INSURANCE AS A COMMODITY company would pay him the amount of the prize drawn . . . even if the holder did not draw the prize, the tickets, before the drawing, had a money value in the market among those who chose to sell or buy lottery tickets." The idea seems to be that the ticket itself, irrespective of the parties concerned, had some value because of the possibilities which it represented. This, however, cannot be said of an insur ance policy, which is only the tangible evi dence of a personal agreement between two parties. If, however, insurance cannot be desig nated as a commodity in this extended sense, can it be called a commodity in the limited sense? It is said that the con tract of insurance contemplates an exchange of property between the insured and the insurer and vice versa, and such exchange, not the contract, is the real business of insurance. In fire insurance, for example, the undertaking of the insurer is to indem nify the insured against loss of a certain kind. This involves the transfer of money or property. If the insurer elect he may transfer a sum of money as indemnity or he may provide another house or supply other things to take the place of those destroyed; or the insurer may, in the case of personal property, take the things damaged and in return give other things. In life insurance the insured transfers money to the insurer who in turn undertakes to accumulate the same for a certain period and return its equivalent to the insured, or in the event of his death during the period of accumula tion, to transfer a certain sum to his repre sentatives, deducting a certain portion for his services. This interpretation of the
nature of the business of insurance seems artificial and strained, and has no judicial sanction. The real business of insurance, the essence of the insurer's contract is not the exchange of property, tangible or in tangible; it is an undertaking to do an act at a particular time and place. Although the performing of the stipulations in the insurance contract may result in the ex change of property across state lines, such a consequence comes about only in an inci dental way. In a fire insurance contract, between parties residing in different states, the obligation of the insurer is to indemnify the insurer against loss. He may perform his obligation by giving to the insured other property of like kind and value as that destroyed, or a sum of money. The contract does not require that he bring the money or the property from another state. If A of New York agrees with B of Virginia to build for him in Virginia a house of Indiana stone, the performance of the contract may result in bringing stone from Indiana to Virginia. Such a consequence arises, however, only incidentally out of A's principal undertaking, namely, to do a particular act in Virginia. As the insurance business is usually carried on, there is practically no authority and very little reason for calling it a commodity, or in saying that the performance of an insurance contract results in the interstate exchange of a commodity, defining that word as it is ordinarily used in connection with commerce, and a legislative fiat cannot make that an interstate commercial trans action which is not such in its essential nature. MADISON, Wis., January, 1906.
