State v. Ins. Co. of N. Am.

• Decision Date: 08 February 1906
• Citation: 106 N.W. 767,71 Neb. 320
• Parties: STATE v. INSURANCE CO. OF NORTH AMERICA.
• Court: Nebraska Supreme Court

71 Neb. 320

106 N.W. 767

STATE

v.INSURANCE CO. OF NORTH AMERICA.

Supreme Court of Nebraska.

Feb. 8, 1906.

Syllabus by the Court.

The state courts are bound by the decisions of the United States Supreme Court regarding the proper construction of a clause of the federal Constitution and its application to the question involved in the litigation.

The business of insurance is not commerce and the making of a contract of insurance is a mere incident of commercial intercourse, in which there is no difference whatever between insurance against fire, insurance against the perils of the sea, or insurance of life. New York Insurance Co. v. Cravens, 20 Sup. Ct. 962, 178 U. S. 389, 44 L. Ed. 1116.

Action by the state against the Insurance Company of North America. Judgment for plaintiff.

Sedgwick, C. J., dissenting.F. N. Prout, Atty. Gen., and Norris Brown, Deputy Atty. Gen., for the State.

Greene, Breckenridge & Kinsler, for defendant.

LETTON, J.

This cause was argued and submitted to the court while Chief Justice HOLCOMB presided. Before his term of office expired, he prepared the following opinion, which meets with our approval and which expresses our views with clearness and perspicuity:

“This cause is submitted on the petition of the plaintiff, the state, the second amended and substituted answer of the defendant, and a motion filed by the state for judgment on the pleadings. The court has heretofore considered and decided the principal legal questions arising in this controversy on a ruling on a demurrer interposed by the state to the answer of the defendant. State of Nebraska v. Insurance Co. of North America (Neb.) 102 N. W. 1022. Nothing new or essentially different from the questions already passed upon is presented by the defendant's second amended and substituted answer except that it is now alleged that the defendant's business of insurance of property against loss by fire, as conducted and carried on between it and the citizens of the different states of the union with whom it contracts for indemnity, is interstate commerce within the meaning of the clause of the Constitution of the United States concerning the regulation of commerce between the different states of the union and the citizens thereof; that the tax sought to be enforced by the state in this action constitutes a direct imposition upon the insurance business of the defendant, and that the section of the statute of this state authorizing the exaction sought to be enforced amounts to a regulation of commerce among the states and of the instrumentalities enjoyed therein, in violation of clause 3, art. 1, § 8, of the Constitution of the United States. The question thus presented pertains to the construction of the federal Constitution and regarding which the ultimate and final decision rests with the United States Supreme Court.

It is plausibly argued that the vast business of fire insurance carried on as it is by the different companies and corporations of many of the states with the citizens of all the states of the union is so vital and interwoven with our industrial and commercial fabric, that it is essential to the welfare, success, and permanence of our institutions, and is in its nature a commodity in the exchange of which the business should be properly classed as interstate commerce, entitled to the protection, and coming within the provision of the clause of the federal Constitution to which reference has been made. Without taking the time to engage in a discussion of the question as an original proposition to be decided upon a course of reasoning and logic based upon underlying principles, and under the rules pertaining to the proper construction of provisions found in the fundamental law of the land, we must content ourselves by saying that the question can hardly be regarded as an open one and that we feel ourselves bound by the decisions of the highest judicial tribunal, whose special and peculiar function it is to construe a clause of the Constitution of the kind and character under consideration, and apply it to questions of litigation as they may arise. It is not for us to ignore or seek to overturn the authoritative utterances of that august body, but rather to remand to it the question of whether its own opinions shall be approved and followed, or overruled because upon further consideration they are believed to be erroneous or unsound.

In New York Life Ins. Co. v. Cravens, 178 U. S. 389, 20 Sup. Ct. 962;44 L. Ed. 1116, decided in 1900, by a unanimous court, it is held that ‘the business of insurance is not commerce and the making of a contract of insurance is a mere incident of commercial intercourse in which there is no difference whatever between insurance against fire, insurance against the perils of the sea, or insurance of life.’ In the opinion, after discussing and affirming the power of the state to regulate in the manner attempted, as shown herein, it is by the court said: ‘Further comment on this head may not be necessary, and we only continue the discussion in deference to the insistence of counsel upon the interstate character of the policy in suit. It is the basis of every division of their argument, and immunity from control is based upon it for plaintiff in error, which, it seems to be conceded, the state can exert over corporations of its...