301 U.S. 459 (1937), 355, Hartford Steam Boiler Inspection & Insurance Co. v. Harrison

Docket Nº:No. 355
Citation:301 U.S. 459, 57 S.Ct. 838, 81 L.Ed. 1223
Party Name:Hartford Steam Boiler Inspection & Insurance Co. v. Harrison
Case Date:May 24, 1937
Court:United States Supreme Court
 
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Page 459

301 U.S. 459 (1937)

57 S.Ct. 838, 81 L.Ed. 1223

Hartford Steam Boiler Inspection & Insurance Co.

v.

Harrison

No. 355

United States Supreme Court

May 24, 1937

Argued February 2, 1937

[57 S.Ct. 839] APPEAL FROM THE SUPREME COURT OF GEORGIA

Syllabus

A statutory discrimination between the mutual companies and the stock companies which write fire, casualty, etc., insurance in the State, forbidding stock companies to act through agents who are their salaried employees but permitting this to mutual companies, is repugnant to the equal protection clause of the Fourteenth Amendment. P. 463.

Georgia Ls., 1935, Act of Mar. 28, 1935, § 1, held unconstitutional. The discrimination has no reasonable relation to the difference between the two classes of companies. It is arbitrary.

183 Ga. 1, 187 S.E. 648, reversed.

Appeal from a judgment which reversed a decision of a trial court directing that a writ of mandamus issue requiring

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the above-named Insurance Commissioner to license one of the appellants as general agent of the other, the Insurance Company.

MCREYNOLDS, J., lead opinion

MR. JUSTICE McREYNOLDS delivered the opinion of the Court.

The Hartford Steam Boiler Inspection & Insurance Company, a stock corporation organized under the laws of Connecticut carrying on casualty insurance business in Georgia, and its salaried employee W. M. Francis, citizen of that State, asked the Superior Court, Fulton County, for a mandamus requiring the Insurance Commission to license him as resident agent. The Commissioner claimed that, while duly qualified in all other respects, the employee could not be so licensed because of the inhibition in § 1, Act of the General Assembly, approved March 28, 1935. Georgia Laws, 1935, p. 140:

No licensed fire or casualty insurance company or company writing fidelity or surety bonds, shall write or issue any policy or indemnity contract on any risk in this State except through a resident agent licensed by the Insurance Commissioner: Provided . . . The words "resident agent" as used in this section are deemed to mean resident agents engaged in the solicitation of such business from the public generally, and shall not include any salaried employee of any insurance company doing business in this State, but shall include any agents of mutual insurance companies however compensated.

Appellants claimed that enforcement of the quoted inhibition would deprive them of the equal protection of the laws, contrary to the Fourteenth Amendment.

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The trial court ruled

that said act, in discriminating against stock companies and the agents thereof and in favor of mutual companies and the agents thereof, sets up an arbitrary classification bearing no reasonable relationship to the subject matter of the legislation, and is discriminatory, depriving both petitioner, The Hartford Steam Boiler Inspection & Insurance Company, as an insurance company, and petitioner, W. M. Francis, as an individual, of their constitutional rights.

Accordingly, it directed that mandamus issue.

In the State Supreme Court, counsel agreed that the sole question involved was the constitutionality of the statute. That Court, being of opinion that the act prescribed no undue discrimination, and did not otherwise conflict with the Federal Constitution, reversed the trial court. The cause is here by appeal.

The applicable principle in respect of classification has often been announced. It will suffice to quote a paragraph from Louisville Gas & Electric Co. v. Coleman, 277 U.S. 32, 37-38:

It may be said generally that the equal protection clause means that the rights of all persons must rest upon the same rule under similar circumstances, Kentucky Railroad Tax Cases, 115 U.S. 321, 337; Magoun v. Illinois Trust & Savings Bank, 170 U.S. 283, 293, and that it applies to the exercise of all the powers of the state which can affect the individual or his property, including the power of taxation. County of Santa Clara v. Southern Pac. R. Co., 18 F. 385, 388, 399; The Railroad Tax Cases, 13 F. 722, 733. It does not, however, forbid classification, and the power of the state to classify for purposes of taxation is of wide range and flexibility, provided always that the classification

must be reasonable, not arbitrary, and must rest [57 S.Ct. 840] upon some ground of difference having a fair and substantial relation to the object of the legislation, so that all persons

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similarly circumstanced shall be treated alike.

Royster Guano Co. v. Virginia, 253 U.S. 412, 415; Air-Way Corp. v. Day, 266 U.S. 71, 85; Schlesinger v. Wisconsin, 270 U.S. 230, 240. That is to say, mere difference is not enough; the attempted classification

must...

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