Simrall v. City of Covington

• Citation: 90 Ky. 444,14 S.W. 369
• Parties: SIMRALL et al. v. CITY OF COVINGTON.
• Decision Date: 30 September 1890
• Court: Court of Appeals of Kentucky

14 S.W. 369

90 Ky. 444

SIMRALL et al. v. CITY OF COVINGTON.

Court of Appeals of Kentucky.

September 30, 1890

Appeal from circuit court, Kenton county.

"To be officially reported."

Tisdale & Gray, for appellants.

W. A Byrne, for appellee.

HOLT C.J.

This appeal questions the validity of an ordinance of the city of Covington entitled "An ordinance to impose a license tax upon certain insurance agents and solicitors," and which provides: "Be it ordained by the city council of Covington that no person, unless he shall have procured a license therefor, shall transact any business as agent or solicitor for any insurance company not located within the city of Covington, Kentucky; and such agent or solicitor shall procure a separate license for each insurance company for which he shall transact said business: provided, that any resident of said city who shall have procured a license to transact business for any such company may employ as many solicitors as he may desire to solicit and procure business for him for said company: and provided, further, that, when said business shall be conducted by several persons in partnership, a license to such persons in the name of the firm shall authorize each member of the firm to transact the business of the partnership, but the name of each member of the firm shall be specified in the license." Other sections provide as to the license fees, and for the prosecution and punishment, by way of fine, of violators of the ordinance. The only provision in the city charter authorizing any ordinance upon the subject is: "The council shall have the power to license and tax all exchange loan, and brokers' offices, agencies of insurance offices, * * * in said city," etc. The appellants, A. G Simrall & Co., residents of the city of Covington, are insurance agents. They represent in said city the Fire Insurance Association of Philadelphia, Pa.; and, judgment for a fine having been rendered against them as individuals for failing to take out license as the agents of the association they are defending against it, upon the ground that the ordinance is invalid. The lower court held otherwise, and they have appealed.

It is contended, first, that the city charter does not authorize the levy of a license tax against an insurance agent for each company that he may represent, but only against his business or agency, and that, when he pays the one license fee, he may represent as many companies as see fit to employ him. In our opinion, however, a fair and reasonable construction of the language, "to license and tax all * * * agencies of insurance offices," gives the power to compel each agent to pay the tax as to each company represented by him. It is quite comprehensive in terms; and, unless this construction be the true one, an agent representing a dozen companies only pays as much as he who is the agent of but one, and this, too, although it is probable the former does twelve times as much business as the latter, or at least much more. It cannot well be presumed that the legislature intended such inequality, and a construction is not required which is likely to work out such a result.

It is next urged that the charter provision does not authorize the passage of such an ordinance, and that it is invalid, because it is unequal, unjust, and partial. Counsel for the city refer to decisions of this court holding that the legislature may impose upon a foreign corporation, proposing to do business in this state, terms and conditions as to the exercise of its powers. Com. v. Milton, 12 B. Mon. 212; Insurance Co. v. Com., 5 Bush, 68. Undoubtedly this is the declared rule in this state. The extent of this power need not be considered. Certainly it reaches so far that the legislature may provide for the safety of our people in dealing with the corporation. The rule is founded upon the fact that the exercise of the corporate powers here rests alone upon comity. If the act of incorporation had of itself extraterritorial force, confusion and conflict between the two powers would constantly ensue. We fail to see, however, that this rule has any bearing upon this case. The ordinance affects the individual. He is required to pay the tax and obtain the license. Its penalty for a failure is upon him. Indirectly the interest of the insurance companies may be involved; but the ordinance relates directly to and deals with the individual person, and in this light the question is to be considered. The person who represents a Covington insurance company requires no license, while the representative or solicitor of any other company must obtain a license as to each company he represents. If the representative be a resident of the city, he may employ as many as he may desire to solicit for his company. Thus the ordinance discriminates in two ways. As to the last, however, the appellants are not in an attitude to complain, because they are residents of the city. They are taxed, however, for the privilege of earning a livelihood, while their neighbor, who earns his in the same way, goes untaxed, the only difference being that one works for a city company, while the other represents one located either in or out of the state, but outside of the city.

A doubt as to the constitutionality of a legislative act...