Allied Am. Mut. Fire Ins. Co. v. Commissioner of Motor Vehicles

• Decision Date: 17 April 1959
• Docket Number: No. 244,244
• Citation: 150 A.2d 421,219 Md. 607
• Parties: ALLIED AMERICAN MUTUAL FIRE INSURANCE COMPANY et al. v. COMMISSIONER OF MOTOR VEHICLES et al.
• Court: Maryland Court of Appeals

Page 607

219 Md. 607

150 A.2d 421

ALLIED AMERICAN MUTUAL FIRE INSURANCE COMPANY et al. v. COMMISSIONER OF MOTOR VEHICLES et al.

No. 244.

Court of Appeals of Maryland.

April 17, 1959.

J. Cookman Boyd, Jr., and Henry M. Decker, Jr., Baltimore (Harris James George, Baltimore, on the brief), for appellants.

E. Clinton Bamberger, Jr., Sp. Asst. Atty. Gen. (C. Ferdinand Sybert, Atty. Gen., Stedman Prescott, Jr., Deputy Atty. Gen., James H. Norris, Jr., Sp. Asst. Atty. Gen., on the brief), for appellees.

Richard W. Kiefer and Allan H. Fisher, Jr., Baltimore, on brief on behalf of Bar Association of Baltimore City amicus curiae.

J. Kemp Bartlett, Jr., Joseph Sherbow and Edward F. Shea, Jr., Baltimore, on brief on behalf of Association of Casualty and Surety Companies and National Association of Independent Insurers amici curiae.

Before BRUNE, C. J., and HENDERSON, HAMMOND, and PRESCOTT, JJ.

HAMMOND, Judge.

The appellants, two mutual insurance companies that write automobile liability insurance, and an insured of each, brought a bill for a declaration that Ch. 836 of the Acts of 1957--the Unsatisfied Claim and Judgment Fund Law, Code 1957, art. 66 1/2, § 150 et seq.--was unconstitutional and void and for an injunction against the officials named in the Act to prevent its enforcement and administration. The chancellor found the law constitutional and denied the relief sought, and this appeal followed.

The Act was passed to meet what the Legislative Council's Committee on Motor Vehicle Insurance called the 'growing and serious social problem stemming from the innocent victims of motor vehicle accidents who were unable to get redress from the other (and uninsured) parties to accidents.' Although the Council's Committee recommended passage of a compulsory liability insurance law, it said: 'In theory, the unsatisfied judgment fund would offer the greatest assurance of such recovery.' Report to the General Assembly of 1957, Special Committee Reports, pp. 391-392. The General Assembly did not follow the Committee's recommendation but passed the Unsatisfied Claim and Judgment Fund Law as a substitute.

The law provides for a fund to indemnify the innocent victims of financially irresponsible owners and operators of motor vehicles. The fund was to be accumulated from the fee of $1 required in 1958 from the registrant of each insured motor vehicle in Maryland. Thereafter, registrants of insured motor vehicles are not called upon for any contribution. In 1958 registrants of uninsured motor vehicles were required to pay a fee of $8 to the fund. In 1959 every insurer permitted to write automobile liability insurance in Maryland is required to contribute to the fund a sum equal to one-half of one per cent of its premiums on liability policies covering motor vehicles principally garaged in Maryland. On December 30th of each year, beginning with 1959, the Commissioner of Motor Vehicles is to determine whether there is a need for additional contribution to the fund in the ensuing year. If he finds such a need, he is to assess the estimated deficiency against the insurers and the registrants of uninsured motor vehicles. The insurers are required to pay annually one-half of one per cent of the total premiums of liability policies insuring motor vehicles in this State, or ten per cent of the estimated deficiency in the fund, whichever is less. The remaining ninety per cent of the estimated deficiency is to be assessed to and paid by registrants of uninsured motor vehicles, in equal shares.

The fund is administered by a board of six, the Commissioner of Motor Vehicles, the Insurance Commissioner, and representatives, appointed by the Insurance Commissioner, of each of four classes of insurers. Residents of Maryland or the owner of a motor vehicle registered in the state, or residents of any other state or a province of Canada which has a similar reciprocal law, may claim from the fund. When one entitled to make claim suffers damage to his property or injury to his person under circumstances which may entitle him to indemnification from the fund, he must give notice of the intention to file a claim and supply information about the accident, injury and damage. The board that administers the fund is not authorized, or given a staff, to investigate claims to protect the fund from improper payments. The board is to assign claims for investigation and defense to insurers in propertion to their respective premium writings subject to assessment under the Act. If the claimant files suit against a financially irresponsible tortfeasor, the defendant is represented, and the fund defended, by counsel selected by the insurer to whom the claim has been assigned. The defendant must cooperate with such counsel, but he may have counsel of his own choosing because he is required to reimburse the fund for any payment it makes to satisfy the judgment against him. Until he does reimburse the fund, he may not register or operate a motor vehicle in this state. There are various provisions with respect to settlements, safeguarding payments from the fund, default actions, cases in which the identity of the tortfeasor is unknown, and criminal penalties for violations of the law.

The appellants' principal arguments are that the title of the Act violates Sec. 29, Art. 3 of the Constitution of Maryland, that the Act, in compelling insurers to contribute money and to render services at their own expense and without compensation, deprives them of their property without due process of law under the Fourteenth Amendment, Art. 23 of the Maryland Declaration of Rights, and Art. 3, Sec. 40 of the Constitution of Maryland, and that the Act is a denial of the equal protection of the laws contrary to the Fourteenth Amendment.

The title of the Act is in the form currently generally used. It recites that there are to be added thirty new sections to Art. 66 1/2 of the Code, giving their numbers and their place of codification in the article, and that it is an act providing: 'for the establishment, maintenance, and administration of an Unsatisfied Claim and Judgment Fund for the payment of damages for injury to or death of certain persons and for damages to property arising out of the ownership, maintenance and use of motor vehicles in this State in certain cases and relating generally to said Fund and to the financial responsibility laws of this State.'

The appellants say that nowhere in the title do the words 'insurance,' or 'insurer,' or 'insurance company' appear, although such companies are required to contribute monies and services to the fund; therefore, there is nothing to put such companies on notice as to the imposition of these burdens; and, in addition, the title is misleading in that it indicates a narrower scope than the body of the act is made to encompass. Chief reliance is put on Culp v. Com'rs of Chestertown, 154 Md. 620, 141 A. 410. We think the Culp case is clearly distinguishable. There the title of the act was misleading because it stated that the municipal improvements for which it provided were to be financed by a bond issue. The act levied an assessment on owners of adjoining property. The title stated one source of revenue; the body provided for an additional source. There is no such affirmative infirmity in the title of the act before us.

The commands of Sec. 29 of Art. 3 of the Maryland Constitution that every law shall embrace but one subject, which must be described in the title, have been said by this Court to be designed to prevent the combination in one act of several and distinct incongruous subjects and to require that the Legislature and the people of the state be fairly advised of the real nature of pending legislation. State v. Norris, 70 Md. 91, 95, 16 A. 445; Neuenschwander v. Washington Suburban Sanitary Comm., 187 Md. 67, 78-80, 48 A.2d 593. This Court has never leaned to a narrow interpretation of the constitutional requirements but has been of a disposition to uphold rather than defeat the enactment wherever possible. Baltimore City v. Flack, 104 Md. 107, 118, 64 A. 702; Board of Education of Baltimore County v. Wheat, 174 Md. 314, 318, 199 A. 628. Numerous cases have said that while the title must indicate the subject, it need not give an abstract of the act nor mention the means by which the general purpose is to be accomplished, although it must not be misleading. Painter v. Mattfeldt, 119 Md. 466, 474, 87 A. 413; Pressman v. State Tax Comm., 204 Md. 78, 102 A.2d 821. It had been held that titles need do no more than indicate the precise article and section of the Code in which the new legislation appears. Dean v. Slacum, 149 Md. 578, 580, 132 A. 73. Since the description in the title which follows the condification language fairly apprised the Legislature and the people of the purpose of the Act, and was not misleading, it is not fatal that the means and methods by which the legislation is to be carried into effect are not spelled out. Baltimore City v. Flack, supra; Bond v. State, 78 Md. 523, 525, 28 A. 407; Oursler v. Tawes, 178 Md. 471, 487, 13 A.2d 763; Mayor, etc., of Baltimore v. Reitz, 50 Md. 574, 579; Benesch v. State, 129 Md. 505, 510, 99 A. 702.

The Supreme Court of New Jersey recently sustained the Unsatisfied Claim and Judgment Fund Law of that state, N.J.S.A. 39:6-61 et seq., against an attack on its title. The New Jersey Constitution, art. IV, § VII, par. 4, has the same provision as Maryland that every law shall embrace but one object and that shall be expressed in the title. The title of the New Jersey Act is not distinguishable from the title of the Maryland Act, and the New Jersey Court held that the title complied with the constitutional requirements, and said: 'A title to an act need not be an index to all that it contains and need not set forth all of its exclusions or conditions. It is a label and need only set forth its object, not its product.' Robson v. Rodriquez, 26 N.J. 517, 141...