Pollard v. Phœnix Insurance

Campbell, J., delivered the opinion of the court. The replication to the fifth plea was sufficient. It directly traverses the averment of the plea that the plaintiff did not, as soon as possible after the loss, render a particular account of it, as required by the policy, and affirms that the plaintiff did render [256] such account as soon as possible, “as the nature of the case and surrounding circumstances would admit.” The addition of the words quoted was the mere expression of what the law implies in every such case, viz.: that the particular account shall be rendered as soon as possible in the nature of the case, and under the circumstances in which the person is compelled to act. We are called upon to determine whether one exercising the privilege of keeping a store without paying the price and obtaining license as prescribed by law, and effecting insurance of the stock of goods so employed, can recover on the policy in case of their loss. An answer to this question requires an interpretation of § 589 of the code, which declares that any person who shall exercise any of the privileges enumerated, “ without first paying the price and procuring license as required, shall, on conviction, be fined * * * or imprisoned * * * or by both * * * and all contracts made with any person who shall violate this act, in reference to the business carried on in disregard of this law, shall be null and void, so far only as such person may base any claim upon them, and no suit shall be maintainable in favor of spell person on any such contract.” The purpose of the act is manifest. It is to constrain those who would enjoy the privileges taxed to pay the price and obtain license by a twofold penalty, one being fine or imprisonment, or both, and the other disability to claim under any contract made in reference to the business carried on in disregard of law; one to be enforced through the machinery provided for the punishment of misdemeanors, and the other on the plea of the party sought to be held liable on the contracts made in reference to the business. We repudiate the distinction attempted to be maintained between not obtaining license at all and obtaining an insufficient one. The statute denounces its penalty against him who fails to pay the price and obtain license, and he who pays the price of a business less than that prescribed, and carries on a business greater than he has paid for the privilege of conducting, is as much within the contemplation of the statute as he who pays no tax. It may be said that undervaluation is the form in which the chief frauds are committed [257] on the revenue. He who pays no tax is almost sure to attract attention to his default and to be visited by the penalty of the law, while successful fraud may be practiced by paying a small tax, and under color of the license thus obtained transacting business on a scale much larger than that authorized by the license purchased. As the statute is broad enough to include it, and the case of one who pays a small tax and does a large business is a common form of the evil sought to be remedied by the penalty prescribed, it must be assumed that the legislative purpose was to embrace it. The statute does not deprive the owner of his property embarked in the business illegally carried on. The title is not in any manner affected. All the incidents of title remain, with the rights of owner, in all respects, as to the property, except that no contract made in reference to the business not duly licensed can be enforced by him who has violated the law in carrying on the business. The owner may resort to the courts, and maintain any action to the maintenance of which title to the property entitles him, unaffected by the fact that the property is employed in business unlawfully carried on, because the disability imposed by the statute extends only to rights founded on contracts made in reference to the business. The distinction is between title with its incidents and power to contract with respect to the subject of it. Not the title of the delinquent owner is impaired, but his capacity to make a contract he can enforce whereby to make successful the business he is illegally conducting. The common law as to contracts founded on or growing out of illegal considerations furnishes no guidance in ascertaining the true interpretation of the statute. The common-law rule of invalidity of contracts was not looked to in framing this statute, which speaks the will of the lawmaker, and it must be found in the words employed for that purpose. It is, therefore, needless to inquire what would have been the rule if the statute had not declared the consequence of its violation. The question is, what does the statute declare? When that is ascertained it must prevail. Its language is plain and unambiguous. It declares that no suit shall be main [258] tainable in favor of the violator of the law on any contract made by him in reference to the business carried on in disregard of this law. The controversy is as to the scope of the expression, “In reference to the business carried on in disregard of this law,” for only as to such contracts is disability to maintain a suit imposed. The language should not be extended beyond its plain meaning, nor should it be limited within narrower bounds. We should not extend it by construction nor fritter it away by refinement, but should so interpret it as to effectuate the intention of the legislature in passing it. What is the plain, ordinary, popular signification of the language employed, its natural, unstrained meaning? We answer, it embraces all contracts in the prosecution of the particular business, which relate to it, and have for their object its maintenance, protection, or furtherance—all which pertain to it and grow out of it. The phrase, “ In reference to the business,” is synonymous with having relation to, regarding, in respect to, concerning, pertaining to, it, and the contracts which the delinquent is incapacitated to claim the benefit of are those included in these terms. Was the contract made in the prosecution of the business? Did it grow naturally out of it? Was it incident to it, connected with it, relating to it? did it regard it and pertain to it? If so, it is one which Ihe,,delinquent dealer cannot enforce, for to permit it would be^ro enáBl^him to make valid contracts whereby to secure himself against loss in his illegal venture—to guard the cargo against perils incident to the forbidden voyage, and thereby save himself from the penalty declared against his temerity. Is a policy of insurance on a stock of goods in a store carried on in violation of law a contract in reference to the business ? It is made to cover such goods as may constitute the stock when a loss occurs. It is a contract for indemnity against loss. It grows out of the business—it pertains to it and concerns it—it relates to it and is made for its success. It is impossible to dissociate ideas of the stock of a merchant* and the business in which he is engaged. True, buying and selling constitute the principal operations of a [259] merchant, but there are many accessories. The illegality of the principal things involves and infects the incidents. Shall it be said that the unlicensed dealer is incapacitated to make an enforceable contract to buy or sell goods, but he may make one for their preservation or for indemnity against their loss ? that although they are being used for profit in an unlawful business, and are kept for that purpose, a lawful contract maybe made for indemnity against their loss by a casualty incident to the business ? although no enforceable contract may be made for their sale, one may be made for their conservation or replacement in order that they may continue to be dealt with in violation of law? To permit the unlicensed merchant to stipulate for protection against loss of goods by a casualty incident to the business would be to allow him to acquire rights by contract from an illegal business, in the face of the statute which denies it. The statutory incapacity relates to all dealing with reference to the stock of goods kept for sale. . The price of license is graduated with reference to the amount of such stock, and contracts pertaining to it are what cannot be enforced. The ■ scope of the business of a store embraces the purchase, care, preservation, and sale of goods, and the disability of the violator of the law extends to all the operations of the business. He cannot claim • the benefit of any contract made in 'its prosecution, growing out of it, and having relation to it. So the law is written. Were a merchant to make a power of attorney authorizing one. to take charge of his store, and make all contracts “in reference to the business,” it could not be denied that the agent might effect in-, surance on the stock, and bind his principal by a bill or note for the-premium. Why should the same language have a different meaning in a statute ? Reversedf,