State v. Schively

• Decision Date: 08 April 1912
• Citation: 122 P. 1020,68 Wash. 148
• Parties: STATE ex rel. MORTH COAST FIRE INS. CO. v. SCHIVELY, Insurance Commissioner.
• Court: Washington Supreme Court

122 P. 1020

68 Wash. 148

STATE ex rel. MORTH COAST FIRE INS. CO. v. SCHIVELY, Insurance Commissioner.

Supreme Court of Washington

April 8, 1912

Department 2. Application for mandamus by the State, on the relation of the North Coast Fire Insurance Company, against J. H Schively, Insurance Commissioner. Heard on defendant's demurrer to the alternative writ and return. Writ denied.

Wm. O'Connor and James W. McBurney, both of Seattle, for relator.

W. V Tanner and J. T. S. Lyle, both of Olympia, for respondent.

ELLIS J.

This is an original application on the relation of the North Coast Fire Insurance Company, a domestic corporation, for a writ of mandamus to compel the insurance commissioner to issue to it a license to make both fire and plate glass insurance. The respondent has demurred to the petition on the ground that this court has no jurisdiction of the proceeding, and has also made his return to the altermative writ.

The respondent contends that under the holding of this court in State ex rel. Stearns v. Smith, 6 Wash. 496, 33 P 974, the demurrer should be sustained. In that case it was stated to be the general rule that the term 'state officer' is only applied to those superior executive officers who constitute the heads of the executive departments of the state. Had that definition of state officers been left by the decision thus broadly stated, it would obviously include the insurance commissioner. He constitutes the head of the insurance department, and is elected as are other heads of executive departments. On that ground the case here might easily be distinguished from the case cited. That case determined that a member of the board of regents of the agricultural college is not such a state officer as by the Constitution is made subject to the original jurisdiction of the Supreme Court in mandamus.

That decision, however, by construction further contracts the meaning of the term 'state officers,' as used in section 4, art. 4, of the Constitution which confers upon this court original jurisdiction in mandamus, until it is made to include only those heads of executive departments recognized eo nomine as executive officers in article 3 of the Constitution. On mature consideration we now hold that construction too narrow. In State v. Womack, 4 Wash. 19, 29 P. 939, this court held that article 3 of the Constitution does not undertake to limit the executive officers of the state to those enumerated therein, but that the object of the framers of the Constitution was 'to classify the executive departments of the state rather than to exclusively establish its executive officers.' The reasons for that holding as set forth in the last-mentioned opinion seem to us unanswerable. That holding renders untenable the ground upon which the decision in State ex rel. Stearns v. Smith, supra, is made to rest. If article 3 of the Constitution does not limit state officers to those therein enumerated, then there is no good reason why section 4 of article 4, which confers original jurisdiction in mandamus 'as to all state officers,' should be so limited. We are impelled to the conclusion that the insurance commissioner is such a state officer as, within the meaning of the Constitution, is subject to the jurisdiction of this court in original proceedings for mandamus. This court actually entertained that jurisdiction in the recent case of State ex rel. Cowles v. Schively, 63 Wash. 103, 114 P. 901, though the question here presented seems not to have been raised. The demurrer is overruled.

On the merits, it appears that the relator was incorporated under the laws of the state of Washington on February 4, 1907, with a capital stock of $250,000. It is empowered by its articles of incorporation to make fire, plate glass, and various other kinds of insurance. At the time of the enactment of chapter 49, Laws of 1911, defined in the act itself as 'The Insurance Code,' the relator was licensed to make both fire and plate glass insurance, and was not writing any other kind. Before the enactment of the Insurance Code no restrictions other than those imposed by their articles of incorporation were placed on stock insurance companies prohibiting them from writing whatever different kinds or classes of insurance they might elect. The act of 1911 is a complete insurance code. It covers the entire subject of insurance. It expressly supersedes and repeals all prior acts on the subject. Section 238 of the Code declares: 'This act may be referred to and shall be known as 'The Insurance Code' and shall supersede all prior acts on the subject of the organization and government of insurance companies and insurance business, and all such prior act are hereby repealed.'

The respondent contends that, the relator being a domestic insurance company operating under former insurance laws, its right to continue making insurance in this state is now governed by the provisions of the Insurance Code. Section 20 of the Code provides that: 'All domestic insurance companies, now or hereafter formed under the laws of this state, and every insurance agent, solicitor, broker surveyor, or adjuster, doing business in this state, and all insurance business transacted in whole or in part within or outside of this state, the subject-matter of which insurance is located wholly or in part in this state, and any marine insurance made, effected, or placed by any company through any agent or broker in this state, unless otherwise provided, shall be subject to and be governed by this act; and the records of each insurance company, agent, solicitor, broker, surveyor or adjuster doing business in this state shall be subject to the inspection and examination of the commissioner, his deputy or examiner.' This section clearly subjects the relator to the restrictions of the Insurance Code unless there can be found in the act some exception in its favor either expressed or implied. Among these restrictions domestic insurance companies writing fire insurance are prohibited by the Code from making plate glass insurance. An analysis of the pertinent parts of the Code makes this plain. Section 83 classifies the various kinds of insurance. Fire insurance is included in class 1. Plate glass insurance is separately classified as class 7. Section 84 provides that: 'Any insurance company having the required amount of capital, or assets, when permitted by its articles of incorporation or charter, may be authorized and licensed by the commissioner to make insurance in this state under one or more of the classes prescribed in the several paragraphs in section eighty-three of this act, as follows: (1) Fire and Inland Marine Companies--Qualifications. No stock insurance company shall make insurance in this state under class one of section eighty-three of this act, without having capital stock of at least two hundred thousand dollars, of which not less than one-half must be paid in in cash or like securities authorized by this act, and the remainder, in cash or like securities, paid within one year after the company is incorporated, and a surplus of not less than fifty thousand dollars, nor shall such company make insurance in this state, in any other of said classes of insurance specified in said section, except in classes two and thirteen; and is not to make insurance in class two without having additional capital of at least one hundred thousand dollars, and is not to make insurance in class thirteen in addition to class one without...