Cole v. State ex rel. Harris

• Decision Date: 16 December 1907
• Docket Number: 13027
• Citation: 91 Miss. 628,45 So. 11
• Court: Mississippi Supreme Court
• Parties: WILLIAM Q. COLE, INSURANCE COMMISSIONER, v. STATE OF MISSISSIPPI EX REL. GARRARD HARRIS, DISTRICT ATTORNEY

45 So. 11

91 Miss. 628

WILLIAM Q. COLE, INSURANCE COMMISSIONER, v. STATE OF MISSISSIPPI EX REL. GARRARD HARRIS, DISTRICT ATTORNEY

No. 13027

Supreme Court of Mississippi

December 16, 1907

FROM the circuit court of, first district, Hinds county, HON WILEY H. POTTER, Judge.

The state, suing on the relation of Garrard Harris, district attorney, appellee, was plaintiff in the court below; Cole insurance commissioner, appellant, was defendant there. From a judgment ordering the issuance of a writ of mandamus directing Cole, insurance commissioner, to revoke the license to do business in the state previously granted by him to the Great Western Life Insurance Company the defendant appealed to the supreme court.

The questions involved were:

(1) Is the matter of the revocation of the license of an insurance company to do business in the state, like that of granting such license, committed by law to the discretion of the insurance commissioner, and beyond the control of the courts?

(2) Is the matter res adjudicata as to everything relating to the form of the contract employed by the insurance company after the license has been granted by the commissioner with full knowledge of the nature of such contracts.

(3) Does the insurance contract under consideration violate § 2600 of the Code of 1906?

The Code section is as follows: "Sec. 2600. No distinction in same class; rebates prohibited.-- No life insurance company doing business in Mississippi shall make any distinction or discrimination in favor of individuals of the same class and equal expectation of life in the amount of payments of premiums or rates charged for policies of life or endowment insurance, or in the dividends or other benefits payable thereon, or in any of the terms and conditions of the contract it makes, nor shall any such company or any agent thereof make any contract of insurance or agreement as to such contracts other than are plainly expressed in the application and policy issued thereon; nor shall any such company or agent pay or allow as inducements to insurance any rebate of premium payable on the policy or any special favor or advantage in the dividends or other benefits to accrue thereon, or any valuable consideration or inducement whatever not specified in the policy contract of insurance. Whenever it shall appear to the satisfaction of the commissioner after a hearing before him upon notice that any company, officer agent, subagent, broker or solicitor has violated any provision of this section, he shall revoke the license of any such company or person to transact business in this state and no other license shall be issued to any such company or person within one year after such revocation."

The features of the insurance policy to which objection was interposed are as follows:

"SPECIAL INCOME.

"(1) The Great Western Life Insurance Company hereby agrees to apportion and pay to . . . the insured hereunder, during the continuance of this policy, the premiums on the same having been paid in full each year as they become due, a special annual income consisting of . . . shares of the proceeds of One Dollar ($ 1.00) per One Thousand Dollars ($ 1,000.00) of all insurance, except reinsurance, written by said Company in the United States from the date of its incorporation to the first day of January, 1918, on which premiums, computed on the annual basis, have been received in cash, and also for so long thereafter as premiums are received on such insurance said special income to be determined as follows:

"(2) The total sum of said One Dollar ($ 1.00) per One Thousand Dollars ($ 1,000.00) of insurance shall be ascertained at the end of each calendar year and such sum divided by the number of thousands of insurance represented by policies containing this provision. The quotient obtained shall be the apportionment to each such share, and the total sum of . . . such shares shall be the special income payable hereunder upon the succeeding anniversary of this policy, subject to the payment of the premium hereon.

"(3) The total amount of insurance issued in policies containing this provision shall not exceed Fifteen Million Dollars ($ 15,000,000). Each One Thousand Dollars ($ 1,000.00) of insurance shall represent one share. No lapsed share shall be reissued to a new policy holder. Shares surrendered by lapse or death shall decrease the number of shares participating and inure to the benefit of the survivors.

"(4) It is understood and agreed that in consideration of the income paid thereunder, the insured will, upon written request, advise the Company as to the fitness and desirability of agents and applicants for agencies, furnish confidentially such information as he may possess regarding the personal habits of applicants for insurance and those of lapsed policy holders who apply for reinstatement, and such information as may come to his knowledge regarding claims against the company which might assist in protecting the company from fraudulent or false claims, or fraudulently acquired insurance."

Judgment reversed and proceeding dismissed.

McWillie & Thompson, for appellant.

It will be observed that the matter of the revocation of a license is committed to a particular officer, who is supposed to be chosen with reference to his knowledge and experience in respect to the business of insurance, and that he is not authorized to act until he has given notice to the company or person to be affected by his decision and has had a hearing before himself, which has resulted in his being satisfied that such company or person has violated the statute.

Very early in our judicial history it was held that mandamus could be availed of to compel the performance of ministerial duties only by public officers, and not to control them in matters of discretion.

In 1866 this was held in a mandamus proceeding to compel the auditor of Public Accounts to pay a balance due on the salary of an officer. Swann v. Buck, 40 Miss. 290.

Iu 1870 it was held that the duty of the chancery clerk to approve official bonds is in the nature of a judicial act requiring the exercise of judgment and discretion in its performance which the courts could not control by mandamus. Swann v. Gray, 44 Miss. 393.

In 1892 the same thing was held in respect to the action of the president of the board of supervisors in approving or disapproving the bonds of county officers, under the provisions of the Code of 1880. Shotwell v. Covington, 69 Miss. 735.

As the judgment in this case not only requires the commissioner to act, but provides also how he shall act in a matter committed to his discretion, that is to say, by revoking the license in question, we could well afford to suspend further argument on this branch of the question, but will nevertheless devote a few words to the manner in which it is sought to evade the above well established principle.

It will be noticed that although the judgment follows the prayer of the petition and requires the commissioner to revoke the license, it is relied on as simply requiring the commissioner to act in the matter. In other words it is sought to defend an invasion of the jurisdiction of the commissioner under color of the authorities which hold that while an inferior court cannot be controlled in the exercise of its discretion as to how a matter shall be decided, it can be compelled by mandamus to act by proceeding to decide it. The vice in the petitioner's contention is that the effort is not simply to compel the commissioner to decide a matter which it is his plain duty to decide, but to compel him to decide over again in a different way a matter upon which he has already passed, the setting aside of his former decision being necessarily involved.

The revocation of the license is not sought on account of anything that transpired after the issuance of the license, but on the ground that it was improperly issued, or in other words, that the commissioner erred in issuing it. The matter of issuing such a license is, like the revocation of it, one committed by law exclusively to the discretion of the commissioner. Code 1906, §§ 2559, 2606, provide the method of obtaining a license. The latter section directs what showing in the way of documents, etc., shall be submitted with the application, to which § 2677 makes the additional requirement that "a sample copy of every kind or class of policies offered for sale in this state" shall also be submitted. Section 2606 provides that the company so applying for a license shall satisfy the commissioner that it is fully and legally organized under the laws of its state or government to do the business it proposes to transact, etc., and shall obtain from the commissioner a certificate that it "has complied with the laws of this state and is authorized to make contracts of insurance." By § 2564 it is provided that "Before granting a certificate of authority to any insurance company, the commissioner shall be satisfied that it is qualified under the laws of the state to transact business therein, and as to its financial ability and condition." This last section it will be noted provides for two conclusions, one relating to the legality of the business under the laws of the state, and the other to the solvency of the company.

It would seem that when the commissioner, under the authority vested in him by law, admits a company to do an insurance business in this state of the nature of which a full showing has been made, the matter is entirely beyond the control of the courts.

It has been held in this state that where one has a claim against a county, mandamus is the proper remedy to compel the board of police to proceed to render judgment, but that when a judgment has been entered by the board it cannot be...