FOSTER, Justice.
This is a suit by appellee against appellant on a transportation policy of insur[364]*364anee as later amended by parol agreement. It was tried on counts 3 and 4. Demurrer to those counts was each overruled. The first contention made by appellant is their sufficiency against the demurrer.
Count 3 alleged the issuance on August 25, 1948 of a transportation policy by appellant to appellee in the amount of $8,000.00 to cover the lawful goods and merchandise belonging to appellee. That during the first week in November, 1948, said contract of insurance was amended by parol agreement, by which the coverage was amended so as to include lawnmowers hauled by plaintiff for hire, while in transit, against loss to said goods by overturning, the consideration being the reliance 'by plaintiff on such amended policy and the noncancellation of it by defendant and the nonpayment by defendant of the unearned portion of the premium.
The first contention as to the demurrer to this count is that it does not allege a sufficient consideration for the added feature to it. The necessity for such consideration is of course admitted. But it is claimed by appellee that the count is sufficient in that respect, measured by the rule declared by this Court in Hartford Fire Ins. Co. v. Aaron, 226 Ala. 430, 147 So. 628, 630. We there referred to the principle that “if the contract is bilateral in its advantages and obligations, it may be modified by mutual agreement before a breach without any other consideration than the mutual assent of the parties, to its continued binding effect upon both of them.” Cowin v. Salmon, 244 Ala. 285, 13 So.2d 190; Commercial Credit Co. v. Perkins, 236 Ala. 616, 184 So. 178; Spencer v. Richardson, 234 Ala. 323, 175 So. 278.
It is next insisted that the count does not show an insurable interest in plaintiff as to the lawnmowers. The complaint alleges that the coverage includes lawnmowers hauled -by plaintiff for hire while in transit. The rule is that plaintiff, while carrying the goods for hire, creates by law a certain responsibility to the owner for their safe delivery, either as a carrier or bailee, and therefore that he has an insurable interest to the extent of the full value of the property for his own benefit and that of the owners interested. Snow v. Carr, 61 Ala. 363, 371; 44 Corpus Juris Secundum, Insurance, p. 919, § 217(e); 29 Am.Jur. 295, section 324; Phoenix Ins. Co. v. Erie & Western Transp. Co., 117 U.S. 312, 6 S.Ct. 750, 29 L.Ed. 873, 876; Goldstein v. Harris, 24 Ala.App. 3, 130 So. 313.
This principle is not affected by section 126, Title 7, Code, requiring the beneficial owner to sue on certain claims. The carrier or bailee is here a beneficial owner and sues by that right. This admits that after a loss the claim is within the statute. Capital City Ins. Co. v. Jones, 128 Ala. 361, 30 So. 674; Life & Casualty Ins. Co. v. Crow, 231 Ala. 144, 164 So. 83; Goldstein v. Harris, supra.
Appellant also insists the allegations are not sufficient to show such a verbal contract of insurance as is necessary to be valid in alleging the terms of it. But the complaint alleges that the coverage of the outstanding policy was extended by agreement to include lawnmowers hauled by plaintiff for hire while in transit against loss to said goods by overturning. The policy, to which this was added, contains with the addition all that is necessary as 'to detail and complies with the requirements of Commercial Fire Ins. Co. v. Morris, 105 Ala. 506, 18 So. 34.
The next contention made by appellant is based on the sufficiency of pleas 5, 6, 10, 11, 12, 14, 15, 16, 17, 22, 23 and 24 against the demurrer which was sustained to them. Those pleas all set up the terms of the usual and customary policy issued by appellant and other insurance carriers to cover the risk, which it is alleged appellant assumed by virtue of the verbal coverage. The argument is based on the principle that a venbal contract of insurance is governed by the terms and provisions of the usual and customary policy issued to cover such risks; that such verbal contracts can only be thus sustained by then providing the details intended to be included. Hartford Fire Ins. Co. v. King, 106 Ala. 519, 17 So. 707; Cherokee Life Ins. Co. v. Brannum, 203 Ala. 145, 82 So. 175.
But such is not the nature of the verbal matter added to the written agree[365]*365ment. It does not purport to stipulate for a contract whose terms are not expressly-agreed upon in detail, but it adds a coverage to an outstanding contract whose terms are fully set forth in the policy to which the new feature is added. That is sufficient to comply with the rule. Commercial Fire Ins. Co. v. Morris, supra; Home Ins. Co. v. Adler, 71 Ala. 516.
The same legal status applies to the rulings of the court in sustaining objection to the testimony offered by appellant to prove what were the terms and provisions of the usual policy issued to cover risks on cargoes carried by carriers embracing the risk included in the amendment added to the policy. For the reason stated, supra, there was no error in those rulings.
Appellant also assigns error in respect to the judgment of the court sustaining plaintiff’s demurrer to pleas 8, 21 and 25. We adopt in respect to them the following statement in appellant’s brief:
“AH of said pleas were grounded on the general proposition that at the time the loss occurred, appellee was engaged in hauling said lawnmowers in interstate commerce and appellee had not secured any permit or certificate of convenience and necessity from the I. C. C. to haul said lawnmowers, as required by the laws of the United States; and that said hauling was illegal and in violation of the laws of the United States; and that said acts constituted a criminal offense in violation of the laws of the United States; and that such acts were contrary to the public policy of the United States. It was also alleged that the alleged contract which appellee had to haul said lawnmowers was illegal and unenforceable and null and void. This is the substance of plea 25.
“The trial court took the view that regardless of all of these allegations, and regardless of the fact that appellee was operating in violation of the law, that this did not invalidate the insurance.”
The decisions of this Court have, through a long line of cases, given consideration to a principle analogous to that here involved. It is thus expressed, with the authorities cited, in Knight v. Watson, 221 Ala. 69, 127 So. 841, 842:
“A statute imposing a license tax as a revenue measure merely, although declaring the doing of business without such license unlawful and affixing a penalty as a method of enforcement, does not render void and unenforceable contracts made without such license. Sunflower Lumber Co. v. Turner Supply Co., 158 Ala. 191, 48 So. 510, 132 Am.St.Rep. 20; Morgan v. Whatley & Whatley, 205 Ala. 170, 87 So. 846; Smith v. Sharpe, 162 Ala. 433, 50 So. 381, 136 Am.St.Rep. 52.
“But an act under the police power, designed to regulate the business, to protect the public against fraud and imposition, requiring a license as evidence of qualification and fitness, and prohibiting any act of business under penalty, unless such license is first obtained, does render such contracts illegal, void, and unenforceable in actions for the recovery of compensation and the like. Bowdoin v.
Free access — add to your briefcase to read the full text and ask questions with AI
FOSTER, Justice.
This is a suit by appellee against appellant on a transportation policy of insur[364]*364anee as later amended by parol agreement. It was tried on counts 3 and 4. Demurrer to those counts was each overruled. The first contention made by appellant is their sufficiency against the demurrer.
Count 3 alleged the issuance on August 25, 1948 of a transportation policy by appellant to appellee in the amount of $8,000.00 to cover the lawful goods and merchandise belonging to appellee. That during the first week in November, 1948, said contract of insurance was amended by parol agreement, by which the coverage was amended so as to include lawnmowers hauled by plaintiff for hire, while in transit, against loss to said goods by overturning, the consideration being the reliance 'by plaintiff on such amended policy and the noncancellation of it by defendant and the nonpayment by defendant of the unearned portion of the premium.
The first contention as to the demurrer to this count is that it does not allege a sufficient consideration for the added feature to it. The necessity for such consideration is of course admitted. But it is claimed by appellee that the count is sufficient in that respect, measured by the rule declared by this Court in Hartford Fire Ins. Co. v. Aaron, 226 Ala. 430, 147 So. 628, 630. We there referred to the principle that “if the contract is bilateral in its advantages and obligations, it may be modified by mutual agreement before a breach without any other consideration than the mutual assent of the parties, to its continued binding effect upon both of them.” Cowin v. Salmon, 244 Ala. 285, 13 So.2d 190; Commercial Credit Co. v. Perkins, 236 Ala. 616, 184 So. 178; Spencer v. Richardson, 234 Ala. 323, 175 So. 278.
It is next insisted that the count does not show an insurable interest in plaintiff as to the lawnmowers. The complaint alleges that the coverage includes lawnmowers hauled -by plaintiff for hire while in transit. The rule is that plaintiff, while carrying the goods for hire, creates by law a certain responsibility to the owner for their safe delivery, either as a carrier or bailee, and therefore that he has an insurable interest to the extent of the full value of the property for his own benefit and that of the owners interested. Snow v. Carr, 61 Ala. 363, 371; 44 Corpus Juris Secundum, Insurance, p. 919, § 217(e); 29 Am.Jur. 295, section 324; Phoenix Ins. Co. v. Erie & Western Transp. Co., 117 U.S. 312, 6 S.Ct. 750, 29 L.Ed. 873, 876; Goldstein v. Harris, 24 Ala.App. 3, 130 So. 313.
This principle is not affected by section 126, Title 7, Code, requiring the beneficial owner to sue on certain claims. The carrier or bailee is here a beneficial owner and sues by that right. This admits that after a loss the claim is within the statute. Capital City Ins. Co. v. Jones, 128 Ala. 361, 30 So. 674; Life & Casualty Ins. Co. v. Crow, 231 Ala. 144, 164 So. 83; Goldstein v. Harris, supra.
Appellant also insists the allegations are not sufficient to show such a verbal contract of insurance as is necessary to be valid in alleging the terms of it. But the complaint alleges that the coverage of the outstanding policy was extended by agreement to include lawnmowers hauled by plaintiff for hire while in transit against loss to said goods by overturning. The policy, to which this was added, contains with the addition all that is necessary as 'to detail and complies with the requirements of Commercial Fire Ins. Co. v. Morris, 105 Ala. 506, 18 So. 34.
The next contention made by appellant is based on the sufficiency of pleas 5, 6, 10, 11, 12, 14, 15, 16, 17, 22, 23 and 24 against the demurrer which was sustained to them. Those pleas all set up the terms of the usual and customary policy issued by appellant and other insurance carriers to cover the risk, which it is alleged appellant assumed by virtue of the verbal coverage. The argument is based on the principle that a venbal contract of insurance is governed by the terms and provisions of the usual and customary policy issued to cover such risks; that such verbal contracts can only be thus sustained by then providing the details intended to be included. Hartford Fire Ins. Co. v. King, 106 Ala. 519, 17 So. 707; Cherokee Life Ins. Co. v. Brannum, 203 Ala. 145, 82 So. 175.
But such is not the nature of the verbal matter added to the written agree[365]*365ment. It does not purport to stipulate for a contract whose terms are not expressly-agreed upon in detail, but it adds a coverage to an outstanding contract whose terms are fully set forth in the policy to which the new feature is added. That is sufficient to comply with the rule. Commercial Fire Ins. Co. v. Morris, supra; Home Ins. Co. v. Adler, 71 Ala. 516.
The same legal status applies to the rulings of the court in sustaining objection to the testimony offered by appellant to prove what were the terms and provisions of the usual policy issued to cover risks on cargoes carried by carriers embracing the risk included in the amendment added to the policy. For the reason stated, supra, there was no error in those rulings.
Appellant also assigns error in respect to the judgment of the court sustaining plaintiff’s demurrer to pleas 8, 21 and 25. We adopt in respect to them the following statement in appellant’s brief:
“AH of said pleas were grounded on the general proposition that at the time the loss occurred, appellee was engaged in hauling said lawnmowers in interstate commerce and appellee had not secured any permit or certificate of convenience and necessity from the I. C. C. to haul said lawnmowers, as required by the laws of the United States; and that said hauling was illegal and in violation of the laws of the United States; and that said acts constituted a criminal offense in violation of the laws of the United States; and that such acts were contrary to the public policy of the United States. It was also alleged that the alleged contract which appellee had to haul said lawnmowers was illegal and unenforceable and null and void. This is the substance of plea 25.
“The trial court took the view that regardless of all of these allegations, and regardless of the fact that appellee was operating in violation of the law, that this did not invalidate the insurance.”
The decisions of this Court have, through a long line of cases, given consideration to a principle analogous to that here involved. It is thus expressed, with the authorities cited, in Knight v. Watson, 221 Ala. 69, 127 So. 841, 842:
“A statute imposing a license tax as a revenue measure merely, although declaring the doing of business without such license unlawful and affixing a penalty as a method of enforcement, does not render void and unenforceable contracts made without such license. Sunflower Lumber Co. v. Turner Supply Co., 158 Ala. 191, 48 So. 510, 132 Am.St.Rep. 20; Morgan v. Whatley & Whatley, 205 Ala. 170, 87 So. 846; Smith v. Sharpe, 162 Ala. 433, 50 So. 381, 136 Am.St.Rep. 52.
“But an act under the police power, designed to regulate the business, to protect the public against fraud and imposition, requiring a license as evidence of qualification and fitness, and prohibiting any act of business under penalty, unless such license is first obtained, does render such contracts illegal, void, and unenforceable in actions for the recovery of compensation and the like. Bowdoin v. Alabama Chemical Co., 201 Ala. 582, 79 So. 4; Sunflower Lumber Co. v. Turner Supply Co., supra; Woods v. Armstrong, 54 Ala. 150, 25 Am. Rep. 671.” See, also, Ellis v. Batson, 177 Ala. 313, 58 So. 193; Gill Printing Co. v. Goodman, 224 Ala. 97, 139 So. 250; Marx v. Lining, 231 Ala. 445, 165 So. 207.
An exhaustive annotation on the subject, specifically with reference to insurance contracts, is given in 132 A.L.R. 125, with the supporting case of Northwestern Amusement Co. v. Aetna Casualty and Surety Co., 165 Or. 284, 107 P.2d 110, 132 A.L.R. 118. See, also, 29 Am.Jur. 208 et seq.; 44 Corpus Juris Secundum, Insurance, p. 1007, § 242; Rainer v. Western Union Tel. Co., Mo.App., 91 S.W.2d 202; Roddy v. Hill Packing Co., 156 Kan. 706, 137 P.2d 215.
A distinction which runs through some of the insurance cases is that “If insurance on property does not encourage or promote an unlawful use or business it is not void, although it may be collaterally connected therewith; but, if it directly protects or encourages the unlawful act or business, the policy will be invalid.” 44 Corpus Juris Secundum, Insurance, § 242, p. 1007; 132 A.L.R. 125. Again, it is said [366]*366that if the effect of the insurance “is to promote the illegal use, the contract is void as against public policy; but, if the contract does not promote the illegal use, it is not void though it may have a collateral connection with the illegal use.” Demary v. Royal Indemnity Co., La.App., 182 So. 389.
Another statement hy this Court is “that contracts, specially prohibited by law, or the enforcement of which violated a law, or the making of which violated the law which was enacted for regulation and protection, as distinguished from a law created solely for revenue purposes, is void and nonenforceaible * * * (and) Whenever a party requires the aid of an illegal transaction to support his case, he cannot recover;” Ellis v. Batson, supra, 177 Ala. at page 317, 58 So. at page 194; Pope v. Glenn Falls Ins. Co., 136 Ala. 670, 34 So. 29. See, also, 9 A.L.R.2d 184.
Plaintiff’s contract of insurance was not prohibited by law. While the Motor Transportation Act is for regulation and protection, th-e insurance here involved did not violate that Act. But we think plaintiff could not establish his case without reference to or in reliance- upon an illegal act or transaction within the principle declared above. This is for the following reason: his only insurable interest is dependent upon an illegal transaction made so by an act, which was enacted for regulation and protection and not f-or revenue. His contract to transport the lawnmowers,- and the transportation of them as a contract carrier in interstate commerce, was illegal and subjected him to a penalty by virtue of such an act of Congress, 49 U.S.C.A. §§ 309 and- 322, which was a regulation for the protection of the public. He cannot recover against the consignor or consignee for the charges for doing so. Knight v. Watson, supra; Town of Cottonwood v. H. M. Austin & Co., 158 Ala. 117, 48 So. 345; Bluthenthal v. Headland, 132 Ala. 249, 31 So. 87; Booker T. Washington Burial Ins. Co. v. Roberts, 228 Ala. 206, 153 So. 409; General Electric Co. v. Town of Fort Deposit, 174 Ala. 179, 56 So. 802.
The case of Ocean Ins. Co. v. Polleys, 13 Pet. 157, 10 L.Ed. 105, is distinguishable. It may be quite true that the insurance was only -remotely connected with the illegality of the trip and the insurance was in no-respect to aid, assist or advance any such illegal purpose. But we observe that the assured was there the owner of the vessel and had an insurable interest not dependent upon an illegal transaction for its existence,, and his possession and -ownership were not contrary to law. If its possession was contrary -to law it is said not to be the subject of valid insurance. 132 A.L.R. 125.
The possession of the truck in the instant case was not contrary to law, and insurance upon it in favor of plaintiff would be different from insurance by him on the lawnmowers of another carried by him on a trip which was illegal because the contract of carriage was illegal and, therefore, confers -o-n the truck owner no interest in the lawnmowers enforceable at 'his instance, being -a party to an illegal transaction from which alone his insurable interest is derived and necessary -to be shown to support his claim on the insurance contract.
There is apparent authority for an -opposite view, which is thus explained editorially in 9 A.L.R.2d 185. The courts are primarily restricted by the outcome of -the inquiry into whether the insured is so situated with reference to the property that he would be liable -to loss should it be damaged or destroyed by the peril against which it is insured.
But that theory will not fit our cases. Our cases 'hold steadfastly to th-e view that if plaintiff to- support his case must predicate his right on a contract which violates a law which was enacted as a police regulation to protect the public against fraud, imposition or unfitness, especially with a penalty for its violation, and which is not primarily a revenue measure, cannot stand in our courts. Knight v. Watson, supra, and other cases cited there and supra. In view of those pronouncements, the editorial comment supra, cannot be adopted as our guide.
The broad statement in Pope v. Glenn Falls Ins. Co., supra, and Ellis v. Batson, supra, must be construed in connection with the principle so fully established by our [367]*367cases. ’ It is not alone the illegality of the transaction which is controlling, but the nature of such illegality. It is not necessary to approve the statement in Pope v. Glenn Falls Ins. Co., as properly applied in that case. It was there stated only to further support an argument which was well supported without it. A contract void by noncompliance with thq statute of frauds is valid as respects persons not connected with it, when the parties themselves 'have not repudiated it. Bradley v. Hall, 239 Ala. 544, 195 So. 883.
But the pleas here set-up that sort of contract which puts plaintiff beyond the help of the courts. It confers on him no right upon which to base his claim of an insurable interest.
We do not think that any good purpose -could be accomplished by wading through the one hundred and eighty-seven assignments of error to see if correct principles 'have been properly applied in them. The judgment must be reversed for sustaining the demurrer to pleas 8, 21 and 25. We assume that will be sufficient for another trial.
Reversed and remanded.
BROWN, LIVINGSTON, and. TAW-SON, JJ., concur.