Supreme Ruling of Fraternal Mystic Circle v. Snyder - 227 U.S. 497 (1913)
U.S. Supreme Court
Supreme Ruling of Fraternal Mystic Circle v. Snyder, 227 U.S. 497 (1913)
Supreme Ruling of the Fraternal Mystic Circle v. Snyder
Submitted December 16, 1912
Decided February 24, 1913
227 U.S. 497
The state is entitled at all time to prevent the perversion of its legal machinery, and may require that it be availed of only bona fide.
To impose a penalty on those who unsuccessfully and not in good faith defend their liability on contracts does not violate the obligation of the contract. Quaere whether the state could impose such a penalty as to prior contracts as a mere consequence of unsuccessful defense. This Court will not construe a state statute as including that which it expressly excludes on the ground that the statute's practical effect will be to include cases which are so excluded therefrom.
A state statute imposing on insurance companies an additional specified proportionate amount of the policy where there has been an unsuccessful defense interposed not in good faith is not unconstitutional as violating the contract clause of the Constitution, and so held as to a statute of Tennessee to that effect.
122 Tenn. 248 affirmed.
The facts, which involve the constitutionality under the contract clause of the federal Constitution of a statute of Tennessee permitting the court to add certain amounts to the recovery on insurance policies where refusal to pay was not in good faith, are stated in the opinion.