State v. Loucks

• Decision Date: 09 September 1924
• Docket Number: 1211
• Parties: STATE EX REL. v. LOUCKS [*]
• Court: Wyoming Supreme Court

228 P. 632

32 Wyo. 26

STATE EX REL. v. LOUCKS ^[*]

No. 1211

Supreme Court of Wyoming

September 9, 1924

Original proceedings in mandamus by the State on relation of Horace R. Coddington against H. A. Loucks, as Insurance Commissioner of the State of Wyoming to compel respondent to vacate his order cancelling relator's license as a life insurance agent. Heard on demurrer to respondent's answer. At a former hearing defendant's demurrer to the petition was overruled; see 30 Wyo. 485, 222 P. 37. The case was submitted on the briefs filed in the former hearing.

Charles L. Rigdon, for plaintiff.

David J. Howell, Attorney General, for defendant.

POTTER Chief Justice. BLUME and KIMBALL, JJ., concur.

OPINION

POTTER, Chief Justice.

This action, brought in this court for a writ of mandamus to compel the respondent, as insurance commissioner of the state, to vacate his order cancelling relator's license as a local life insurance agent, has been now submitted upon a demurrer to defendant's answer. At a former hearing a general demurrer of the defendant to the petition was overruled. See 30 Wyo. 485, 222 P. 37.

The respective contentions were stated in the opinion disposing of that demurrer substantially as follows: For relator, that the statutes do not authorize a revocation for the reason assigned for revoking relator's license, and that, if they do, they are to that extent void because failing to provide for a notice and hearing. And for the defendant, that sections 5235 and 5237, Comp. Stat. 1920, legally confer upon the commissioner ample power for said revocation. But, as then also stated, we deemed it unnecessary to decide the questions raised by those contentions, and the demurer was overruled upon the grounds that the petition sufficiently alleges that the reason given for revoking the license did not in fact exist, and, taking that as admitted by the demurrer, it would follow that the commissioner's action was based upon false information or was unreasonable and arbitrary; the court having held that though the relator's right under his license was not property, it could not be arbitrarily taken from him, and that mandamus was an appropriate remedy for the review of the commissioner's action upon the facts alleged in the petition.

The questions aforesaid not disposed of by that opinion are again presented, and upon the briefs submitted at the former hearing. The answer admits the following allegations of the petition: That the Insurance Company is a corporation organized and existing under the laws of the State of Colorado; that it has complied with the insurance laws of this state, and is duly authorized to transact the business of life insurance in this state. That on January 30, 1923, the insurance commissioner duly granted the relator authority as local agent of said company; said authority being evidenced by an instrument called a license, and in words and figures as set out in the petition; that the defendant, as insurance commissioner, cancelled the said license for the violation of Section 5235, Comp. Stat. 1920. The answer then alleges, as and for a second defense, certain facts which, so far as material to the present issue, may be summarized as follows: That during the month of March, 1923 numerous complaints were made to defendant to the effect that certain agents of said insurance company, and the relator in particular, were violating section 5235, Comp. Stat. 1920, in that he and they were offering stock in the said company as an inducement to purchase life insurance policies in said company. That on April 4 the defendant sent a notice to relator, which is set out in full in said answer, informing him of said complaints, and calling his attention to the statute forbidding such conduct and the penalty for the violation thereof. That the relator replied thereto by a letter dated April 7, wherein the truth of said complaints were denied. That complaints continued to be made to defendant that relator was offering and selling stock of said company as an inducement to purchase life insurance. And that upon then investigating the matter the defendant found that stock in the company had been sold by relator to certain named purchasers of policies in said company; and attached to the answer are affidavits from said alleged purchasers, stating the fact that stock in the company had been offered them as an inducement to the purchase of life insurance in the company. It is then finally alleged that as a result of his said investigations defendant became satisfied and convinced that relator had violated the statute, in the manner stated, both before and after the notice to him of April 4, 1923, and thereupon, on September 25, 1923, the defendant cancelled the license and authority issued for the benefit of the relator "to act as local life insurance agent for said company." The answer is demurred to upon the single and general ground that it is "insufficient in law on its face."

Section 5235, Comp. Stat. 1920, alleged to have been violated and for which the relator's license was cancelled, reads as follows:

"No life insurance company doing business in this state, shall make or permit any distinction or discrimination in favor of individuals between insurants (the insured) of the same class and equal expectation of life in the amount or payment of premiums or rates charged for policies of life or endowment insurance, or in the dividends or other benefits payable thereon, or in any other of the terms and conditions of the contracts it makes; nor shall any such company or agent thereof make any contract of insurance or agreement as to such contract other than as plainly expressed in the policy issued thereon; nor shall any such company or any officer, agent, solicitor or representative thereof pay, allow or give, or offer to pay, allow or give, directly or indirectly, as inducement to insurance, any rebate of premium payable on the policy, or any special favor or advantage in the dividends or other benefits to accrue thereon, or any paid employment or contract for services of any kind or any valuable consideration or inducement whatever not specified in the policy contract of insurance; or give, sell or purchase, or offer to give, sell or purchase as inducement to insurance or in connection therewith any stocks, bonds or other securities of any insurance company or other corporation, association or partnership, or any dividends or profits to accrue thereon or anything of value whatsoever not specified in the policy."

As will be noticed from the above statement of facts, the only provision of said section 5235 alleged or claimed to have been violated is found in the last clause, prohibiting the giving, selling or purchasing of stocks, bonds or other securities, dividends or profits to accrue thereon, or anything of value not specified in the policy, or offering to do so, as inducement to insurance; and a violation of that provision is specifically alleged in the answer as the sole ground for cancelling the license. On behalf of defendant it is contended that the authority for such cancellation is to be found in section 5237, and no provision found elsewhere in the statutes seems to be relied upon as conferring such authority, nor are we referred to any other provision as having that effect. And counsel for relator refers to said section as containing the only provision to be considered, other than the provisions found in section 5235, in determining the validity of the commissioner's act here complained of. We here quote that section, but in connection with and following the intervening section, 5236, which, enacted at the same time as the other two sections aforesaid in their original form and as a part of the same act, may be considered with them, though bearing but slightly, perhaps, upon the disputed question of the commissioner's authority:

"§ 5236. It shall not be lawful for any life insurance company doing business in this state, or its representatives, to procure for any person seeking life insurance, a state auditor's certificate for the purpose of allowing to such person a rebate."

"§ 5237. Any life insurance company, its agent or agents, violating the provisions of the two preceding sections, shall be guilty of a misdemeanor, and upon conviction thereof, the offender or offenders shall be sentenced to pay a fine of five hundred dollars on each and every violation, when the amount of the insurance is twenty-five thousand dollars, or less, and for every additional twenty-five thousand dollars or less there shall be an additional penalty of five hundred dollars to be recovered by action in the name of the state, and on collection it shall be paid into the county treasury for the benefit of the common school fund in the county in which the offense was committed, and said agent or agents shall be prohibited from doing business in this state for the period of one year after the offense was committed. In cases where no suit is brought, but where proper and convincing evidence is brought to the attention of the state auditor, or insurance commissioner, of such rebate having been allowed or offered, he shall impose the penalty mentioned above of a cancellation of the license of such agent or agents for the period of one year after the offense was committed."

The particular provision relied on as granting authority for the commissioner's act is found in the concluding part of section 5237 declaring that where no suit is brought, "but where proper and convincing evidence" of the fact "of such rebate" having been allowed or offered is brought to the commissioner's attention, he shall impose the penalty "mentioned above," of a cancellation of the license "of such agent or agents for the period of one year...