Obligations Arising after the Policy Is Issued. 1) The insured must pay the premiums at the times and according to the terms stated in the policy.
2) The insured must not increase the risk assumed by the company. Concretely, in cases of property insured, the insured is bound in commutative justice not to deliberately destroy or damage the property covered by the policy under penalty of losing all rights to compensation. Compensation could be claimed, however, if the damaging or destructive action was only theologically right.
3) He must not claim or accept indemnity for articles not damaged; he must not submit a claim beyond a just estimate of the real damage. Some moralists maintain that a claim may be made for a higher amount with the intention of getting a just value after the insurance adjustor has made his investigation and lowered the estimated value. The adjustor’s estimate, even if higher than the insured estimate, may be accepted provided no means have been taken to prevent a full and free examination of damage.
Operations on the stock market and similar markets are primarily contracts of buying and selling; they become contracts of chance when they assume the quality of speculation, i.e., gambling on future changes of prices. It is generally conceded that such contracts are not morally wrong in themselves and follow the laws of betting. Additional justification is added on the ground that such transactions in many instances supply the capital required for large-scale operations, future deliveries, etc. Occasional dissenting voices insist that certain aspects of such transactions, e.g., dealing in future values of wheat, rye, and other commodities, are immoral since they tend to determine prices independent of the real value of the products, the laws of supply and demand, etc. However, the arguments seem to involve more abuses controllable, if not actually controlled, by marketing laws and civil laws rather than any immorality in the operations themselves.
(c) Onerous Contracts.—These contracts require that there be equality between the recompense and the thing received. Thus, in a lease the lessor must not charge excessive rent, and the lessee must pay the rent faithfully; in a contract of labor, the employer must pay a fair wage (that is, one that at the minimum will meet the primary needs of the worker and his family to live in frugal comfort, and which will moreover equal the special value of the service given; for a complete treatment of the theology of the just wage, see Fr. Jeremiah Newman, “The Just Wage,” _Theology Digest_, Vol. 2, Spring 1957, pp. 120-126, and “A Note on the Living Wage,” by Edward Dui, S.J., in the same issue), and the laborer on his part must give a fair day’s work as to quantity and quality; in partnership, the members must divide the profits and loss according to a reasonable distribution; in guaranty, pledge, and mortgage, justice requires that the burden assumed be not out of proportion to the benefit that is received.
2138. Fraudulent Contracts.—Examples of fraud in contracts are the following:
(a) in gratuitous contracts, a donee who by false representations obtains a gift, a lender who fails to make known to the borrower defects or dangers in the thing loaned;
(b) in onerous contracts, a landlord who conceals defects from one who is renting a house, members of a business concern who keep back information from partners or who give out false statements in order to entice investors, creditors who conceal their knowledge about the unreliability of a man for whom surety is given them;
(c) in aleatory contracts, in a pure wager, a person who bets on a thing supposed to be uncertain but about which he has certain information, or who knows that he will be unable to pay should he lose, or who will allow no odds though he knows that the probabilities are in his favor; in gaming, a player who pretends to be ignorant in order to inveigle another person into a game of skill, or who does not observe the rules of the game, or who fixes the cards or dice for himself in a game of chance; in lottery, a drawer who manipulates the lots so as to favor some of the players, etc.