Wilkinson v. Goza

• Decision Date: 12 December 1932
• Docket Number: 30233
• Citation: 145 So. 91,165 Miss. 38
• Court: Mississippi Supreme Court
• Parties: WILKINSON et al. v. GOZA

145 So. 91

165 Miss. 38

WILKINSON et al. v. GOZA

No. 30233

Supreme Court of Mississippi

December 12, 1932

Division A

Suggestion Of Error Overruled January 9, 1933.

APPEAL from circuit court of Clay county, HON. J. I. STURDIVANT Judge.

Suit by M. A. Goza against W. A. Wilkinson and others, alleged to be a copartnership doing business under the name and style of the Houston Insurance Agency, and others. From an adverse judgment, W. A. Wilkinson and others appeal. Affirmed.

Affirmed.

Thos. L. Haman, of Houston, for appellant.

Section 5197, Code of 1930 is a penal statute and creates a penalty or forfeiture given to the insured and the statute may be upheld only on that ground, especially considered in connection with the provision of section 5196 that whoever shall transmit any premium of insurance, or who shall receive or deliver a policy of insurance, or do or perform any other act or thing in the making or consummation of any contract of insurance with any Insurance Company "other than for himself" (which we read in effect, for another), whether any such acts shall be done at the instance or request, or by the employment of the Insurance Company, or of, or by any broker or other person, shall be held to be the agent of the company for which the act is done or the risk is taken as to all the liabilities imposed by law.

If we could isolate section 5197 from section 5196 and rest of the chapter on insurance and from section 1006 making the very act of assisting another in getting insurance from an unauthorized company unlawful, then section 5197 might be considered as merely remedial.

If there is by the statute, a mere substitution of the statutory agent for the insurance company in the contract, such operates to release the insurance company, and undertakes to impose a contract between two parties not in fact contracting. A liability by substitution imposed on the statutory agent under the contract with release of the insurance company, actual party to the contract, would certainly operate as a statutory forfeiture, if upheld, as valid, and action for recovery of which is barred by section 2301.

An escheat is in the nature of a forfeiture, but not in fact rather a reversion.

Under our constitution there can be no forfeiture provided by a statute not penal.

If the liability imposed by the statute on the statutory agent is joint with that of the insurance company, and not several, the peremptory instructions requested for appellants should have been granted.

The court in the case of Cain v. State, 103 Miss. 701, construes these two sections together with the section making the act defined by these sections criminal, sections 1248, 2615, and 2616 of the 1906 Code, corresponding in numbers to sections 1006, 5196 and 5197 of the 1930 Code.

The action is for a penalty exacted by statute law by way of punishment for doing an unlawful and prohibited act; for the commission of an offense against the public. A penalty or forfeiture created by statute alone, inflicted for dereliction of duty and for the commission of acts prohibited and made unlawful by the statute for which but for the statute making the act unlawful, there would be no penalty and no cause of action.

37 C. J. 788-789-790; 25 C. J. 1183, 1181, 1179, 1189; Bank of Hickory v. May, 80 So. 704, 119 Miss. 239.

The mode in which penalties shall be enforced and the disposition of the amount of the penalty are matters of legislative direction.

Staten Island Rapid Transit Ry. Co. v. Phoenix Co., 281 U.S. 98, 74 L.Ed. 726.

Provision of penalty as punishment for violating statute does not invalidate statute as denying liberty of contract. The liberty of contract guaranteed by Federal Constitution is freedom from arbitrary restraint.

Liberty Warehouse Co. v. Burley Tobacco Growers Co-op Marketing Ass'n, 72 L.Ed. 473.

As an action for a penalty or forfeiture, the suit was barred by section 2301 of the Code.

Considered, however, as an act not creating a penalty or forfeiture, the act would be violative of the Fourteenth Amendment to the Federal Constitution and section 14 of the state constitution.

Hunnington v. New York, 118 F. 686, 193 U.S. 441, 48 L.Ed. 741; South Carolina v. U.S. 199 U.S. 449, 50 L.Ed. 261; Smith v. Alabama, 124 U.S. 465, 31 L.Ed. 508-512.

The statute, if not providing a penalty for doing an act prohibited by the statute, undertakes to abridge the privileges of citizens of the United States, and would deprive citizens of both the United States and of the State of liberty of contract, while all such constitutional prohibitions are subject to such restraints as the government of the state may prescribe for the general good of the whole.

Virginia v. Rives, 100 U.S. 373, 25 L.Ed. 667; Hodges v. U.S. 203 U.S. 1, 51 L.Ed. 65; The Slaughter House cases, 16 Wall. 36, 21 L.Ed. 394, 408; Lochner v. New York, 49 L.Ed. 937.

There was no liability under the contract of insurance. Right of recovery even against the insurance companies depended on sole ownership of the real estate as to the building.

Our proposition is that the statute imposing liability on the agent is invalid, unless it may be held as imposing a penalty; that if the statute is penal, the action is barred.

The suit is for an unlawful act, not by way of damages arising therefrom, but for a liability imposed by statute for a violation of law. One partner cannot charge his firm with such liability. The general issue was plead. The burden of proof was on appellee as against each of appellants. No proof was introduced even tending to connect W. A. Wilkinson, one of appellants, with the matter. The statute defines an actor in an unlawful enterprise to whom the penalty of sections 5197 and 1006 may apply. The court in the case of Cain v. State, 103 Miss. 701, 60 So. 731 in construing section 1006 (section 1248, Code of 1906) found it necessary to read and construe all three sections together.

Rush H. Knox, of Jackson, for appellant.

At the time of the contract E. F. White was not a member of the Houston Insurance Agency, neither was he an insurance agent. He did not begin to write insurance until March, 1929, and was not acting as an agent for any insurance company or agency at this time, and therefore, could not possibly have been interested in this matter further than trying to favor someone who felt that he had to have insurance, and therefore cannot be classed as an agent under section 5196 of the Mississippi Code of 1930.

It will be observed that all that was said and done with reference to securing these two insurance policies, was said and done in the office of the Houston Insurance Agency, the members of the firm being licensed agents, and engaged in the insurance business, and if section 5196 of the Code of 1930 applies to anyone who had any connection with these insurance policies, it applies to W. A. Wilkinson and J. A. Wilkinson and not to E. F. White.

Appellants W. A. Wilkinson and J. A. Wilkinson were insurance agents, being engaged in a general insurance business. Appellant E. F. White was not at this time an insurance agent, and was not engaged in the insurance business. He was a cotton buyer.

Whether or not this suit was barred by the statute of limitations was a question of fact to be determined by the jury, inasmuch as the Houston Insurance Agency, by J. A. Wilkinson had signed what appellee is pleased to call an extension or waiver as to the time of commencing suit.

It was also a question of fact to be determined by the jury as to whether or not the insured, or his son, Sam Goza owned the furniture that was said to have been destroyed by fire in this case, it appearing from the evidence in the case that very likely there was a change of ownership without notice to the insurance company or to either of the appellants herein.

An instruction assuming the existence of facts at issue, is erroneous.

Gilliespie v. Planters, etc., Mfg. Co., 18 So. 120; Coleman v. Adair, 75 Miss. 660, 23 So. 369; Godfrey v. Meridian Ry. & Lt. Co., 101 Miss. 565, 58 So. 534; Jackson Light & Tract Co. v. Taylor, 112 Miss. 60, 72 So. 856; King v. Rowan, 82 Miss. 1, 34 So. 325; Scalley v. Wardlaw, 123 Miss. 857, 86 So. 625; King v. King, 134 So. 830; Rhodes v. Fullilove, 134 So. 840.

B. H. Loving and Frank A. Critz, both of West Point, for appellee.

A penal statute is one where the punishment is on account of a crime committed against the state, and where it provides a private individual may collect to recompense him for loss of suffering such a statute is not penal but is remedial.

Whatever may be said of the penal nature of these statutes, the cases are coming more and more to the proposition that they are not penal in the strict and proper sense applied to statutes imposing punishment for offenses against the state. This term has evidently arisen from the supposition that a penalty is imposed. With reference to their nature and construction, the better, and undoubtedly the correct, rule is that they are penal as to their construction and remedial as respects the creditors.

Metzger et al. v. Joseph, 111 Miss. 385, 71 So. 645; 2 Thompson on Corporations (2 Ed.), par. 1326; Huntington v. Attrill, 146 U.S. 657, 13 S.Ct. 224, 36 L.Ed. 1123.

It is clearly the law that section 5197 is a remedial statute, giving the insured a right to recover from an agent for the damages suffered, which damages are provided and agreed upon under the contract of insurance, and under said section the agent is liable only to the extent that the insurance company issuing the policy is liable, and if there should be only a partial loss under the policy, the agent is only liable for said partial loss.

The point was raised by appellant as to sole and unconditional ownership....