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tion invalid as to other insurance companies, as of said insurance board, which board had denying them the equal protection of the laws. thereafter organized and promulgated cer(Ed. Note.--For other cases, see Constitution-ltain rules and reonla
tain rules and regulations for the governal Law, Cent. Dig. 88 688, 692, 693, 697-699; Dec. Dig. 240.]
ment of said board and the insurance com
panies and their agents doing business with8. STATUTES O 125 - TITLE AND SUBJECTMATTER-INSURANCE.
in this state. The case came on for hearing The title of the act is sufficiently compre on the application of plaintiffs for a temhensive to embrace the various provisions there- porary injunction on the 7th day of August. of.
1915, at which time evidence was introduced, [Ed. Note. For other cases, see Statutes, Cent. Dig. 88 187–191; Dec, Dig. Om 125.)
when the court denied the temporary injunc9. INJUNCTION 7 - ADEQUATE REMEDY AT
tion, and plaintiffs bring error. LAW-RIGHT OF APPEAL-ORDER OF STATE
 The petition attacks the validity of INSURANCE BOARD.
said House Bill No. 70 because it is in violaProvision having been made for an appeal
tion of the Constitution of the United States to this court from any regulation, order or rate adopted by said board, said provision gives a
and of this state, an unwarranted interferspeedy and adequate remedy, and an injunction ence with the power of plaintiffs to contract, will not lie to restrain said board from proceed- a deprivation of property without due proing in a matter within its lawful jurisdiction.
cess of law, and a denial of the equal pro(Ed. Note.--For other cases, see Injunction, Cent. Dig. $$ 6, 34; Dec. Dig. @m7.)
tection of the laws. Counsel in their brief
and oral argument concede the right of the Error from District Court, Oklahoma state to regulate the rates charged by inCounty ; Edward Dewes Oldfield, Judge.
surance companies, but do not concede the Action by the Insurance Company of North | validity of other regulations pres
validity of other regulations prescribed by America and others against A. L. Welch, the act. Insurance Commissioner, and others. Judg
 The power of the state to regulate the ment for plaintiffs, and defendants bring business of insurance has frequently been error. Affirmed.
before the courts in recent years. This quesBurwell. Crockett & Johnson, of Okla- tion was presented to the Circuit Court of homa City, for plaintiffs in error. S. P. | the United States for the District of KanFreeling, Atty. Gen., and J. H. Miley and sas in the case of German Alliance Ins. Co. v. Smith C. Matson, Asst. Attys. Gen., for de Barnes (C. C.) 189 Fed. 769. The Legislature fendants in error.
of Kansas had passed a law conferring upon
the superintendent of insurance of that HARDY, J. Plaintiffs in error brought state authority very similar to the authority suit in the district court of Oklahoma coun- conferred upon the state insurance board ty, on behalf of themselves and others simi- by House Bill No. 70. The Kansas act was larly situated, against defendants in error, in many respects similar to House Bill No. seeking to enjoin defendants in error, as the 70, and some of its sections identical with state insurance board, from enforcing the those of the latter act. The plaintiff in that provisions of an act of the Legislature, re case sought to enjoin the superintendent of ferred to as House Bill No. 70, being chapter insurance from proceeding in or enforcing 174, Sess. Laws 1915, p. 340, which created the provisions of said act, and urged as a a state insurance board, prescribed the pow- reason therefor that said act was an inter
und duties thereof, and prescribed cer- | ference with the right of plaintiff to contract, tain regulations in reference to the conduct and that it was an appropriation by the state of insurance within this state. The parties of private property within the probibition of will be referred to as they appeared in the the Fourteenth Amendment, and that it was trial court.
beyond the police power of the state to reguPlaintiffs alleged that the Insurance Com- late the rates charged by insurance company of North America was an insurance panies doing business in that state. This company duly incorporated under the laws contention was denied by the court, and the of the state of Pennsylvania, and that it injunction refused; the court being of the had complied with all the laws of this state, opinion that said act was not subject to the and was licensed to do business within the objections enumerated. The case was apstate during the year 1915; that plaintiff pealed to the Supreme Court of the United Ludlow was its general agent, having charge States, and in German Alliance Ins. Co. v. of its business within this state, and that Lewis, 233 U. S. 389, 34 Sup. Ct, 612, 58 L. plaintiff McDaniels was the local agent of Ed. 1011, L. R. A. 1915C, 1189, the judgment said company in the city of Norman, Okl. of the Circuit Court was affirmed, and Mr. The petition then alleged the passage of Justice McKenna in a very learned opinion House Bill No. 70, creating the state insur set at rest the authority of the state in the ance board, to be composed of the insurance exercise of its police power to regulate the commissioners, fire marshal, and a third business of insurance and the rates and member to be appointed by the Governor, and charges exacted by insurance companies in that in pursuance thereof the Governor had the conduct of their business. appointed Hon. W. R. Samuels as secretary In Citizens' Insurance Co. v. Clay (D, C.)
For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes
197 Fed. 435, in the United States District, to investigate and fix rates for such services, Court for the Eastern District of Kentucky, subject to review by the courts. The reasonan act of the Legislature of that state wasing of the opinions is usually based upon the under review which created a state insurance extensive and complex character of the busiboard empowered to require certain data to ness, involving a multitude of detail, and rebe furnished by companies doing business in quiring expert knowledge to intelligently conthe state, and therefrom to establish rates duct the numerous separate investigations for such companies. The court there stated and the necessity for frequent changes and the principle that the business of insurance adjustments in the rates and services, which was one which from its character was of a would render it impossible for the Legislaquasi public nature and subject to reason ture to acquire the necessary information able state regulations, and that said act was and to fix just and reasonable rates applicanot violative of the federal Constitution as ble to the varying conditions and circumdepriving plaintiff of its property without stances. Direct legislative control has been due process of law, or denying it the equal tried and abandoned because found imposprotection of the laws.
sible, for the reason that the business of the The Supreme Court of Nebraska, in State common carrier has grown and extended and ex rel. Martin v. Howard, 96 Neb. 278, 147 become such a large and indispensable factor N. W. 689, following the opinion of the Cir- in our complicated social and economic life cuit Court for the Eastern District of Kan- that the cumbersome methods of direct acsas and the Supreme Court of the United tion is no longer adequate or possible. RailStates in German Alliance Ins. Co. v. Lewis, road Com. Cases, 116 U, S. 307, 6 Sup. Ct. supra, held that an act of the Legislature 334, 388, 1191, 29 L Ed. 636; Reagan v. of that state regulating the business of in- | Farmers' L. & T. Co., 154 U. S. 362, 14 Sup. surance was valid.
Ct. 1047, 38 L. Ed. 1014; Ga. Railroad et al. In Welch v. Maryland Casualty Co., 147 v. Smith et al., 70 Ga. 694; Hopper et al. v. Pac. 1046, not yet officially reported, this
C., M. & St. P. Ry. Co., 91 Iowa, 639, 60 N. court said:
| W. 487; Railroad Commission v. H. & T. C. “That the state, in the exercise of its police
Ry. Co., 90 Tex. 340, 38 S. W. 750; Chicago, power, may fully and completely regulate the in
B. & Q. R. Co. v. Jones, 149 Ill. 361, 37 N. E. surance business is no longer a debatable ques- 247, 24 L. R. A. 141, 41 Am. St. Rep. 278; tion. This proposition is too well settled to re State ex rel. Railroad & Warehouse Comm. v. quire citation of authority to sustain it."
| M, & St. P. Ry. et al. 80 Minn. 191, 83 N. W. The power of the state, then, to regulate 60 89 Am. St. Rep. 514; State v. Atlantic the business of insurance and the rates to be Coast Line Railroad Co. 56 Fla. 617, 47 charged by the companies engaged in that South. 969, 32 L. R. A. (N. S.) 639. business seems not to admit of doubt, and it In recent years the business of insurance cannot be successfully urged that it is not has grown to such an extent that its ramifiwithin the police power of the state to pre- cations extend to practically every phase of scribe reasonable regulations affecting this business in the commercial world, and the business.
necessity for regulation of the business has  The act is further challenged because become more and more apparent, until legisthe powers therein enumerated are confer-lation having that purpose was enacted and red upon the state insurance board, and be brought into review before the courts, with cause, such powers being legislative in their the result that the right of the state to regucharacter, the Legislature may not dele- late the same has been finally determined. gate them. We recognize the principle that The difficulty of direct legislative regulation it is not within the power of the Legislature is equally present in the insurance business to delegate its legislative functions or its ex- as it is in the business of common carriers. clusive authority to declare what the law To illustrate: In order to properly prescribe shall be, but it is generally established at rates for the business of fire insurance that this time that the Legislature may enact a will be just and reasonable, it becomes neceslaw which is complete in itself, having for sary to know the location of the property, its aim the accomplishment of some general the character of the neighborhood in which public purpose, and may, in order to secure it is situated, whether city, town, or country, the just and equitable operation of the law and, if in a town or city, the fire protection thus enacted, delegate the power within def- which has been provided, the extent of the inite and valid limitations to make necessary water supply, and other physical conditions. investigations, determine preliminary facts, It is necessary to know the character of the and prescribe suitable rules and regulations property to be insured, and, if a building, the intended to accomplish the operation and en- size, material of which it is constructed, the forcement of the law in accordance with the manner of its construction, the character of express legislative will. A familiar illustra- the occupancy, the construction and location tion of the exercise of this power is where of adjacent buildings, the occupancy and conthe Legislature enacts a law prescribing that tents thereof, and the manner in which the rates for services by railroads and other contents are stored. All these matters enter common carriers shall be reasonable, and into a consideration of the question as to thus seen that it would be a physical impos- duties were enumerated by the statute at the sibility for the Legislature, which ordinarily time the Constitution was adopted, or where meets but once in two years, and sits for a the office owed its origin to the common law, limited period of time, and is composed of and had certain well-recognized duties atmembers from all of the varying walks and tached thereto, or inherently connected thereoccupations of life, to make the necessary with, or forming a substantial part thereof, investigations, ascertain the necessary facts, it was not within the power of the Legislaand prescribe rates that are just and rea- ture to transfer such duties to an office of its sonable and rules and regulations that would own creation or to an officer selected and apply to the varying conditions and circum- chosen in a manner different from that by stances, which would necessarily have to be which the constitutional officer was named. considered in the proper exercise of its pow-Conceding the correctness of the rule coners in this regard. So legislation which has tended for, it cannot have any controlling apdelegated this power to a board or other of- plication here, because by section 22 of artificials, in connection with proper statutory cle 6 an insurance department is created, enactment, has been upheld. German Alli- which is charged with the execution of all laws ance Ins. Co. v. Barnes, Supt. of Ins. (C. C.) not in force or that may be hereafter passed in 189 Fed. 769; German Alliance Ins. Co. v. relation to insurance and insurance companies Lewis, 233 U. S. 389, 34 Sup. Ct. 612, 58 L doing business in the state, and no duties are Ed. 1011, L R. A. 1915C, 1189; Citizens' Ins. prescribed by the Constitution for the insurCo. v. Clay et al (D. C.) 197 Fed. 435; State
ance commissioner, but, on the contrary, by ex rel. Martin v. Howard, 96 Neb. 278, 147 N. section 24 it is expressly provided that he W. 689.
shall perform such duties as may be prescrib[4-7] Plaintiffs insist that House Bill No. ed by law, thereby indicating an intention 70, in so far as it attempts to confer upon the upon the part of the people to leave to the state insurance board power to supervise and Legislature the determination of what duties regulate rates of insurance and the granting should be imposed upon the commissioner, but and revoking of insurance agents' license and expressly asserting an intention that the expower to determine the form of policy that ecution of all laws now in force or which should be used and to cancel licenses of the
should hereafter be passed should be executcompanies and agents, is void because said
ed by the insurance department. The arguact is in conflict with sections 22, 23, and 24
ment is made that the commissioner is the of article 6 of the Constitution, which are as
department. This argument does not appear follows:
to be sound; for, if it had been the intention "Sec. 22. Insurance Commissioner-Duties.
of the people in adopting the Constitution to There is hereby established an insurance de
ment, which shall be charged with the exe prohibit the creation of any other officers in cution of all laws now in force, or which shall this department, it would have been an easy hereafter be passed, in relation to insurance and matter to say so and to have created only the jrsurance companies doing business in the state. "Sec. 23. Insurance Commissioner-Term
office of insurance commissioner, and not to Qualifications. There shall be elected by the have created the insurance department. The qualified electors of the state, at the first general fact that the department was created and election a chief officer of said department, who l that the commissioner was designated as the shall be styled 'the insurance commissioner,' whose term of office shall be four years: Pró- | chief officer would imply on the contrary pervided, that the first term of the insurance com- mission to add other officers to the departmissioner, so elected, shall expire at the time of
ment, and the department so constituted, as the expiration of the term of office of the first
distinct from the insurance commissioner, Governor elected. Said insurance commissioner shall be at least twenty-five years of age and
should be charged with the execution of the well versed in insurance matters.
laws upon the subject of insurance. In deter"Sec. 24. Insurance Commissioner-Addition
mining the effect to be given to the words, al Duties. The insurance commissioner shall give bond, perform such duties, and possess such
"chief officer," as applied to the commissionother qualifications as may be prescribed by er, we are not aided by citation to any aulaw.”
thorities where a similar question has been The argument is made that, because section considered by the courts, nor in our investiga23 provides for the election of an insurance tions have we found any. We therefore turn commissioner, who shall be "the chief officer to the Constitution and the laws in force at of said department," thereby the Legislature the time of its adoption in order to ascertain, is prohibited from creating other and addi- | if possible, the effect to be given to these tional offices in said department than that of words as used in the connection indicated. insurance commissioner, and imposing duties Section 3942, Stat. 1893, being section 4715, upon such additional officers, unless they be Rev. Laws 1910, provides that a summons subordinate to the insurance commissioner, I against a corporation may be served upon the and plaintiffs cite in support of this argument president, mayor, chairman of the board of many cases in which were applied the rule directors or trustees, or other chief officer that, where an office is created by or imbed- of such corporation, and, in the event its ded in the Constitution, and the duties there- chief officer is not found in the county, upon of are defined by that instrument, or where certain other officers designated therein. the board of directors or trustees is referred commissioner. In the provisions in reference to as the chief officer of such corporation, to the commissioner of labor and chief inine but no one would contend that such officer inspector no duties are prescribed for them was the only officer of such corporation, or by the Constitution, the provision as to their that he possessed supreme power as such. duties being similar to that in the case of the Section 6, art. 7, provides for the election of insurance commissioner, thus leaving to the a Chief Justice of the Supreme Court, whose Legislature to prescribe what duties shall duties are well known. Section 2, art. 6, pro- be performed by such officers. The right of vides that the supreme executive power of the Legislature to create an office and to prethe state shall be vested in a chief magis- scribe the powers and duties thereof is one trate, who shall be styled the Governor of that is not open to question in the absence of the state of Oklahoma, but the Constitution any constitutional limitation. By article 5, 8 created other officers in the executive depart- 36, it is provided: ment, and conferred upon them certain pow "Scope of Authority of the Legislature. The ers and duties independent of the Governor,
authority of the Legislature shall extend to all
rightful subjects of legislation, and any specific and has provided for the creation of certain
grant of authority in this Constitution, upon boards of which the Governor is a member any subject whatsoever, shall not work a rewith the same authority as any other member striction, limitation, or exclusion of such au
thority upon the same or any other subject or of the board, as may be noted in the follow
subjects whatsoever." ing instances: Commissioners of the land of
That the creation of an office and the prefice (article 6, 8 32); state board of equaliza
scribing of its duties and powers is a righttion (article 10, $ 21); state board of educa
ful subject of legislation is stated in 29 Cyc. tion (article 13, 8 5). And the Legislature in
1368. The office of fire marshal was created various instances has created certain boards
by chapter 46, Sess. Laws 1910–11, p. 114, and and commissions of which the Governor is a
by that act he was required to report to the member, possessing like powers and duties as
insurance commissioner, and his salary and any other member; for example: State game
expenses were to be paid out of a special tax and fish commission (section 3293, Rev. Laws
upon the gross premium receipts of fire in1910). By section 6779, Rev. Laws 1910, the
surance companies. Thus it is seen that the state treasurer, by and with the consent of
fire marshal was already an officer of the inthe Governor and Attorney General, is au
surance department. House Bill No. 70, thorized to select depositories of the public
which creates the insurance board, names the funds, and the three officials named are au
insurance commissioner and fire marshal as thorized to approve securities offered for such
two of its members, and provides for the apdeposits. So, by chapter 6, Sess. Laws 1907
pointment of a third member of the board, 08, p. 125, the Governor was created a mem
designated as secretary, whose duties have ber of the state banking board. The law cre
reference to insurance, and nothing else. ating the banking board, providing for insur The board is therefore a part of the insurance of deposits, was under consideration by
ance department, and includes in its personthe court and its validity sustained in State nel all the officers of that department as now ex rel. West v. Farmers' Nat. Bank of Cush- constituted, and the duty of executing the ing, 150 Pac. 212; Noble State Bank v. Has- I laws relating to insurance is rightfully imposkell, 22 Okl. 48, 97 Pac. 590.
ed upon the board. The insurance commisHere we have constitutional and legislative sioner, as such, did not exist at the time of construction of similar terms which support the adoption of the Constitution, but the secour conclusion in the present instance. The retary of state was by section 6553, Wilson's powers and duties of the various executive Rev. & Ann. Stat., required to discharge cerofficers, with three exceptions, are defined in tain duties under then existing laws in referthe Constitution, and in the following casesence to insurance. He was not authorized to . provision is made that additional duties may regulate rates of insurance companies, nor be prescribed by law: Article 14, creating a in the main discharge the duties imposed by banking department and placing same under House Bill No. 70 upon said insurance board. the control of the bank commissioner; also Therefore it cannot be said that the act in section 17, art. 6, prescribing certain duties question comes within the rule of the authorto be performed by the secretary of state, ities relied upon by plaintiffs; and the said and which further provides: “He shall per- act is not unconstitutional in the respects unform such other duties as shall be prescribed der consideration. Even though the duties by law." In article 6, § 19, creating the of- imposed upon the insurance board by House fice of state examiner and inspector, certain Bill No. 70 had been a part of the duties of the duties are prescribed, and it is then provided : superintendent of insurance at the time of "Other duties and powery may be added by the adoption of the Constitution, it was withlaw.” Article 6, 88 28, 29, creates the office in the power of the people to redistribute the of commissioner of charities and corrections, executive powers of the state government in prescribing certain duties, and by section 30 any manner they saw fit, and to confer the it is provided that the Legislature shall have duty of enforcing the laws relating to insurthe power to alter, amend, or add to the du- ance upon the insurance department, instead
done by that instrument, and previous condi-1 "In declaring in the language of the title that tions existing in Oklahoma Territory, had the act was one 'to establish an insurance
bureau,' the Legislature must be understood as they been different, could not have the effect
saying that it was made up of such provisions of preventing the exercise of such power nor and details as were deemed suitable for the obhave any weight with the court, except as ject; and under such title, and in keeping with, they may have been considered in framing
and in furtherance of, the single object expressed,
it was competent to go further than to enact the Constitution.
mere organic provisions. It was certainly adThere is nothing in the provisions of article missible to include any just and pertinent regu9, $ 19, of the Constitution that prevents the lations respecting the course of action to be ob-'
served by the bureau as a state agency towards enactment by the Legislature of the act under
those engaged in the business of insurance; and consideration. That portion of the section it was equally admissible to include any just and cited declares that:
appropriate provisions for prescribing the duty "The commission may be vested with such ad
due to the state in the matter of taxation from ditional powers, and charged with such other du
insurance companies. The fundamental prin
ciple of the law was the marking out the recipties (not inconsistent with this Constitution) as
rocal rights and duties of the state and those may be prescribed by law, in connection with
carrying on insurance, and to provide the inathe visitation, regulation, or control of corpora
chinery for administration, in so far as the state tions, or with the prescribing and enforcing of rates and charges to be observed in the conduct
by a political agency might properly supervise." of any business where the state has the right to This opinion was concurred in by Mr. Jusprescribe the rates and charges in connection tice Cooley, author of an able work on Contherewith.
stitutional Limitations. It is apparent that the power to regulate In the case of State v. Matthews, 44 Mo. the rates and business of insurance was not 523, the title of an act under consideration by the provision quoted delegated to the Cor- was "An act to create an insurance departporation Commission, nor has the Legisla ment," and in sustaining the validity of the ture, under the authority therein given to act therein involved the court said: delegate such powers, seen fit to do so, and “The act 'to create an insurance department' the miere fact that specific authority is con- defines the duties and powers of the superinferred upon the Legislature to vest the com
tendent. It invests him with certain authority
and power necessary to enable him effectively mission with such additional powers and du
to execute and enforce the law, and make it ties does not deprive the Legislature of au subserve the object for which it was passed. thority to pass a law which is complete in it. For the purpose of obtaining information and self, regulating the business of insurance,
thoroughly understanding the condition of in
surance companies, they were required to furand, in order to insure a practical operationnish him with certain statements and facts; of the law, delegating to the insurance board and a refusal to comply with that duty was administrative authority to make the neces
made a misdemeanor. Therefore, whenever they
fail to comply with or violate the provisions sary investigations, ascertain the necessary
of the said thirteenth section, they are liable facts, and prescribe such reasonable rules to be proceeded against for a misdemeanor. and regulations as may be necessary, when,
* * * So in the organization of the insuras in this case, a review of the orders of the
ance department it was necessary, in order to
carry out the act, to empower the superintendboard in this regard is provided for in the
ent to do certain things; but the power would Supreme Court. Article 5, $ 36, Constitution. | have been fruitless without authority to enforce  Various provisions of the act are at
it. To say that a separate chapter must be en
acted for every provision in the framework of tacked because it is said the subjects therein a law, with a distinct title, would be almost imembraced are not included within the title. possible and wholly ridiculous." The provisions under consideration in this The title of the act involved in Hickman v. respect all have reference to the regulation of State, 62 N. J. Law, 499, 41 Atl, 942, was "An the business of insurance and insurance com- act to provide for the incorporation and regupanies and their agents. The argument is lation of insurance companies," and it was made that the title of the act is not sufficient- held in that case that the title warranted legly broad to justify legislation of this charac-islation regulating the business in that state ter. The title of the act is as follows:
of foreign insurance companies and the pros"An act creating a state insurance board, pro-ecution of their agents for unlawfully transviding for the regulation and control of rates of
acting business in their behalf. So in the premiums on insurance and to prevent discriminations therein, and the granting and revoking
case of State v. Twining, 73 N. J. Law, 683, 64 insurance agents' license and repealing all laws Atl. 1073, 1135, under an act entitled "An act or parts of laws in conflict herewith, and declar concerning trust companies," it was held ing an emergency."
that the title was sufficiently broad to include This title is sufficient to include within its within the object of the act legislation includterms a law generally regulating the business ing not only trust companies, but also safe of insurance, insurance companies, and insur- deposit and trust companies exercising trust ance agents. In Conn. Mut. Life Ins. Co. v. powers, and any regulation deemed proper State Treas., 31 Mich. 6, the title of the act to enforce the provisions of the act by penalwas "An act to establish an insurance bu- ties or prosecution. In the case of People v. reau.” In determining that the provisions of Superior Court, 100 Cal. 105, 34 Pac. 492, the the act there were within the title, the court title of the act was "The Bank Commission