Pennypacker v. Capital Insurance

Given, J. 1. Fire insurance: policy issued in violation of law: validity. — I. The questions raised and argued on the demurrer may be resolved into the single inquiry, is the contract of insurance sued upon void ? It is alleged that it is void because the defendant had not and was not entitled to qualify, under the laws of Pennsylvania, to contract insurance upon property in that state at the time this policy was issued, and because the plaintiff received it knowing that fact. For the purposes of the demurrer these allegations are to be taken as true, and we are to say whether, being true, they render the policy void. Appellant’s contention is that the contract was made, and policy issued and accepted, in violation of the laws of Pennsylvania, as set out in the answer,. and that, the plaintiff having received the policy knowing that fact, the parties are in pari delicto, and the law will not enforce the contract at the suit of either. Appellee contends that the policy was issued and is payable in Iowa, and its validity is, therefore, to be determined by the laws of Iowa, and that the statute set out-did not forbid the issuing the policy in suit, nor make the same void, but simply declares the company liable to a fine for issuing it. II. It does not appear from the answer, nor from it and the petition, where the contract was made, premium paid, or policy delivered, nor where it is payable.' [60] Prom the facts that the company is of Iowa, and the insured property in Pennsylvania, we may infer the contract to have been made in either state as readily as the other. Such being the state of the pleadings, we are not called upon to determine what effect the law of Pennsylvania would have upon this policy as an Iowa contract. III. The principle that contracts made in violation of law are void, is too well established to require citations. “The well-settled general rule is that, when a statute prohibits or attaches a penalty to the doing of an act, the act is void, and will not be enforced, nor will the law assist one to recover money or property which he has expended in the unlawful execution of it. Or, in other words, a penalty implies a prohibition, though there are no prohibitory words in the statute, and the prohibition makes the act illegal and void. * * * Rut, notwithstanding this general rule, it must be apparent to every legal mind that, when a statute annexes a penalty for the doing of an act, it does not always imply such a prohibition as will render the act void.” Pangborn v. Westlake, 36 Iowa 548. The law of' Pennsylvania, as set out, provides that no insurance company, not of that state, shall insure property therein, unless it has a certain amount of capital stock, has complied with certain requirements, and has obtained a certificate from the insurance commissioner that it is qualified to do business in that state,, and that any such company that shall do business in that state without having first qualified itself, and without first having received a certificate, as prescribed, from the insurance commissioner, “shall pay a fine and penalty for such offense.” The evident purpose of such a law is the protection of those paying for insurance upon property in that state. The prohibition and penalty is against the company only. No duty is required of the insured, and no act upon his part expressly prohibited. There is nothing in the law declaring what effect it shall have upon policies issued and accepted as this [61] is alleged to have been. A number of cases are cited by appellant where, in actions brought by the insurance company to enforce rights under the contract of insurance, it was held that statutes similar to that set out were prohibitory and the contracts void ; but in none of those cases is it held that they are void as to the assured. The Manistee, 5 Biss. 382, is a case wherein the statute of Illinois was under consideration. That statute required foreign insurance companies to produce certain statements, and to procure authority from the auditor of state to transact business within the state, and declared it unlawful for any agent to do business without having first complied with those laws. It was provided that, upon conviction for violating these requirements, punishment by fine or imprisonment, or both, may be imposed. The court says : “Those statute laws do not declare void policies issued by foreign companies, through a local agent, in disregard or violation of them. The object of these statutes was for the security of citizens doing business with such companies, by bringing them as near as possible to local corporations, and also as a provision for revenue. Where a statute prohibits or annexes a penalty to its commission, the'act is made unlawful; but it does not follow that the unlawfulness of the act was meant by the legislature to avoid a contract made in contravention of it. Where a statute is silent, and contains nothing from which the contrary can properly be inferred, a contract in Contravention of it is void. But the whole statute must be examined in order to decide whether or not it does contain anything from which the contrary can be properly inferred. There is no penalty pronounced against a person for obtaining a policy from or doing business with the company that has not complied with the requirements of those statutes.” Insurance Co. v. McMillen, 24 Ohio St. 67, is somewhat in point. That was an action upon a policy of life insurance issued by the plaintiff in error. The company claimed that its failure to comply with a statute similar to that under [62] consideration rendered, the policy void. The court says : “ Whether the statute was meant to invalidate policies issued by companies in contravention of its provisions ; is to be determined from a consideration of the statute as a whole. The object of the act is not to make the business of life insurance unlawful, The statute is designed for the protection of policy-holders and others dealing with insurance companies. To this end, it is made unlawful for persons to act on behalf of such companies until the provisions of the statute have been complied with. But we do not think it was intended to devolve on persons dealing with the companies the duty and risk of ascertaining whether they had complied with the statute. On the contrary, it seems to have been the intention of the legislature to rely on the penalties imposed as sufficient to insure such compliance.” In Pangborn v. Westlake, supra, the question was whether a contract for the sale of a lot in a plat that had not been recorded was void because of the statute providing that any person who shall dispose of, or offer for sale, any lot in any town or addition until the plat was acknowledged and recorded, shall forfeit fifty dollars for each lot sold or disposed of. This statute is similar in several respects to that in question. It is quite as prohibitory. It is addressed to the seller alone. It is for the protection of the purchasers, and imposes no duty upon or prohibition against them. In passing upon the question, this court said: “We are, therefore, brought to the true test, which is that while, as a general rule, a penalty implies a prohibition, yet the courts will always look to the language of the statute, the subject-matter of it, the wrong or evil which it seeks to remedy or prevent, and the purpose sought to be accomplished in its enactment; and if, from all these, it is manifest that it was not intended to imply a prohibition, or to render the prohibited act void, the courts will so hold, and construe the statute accordingly.” See, also, Hill v. Smith, 1 Iowa, 70; Tootle v. Taylor, 64 Iowa, 629. It is argued that to hold this contract not prohibited is to defeat [63] the purposes of the law; that it will admit foreign companies to do business subject only to such fines as may be assessed. In view of the language of the law as stated, the absence of express prohibition, and the evident purpose to protect the insured, we are clearly of the opinion that it was not intended to render contracts such as that in suit void. To so hold does not necessarily admit foreign companies to do business in that state in disregard of its laws. The power of the courts is ample to compel, by fine and- otherwise, compliance with the law of the state. The contract being valid, the matter demurred 'to is no defense, and the question of estoppel does not arise. We think the demurrer was properly sustained. 2. -: notice and proofs of loss: evidence. IY. On the trial the plaintiff was permitted to testify that he received the policy through Rhem & Van Deinse, of' Indianapolis, Indiana ; that he sent notice by mail, and proofs of loss, to them ; and that after sixty days he drew on the defendant, and the draft was returned protested. Anton J. Van Deinse was also permitted to testify, over defendant’s objection, to the receipt of the notice and proofs of loss from the plaintiff, and that they were forwarded by mail to the defendant. While it is true that Rhem & Van Deinse were not the agents of the defendant, yet this testimony only tended to show how and when the notice and proofs were transmitted, and was properly admitted, If such notice and proofs may be given in the manner stated. That they were transmitted through Rhem & Van Deinse is immaterial, except as it tends to show whether the defendant received them, and when. 3. -:-: sending by mail: presumption. [64] 4. -: notice of loss: time of giving. [63] Y. The court instructed the jury that, if Van Deinse mailed the notice and proofs of loss, properly addressed, to the defendant, the presumpti°n ds that they were duly received, but that this presumption may be overcome by evidence. Appellant concedes that such is the rule as' to the notice, but contends that, as the plaintiff had sixty days in which to furnish proofs of loss, he should [64] be held to proof of their actual delivery. We see no reason for the distinction. The plaintiff was under the same obligation to furnish both. Hodgkins v. Insurance Co., 84 Barb. 213, is relied upon. That case is not in point, as it turned upon certain express provisions in the policy not found in this. The court instructed the jury that they must find that the notice of the loss was given within a reasonable time. Appellant contends that this was erroneous, as the p0pCy requires that it be given forthwith. We think the terms are so nearly synonymous that no prejudice could have resulted therefrom. We see no error in the instructions in either of the respects alleged. Some objection is made to the sufficiency of the proofs of loss claimed to have been forwarded, but, as no such objection appears to'have been made in the lower court, it cannot be considered here. 5. -: notice and proofs of loss: reception: evidence: conflict. 5. -: -: date of reception: special finding. VI. In addition to the alleged errors already considered, it is urged that the court erred in not granting a new trial on the grounds that the verdict n°t supported by the testimony, and that the special finding was not properly answered. The fact in question was whether the notice and proofs' of loss had been furnished as required. For the plaintiff, there was the testimony of Van JDeinse as to addressing, stamping and mailing them, and the presumption that arises therefrom. Against this, there was the testimony of the defendant’s officers and clerks who received its mail that no such documents were received. It was properly left to the jury to say whether the documents were received, and they have found that they were. There is surely evidence upon which to so find, and, therefore, the verdict should not be disturbed on that ground. The special finding was answered as definitely as it could be, under the testimony. There was nothing from which to fix the precise day upon which the proofs of loss were received, except as it might be inferred from the time and place they were [65] mailed. It was important to decide whether they were received within the sixty days, and this the jury could and did find as a fact from the testimony. They could not have found with the same certainty the precise day, nor was it material that they should. Our conclusion is that the judgment of the district court should be Affirmed,