State v. Lancashire Fire Insurance Company

• Decision Date: 27 May 1899
• Citation: 51 S.W. 633,66 Ark. 466
• Parties: STATE v. LANCASHIRE FIRE INSURANCE COMPANY
• Court: Arkansas Supreme Court

51 S.W. 633

66 Ark. 466

STATE v. LANCASHIRE FIRE INSURANCE COMPANY

Supreme Court of Arkansas

May 27, 1899

Appeal from Pulaski Circuit Court, JOSEPH W. MARTIN, Judge.

STATEMENT BY THE COURT.

The attorney general of the state filed a complaint against the defendant Lancashire Insurance Co., alleging that it was a foreign corporation organized under the laws of England; that it was, on and after March 6, 1899, engaged in the business of insuring property in this state against loss or damage by fire, and that, while so engaged, it became and was a member of a pool or combination with other corporations engaged in a similar business to regulate or fix the price or premium to be paid for insuring property against loss or damage by fire. Wherefore he asks judgment against said company for the sum of five thousand dollars.

The defendant company filed its answer, admitting that it was engaged in the business of insuring property against loss or damage by fire as alleged in the complaint, but denied that while so engaged in business of insuring property in this state, it became or was a member of any pool or combination either in this state or elsewhere, for the purpose of fixing or regulating the price or premium to be paid for insuring property in this state against loss or damage by fire, etc.

The state by her attorney filed a demurrer to this answer, on the ground that it did not state facts sufficient to constitute a valid defense. The circuit court overruled the demurrer, and the state electing to stand on its demurrer, final judgment was entered against it, from which judgment the state appealed.

Judgment affirmed.

Jeff Davis, Attorney General, and Chas. Jacobson, for appellant; Jesse C. Hart and Hal L. Norwood, of counsel.

The state has power to annex any conditions it sees fit to the permission it gives to foreign insurance companies to do business in the state. 8 Wall. 168; 18 How. 404; 13 Pet. 519; 94 U.S. 535. The agreement in this case constitutes a "trust," within the meaning of the act. The court will take judicial knowledge of the records and journals of the legislature, in so far as they throw light upon the intention of the lawmakers. 5 Ark. 613; 57 F. 429; 58 F. 768; 23 Wall. 307; 70 Ind. 332, 338; 23 Enc. Law, 335; 91 U.S. 79; 107 Ind. 348; 112 Ind. 75; 87 Ala. 225; 33 Ct. Cl. 135; 33 Ct. Cl. 36. The word "any" as used in the act is to be given its plain and usual meaning, and not restricted to trusts, etc., in this state. 133 N.Y. 332; 112 Pa.St. 620; 166 U.S. 290, 312, 320, 325. An act which, though committed in another state, takes effect in Arkansas, is punishable here, if contrary to our law. Clark's Cr. Law, 360, 364, 366. 49 Am. Dec. 474; 53 Ark. 386. This statute is an exercise of the state's police power. As to extent of this power, see 123 U.S. 623; 161 U.S. 677. The legislature prescribes the bounds of public policy, and rules may be prescribed by it looking to the supervision of whatever in business is contrary to such public policy. Beach, Monopolies & Ind. Trusts, § 13; 94 U.S. 124; 5 How. 583; 129 U.S. 29; 104 N.C. 710; 7 Cush. 84; 27 Vt. 140; Cooley, Const. Lim. pp. 707-720; 165 U.S. 16; 113 U.S. 109; 137 U.S. 89; 163 U.S. 304; 127 U.S. 634; 157 U.S. 160-165; 169 U.S. 391-393; 1 Thayer's Cas. Const. Law, 453. Insurance business may be so regulated. Cooley, Const. Lim. 743, 744; 42 Conn. 583; 97 Ill. 593; Tied. Police Power, 281; 10 Wall. 410; ib. 566; 15 Kan. 628; The policy of all this state's legislation, prior to the act of March 6, 1899, has been to encourage and protect foreign insurance companies. The construction given the latter act by the appellant would effectually repeal all such prior enactments. Repeals by implication are not favored. 11 Ark. 94-103; ib. 481-496; 28 Ark. 317-325, 29 Ark. 225-237; 34 Ark. 499; 48 Ark. 159; 56 Ark. 45-47; 41 Ark. 149; 45 Ark. 90-92. The title of the act may properly be considered in construing it. Black, Int. Stat. 174; 144 U.S. 550-563; End. Int. Stat. §§ 62, 65; 143 U.S. 447-462. Penal laws have no extra-territorial effect. Cooley, Const. Lim. 128; End. Int. Stat. §§ 167-171; Bish. Writ. Law, § 141; Story, Conf. Laws, §§ 18-20; 37; Fed. 497. An unconstitutional meaning must not be given to a law, if it be susceptible of any other construction. End. Int. Stat. § 178; 112 U.S. 269; 12 Pet. 76; Black, Int. Law, 91; 7 Cranch, 350. The same language in the act makes persons and corporations guilty of an offense. If the word "any" be construed to have extra-territorial effect as to persons, the act is unconstitutional. 18 L. R. A. 628; 50 Kan. 609; 25 L. R. A. 243; 47 Tex. 381; 25 L. R. A. 250. The rule of strict construction of penal statutes does not require that the narrowest construction be given to plain words. 6 Wall. 395; 92 U.S. 244; 31 F. 800; 14 Pet. 474-475; 32 F. 726; 42 F. 891; 13 Johns. 49; 118 Mo. 380. Nor does it prevent the court from applying other rules of statutory construction. 163 Ill. 56. The question before the court is the provision in the statute against certain acts of corporations; and the constitutionality of the act, so far as concerns individuals, is not in the case. 58 Ark. 407; 12 So. 690. Unconstitutional parts of a statute may be rejected. 71 N.W. 941; 14 So. 50.

Rose, Hemingway & Rose, Blackwood & Williams, Cockrill & Cockrill, J. M. Moore, Dodge & Johnson, Carroll & Pemberton, and Morris M. Cohn, for appellee.

That construction is to be given to an act which will render effectual and constitutional every word or part of it, if possible. 15 Ark. 555; 17 Ark. 608, 652; Bish. Writ. Laws, 5, 82; 56 Ark. 495; 22 Ark. 369; 112 U.S. 269; 12 Pet. 76; 3 Pet. 448; Cooley, Const. Lim. 220. The word "any," as applied to corporations and to persons, must be given the same meaning. Endl. Int. Stat. §§ 23, 265; Suth. Stat. Const. §§ 239, 82; Black, Int. Laws, 60-98; Potter's Dwarris, 188; 11 Ark. 44. The terms of the act are clearly those of a criminal act. 116 U.S. 616, 634; 150 U.S. 476-480; 37 F. 497. The word "any" in this act must be construed just as it is in any other criminal act--i. e., to refer to crimes in this state, because this was the underlying purpose of the law. Endl. Int. Stat. §§ 44, 114, 118, 121, 125, 170, 172, 173, 174. Penal acts are to be strictly construed, and can not be extended by implication. 6 Ark. 134; 43 Ark. 415; 53 Ark. 336; 64 Ark. 271; 2 Elliott, Railroads, § 710; 6 Wall. 385; 87 N.C. 255; 23 Am. & Eng. R. Cas. 654; 56 Ark. 45; 51 Ark. 309-315; 65 Ark. 183; 59 Ark. 344-356; 47 Ark. 442; 41 Ark. 517; 52 P. 789; 18 Wall. 409. The law should have no construction which will give it an extraterritorial operation. 162 U.S. 197; Story, Conf. Laws, §§ 18-20; Black, Int. Laws, 91; End. Stat. Con. §§ 169, 170, 335; Bish. Stat. Cr. § 141; 4 H. L. Cas. 946, 955; 4 Kay & J. 367; 3 H. L. Cas. 100; 12 Ch. Div. 522; 3 Starkie, 158; 2 Bing. N. C. 722; 4 M. & Gr. 335; 2 Rose, 311; 3 Mo. Pl. Crown, 133; 3 Wheat. 610; 7 Cranch, 350; 10 Oh. St. 587; 10 So. 86; 1 Park. Cr. Rep. 645; 1 Bish. M. & D. §§ 353, 657; 2 Nelson, M. & D. 568; 86 N.Y. 18; 113 Mass. 458; 2 Park. Cr. Rep. 195; 61 Ark. 329, 338; 60 Ark. 269. The act is a criminal one, and hence unconstitutional, because it attempts to impose a criminal liability without presentment or indictment by a grand jury. 116 U.S. 616, 634; ib. 436; 150 U.S. 476, 480; 37 F. 497.

RIDDICK J., WOOD J.

OPINION

RIDDICK, J., (after stating the facts.)

This is an action against a foreign insurance company in which the state, through her attorney general, claims a penalty of five thousand dollars. The question presented is whether a foreign corporation, doing a fire insurance business in this state, subjects itself to a penalty, under the recent statute against trusts and combinations, by entering into an agreement with other insurance companies for the purpose of fixing rates of insurance in foreign countries, when such agreement is neither made in this state, nor intended in any way to affect the prices or premiums to be paid for insuring property in this state.

As the legislature has the power to entirely exclude foreign insurance companies from doing business in this state, it can, of course, dictate the terms upon which such companies may do business here. The whole matter rests in the discretion of the legislature. Paul v. Virginia, 75 U.S. 168, 8 Wall. (U. S.) 168, 19 L.Ed. 357. There is no controversy on this point, but the attorney general contends that no insurance company, while a member of a trust or combination to fix rates in any portion of the world, can do business here, without becoming liable to a penalty under our statute. The defendant, on the other hand, denies that the language of the statute in question carries the meaning contended for by the attorney general, and the question before us has reference, not to the power of the legislature,--for that is conceded,--but to the proper construction and meaning of the statute.

The statute in question, so far as it affects this case, provides that "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, * * * who shall create, enter into, become a member of or party to any pool, trust, agreement combination, confederation or understanding * * * to fix or limit * * * the price or premium to be paid for insuring property against loss or damage by fire, * * * shall be deemed and adjudged guilty of a conspiracy to defraud, and be subject to the penalties as provided by this act." Acts 1899, p. 50, § 1. Another section provides that any person or corporation violating any provisions of the act shall forfeit not less than $ 200 nor more than $ 5,000 for every such offense, and each day...