Karnes v. American Fire Ins. Co. of Philadelphia

• Decision Date: 24 May 1898
• Citation: Karnes v. American Fire Ins. Co. of Philadelphia, 144 Mo. 413, 46 S.W. 166 (Mo. 1898)
• Parties: KARNES v. AMERICAN FIRE INS. CO. OF PHILADELPHIA.
• Court: Missouri Supreme Court

46 S.W. 166

144 Mo. 413

KARNES v. AMERICAN FIRE INS. CO. OF PHILADELPHIA.

Supreme Court of Missouri.

May 24, 1898.

CONSTITUTIONAL LAW — LIMITATIONS IN CONTRACTS — NONSUIT.

1. Rev. St. 1889, § 2394, providing that provisions of any contract to be entered into which may limit the time in which an action thereon may be instituted shall be void, is constitutional on the ground of public policy; and stipulations in violation of it in policies are void.

2. Rev. St. 1889, § 6784, allowing another action on the same grounds to be brought within a year after a nonsuit, does not curtail, but extends, the time allowed by other sections of the limitation law.

In banc. Appeal from circuit court, Audrain county; E. M. Hughes, Judge.

Action by Jennie Karnes against the American Fire Insurance Company of Philadelphia. From a judgment for defendant, plaintiff appealed to the St. Louis court of appeals, and the case was transferred to this court on account of the constitutional question involved. Reversed.

J. H. Cupp and W. W. Fry, for appellant. Geo. Robertson, for respondent.

WILLIAMS, J.

This is a suit upon a policy of insurance, issued April 18, 1888, on a stock of millinery goods belonging to plaintiff. The property was destroyed by fire on the 27th of November in said year, and during the time covered by the policy. The present suit was begun April 28, 1891. The case was tried by the court without a jury, and, at the close of the testimony, a declaration of law was given that, under the pleadings and evidence, plaintiff could not recover. Judgment was accordingly rendered for defendant, and an appeal was taken to the St. Louis court of appeals. The case was transferred to this court on account of the constitutional question hereinafter mentioned.

Counsel have presented only two propositions of law for our consideration, and both relate to the time of bringing this action.

1. The present suit was commenced more than one year after the loss. The policy contains a clause stating that "no suit or action of any kind against this company for a recovery of a claim under this policy shall be sustainable in any court, unless begun within one year from the date of the fire." The contract of insurance was made, after the act of March 18, 1887 (now, Rev. St. 1889, § 2394), went into effect, and the provisions of which are as follows: "All parts of any contract or agreement hereafter made or entered into, which either directly or indirectly limit or tend to limit the time in which any suit or action may be instituted, shall be null and void." The statute, it will be observed, does not undertake to interfere with existing contracts, but declares null and void all future agreements contrary to its provisions. Defendant assails the act as an unconstitutional attempt to take away the right of private contract, which, it is said, is guarantied to the citizen. It is argued that "the right to acquire, possess, and protect property includes the right to make reasonable contracts, which shall be under the protection of the law." The state may nevertheless prohibit such contracts as contravene the policy of its laws, and the right exists to prevent the enforcement of agreements that are against the public policy of the state, or that will result in fraud, imposition, or oppression. It cannot be claimed that parties have the right to make any and all such contracts as they deem proper. The state has made, and may make many, regulations that will restrict this right. For instance, we have usury laws, and their validity is unquestioned. Parties are not permitted to insert certain specified conditions in insurance contracts which would be perfectly legitimate and entirely proper but for the statutory prohibition; yet the courts sustain these provisions, and declare ineffectual any attempt, by contract, to evade or nullify the statute. Society v. Clements, 140 U. S. 226, 11 Sup. Ct. 822. The legislature determined that a sound public policy demands that the courts of the state shall remain open to litigants as long as their claims are not barred by the statute of limitations, and hence passed this act. The statute proceeds upon the theory that rules limiting the time for bringing suits should be uniform and general, and should not be left to private contract. The policy of the state has been to except from the operation of the statute of...