Fire Insurance Companies v. State

• Decision Date: 24 May 1897
• Citation: 22 So. 99,75 Miss. 24
• Court: Mississippi Supreme Court
• Parties: FIRE INSURANCE COMPANIES v. THE STATE OF MISSISSIPPI

22 So. 99

75 Miss. 24

FIRE INSURANCE COMPANIES v. THE STATE OF MISSISSIPPI

Supreme Court of Mississippi

May 24, 1897

March 1897

FROM the circuit court of Lauderdale county HON. JOHN W. FEWELL Judge.

The facts are stated in the opinion of the court.

Judgment reversed.

Miller Smith & Hirsh for appellants.

The section and clause [4437g] of the code, upon which the indictment is founded, must of course be taken in connection with section 1007, which announces the penalty. And we apprehend that no indictment can be regarded as sufficient, in substance, unless it is so framed that, upon its face, upon a plea of guilty, a legal sentence can be pronounced. An overt act in this state, in furtherance of the agreement, and itself a crime, must follow to the injury of some person or corporation here, in order to bring this criminal statute into play. In the absence of an averment and proof of specific injury, the only possible penalties are civil. Neither at common law or under the statute does any penalty attach to combinations or agreements neither wrong in themselves nor hurtful to third persons. At common law there is no support for the indictment, because, in the first place, it is based upon particular acts with which the statute deals for the first time, and has relation to a particular penalty which the statute would prescribe for the complete offense, and, secondly, it does not aver that the purpose was to form a conspiracy to extort money from the public or any third person, known or unknown to the grand jurors. We think it patent that we are, so far as the indictment is concerned, dealing with the statutory offense provided for by § 1007 of the code, or none at all.

To warrant punishment under § 1007, for violating ch. 140, it is clearly necessary to show on the face of the indictment, not alone that an agreement was entered into to place the control of rates to be charged in Lauderdale county under the control of trustees, with an agreement to abide by the same, but that, in pursuance to such agreement, this control was vested in and exercised by the trustees; that the trustees did accordingly fix uniform rates or rates by which all were bound and were actually governed; and, lastly, by means thereof the insurances were raised, or otherwise were unreasonable, to the injury of some named person or corporation in Lauderdale county, known or unknown to the grand jurors. Or, if the court should be of the opinion that the words, "the public, " are so comprehensive as to embrace all persons and all corporations, it would still be necessary to aver, under the statute, some loss or injury resulting from the application by the trustees, pursuant to the agreement of uniform rates, shutting off competition and maintaining or embracing rates of insurance. It is a mere assumption in the pleading--not a known fact or legal presumption--that the absence of competition in rates would work an injury. The contrary might be true.

A consideration of the indictment will show that these essential averments to constitute the offense of placing the control of insurance business, to the extent of fixing rates, in the hands of trustees are entirely wanting.

No place is even mentioned or hinted at to indicate where this alleged conspiracy was formed. The venue is not laid.

J. A. P. Campbell, on same side.

It is evident that the indictment was framed with reference to § 1007 of the code of 1892, and it is equally evident that it is not good under that, if for no other reason than because it fails to aver that the combination had "the effect to injure any person, or corporation, in this state." At common law, it, was not unlawful to agree on rates of premiums or to combine for that, or to adopt appropriate means to effect that object. The indictment does not charge an improper purpose in what was done. It does not aver the creation of a monopoly, or an improper schedule of rates. The conspiracy must be charged, and not aided by averment of acts. United States v. Britton, 108 U.S. 199; Pettibone v. United States, 148 U.S. 197; Laura v. State, 26 Miss. 174. As a charge of conspiracy, this indictment is mere sound and fury. Is it not manifest that the indictment must be tried by ch. 140 of the code alone, unaided by anything else, and being bad under that, must fall? The indictment is for a criminal conspiracy, under subsection g of § 4437 of the code of 1892, and is bad under that and § 1007 both, because the firing done is not averted to have been "inimical to the public welfare, " or to have had "the effect to injure any person in this state."

Insurance companies are not in the purview of ch. 140 of the code. They are not named in the chapter, and the terms it employs do not embrace them; and so many considerations suggest the folly of denying to them the right to make use of a convenient instrumentality for fixing a just basis for insurance, as matter of fairness and justice to both insured and insurers, as to lead to the conclusion that such action by insurance companies was not intended to be prohibited under the severe penalty prescribed. The terms "trade, " "commodity, " "production, " "importation, " "manufacture, " "transportation, " "sale or purchase of a commodity, " are not applicable to insurance companies and their business as insurers; and, while carrying on insurance is a business, it is not trade or traffic or commerce, etc., and it does not produce commodities and has no "product;" and, while it has earnings, the use of this term, in conjunction with "products, " shows the character of business meant by the law. Noscitur a sociis; and the terms of the law show clearly what the lawmaker had in view, and that insu ???mpanies were not thought of. Not being mentioned, they ???ot be brought within the influence of this highly penal ???unless they are clearly included in its terms; and, so far from that, they are plainly excluded by the language used. The exceptions of certain classes from the operation of the chapter show that the whole chapter relates to those engaged in the production of commodities, transportation, sale, etc.

Miller & Baskin, on the same side.

We submit that the indictment charges no offense, because the facts therein alleged do not constitute a conspiracy under code 1892, subsection g, § 4437. That subdivision of § 4437 was intended evidently to prohibit any agreement to place under the control of trustees the legal estate or the beneficial interest in property or business. The word "control" used in that subsection clearly means that the trustee to whom the control is surrendered should have the government, the rule, the command, the control, and direction of the matter or estate delegated, to the exclusion of the person delegating such authority; and the word "power, " used in said subsection, evidently contemplates that the trustee, by the agreement, should have authority enabling him to dispose of the interest vested in him for himself or for another person.

Again, we submit that the indictment is defective in no averring any act committed by the alleged trustees or the defendants in furtherance of the conspiracy. It does not appear from the indictment that the trustees exercised any control whatever over the rates prescribed for fire insurance in Lauderdale county. We contend that no indictment would be sufficient unless it appear therefrom that the rates were fixed by the trustees, and that charges were made in pursuance thereof, and that the same were unreasonable and unjust, and thereby injuriously affected the public trade.

As to the contention that the indictment sufficiently charges an offense under the common law, we submit that the act so prohibted by § 4437, subdivision [g], are not in???le at common law.

Wiley N. Nash, attorney-general, for the appellee.

A combination is a conspiracy in law whenever the act to be done has a necessary tendency to prejudice the public or oppress individuals by unjustly subjecting them to the power of the confederates, and giving effect to the purposes of the latter, whether of extortion or mischief. 3 Wharton's Crim. Law, sec. 2322 and note y.

The offense consists not so much in the accomplishment of any unlawful or injurious purpose, nor in any one act moving towards that purpose, but in the actual concert and agreement of two or more persons to effect some thing, which being so concerted or agreed upon, the law regards as indictable. Wharton's Precedents of Indictment and Pleas, 431, 432, note a.

Such a combine as the one charged is unlawful at common law; the combine itself is unlawful and indictable. It is indictable to engross under any one control any business staple so as to force the community to purchase it at an exorbitant price. 2 Wharton's Criminal Law, sec. 2324. A combination between miners in a particular market, controlling the coal in that market, was held, in Pennsylvania in 1871, to be indictable at common law. I b., citing Morris Run Coal Co. v. Barclay Coal Co., 18 Pa. St. [18 P. F. Smith], 173.

Argued orally by C. C. Miller, J. A. P. Campbell, and T. M. Miller for appellants and by Attorney-general Wiley N. Nash, for appellee.

OPINION

WHITFIELD, J.

Section 4437 [ g ], of code of 1892, defining certain trusts and combines, is in these words: "A trust and combine is a combination, contract, understanding or agreement, express or implied, between two or more persons, corporations, or firms, or associations of persons, or between one or more of either, with one or more of the others, [ g ] to place the control, to any ex-extent, [1] of business, or [2] of the products, or [3] earnings thereof, in the power of trustees, by whatever name called; and is inimical to the public welfare, unlawful and a criminal...