Hassler v. Engberg

• Decision Date: 06 April 1951
• Docket Number: No. 35328,35328
• Citation: 233 Minn. 487,48 N.W.2d 343
• Parties: HASSLER v. ENGBERG et al.
• Court: Minnesota Supreme Court

Page 343

48 N.W.2d 343

233 Minn. 487

HASSLER v. ENGBERG et al.

No. 35328.

Supreme Court of Minnesota.

April 6, 1951.

Syllabus by the Court.

1. Proceedings for a declaratory judgment must be based on an actual controversy. The controversy must be justiciable in the sense that it involves definite and concrete assertions of right and the contest thereof touching the legal relations of parties having adverse interests in the matter with respect to which the declaration is sought, and must admit of specific relief by a decree or judgment of a specific character as distinguished from an opinion advising what the law would be upon a hypothetical state of facts. Held that a justiciable controversy exists under the facts and circumstances here.

2. In construing the constitutionality of a legislative act, the intent of the legislature must be ascertained from the language of the entire act read in the light of the object evidently in view. Every presumption is in favor of the constitutionality of the act, and the court should not declare it unconstitutional unless it is satisfied, after careful consideration, that it conflicts with some provision of the state or federal constitutions. If the act is reasonably susceptible of two different constructions, one of which will render it constitutional and the other unconstitutional, the former construction must be adopted. It is possible under our holdings that the same tax can be maintained as a property tax against one taxpayer, as a privilege tax against another, and as a combination property and privilege tax against a third person. Taxes are often imposed on a group or class without regard to responsibility for the creation or relief of the conditions to be remedied. The provisions of legislation earmarking funds collected are not important in determining whether or not the classification of the legislative act challenged is discriminatory. It is inherent in the exercise of the power to tax that a legislature is free to select the subjects of taxation and to grant exemptions. Neither due process nor equal protection imposes any rigid rule of equality of taxation upon a state. A legislature, in the enactment of laws, has a wide latitude within the limits of the constitution. In the nature of the proceedings, it cannot record a complete catalogue of the considerations which moved its members to enact laws. In the absence of such a record, courts cannot assume that its actions were capricious or that, with its informed acquaintance with local conditions to which the legislation is to be applied, it was not aware of facts which afforded a reasonable basis for its action. The legislature has a wide discretion in classifying property for the purpose of taxation, provided its classifications are based upon differences which furnish a reasonable ground for the resulting distinctions between the several classes.

3. A law, to be general, need not operate alike upon all the inhabitants of the state, or all the cities, or all the villages in the state. It is general when it operates alike upon all the inhabitants, or all the cities, or all the villages, or other subjects of a class of such subjects of legislation. It may be necessary, for the purposes of legislation, for the legislature to make such classifications. The only practical limitation to this power is that the classification shall be based upon some reasons suggested by necessity or by some difference in the situation and circumstances of the subjects classified suggesting the necessity of different legislation with respect to them. It shall not be merely arbitrary, with no apparent reason except a desire to evade, under the forms of a general law, the constitutional inhibition of special legislation. Under the facts and circumstances here, it appears that there were clear reasons which justified the legislature in treating cities of the first class differently from other cities with respect to firemen's pension and relief, and that the act here challenged is not unconstitutional on the ground of being special legislation.

4. While the legislature cannot delegate legislative power, it may delegate legislative functions which are merely administrative or executive. It may clothe officials, commissioners, or boards with administrative powers. The legislature has a large discretion in determining the means through which its laws shall be administered. The legislature may delegate to a board or commission authority or discretion to be exercised in carrying out the purposes of a statute. The tendency is to hold an act not to be a delegation of legislative power in violation of the constitution when the legislature has defined the general policy of the act as far as is reasonably possible and has left to the administrative bodies the adaptation of such policy to the peculiar varying conditions.

J. A. A. Burnquist, Atty. Gen., Lowell J. Grady, Asst. Atty. Gen., for appellant Armand W. Harris, as Commissioner of Insurance.

John T. O'Donnell, Minneapolis, for intervener Minneapolis Firemen's Relief Assn.

Lewis L. Anderson, St. Paul, for intervener St. Paul Fire Department Relief Assn.

Gillette, Nye, Montague, Sullivan & Atmore, Duluth, for intervener Duluth Firemen's Relief Assn.

Charles S. Kidder, St. Paul, for respondent Hassler.

Snyder, Gale, Hoke, Richards & Janes, Minneapolis, for LeRoy D. Engberg and Travelers Fire Ins. Co. of Hartford, Connecticut.

John F. Bonner, City Atty., Raymond H. Hegna, Asst. City Atty., Minneapolis, for City of Minneapolis, amici curiae.

William M. Serbine, Corp. Counsel, Marshall F. Hurley, Asst. Corp. Counsel, St. Paul, for City of Saint Paul, amici curiae.

Harry E. Weinberg, City Atty., Duluth, for City of Duluth, amicus curiae.

FRANK T. GALLAGHER, Justice.

Appeal from an order of the district court denying a new trial.

Plaintiff is and has been the owner of a home in the city of St. Paul, with structures thereon consisting of a house and garage, and he also owned household goods located in his home. Defendant Engberg, referred to hereinafter as the agent, is a St. Paul agent for defendant Travelers Fire Insurance Company of Hartford, Connecticut, a foreign company admitted to do business in Minnesota, referred to hereinafter as Travelers. Plaintiff previously had fire insurance in Travelers on his property amounting to $4,000 on the buildings and $1,000 on the contents. In June 1948, he applied to the agent for additional fire insurance coverage of $3,000 on the buildings and $500 on the personal property, and shortly thereafter the agent delivered to him a standard form of fire insurance policy for the additional insurance issued by Travelers. Plaintiff promptly paid the regular premium of $21.50 on the additional coverage, but refused to pay a surcharge of two percent of the premium demanded by the agent and Travelers pursuant to an order of defendant Armand W. Harris as state commissioner of insurance, referred to hereinafter as the commissioner, which order was issued pursuant to Ex. Sess. L. 1933--1934, c. 53, § 1, as amended by L. 1937, c. 361 (M.S.A. § 69.54). Section 69.54 reads: 'When the balance in the special fund of any firemen's relief association in any city of the first class is less than $600,000, as determined by the association's board of trustees, which fact shall be duly certified to by the public examiner, the board of trustees may thereupon file its duly verified petition for relief, accompanied by such certificate, with the commissioner. The commissioner shall thereupon order and direct a surcharge to be collected of two per cent of the fire, lightning, and sprinkler leakage gross premiums, less return premiums, on all direct business received by any foreign or domestic fire insurance company on property in this city of the first class, or by its agents for it, in cash or otherwise, until the balance in the special fund of the relief association amounts to $600,000 and for a period of 15 days thereafter. As soon as the balance in this special fund amounts to $600,000 the board of trustees of the relief association shall certify that fact to the commissioner, who shall forthwith issue his order directing that the collection of the surcharge be discontinued after the expiration of the 15-day period and forthwith mail a copy of this order to each insurance company affected thereby. This surcharge shall be due and payable from these companies to the state treasurer, in semiannual instalments, on June 30th and December 31st of each calendar year, and if not paid within 30 days after these dates, a penalty of ten per cent shall accrue thereon and thereafter this sum and penalty shall draw interest at the rate of one per cent per month until paid.' (Italics supplied.)

Upon the refusal of plaintiff to pay the two percent surcharge, the agent and Travelers threatened to cancel plaintiff's policy unless he paid the surcharge by September 15, 1948, on the claim that the order of the commissioner required them to collect the surcharge or to cancel the policy. Plaintiff then made a demand on the commissioner to set aside the order for the collection of the surcharge, contending that the commissioner's order and § 69.54 are void. The commissioner refused to set aside his order. He contends that § 69.54 and his order thereunder are valid and lawful. Plaintiff thereupon brought this action against the agent, Travelers, the commissioner, and J. A. A. Burnquist as attorney general. The action was later dismissed against the attorney general.

The relief prayed for by plaintiff in his complaint was:

(1) A judgment declaring (a) that Ex. Sess. L. 1933--1934, c. 53, as amended, is null and void and of no force or effect; and (b) that the order of the commissioner ordering and directing the collection of the surcharge is unauthorized, null, and void and does not constitute authority to the agent and Travelers to collect the surcharge from plaintiff.

(2) A...