Case XXVII: A Case of Restitution

Some time ago a fire broke out in a store in which John is employed as a clerk. To increase the amount of damages which his employer would receive from the insurance company, John, together with another clerk named Donald, testified that a large quantity of silk goods and laces had been destroyed by the fire, when, in fact, they had been removed by the proprietor and were intact. In the meantime the storekeeper has disposed of his business and removed elsewhere. Donald has a good position in a large New York house, but John makes scarcely enough to keep him.

All this John makes known in his Easter confession. He knew at the time that he made the statement to the insurance agents about the silk goods and laces that it was a false statement, but Donald's testimony alone would not have sufficed to recover the supposed damages, and so he was induced to make a joint statement with Donald. He did not profit by it himself, nor does he know how much money the storekeeper got from the insurance people for the silk and laces, except that it was hundreds of dollars. When questioned further by the confessor, John admits that there is no probability whatsoever, that either the storekeeper or Donald will ever make any restitution, neither of them being Catholics. Under these circumstances, the confessor holds John to restitution in the full amount. But John has nothing wherewith to make restitution, neither does he know the exact amount to be restored, nor the parties to whom restitution is to be made, since the old company has gone out of business and a new concern has bought up its interests. Under these circumstances the confessor volunteers himself to find out how much money was recovered from the insurance people for the silk and laces, and to what individuals restitution must be made, and to inform John later of the results of his inquiries. In the meantime, however, the confessor grows anxious about the course he is taking in the matter, and asks whether he is acting rightly. Theoretically, there can be no doubt of John's obligation to make restitution, but only in case the storekeeper refuses to restore, in which case John is held jointly with Donald, because Donald's testimony, by itself, did not suffice to prove the supposed damage. Therefore, John is liable, together with Donald, for the whole amount, but only in the second instance, that is, in case the storekeeper does not make good, in which case John may recover from the storekeeper. But Donald refuses to pay his share; therefore, John is liable for the full amount, but with the right to recover from Donald, Donald's half of the amount restored. In principle, therefore, the decision of the confessor is correct. In practice, however, we are obliged to take a different view of the confessor's conduct.

In the first place, the confessor acted imprudently in undertaking to find out for John the exact amount of money paid by the insurance company to the storekeeper for the supposed destruction of the silk goods and laces, and to what persons this money should be restored. There is always danger of breaking the seal of confession in making such inquiries. Moreover, even supposing the penitent gives the necessary permission to make the inquiry, the undertaking is odious in itself, and may lead to embarrassing complications. There is no need, in the present instance, of such an investigation, because John has no means wherewith to restore. There is question of making restitution to an insurance company. These companies are operated and secured by the premiums paid by the persons insured. The rate of the premiums depends on the risk the company takes in insuring, the risk being computed on the average frequency of fires, as shown by the records of insurance companies, no account being taken whether the fires are accidental or of incendiary origin. The company endeavors, by means of restrictive clauses and thorough investigation into the origin of each fire, to protect itself against fraud. However, it can not guard against every deception practised by the insured. Therefore, in fixing the rate for insurance the company considers only the possible damages it may have to pay. Hence it follows that the carriers of fire insurance policies are themselves, to some extent, the sufferers when unjust fire damages are allowed, because they pay a higher premium rate in consequence of fires of incendiary origin. If no fraud were practised on insurance companies by holders of policies in the same, the rate for insurance in such companies would be much lower than it is. It is but just that the policy-holders should be indemnified for unjust damages they are thus indirectly made to suffer. But the number of policy-holders is so great that the amount of restitution to be made to each policy-holder for damage done him by any particular fire is inconsiderable.

Moreover, their identity is unknown. Therefore, the poor may be substituted for them and restitution made to the poor. In this view, and it is well founded (cf. Lehmkuhl, I. 11, 34), John's case may be easily disposed of. John is actuated by a sincere desire of making restitution, but is prevented by his poverty. The confessor may tell him that he may give alms to the poor by way of restitution, and as he is poor himself, he is included in the number of those who may benefit by the alms. In this way John's conscience is set at rest. But the storekeeper and Donald are still bound to restore.