State ex rel. Read v. Midwest Mut. Burial Ass'n, Inc., Case Number: 26130

• Decision Date: 03 March 1936
• Docket Number: Case Number: 26130
• Citation: 56 P.2d 124,1936 OK 220,176 Okla. 468
• Parties: STATE ex rel. READ, Ins. Com'r. v. MIDWEST MUTUAL BURIAL ASS'N, Inc.
• Court: Oklahoma Supreme Court

1936 OK 220

56 P.2d 124

176 Okla. 468

STATE ex rel. READ, Ins. Com'r. v. MIDWEST MUTUAL BURIAL ASS'N, Inc.

Case Number: 26130

Supreme Court of Oklahoma

Decided: March 3, 1936

Syllabus

¶0 1. STATUTES - CONSTRUCTION - Doubts Resolved in Favor of Constitutionality.

Acts of the Legislature will not be held invalid unless they are clearly in conflict with some constitutional provision, and all doubt, where there is doubt, will be resolved in favor of the constitutionality of the act.

2. INSURANCE - Statute Authorizing Burial Associations Held not Vialative Constitutional Provision.

The legislation contained in chapter 33, S. L. 1929 (sec. 10453, O. S. 1931), is not prohibited by section 3, art. 19, of the Constitution.

3. STATUTES - Sufficiency of Titles Under Constitutional Provision.

Under section 57 of article 5 of the Constitution, with said exceptions therein specifically enumerated, the subject of every act of the Legislature must be clearly expressed in its title. However, as a practical application of the principle, a statute will not be held unconstitutional on the ground that the subject or object is not expressed in the title unless the title is clearly insufficient.

4. SAME - Title to Act Authorizing Burial Associations Held Sufficient.

The title to chapter 33, S. L. 1929 (sec. 10453, O. S. 1931), is sufficient to comply with section 57, art. 5, of the Constitution.

5. STATUTES - CONSTRUCTION - Intention of Legislature.

The fundamental rule of construction of a legislative enactment is to ascertain and give effect to the intention of the Legislature as expressed in the statute.

6. INSURANCE - Act Authorizing Burial Associations Held not Violative of Constitutional Provision Establishing Insurance Department.

Chapter 33, S. L. 1929 (sec. 10453, O. S. 1931), is construed to refer to the statutory insurance laws of the state, and does not purport to authorize an exemption from any provision of the Constitution, and the act as adopted is not in violation of section 22, art. 5 of the Constitution.

Appeal from District Court, Oklahoma County; W.G. Long, Assigned Judge.

Action for injunction by the State ex rel. Jess G. Read, Insurance Commissioner, against the Midwest Mutual Burial Association. From a judgment for defendant, the plaintiff appeals. Affirmed.

Mac Q. Williamson, Atty. Gen., Fred Hansen, Asst. Atty. Gen., Barefoot & Carmichael, and Cook & Bingaman, for plaintiff in error.

MacDonald & MacDonald, E.F. Lester, and Claud Briggs, for defendant in error.

WELCH, J.

¶1 This suit, prosecuted in the name of the State Insurance Commissioner, seeks to enjoin the continued operation of the defendant, Midwest Mutual Burial Association, Inc.

¶2 The defendant a corporation organized and existing under and by virtue of the laws of the state of Oklahoma, and issues to its members a certificate evidencing the right to burial benefits in compliance with chapter 33, S. L. 1929 (sec. 10453, O. S. 1931).

¶3 It is plaintiff's theory that defendant is conducting "an insurance business" and that the defendant "has wholly failed and refused to comply with the laws of Oklahoma relating to insurance or to any part thereof," and should therefore be enjoined from continuing to operate. Plaintiff cites Oklahoma Southwestern Burial Ass'n v. State ex rel. Read, Ins. Com'r, 135 Okla. 151, 274 P. 642, decided early in 1929, as supporting its contention that defendant's transactions, amount to "insurance business."

¶4 For some time prior to that decision it was a mooted question whether burial associations, operating as plaintiff, were or were not thereby engaging in the "insurance business." That decision analyzed the business of burial associations and held that such transactions do constitute a sort or kind of insurance business; it being there reasoned that the business of such burial associations were analogous to life insurance.

¶5 When that case was decided, the Legislature was in session and immediately enacted chapter 33, S. L. 1929 (sec. 10453, O. S. 1931), providing as follows:

"That all associations now operating or that may be hereafter organized which are nonprofit sharing in their operations and pay no fees or salaries to any of their officers and have no capital stock and pay not to exceed one hundred dollars ($100), as a burial fund to the beneficiary or beneficiaries named in the certificate issued by them or only furnish a burial outfit, and burial, the total amount of which shall not exceed one hundred dollars in value to those entitled thereto under the said certificate, and which associations do not make an assessment against their members until and unless the fund on hand derived from membership fees, or assessments, in the treasury of said association would only pay for the burial of one adult entitled to a burial by said association, shall be exempt from the operations and the effect of the insurance laws of the state of Oklahoma, and shall not be required to comply with the insurance laws of the said state; provided, that money collected by said associations shall be held as a trust fund for the benefit of the beneficiaries and that at least seventy-five per cent. of the membership fees collected from the members shall be accounted for and paid into this fund and that all of any future assessments of members shall be paid into this fund.

"That the treasurer of said association be required to file with the court clerk of the county in which the association is organized, a surety bond running in the name of the state of Oklahoma; said bond to be approved by the court clerk of such county, and to be conditioned that the funds of the association will be held and applied as a trust fund to be paid out only in accordance with the purposes of the association, which bond shall at all times be equal to the amount of the trust fund on hand in such association, and In no event to be less than one thousand dollars ($1,000)."

¶6 Prior to that time the Legislature had not dealt in any manner with this exact class of insurance business, but had enacted laws with reference to many specified classes of insurance, and several kinds of life insurance. (Sections 10454 to 10790, O. S. 1931.) It is insisted that the defendant should not be permitted to operate without complying with those former enactments.

¶7 These former enactments contain requirements that life insurance companies possess a paid-up capital of $100,000 or guaranty capital or surplus before being permitted to operate; that the reserve shall be invested as provided by the laws of the state; that in the case of mutual companies the holder of guaranty capital stock shall elect directors, and may receive dividends in the manner stated, and such stock shall be retired in the manner stated (sec. 10500, O. S. 1931). There are provisions in detail for the commissioner to make calculations of outstanding policies and liabilities of companies, valuations, dividends, and funds or assets (secs. 10501 and 10502, O. S 1931). And provisions as to premiums (10504), and as to expense of management (10506), as to salaries of corporation officers (10508), as to contents of policies (10509, 10511, 10519, 10522), to necessity of medical examination. (10520), as to loans on policies (10524), as to approval of forms of policies (10525).

¶8 It must have been the view of the Legislature that these and other general insurance laws of the state should not all be applied to burial associations operating as the defendant's business is conducted. This is clearly evidenced by the enactment of 1929, above quoted in full. But the plaintiff argues that this last enactment is unconstitutional upon three grounds:

¶9 First. That it violates section 3, article 19. That section of the Constitution is as follows:

"The revenue and tax provisions of this Constitution shall not include, but the state shall provide for the following classes of insurance organizations not conducted for profit, and insuring only their own members:

"First, farm companies insuring farm property and products thereon; second, trades insurance companies, insuring the property and interests of one line of business; third, fraternal life, health, and accident insurance in fraternal and civic orders, and in all of which the interest of the members of each respectively shall be uniform and mutual."

¶10 It seems to be plaintiff's theory that this section forbids provision for any other character of insurance organizations not conducted for profit and insuring only their own members, except the designated farm companies, trade companies and fraternals, but we do not so read the constitutional provision. The fact that the Constitution expressly demands that the named classes of insurance organizations shall be provided for, does not in tiny sense operate to prohibit provision for other classes of insurance organizations. That seems clear from a deliberate reading of the constitutional provisions, and no authority is cited to the contrary. Section 36 of article 5 of the Constitution contains the provision that:

"* * * Any specific grant of authority in this Constitution, upon any subject whatsoever, shall not work a restriction, limitation, or exclusion of such authority upon the same or any other subject or subjects whatsoever."

¶11 The plaintiff cities Modern Order of Praetorians v. Bloom, 69 Okla. 219, 171 P. 917. That case holds that there are certain restrictions upon a fraternal insurance organization as to its right to make further classification, but there is nothing in that opinion touching the question of the constitutional authority of the Legislature to enact legislation as to other or separate classes of insurance business.

¶12 Second. It is contended that said chapter 33 was enacted in violation of section 57, article 5, of our Constitution, ass to title to the act.

¶13 The title of said chapter 33 is as follows:

"An act providing that nonprofit sharing associations that have no capital stock and pay no fees or

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