Hartford Fire Insurance Co. v. State

• Decision Date: 15 July 1905
• Citation: Hartford Fire Insurance Co. v. State, 76 Ark. 303, 89 S. W. 42 (Ark. 1905)
• Parties: HARTFORD FIRE INSURANCE COMPANY v. STATE
• Court: Arkansas Supreme Court

89 S.W. 42

76 Ark. 303

HARTFORD FIRE INSURANCE COMPANY v. STATE

Supreme Court of Arkansas

July 15, 1905

Appeal from Pulaski Circuit Court, Second Division EDWARD W WINFIELD, Judge.

Affirmed.

The State brought this action against the Hartford Fire Insurance Company, and alleged that defendant was an insurance corporation organized under the laws of Connecticut, and on January 23, 1905, and on March 25, 1905, transacting and conducting the business of insuring property in this State and was a member of and party to a pool, trust, agreement combination, confederation and understanding with other insurance corporations to regulate and fix the price and premium to be paid for insuring property against loss and damage by fire, lightning and tornadoes; that on the 27th day of March, 1905, while a member of and party to such pool etc., defendant conducted in Pulaski County, in this State, the business of insuring property against loss and damage by fire, lightning and tornado, and while then and there transacting and conducting such business was, on the 27th day of March, 1905, a member of, and party to, such pool, etc., contrary to the statute; wherefore judgment was prayed that defendant's right to do business in the State be forfeited, and that plaintiff recover the sum of $ 5,000.

Defendant filed a motion to require the plaintiff to make the complaint more specific, in this,

"First, that the complaint should allege whether the defendant was a member of and party to such pool, trust, agreement, etc., in this State or without the limits of the State.

"Second, that the complaint should allege whether the being a member of, and a party to, such pool, trust, agreement, etc., was to fix and regulate the price and premium to be paid for insuring property in this State or without the limits of the State.

"Third, that the complaint should allege specifically as to which one of the several combinations mentioned the defendant belonged."

The motion was overruled, and defendant answered, alleging that it is not, and was not, a member of, or party to, any pool, etc., made and entered into in this State, to regulate or fix the price or premium to be paid for insuring property anywhere, and that it was not on the dates mentioned in the complaint nor at any time since the passage of the act a member of, or party to, any pool, etc., made and entered into in the State or elsewhere to fix or regulate the price or premium to be paid for insuring property in this State against loss or damage by fire, lightning or tornadoes, or which in any manner affected or affects the price or premium to be paid for insuring property within the State.

It was agreed between the parties that, in the event defendant's answer herein should be held or adjudged insufficient as a defense to plaintiff's action, judgment shall at once be rendered in the circuit court in plaintiff's favor against defendant for recovery of a penalty of $ 200 and costs, and that if said judgment is not reversed by the Supreme Court of Arkansas, the penalty and costs, including costs in said Supreme Court, should be paid by defendant upon the determination of said cause in said Supreme Court of Arkansas, and that defendant was to take no appeal from the Supreme Court of Arkansas in this cause.

A demurrer to the answer was sustained, and defendant appealed.

Judgment affirmed.

J. W. & M. House, for appellant; J. M. Moore & W. B. Smith, Morris M. Cohn and Ashley Cockrill, of counsel.

Robert L. Rogers, Attorney General, for appellee; W. L. Terry, W. M. Lewis and Lewis Rhoton, of counsel.

HILL C. J., BATTLE, J., WOOD, J.

OPINION

HILL, C. J.

On the 6th of March, 1899, the General Assembly passed an act, commonly called the "Rector Anti-Trust Act." It was construed by this court in Lancashire Insurance Company v. State, 66 Ark. 466, 51 S.W. 633, and is found in section 1976-1982, Kirby's Digest.

On the 23d of January, 1905, an act repealing this act and "providing for the punishment of pools, trusts and conspiracies to control prices, and as evidence and prosecution in such cases," was approved. This is a prosecution instituted by the State under the latter act against the appellant, which is a foreign insurance corporation, for doing an insurance business in the State without complying with the provisions of said act of 1905. The Reporter will set forth the issues framed by the pleadings and the agreed statement of facts. The circuit court held the appellant liable to the penalty of the act, and gave judgment accordingly, and the appellant brings the case here, and it involves the construction of the act.

The defining and controlling part of the act is found in the first section thereof. The body of the first section is a copy of the first section of the Rector act, with certain words and phrases inserted therein. It is here given with the inserted words and phrases placed in brackets, so that the eye may detect the additions to the Rector act:

"Section 1. Any corporation organized under the laws of this or any other State, or country, and transacting or conducting any kind of business in this State, or any partnership or individual, or other association or persons whatsoever, who [are now, or] shall [hereafter] create, enter into, become a member of, or a party to, any pool, trust, agreement, combination, confederation or understanding, [whether the same is made in this State or elsewhere], with any other corporation, partnership, individual, or any other person or association of persons, to regulate or fix [either in this State or elsewhere] the price of any article of manufacture, mechanism, merchandise, commodity, convenience, repair, any product of mining, or any article or thing whatsoever, or the price or premium to be paid for insuring property against loss or damage by fire, lightning or tornado, or to maintain said price when so regulated, or fixed, [or who are now], or shall [hereafter] enter into, become a member of, or a party to any pool, agreement, contract, combination, association or confederation, [whether made in this State or elsewhere], to fix or limit, [in this State or elsewhere,] the amount or quantity of any article of manufacture, mechanism, merchandise, commodity, convenience, repair, any product of mining, or any article or thing whatsoever, or the price of premium to be paid for insuring property against loss or damage by fire, lightning, storm, cyclone, tornado, or any other kind of policy issued by any corporation, partnership, individual or association of persons aforesaid, shall be deemed and adjudged guilty of conspiracy to defraud and be subject to the penalties as provided by this act."

Other sections are added to the act not contained in the Rector act, but all of the sections of the Rector act are retained, the only changes in them being that clauses are inserted where necessary to make the other parts conform to the first section. These new sections throw no light on the construction, and are not involved in this case.

These are the questions involved:

1. Does the act prohibit, under the penalty named therein, a foreign insurance corporation from doing business in Arkansas while such corporation is a member of a pool, trust or combination to fix insurance rates anywhere, although such pool, trust or combination is not created or maintained in Arkansas, and does not affect or fix, or attempt to do so, rates of insurance in Arkansas? To state the proposition by illustration: Assume that the appellant is a member of a trust--called a rating bureau--created and maintained in New York City to fix insurance rates in New York City and St. Petersburg, but which does not fix or affect rates in Arkansas, is it guilty of a violation of the act if it transacts an insurance business in Arkansas upon complying with all the statutes of this State except the one at bar?

2. If the act reaches to and makes unlawful the transaction of an insurance business in Arkansas by a foreign insurance corporation while belonging to a trust, pool or combination to fix or affect rates in other places than Arkansas, but not in Arkansas, is the act constitutional, and is it within the power of the State to enact it?

1. The State contends for the affirmative of both propositions above stated, the appellant for the negative. The insurance company contends that the act renders unlawful the doing of business in this State by a foreign corporation while it belongs to a trust or pool made in this State or elsewhere to regulate or fix the rates of insurance on property in this State. It admits that it belongs to a trust, within the definition of the act, but says that such trust is created and maintained without the State to fix prices at places without the State, and that it does not belong to such trust created or maintained anywhere to fix or affect insurance rates on property within this State. These different constructions have been pressed upon the court in strong and plausible oral arguments and in able and exhaustive briefs, and the court has laboriously and painstakingly examined, discussed and deliberated upon the arguments presented by counsel.

If the act itself was clearly and properly drawn, and free of obscurity and ambiguity, this case would not, in all probability, be here, or, if perchance it were, the work of the court would have been easily and speedily done, for it is elemental that the act itself furnishes its construction; or rather, when it is plain there is nothing to construe. The law on that subject is thus stated: "The statute itself furnishes the best means of its own exposition; and if the intent of the act can be clearly ascertained from reading its provisions, and all its parts may be brought in harmony therewith,...