State Ex Rel. Chaves v. Sargent

• Decision Date: 24 February 1914
• Court: New Mexico Supreme Court
• Parties: STATE EX REL. CHAVESv.SARGENT, STATE AUDITOR.

18 N.M. 627

139 P. 144

STATE EX REL. CHAVES

v.SARGENT, STATE AUDITOR.

Supreme Court of New Mexico.

Feb. 24, 1914.

Syllabus by the Court.

The office of Superintendent of Insurance, created by chapter 5, Laws of 1905, which was amended by chapter 48, Laws 1909, was not abolished by section 6 of article 11 of the Constitution. The latter is not self-executing except as to those powers specifically conferred upon the Corporation Commission therein. It requires legislation to carry the section into effect in regard to some of the powers therein conferred on the Corporation Commission, among which are many of the powers now exercised by the Superintendent of Insurance. The Superintendent of Insurance was continued in office by section 9 of article 22 of the Constitution, until superseded by the Corporation Commission, and he has not been fully so superseded, by reason of the lack of legislation to carry the constitutional provision into effect. He may still exercise such functions of his office as were not specifically transferred to the Corporation Commission.

State ex rel. Fornoff v. Sargent, 136 Pac. 602, and State ex rel. Delgado v. Sargent, 134 Pac. 218, approved. Sections 4 and 11 of chapter 127, Laws 1909, and chapter 40, Laws 1909, interpreted and construed, and held to repeal, by necessary implication, section 12 of chapter 5, Laws 1905, in so far as the same authorizes the payment of the salary of the Superintendent of Insurance out of the insurance fund upon the warrant of the Superintendent of Insurance approved by the State Auditor. The Superintendent of Insurance, after the act of 1909, was to be paid his salary out of the general salary fund of the territory, and was so paid until December 1, 1912, when the appropriation therefor ceased.

Appeal from District Court, Santa Fé County; before Justice E. C. Abbott.

Mandamus by the State, on the relation of Jacob Chaves, against William G. Sargent to compel approval of a warrant drawn on insurance fund. From judgment for relator, respondent appeals. Reversed and remanded, with directions to dismiss the writ of mandamus.

Laws 1905, c. 5, § 12, in so far as it authorizes payment of the salary of the superintendent of insurance out of the insurance fund upon warrant approved by the state auditor, is repealed by implication by Laws 1909, c. 127, §§ 4, 11, and chapter 40; and the superintendent could not, by mandamus, compel the state auditor to approve a salary warrant drawn by him on the insurance fund for salary from December 1, 1912, to July 1, 1913, though no appropriation had been made for such salary.

Ira L. Grimshaw, Asst. Atty. Gen., for appellant.

Renehan & Wright, of Santa Fé, for appellee.

PARKER, J.

This is a proceeding by mandamus by the relator, as Superintendent of Insurance, against the respondent, as State Auditor, to compel the approval of a warrant drawn by him on the insurance fund for the sum of $1,400 in favor of relator, as Superintendent of Insurance, for salary from the 1st day of December, 1912, to the 1st day of July, 1913. The respondent defended upon the ground that there was no appropriation of the Legislature for any salary of the Superintendent of Insurance after December 1, 1912, and that, therefore, he had no authority to pay the salary. The district court found against the respondent, and he appeals to this court.

[1] The question is one of statutory construction. The insurance department was organized by chapter 5 of the Laws of 1905. Section 4 of that act is as follows: “Such Superintendent of Insurance shall receive a salary of two thousand four hundred dollars per annum, which shall be paid out of the insurance fund hereinafter provided for.”

Section 12 of that act creates an insurance fund out of which all the salaries and expenses of the department are to be paid, upon the warrant of the Superintendent of Insurance, approved by the State Auditor. This act was amended by chapter 48 of the Laws of 1909. Section 11 of chapter 5 of the Laws of 1905, as amended by section 2 of chapter 48 of the Laws of 1909, requires “all insurance companies, partnerships or associations engaged in the transaction of the business of insurance in this territory shall annually on or before the 1st day of February in each year, pay to the Superintendent of Insurance two per centum on the gross amount of premiums received, less returned premiums within this territory, during the year ending the previous 31st day of Dec.”

Section 16 of the act of 1905, as amended by section 4 of the act of 1909, provides that: “No insurance company organized by any other authority than the territory of New Mexico shall, directly or indirectly, issue policies, take risks or transact business in the territory until it shall have first appointed, in writing, the Superintendent of Insurance to be the true and lawful attorney of such company in and for this territory, upon whom all lawful processes in any action or proceedings against the company may be served with the same effect as if the company existed in this territory. Said power of attorney shall stipulate and agree upon the part of the company, that any lawful process against the company which (when) served on said attorney shall be of legal force and validity as if served upon the company and that the authority shall continue in force so long as any liability remains outstanding against the company in this territory. A certificate of such appointment, duly certified and authenticated shall be filed in the office of the Superintendent of Insurance, and copy certified by him shall be deemed sufficient evidence; service upon such attorney shall be deemed sufficient service upon the principal.”

Section 6 of the act of 1909 provides, “That in this act, unless the context otherwise requires, ‘company’ or ‘insurance company’ shall include all corporations, associations, partnerships or individuals engaged as principals in the insurance business, excepting fraternal and benevolent orders and societies.”

Section 25 of the act of 1905, as amended by section 41, Laws 1909, requires all fraternal, benevolent, or religious societies or associations, whether operating under the lodge system or otherwise, to designate the Superintendent of Insurance as its attorney upon whom processes may be served, and requires all such societies to make annual reports to the Superintendent of Insurance, and to pay an annual fee of $5, but otherwise they are expressly exempted from all of the provisions of the two acts. The two acts contain quite a comprehensive system of inspection and regulation, both of foreign and domestic insurance companies, with power in the Superintendent of Insurance to revoke the authority of any company to do business in the state.

This was the state of the law at the adoption of the Constitution. By that instrument it was provided in section 6, of article 11, as follows: “Subject to the provisions of this Constitution, and of such requirements, rules and regulations as may be prescribed by law, the State Corporation Commission shall be the department through which shall be issued all charters for domestic corporations and amendments or extensions thereof, and all licenses to foreign corporations to do business in this state; and through which shall be carried out all the provisions of this Constitution relating to corporations and the laws made in pursuance thereof. The Commission shall prescribe the form of all reports which may be required of corporations by this Constitution or by law, and shall collect, receive and preserve such reports, and annually tabulate and publish them. All fees required by law to be paid for the filing of articles of incorporation, reports and other documents, shall be collected by the Commission and paid into the state treasury. All charters, papers and documents relating to corporations on file in the office of the Secretary of the territory, the Commissioner of Insurance and all other territorial offices, shall be transferred to the office of the Commission.” It appears from this section of the Constitution that an entire transfer of all of the powers of the supervision and control of insurance corporations from the Superintendent of Insurance to the Corporation Commission was contemplated. The Superintendent of Insurance is required to transfer to the Corporation Commission all charters, papers, and documents relating to corporations on file in his office. The Corporation Commission is declared to be the agency through which all of the provisions of the Constitution, or laws made in pursuance thereof, should be carried out.

Section 4, article 22, of the Constitution, brought forward such laws of the territory as were not inconsistent with the Constitution. There is nothing inconsistent between insurance laws of the territory and the state Constitution in regard to the regulation of insurance companies, except that the powers of regulation shall be exercised by the Corporation Commission instead of the Superintendent of Insurance. But this provision of the Constitution is not self-executing. It announces a general principle or rule which requires legislation to make it effective. This is at once apparent. Had the section provided that the chairman of the Corporation Commission or any member thereof, should have and exercise, until otherwise provided by law, all the powers exercised by the Superintendent of Insurance under the territorial laws, and that each insurance company should appoint said chairman or member its attorney in fact to receive service of process as now required in regard to the Superintendent of Insurance, then the section would be self-executing and no legislation would be required to carry it into effect. Then the Corporation Commission might investigate insurance companies and might cancel permits or licenses to do business, and might receive service of process for insurance companies, and otherwise do and perform all of the...