Pride v. Commercial Union Ins. Co., Limited, of London, England

Decision Date13 November 1913
Citation9 Ala.App. 334,63 So. 803
CourtAlabama Court of Appeals

Rehearing Denied Dec. 9, 1913

Appeal from Law and Equity Court, Morgan County; Thomas W. Wert Judge.

Action by Thomas E. Pride against the Commercial Union Insurance Company, Limited, of London, England, for money had and received. Judgment for defendant, and plaintiff appeals. Affirmed.

The complaint alleges that the sum of $740.35 was due, by virtue of the fact, from the defendant, that by an agreement with Haas & McIntyre, general agents of the defendant company plaintiff was to solicit insurance on behalf of defendants on cotton to be exported by the cotton firm of Harris Cortner & Co., doing business in the city of Decatur, by which certain premiums of insurance were to be exacted by the defendant company and the plaintiff from said Harris, Cortner & Co., from insurance which plaintiff was to procure from said company; one-tenth of the premiums to belong to plaintiff, and nine-tenths to be the property of defendant. Plaintiff then alleges that the premiums paid defendant by said concern amounted to $7,403.50, and that one-tenth of that was the property of plaintiff, was received by defendant for use of plaintiff, and has never been remitted or paid plaintiff.

Tennis Tidwell, of New Decatur, for appellant.

E.W. Godbey, of Decatur, for appellee.


To the original complaint in this case a special plea was interposed, which averred "that the sum sued for in this action, and each and every count thereof, is compensation reward, hire, or commission claimed by the plaintiff for the following services, to wit: For soliciting insurance in this state, since August 25, 1909, on behalf of the defendant, a foreign insurance company not incorporated in this state, of Harris, Cortner & Co.; and defendant says that at the time of the performance of such service and work, and prior thereto, the plaintiff had not received a proper certificate from the Insurance Commissioner, authorizing him to perform any of the actions of an agent of such company." There were other special pleas which in their averments were similar to the one quoted, except that the services rendered by the plaintiff were in such other pleas, respectively, alleged to be other acts which, by the provisions of section 1 of the "Act to amend section 7189 of the Code of Alabama," approved August 25, 1909 (Acts of Ala., Special Session 1909, p. 120), are given the effect of making the person doing them an insurance agent. The second section of the statute referred to makes it a misdemeanor for such person to do for another any of the acts mentioned until the insurance company, for or in behalf of which it is done, shall have complied with the laws of the state, and received the proper license or certificate authorizing it to do business in this state, and until such person shall have received the proper certificate from the Insurance Commissioner authorizing such person to perform any of the acts of an agent for such company. Appellant assigns as error the action of the court in overruling demurrers to these special pleas. The ground of demurrer which is relied on in the argument of the counsel for the appellant is the following: "Each of said pleas shows that the sum sued for in the plaintiff's action, and in each count thereof, is for compensation, hire, reward, or commission claimed by plaintiff for services performed for the defendant since the 25th day of August, 1909, and each of said pleas shows upon its face that the services performed for defendant were the services of an agent, and a conclusive presumption arose by reason of the fact that plaintiff performed the services for defendant as its agent that the defendant had complied with section 4561 of the Code of Alabama 1907, and had obtained a certificate of authority for plaintiff to do and perform the acts as agent that each of said pleas alleged he did perform; and defendant cannot be heard to deny that it had not in fact complied with the requirement enjoined upon it by section 4561 of the Code of Alabama 1907, and that it had not in fact obtained the certificate of authority for the plaintiff to do and perform the acts that each of said pleas alleges he did perform."

In support of this ground of demurrer it is urged in argument that, as the statute (Code, § 4561) made it the duty of the defendant insurance company itself to obtain from the Insurance Commissioner a certificate of authority for the plaintiff as its agent in this state, in an action by that agent against such company the latter cannot be heard to say that it failed to secure such certificate. In this connection the decision in the case of Brooklyn Life Insurance Co. v. Bledsoe, 52 Ala. 538, is referred to. That was an action on a policy issued by a foreign insurance company. It was held that the defendant could not, in avoidance of the contract sued on, set up its own failure to procure the certificate of authority which the statute then in force required to entitle it to do business in this state. In passing upon the question there presented it was said in the opinion: "While it is a settled principle that a contract founded on an act prohibited by statute is void, yet it is subject to this qualification: That, although the Legislature may forbid the doing of a particular act, a party not a privy to it, or involved in the guilt of the transaction, may recover of the guilty actor, unless the act itself is void. *** The statute did not declare void the policy or contract of insurance made here, by a foreign company, without a certificate of authority. Its purpose was not to absolve the company from liability on its contracts made here. The object was to afford our own citizens ample security against loss, because of transactions had here with the companies. The company and its agents are alone guilty under the statute, if they violate it. Such violation they cannot invoke as a protection from liability on their contracts." This statement by the court of the reasons supporting the conclusion reached in that case is enough to prove that it is a perversion of that ruling to invoke it in favor of a plaintiff whose own act upon which he relies as the ground of the recovery sought is itself a criminal offense. We are not cited to any authority which furnishes support to the proposition that the presumption of a compliance with the law which is indulged against a defendant corporation in favor of an innocent plaintiff with whom it has contracted (13 Am. & Eng.Ency. of Law [2d Ed.] 878) is also to be indulged in favor of a plaintiff who is seeking to maintain his action on a transaction which involved the commission of a crime by himself. A clear distinction between such cases as the one just referred to and the one at bar is that in the former the defendant undertakes

to set up its own failure to comply with the law, while in the latter the defendant is setting up a criminal breach of the law by the plaintiff himself. We know of no rule of law which forbids a defendant, though he is guilty himself, to set up a state of facts showing that to permit the plaintiff to maintain his action would amount to allowing him to recover compensation for the commission of a crime. To recognize the failure of the defendant insurance company to do what the law required of it to entitle it to do business in this state by agent as an excuse for the conduct of one who acted as its agent in transacting such business in this state without having received the proper certificate authorizing him to do so would contravene the plain purpose of the criminal statute above referred to, in prohibiting the doing of the things specified by any one for or as the agent of a foreign insurance company who had not received the proper certificate from the Insurance Commissioner authorizing him to perform such act of agency. The prime object of the statute was to prevent the performance of such acts by the agent when there has been such failure on the part of his principal. "The law will not allow a right to spring from its own deliberate violation." Jemison et al. v. Birmingham & Atlantic R. Co., 125 Ala. 378, 28 So. 51; 1 Page on Contracts, § 332. A criminal act is not a valid consideration to support a contract, either express or implied. The averments of each of the special pleas above mentioned showed that the plaintiff's action was for the recovery of compensation, reward, hire, or commission for committing a misdemeanor. The demurrers to those pleas were properly overruled.

If in such a case the plaintiff could improve his position by showing that the defendant was more in fault than he was, no benefit could accrue to the plaintiff in this case as a result of a comparison of his conduct with that of the defendant. His violation of a criminal statute certainly was not, in the eye of the law, a fault less grave than that of the defendant insurance company in engaging in business in this state without having done what the law required to entitle it to do so.

The plaintiff amended his complaint by adding count A. This count claimed $740.35 and interest thereon for money had and received for the use of the plaintiff, the count specifying substantially as follows the manner of the defendant's receipt of the amount claimed: Plaintiff made a contract with Haas & McIntyre, the general agents of the defendant, a foreign insurance company, to procure from Harris, Cortner & Co., a cotton firm doing business in Decatur, insurance for them in the defendant company on cotton to be exported. Premiums were to be charged on all cotton insured under this arrangement, and one-tenth of the premiums exacted from the insured on all policies...

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