Hartford Fire Insurance v. State , 76 Ark. 303 ( 1905 )

Hire, 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, and is found in sections 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 or 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 insuranee 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, that intent will prevail, without resorting to other aids for construction.” 2 Lewis’ Sutherland on Stat. Con. § 348. Therefore the first duty of the court is to ascertain, if it can, from the act itself the intent of the law-makers, and when that is found then declare it; and the act is enforced as so declared, if otherwise valid.

The first matter to attract attention is the connection in which the words “in this State or elsewhere” are inserted into the body of the Rector act. The first connection is descriptive of “the pool, trust, agreement, combination, confederation or understanding” (hereafter for brevity’s sake this clause will be called a “trust”), “whether made in this State or elsewhere.” The second connection is with the persons confederating to regulate or fix, “either in this State or elsewhere,” prices, etc. The third connection is with the trust, “whether made in this State or elsewhere,” “to fix or limit in this State or elsewhere” the amount or quantity of production, the rates or premiums of insurance, etc. These terms should qualify the clauses to which they are annexed grammatically and in fact, if possible. When so considered, they indicate that' they refer to the trust made in this State-or elsewhere to regulate prices, either in this State or elsewhere, or to become a member of a trust to fix or limit production (or prices) in this State or elsewhere, and not merely doing business in this State under a trust agreement created in this State or elsewhere to fix prices in this State.

To construe the act as making unlawful alone the doing of business in this State while a member of a trust fixing, prices in this State, though the trust might be made elsewhere to fix prices here, would be rendering unnecessary and meaningless these words “in this State or elsewhere,”' so often used, for the Rector act was construed to be just such an act as this would then be. The natural construction is to make the doing of business in this State while a member of a trust formed anywhere to regulate prices anywhere unlawful. This gives full force to each word and phrase employed, eliminates none, and creates nothing by implication or construction, but gives force and effect to each and, every part of the section, and that is a primary duty in construction. 2 Lewis’ Sutherland, Stat. Const. § § 368, 369. While the foregoing seems the natural construction of the act, yet the plausibility and force with which the other -has been pressed, and the fact that members of this court see in it yet another construction, calls for hesitation and doubt as to the true construction to be placed upon it from the language alone. In such cases it is the duty of the court to turn to the “history of the times” to collect the intention of the Legislature from the occasion or necessity of the-law; “from the mischief felt, and objects and remedy in view.”

To ascertain the legislative intention, the courts must look to public events which are sufficiently notorious to be known to all men of reasonable information; to public documents, executive messages, proclamations and recommendations; to legislative proceedings and journals, but not to individual views, votes or speeches of legislators; to the result of elections and political issues therein determined; to a well-defined and crystallized public sentiment, when so notorious as to be part of the well-known ■events of the day. In short, the courts may, and, when the statute is not clear, must, take cognizance of the trend of public events which make the “history of the times,” in so far as the same touches or furnishes the moving cause for the statute under review. These principles are well established. 2 Lewis’ Sutherland on Stat. Con. § § 462, 470, 471; 1 Elliott, Evidence, § § 53, 59, 65, 67; U. S. v. Union Pac. Ry. Co. 91 U. S. 72; U. S. v. Trans-Missouri Freight Assn. 166 U. S. 290; Redell v. Moores, 63 Neb. 219; State v. Schoonover, 135 Ind. 526; State v. Downs, 148 Ind. 324; Stout v. LaFollette, 64 Ind. 553; Prince v. Skillin, 71 Me. 361, 36 Am. Rep. 325; Swinnerton v. Columbian Ins. Co. 37 N. Y. 188.

Turning then, under the requirement of the law, to the “history of the times,” derived -'from the sources mentioned, these facts throw light on the act:

When the Rector act was before the court in Lancashire Ins. Co. v. State, 66 Ark. 466, the court thus stated the contentions of the respective parties: “The Attorney-General contends that no insurance company, while a member of a trust or combination to-fix rates in any part 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 IheLegislature, for that is conceded — but to the proper construction and meaning of the statute.” The court then fully discussed the contentions and the act, and reached this conclusion: “Our conclusion is that this statute does not apply to pools or combinations, formed outside of this State, and not intended to affect, and. which do not affect, persons, property, or prices oí insurance in this State. In other words, we are of the opinion that the Legislature by this act did not intend to prohibit or punish acts done or agreements made in foreign countries by corporations doing business here when such acts or agreements have reference only to-persons, property or prices in such foreign countries-”

When the court failed to construe the Rector act as contended for by the Attorney-General, he dismissed all prosecutions which, had been instituted under it, and the act has since then been but an incumbrance on the statute book. The next General Assembly-following this decision,that of 1901, had before it a bill called the-“King bill,” which was generally supposed to embody into law the-views pressed upon the court by the State in the Lancashire case. This bill was defeated in 1901, and again in 1903. In 1904 the-dominant political party in this State, through its party platform, demanded of the next General Assembly the passage of the King Bill, and of the purpose of said bill said:”

“Whereby all foreign corporations shall be prevented from-doing business in this State if they are members-of any trust, pool, combination or conspiracy against trade, whether such trust, pool, combination or conspiracy affects, or is intended to affect, prices or rates in Arkansas or not.” The General Assembly elected in 1904, composed almost entirely of members of the political party whose platform is quoted, with remarkable unanimity and rapidity, passed the King bill, which had been rejected by the two preceding General Assemblies, and in less than a fortnight of its organization it was approved, and it is the statute now at bar. Reaching back to _ the construction sought by the State in the Lancashire case, an act is now before the court supposed to embody that theory, demanded by the dominant party as containing it, and speedily passed by the General Assembly elected on the platform demanding it. These facts render the conclusion irresistible that the General Assembly intended to render unlawful the doing of business in this State by any corporation when such corporation belonged to any trust to" fix prices anywhere, when it passed this act. Whether the moving cause for this demand was wise or foolish, whether the act will promote the general welfare or bring wreck and disaster in its enforcement, are questions with which the courts cannot deal. These questions are addressed to the other departments of the government; and when the intention of the law-makers is discovered, either in the language employed or from the language aided by a search into the intention from the history of events, the duty of the court is plain. When this history is considered in connection with the language used in the act, then the ambiguity, uncertainty and obscurity resulting from the confused terms of the statute are cleared away, and the construction heretofore indicated made certain to be the construction intended, and such construction is conformable to the language employed, and not in violence to any part of it. It being plain that the General Assembly intended by this act to subject to the penalty of it any foreign corporation doing business in this State while a member of a trust formed to fix prices anywhere, it remains to consider the constitutionality of it.

2. In Lancashire Ins. Co. v. State, 66 Ark. 466, the court, in construing the Rector act, said: “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.” This act requires every corporation doing business in this State to annually make affidavit that it does not belong to any trust described in the first section of it to fix prices in this State or elsewhere; provides for prosecutions against them for a failure to make such affidavit and for the right to do business to be forfeited; and in other ways clearly indicates that it shall be unlawful to do business in this State while, belonging to a, trust to fix prices anywhere. It gave sixty days to corporations then doing business to come within its terms, and thereafter it was unlawful to transact any business in the State while maintaining a membership in a trust anywhere to fix prices anywhere. In the language of the Lancashire case, the State has dictated these terms upon which foreign insurance companies can do business in this State. Limiting the decision entirely to the facts before the court, it is held that the State has declared, and possesses the right to declare, that foreign insurance corporations cannot do business in this State while belonging to a pool, trust, combination, conspiracy or confederation to fix or affect insurance rates anywhere.

The judgment is affirmed.