Welch v. Md. Cas. Co.

• Decision Date: 09 January 1915
• Docket Number: Case Number: 6984
• Citation: 47 Okla. 293,147 P. 1046,1915 OK 10
• Parties: WELCH, Insurance Com'r, v. MARYLAND CASUALTY CO. et al.
• Court: Oklahoma Supreme Court

1915 OK 10

147 P. 1046

47 Okla. 293

WELCH, Insurance Com'r, v. MARYLAND CASUALTY CO. et al.

Case Number: 6984

Supreme Court of Oklahoma

Decided: January 9, 1915

Syllabus

¶0 1. INSURANCE--Foreign Companies--Appointment of Agent--"Suitable Person"--"If the Facts Warrant It." Part of section 3429, Rev. Laws 1910, reads: "Upon written notice by an unauthorized foreign insurance company of its appointment of a suitable person," etc., the insurance commissioner shall, "if the facts warrant it," etc. Held, the words, "suitable person" relate to the right and authority of the insurance company, in the first instance, to appoint some person suitable to it. Held, further, the words, "if the facts warrant it" relate to the question as to whether or not the insurance company is authorized to engage in business within the state by complying with the law and to the question of the sufficiency of the notice to the insurance commissioner of the appointment of such agent.

2. SAME--Determination of Suitableness--Validity of Statute. Section 3433, Rev. Laws 1910, in part reads: "Every insurance company, domestic or foreign, permitted to do business in this state, shall file with the insurance commissioner the name and residence of each person it appoints or employs to act as its agent in this state, but the insurance commissioner may, at any time thereafter, for cause shown, determine any person so appointed or employed to be unsuitable to act as such agent, and shall thereupon notify both the company and the agent so determined to be unsuitable: Provided, that * * * he may likewise, for cause shown, refuse to license such agent." Held, that that part of said section which reads: "The insurance commissioner may, at any time thereafter, for cause shown, determine any person so appointed or employed to be unsuitable to act as such agent, and shall thereupon notify both the company and the agent so determined to be unsuitable. * * * He may likewise, for cause shown, refuse to license such agent"--is in contravention of both the fourteenth amendment to the federal Constitution, and likewise of section 2, art. 2, of the Constitution of Oklahoma, in that it fails to prescribe any uniform and permanent rule or test, but undertakes to vest in the insurance commissioner a discretionary and arbitrary power to license or to withhold a license from whomsoever he will; hence is void as an infringement upon the personal liberties and rights of a citizen.

Error from District Court, Oklahoma County; W. R. Taylor, Judge.

Action by the Maryland Casualty Company, a corporation, and another, against A. L. Welch, Insurance Commissioner. Judgment for plaintiffs, and defendant brings error. Affirmed.

Chas. West, Attorney General, and Chas. L. Moore, Assistant Attorney General (C. W. Stringer, of counsel), for plaintiff in error.

Burwell, Crockett & Johnson, for defendants in error.

RIDDLE, J.

¶1 The plaintiff in error will be referred to as the insurance commissioner, and the defendants in error as plaintiffs. The plaintiff Maryland Casualty Company is a foreign insurance corporation, and plaintiff F. A. Skipwith has been acting in the capacity of general agent for plaintiff Maryland Casualty Company for several years past in the state of Oklahoma. Plaintiffs, on August 4, 1913, filed their petition in the district court of Oklahoma county, alleging, substantially, a compliance with the law in every respect on the part of the insurance company, and the issuance of a permit authorizing it to engage in the insurance business in this state. They allege the appointment by plaintiff insurance company of plaintiff Skipwith as its local state agent, and of notice to the insurance commissioner of the designation of said Skipwith as its agent, a request to the insurance commissioner to issue a license to said Skipwith, and a refusal on the part of the insurance commissioner to issue such license, claiming that said refusal was arbitrary and without any just cause. They prayed for a writ of mandamus against said insurance commissioner directing the issuance of said license.

¶2 An alternative writ of mandamus was issued, reciting the foregoing facts. To this writ the insurance commissioner made his return, admitting substantially the foregoing facts, and affirmatively alleging that the application of the company and of said Skipwith and his appointment as agent were considered, and he having considered the fitness and suitability of said Skipwith to act as insurance agent for the Maryland Casualty Company, and cause having been shown as to the lack of fitness and suitability of said Skipwith to act as such agent, it was adjudged that the said Skipwith was not a suitable person to act as such agent, and, as the facts did not warrant the issuance of such license, the same was therefore refused. The insurance commissioner denied that he acted arbitrarily and without just cause, and claimed that he acted in good faith and with judgment and discretion.

¶3 Plaintiffs filed a motion for judgment on the pleadings, which motion the court sustained, and issued a peremptory writ of mandamus. Motion for new trial was filed and overruled. From this judgment and order overruling motion for new trial, the insurance commissioner prosecutes this appeal.

¶4 In his petition in error, the insurance commissioner sets out six assignments of error, of which Nos. 1, 3, and 4 will be the only ones necessary to be considered. They are: (1) The court erred in sustaining motion for judgment on the pleadings. (3) Error in denying defendant's motion for a new trial. (4) Error in granting a peremptory writ of mandamus.

¶5 The view we take of this case will involve the consideration of only two questions in connection with the foregoing assignments of error: (1) The construction of section 3429, Rev. Laws 1910; (2) the constitutionality of a portion of section 3433, Rev. Laws 1910. Said section 3429, supra, reads:

"Upon written notice by an authorized foreign insurance company of its appointment of a suitable person to act as its agent within this state, and the payment of three dollars, the insurance commissioner shall, if the facts warrant it, grant to such person a license, which shall state in substance that the company is authorized to do business in this state and that the person named therein is a constituted agent of the company for the transaction of such business as it is authorized to do in this state: Provided, that domestic insurance companies shall pay fifty cents, only, for each agent's license. Said license shall continue in force until the last day of February next after its issue, and, by the renewal thereof, on the annual payment for such renewal of three dollars, if a foreign company, and if a domestic company, on the annual payment of fifty cents, until revoked by the insurance commissioner for non-compliance with the laws, or until the company, by written notice to the insurance commissioner, cancels the agent's authority to act for it. While such license remains in force, the company shall be bound by the acts of the person named therein within his authority as its acknowledged agent."

¶6 The words in this section requiring construction are "its appointment of a suitable person." In our judgment, these words relate to the appointment of an agent by the insurance company, and the connection in which they are used here has no application to or bearing upon the insurance commissioner; in other words, the insurance company, which is authorized to transact business in this state, may, in the first instance, by written notice, notify the insurance commissioner of its appointment of a suitable person to act as its agent within this state, etc. In our judgment, a fair construction of this language intends to leave it with the insurance company, in the first instance, to appoint some person suitable to said company to transact its business in the state. It is presumed that the company will know best the fitness and qualifications of the person who is to act as its agent, and who can best serve the interests of such company, with the right or authority in the state, however, to require such insurance company to comply with all state laws and reasonable regulations prescribed.

¶7 The next words in this section requiring construction are "the insurance commissioner shall, if the facts warrant it, grant to such person a license." The particular words here involved are "if the facts warrant it." We think these words have reference to the question as to whether or not the insurance company has met the requirements of the law, and also refers to the...