State v. American Surety Company

• Decision Date: 12 March 1912
• Docket Number: 16,559
• Citation: 135 N.W. 365,91 Neb. 22
• Parties: STATE OF NEBRASKA, APPELLANT, v. AMERICAN SURETY COMPANY, APPELLEE
• Court: Nebraska Supreme Court

135 N.W. 365

91 Neb. 22

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

No. 16,559

Supreme Court of Nebraska

March 12, 1912

REHEARING of case reported in 90 Neb. 154. Former judgment vacated, and judgment of district court reversed.

REVERSED.

LETTON J. REESE, C. J., not sitting.

OPINION

LETTON, J.

The former opinion in this case is reported in 90 Neb. 154. The principal contention now made by the attorney general on rehearing is that the provisions of chapter 79, laws 1897 commonly known as the "Gondring act," when considered in connection with the provisions of chapter 162, laws 1905, commonly known as the "Junkin act," made it the duty of the defendant to file the statements and undertakings required by section 4 of the latter act; that these statutes must be considered and construed together, and that, since a combination to prevent competition in insurance is within the definition of a "trust" by the terms of the former act, it was the intention of the legislature to protect trade from such an unlawful restraint on competition by the latter act, and, consequently, that a foreign insurance company is among those corporations required to make report thereunder.

The defendant insists that the Junkin act is by its title restricted to "trade and commerce;" that insurance does not fall in either of these classes; that insurance is a distinct and separate subject of legislation; that since 1905 the state has not required such reports to be filed and that its right to the same, if one ever existed, has been waived, and it is now estopped to insist upon it; that section 4 is in violation of the constitution; that the penalties imposed by the act are not for failure to file the statements required by section 4; and that if insurance is held to be commerce the act is an attempted regulation of interstate commerce, and therefore void.

At the outset of the discussion it is proper to say that we agree with the defendant that the requirements of section 4 can only apply to such persons or corporations as may reasonably be considered as being embraced within the title of the Junkin act. We adhere to the view expressed in the former opinion that generally the words "trade and commerce" would not include the business of insurance, but we have no doubt that it is within the power of the legislature within reasonable limitations to include within the concept and definition of a term ideas which may not unreasonably be included therein, though perhaps not strictly within its ordinary definition. The line of demarcation between the ideas expressed by the words "trade and business" and "trade and commerce" is somewhat hard to draw, and the legislature may without violence to any constitutional limitations and with propriety embrace within the definition of one term or the other transactions which may lie close to the border line. Statutory definition often relieves the court of questions otherwise hard to solve when endeavoring to ascertain the meaning of the legislature, and is a practice which is to be commended if exercised within proper limitations. As was said in In re Pinkney, 47 Kan. 89, 27 P. 179, which was quoted in the former opinion: "While the legislature cannot extend the scope of the title by giving to a word therein a definition which is unnatural and unwarranted by usage, still, if the word admits of the construction given to it by the legislature, and can be properly used in a sense broad enough to include the provisions of the act, the intention of the legislature is entitled to great weight in determining the sufficiency of the title."

Was it the intention of the legislature that the prevention of competition in insurance should be included within the title?

The title of the Gondring act, so far as necessary to consider here, is "An act to define trusts and conspiracies against trade and business, declaring the same unlawful and void, and providing means for the suppression of same." Section 1 of that act, so far as essential here, is as follows: "That a trust is a combination of capital, * * * skill or acts by two or more persons, or by two or more of them for either, any or all of the following purposes: * * * (3) to prevent competition in insurance, either life, fire, accident or any other kind. * * * (5) To make or enter into, carry on or carry out any contract, obligation or agreement of any kind or description * * * by which they shall in any manner establish or settle the price of any article of merchandise, commodity, or of insurance, fire, life or accident, * * * or by which they shall agree to pool, combine or unite any interest they may have in connection with the sale, production or transportation of any such article of merchandise, product or commodity or the carrying on of any such business, that its price might in any manner be affected thereby." By section 2 it is declared: "That any and all acts by any person or persons carrying on, creating, or attempting to create, either directly or indirectly, a trust as defined in section one (1) of this act, are hereby declared to be a conspiracy against trade and business and unlawful," etc. By section 13 of the act it was provided: "That the word 'person' or 'persons' wherever used in this act shall be deemed to include firm, firms, corporation, corporations, partnerships, copartnerships and associations existing under, permitted or authorized by the laws of the United States, this state or any other state, or the laws of any foreign country or territory of the United States." By this statute, therefore, a combination for the purpose of preventing competition in insurance of any kind is defined as a trust, and a trust is declared to be a conspiracy in restraint of trade and business, and unlawful. Evidently the words "trade and business" are intended as a generic term to embrace all the transactions and practices set forth in the preceding section, and properly include the regulation of insurance contracts in restraint of competition.

At the same session there was passed "An act to prevent combinations between fire insurance companies and providing penalties therefor," commonly known as the "Haller act." Laws 1897, ch. 81. This act prohibited combinations to fix rates and commissions by fire insurance companies, but made no attempt to prevent such combinations to prevent competition in other classes of insurance.

Eight years later the Junkin act was passed. Laws 1905, ch. 162. It was a further development of the legislative campaign against the evils of combinations to enhance prices and to prevent competition in all lines of trade and business. The legislature necessarily must have had in mind the existing statutes on the general subject and the prior definitions of the terms used therein. Our views on this subject are plainly expressed in the opinion in State v. Omaha Elevator Co., 75 Neb. 637, 106 N.W. 979, as follows: "We think it clear that the whole series of statutes directed against combinations and monopolies should be considered as parts of a connected system, and that no one act should be singled out for construction and be considered apart from the general trend of legislation upon the subject. * * * It is apparent that the Junkin act of 1905 in a large measure covers the same subject matter as the Gondring act of 1897. Its provisions in some respects are more specific. It is preventive in its nature as well as remedial, and it is apparent that it was intended by the legislature to cover the same subject matter and to furnish like and additional remedies to those provided by the Gondring act. It evidently was intended to be a substitute for that act, in so far as the preventive and remedial features are concerned. It fails, however, to specifically define or construe or determine what a 'trust' is. We think that...