Johnson v. Betts

Decision Date22 March 1920
Docket NumberCivil 1759
Citation21 Ariz. 365,188 P. 271
PartiesIRA J. JOHNSON, Appellant, v. AMOS A. BETTS, F. A. JONES and D. F. JOHNSON, Constituting the Corporation Commission of the State of Arizona, Appellees
CourtArizona Supreme Court

APPEAL from a judgment of the Superior Court of the County of Maricopa. F. H. Lyman, Judge. Reversed and remanded, with directions.

Messrs Bullard & Jacobs, for Appellant.

Mr Wiley E. Jones, Attorney General, and Mr. C. M. Gandy Assistant Attorney General, for Appellees.



On June 6, 1918, there was filed with the Corporation Commission a complaint against appellant, charging him, as the licensed agent of the New York Life Insurance Company, with accepting an application for a policy of insurance in favor of Edwin L. Sexton, solicited and procured by one H. Herwig, the said Herwig not being a licensed or certified agent of the said New York Life Insurance Company, and with compensating or agreeing to compensate the said Herwig for soliciting such application.

The commission served appellant with notice of the charges that had been filed against him. In due course appellant filed his answer to said charges, and on October 12, 1918, a hearing was had before the commission, at which evidence was submitted in support of the charges and in support of appellant's answer. Thereafter, on the thirtieth day of October, 1918, the commission filed its decision exonerating appellant of said charges, and dismissed the complaint.

On or about January 6, 1919, the person who made the original charge filed a motion for a rehearing, which motion, on the twenty-fourth day of January, 1919, was by the commission granted. Thereafter appellant filed this suit against the commission, praying that a writ of prohibition be issued restraining the commission from proceeding with the hearing. A preliminary writ issued, but upon the final trial the relief prayed for was denied and the appellant's complaint dismissed.

The main question presented for our determination is the jurisdiction of the commission to grant the rehearing. It is contended by appellant that the commission exhausted its power to act further on the question involved when it exonerated him from the charges, whereas appellee contends that the statutes and the commission's rules empower the commission to grant the rehearing.

Paragraph 3414, Civil Code, provides for the issuance of licenses to insurance agents to solicit business in this state. Chapter 58, Reg. Session Laws 1915, makes it unlawful for a foreign insurance company to write or accept any insurance policy except through its lawfully appointed and authorized agents, and the company violating this rule may have its certificate to do business suspended. It further provides that --

"When an agent or solicitor of any insurance company doing business in this state accepts an application for insurance from any person not provided with a certificate for a broker or an agent or solicitor as required herein, and in any way compensates or promises to compensate such person for soliciting such application, the commissioner [commission] shall, upon due proof and notice suspend or revoke the certificate of such agent or solicitor."

Chapter 58 is not an independent act, but is an amendment of the insurance law of the state as found in article 1, title 24, Civil Code, and of course must be construed in view of the whole law on that subject. By the Insurance Code, the Corporation Commission is given general supervision of all insurance companies doing business in this state. The commission's duties and powers are therein specifically enumerated, and, among others, it is empowered to supervise and regulate the licensing of agents to solicit insurance, and it may, after notice and proof, suspend or revoke such license. This clearly implies that before a license can be suspended or revoked the agent must be given a hearing by the commission and permitted, if he so chooses, to contest any charge laid against him. In this case such a hearing was had, in which both sides introduced evidence. The Insurance Code does not provide for a rehearing in such cases.

Appellee commission seeks authority to grant a rehearing in paragraphs 2336, 2337 and 2342, Civil Code, being a part of the "Public Service Corporation Act." These provisions, however, have reference to proceedings before the commission affecting public utilities. A casual reading of them is enough to convince one of this. The act of which they are a part treats of public service corporations and their control and supervision by the commission, and the procedure therein provided was not intended to extend to a hearing or proceeding authorized by some other statute or law, to be had or held by the commission. While the language employed in paragraph 2329, Civil Code, being also a part of the "Public Service Corporation Act," is broad enough to cover and include a proceeding like this one we are considering, it clearly was not the legislative intent to have it do so, for the reason that the "Public Service Corporation Act," as originally passed (Act 90, Reg. Session 1st Legislature 1912), did not directly or by implication extend its provisions to proceedings before the commission affecting insurance companies. "All hearings and investigations before the commission or any commissioner," as used in paragraph 2329, must therefore be limited to refer to hearings and investigations before the commission or a commissioner affecting a public service corporation.

It is also contended by appellee Corporation Commission that it had power to prescribe rules and regulations to govern the proceedings in this case, expressly granted by section 6, article 15, of the Constitution, and that, in pursuance thereof, it had promulgated the following rule:


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