La Tourette v. Master

• Decision Date: 20 January 1919
• Docket Number: No. 114,114
• Citation: La Tourette v. Master, 248 U.S. 465, 39 S.Ct. 160, 63 L.Ed. 362 (1919)
• Parties: LA TOURETTE v. McMASTER, State Ins. Com'r
• Court: U.S. Supreme Court

248 U.S. 465

39 S.Ct. 160

63 L.Ed. 362

LA TOURETTE

v McMASTER, State Ins. Com'r.

No. 114.

Submitted Dec. 19, 1918.

Decided Jan. 20, 1919.

Messrs. John L. McLaurin, of Bennettsville, S. C., and Wendell P. Barker, of New York City, for plaintiff in error.

Messrs. Thomas H. Peeples and C. N. Sapp, both of Columbia, S. C., and Fred H. Dominick, of Newberry, S. C., for defendant in error.

Mr. Justice McKENNAdelivered the opinion of the Court.

An act of South Carolina approved March 2, 1916(29 St. at Large, p. 676), entitled 'An act to provide for the licensing of insurance brokers,' defines in its first section an insurance broker 'to be such person as shall be licensed by the insurance commissioner to represent citizens' of the state in placing insurance with insurers in the 'stateor in any other state or country.'And it is provided in section 2 of the act, among other conditions, that only such persons may be licensed as are residents of the state and have been licensed insurance agents of the state for at least two years.

La Tourette offered to comply with all of the provisions of the act, but could not comply with the requirement of section 2, he being, as he alleged, a resident and citizen of New York; and he attacked the requirement by a petition in the Supreme Court of the state by which he charged it to be a violation of the Constitution of the state and of section 2 of article 4 and the Fourteenth Amendment of the Constitution of the United States in that he, a citizen of New York, was denied the privileges and immunities granted to citizens of the state of South Carolina and deprived of liberty and property without due process of law.He further alleged that the commissioner had refused to issue a license to him and prayed that he be required to do so.

The insurance commissioner, by the Attorney General of the state and other counsel, demurred to the petition, asserting as the ground thereof that the requirement of the act was a legal exercise of the police power of the state and that La Tourette was not deprived of any privilege or immunity secured to citizens of other states by the Constitution of the United States.The court sustained the demurrer and dismissed the petition, and to that action this writ of error is directed.

The pleadings and the action of the court indicate the question in the case, and, it would seem, the elements of it, but they are not clearly segregated in the argument of counsel.They seem to be (1) That La Tourette is deprived of his liberty and a property right by the act of the state in violation of the due process clause of the Fourteenth Amendment.(2) That the act discriminates against citizens of other states in favor of citizens of the state of South Carolina in violation of section 2, article 4, of the Constitution of the United States.

1.This contention depends upon the character of the business of insurance, and it was decided in German Alliance Insurance Co. v. Kansas, 233 U. S. 389, 34 Sup. Ct. 612, 58 L. Ed. 1011, L. R. A. 1915C, 1189, to be clothed with a public interest and subject, therefore, to the regulating power of the state.And it necessarily follows that, as insurance is affected with a public interest, those engaged in it or who bring about its consummation are affected with the same interest and subject to regulation as it is.A broker is so engaged—is an instrument of such consummation.The statute makes him the representative of the insured.He is also the representative of the insurer (Hooper v. California, 155 U. S. 648, 657, 15 Sup. Ct. 207, 39 L. Ed. 297), and his fidelity to both may be the concern of the state to secure.As said by the Supreme Court of the state(104 S. C. 501, 89 S. E. 398):

'It is important for the protection of the interests of the people of the state that the business should be in the hands of competent and trustworthy persons.'

And we may say that this result can be more confidently and completely secured through resident brokers, they being immediately under the inspection of the commissioner of insurance.¹The motive of the statute, therefore, is benefit to insurer and insured and the means it provides seem to be appropriate.

'But we need not cast about for reasons for the legislative judgment.We are not required to be sure of the precise reasons for its exercise or be convinced of the wisdom of its exercise.'It is enough if the legislation be passed in the exercise of a power of government and has relation to that power.Rast v. Van Deman & Lewis, 240 U. S. 342, 365, 366, 36 Sup. Ct. 370, 60 L. Ed. 679, L. R. A. 1917A, 421, Ann. Cas. 1917B, 455, and cases cited; also Bunting v. Oregon, 243 U. S. 426, 437, 37 Sup. Ct. 435, 61 L. Ed. 830, Ann. Cas. 1918A, 1043.

2.This contention, that is, that the act discriminates against citizens of other states and thereby offends the Constitution of the United States, is La Tourette's ultimate reliance, and to it his counsel devote their entire argument.The state replies its power over insurance and that the legislation it justifies extends to its agents and is best executed when they are residents of the state.This view we have...