Department of Ins. v. Schoonover
| Decision Date | 13 May 1947 |
| Docket Number | 28235. |
| Citation | 72 N.E.2d 747,225 Ind. 187 |
| Parties | DEPARTMENT OF INSURANCE et al. v. SCHOONOVER et al. |
| Court | Indiana Supreme Court |
Rehearing Denied June 18, 1947.
Appeal from Morgan Circuit Court; Omar O'Harrow, Judge.
James A. Emmert, Atty. Gen., Cleon Foust, Deputy Atty. Gen., and Baker & Daniels, John D. Cochran, and Warrack Wallace, all of Indianapolis, for appellants.
Dailey Dailey & Lesh and Harvey A. Grabill, all of Indianapolis Ralph K. Lowder, of Martinsville, and Nicholas S. Kiefer and Walter F. Dodd, both of Chicago, for appellees.
The only question involved in this appeal is whether § 209(a) of Art. 1, Part 4 of the Indiana Insurance Law of 1935, § 39-4501 (a), Burns' 1940 Repl., is unconstitutional because it violates § 1 and § 23 of Art. 1 of the Constitution of the State of Indiana and the 14th Amendment to the Constitution of the United States as claimed by the appellees or whether it violates any of said Constitutional provisions.
Article 1 of Part 4 of the Indiana Insurance Law of 1935 has to do with insurance agents other than life insurance agents and restricts the selling of fire and casualty insurance in Indiana to agents selling 'on a commission basis only.' Section 209(a) which provides said restriction is in words and figures as follows, to wit:
'Unless a different meaning appears from the context the word 'agent,' as used in this article, shall mean an individual, a copartnership, or a corporation authorized by its charter or by law to do an insurance agency business, resident in this state, and lawfully authorized in writing by an insurance company to transact business as its representative, on a commission basis only.'
This action was brought on behalf of the plaintiffs and all others similarly situated. One of the plaintiffs was an agent of the company coming under Art. 1 of Part 4 and was employed not on a commission basis only but was paid a salary by his employer. The other plaintiff was an insurance company coming under the provisions of Art. 1 and employed agents on a salary basis. The facts set out in the consolidated complaints are sufficient to show tat each plaintiff is directly and peculiarly affected by the statute complained of. The trial court found for the plaintiffs, and all others similarly situated and declared § 209(a) invalid and enjoined the defendants other than the Indiana Association of Insurance Agents from limiting the issuance of licenses under Art. 1, Part 4 to agents authorized to transact business on a commission basis only and from making any distinctions for licensing purposes under said article between agents employed on a commission basis and agents employed on a salary or other basis.
Appellants in their motion for a new trial have assigned as errors of law at the trial, the admission and exclusion of certain evidence bearing on the constitutionality of the involved statute. As a further ground for new trial they assign that the decision is not supported by sufficient evidence and as the sole reason therefor, argue that all the evidence conclusively shows that the statute is constitutional.
Whether or not extrinsic evidence can be considered on the question of the constitutionality of a statute is a question upon which the authorities are in hopeless disagreement. Aside from the case of Weisenberger v. State, 1930, 202 Ind. 424, 175 N.E. 238, which was not exhaustively reasoned on this point, this court has steadfastly held to the general rule that in determining the constitutionality of a statute involving the exercise of police power the question is one of law, and extrinsic evidence will not be received on the constitutionality of such statute. The only extrinsic facts which will be considered are those of which the court will take judicial notice. This principle is illustrated in the case of Pittsburgh, C. C. & St. L. R. Co. v. Hartford City, 1907, 170 Ind. 674, 82 N.E. 787, 85 N.E. 362, 20 L.R.A., N.S., 461; there the appellant insisted that it was entitled to form issues of fact regarding the necessity of an ordinance which required it to keep and maintain electric lights at a street crossing in Hartford City and as to whether the exercise of this power was fair, honest and proper. In answer to this contention the court on pages 683 and 685 of 170 Ind., page 363 of 85 N.E., 20 L.R.A.,N.S., 461, made the following statements which we approve:
'Cases might be conceived of wherein a question of fact might be raised as a means of arresting a legislative act, as, for instance, an inquiry might be made whether a law regulating the charges of a public service corporation amounted to a taking of property in the particular instance; but we regard it as a general rule that the determination, by the legislative tribunal, of open or debatable questions concerning what is expedient, is not subject to review on questions of fact, provided that the question is one within the competency of the legislative tribunal to determine.'
And again on page 685 of 170 Ind., on page 363 of 85 N.E., 20 L.R.A., N.S., 461:
'In reviewing the act of a legislative body, involving an exercise of the police power, all reasonable assumptions must be indulged in its favor, and in determining upon its validity the court will treat the question as one of law, resort being had to extrinsic considerations only to the extent that the facts are, or may become, a matter of judicial knowledge.'
We approve of the above quotations in regard to a question of fact being raised as a means of arresting a legislative act. All that means is the application of a statute to a particular situation. In such a case the statute might be found unconstitutional as applied to the particular situation though otherwise left in full force and effect; we have no such situation in the case before us. See also on the right to introduce evidence in a case of this kind Hovey, Governor, et al. v. Foster, 1888, 118 Ind. 502, 21 N.E. 39; State v. Barrett, 1909, 172 Ind. 169, 87 N.E. 7; Pittsburgh, etc., R. Co. v. State, 1912, 178 Ind. 498, 99 N.E. 801; Pittsburgh etc., R. Co. v. State, 1913, 180 Ind. 245, 102 N.E. 25, L.R.A.1915D, 458; Vandalia R. Co. v. Stilwell, 1914, 181 Ind. 267, 104 N.E. 289, Ann.Cas.1916D, 258. For a comprehensive note on this subject see 82 L.Ed. 1244. This note specifically excludes public utility cases. See also 38 Harvard Law Review 6.
Since evidence was not properly received for the purpose of determining the constitutionality of the involved statute, we conclude that no question is raised by either of the above mentioned grounds in said motion for a new trial.
Appellees rely upon Art. 1, § 1, of our Constitution which guarantees to them the 'unalienable' rights to 'life, liberty and the pursuit of happiness.' This legislation must be sustained if at all as a proper exercise of police power for the promotion of peace, safety, health or public welfare otherwise it runs afoul of said Art. 1, § 1. Evidently the legislature intended it for the promotion of public welfare but the legislature is not the sole judge of what constitutes a proper exercise of police power.
In speaking of police power it has been well said in the case of Weisenberger v. State, supra, 202 Ind. at page 429, 175 N.E. at page 240:
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