Chicagoland Agencies, Inc. v. Palmer

• Decision Date: 17 June 1936
• Docket Number: No. 23202.,23202.
• Citation: 2 N.E.2d 910,364 Ill. 13
• Parties: CHICAGOLAND AGENCIES, Inc., v. PALMER, Director of insurance.
• Court: Illinois Supreme Court

364 Ill. 13

2 N.E.2d 910

CHICAGOLAND AGENCIES, Inc.,

v.PALMER, Director of insurance.

No. 23202.

Supreme Court of Illinois.

June 17, 1936.

Certiorari proceeding by the Chicagoland Agencies, Inc., to review the action of Ernest Palmer, Director of Insurance, in revoking licenses of plaintiff to act as insurance agent and broker. From an adverse judgment, the defendant appeals.

Affirmed.Appeal from Circuit Court, Sangamon County; Lawrence E. Stone, judge.

Otto Kerner, Atty. Gen., and John B. Harris, of Granite City, for appellant.

A. M. Fitzgerald, of Springfield, for appellee.

HERRICK, Justice.

The plaintiff, Chicagoland Agencies, Inc., appellee, is an insurance agent and insurance broker heretofore licensed by the director of insurance (hereinafter called the director). On October 23, 1934, the director purported to revoke each license pursuant to the provisions of section 11 of ‘An Act providing for the qualification and license of insurance agents and solicitors,’ etc. (Smith-Hurd Ann.St. c. 73, §550, Ill. Rev.Stat.1935, c. 73, par. 573, p. 1935), and section 11 of ‘An Act providing for the qualification and license of insurance brokers and solicitors,’ etc. (Smith-Hurd Ann. St. c. 73, § 570, Id. c. 73, par. 595, p. 1938). The plaintiff filed in the circuit court of Sangamon county its petition for a writ of certiorari to review the action of the director, alleging that section 11 of each of such acts is unconstitutional. The cause was tried on a stipulation of facts. The trial court quashed the record. The director brings the cause here on appeal.

Section 11 of the first-named act is as follows:

Ԥ 11. A certificate issued under this Act may be revoked and/or a renewal thereof refused by the Director, if after due investigation and a hearing either before him or before any salaried employee of the insurance department designated by him whose report he may adopt, he determines that the holder of such certificate

‘(a) has violated any provision of the insurance law; or

‘(b) has intentionally made a material misstatement in the application for such certificate; or

‘(c) has been guilty of fraudulent or dishonest practices; or

‘(d) has demonstrated his incompetency or untrustworthiness to transact the insurance brokerage business.’

Section 11 of the Brokers Act is identical in language, except in subdivision (d) the words ‘brokerage business' are used instead of ‘agency business.’

It is earnestly urged by the director that each section is a constitutional and reasonable regulation, while the plaintiff insists that section 11 attempts to delegate to the director, and any salaried employee of his department, arbitrary powers of a legislative or judicial nature, and that the law is incomplete, uncertain, and vague.

The insurance business affects practically all branches of industry. It is written also against the hazards of health and life of a vast number of citizens, and is generally regarded by the business world, the heads of families, and others as a necessity. It deals with the public generally, and is subject to regulation under the police power of the state. North American Ins. Co. v. Yates, 214 Ill. 272, 73 N.E. 423. The regulation, however, must be within reasonable limitations. It is the law that, where a business is subject to regulation by the state, the Legislature may grant discretionary powers to administrative boards created for that purpose, which may grant or refuse permission to pursue such occupation, business, or profession, but such law must be complete in itself in order to afford due process. An attempted regulation beyond the constitutional limitations is neither justified nor valid. No discrimination against the insurance business different from that of any other business impressed with the public interest is warranted in the application of regulations under the police power. Integrity Mutual Ins. Co. v. Boys, 293 Ill. 307, N.E. 748.

The ‘due investigation and hearing’ prescribed for the revocation of the license of either an agent or broker provides that the ‘hearing’ may be had before any salaried employee of the insurance department designated by the director. No standard to sit as arbitrator or judge on the part of such employee is required other than that he be on salary. No knowledge of the rudiments of the business of insurance agent or broker is requisite. The only test is whether such employee is on salary and has been designated by the director. It is thus possible, provided such employee has been designated by the director, for a stenographer, bookkeeper, or janitor on salary under the director to act as judge at the hearing of charges made against an agent or broker which may involve a property right in business of great value. The statute does not undertake to prescribe the qualifications necessary to conduct the business of an insurance broker or agent, nor is any board created the members of which are required to be trained or learned in that business, with rules of procedure created by the act, as in the cases of Klafter v. State Board of Examiners of Architects, 259 Ill. 15, 102 N.E. 193,46 L.R.A. (N.S.) 532, Ann.Cas.1914B, 1221,People v. Apfel baum, 251 Ill. 18, 95 N.E. 995, and Ramsay v. Shelton, 329 Ill. 432, 160 N.E. 769, relied upon by the appellant.

What does the term ‘due investigation,’ used in section 11, contemplate? The director is left without restraint to interpret that phrase. It is possible that each succeeding director may place a substantially different meaning upon it. Even a salaried employee designated from time to time by the director might differ in his interpretation of the term from that of some previous salaried employee so acting, as to the character and type of investigation to be heard on the inquiry before him. It is significant that no charges are required to be filed under any of the four subdivisions of section 11. No provision is made for the giving of notice of such charge to the agent or broker under investigation so that he may know what accusation he is to meet, and prepare his defense, if any; no place is fixed for the hearing nor the manner or the giving of notice thereof; no procedure is prescribed for the production or consideration of the evidence, subpoenaing of witnesses, administering of an oath thereto, nor the preservation of the record. These usual and necessary incidents to a ‘hearing,’ as that term is commonly understood, are lacking, but the director, alone, determines what manner of hearing will be had and the procedure to be followed.

An act, to be valid, may not be vague, indefinite, and uncertain, but must be complete when it leaves the Legislature and be sufficiently explicit to advise everyone what his rights are under it and how he will be affected by its operation. Mayhew v. Nelson, 346 Ill. 381, 178 N.E. 921;People v. Emmerson, 325 Ill. 357, 156 N.E. 474;People v. J. O. Beekman & Co., 347 Ill. 92, 179 N.E. 435;People v. Federal...