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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 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 Le 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. led by law. thereby indicati,
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 department, 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 insurance 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 that the commissioner was designated as the shall be styled 'the insurance commissioner,' whose term of office shall be four years: Pro
Pri 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 the expiration of the term of office of the first Governor elected. Said insurance commissioner
distinct from the 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 au
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 probibited 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, 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 office antedated the Constitution, and its 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
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- 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 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, 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- "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 van 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 printies (not inconsistent with this Constitution) as
ciple of the law was the marking out the recipmay be prescribed by law, in connection with
rocal rights and duties of the state and those the visitation, regulation, or control of corpora
carrying on insurance, and to provide the mations, or with the prescribing and enforcing of
chinery for administration, in so far as the state 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 nere fact that specific authority is con defines the duties and powers of the superin
dent. It invests him with certain authority ferred upon the Legislature to vest the com
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
5, surance companies, they were required to furand, in order to insure a practical operation nish 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. I 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 Commissionsaid:
er'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 Digest of United States Supreme Court The rule in this state with reference to the Reports, published by the Lawyers' Co-operatitle of an act was stated in City of Pond | tive Publishing Company, under the title Creek v. Haskell, 21 Okl, 711, 97 Pac. 338, as "Corporations" (section 761). Such corporafollows:
tions 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 may fairly be visited upon their agents. specify every clause in the statute, it being sufficient if they are all referable and cognate to
Such provision is incidental to the general the subject expressed; and, when the subject is object of the regulation of the business of expressed in general terms, everything which is insurance, and, if this power be denied, the necessary to make a complete enactment in re: 1 regulation becomes ineffectual. Hickman v. gard to it, or which results as a complement of the thought contained in the general expression,
State, 62 N. J. Law, 503, 41 Atl. 942; State is included in and authorized by it."
v. Morgan, 2 S. D. 32, 48 N. W. 314; InsurSee, 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.
W. 474. Hooker, 22 Okl. 712. 98 Pac. 964; Holcomb It was not necessary that the provision v. C., R. I. & P. R. Co. 27 Okl. 667, 112 Pac. authorizing appeal should be expressed in the 1023; Coyle v. Smith et al., 28 Okl. 121, 113 title; such provision being incidental to and Pac. 944; Binion, Sheriff, v. Okl. Gas & Elec. a necessary requisite to the regulation inCo., 28 Okl. 356, 114 Pac. 1096; Jefferson v. tended, preserving to the companies and inToomer, 28 Okl. 658, 115 Pac. 793; Rea, dividuals affected the right to a review in County Clerk, v. State, 29 Okl. 708, 119 Pac. the courts of any order, rule, or regulation 235; Leatherock V. Lawter, 147 Pac. 324 that might be prescribed by the insurance (not yet officially reported); Ex parte Ambler board. Ex parte Ambler (Cr. App.) 148 Pac. (Cr. App.) 148 Pac. 1061 (not yet officially 1061. The general scope and purpose of the reported).
act being to regulate the business of insurThe fact that penalties are imposed for ance, and the various provisions being cog. violation 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 uninst discrimination between thereof. Plumb v. Christie, 103 Ga. 700, 30 classes of comna
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 agents
ganized and doing business under the laws of the companies affected, and requiring
of that state, and insuring only farm propobedience upon their part to said law, and
erty. In holding adversely to this contenprescribing punishment for a violation there
tion, the court said: of. It cannot be said that such provisions in
"There are special provisions in the statutes terfere with the right of contract or deprive
of Kansas for the organization of co-operative the agents affected of property without due companies, and, if the statute under review disprocess of law. Corporations organized un criminates between them, the German Alliance
Company cannot avail itself of the discriminader the laws of other states to engage in
tion. A citation of cases is not necessary, nor and carry on the business of insurance can- for the general principle that a discrimination is not carry on said business in this state with- valid if not arbitrary, and arbitrary in the legisout permission from the state. express or im- lative sense that is, outside of that wide dis
cretion which a Legislature may exercise. plied, nor have they any right to take risks
legislative classification may rest on narrow disor transact such business in this state with
ess in this state with: 1 tinctions. Legislation is addressed to evils as out first having complied with the laws of they may appear, and even degrees of evil may the state. It has been repeatedly held that determine its exercise. Ozan Lumber Co. v.
Union County Nat. Bank, 202 U. S. 623, 26 Sup. corporations of one state have no right to
Ct. 768, 50 L. Ed. 1176. There are certainly exercise their franchises in another state differences between stock companies, such as without the consent of the state and upon complainant is, and the mutual companies desuch terms as may be imposed by the state
scribed in the bill, and a recognition of the dif
ferences we cannot say is outside of the constiin which their business is carried on, not | tutional power of the Legislature. Orient Ins. inconsistent with the federal Constitution; Co. v. Daggs, 172 U, S. 557, 19 Sup. Ct. 281, 43