Plunkett v. Hopley ( 1929 )

The opinion of the majority in this case, as I view it, is the exact negative of the plain, unambiguous language of Section 8958, Code of 1927, and of the obvious intent of the legislature. The statement in the opinion quoted from Cookv. Weirman, 51 Iowa 561, that the purpose of the statute is "to discourage unauthorized companies from doing business in this state," is without contrary significance. If this be conceded to be the purpose, how does it conceivably affect the statute? The court held, in the cited case, that the omission of the words "for insurance," or other equivalent language, does not affect negotiability. Thus, a note taken in violation of the statute is collectible in the hands of an innocent purchaser for value. The opinion of the majority interprets the words "shall not be collectible" as meaning collectible unless the defendant assumes and carries the burden of proving that the payee has not conformed to the statute. The word "unless," as defined by Webster, and as judicially defined, means: "Upon any less condition than (the fact or thing stated in the sentence or clause which follows)." Hickory v. Railroad, 137 N.C. 189 (49 S.E. 202); Stein v. Dunne, 119 A.D. 1 (103 N.Y. Supp. 894);Central of Georgia R. Co. v. Finch, 179 Ala. 121 (59 So. 619);People ex rel. Rochester Tel. Co. v. Priest, 181 N.Y. 300 (73 N.E. 1100); Laborde v. Ubarri, 214 U.S. 173 (53 L. Ed. 955).

The definition applied to the statute means that the note is collectible only upon no less condition than compliance with the statute. What is it that the statute requires, to give the note collectibility? It must state upon its face that it was given for insurance. Collectibility is the exact opposite of uncollectibility. Collectibility means legally demandable. M'Doalv. Yeomans, 8 Watts (Pa.) 361; French v. Marsh, 29 Wis. 649. If collectibility means legally demandable, then uncollectibility must mean not legally demandable, or the contrary. It being assumed that the purpose of the statute is to discourage unauthorized companies from doing business in this state, is there any reason why the purpose should be "soft-pedaled?" Surely, if the burden of proving collectibility is placed upon the corporation, it would incur no difficulty in making the proof. It is in possession at all times of the facts; whereas the defendant, if the burden is cast upon him, must institute inquiry and search at his own expense, and produce testimony to show that the plaintiff has not complied with the statute. If the burden is put where the statute puts it, — on the corporation, — the effect will be to discourage unauthorized companies from doing business in this state, far more than if the statute is given a reverse meaning, and application and the burden placed upon the maker. If the note is negotiable, and protected in the hands of a purchaser for value, and if the burden is on the maker to show that the company, at the time the note was executed, was not authorized to do business in this state, about all of the discouragement contemplated by the legislature disappears, and the protection to the maker, which was intended to be something more than a mere incident, is practically destroyed.

Insurance companies prepare their own notes, and it is no hardship upon them to print the words "given for insurance" on the face thereof. The natural tendency on the part of insurance companies will be to omit the words, if negotiation is desired.

In my opinion, the statute means what it says, and if it is given for insurance, the note is uncollectible unless the words required by the statute are written thereon. I would affirm.

ALBERT, C.J., joins in this dissent.