Ins. Co., 43 Wis. 449. (2) The statute was in force when this policy was issued. A law passed before a contract was made can not impair its obligation. Bronson v. Rinsey, 1 How. 311; Moor v. Fowler, Hemp, 536; Blair v. Williams, 4 Lit. 54; Robby v. Boswell, 23 Ga. 51; Powers v. Dougherty, Ibid., 65; Sparrow v. Railroad, 7 Ind. 369; Davis v. Bronson, 6 Iowa, 410; Bruns v. Crawford, 34 Mo. 330; Edwards v. Keory, 96 U.S. 600. (3) A law existing at the time the contract is made and by which the contract is enforced, enters into and becomes a part of the contract as much as if it was referred to and made a part of its terms and does not impair its obligation. Ellerbe v. Association, 114 Mo. 501; Havens v. Ins. Co., 123 Mo. 403; Barnard v. Ins. Co., 38 Mo.App. 106; Baker v. Ins. Co., 57 Mo.App. 559; Pinney v. Pinney, 81 Mich. 450. (4) And the constitutional prohibition relates to laws passed after the contract is made. Lehi Water Co. v. Easton, 121 U.S. 388; Augdon v. Saunders, 12 Wheat. 213. And it is immaterial where the law originated. Williams v. Bruffy, 98 U.S. 176. (5) And a law prohibiting the making of a contract is not a law impairing the obligation of contract. Churchman v. Martin, 54 Ind. 380. (6) Nor a law varying the consequence without changing the essence and character of the contract or altering the nature or obligations therein. Gosey v. Nav. Co., 2 Watts & S. 156. (7) A state has full power to prescribe the conditions on which an insurance company may carry on its business therein (State v. Stone, 118 Mo. 388), and regulate foreign insurance companies doing business in a state. State v. Phips, 31 P. 1097; Paul v. Virginia, 8 Wall. 168; Ducat v. Chicago, 10 Wall. 410; Ins. Co. v. Mass., Ibid. 566. (8) The statute can not be stipulated away and any attempt to do so will be held invalid, and this character of a stipulation is what the statute of this state strikes at. R. S. 1889, sec. 5898. If it was otherwise, the public would not be safe, law would become a farce, the strong would take advantage of the weak. Hence it has been often held that no contract can change the law. Havens v. Ins. Co., supra, and cases cited at page 417. (9) Where a corporation recognizes a statute by doing business under it, it is estopped from denying its constitutionality when it finds that the law imposes a liability on it. Railroad v. King, 98 Miss. 852; Collier v. Morrow, 90 Ga. 148. (10) Insurance company waives its right by acting under the law. State v. Ins. Co., 15 S. Rep. 347. And a statute does not deny a corporation the equal protection of the law if it treats them all alike (151 U.S. 556); Railroad v. Bristol, 14 S.Ct. U. S. 437. (11) And a law which changes the rules of evidence relates to the remedy only and may be applied to cases existing at the passage of the act. O'Bryan v. Allen, 108 Mo. 227. (12) As to whether this is a local or special law, and, therefore, in contravention of section 53, article 4, constitution, has been settled by the following cases: Ex parte Swan, 96 Mo. 44, 50, citing and affirming State ex rel. v. Pond, 93 Mo. 606. And see State v. King, 74 Mo. 612; State v. Jackson, 80 Mo. 175.

Gantt, J. Brace, C. J., and Macfarlane, Sherwood, Burgess, and Robinson, JJ., concur in the opinion. Barclay, J., concurs in affirming the judgment.

OPINION

In Banc.

Gantt J.

Action upon a fire insurance policy issued upon a barn belonging to respondent in Scotland county, Missouri,...