Lovejoy v. City of Portland

• Decision Date: 09 March 1920
• Citation: 188 P. 207,95 Or. 459
• Parties: LOVEJOY v. CITY OF PORTLAND.
• Court: Oregon Supreme Court

188 P. 207

95 Or. 459

LOVEJOY v. CITY OF PORTLAND.

Supreme Court of Oregon

March 9, 1920

In Banc.

Appeal from Circuit Court, Multnomah County; J. P. Kavanaugh, Judge.

Suit by George A. Lovejoy to enjoin the City of Portland from compelling him to pay a license fee for the right to act as an insurance agent. Decree for plaintiff, and defendant appeals. Affirmed.

This is a suit brought by George A. Lovejoy to enjoin the city of Portland from compelling him to pay a license fee for the right to act as an insurance agent in Portland. The city demurred to the complaint. The court overruled the demurrer and upon the refusal of the city to plead further a decree was entered for the plaintiff, and the city appealed. The demurrer assumes that the allegations of the complaint are true.

The controversy arises out of a conflict between a state statute and a city ordinance, and on that account it will be necessary to direct attention first to the state statute and then to the city legislation. In 1917 the legislative assembly enacted a measure entitled "An act to provide for the regulation and supervision of insurance in the state of Oregon, other than state industrial accident insurance and repealing" a considerable number of sections of the Code as well as certain laws adopted in 1911 and 1915. This enactment is otherwise known as chapter 203, Laws 1917, and it thoroughly covers the field of insurance regulation and supervision. It regulates the conditions under which business may be commenced and the manner in which it may be conducted. It regulates the organization of the insurance department and it prescribes the jurisdiction and defines the powers of the state insurance commissioner. It deals with the mode of organizing local companies, the admission of foreign companies, the nature of the investments of local and foreign companies, and examinations and reports of companies. It contains various provisions to insure the solvency of insurance companies, and it affords means for excluding companies of impaired or doubtful solvency. It prescribes the qualifications of agents and provides for licensing them and for revoking the licenses of agents who violate the law or are otherwise unfit. It specifies the kinds of insurance which various companies may write, and it designates the form and manner in which policies may be written. It contains rules designed to secure equal rights and opportunities between insurance companies, to prevent discrimination in rates, and to compel insurers to treat all insured alike. It furnishes safeguards against excessive or unjust premium rates, and it contains prohibitions against combinations between companies or agents for any purpose detrimental to the public welfare. In a word, the Legislature has attempted to place the insurance business completely under the supervision of the state, and to accomplish that purpose the state has adopted an elaborate and comprehensive statute covering the whole field of insurance regulation and supervision.

This statute imposes a tax upon the business done by a company and it prescribes license fees for companies and agents. Section 3d, subd. 2, requires a foreign company to pay to the insurance commissioner an annual tax of 2 1/2 per cent. of the net premiums. Subdivision 5 of the same section prescribes fees to be paid by companies, including an annual license fee of $100 for life insurance companies and a license fee of $2 for each of its agents. Section 3e imposes reciprocal obligations upon the companies of other states in which the taxes, license fees, obligations, and prohibitions in the aggregate exceed those imposed by this state. Section 3f provides that the fees, licenses, taxes, fines, and penalties paid to the insurance commissioner shall be turned over to the state treasurer and so far as necessary shall be available from the general fund for the payment of the expenses of the insurance department.

In section 3d, subd. 6, it is said:

"The taxes, fees and charges as herein and elsewhere provided for in the 'Insurance Law' shall be in lieu of all other taxes, licenses, fees and charges of every kind and character by the state or any city, town, county or other political subdivision thereof, except taxes on real and personal property located in this state, which may be required of companies or their agents for the privilege of transacting insurance business."

On June 6, 1917, the council of Portland passed an ordinance numbered 32925 and entitled "An ordinance on the regulation of private business, including licenses, and declaring an emergency." This ordinance makes it unlawful for any person to engage in any business, profession, trade, or calling, specified in the ordinance, unless such person obtains an appropriate license from the city. Insurance agents are among those included in the ordinance, for it is provided that every agent of any insurance, bonding, surety, indemnity, or guaranty company shall pay for each company represented by him, and that any company doing business directly shall pay to the city of Portland a quarterly license of $10 payable January 1st, April 1st, July 1st, and October 1st of each year in advance. The ordinance declares that a violation of any of its provisions shall be punished by a fine or imprisonment or both. Ordinance No. 32925 is, so far as insurance agents are concerned, in substance the same as a prior ordinance which had been adopted before the enactment of chapter 203, Laws 1917, but this prior ordinance was not repealed or modified by the city until Ordinance No. 32925 was adopted.

The city is authorized by its charter to impose licenses and taxes. The charter (section 73, subd. 21) granted by the Legislature in 1903 (Sp. Laws 1903, c. 1) empowered the council to "grant licenses, with the object of raising revenue or of regulation, or both, for any and all lawful acts, things, or purposes, and to fix, by ordinance, the amount to be paid therefor, and to provide for the revoking of the same.

* * *"

When the legal voters of Portland, in the exercise of the power of the initiative, reframed the city charter in 1913, they inserted in the reframed charter the following provision:

"The specific powers granted to the city under sections 73 and 73 1/2 of the charter of 1913 shall continue to be exercised by the council as a part of the general grant made by the charter."

The Guaranty Fund Life Association, hereinafter called the company, is a life insurance corporation organized under the laws of Nebraska, and it has fully complied with the laws of Oregon relating to the admission of foreign insurance companies in this state. This company has been legally licensed and permitted by the state insurance commissioner to transact business here, and it is engaged in transacting life insurance business throughout this state. The company has paid to the state insurance commissioner all licenses, fees, and taxes required by this state, including the sum of $86.18, which is the portion of the annual license fee required for the privilege of transacting business from May 21, 1917, to April 1, 1918. The plaintiff is authorized by the company "to act as its agent at Portland," and the company has paid to the state insurance commissioner the sum of $2, "being the fee required by the laws of the state of Oregon to be paid for the licensing of this plaintiff as its agent for the period of time from May 21, 1917, to April 1, 1918," and the plaintiff was licensed and authorized by the insurance commissioner to act as an agent of the company at Portland until April 1, 1918.

Notwithstanding the terms of section 3d, subd. 6, of chapter 203, Laws 1917, the city claims that Ordinance No. 32925 was valid and enforceable and demanded that the plaintiff "as agent at Portland" of the company pay to the city the sum of $10 "as a quarterly license fee under the ordinance" for the quarter beginning July 1, 1917; and the city threatened, unless the plaintiff paid the demanded fee, to arrest and fine and imprison him. On July 7, 1917, the plaintiff, for himself and in behalf of about 200 other insurance agents in Portland similarly situated, began this suit for the purpose of enjoining the city from enforcing the ordinance.

of Portland, for appellant.

J. C. Veazie, of Portland (Veazie, McCourt & Veazie and Lionel C. Mackay, all of Portland, on the brief), for respondent.

HARRIS, J. (after stating the facts as above).

Like most of the state Constitutions, our organic law commands that--

"Every act shall embrace but one subject, and matters properly connected therewith, which subject shall be expressed in the title." Article 4, § 20.

The defendant contends that the title of chapter 203, Laws 1917 is not sufficient, within the meaning of article 4, § 20, of the state Constitution, to include and sustain subdivision 6 of section 3d of the act. This section of the Constitution was designed to do away with several abuses, among which was the practice of inserting in one bill two or more unrelated provisions so that those favoring one provision could be compelled, in order to secure its adoption, to combine with those favoring another provision, and by this process of logrolling the adoption of both provisions could be accomplished, when neither, if standing alone, could succeed on its own merits. Another abuse which developed in legislative bodies was the practice of concealing from the members of the Legislature the true nature of the proposed law by giving it a false and misleading title, and to prevent surreptitious legislation in this manner is one of the objects of the Constitution. These and similar abuses inspired the adoption of article 4, § 20. Northern Counties Trust v. Sears, 30 Or. 388, 400, 41 P. 931, 35...