State v. American Surety Company

• Decision Date: 14 November 1911
• Docket Number: 16,559
• Parties: STATE OF NEBRASKA, APPELLANT, v. AMERICAN SURETY COMPANY, APPELLEE
• Court: Nebraska Supreme Court

133 N.W. 235

90 Neb. 154

STATE OF NEBRASKA, APPELLANT, v. AMERICAN SURETY COMPANY, APPELLEE

No. 16,559

Supreme Court of Nebraska

November 14, 1911

APPEAL from the district court for Lancaster county: ALBERT J CORNISH, JUDGE. Affirmed.

AFFIRMED.

Grant G. Martin, Attorney General, and George W. Ayres, for appellant.

Montgomery & Hall and Hall, Woods & Bishop, contra.

REESE C. J. ROSE, J., took no part in this decision.

OPINION

REESE C. J.

This action was commenced in the district court for Lancaster county by the attorney general, on behalf of the state, to enjoin the defendant from transacting or carrying on the business of a surety company within the state, the averment of the petition being that it had failed and refused to file in the office of the attorney general the statement required by section 4, art. II, ch. 91a, Comp. St. 1911. It is alleged in the petition, in substance, that the defendant is a corporation, incorporated under the laws of the state of New York, and is engaged in the transaction of the business of a surety company in this state, having established agents throughout the state; that it is not a Nebraska corporation nor a corporation whose stockholders are personally liable for its debts, and is not engaged in any of the lines of business named in the exception contained in section 4 of the anti-trust laws of this state; that, as the defendant corporation is engaged in business in this state, it is its duty to file the statement in the office of the attorney general as required by said act, but that it has refused so to do, and that, by reason of its failure to comply with the law, it is unlawfully engaged in business in this state. The prayer is that it be enjoined from further carrying on its business within the state. The defendant demurred upon the ground that said petition did not state facts sufficient to constitute a cause of action. The demurrer was sustained by the district court, and the cause dismissed. Plaintiff stood upon its petition and appeals, assigning as error the ruling in sustaining the demurrer.

A wide range is taken in the briefs, and many questions are therein presented and were also discussed in the oral arguments. The principal and underlying question involved is as to the construction to be given to what is known as the "Anti-Trust Law" of this state. An act, commonly known as the "Junkin Act," was passed by the legislature in 1905 (laws 1905, ch. 162), the title to which is, "An act to protect trade and commerce against unlawful restraints and monopolies, and to prohibit the giving or receiving of rebates on the transportation of property, and to provide a penalty for the violation thereof." Section 4 of the act is as follows: "That from and after the 30th day of June, in the year 1906, no corporation, joint stock company, or other association, whose stockholders are not personally liable for their debts, except corporations incorporated under the laws of the state of Nebraska, and common carriers and corporations owning or using property exclusively in connection with the business of transportation, and corporations engaged in furnishing additional accommodations to passengers as such while being carried by such carriers, shall engage in business within this state, or continue to carry on such business, unless it shall comply with the following conditions." The conditions imposed are too long to be here copied, and it is only necessary to say that the corporations included within the provisions of the act are required to file a statement in the office of the attorney general making quite a complete showing of the organization and financial status of the corporation or association. This statement the defendant did not file, and claims that it, being an insurance company, is not required so to do by the act. As will be observed, the title to the act is to protect "trade and commerce" against unlawful restraints and monopolies. It is insisted by defendant that the insurance business cannot be held to be included within those two words; that, if it cannot be so included, the provisions of section 4 are not to be applied to it. This last proposition is conceded by the attorney general's department, but it is strenuously insisted that that business is included, and that foreign insurance companies are required to file the statement, and hence that duty is devolved upon defendant. The demurrer admits all well-pleaded, issuable material facts alleged, and hence it is taken as true that the defendant is a foreign corporation doing business in this state, that its stockholders are not personally liable for its debts, and that it is not within the exception contained in section 4 of the act. The sole question to be here decided is: Is defendant engaged in "trade" or "commerce" within the meaning of the title to the act. The terms "trade" and "commerce" have received a great number of definitions by the courts, but cannot all be applied to this case. We should keep in view the sense and connection in which they occur in the act under consideration.

One of the cases cited by the attorney general is In re Pinkney, 47 Kan. 89, 27 P. 179. The title to the act under consideration in that case was, "An act to declare unlawful trusts and combinations in restraint of trade and products, and to provide penalties therefor." In a section of the act it was provided that all contracts or arrangements to control the cost or rate of insurance was prohibited. The supreme court of Kansas held, correctly we think, that the title to the act was sufficiently comprehensive to include "trusts and combinations" in restraint of insurance; that, in the sense in which the word "trade" was used in the title it would include business, occupation, employment, etc.; and that a "combination" in restraint of the business of insurance could be prohibited under the title to the act. When we compare the titles to the two acts and the purposes of the legislature in the two instances, we are unable to derive much benefit from...