Noble v. Mitchell

100 Ala. 519

Opinion

COLEMAN, J.

The action was instituted by appellee to recover a loss covered by a policy of fire insurance, and arose under section 1206 of the Code of 1886. It is contended by the defendants that the act is unconstitutional, and that this is apparent when section 1206 is considered and construed in connection with sections 1205 and 1207. These three sections are as follows: Section 1205: “Any person, who solicits insurance on behalf of an insurance company, not incorporated by the laws of this State, or who, other than for himself, takes or transmits an application for insurance, a premium of insurance, or a policy of insurance to or from such company, or in any way gives notice that he will receive or transmit the same, or receives or delivers a policy of insurance of such company, or who inspects any risk, or makes or forwards a diagram of any building, or does any, other thing in the making of a contract of insurance, for or with such company, other than for himself, or examines into, adjusts, or aids in examining into or adjusting any loss for such company, whether such acts are done at the instance of such company, of any broker, or other person, shall be held to be the agent of the company for which the act is done, and such company held to be doing business in this State.” Section 1206: “Any person, acting as agent of any foreign insurance company which has not received the license from the auditor provided for, or shall so act after its expiration, is liable personally to the holder of any policy of insurance in respect to which he so acted as agent, for any loss covered by it; and shall forfeit, for each offense, the sum of five hundred dollars to be sued for in the circuit court where the delinquency occurs, by the solicitor, in the name of the State, and paid into the State treasury, less twenty per cent, retained by the solicitor for his services.” Section 1207 : “The term ‘insurance company,’ as used in this article, includes every company, corporation, association, or partnership, organized for the purpose of transacting the business of insurance.”

The Virginia statute, construed in the case of Paul v. Virginia, 8 Wal. 168 provided “that no insurance company, not incorporated under the laws of the State, should carry on its business within the state without previously obtaining a license for that purpose,” &c. This statute was construed as applicable to foreign corporations, and it was held to be constitutional. Section 1205 of tbe Code is “Any person who solicits insurance on behalf of an insurance company not incorporated by the laws of this State,” &c. If section 1205 of the Code, supra, stood alone we could put no other construction upon the words “an insurance company not incorporated by the laws of this State,” than as having reference only to foreign corporations ; and so, if necessary to sustain the constitutionality of section 1206, supra, we would hold, that the term “foreign insurance company” as there used, referred only to foreign coporations, resting this construction upon the principle that, when a statute is assailed upon constitutional grounds, it is the duty of the court to adopt, if the statute will admit of it, such a construction as will bring it within the constitutional power of the legislature, (Wilburn v. McCally, 63 Ala. 436), but when construed in pari passu with sections 1201 and 1205, and other provisions appearing in the same article of the Code, as 1207, it would appear, that such was clearly the legislative intention It is well settled, that the legislature of the' State has authority to exclude foreign corporations altogether, and may impose any restrictions it may deem proper as a condition upon which foreign corporations may do business in the State.—8 Wallace, supra, 181; Ware v. Shoe Co., 92 Ala. 145; Nelms v. Land Mortgage Co. Ib., 160-1. It is contended however, that by section 1207 of the Code, supra, these provisions of the law are made to include “associations” and “partnerships” as well as “corporations” and in this respect discriminates against citizens of another State who may compose such “partnerships,” and in this respect is violative of the constitutional provision which declares that “the citizens of each States shall be entitled to all privileges and immunities of citizens in the several States.” We construe section 1207 as amendatory of the sections to which it refers, so as to substitute the words “corporation, association, or partership,” for the words “insurance company.” Thus construed section 1205, supra, would read as follows: “Any person who solicits insurance on behalf of a corporation, association, or partnership not incorporated by the laws of this State,” &c., and section 1206, supra, would read: “Any person acting as agent of any .foreign corporation, association, or partnership which has,” &c.

By holding that section 1207 is amendatory of the other sections referred to in the manner declared, sections 1205 and 1206 are separable in their provisions, and so far as they are made to apply to, and are enforced against “foreign corpor ations” they do not contravene any provision of the State constitution, or the constitution of the United States.—8 Wallace, supra; Baldwin v. Franks, 120 U. S. Rep., 678; S. & N. R. R. Co. v. Morris, 65 Ala. 193; McCreary v. The State, 73 Ala. 480; Powell v. The State, 69 Ala. 10; Vines v. The State, 67 Ala. 73. The construction of the statute is one of difficulty and the one given to it, is not altogether satisfactory, but we are of opinion the language used in section 1207, considered in connection with other sections to which it refers admits of the interpretation given to it, and when the statute is attacked upon constitutional grounds, it is our duty to avoid such a construction if it can be done consistently, as will defeat the entire legislation of the State upon questions embraced in these statutes relating to insurance companies. We are of opinion that plaintiff was not required, in order to maintain his action under section 1206, supra, to comply with the provision of the policy, in the matter of making proof of the loss and forwarding the same to the insurance company, within sixty days, or the other provision that no suit should be begun within ninety days, and like provisions contained in the policy which the policy required to be complied with, before the institution of a suit against the company itself. The right of action is given against the agent who acts as such for a foreign insurance company which has not received a license from the auditor. It is the acting as agent for such a company that constitutes the “offense” which is the foundation of the suit. The recovery is limited to the loss sustained covered by the policy. The amount which may be recovered does not affect the right of action. It is the “offense” which forfeits to the State five hundred dollars, and not the failure to observe the stipulations, contained in the policy of insurance. We think there was some evidence tending to show The Eairmount Association of Philadelphia was a foreign corporation. , It is fully proven that the policy was procured through brokers living in Chicago, and that it was sent to plaintiff by mail. The policy itself bears on its face evidence tending to show it was chartered under the laws of Pennsylvania. Its heading is, “The Eairmount Insurance Association of Philadelphia, Pa.” The proofs of loss were to be “received at the office of the Association in Philadelphia, State of Penn.” Other provisions were subject to the Orders of the “Directors * * pursuant to its charter and bv-laws and the laws of the State of Pennsylvania.” It was “signed by its president and attested by its secretary at the city of Philadelphia, Penn.” It is further contended by the defendant, that there is no evidence to show they acted as agents for the Fairmount Insurance Association. We do not think this contention maintainable.

Stated broadly and favorably for the defendants, the facts are that the defendants themselves had no correspondence whatever with the insurance company, had no information that The Fairmount Association Insurance Company had issed to plaintiff a policy, and did not in fact know there was such an insurance company in existence. We give the defendant the benefit of this extreme statement of the facts. On the other hand the plaintiff received and held through some agency an insurance contract in this insurance company. He had no correspondence with the insurance company, and had no transaction with any other person, directly or indirectly, than' the defendants, in the procurement of the policy. The defendants solicited from the plaintiff an order to place an insurance risk, and the plaintiff authorized them to place a risk for one thousand dollars in some good company on his stock of goods. Not being able to place the risk in Montgomery, the defendants requested an insurance broker in Chicago generally to place the risk. This broker had the policy in question executed and forwarded to the plaintiff. The plaintiff had no notice or information of the correspondence between the defendants and the Chicago broker, or of that of the Chicago broker with the Insurance Company. The plaintiff sent his check payable to the defendants, to pay the premium on a policy. The policy bears date of September 25th, 1890 and the check for the premium bears date October 13th, 1890. This check was cashed to the defendants upon the presentation to the drawee, and as they testify, the proceeds were remitted by them to the broker in Chicago. The first policy obtained was cancelled before the application was made to the Fair-mount Association Insurance Company, and necessarily before the latter policy was received by plaintiff. When defendants received and retained plaintiffs check for the premium, they knew necessarily that the money received by them could not be applied to the cancelled policy, and when they remitted the premium to Chicago, they knew it was not for a policy already cancelled by them. Certainly the acts of the defendant if believed by the jury are sufficient to constitute them agents within the sweeping provisions of section 1205 of the Code, supra. The acts of the legislature of 1879 page 26, and of 1881 sections 16 and 17 pages 19 and 20, codified as section 1205 supra, fixed a penalty and by the latter act, in addition to the penalty a personal liability upon any person who did any of tbe acts therein specified, for such an insurance company, and we do not doubt, that it was the intention of the legislature to subject such a person or agent to the liabilities provided in section 1206 under which the present action was brought. The construction given to the statute by the court in its instructions to the jury accords with these conclusions. The charges requested by the defendant were properly refused. The propositions of law contained in them either asserted a contrary doctrine, or were abstract, or argumentative and misleading.

The bill of exceptions states that in the concluding argument of plaintiff’s counsel to the jury, he stated “that the evidence showed that defendant had taken $32.50 from plaintiff and insured him in an insolvent company.” The defendant objected to this statement of counsel and moved the court to exclude it from the jury. This question is presented in a somewhat different form, from that heretofore considered. It will be seen that the statement, is “that the evidence showed,” dec. This was not the assertion of a fact as being within the knowledge of counsel outside of and without reference to the evidence. Where counsel honestly differ as to the facts in evidence or are honestly mistaken as to correct inferences, from proven facts, there is not that transgression- of the limits of legitimate argument, which will cause a reversal of the case. While we think the statement was not warranted by the evidence and its tendency may have been to prejudice the defendants before- the jury, the fact itself, whether true or false could have no material bearing on the issue. The real issues were, whether the company was a foreign corporation doing an insurance business without a license, and whether the defendants acted as agents within the provisions of the statute. The solvency or insolvency of the corporation could exert no influence on the issues, and the verdict should have been the same in either event. Cross v. The State, 68 Ala. 476; L. & N. R. R. Co. v. Orr, 91 Ala. 548.

Affirmed.