INSURANCE COMPANY OF NO. AMERICA v. County of Hall

Newton, J.,

dissenting.

I respectfully disagree with the majority opinion. Under that opinion an insurance company may deliberately and knowingly overinsure a property against loss by fire. It may, over a period of years, collect premiums on the basis of the inflated value and then, when a loss occurs, contend that the actual value of the property was less than its insured value and pay *614only the actual value. It would seem that if this is to be accepted as the law, equity would require the insurer to at least refund, with interest, all excess premiums collected.

The opinion is based on the theory that Laws 1951, c. 139, § 1, p. 572, repealed by implication section 44-380, R. R. S. 1943. This court stated in Steeves v. Nispel, 132 Neb. 597, 273 N. W. 50: “ ‘Repeals by implication are not favored, and a construction of a statute which, in effect, repeals another statute will not be adopted, unless such construction is made necessary by the evident intent of the legislature.’ ”

In Bass v. County of Saline, 171 Neb. 538, 106 N. W. 2d 860, we stated: “Where general and special provisions of statutes are in conflict, the general law yields to the special, without regard to priority of dates, in enacting the same, and a special law will not be repealed by general provisions unless by express words or necessary implication.” In that case it is further stated that: “Statutes pertaining to the same subject matter should be construed together. Such statutes, being pari materia, must be construed as if they were one law and effect given to every provision.”

To the same effect is State ex rel. Retchless v. Cook, 181 Neb. 863, 152 N. W. 2d 23, wherein it is stated: “All statutes relating to the same subject should be construed and considered together for the purpose of giving effect to the legislative intention. All statutes in pari materia must be considered together and construed as if they were one law, and, if possible, effect given to each provision.”

“In construing a statute, the court must look to the object to be accomplished, the evils and mischief sought to be remedied, or the purpose to be subserved, and place on it a reasonable or liberal construction which will best effect its purpose rather than one which will defeat it.”

As pointed out in the majority opinion, section 44-*615501, R. R. S., 1943, prior to 1951, stated that the New York standard form of policy should be followed “as nearly as practicable.” These words were construed by this court as an indication that it was not the legislative intent to render section 44-380, R. R. S. 1943, nugatory. See, Fadanelli v. National Security Fire Ins. Co., 113 Neb. 830, 205 N. W. 642; State ex rel. Martin v. Howard, 96 Neb. 278, 147 N. W. 689.

In State ex rel. Martin v. Howard, supra, it is pointed out that the original act required deviation in many respects from the New York standard form. In Fadanelli v. National Security Fire Ins. Co., supra, reasons other than the inclusion of the words “as nearly as practicable” were given for construing the valued policy act in conformity with the requirements of section 44-380, R. R. S. 1943. It is therein stated: “The valued policy act was designed to repress an evil practice, and thereby advance public interest and promote public justice by securing for the assured a policy payment, in the event of total loss, of the full amount of indemnity for which he contracted, and for which he paid. In the present instance we have a recurrence of the evil practices above referred to, to wit: The endeavor to secure a settlement by the insurer for less than his contract in terms imposes upon him. This conclusion certainly cannot be gainsaid. It must be admitted that the purpose of the rebuilding clause in the policy in question, and its only purpose, was and is that it might enable the defendant company, in case of a total loss, to discharge its liability on the policy by an expenditure of a less sum of money than would be required to pay the amount of insurance named in the policy. In no other way could the company derive any benefit from that clause. If the expense of rebuilding would exceed or even equal the amount of the insurance mentioned, there could be neither advantage nor object on the part of the company to undergo that trouble, and when the expense is less the performance of that condition by *616rebuilding the destroyed property would be but a mode of satisfying the obligations of the company by payment to persons other than the assured of a sum less than became payable on the policy according to the provisions of the statute. Thus, the evident purpose by this method is to accomplish by indirection the effect of a transaction expressly prohibited by the ordinary construction of the terms of the section of the statute involved.”

There never has been a direct attempt to repeal section 44-380, R. R. S. 1943. The section has been consistently enforced by the decisions of this court. Certainly the existence of these court decisions and of the statute were within the knowledge of the legislators, yet the statute was not repealed. The implication is that it was the legislative intent to leave it in full force and effect. Section 44-501, R. R. S. 1943, is a general statute dealing with the New York standard form whereas section 44-380, R. R. S. 1943, is a special statute enforcing the insurance contract according to the amount of insurance stipulated and paid for. Under the rules of statutory construction, the special statute prevails over the general statute. The two must be construed together and effect given to both. Repeals by implication are not favored. Particularly is this true when a long-settled and well-recognized legal doctrine is at issue and there has been no attempt to repeal the statute in controversy.

As pointed out in Fadanelli v. National Security Fire Ins. Co., supra, there are good reasons for sustaining section 44-380, R. R. S. 1943. To hold otherwise is tantamount to sanctioning a legal fraud. It promotes a situation whereby, as hereinbefore pointed out, fire insurance companies may knowingly sell excess insurance policies, collect premiums on the excess insurance, and then in the event of a loss pay off for a lesser amount. Certainly, such was not contemplated by the Nebraska Legislature.

*617Spencer, J., joins in this dissent.