150 Mo. 113 | Mo. | 1899
These are quo wcurrcmto proceedings by the relator, as Attorney-General, against respondents, nonresident insurance companies doing business in this State, to
The petition alleges that each of the defendants is a nonresident corporation duly organized and carrying on the business of fire insurance in this State, they having been licensed by the Insurance Commissioner of the State so to do.
The petition then proceeds as follows: “That afterwards, to wit, on the — day of July, A. D. 1897, each and all of said defendant corporations, unlawfully misused and abused their said franchises, rights and privileges as fire insurance companies, authorized to do business under the laws of the State of Missouri, by, within the city of Kansas City, Jackson County, Missouri, creating, entering into, becoming a member of, and a party to a certain pool, trust, agreement, combination, confederation, and understanding with each other, and other fire insurance corporations, and associations of persons, to regulate and fix the prices and premiums to be paid for insuring property in said Kansas City, Jackson County, Missouri, against loss or damage by fire, lightning and storm, and to maintain and control said price when so regulated and fixed.
“That each and everyone of said defendant corporations is represented in said Kansas City, Jackson County, Missouri, by a local resident fire insurance agent, legally and fully authorized by each of said several corporations to act for their respective corporations in all matters relating to the insuring of property against loss or damage by fire, lightning and storm, in said city, and that heretofore, to wit, on the — day of July, A. D. 1897, each of said defendant corporations, by their respective agents (each of which said several agents are duly and legally licensed and authorized to write said insurance under the laws of the State of Missouri), entered into and were
“And that the said defendant corporations, through said Board of Underwriters aforesaid, and in pursuance of the object, purpose and intention of said defendant corporations, have unlawfully agreed, combined and confederated with each other, and with other fire insurance corporations (doing business under the insurance laws of the State of Missouri), to form an insurance trust in Kansas City, Missouri, to regulate, fix and maintain the price or premium to be charged by each of said corporations for insuring the different designated classes of risks on property against loss or damage by fire, lightning and storm in Kansas City, Missouri.
“And the said defendant corporations, and other insurance companies, acting with them, in pursuance of the said agreement, combination, confederation and trust, are each of them, through their respective agents, unlawfully maintaining said agreed price or premium upon the respective classes of risks on property against loss by fire, lightning and storm in Kansas City, Missouri, and which said rate so fixed hy said agreement aforesaid, is the minimum rate charged in Kansas City, Missouri, by all said defendant corporations. And that said rate aforesaid, so fixed as aforesaid, is the mininrmm rate agents of said insurance companies are allowed to charge by
“And relator charges and avers that since the — day of July, A. D. 1897, said defendant corporations in the city of Kansas City, Jackson County, Missouri, have offended against the laws of this State, and have greatly abused and misused their corporate authority, franchises and privileges, and unlawfully assumed and usurped franchises and privileges not granted to said corporations by the laws of the State of Missouri, by entering into, becoming a member of and a party to said pool, trust, combination and confederation, as aforesaid, to regulate, fix and maintain the price and premiums to be paid for insuring property against loss or damage by fire, lightning and storm in Kansas City, Missouri.
“And relator further charges that the action of the defendant corporations hereinbefore set out, is a gross perversion of the franchise granted to them by the State of Missouri, and an illegal usurpation of privileges not granted to them, and which said usurpation of privileges and franchises not granted them is of great injury to the public.”
Respondents answered jointly, admitting that they are foreign corporations duly organized and respectively engaged in the business of fire insurance; and allege that they have complied with the laws of the State of Missouri with respect to foreign insurance companies desiring to do a fire business therein, they having been duly, licensed by the Insurance Commissioner to so do.
The answer then proceeds as follows: “And further answering these defendants deny that on the ■ — ■ day of July, 1897, each and all or any of said defendant corporations unlawfully misused and abused their said franchises, rights and privileges as fire insurance companies authorized to do business under'the laws of the State of Missouri; and they deny that they or either of them in the city of Kansas City, Jackson County, Missouri, entered into or became a member of the
“And further answering defendants say that the truth and facts are as follows: That at and prior to the time alleged in said information, each of these defendants had appointed a local agent in Kansas City, Missouri, each representing his respective company; that said local agent had authority from the respective defendants to make contracts of insurance for and on its behalf, insuring property in said city against loss or damage by fire, lightning or storm, in so far as said respective insurance companies were authorized by their respective charters to effect such different kinds of insurance, and to agree with the assured upon the amount of premium to be charged under the specific contracts effected by them, and that in order to effectuate their business these defendants respectively sent their respective policies of insurance in blank, signed by their respective presidents and secretaries, with their respective corporate seals attached, to their respective agents to be by them respectively countersigned and delivered to the parties with whom they had effected contracts of insurance aforesaid; that during the month of July, 1897, there existed in Kansas City, Missouri, an association known as the Kansas City Board of Eire Underwriters, whose object was the improvement of
“And further answering these defendants say tbat tbe constitution, rules and transactions of said Board of Under-, writers did not in any manner constitute it a pool, or a trust or a conspiracy to control prices; nor did they constitute an agreement, combination, confederation or understanding with any other corporation, partnership, individual or any other person or association of persons to regulate, fix or maintain tbe price or premium to be paid for insuring property against loss or damage by fire, lightning or storm.
“And these defendants further answering say that said Board of Eire Underwriters was not at the date mentioned in said information engaged in any business reprobated or forbidden by the laws of this State, and they deny that since the date mentioned in said information, to wit, July —, 1891, they, or either of them, in the city of Kansas Oity aforesaid, have offended against the laws of this State, or have abused and misused their respective corporate authority, franchises and privileges, or that they have unlawfully assumed or usurped franchises and privileges not granted to defendants by the laws of the State of'Missouri; and they respectively deny that they have entered into or become a member of or party to any pool, trust, combination and confederation as aforesaid, to regulate, fix and maintain the prices and premiums to be paid for insuring property against loss or damage by fire, lightning and storm in Kansas Oity, Missouri; and they deny that they or either of them have been guilty of a perversion of the franchises granted to them by the State of
W. J. Eetter testified in behalf of relator substantially as follows: “In July,*1897, the respondents were engaged in the fire insurance business in Nansas City, Missouri, and their agents were then members of the Kansas City Board of Underwriters, and that said board was composed of the agents of fire and tornado insurance companies. The. board is an unincorporated institution, but have a constitution and rules by which they are governed, which were adopted February 25, 1897, and have not since been altered or amended. The rates of insurance in Kansas City, Missouri, are fixed by myself, and not by the Board of Underwriters. This was by agreement among the insurance agents in the city. The estimates on dwellings are in card form. When agents want estimates on dwellings they ash for the card, which has only estimates on dwellings, private barns and churches. When an agent wants rates on business houses in the city he calls on me for them. About seventy-five per cent of the business written*in the city during the dates named in the petition was written at the rates fixed by me. My duties as secretary of the board are prescribed by the rules of the board. The board was organized many years ago. My salary as secretary of the board is received from the insurance companies. The board has two funds, or rather there are two funds in connection with it. The board have a fund of their own, they charge a membership fee of $200 for every member, and accumulate a fund in that way. I am paid by the companies for making rates and attending to the office business of the companies. The companies do not pay the expenses of the board that the agents mate; they have to pay that themselves. I act in a double capacity. I have the companies’ money and pay it out'
On cross-examination he testified substantially as follows: “I have been in the fire insurance business 48 or 49 years. Eor 16 years I have been engaged in preparing rates and furnishing information to insurance companies. My business during that time has been to gather up information and make rates. Previous to 1893 for a number of years premiums had been gradually decreasing in Missouri and losses gradually increasing until the companies found that they were losing money rapidly and then it became necessary to increase rates. There was at that time a State Board of Underwriters that had control of that branch of the business and they increased the rates in this State in 1893 and 1894 considerably.” Witness was permitted to testify, over the objection of counsel for relator, that the rates fixed by witness in Kansas City were reasonable. “The rates are prepared on data that take into consideration the merits of the building for resisting fire; whether or not they have a shingle roof, or tin roof, and whether or not a skylight is in the building, and the size of the same. Also an elevator shaft is considered if there is one; also any other exposures. These additions to rates or reductions from rates are based upon a general experience in the insurance business, and are arrived at by the losses. The facilities for extinguishing fire, and whether or not a town has a good fire department, are all taken into consideration in fixing the rate. Insurance statistics have been kept, but have not been collated. I fix my rates in this way: for instance, I take any large district, as, for instance, the State of Missouri, and the different companies say we are losing money on a certain class of risks, say a planing mill, and one company says we are losing money on this class of risks,
On redirect examination, he said: “The basis of my rates in. Kansas City is not in my own information alone, but is a rather general concensus of opinion and experience of the companies and agents, not written opinions, but collected by means of a general knowledge and information. This data I do not find anywhere collated. In making a rate I am governed very' frequently by the general ideas of all the com-
“The Salvage Corps that I have mentioned is a part of the city government of Kansas City, Missouri. The Chief of the Eire Department of Kansas City nominates the members of the Salvage Corps and they are confirmed by the city council. In the work the Salvage Corps does in a fire they are under the control of the Chief of the Fire Department.
“No one other than myself has a right to change a rate in Kansas City. As a rule when I raise or lower rates, my action is not subject to review. Sometimes, of course, the agents think the rates fixed by me are unreasonable and they appeal to the companies and then the companies and myself adjust the matter. I am really the agent of the companies. The companies would simply, if they thought a rate was.
James A. Waterworth testified as follows: “Been president of the Board of Eire Underwriters of St. Louis for fifteen-years. The Board of Eire Underwriters has been engaged in obtaining the adoption of what is called slow-burning methods of construction here in the city of St. Louis. That pertains to'buildings of large size and then another method was adopted,, that of obtaining the erection of fire-proof buildings, such as are built of indestructible material, with the elevators and staircases inclosed by brick, so that no communication of fire or heat will proceed from one floor to the other. These are the chief modern improvements of construction. Accompanying.
On cross-examination the witness stated that the premiums paid by insurance companies in St. Louis were larger than they were in 1896 and 1897, although the volume of business in 1897 was larger than it was in 1892, and the assessable wealth of St. Louis was greater than it was in 1892. That the companies did not make as much money in 1897 as they did in 1892, although these improvements had been made. “The general improvements, automatic sprinklers, electrical appliances, and improvements in the water service of cities certainly benefit insurance. This class of improvements I have been speaking of applies only to what is known as mercantile risks and does not 'apply to dwelling house risks. Taking the whole State of Missouri, the insurance rates have been remarkably steady for the last ten years.”
Section one of an act of tbe General Assembly of tbe State of Missouri against pools, trusts and conspiracies, approved March 24, 1891, page 208, Acts of 1897, reads as follows:
“Section 1. Any corporation organized under tbe laws of this or any other State or country for transacting or conducting any kind of business in this State, or which does transact or conduct any kind of business in this State, or any partnership or individual, or other association of persons whatsoever, who-shall create, enter into, become a member of or ■a party to any pool, trust, agreement, combination, confederation or understanding with any other corporation, partnership, individual, or any other person or association of persons, to regulate or fix the price of any article of manufacture, mechanism, merchandise, commodity, convenience, repair, any product of mining, or any article or thing whatsoever, or the price or premirttn to be paid for insuring property against loss ■or damage by fire, lightning or storm, or to maintain said price when so regulated or fixed, or shall enter into, become a member of or a party to any pool, agreement, contract, combination or confederation to fix or limit the amount or quantity of any article of manufacture, mechanism, merchandise, commodity, convenience, repair, any product of mining, or any article or thing whatsoever, or the price or premium to*133 be paid for insuring property against loss or damage by fire, lightning or storm, shall be deemed and adjudged guilty of a conspiracy to defraud, and be subject to penalties as provided in this act; Provided, however, that the provisions of this section shall not apply to agreements of fire insurance companies, or their agents, or boards of fire underwriters, to regulate the price or premium to be paid for insuring property against less or damage by fire, lightning or storm in cities in this State which now have or which may hereafter acquire a population of one hundred thousand inhabitants or more; and provided further, that if such insurance companies, or their .agents, or the board of fire underwriters doing business in any such city, shall combine in such city, either directly or indirectly, or agree or attempt to agree, directly or indirectly, to fix or regulate the price or premium to be paid for insuring property located wholly outside of such city against loss or -damage by fire, lightning or storm, such company so violating the provisions of this act, either by itself, its agents, or by any such board. of underwriters, shall be taken and deemed to have forfeited its right to do business in this State, and shall become liable to all the penalties and forfeitures provided for by the provisions of this act.”
It is manifest from the evidence in this case that respondents were at the time of and before the institution of these proceedings unless, exempted therefrom by the proviso in said section, acting in violation of that provision of the section of the act quoted, which prohibits any corporation doing business in this State from entering into any agreement, combination or understanding with any other corporation to regulate or fix the price or premium to be paid for insuring property against loss or damage by fire, lightning or storm, ‘ or to maintain said price when so regulated or fixed (State v. Phipps, 50 Kan. 609), and it makes no difference that an agreement to that effect was entered into by the agents of respondents instead of themselves, for it is perfectly clear that the rates
The secretary of the Board of Underwriters of which he, and other agents of respondents were members was empowered to fix the rates, and no member of the board could write a risk until the rate was fixed by him as secretary, nor could they issue a policy, or cause insurance to be written or placed by any company at less than the rates thus fixed.
The question then is, are the respondents with respect to fire insurance in Kansas City, Missouri, exempted from the-penalties imposed by said act, by the proviso in said section by which it is provided that its provisions shall not apply to-agreements of fire insurance companies' or their agents, or boards of fire underwriters, to regulate the price or premium to be paid for insuring property against loss or damage by fire, lightning or storm, in cities in this State which now have or which may hereafter acquire a population of one hundred, thousand inhabitants or more?
The Attorney-General insists that this proviso is unconstitutional upon the ground that it divides a natural class, to-Avit, fire insurance companies, into two portions, making two-' classes out of one, and thus, in effect, arbitrarily enacts different rules for the government of each- We are unable to s^e the force of this contention. The act as we understand it does not divide insurance companies into two classes, but by-the proviso such companies 'are simply exempted from the provisions of the act prohibiting them, their agents, and boards of' fire underwriters, from regulating the price or premium to be-paid for insuring property against loss or damage by fire, lightning or storm, in cities in this State which noAV have or Avhich may hereafter acquire a population of one hundred, thousand inhabitants or more. This is but saying by implication, at least, that insurance companies may by agreement:
Section 53, Art. IY, of the Constitution of this State provides that, “The General Assembly shall not pass any local or special law.granting to any corporation, association or individual any special or exclusive right, privilege or immunity,” and it is argued by relator that the proviso in the act in question is in conflict with that provision of the Constitution because it imposes upon a combination of certain wholesale -dealers in St. Louis and Kansas City special obligations or burdens from which insurance companies in said cities are ■exempt.
The cardinal rule in this State is “that a statute which relates to persons or things'as'a class, is a general law, while a statute which relates to particular persons or things of a class, is special.” [State ex rel. v. Herrmann, 75 Mo. loc. cit. 354; Lynch v. Murphy, 119 Mo. 163.]
In State ex rel. v. Bronson, 115 Mo. 271, a section of an act of the General Assembly was under consideration which provided that “from and after the first day of September, 1891, no text-book upon the subject named in section 5, of this Act, except those contracted for by said commission, shall be sold for use in the public schools of Missouri; and, from and after the first day of September, 1892, no textbook upon the aforesaid subjects, except those contracted for by said commission, shall be used or t-aught in any public school within this State; Provided, that this act shall not apply to any city or district which now contains or may hereafter contain more than one hundred thousand inhabitants,” and it was held that the proviso did not make the law unconstitutional.
The proviso relates to fire insurance in cities of a class, that is, cities in this State which now have or which may hereafter acquire a population of one hundred thousand inhabitants •or more, and while there are but two of such cities in this
In State ex rel. v. Miller, 100 Mo. 439, an act of the General Assembly which fixed the number of school directors in cities of over three hundred thousand inhabitants, prescribing their qualifications, and determining the manner of their election and terms of office, was held not obnoxious to the Constitution as being a special or local law.
Whether or not an act of the legislature be a local or general law must be determined by the way in which it affects the people as a whole, rather than the extent of the territory over which it operates, and if it affects equally all persons who come within its range it is not a local or special law. In this case the proviso affects the business of insurance in all cities of a certain class. It does not grant to any corporation, association or individual any special exclusive right, privilege or immunity but applies alike to all fire insurance companies doing business in a certain class of cities. Nor is-it class legislation. It relates to fire insurance companies as a class- and is therefore a general law.
In Phillips v. Railroad, 86 Mo. loc. cit. 543, it is said: “In the determination of a question involving the constitutionality of a law, it is a settled rule for the guidance of courts that the acts of the legislature are presumed to be constitutional, and it is only where they manifestly infringe on some provision of the Constitution that they can be declared void for that reason. In case of doubt every possible presumption not directly inconsistent with the language and subject-matter is to be made in favor of the constitutionality of the act.” See, also, State v. Able, 65 Mo. 357.
Eor these considerations it follows that the writs should be denied. And it is so ordered.