Pacolet Manufacturing Co. v. Weiss

Jenkins, Justice,

dissenting. Section 1 of the act of March 38, 1935, provides: “No corporation . . not licensed in Georgia to transact the business of . . casualty insurance . . shall so engage in such business within the limits of this State.” Section 3 provides: “No . . corporation . . doing business in this State shall accept a policy of . . casualty insurance. . . issued'by a non-admitted company . . in violation of the preceding section, unless . . [it], shall . . report the fact to the insurance commissioner,” etc. The only question dealt with by the majority opinion and the only question considered here is, as stated in the majority opinion, “Is a policy issued cin violation of the preceding section ’ (that is sec. 1), unless it is issued within the limits of the State of Georgia?” The majority opinion appears to limit the prohibition of and penalty upon the acceptance of a policy issued contrary to the terms of section 1 to the one naked question as to whether the prohibited written instrument was delivered and accepted in this State. Since the policy covering property in this State was issued by an unlicensed non-resident corporation and delivered in another State to a non-resident corporation doing business in this State, the opinion holds that the policy was not “issued” in violation of section 1, and there is no penalty against the insured for accepting it, “regardless of whether *301the insured may otherwise have violated £the preceding section’ either before or after the issuance of the policy.” The opinion seems based upon the assumption that even if the stipulations expressed in the policy at the time it was “issued” in fact “amounted to the transaction of insurance business within the State,” yet since the acts provided for by the policy were to be done and were in fact done within this State subsequently to its “issuance,” the “issuance” was not in violation of section 1 prohibiting an unlicensed corporation to “ engage in such business within the limits of this State.” If it be conceded that the policy issued by the unlicensed company provided by its terms at the time of its “ issuance” for the illegal transaction of insurance busyness in this State, it would seem that the “issuance” itself was illegal and in contravention of section 1, which prohibits an unlicensed corporation from engaging in insurance business in Georgia. If the insured by its contract required that section 1 be violated, it would seem the contract was “issued” in violation of section 1. Section 2 does not in fact require, in order for the penalty to be incurred by the acceptance of an illegally issued policy, that the policy shall be issued, delivered, or accepted in Georgia. What it does provide is a penalty for the acceptance of a policy issued by an unlicensed corporation which “ shall so engage in such business within the limits of this State.”

In Jalonick v. Greene County Cotton-Oil Co., 7 Ga. App. 309 (66 S. E. 815), it appeared that an insurance association not authorized to do business in Georgia issued in Texas a policy of insurance covering property in this State, and mailed the policy to the owner in Georgia. The insurer afterwards brought suit against the insured, to recover the premium. The Court of Appeals held that the plaintiff could not recover, because it was not authorized to do business in this State. In its decision the court said: The law “prescribes certain prerequisites to the doing of any insurance business in this State. Plaintiff has not complied with any of these prerequisites, and immunity is claimed because the contract of insurance was made in Texas. It can not be supposed that the purpose of the law was to prevent the act of making the contract in this State. The object is to protect the people of this State against irresponsible companies or individuals, and to prevent all unauthorized companies or individuals from writing insurance on *302property in this State, or from transacting any sort of insurance business in this State.”

Any other construction would leave this statute open to the easiest sort of evasion, in that any non-admitted company and any prospective insured could merely step across the State line and there with perfect immunity execute an insurance contract which would be clearly in violation of this statute if delivered and accepted within the borders of this State. The majority opinion has given recognition to the rule that statutes of penal nature shall be most strongly construed against the State. It has also given recognition to the more important and more controlling rule that “ Penal laws should be construed strictly, but they should not be so construed as to defeat the obvious intention of the General Assembly. In construing an act, whether of a civil or penal nature, the intention of the General Assembly should be sought for, keeping in view the evil and the remedy.” Atlantic Coast Line R. Co. v. State, 135 Ga. 545 (69 S. E. 725, 32 L. R. A. (N. S.) 20). See also Mathis v. Fulton Industrial Cor., 168 Ga. 719 (149 S. E. 35); Singer Mfg. Co. v. Wright, 97 Ga. 114 (25 S. E. 249, 35 L. R. A. 497); Wellmaker v. Terrell, 3 Ga. App. 791 (60 S. E. 464). It may be also suggested that if the construction here given be not the correct one, then the act of 1935 with reference to these matters was a vain, a futile thing.

The act in question is not a new departure. It appears to be an effort to correct what must have been abuses not covered by previous enactments. Before the act of 1935 the legislature had provided that no insurance company could operate in Georgia until it had been duly qualified; no agent could represent such a company until he had been duly qualified; and no qualified agent could represent an unqualified company. As was quoted by Justice Lumpkin in Gillis v. Gillis, 96 Ga. 1, 8 (23 S. E. 107, 30 L. R. A. 143, 51 Am. St. R. 121), “The presumption against absurdity in .the provision of a legislative enactment is probably a more powerful guide to its construction than even the presumption against unreason, inconvenience, or injustice. The legislature may be supposed to intend all of these; but it can scarcely be supposed to intend its own stultification.” (Endlich on Statutes, §§ 264, 295.) The construction of the statute given by the majority opinion would defeat each of what would seem to be the manifest purposes *303of the legislation: first, to protect residents of Georgia against fraudulent and unsafe insurance companies, by giving the insurance commissioner of Georgia some measure of control and supervision over all companies desiring to transact any business in .this State, and by safeguarding citizens who may have losses by requiring all insurers who transact any business herein to become suable in the courts of this State; second, to guarantee to the State the income from all of the insurance on property located in this State by any company which may transact any business therein through license, premium, and ad valorem taxes, and other forms of taxation which are now or may hereafter be levied by law.