Court Opinion

ID: 7003064
Source: CourtListenerOpinion
Date Created: 2022-07-24 03:45:34.490903+00
Date Added: 2024-06-11T16:09:58.877855
License: Public Domain

Mr. Justice Windes delivered the opinion of the court. For appellant it is claimed that under the insurance statute of this State (Hurd, 1889, p. 820, Sec. 8), these policies are wager or gaming contracts, and as such are illegal and void. And if illegal, then he is entitled to recover the money by him paid thereon as for money had and received. We are of opinion that this claim is not tenable. Conceding the appellant’s claim that the policies are void for the reason that they are expressly prohibited by the statute of this State, the illegality appears upon the face of the policies, and was known to appellant as well as appellee. He is bound to know the law. Watertown F. I. Co. v. Rust, 40 Ill. App. 119, and cases cited; affirmed 141 Ill. 85; Jubell v. Church, 2 Johns. Cas. 333, and cases cited; 2 Joyce on Ins., Sec 1405. In the Jubel case, supra, in which was ¿onsidered the right of an insured to recover a premium paid upon a policy of marine insurance, Chancellor Kent held the policy to be. invalid, and, among other things, said: “ If it be unlawful and consequently void on the ground of its being a wager policy, the assured is not at any rate entitled to a return of the premium, for in pari delicto potoir est conditio possidentis. It was so decided in the cases of Lowry v. Bourdieu (Doug. 468), and Andre v. Fletcher (3 Term Rep. 266).” The cases cited sustain the opinion of the chancellor. In the Lowry case, Lord Mansfield, in speaking of a gaming policy, held that the nature of the insurance being known to both parties, they were in pari delicto, and there could be no recovery of the premium by the insured, because they “ must draw their remedy from pure fountains.” In the Rust case, supra, in which Mr. Justice Pleasants delivered a carefully considered opinion, while he distinguished that case from the general rule because the illegality of the contract depended upon facts outside the policy and unknown to the assured, recognizes the general rule above stated by Chancellor Kent, which he states is supported by, among other cases, Lewis v. Headley, 36 Ill. 433, and Penn v. Bowman, 102 Ill. 523. " The Supreme Court, in affirming the Appellate Court, says, in substance, that the opinion of the latter court discusses the question presented very thoroughly and exhaustively, and that the Supreme Court was content to rest its judgment upon the argument of the Appellate Court opinion, which appears to be based upon the fact that the assured had no notice of the facts which made the contract of insurance illegal. There are cases which hold differently, but this rule seems to be sustained by the weight of authority, and seems reasonable. This rule is analogous to the well settled principle in this State in usury cases, which, in effect, hold that although the contract is usurious, there can be no recovery for money so paid. It is not the basis of attack, but only of defense. Hadden v. Innes, 24 Ill. 381; Carter v. Moses, 39 Ill. 539, and Riddle v. Rosenfield, 103 Ill. 600. We are, however, of opinion that the policies here in question are not illegal. The section of the statute above referred to and invoked by the appellant, is as follows': “ Sec. 8. All corporations, associations or societies transacting business under the provisions of this act, may provide, by by-laws, for the accumulation of a surplus, general or guaranty fund, which may be invested only in the corporate name of the association or society in the United States, state, county, city, or other first-class convertible bonds or stocks, upon which interest has not been in default. Such funds, when so set apart, and so invested, shall, with the increase thereof, belong to such corporation^association or society, and not to the directors, trustees, managers or officers thereof, and shall be used only for mortuary benefits, without assessment, or applied in payment of future assessments, or otherwise used for the promotion of the object or objects for which said funds are specially provided and set apart, and such use shall not be deemed orconstrued to mean a profit received by members within the meaning of the statutes of this State: Provided, that nothing in this act shall be deemed or construed to authorize the payment of such funds to members as- endowments, or as tontine profits, or as payments to members otherwise than for mortuary benefits, or accidents, or permanent disability benefits, except upon the dissolution of the corporation.” ” Appellant’s contention is that the following provision in the policy is' clearly within the inhibition of the statute, viz.: “ First. At the option of said member, provided he shall notify said association in writing at least one year before the expiration of said fifteen years, thit he desires to have said sum paid as a tontine accumulation, then, and in that event, this certificate or policy shall thereupon, on the completion of said term of fifteen years, be payable only as a cash tontine accumulation, so ascertained and determined as aforesaid, and shall be paid in cash to said member upon the surrender hereof to said association.” The statute, by its terms, is permissive, and, as we construe it, has no application to foreign corporations doing business in this State. Its language is, “ All corporations, associations, or societies transacting business under the provisions of this act, may provide, by by-laws, for the accumulation of a surplus, general or guaranty fund,” etc. The appellee corporation does not appear from this record to be doing business in this State under the provisions of the act quoted, but is doing business here by comity and under a general statute of this State which does not require it to conform to the speciaVprovisions of the section of the statute quoted. The case of Chicago, etc., Ass’n v. Hunt, 127 Ill. 257, relied on by appellant, is that of a domestic corporation doing business under the act in question, and is not applicable to this case. It appears from the facts set out in the statement, that the appellee corporation is fully authorized by the laws of New York to make such contracts as the policies here in question, and in the absence of any prohibition by the laws of this State, a contract which the appellee was authorized to make under the laws of the State in which it was incorporated is valid here. Relfe v. Rundle, 103 U. S. 222-5; Cravens v. Ins. Co., 148 Mo. 583-607; Ins. Co. v. Cravens, 178 U. S. 389-97; Bachmann v. Knights of Honor, 44 Ill. App. 188-90. In the Relfe case, supra, the Supreme Court of the United States say: “No state need allow-the corporations of other states to do business within its jurisdiction unless it chooses, with, perhaps the exception of commercial corporations; but if it does, without limitation, express or implied, the corporation comes in as it has been created. Every corporation necessarily carries its charter wherever it goes, for that is the law of its existence.” In the Cravens case, supra, the Supreme Court of Missouri say : “ The rule to be deduced from the authorities seems to be, that when no statute intervenes prohibiting it, a corporation doing business by permission in another state from that of its incorporation may by contract make the law of the state of its incorporation the applicatory law of the contract, but that where the laws of the state in which it does business by license prohibit such corporations from making certain kinds of contracts, they can only act in accordance therewith.” In the Bachmann case, supra, this court held that a foreign corporation (in the case under consideration a benefit society, doing business in Illinois), may do business pursuant to the terms of its foreign charter, so far as consistent with and not forbidden by the laws of Illinois, and quote the following from Morawetzon Private Corporations, Sec. 993: “ A statutory license authorizing a foreign corporation to do business within the state does not alter the company’-s constitution, but merely gives the company a legal right to act pursuant to its constitution outside of the state by which it was chartered.” If, however, the tontine provision of these policies is void because it contravenes the section of the statute here under consideration, that does not invalidate the policies as a whole. Eliminating this provision, the policies still constituted a valid insurance upon the life of appellant which bound the appellee. The consideration for appellant’s dues and assessments paid, was the insurance which he received upon his life. While the policies were in force the appellee was bound by its contracts, and appellant could not, for that reason, recover under the common counts. Watertown, etc., Co. v. Rust, 141 Ill. 85-8; Phenix, etc., Ins. Co. v. Baker, 85 Ill. 410-15; Brooklyn, etc., Co. v. Week, 9 Ill. App. 358-60; Leonard v. Washburn, 100 Mass. 251-4; Ganser v. Firemen’s F. Ins. Co., 34 Minn. 372; Swan v. Watertown F. Ins Co., 96 Pa. St. 37-42; Watertown F. Ins. Co. v. Simons, Id. 520-6; 1st Joyce on Ins., Sec. 331, and cases cited. Other contentions made by appellant have been considered, but we think none of them are tenable. It seems unnecessary to consider the arguments of appellee’s counsel, which present other reasons for the affirmance of the judgment, inasmuch as we think the views expressed are controlling. The judgment is affirmed.