German Alliance Insurance Company v. Foster Hale
Decision Date | 16 January 1911 |
Docket Number | No. 56,56 |
Citation | 31 S.Ct. 246,55 L.Ed. 229,219 U.S. 307 |
Parties | GERMAN ALLIANCE INSURANCE COMPANY, Plff. in Err., v. FOSTER K. HALE, Junior |
Court | U.S. Supreme Court |
Messrs. Alexander C. King, H. Pillans, Shelton Sims, J. H. Webb, King & Spalding, and Pillans, Hanaw, & Pillans for plaintiff in error.
[Argument of Counsel from pages 308-311 intentionally omitted] Messrs. Thomas M. Stevens and Stevens & Lyon for defendant in error.
[Argument of Counsel from page 311 intentionally omitted] Mr. Justice Harlan delivered the opinion of the court:
This action was brought in one of the courts of Alabama by the defendant in error, hale, on a policy of fire insurance issued by the German Alliance Insurance Company, a New York corporation.
The policy covered 'lumber and squared timber while stacked on the banks of Byrne's Mill pond, near Bay Minette, Baldwin county, Alabama, said lot of lumber and timber containing 300,000 feet,' etc.
Upon the petition of the defendant, the case was removed into the circuit court of the United States for the southern district of Alabama, where a verdict was returned for $5,198.93 in favor of the plaintiff. For that amount judgment was rendered against the company. The circuit court suggested that the verdict was excessive, and that the motion for new trial would be granted, unless the plaintiff reduced the verdict to $4,112. The required reduction was made and the new trial denied. Northern P. R. Co. v. Herbert, 116 U. S. 642, 647, 29 L. ed. 755, 758, 6 Sup. Ct. Rep. 590.
The principal question presented by the assignments of error arises out of certain provisions of the Code of Alabama, as follows:
Ala. Code 1896, §§ 2619, 2620; Id. 1907, §§ 4594, 4595.
At the time of the contract of insurance, the defendant corporation was connected with a tariff association which prescribed the rates of premium to be charged by its constituent members. The verdict and judgment against the company gave effect to that clause of the statute providing that, under every contract or policy of insurance, thereafter made or issued by any such association, the assured or beneficiary may, in addition to the actual loss or damage suffered, recover 25 per cent of the amount of such actual loss, any provision or stipulation in such contract or policy to the contrary notwithstanding.
The assignments of error present a question of practice which is supposed to be raised by those provisions of the policy which contained a covenant and warranty in these words:
The principal question arising on this writ of error is whether the above sections of the Alabama Code are consistent with the Constitution of the United States. The contention is that the provision allowing the insured or beneficiary in a named contingency to recover, in addition to the actual loss or damage suffered by him, 25 per cent of the amount of loss or damage so suffered,—any stipulation in the contract of insurance to the contrary notwithstanding,—deprives the company of its property without due process of law, and also denies to it the equal protection of the laws; thus, it is contended, violating the 14th Amendment of the Constitution of the United States.
In our opinion the statute is not liable to objection on constitutional grounds. The state—as we may infer from the words of the statute alone—regarded the fixing of insurance rates by self-constituted tariff associations or combinations as an evil against which the public should be guarded by such legislation as the state was competent to enact. This question was before the supreme court of Alabama, and the statute was there assailed as violating both ...
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