American Sur. Co. of New York v. Fishback

• Decision Date: 28 February 1917
• Docket Number: 13690.
• Citation: 95 Wash. 124,163 P. 488
• Court: Washington Supreme Court
• Parties: AMERICAN SURETY CO. OF NEW YORK v. FISHBACK, State Ins. Com'r.

163 P. 488

95 Wash. 124

AMERICAN SURETY CO. OF NEW YORK v. FISHBACK, State Ins. Com'r.

No. 13690.

Supreme Court of Washington

February 28, 1917

Department 1. Appeal from Superior Court, Thurston County; John R Mitchell, Judge.

Suit for injunction by the American Surety Company of New York against H. O. Fishback, State Insurance Commissioner. From a judgment for plaintiff, defendant appeals. Affirmed.

W. V Tanner, Howard Waterman, and Chas. E. Arney Jr., all of Olympia, for appellant.

Hastings & Stedman, of Seattle, for respondent.

CHADWICK J.

This appeal is taken from a permanent order granted by the superior court of Thurston county, restraining the insurance commissioner from revoking the license of the respondent, American Surety Company.

On June 7, 1915, the Puget Sound Bridge & Dredging Company recovered a judgment in the superior court of King county for $7,854.74 against the Guardian Casualty & Guaranty Company as surety on a contractor's bond. The Guardian Company appealed, filing a supersedeas bond with respondent herein as surety. Judgment against the Guardian Company and its surety was affirmed. After the remittitur was sent down, the Guardian Company, with another company as surety, filed a bond, staying execution of the judgment for 90 days under Rem. Code, § 522, which is as follows:

'Stay of execution shall be allowed on judgments rendered in the Supreme Court and superior courts as follows: * * * On all sums over fifteen hundred dollars, ninety days.'

This is a part of the practice act passed in 1854. At the time, there was upon the statute books (a part of the Insurance Code, Laws 1911, p. 270) a provision which, by its terms, is intended to insure prompt payment of judgments rendered against indemnity and surety companies:

' Failure to Discharge Contract.--Forfeiture. If any such company shall neglect, fail, or refuse to pay any final judgment or decree, rendered against it, upon any such recognizance, bond, stipulation, or undertaking made or guaranteed by it, in this state, for the period of thirty days after any such judgment or decree shall have been finally determined in case of an appeal, or within thirty days after the time for taking an appeal has expired when no appeal is taken from such judgment or decree, or in case an appeal be taken and the same be dismissed before final determination on appeal, then within thirty days from such dismissal, it shall forfeit all right to do business in this state and the commissioner shall thereupon revoke its license and the license of its agent. (L. '11, p. 270, § 196).' Rem. Code, § 6059- 196.

The insurance commissioner, on the advice of the Attorney General, notified respondent that, unless the judgment was satisfied within 30 days after the appeal was finally determined, the license of respondent would be revoked. The effect of this ruling is to deny to surety companies the privilege of staying executions under the general law.

It is the contention of the Attorney General that the Insurance Code, of which section 196 is a part, is a special act intended to cover the whole subject of insurance of whatever kind, and, under well-recognized rules of construction, as well as by its terms, supersedes all general laws, and that a company, finding a judgment rendered against it, must meet it under the provisions of the special act or suffer a forfeiture of its right to do business within the state.

It is the contention of respondent that no part of the practice act was expressly repealed; that repeals by implication are not favored; that the Insurance Code is a general and not a special law, and that courts will, wherever possible, so construe statutes, which are in apparent conflict, as to give effect to both. It is obvious that the court might reach either result, depending, of course, upon which premise is adopted. Granting the Insurance Code the quality of a special act, and that it would be effectual to deny to respondent the benefit of a stay under a general law subsequently passed, we cannot see our way clear to hold that it was the intent of the Legislature to deny parties litigant the remedies and privileges theretofore existing. Looking to the intent of the Legislature, as it is to be gathered from the body of the act, it would seem, in so far as it may be held to affect the state of facts now before us, to be twofold: To insure prompt payment of all judgment rendered against companies which frequently operate without tangible assets; and to protect the whole people of the state from the evasive conduct of irresponsible concerns, the latter being an evil existing prior to the passage of the law of which we may well take judicial notice. The one object was to protect personal rights; the other to protect the public. It is manifest that there can be no invasion of the public right calling for a penalty so extreme as the revocation of a license to do business, unless the individual, who is a judgment creditor, has been denied some right that is guaranteed by law. The Code asserts that the business of insurance, in all its branches, is of a public character, and that all companies concerned 'shall at all times be actuated by good faith in everything pertaining thereto; shall abstain from deceptive or misleading practices, and shall keep, observe, and practice the principles of law and equity in all matters pertaining to such business.' (Section 6059-1), and, further, that "the Insurance Code' * * * shall supersede all prior acts on the subject of the organization and government of insurance companies and insurance business, and all such prior acts are hereby repealed' (section 6059-238).

In no manner does the Insurance Code attempt to interfere with the remedies defined in the practice act, or the legal rights of either party to the contract. All remedies must be established, as before, by civil action in a court of competent jurisdiction.

We shall not discuss the several rules of construction suggested by both sides, nor will we review the authorities. We admit the rules and subscribe to the doctrine of the several cases. We find nothing in the law, when treated as a complete act, that would call for a restatement of settled rules. However, in the familiar principle that, in the construction of statutes, courts will first of all consider the reason and spirit of the law, and in the more ancient principle that 'the letter killeth, but the spirit giveth life,' we find ample authority to sustain our holding.

The Attorney General also contends that our holding will give delinquent companies an advantage over a private litigant; that the 30 days of grace given in section 6059-196 is a limitation to which may be added 90 days under section 522. It would seem that our holdings that the Insurance Code indicates no intention on the part of the Legislature to repeal, by implication, pro tanto any part of the practice act and that the two statutes are to be construed in pari materia were a sufficient answer to this objection. The Insurance Code makes no pretense of superseding or repealing existing laws other than those 'on the subject of the organization and government of insurance companies and insurance business.' Section 6058-238.

We have so frequently held that repeals by implication are not...