112 Ga. 585 | Ga. | 1901
Lead Opinion
Frank Word sued the Southern Mutual Insurance Company for the sum of $4,000, the value of his dwelling-house, which was totally destroyed by fire while he held a policy of insurance upon it, for that amount, issued to him by the defendant company. The policy sued upon was issued to the plaintiff by the defendant-on the 28th of March, 1894, and was renewed, upon the payment of the premium required, year by year. The premises insured were destroyed by fire on the 16th of April, 1899. The loss plaintiff sustained by the destruction of his dwelling-house was appraised at-$4,000, and this appraisement was acquiesced in by both parties to-the contract of insurance. The only dispute between them was as to the amount for which the insurancé company was liable to the plaintiff; he churning that it was liable for the full amount of the loss sustained by him, and the defendant claiming that it was hable for only three fourths of this amount. The case was, by consent of parties, submitted to the judge below upon an agreed statement of facts. He found in favor of the contention of the defendant, and rendered judgment accordingly; to which judgment the plaintiff excepted. Under the policy the defendant insured the plaintiff “ against loss or damage by fire to the amount of four thousand dollars,” for the term of one year from the date of the policy, upon his brick dwelling-house, the policy stipulating “ that the funds of said company are bound and made subject to indemnify the said assured . . for all immediate loss or damage which may happen to said property by fire, within the term aforesaid, not exceeding the amount above named, and not exceeding three fourths the actual value of said property when the loss occurs.” This “ three-fourths ” clause was printed in larger and more conspicuous type than the rest of the policy. The plaintiff’s contention is, that, as his loss did not exceed the amount-of insurance named in the policy, the insurance company is liable to-
If it be said, as contended in this case, that the property insured may depreciate in value between the time when the contract of insurance is entered into and the time when a loss thereunder occurs, the reply is, that the three-fourths value limitation in the charter evidently has reference to the value of the property at the time the contract of insurance is entered into. For, in any case, it would be the value of the property at the time the company exercised its power to insure which would be taken into consideration in determining whether or not the company then exceeded this power. The provisions, in section five of the charter, for ascertaining and determining, after a loss has been sustained by the insured, whether, the company is hable at all to the insured, and, if hable, in what amount,
The question whether or not the contract is ultra vires is not made in this case. It is true that one of the pleas of the defendant was that “it is restricted in the payment of losses sustained by its policy-holders to an amount not exceeding three fourths of the value of the property insured.” But this was evidently not intended to be a plea that the contract, either in whole or in part, is ultra vires; for the argument in behalf of the defendant in error has not proceeded upon that theory, but has been as heretofore indicated. The company seeks not to repudiate its- contract, either wholly or partially, but contends that, giving effect to the contract just as it is written, it is only liable for three fourths of the value •of the insured property at the time that the loss occurred. Even
Judgment reversed.
Dissenting Opinion
dissenting. After a mature deliberation and a careful investigation of the authorities, I have reached the conclusion that the decision of our brother Reagan, in which he held “ that the
When a corporation is created by a State, the parties are the State and the incorporators, the subject-matter is the particular business for which the corporation is created, and the consideration is generally the benefit which the people of the State are supposed to derive from the presence iu their midst of the enterprise which the corporation is formed to carry out. “ There is no necessity of looking for the consideration for a legislative contract outside of the objects for which the corporation was created. These objects were deemed by the legislature to be beneficial to the community, and this benefit constitutes the consideration for the contract, and no other is required to support it.” Home of the Friendless v. Rouse, 8 Wall. 437. In dealing with a question of this kind, it is necessary primarily, as was said in the above quotation, to inquire what contracts are embraced in the charter, and secondly, whether the legislature has passed any act which has the effect of impairing the obligations contained in such contracts. If the act has the effect of withdrawing or substantially modifying those obligations, against the will of the incorporators, it is unconstitutional and void. Of course, the right to engage in the particular business which the corporation was formed to carry out is a part of the contract; the State can not compel persons incorporated for the purpose of carrying on one enterprise to abandon that business and embark in another enterprise. Not only is this true, but the method and plan by which this business is to be carried on is itself part of the contract between the State and the incorporators. A corporation organized for the purpose of carrying on the business of insurance can not by legislative enactment be changed, against the will of its members, into a corporation to carry on the business of a common carrier, for the simple reason that the State has granted to the incorporators the right to carry on the business of insurance. For a similar reason, a corporation formed for the purpose of engaging in the business of fire-insurance can not be changed, without its consent, into a life-insurance organization. And, for a like reason, a corporation which,
Such I understand to be the principles deducible from the decision in the Dartmouth College case, and while many so-called limitations have been placed upon that decision by subsequent rulings, of both State and Federal courts, so far as my investigations have gone I have found nó case which places such a limitation upon that doctrine as would prevent its application to cases pf the character above referred to. See Notes on U. S. Reps., by Rose, vol. 1, p. 909 et seq. It would be beyond the scope of this discussion to refer to all of these limitations. An important one is found in those cases which relate to the police power of the State. “No legislature,” said Mr. Chief Justice Waite, in Stone v. Mississippi, supra, “ can bargain away the public health or the public morals.” See also Fertilizing Co. v. Hyde Park, 97 U. S. 659; Thorpe v. R. & B. R. R. Co., 27 Vt. 140, s. c. 62 Am. Dec. 626; Platte etc. Co. v. Dowell, 17 Colo. 382, s. c. 30 Pac. 68; Rodemacher v. Milwaukee etc. R. R. Co., 41 Iowa, 297, s. c. 20 Am. Rep. 592. The principle of the decision has been allowed to control in its full vigor in cases where the right to tax was involved. See Piqua Branch Bank v. Knoop, 16 How, 369; Home of the Friendless v. Rouse, 8 Wall. 430; Farrington v. Tenn., 95 U. S. 679; Asylum v. New Orleans, 105 U. S. 362; State v. Georgia R. R. & Bkg. Co., 54 Ga. 423. The existence of these decisions at the present time affords the highest evidence that the principle of the decision in the Dartmouth College case has not been materially shaken, at least by the Supreme Court of the United States. It must be conceded that in the past the principle has been in some cases extended to a point where the courts at the present time would hardly go. For instance, it has been held that a charter authorizing a lottery was protected under the principle of this decision. Kellum v. State, 66 Ind. 588; Broadbent v. Art Ass’n, 45 Ala. 170; Boyd v. State, 46 Ala. 329. Of course, the general rule applied when legislative grants are under construction is applicable in cases like the present, and that is, the grant must be construed strictly as against the grantee and liberally in favor of the public. Charles River Bridge Co. v. Warren Bridge Co., 11 Pet. 582; Tuttle v. Walton, 1 Ga. 59; Frederick v. Augusta, 5 Ga. 561; McLeod v. R. R. Co., 25 Ga. 445; Central R. R. Co. v.
Applying what is above said to the facts of the present case, what is the result?' We find that there was in 1847 incorporated by the General Assembly of Georgia an insurance company under the name and style of the Southern Mutual Insurance Company. Acts 1847, p. 126. An examination of the charter and the different amendments thereto will show that the scheme of the enterprise was one of mutual insurance. Those portions of the charter and amendments material to the present discussion were in the following language: Section 3. “ Said corporation may insure, for any term not exceeding ten years, any houses, goods, or other species of property against loss or damage by fire, or water, and the lives of slaves against death, such damage, loss, or death not resulting from the carelessness, negligence, or design of the party insured, and to any amount not exceeding three fourths of the value of the property insured, property on shipboard or in storage not subject to this limitation, and not exceeding ten thousand dollars on any one block of buildings or stock of goods.” Acts 1849-50, p. 266. Section 5. "Whenever any person shall sustain any loss of the property so insured, he shall, within thirty days after his knowledge of said loss, and in case of real estate before any repairs or alterations are made, give notice in writing of the same to some one of the directors, or other person appointed by the directors, whose •duty it shall be to view immediately the premises where the loss occurred, or otherwise make satisfactory inquiries into the circumstances attending it, and under oath determine, in writing by him subscribed, the amount, if any, of the liabilities of said corporation for such loss; and if the sufferer shall not acquiesce in such estimate, he may, within sixty days after he- is notified of the estimate, bring an action at law against said corporation. If in this action lie shall not receive more than the amount estimated as aforesaid, he shall be liable for all costs incurred in the suit, and execution shall issue against the corporation only for such amount as may be allowed, after deducting said costs of suit; but if the amount allowed be greater than the estimate, then the corporation shall be liable for all the costs of suit.” The only reference in the charter to the proportion of the loss for which the company should be liable, and as to when and how this amount should be ascertained,
This being true, the provisions of the charter constitute, in effect, a binding agreement between the State and the incorporators, that the business they shall carry on shall be one of- insurance against loss or damage by fire, etc., and that in carrying on this business they shall not be compelled to ascertain, in advance of the loss, the value of the property or the amount that shall be paid to the policy-holder, but the amount, whatever it may be, shall be determined after the loss occurs and in the manner prescribed in section 5 of the charter. The company under its charter has a right to insure for a term of ten years. The property which the company insures depreciates in value from year to year, some property more than others. The construction placed upon the charter by the majority would require the company in each case to fix the valuation of the property in advance, and in any event pay three fourths of this amount, although the actual value at the time of the loss might be less than three fourths of the amount stated in the policy. Such a
Under section 5 of the charter the company is guaranteed the right to determine'the value after the loss has occurred. Under section 3 the company is authorized to engage in a business by which' it will insure against loss by fire, etc., to an amount not exceeding three fourths of the value of the property insured. This section is as much a part of the contract between the State and the incorporators as section 5, and, so far as the controversy involved in the present case is concerned, there was in this section a binding agreement between the State and the incorporators, that the latter were to be allowed to engagé in a business in which they were not to be liable for more than three fourths of the value of any property which might be destroyed by fire, and they were not to be required, under any conditions, to pay to one sustaining loss by fire an amount exceeding three fourths of the value of the property insured, and the amount to be so paid was to be in all cases ascertained after the loss had occurred. Under the act of 1895 fire-insurance companies are required to pay, in case of loss, the amount stated in the policy, provided the value of the property at the time of the loss was equal to or greater than that amount, and the value of the property at the time of the loss, if such value is less than the amount stated in the policy, notwithstanding any clause to the contrary in the policy. If the rule laid down in this law is applied to policies issued by the defendant company, the result would be, in many cases, that it would be required to pay more than three fourths of the actual value of the property destroyed. But it is said that this result can be avoided, and the law be allowed to be effective, so far as the defendant company is concerned, if in writing its policies it will state in the face of the same an amount which would in no event exceed three fourths of the value of the property at the time of the loss. The impracticability of such a plan is apparent. It can not be determined in one year what will be the value of the property in another year, even if the company should issue policies renewable annually; and the difficulties would be increased if the
The foregoing argument has proceeded upon the theory that the act of 1895 would be applicable to this company, if the General Assembly had' constitutional authority to make it so. It is not dear, however, that even this is true. The title of the act is to compel insurance companies to pay the full amount of loss sustained up to the amount expressed in the policies, “notwithstanding any stipulation in such policies to the contrary.” Acts 1895, p. 51. The body of the act contains similar language. So that it is not at all clear that, irrespective of the presumption arising from want of constitutional power, the legislature intended the act to apply to companies whose charters contained contrary stipulations. It is conceded in the opinion of the majority that this company has not, by accepting any substantial amendment to its charter, made itself amenable to legislation of this character; and hence a discussion of the acts passed since 1863 relating to this company
An examination of the policy involved in the present case will show that the company has not written a contract that is at all in violation of its charter. On the contrary, the contract as written is in exact accord with the provisions of the charter as to the amount for which insurance can be written by the company and the time that the liability of the company as to amount shall be ascertained. The company has not undertaken to insure for more than three fourths of the actual value of the property at the timé of the loss. The policy upon its face shows that that was the contract entered into between the parties. It is true that $4,000 is stated in the policy; but this is not the sum which the company agrees to pay, but is simply stated, according to the usual rule and custom, as a maximum amount beyond which the company will not be liable in any event. The contract of the company is not to pay this amount, neither is it to pay the full value of the property, if such value should be equal to this amount; but the contract is purely and simply an undertaking on the part of the company to pay a sum which will equal three fourths of the actual value of the property at the time of the loss, provided that sum does not in any event exceed four thousand dollars. I am of opinion that the act of 1895, if applied to this company, would be an impairment of the obligation of contracts contained in its charter, which is forbidden by the constitution of the United States.