Where the allowance of an attorney's fee under the provisions of
a state statute is the basis of the federal right asserted, and it
appears that one of the assignments of error relied upon before,
and considered and expressly decided by, the highest court of the
state was that the statute was unconstitutional and void and in
conflict with the Fourteenth Amendment for the want of mutuality,
and deprived the plaintiff in error of the equal protection of the
law, the motion to dismiss will be denied.
Sections 43, 44, 45 of chapter 48 of the laws of Nebraska of
1899, by which the court, upon rendering judgment for a total loss
sued for against an insurance company upon any policy of insurance
against loss on real property by fire, tornado, or lightning shall
allow the plaintiff a reasonable attorney's fee to be taxed as
costs, is not repugnant to the equality clause of the Fourteenth
Amendment either because it arbitrarily subjects insurance
companies to a liability for such fees when other defendants in
other cases are not subjected to such burden or because the fee is
to be
Page 189 U. S. 302
imposed on the insurance companies, but not on the insured, when
the
suit is successfully defended, or because the statute
arbitrarily distinguishes between different classes of policies
allowing the fee in certain cases and not in others.
The case is stated in the opinion of the Court.
MR. JUSTICE WHITE delivered the opinion of the Court.
Having been adjudged to pay the amount of a fire policy written
on the dwelling house of the defendant in error which was totally
destroyed by fire, the plaintiff in error prosecutes this writ. The
judgment was for $861.40 with interest, costs, and $150 as a
reasonable attorney's fee. This latter amount was fixed under
authority conferred on the court by sections 43, 44, and 45 of
chapter 43 of the Compiled Statutes of Nebraska, which are a
reproduction of chapter 48 of the Laws of Nebraska for 1899. The
sections in question are reproduced in the margin.
* The allowance of
the attorney's fee is the basis of the federal right asserted. It
is moved to dismiss the writ on the ground that the federal right
was not specially set up
Page 189 U. S. 303
below, as required by Rev.Stat. 709, or was, in any event,
alleged too late to enable the Supreme Court of Nebraska to
consider it. Among the assignments of error contained in the
petition in error filed before the hearing in the Supreme Court of
Nebraska was the following:
"Section 45 of chapter 43 of the Compiled Statutes, under which
the court assumed to allow and order an attorney fee to be taxed,
is unconstitutional and void for want of mutuality of the
provisions, and for excluding defendant from the benefits and
privileges thereby given to plaintiff, and for depriving defendant
of the equal protection of the laws; in each of which particulars
the said section is in conflict with section 1 of the Fourteenth
Amendment to the Constitution of the United States, and in conflict
with section 3 of article 1 and section 15 of article 3 of the
Constitution of Nebraska."
The case was considered by commissioners appointed pursuant to
the Nebraska law to aid the supreme court of the state in the
discharge of its duties. The commission, in an elaborate opinion,
recommended the affirmance of the judgment. In such opinion, the
assignment of error concerning the attorney's fee, above quoted,
was considered, and numerous cases decided by the Supreme Court of
Nebraska sustaining its allowance under the statute in question
were referred to. It was said in the opinion that the legality of
the attorney's fee "was not an open question in this state" because
the right to allow the fee had been previously sustained by the
supreme court of the state in many cases. A passage from the case
of
Lancashire Insurance Company v. Bush, 60 Neb. 116,
expressly declaring that the statute concerning the allowance of
the attorney's fee was consistent both with the Constitution of the
United States and of the State of Nebraska, was approvingly cited,
the passage in question being as follows:
"These decisions are vigorously attacked, but we are convinced,
as a result of further investigation of the subject, that they are
sound and should be adhered to. There is nothing in the
Constitution of the United States or of this state which forbids
classification of subjects for the purpose of legislation."
The Supreme Court of Nebraska, for the reasons stated in
Page 189 U. S. 304
the report of the commission, affirmed the judgment. It results
that not only was the federal question relied upon specially called
to the attention of the Supreme Court of the State of Nebraska, but
it was by that court expressly decided. The grounds upon which the
motion to dismiss is predicated are therefore without merit, and it
is overruled.
All the grounds relied upon to demonstrate that the statute
allowing a reasonable attorneys' fee in case of the unsuccessful
defense of a suit to enforce certain insurance policies is
repugnant to the equality clause of the Fourteenth Amendment are
embraced in the following propositions: first, because it
arbitrarily subjects insurance companies to a liability for
attorneys' fees when other defendants in other classes of cases are
not subjected to such burden; second, because, whilst the
obligation to pay attorneys' fees is imposed on insurance companies
in the cases embraced by the statute, no such burden rests on the
plaintiff in favor of the insurance companies where the suit on a
policy is successfully defended; and, third, because the statute
arbitrarily distinguishes between insurance policies by allowing an
attorney's fee in case of a suit on a policy covering real estate,
where the property has been totally destroyed, and excluding the
right to such fees in suits to enforce policies on other classes of
property, or where there has not been a total destruction of the
property covered by the insurance. Each and all of these
propositions must rest on the assumption that contracts of
insurance, generically considered, do not possess such distinctive
attributes as to justify their classification separate from other
contracts, and that contracts of insurance, as between themselves,
may not be classified separately depending upon the nature of the
insurance, the character of the property covered, and the extent of
the loss which may have supervened. But the unsoundness of these
propositions is settled by the previous adjudications of this
Court.
Orient Insurance Company v. Daggs, 172 U.
S. 557;
Insurance Company v. Warren,
181 U. S. 73;
Insurance Company v. Mettler, 185 U.
S. 308. In the
Orient case, a statute of the
State of Missouri which subjected fire insurance contracts to an
exceptional rule was upheld
Page 189 U. S. 305
not only on the ground of the right of the state to prescribe
the conditions upon which an insurance company should transact
business within its borders, but also because the rule in question
was the lawful exercise of the power to classify. In the
Warren case, a like principle was applied to a statute of
the State of Ohio establishing a particular regulation as to life
insurance companies. In the
Mettler case, a statute of the
State of Texas was sustained, applicable alone to life insurance
policies, which authorized the enforcement not only of a reasonable
attorney's fee, but also of twelve percent damages after demand in
case of the unsuccessful defense of a suit to enforce a life
insurance policy. In all three of the cases referred to, therefore,
it was necessarily held that insurance contracts were so distinct
as to justify legislative classification apart from other contracts
or to authorize a classification of insurance contracts so as to
subject one character of such contracts, when put in one class, to
one rule, and other varieties of such contracts, when placed in
another class, to a different rule. The only claimed distinction
between the cases previously decided and the present one is that,
in this case, the classification is made to depend not alone upon
the general character of the contract, but upon the kind of
property insured and the extent of the loss. This, it is
elaborately argued, takes this case out of the rule established by
the previous cases and causes the statute to be repugnant to the
Fourteenth Amendment. But, as the rule settled by the previous
cases is that contracts of insurance, from their very nature, are
susceptible of classification not only apart from other contracts,
but from each other, it must follow, as the lesser is included in
the greater, that the character of the property insured and the
extent of the loss afford reasons for subclassification.
It is, however, argued that no reason could have existed for
classifying losses on real estate separately from losses on other
property. And by what process of reasoning, it is asked, could the
legislative mind have discovered the foundation for allowing the
recovery of a reasonable attorney's fee in case of a total loss of
real estate insured and not permit recovery of such fee when the
property insured has been only partially destroyed?
Page 189 U. S. 306
The distinction between real and personal property has, in all
systems of law, constantly given rise to different regulations
concerning such property. The differences of relation which may
arise between the insurer and the insured, depending upon whether
the property insured has been only partially damaged or has been
totally destroyed, needs but to be suggested. In the one case, the
amount of the damage affords possibilities for a reasonable
difference of opinion between the parties in adjusting the payment
under the policy. In the other, the amount being determined under
the statute by the value fixed by both parties in the policy, the
question of legal liability under the policy would be, as a general
rule, the only matter to be considered in determining whether
payment under the contract will be made. Besides, it is obvious
that the total destruction of real estate covered by insurance
necessarily concerns the homes of many of the people of the state.
If, in regulating and classifying insurance contracts, the
legislature took the foregoing considerations into view and
provided for them, we cannot say that, in doing so, it acted
arbitrarily and wholly without reason.
Affirmed.
MR. JUSTICE HARLAN, MR. JUSTICE BREWER, and MR. JUSTICE BROWN
dissented.
* Compiled Statutes of Nebraska, chapter 43.
"SEC. 43. Whenever any policy of insurance shall be written to
insure any real property in this state against loss by fire,
tornado, or lightning, and the property insured shall be wholly
destroyed without criminal fault on the part of the insured or his
assigns, the amount of the insurance written in such policy shall
be taken conclusively to be the true value of the property insured
and the true amount of loss and measure of damages."
"SEC. 44. This act shall apply to all policies of insurance
hereafter made or written upon real property in this state, and
also to the renewal, which shall hereafter be made, of all policies
heretobefore written in this state, and the contracts made by such
policies and renewals shall be construed to be contracts made under
the laws of this state."
"SEC. 45. The court, upon rendering judgment against an
insurance company upon any such policy of insurance, shall allow
the plaintiff a reasonable sum as an attorney's fee, to be taxed as
part of the costs."