Utah Ass'n of Life Underwriters v. Mountain States Life Ins. Co.

• Decision Date: 11 June 1921
• Docket Number: 3654
• Citation: 58 Utah 579,200 P. 673
• Parties: UTAH ASS'N OF LIFE UNDERWRITERS v. MOUNTAIN STATES LIFE INS. CO. et al
• Court: Utah Supreme Court

200 P. 673

58 Utah 579

UTAH ASS'N OF LIFE UNDERWRITERS v. MOUNTAIN STATES LIFE INS. CO. et al

No. 3654

Supreme Court of Utah

June 11, 1921

Rehearing Denied September 12, 1921.

Original petition by the Utah Association of Life Underwriters against the Mountain States Life Insurance Company and Insurance Commissioner of Utah for certiorari to the Insurance Commissioner.

Order of the Commissioner granting defendant company a license to transact business SET ASIDE AND ANNULLED, on rehearing, with permission granted defendant company to apply for permit to transact business on compliance with statutes and conditions imposed in opinion and lawful orders of the Commissioner.

Order set aside and annulled.

D. M Draper, of Salt Lake City, for plaintiff.

Dan B Shields, of Salt Lake City, for defendants.

FRICK J. CORFMAN, C. J., and WEBER, GIDEON, and THURMAN, JJ., concur.

OPINION

FRICK, J.

The plaintiff filed a petition in this court against the Insurance Commissioner of Utah hereinafter referred to as Commissioner, and the Mountain States Life Insurance Company, hereinafter called Company, in which it prayed that this court require said Commissioner to certify to this court the record of certain proceedings had before him, and to review said proceedings and to set aside and annul the acts of said Commissioner in granting the said Company a license or permit to carry on the business of life insurance in this state.

In the petition the plaintiff in substance alleges that it is composed of taxpayers, and that it is the party beneficially interested in this proceeding; that on the 20th day of February, 1921, the plaintiff had filed in the office of the Commissioner certain charges against the Company, and had also filed a protest against granting a license or permit to the Company to carry on the business of life insurance in this state; that thereafter, on the 28th and 29th days of March, 1921, the plaintiff and the Company appeared before said Commissioner and that a hearing was had before him in which evidence was produced by both parties both in support of and against the charges and protest aforesaid, and that at the time of concluding the said hearing the Commissioner, over the protest of the plaintiff, renewed the license of said Company; that the renewal of said license is contrary to the facts found by the Commissioner, citing the particulars, etc., and is contrary to our statute, also citing the particulars which will hereinafter be more particularly set forth.

The writ was duly issued requiring said Commissioner to certify to this court all of the evidence and a full record of the proceedings had before him on the hearing aforesaid. The Commissioner, in due time and form, complied with said writ, and all the evidence and a full record of the proceedings is now before us.

The Company and the Commissioner, by their attorney, appeared and filed a motion to quash the writ upon the sole ground that said "application for a writ of review does not state facts sufficient to warrant or justify the issuance of the writ of certiorari." The attorney for the defendants insists that this is not a case or a proceeding in which this court is authorized to issue a writ of certiorari. It is only fair to counsel to state that he treats the writ issued in this case as a purely common-law writ of certiorari, and that the proceedings in this court must be considered and treated in accordance with the rules with respect to such writs prevailing at common law. In so doing, counsel, in our judgment, is clearly in error. He has evidently overlooked the fact that our statute (Comp. Laws Utah 1917, § 1133, as that section is amended by chapter 21, Laws Utah 1919) requires the Commissioner to grant the hearing which was requested by plaintiff and to pass upon the very objections raised by it at the hearing. In addition to that section, section 1154 prescribes the provisions that life insurance policies must contain in this state, while section 1155 prohibits certain provisions in such policies.

Then, again, in our judgment, counsel for the defendants has placed a too favorable construction upon certain other sections of our statute governing life insurance policies to which reference will be made hereinafter, and has entirely overlooked the provisions of section 1157, which specially provides that the action of the Commissioner "shall be subject to review by any court of competent jurisdiction."

It is true that in the section just quoted from the only matter referred to is the suspension or revocation of authority to carry on the business of life insurance, and that the action of the Commissioner in that regard may be reviewed. It is, however, also true, as pointed out in the case of Industrial Com. of Utah v. Evans, 52 Utah 394, 174 P. 825, that, if one party to a proceeding is given the right to have a matter reviewed in the courts under our Constitution, the other party to the proceeding is given the right to have a matter reviewed in the courts under our Constitution, the other party to the proceeding must also be given the same right of review although only one party may be expressly mentioned in the statute. That doctrine has special application here, for the reason that if the statute were literally applied the only party to a proceeding who could have the acts of the Commissioner reviewed by the courts would be the insurance company, while the public or any other interested party would be excluded from the courts.

This is not the only state that has such a statute. Such a statute is in force in Massachusetts, and the Supreme Judicial Court of that state has held that it has the power to review the acts of the Commissioner in a proceeding like the one here in question. See AEtna Life Ins. Co. v. Hardison, 199 Mass. 181, 85 N.E. 407, and New York Life Ins. Co. v. Hardison, 199 Mass. 190, 85 N.E. 410, 127 Am. St. Rep. 478.

While it is true that in proceedings of this character, although the power be conferred under a special statute, yet this court will not review the evidence, nor mere errors of judgment of the commissioner, where, however, as here, it is contended that the Commissioner has exceeded his authority in granting or renewing a license to carry on the business of life insurance in this state by refusing to follow the provisions of our statute, we are required to examine into the acts of the Commissioner to the extent at least of determining whether his acts in granting the license are supported by the provisions of the statute or are contrary thereto. If he has granted a license contrary to the provisions of the statute under which he is empowered to act and must act, then he has exceeded the power or jurisdiction with which he is clothed by statute, and the license should be revoked. That is the precise question that is involved here.

We are clearly of the opinion, therefore, that the motion to quash should be, and it is accordingly, overruled.

In proceeding to a consideration of the merits of the controversy it will be necessary to refer to certain provisions of our statutes relating to the business of life insurance. Comp. Laws Utah 1917, § 1167, provides:

"No life insurance company doing business in this state shall make or permit any distinction or discrimination in favor of individuals between insurance of the same class and equal expectation of life in the amount of 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 an inducement to insurance, any rebate or 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 service of any kind; nor any valuable consideration or inducement whatever, not specified in the policy contract of insurance, nor give, sell, or purchase or offer to give, sell, or purchase as inducement to insurance or in conjunction 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; nor anything of value * * * not specified in the policy."

Section 1168, so far as material here, provides that no life insurance company shall and--

"no corporation or stock company, acting as agent of a life insurance company, nor any of its agents, officers, or employes, shall be permitted to agree, sell, or offer to sell, give or offer to give, directly or indirectly, in any manner whatsoever, any share of stock, securities, bonds, or agreement of any form or nature, promising returns and profits as an inducement to insurance, or in connection therewith. * * *"

The section further provides that in case any company or agent offends against the foregoing provisions or any of them it shall be the duty of the Commissioner to revoke the license.

We have quoted at length from the statute in order to show that it was the purpose and intent of the Legislature to have the business of life insurance conducted free and independent of any other matter of whatever kind or nature, and so that the person who is solicited to enter into a life insurance contract may do so entirely upon the merits of the contract of insurance presented to him. Life insurance contracts are so important in our modern life...