130 Wash. 490 | Wash. | 1924
Lead Opinion
The legislature in 1923 amended the insurance code hy ch. 26 of the session Laws of 1923, p. 57, §2 [Rem. 1923 Sup., §7088], which provides that no insurance company, writing fire or automobile insurance, shall have more than one agent in any city of this state having a population of 50,000 or
This action is to determine the constitutionality of that portion of the act of 1923 which prohibits more than one agent of any company in any city having 50,000 or less people, or more than two agents in any city of over that population, it being the claim of the appellant that the act is in conflict with § 5, article 12, of the state constitution, and the fifth amendment and § 1 of the fourteenth amendment to the constitution of the United States.
The facts are that the Northwestern National Insurance Company is a fire insurance company, organized under the laws of the state of Wisconsin, which for many years has been authorized under the laws of this state, and the permits of the state insurance commission, to write policies of fire insurance in the state of Washington. The appellant Van R. Ferrell has, for sixteen years, been engaged in the insurance business in the city of Tacoma, which is a city of over 50,000 population, as agent for many fire insurance companies; and, for the purpose of transacting that business, he maintains an office in that city. He has been an agent of the Northwestern National Insurance Company since January 1, 1922, and upon his application for a license no objection was made by the respondent insurance commissioner of this state as to his qualifications, or of his character, or the manner in which he conducted his business. In October, 1923, Ferrell made
The question is whether the portion of the act under consideration denies to appellant the equal protection of the law and deprives him of his property without due process of law.
At the outset it is to be remembered that the occupation of insurance agent is a lawful business, and not one which it is within the power of the state to prohibit; and, as is conceded by the respondent’s attorneys, any individual has an inherent right to follow an ordinary lawful calling, and the deprivation of that right would be the taking of property without due process; and that the right to contract for one’s services in a lawful calling is a right guaranteed by the constitution; and that, under the constitution, every individual is entitled to all privileges and immunities granted to those similarly situated. It is contended, however, that the insurance business is not such an ordinary private business that it may not be regulated in accordance with the needs of public welfare ; and it may be conceded that the courts have held that the insurance business is thus subject to legislative regulation. German Alliance Insurance Co. v. Lewis, 233 U. S. 389; National Union Fire Ins. Co. v. Wanberg, 260 U. S. 71, 67 Law Ed. 62.
• But we do not acquiesce in the view that, because the insurance business may be subject to supervision, that
Tbe right of every individual to engage in any lawful business cannot be prohibited, unless that prohibition is based upon some condition existing in tbe business wbicb tbe court finds to be interfering with tbe public morals, health, safety or welfare. State v. Tanner, 244 U. S. 590. In tbe instant case, there is no question that tbe legislation is not protective of tbe public morals, health or safety, and tbe only question is whether it'has any reasonable relation to public welfare. It has been held that tbe business of writing insurance may be regulated. German Alliance Insurance Co. v. Lewis, supra. But tbe contract of tbe agent with tbe company is not a contract wbicb affects tbe public generally as does tbe business of insurance. Tbe right to regulate tbe insurance business was sustained only as to those matters wbicb affect tbe general public, and tbe general public is not concerned with tbe number of agents wbicb tbe insurance company may employ.
In La Tourette v. McMaster, 248 U. S. 465, a state statute was sustained wbicb provided that insurance brokers should be agents both of tbe company and tbe insured and should be residents of tbe state in wbicb they write insurance. But tbe basis of that decision
But the act of 1923 is not an attempt to regulate the insurance business. It is, in effect, nothing more than the creation of a favored class, who are permitted to engage in the lawful business of acting as insurance agents to the exclusion of every one else from that business; and this excludes a great number of persons who, from time immemorial, have acted as insurance agents. We all know that real estate agents, lawyers and persons following many other lines of business, have been accustomed to write insurance as a “side line.” We cannot but feel that the legislature had in view no welfare of the public, but that this legislation is an attempt to monopolize the business of writing insurance. We agree with what the supreme court of Missouri, in Moler v. Whisman, 243 Mo. 571, 147 S. W. 985, 40 L. R. A. (N. S.) 629, said in holding unconstitutional a law passed in the interest of barbers:
“Possibly some barbers, like some lawyers and other persons who have obtained successful and remunerative positions in professional and commercial life, become anxious to shut out competition by ‘burning the bridges behind them,’ so to speak; but such a scheme is entirely un-American, because it is the policy of a free commonwealth to encourage thrift and industry among its citizens, and to keep the door of opportunity ajar so that every qualified and deserving person who so desires may enter thereat.”
This court has heretofore, in State ex rel. Schafer v. Spokane, 109 Wash. 360, 186 Pac. 864, quoted with approval the following from Ex parte Dickey, 76 W. Va. 576, 85 S. E. 781, L. R. A. 1915F 840:
“The right of a citizen to pursue any of the ordinary vocations on his own property and with his own means,*495 can neither be denied nor unduly abridged by the legislature, for the preservation of such right is the principal purpose of the Constitution itself. In such cases, the limit of legislative power is regulation, and that power must be cautiously and sparingly exercised, unless the business is of such character as places it within the category of social and economic evils, such as gaming, the liquor traffic, and numerous others. To this list may be added such useful occupations as may, under certain circumstances, become public or private nuisances, because offensive or dangerous to health. All of these fall within the broad power of prohibition or .suppression, some wholly and absolutely and others conditionally. Such pursuits as agriculture, merchandising, manufacturing and industrial trades cannot be dealt with at will by the legislature. As to them, the power of regulation is comparatively slight when they are conducted and carried on upon private property and with private means. But when a citizen claims a private right in public property, such as a street or a park, a different situation is presented. Such properties are devoted primarily to general and public, not special or private, uses, and they fall within almost plenary legislative power and control. In them, all citizens have the usual and ordinary rights in an equal degree and to an equal extent. In the regulation thereof, the legislature cannot discriminate.”
Authorities might be multiplied until the perusal of them would become exhausting, to the effect that, in any of these matters, where the legislature is interfering with lawful business, the interference must have some fundamentally sound reason back of it. No such has been suggested in support of this legislation. The act itself, unlike most acts in the later years, attempting to prescribe restrictions on human endeavor, contains no statement of its high and lofty purpose and it is left to conjecture and the limited field of judicial knowledge to create some theory upon which can be predicated the reasonableness of this statute.
The record in this case shows that appellant Ferrell is in every way qualified to act as an agent, and that he is denied a license merely because in his community two other agents have already received their licenses. The statute is unreasonable, and is therefore violative of the appellant’s constitutional rights, and the judgment which is appealed from is reversed.
Dissenting Opinion
(dissenting) — I dissent from the conclusion reached in the foregoing opinion. I think the claimed rights of appellant Ferrell are of no consequence in our present inquiry. To my mind, the real
‘ ‘ duly authorized and commissioned by an insurance company, to solicit applications for and effect insurance in the name of the company, and to keep a complete record of all such transactions, and to discharge such other duties as may be vested in or required of the agent by said insurance company;”
and further, that there is no restriction in the act upon the number of solicitors who may be employed under such agent; express provision being made for the employment of such solicitors. For the purpose of investigation and facilitating the keeping in touch with the business of insurance companies by the state insurance commissioner, the legislature may have had in view the thus curtailing of the number of record insurance agencies. Surely, it cannot be said that this is an undue restriction upon the rights of or interference with the business of insurance companies.
Dissenting Opinion
(dissenting) — I concur in what is said and in the conclusion reached by Judge Parker.