Spicer v. Benefit Ass'n of Ry. Employees

• Decision Date: 18 April 1933
• Citation: 21 P.2d 187,142 Or. 574
• Parties: SPICER et al. v. BENEFIT ASS'N OF RY. EMPLOYEES.
• Court: Oregon Supreme Court

21 P.2d 187

142 Or. 574

SPICER et al. v. BENEFIT ASS'N OF RY. EMPLOYEES.

Supreme Court of Oregon

April 18, 1933

Department No. 1.

Appeal from Circuit Court, Union County; J. W. Knowles, Judge.

Action by Leslie William Spicer and another, minors, by Mary E Crandall, guardian, against Benefit Association of Railway Employees. Judgment for plaintiff was affirmed on appeal, and plaintiffs move for allowance of reasonable compensation to their attorney for services performed subsequent to the filing of appellant's notice of appeal.

Motion granted to extent indicated in opinion.

KELLY J., dissenting.

Expense of procuring copy of transcript of evidence held not taxable as "costs." p>Page Cochran & Eberhard, of La Grande for appellant.

R. J Kitchen, of La Grande, for respondents.

ROSSMAN Justice.

The plaintiff (respondent), having prevailed upon the appeal , moves for the allowance of such sum as will constitute reasonable compensation to her attorney for the servicess performed by him subsequent to the filing of appellant's notice of appeal. Section 46-134, Oregon Code 1930, provides that in all actions upon policies of insurance, whether issued by an insurance company or a fraternal society, the plaintiff shall recover, in addition to the judgment upon the policy reasonable compensation for his attorney, if it appears that the insurer failed to effect a settlement of its liability within six months from the day the proof of loss was filed, or failed to tender into court the amount recovered in the action. The foregoing and its antecedents have been the law of this state since the 1919 legislative assembly. Pursuant to the provisions of that law, the circuit court allowed the plaintiff $300 as compensation for the services performed by her attorney in that court. In Lewis v. Continental Casualty Co., 135 Or. 170, 295 P. 450, this court held that the act did not authorize the Supreme Court to award the insured compensaation for the services performed by his attorney in sustaining in this court a judgment in his favor. Immediately thereafter the act was amended (1931) Session Laws, c. 355, p. 620) by adding the following: "If attorney fees are allowed as herein provided and on appeal to the supreme court by the defendant the judgment is affirmed the supreme court shall allow to the respondent such additional sum as the court shall adjudge reasonable as attorney fees of the respondent on such appeal."

It will be observed that the amendment, like the act which it amended, subjects only insurers to the payment of attorney fees. Since only insurance companies are dealt with in that manner, andd since the insurer is not permitted to recover a fee when it prevails, the defendant argues that the act violates article 1, §20, Oregon Constitution. That section of our Constitution, based upon the conviction that in democracies discrimination by public bodies in their treatment of individuals similarly situated should not be tolerated, prohibits class legislation. However, whenever experience shows that an evil arises from the activities of some specific group, a remedy may be prescribed by legislative action, applicable only to those who form the evil-producing group, without violating constitutional restrictions. Hence, the question arises whether experience has shown that insurers display such a hostile attitude towards the payment of lawful claims arising out of their undertakings that the Legislature can properly subject them to the payment of attorney fees when their defense is unsuccessful, even though others are not dealt with similarly. Such legislation has generally been held valid. Cooley's Briefs on Insurance (2d Ed.) p. 6669; 6 R. C. L., Constitutional Law,§ 418, P. 422; 12 C.J., Constitutional Law, § 930, p. 1178; and annotation, 11 A. L. R. 900. The various reasons suggested in the decisions in favor of and against the validity of such legislation are reviewed in the above authorities. The decisions which have sustained the validity of such legislation mention the public interest in the prompt payment of insurance money, the vexatious attitude which some companies assume towards claims presented by policyholders after a loss has occurred, declare a belief that liability to the attorney fee is intended to spur the insurer to a prompt performance of its bounden duty, and still others find in such legislation an effort to overcome the economic advantage possessed and offtimes improperly exercised by the insurers when the insured seeks payment of a claim. The reasons assigned in support of such legislation are criticized in Williamson v. Liverpool & L. & G. Ins. Co. (C. C.) 105 F. 31, wherein the court held a Missouri statute which permitted the court to add to the judgment 10 per cent. damages and a reasonable attorney fee whenever it appeared that the insurer had vexatiously failed to pay a claim, conflicted with the 14th amendment to the Federal Constitution. The constitutionality of the Oregon legislation authorizing the assessment of an attorney fee has never before been questioned in this court, but its validity has been many times recognized. Title & Trust Co. v. U.S. F. & G. Co., 138 Or. 467, 1 P.2d 1100, 7 P.2d 805; Lewis v. Continental Cas. Co., 135 Or. 170, 295 P. 450; School Dist. No. 106 v. New Amsterdam Cas. Co., 132 Or. 673, 288 P. 196; Dolan v. Continental Cas. Co., 133 Or. 252, 289 P. 1057; Eaid v. National Cas. Co., 122 Or. 547, 259 P. 902; Ocean A. & G. Corp. v. Albina M. I. Works, 122 Or. 615, 260 P. 229; M. Murray v. Firemen's Ins. Co., 121 Or. 165, 254 P. 817; Johnson v. Prudential Life Ins. Co., 120 Or. 353, 252 P. 556; Rosebraugh v. Tigard, 120 Or. 411, 252 P. 75; Walker v. Fireman's Fund Ins. Co., 114 Or. 545, 234 P. 542.

Since the validity of legislation subjecting insurance companies to liability for attorney fees when their defense upon their policies has been unsuccessful has been many times recognized by this court, and since it can reasonably be said that the litigation arising out of such policies presents features peculiar to insurance companies, we conclude that the 1931 act does not conflict with article 1, § 20, Oregon Constitution.

The defendant argues that the title to the 1931 amendment violates article 4, section 20, Oregon Constitution, which provides: "Every act shall embrace but one subject, and matters properly connected therewith, which subject shall be expressed in the title. ***" The title to the 1931 act is: "To amend section 46-134, Oregon Code 1930." Section 46-134, Oregon Code 1930, was 1929 Session Laws, chapter 377, p. 442, the title to which was: "To amend section 6355, Oregon Laws, as amended by chapter 184, General Laws of Oregon, 1927, relating to attorney's fees in suit or actions brought upon any policy of insurance." The title of 1919 Session Laws, c. 110, p. 159, is: "To provide for the colection of a reasonable attorney's fee in all suits or actions brought upon any policy of insurance in any of the courts of the state of Oregon." The court has held that the title of an amendatory act which states that it amends a section of our Code specified therein does not conflict with article 4, § 20, Oregon Constitution, if the subject-matter of the original act was sufficiently expressed in its title, and if the subject of the amendatory act could have been included in the original act under its title. For a collation of our holdings see State v. Eaton, 119 Or. 613, 250 P. 233. The courts in other states operating under similar constitutional provisions have held to the same effect. See Cooley's Constitutional Limitations (8th Ed.) p. 318; 59 C.J., Statutes, p. 818, § 400; and 25 R. C. L., Statutes, p. 870, § 115. The subject-matter of the 1931 amendment could have been included under the title of the 1929 act, but since the title of the 1919 act uses the word "fee" and not "fees," the defendant argues that the title is defective. Such technical and critical constructions of the title is foreign to the purpose of this section of our Constitution. 55 C.J., Statutes, p. 809, § 390. We find no merit in this objection of the defendant.

The defendant next contends that the language of the 1931 amendment expresses a purpose to be prospective in operation and not retrospective. Having advanced this contention, it argues that the amendment has no application to the present policy of insurance which was written prior to the enactment of the 1931 law. It is true that the rules of statutory construction strongly favor a prospective interpretation of statutes which affect substantive rights, but when the new statute concerns itself merely with the laws of procedure or remedies, the statute is generally applied to existing rights as well as to those which may accrue in the future. Denny v. Bean, 51 Or. 180, 93 P. 693, 94 P. 503. See, also, Joseph Filipkowski v. Springfield F. & M. Ins. Co., 206 Wis. 39, 238 N.W. 828, 78 A. L. R. 613 (annotated concerning the retroactive effect of insurance legislation). However, the paramount purpose of all rules of statutory construction is not to achieve some preconceived arbitrary objective, but to give effect to the legislative purpose. In the present instance the 1931 amendment indicates that the Legislature itself considered and determined the manner in which the new law should be applied. The act provides: "The terms of this act shall not apply to any suit or action started or begun prior to the passage of this act." Thus, it is evident that the Legislature intended that the act should be applied to all existing rights except those only which had already become the subject-matter of suits or actions. It is our opinion that the act should be applied to policies which were in effect at the time the 1931 amendment became effective.

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