Conithan v. Royal Insurance

Oct 15, 1907
Versions:

Lead Opinion

Mayes, J.,

delivered the opinion of the court.

This suit wаs instituted by Florida Conithan against the Royal Insurance Company for the purpose of recovering the value of household furniture belonging to her which had been destroyed by fire. The declaratiоn alleges that on the 26th day of March, 1906, in consideration of $16 premium paid to the insurance company by appellant, it executed and delivered to' her a fire insurance policy fоr the sum of $600, wherein the company insured and promised to protect the property named in the policy from all damage and loss by fire. This policy was to run for a period of three years from its date; that is to say, from March 26, 1906, to March 26, 1909, at noon. The declaration further alleges that on the Ith day of June, 1906, while the policy was in full force, the property insured was wholly destroyed by fire. This fact was communicated to the insurance company, and a request made for blanks to make proof of loss within the time provided by the terms of the policy. The insurance company rеfused to furnish the blank proofs of loss as requested, and refused to pay the amount due her for the loss, whereupon she brought suit for the sum of $600, the amount insured for under the policy. It may be conceded that on the trial of this case it was shown that the plaintiff was a keeper of a bawdy house, and that the property insured was kept by her in this bawdy house and used for purposes of prostitution. Therе is no stipulation in the policy which prohibits such use of this property as it was being put to at the time. After the proof was all in, the court gave a peremptory instruction to find for the insurance company.

In our judgment, the only question presented by this record is whether or not this contract of insurance is void, as against public policy, because placed upon property and household furniture used by the insured in a bawdy house. Was this contract in aid of an illegal and immoral business so directly as to make the contract void? It is impossible to lay down any exact rule by which it may always bе determined whether *394a contract is collateral to and so disconnected from an illegal and immoral business as to make it enforceable, when it would not be enforceable, if it was dirеctly in aid of, or in tbe advancement or encouragement of, acts in violation of tbe law. In 19 Cyc., p. 722, it is stated: “If the direct purpose of the contract is to effect, advance, or encourage acts in violation of law, it is settled that the policy is void. But it is equally well settled that a mere illegal use made of the premises, there being no provision of the policy apрlicable, and no design by means of insurance to promote an unlawful enterprise, does not affect the right of the insured to recover.”

The main case relied upon by counsel ‍‌‌‌​​‌​‌​​‌‌​‌​‌​‌​‌‌​‌​‌​‌​‌​​‌‌​​​​​​‌‌​‌‌​​‌‌‍for appellee is the case of Pollard v. Insurance Co., 63 Miss., 244; 56 Am. Rep., 805. We do not think that case can be relied upon as authority for holding the contract of insurance in this case as against public policy or as in violatiоn of the law. In the Pollard case, supra, the question arose under a statute of the state making provision for the collection of its revenue. One of the provisions of that statute was that a person exercising any of the privileges enumerated should pay a privilege tax. Mrs. Pollard was a merchant in Okolona, and entered into a contract of insurance against loss by fire with the insurance compаny. Subsequently her stock of goods was destroyed, and she made proof of loss and undertook to collect her insurance. The insurance company set up the defense that the contract was void because the plaintiff was doing business in violation of law. The section of the statute in reference to which privilege taxes were required to be paid provided that, if. any pеrson shall exercise any of the privileges enumerated in the chapter “ without first paying the price and procuring a license as required, they shall, on conviction, be fined,” etc., “ or imprisоned,” etc., “ or both,” etc., “ 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 shall base any claim upon them, • and no suit shall be maintainable *395in favor of such person on any such contract,” etc. On these facts and under this statute the court held that a contract of insurance tо protect the goods used in the business conducted in violation of the revenue laws was a contract “ in reference to the business carried on in disregard of the law,” and therefore void. We do not think the principle announced by this, case can be invoked to defeat the contract of insurance in the ease before the court. The two cases are quite distinct. The lаnguage of the statute in the Pollard case was broad, and it prohibited any rights to accrue to any person violating the privilege tax law, on any contract ‍‌‌‌​​‌​‌​​‌‌​‌​‌​‌​‌‌​‌​‌​‌​‌​​‌‌​​​​​​‌‌​‌‌​​‌‌‍made in reference to the business carried on in disregard of the law. The court’s decision in the Pollard case was based squarely on the language of the statute. The statute made void all contracts, however remote they might be from the actual business. in which thе party was engaged, if the contract was made merely in reference to the business carried on in violation of the law. Had the statute not been so written, we dare say that the court would not have held, even in this case, that the contract of insurance on the stock of goods was void.

Where a contract of insurance is made in good faith and the premiums paid, and the purрose of the insurance is not to effect, advance, or encourage acts in violation of the law, the policy is not void. This insurance contract was not necessary in order to enable appellant to conduct her bawdy house. The contract of insurance did not in any way advance her interest in this business or encourage it. It did not promote the unlawful business, or help her to accomplish it in any way whatever. She could have conducted and carried on her bawdy house as well without the insurance policy as she could with it. The only effect of the insurancе policy was that, in case her property was lost by fire, she should have an indemnity for the loss of the property; but the contract did not even remotely aid or assist her in the conduct of this business. Shе did not receive by means of this insurance any aid to the conduct of her *396business. Tbe only thing she did do was to make an illegal use of the property which the provisions of the policy covered; but this did not invalidate the contract. This contract of insurance was perfectly good. The keeping of the bawdy house was an independent, illegal transaction, which the insurance policy Tn no way aided or promoted. To-defeat the action on the policy it is necessary to hold that the policy itself is an immoral contract, against public policy as tending to promote the business of maintaining a bawdy house. The record in this case does not show that the contract of insurance was an immoral one and against public policy, nor is its tendency necessarily or even remotely the promotion of the business of maintaining a house of prostitution. The insurance of this property, although it may be illegally used, is a perfectly good insurance, unless the contract of insurance in some way promotes the business. This contract does not do this. Phœnix Ins. Co. v. Clay, 101 Ga., 331; 28 S. E., 853; 65 Am. St. Rep., 307; Joyce on Insurance, vol. 3, §§ 2536, 2507; Behler, Admr v. German Mutual Fire Ins. Co., 68 Ind., 347.

Reversed and remanded.





Dissenting Opinion

Whitfield, C. J.,

delivered the following dissenting opinion.

I dissent in tolo from the reasoning of the opinion and the judgment of the court ‍‌‌‌​​‌​‌​​‌‌​‌​‌​‌​‌‌​‌​‌​‌​‌​​‌‌​​​​​​‌‌​‌‌​​‌‌‍in this case. - If the court had squarely overruled Pollard v. Insurance Co., 63 Miss., 244; 56 Am. Rep., 805, and held that a fire insurance policy is not a contract which relates to or concerns the business of a merchant whose .stock is insured against fire, within the meaning of the provision of оur statute that, unless such merchant pays the proper privilege tax, he cannot enforce contracts relating to his business, there might have been some pretty solid ground for the court to stаnd on, since there are decisions, especially two by the United States supreme court (Ocean Ins. Co. v. Polleys, 38 U. S., 157; 10 L. Ed., 105, and Armstrong v. Toler, 24 U. S. 258; 6 L. Ed., 468, and note), referred to by the *397learned counsel representing the insured in this case, 'which go far to show that the Pollard case was unsoundly decided in the particular indicated. But it is not logically possible to approve and stand by the Pollard case, and at the same time hold that the insured can recover in this case. It is not ‍‌‌‌​​‌​‌​​‌‌​‌​‌​‌​‌‌​‌​‌​‌​‌​​‌‌​​​​​​‌‌​‌‌​​‌‌‍a possible thing, in reason, to draw аny sound distinction between the Pollard case and this case. Indeed, the principles of the Pollard case apply more strongly to the facts of this case than to the facts of the Pollard case itself, just as much more strongly as prostitution is a greater outrage on public policy than thе mere failure to pay a privilege tax. In the single respect that the fire insurance policy pertains to, or relates to, or concerns the business carried on, the two cases are absolutely identical.

Another plain reason why, if the Pollard case is sound, these plaintiffs cannot recover — for they are, indeed, far less able to recover on principle than Pollard was — is that in the Pollard case the only thing which made Pollard’s fire insurance policy enforceable ‍‌‌‌​​‌​‌​​‌‌​‌​‌​‌​‌‌​‌​‌​‌​‌​​‌‌​​​​​​‌‌​‌‌​​‌‌‍was the mere failure to pay a privilege tax, a thing malum prohibitum, not malum in se; whereas, here the thing which makes this contract unenforceable is not something malum prohibitum only, but something which is malum in se in every civilizеd community in the world, to-wit, prostitution. In other words, if it was sound law to hold Pollard barred because of a failure to comply with the mere technical law, failure to pay a privilege tax, how cаn these plaintiffs recover who are engaged in a business far worse than one merely malum prohibitum — one that is abhorrent to the public policy of every civilized community?

I do not care to enlarge. I merely wish to put myself properly on record.