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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 was ing 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 inquiring expert knowledge to intelligently conthe state, and therefrom to establish rates for such companies. The court there stated the principle that the business of insurance was one which from its character was of a quasi public nature and subject to reasonable state regulations, and that said act was not violative of the federal Constitution as depriving plaintiff of its property without due process of law, or denying it the equal protection of the laws.

The Supreme Court of Nebraska, in State ex rel. Martin v. Howard, 96 Neb. 278, 147 N. W. 689, following the opinion of the Circuit Court for the Eastern District of Kansas and the Supreme Court of the United States in German Alliance Ins. Co. v. Lewis, supra, held that an act of the Legislature of that state regulating the business of insurance was valid.

In Welch v. Maryland Casualty Co., 147 Pac. 1046, not yet officially reported, this court said:

"That the state, in the exercise of its police power, may fully and completely regulate the insurance business is no longer a debatable question. This proposition is too well settled to require citation of authority to sustain it."

The power of the state, then, to regulate the business of insurance and the rates to be charged by the companies engaged in that business seems not to admit of doubt, and it cannot be successfully urged that it is not within the police power of the state to prescribe reasonable regulations affecting this business.

duct the numerous separate investigations
and the necessity for frequent changes and
adjustments in the rates and services, which
would render it impossible for the Legisla-
ture to acquire the necessary information
and to fix just and reasonable rates applica-
ble to the varying conditions and circum-
stances. Direct legislative control has been
tried and abandoned because found impos-
sible, for the reason that the business of the
common carrier has grown and extended and
become such a large and indispensable factor
in our complicated social and economic life
that the cumbersome methods of direct ac-
tion is no longer adequate or possible. Rail-
road Com. Cases, 116 U. S. 307, 6 Sup. Ct.
334, 388, 1191, 29 L. Ed. 636; Reagan v.
Farmers' L. & T. Co., 154 U. S. 362, 14 Sup.
Ct. 1047, 38 L. Ed. 1014; Ga. Railroad et al.
v. Smith et al., 70 Ga. 694; Hopper et al. v.
C., M. & St. P. Ry. Co., 91 Iowa, 639, 60 N.
W. 487; Railroad Commission v. H. & T. C.

Ry. Co., 90 Tex. 340, 38 S. W. 750; Chicago,
B. & Q. R. Co. v. Jones, 149 Ill. 361, 37 N. E.
247, 24 L. R. A. 141, 41 Am. St. Rep. 278;
State ex rel. Railroad & Warehouse Comm. v.
M. & St. P. Ry. et al. 80 Minn. 191, 83 N. W.
60 89 Am. St. Rep. 514; State v. Atlantic
Coast Line Railroad Co. 56 Fla. 617, 47
South. 969, 32 L. R. A. (N. S.) 639.

In recent years the business of insurance has grown to such an extent that its ramifications extend to practically every phase of business in the commercial world, and the necessity for regulation of the business has [3] 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 limited period of time, and is composed of members from all of the varying walks and occupations of life, to make the necessary investigations, ascertain the necessary facts, and prescribe rates that are just and reasonable and rules and regulations that would apply to the varying conditions and circumstances, which would necessarily have to be considered in the proper exercise of its powers in this regard. So legislation which has delegated this power to a board or other officials, in connection with proper statutory enactment, has been upheld. German Alliance Ins. Co. v. Barnes, Supt. of Ins. (C. C.) 189 Fed. 769; German Alliance Ins. Co. v. Lewis, 233 U. S. 389, 34 Sup. Ct. 612, 58 L Ed. 1011, L. R. A. 1915C, 1189; Citizens' Ins. Co. v. Clay et al (D. C.) 197 Fed. 435; State ex rel. Martin v. Howard, 96 Neb. 278, 147 N. W. 689.

the office owed its origin to the common law, and had certain well-recognized duties attached thereto, or inherently connected therewith, or forming a substantial part thereof, it was not within the power of the Legislature to transfer such duties to an office of its own creation or to an officer selected and chosen in a manner different from that by which the constitutional officer was named. Conceding the correctness of the rule contended for, it cannot have any controlling application here, because by section 22 of article 6 an insurance department is created, which is charged with the execution of all laws not in force or that may be hereafter passed in relation to insurance and insurance companies doing business in the state, and no duties are prescribed by the Constitution for the insurance commissioner, but, on the contrary, by section 24 it is expressly provided that he shall perform such duties as may be prescrib ed by law, thereby indicating an intention upon the part of the people to leave to the Legislature the determination of what duties should be imposed upon the commissioner, but expressly asserting an intention that the execution of all laws now in force or which should hereafter be passed should be executed by the insurance department. The argument is made that the commissioner is the department. This argument does not appear to be sound; for, if it had been the intention of the people in adopting the Constitution to prohibit the creation of any other officers in this department, it would have been an easy matter to say so and to have created only the office of insurance commissioner, and not to have created the insurance department. The fact that the department was created and that the commissioner was designated as the chief officer would imply on the contrary permission to add other officers to the department, and the department so constituted, as distinct from the insurance commissioner, should be charged with the execution of the laws upon the subject of insurance. In deter"Sec. 24. Insurance Commissioner-Addition-mining the effect to be given to the words,

[4-7] Plaintiffs insist that House Bill No. 70, in so far as it attempts to confer upon the state insurance board power to supervise and regulate rates of insurance and the granting and revoking of insurance agents' license and power to determine the form of policy that should be used and to cancel licenses of the companies and agents, is void because said act is in conflict with sections 22, 23, and 24 of article 6 of the Constitution, which are as

follows:

“Sec. 22. Insurance Commissioner-Duties There is hereby established an insurance department, which shall be charged with the execution of all laws now in force, or which shall hereafter be passed, in relation to insurance and irsurance companies doing business in the state. "Sec. 23. Insurance Commissioner-Term Qualifications. There shall be elected by the qualified electors of the state, at the first general election a chief officer of said department, who shall be styled 'the insurance commissioner,' whose term of office shall be four years: Provided, that the first term of the insurance commissioner, so elected, shall expire at the time of the expiration of the term of office of the first Governor elected. Said insurance commissioner shall be at least twenty-five years of age and well versed in insurance matters.

al Duties.-The insurance commissioner shall

give bond, perform such duties, and possess such other qualifications as may be prescribed by law."

The argument is made that, because section 23 provides for the election of an insurance commissioner, who shall be "the chief officer of said department," thereby the Legislature is prohibited from creating other and additional offices in said department than that of insurance commissioner, and imposing duties upon such additional officers, unless they be subordinate to the insurance commissioner, and plaintiffs cite in support of this argument many cases in which were applied the rule that, where an office is created by or imbedded in the Constitution, and the duties thereof are defined by that instrument, or where the office antedated the Constitution, and its

"chief officer," as applied to the commissioner, we are not aided by citation to any authorities where a similar question has been considered by the courts, nor in our investigations have we found any. We therefore turn to the Constitution and the laws in force at the time of its adoption in order to ascertain, if possible, the effect to be given to these words as used in the connection indicated. Section 3942, Stat. 1893, being section 4715, Rev. Laws 1910, provides that a summons against a corporation may be served upon the president, mayor, chairman of the board of directors or trustees, or other chief officer of such corporation, and, in the event its chief officer is not found in the county, upon certain other officers designated therein. Here the president, mayor, or chairman of

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 mine 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, § 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 and has provided for the creation of certain grant of authority in this Constitution, upon rightful subjects of legislation, and any specific 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 auof the board, as may be noted in the follow-thority upon the same or any other subject or subjects whatsoever." ing instances: Commissioners of the land office (article 6, § 32); state board of equalization (article 10, § 21); state board of education (article 13, § 5). And the Legislature in

various instances has created certain boards

scribing of its duties and powers is a rightThat the creation of an office and the preful subject of legislation is stated in 29 Cyc. 1368. The office of fire marshal was created by chapter 46, Sess. Laws 1910-11, p. 114, and by that act he was required to report to the insurance commissioner, and his salary and expenses were to be paid out of a special tax upon the gross premium receipts of fire insurance companies. Thus it is seen that the fire marshal was already an officer of the insurance department. House Bill No. 70, which creates the insurance board, names the insurance commissioner and fire marshal as two of its members, and provides for the ap

and commissions of which the Governor is a member, possessing like powers and duties as any other member; for example: State game and fish commission (section 3293, Rev. Laws 1910). By section 6779, Rev. Laws 1910, the state treasurer, by and with the consent of the Governor and Attorney General, is authorized to select depositories of the public funds, and the three officials named are authorized to approve securities offered for such deposits. So, by chapter 6, Sess. Laws 1907-pointment of a third member of the board, 08, p. 125, the Governor was created a member of the state banking board. The law creating the banking board, providing for insurance of deposits, was under consideration by the court and its validity sustained in State ex rel. West v. Farmers' Nat. Bank of Cushing, 150 Pac. 212; Noble State Bank v. Has-laws relating to insurance is rightfully imposkell, 22 Okl. 48, 97 Pac. 590.

designated as secretary, whose duties have reference to insurance, and nothing else. The board is therefore a part of the insurance department, and includes in its personnel all the officers of that department as now constituted, and the duty of executing the

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 cases ence 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 powers may be added by the adoption of the Constitution, it was withlaw." Article 6, §§ 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 conditions existing in Oklahoma Territory, had they been different, could not have the effect of preventing the exercise of such power nor have any weight with the court, except as they may have been considered in framing

the Constitution.

There is nothing in the provisions of article 9, § 19, of the Constitution that prevents the enactment by the Legislature of the act under consideration. That portion of the section cited declares that:

"The commission may be vested with such additional powers, and charged with such other duties (not inconsistent with this Constitution) as may be prescribed by law, in connection with the visitation, regulation, or control of corporations, or with the prescribing and enforcing of rates and charges to be observed in the conduct of any business where the state has the right to prescribe the rates and charges in connection therewith.

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"In declaring in the language of the title that was one 'to establish an insurance the act saying that it was made up of such provisions bureau,' the Legislature must be understood as and details as were deemed suitable for the object; and under such title, and in keeping with, and in furtherance of, the single object expressed, it was competent to go further than to enact mere organic provisions. It was certainly admissible to include any just and pertinent regulations respecting the course of action to be obthose engaged in the business of insurance; and served by the bureau as a state agency towards it was equally admissible to include any just and appropriate provisions for prescribing the duty due to the state in the matter of taxation from insurance companies. The fundamental principle of the law was the marking out the reciprocal rights and duties of the state and those carrying on insurance, and to provide the machinery for administration, in so far as the state by a political agency might properly supervise."

This opinion was concurred in by Mr. Justice Cooley, author of an able work on Constitutional Limitations.

In the case of State v. Matthews, 44 Mo. 523, the title of an act under consideration was "An act to create an insurance department," and in sustaining the validity of the act therein involved the court said:

"The act 'to create an insurance department' defines the duties and powers of the superintendent. It invests him with certain authority and power necessary to enable him effectively to execute and enforce the law, and make it subserve the object for which it was passed. For the purpose of obtaining information and surance companies, they were required to furthoroughly understanding the condition of innish him with certain statements and facts; and a refusal to comply with that duty was fail to comply with or violate the provisions made a misdemeanor. Therefore, whenever they of the said thirteenth section, they are liable to be proceeded against for a misdemeanor.

It is apparent that the power to regulate the rates and business of insurance was not by the provision quoted delegated to the Corporation Commission, nor has the Legislature, under the authority therein given to delegate such powers, seen fit to do so, and the mere fact that specific authority is conferred upon the Legislature to vest the commission with such additional powers and duties does not deprive the Legislature of authority to pass a law which is complete in itself, regulating the business of insurance, and, in order to insure a practical operation of the law, delegating to the insurance board administrative authority to make the necessary investigations, ascertain the necessary facts, and prescribe such reasonable rules and regulations as may be necessary, when, as in this case, a review of the orders of the board in this regard is provided for in the Supreme Court. Article 5, § 36, Constitution. [8] Various provisions of the act are at tacked because it is said the subjects therein embraced are not included within the title. 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:

"An act creating a state insurance board, providing for the regulation and control of rates of premiums on insurance and to prevent discriminations therein, and the granting and revoking insurance agents' license and repealing all laws or parts of laws in conflict herewith, and declaring an emergency."

This title is sufficient to include within its terms a law generally regulating the business of insurance, insurance companies, and insurance agents. In Conn. Mut. Life Ins. Co. v. State Treas., 31 Mich. 6, the title of the act was "An act to establish an insurance bureau." In determining that the provisions of the act there were within the title, the court said:

So in the organization of the insurance department it was necessary, in order to carry out the act, to empower the superintendent to do certain things; but the power would have been fruitless without authority to enforce it. To say that a separate chapter must be enacted for every provision in the framework of a law, with a distinct title, would be almost impossible and wholly ridiculous."

of foreign insurance companies and the prosecution of their agents for unlawfully transacting business in their behalf. So in the case of State v. Twining, 73 N. J. Law, 683, 64 Atl. 1073, 1135, under an act entitled "An act concerning trust companies," it was held that the title was sufficiently broad to include within the object of the act legislation including not only trust companies, but also safe deposit and trust companies exercising trust powers, and any regulation deemed proper to enforce the provisions of the act by penalties or prosecution. In the case of People v. Superior Court, 100 Cal. 105, 34 Pac. 492, the title of the act was "The Bank Commissioner's Act," and it was held to be sufficiently

general in its scope to warrant legislation of the Legislature. The authorities upon this regulating the banking business and provi-point are collected in the second volume of sions for the enforcement thereof.

The rule in this state with reference to the title of an act was stated in City of Pond • Creek v. Haskell, 21 Okl. 711, 97 Pac. 338, as follows:

the Digest of United States Supreme Court Reports, published by the Lawyers' Co-operative Publishing Company, under the title "Corporations" (section 761). Such corporations must act through agents, and the pen

"Under this clause of the Constitution, the ti-alties of a restrictive statute affecting them tle of a bill may be very general, and need not specify every clause in the statute, it being sufficient if they are all referable and cognate to the subject expressed; and, when the subject is expressed in general terms, everything which is necessary to make a complete enactment in re gard to it, or which results as a complement of the thought contained in the general expression, is included in and authorized by it."

may fairly be visited upon their agents. Such provision is incidental to the general object of the regulation of the business of insurance, and, if this power be denied, the regulation becomes ineffectual. Hickman v. State, 62 N. J. Law, 503, 41 Atl. 942; State v. Morgan, 2 S. D. 32, 48 N. W. 314; Insur

W. 474.

See, also, In re County Com'rs, 7th Jud.ance Co. v. Raymond, 70 Mich. 485, 38 N. Dist., 22 Okl. 435, 98 Pac. 557; State v. Hooker, 22 Okl. 712, 98 Pac. 964; Holcomb v. C., R. I. & P. R. Co. 27 Okl. 667, 112 Pac. 1023; Coyle v. Smith et al., 28 Okl. 121, 113 Pac. 944; Binion, Sheriff, v. Okl. Gas & Elec. Co., 28 Okl. 356, 114 Pac. 1096; Jefferson v. Toomer, 28 Okl. 658, 115 Pac. 793; Rea, County Clerk, v. State, 29 Okl. 708, 119 Pac. 235; Leatherock v. Lawter, 147 Pac. 324 (not yet officially reported); Ex parte Ambler (Cr. App.) 148 Pac. 1061 (not yet officially reported).

It was not necessary that the provision authorizing appeal should be expressed in the title; such provision being incidental to and a necessary requisite to the regulation intended, preserving to the companies and individuals affected the right to a review in the courts of any order, rule, or regulation that might be prescribed by the insurance board. Ex parte Ambler (Cr. App.) 148 Pac. 1061. The general scope and purpose of the act being to regulate the business of insurThe fact that penalties are imposed for ance, and the various provisions being cogviolation of the provisions of the act does nate to the subject, and properly connected not render these sections void as being with- therewith and necessary to an effectual regout the title; for it would be a natural com- ulation, such as is intended by said act, we plement to the act regulating the business of think the title thereof was sufficient to eminsurance to include any just and proper brace within its general scope the various provisions for enforcing the duties imposed provisions challenged. Section 19 is assailupon the persons and companies affected, ed upon the theory that it is class legislaand to prescribe penalties for the violation tion and an unjust discrimination between thereof. Plumb v. Christie, 103 Ga. 700, 30 classes of companies therein enumerated. S. E. 759, 42 L. R. A. 181; State v. Mat- This question was involved in the case of thews, supra; State v. Bernheim, 19 Mont. German Alliance Ins. Co. v. Lewis, supra, 512, 49 Pac. 441; Gothard v. People, 32 Colo. where complainant attacked the statute of 11, 74 Pac. 890; Hartford Fire Ins. Co. v. Kansas as discriminating against complainRaymond, Ins. Com'r, 70 Mich. 485, 38 N. W. ant because it excluded from its provisions 474. And it is also permissible to make the Farmers' Mutual Insurance Companies orprovisions of said act applicable to the agentsganized and doing business under the laws of the companies affected, and requiring obedience upon their part to said law, and prescribing punishment for a violation thereof. It cannot be said that such provisions interfere with the right of contract or deprive the agents affected of property without due process of law. Corporations organized under the laws of other states to engage in and carry on the business of insurance cannot carry on said business in this state without permission from the state, express or implied, nor have they any right to take risks or transact such business in this state without first having complied with the laws of the state. It has been repeatedly held that corporations of one state have no right to exercise their franchises in another state without the consent of the state and upon such terms as may be imposed by the state in which their business is carried on, not inconsistent with the federal Constitution;

of that state, and insuring only farm property. In holding adversely to this contention, the court said:

"There are special provisions in the statutes of Kansas for the organization of co-operative companies, and, if the statute under review discriminates between them, the German Alliance Company cannot avail itself of the discrimination. A citation of cases is not necessary, nor for the general principle that a discrimination is valid if not arbitrary, and arbitrary in the legislative sense-that is, outside of that wide discretion which a Legislature may exercise. A legislative classification may rest on narrow distinctions. Legislation is addressed to evils as they may appear, and even degrees of evil may Ozan Lumber Co. v. determine its exercise. Ct. 768, 50 L. Ed. 1176. There are certainly Union County Nat. Bank, 202 U. S. 623, 26 Sup. differences between stock companies, such as complainant is, and the mutual companies described in the bill, and a recognition of the differences we cannot say is outside of the constitutional power of the Legislature. Orient Ins. Co. v. Daggs, 172 U. S. 557, 19 Sup. Ct. 281, 43

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