145 N.W. 425 | N.D. | 1913
Lead Opinion
This is an original application to this court for the issuance of its prerogative writ to prohibit and enjoin the state commissioner of insurance from proceeding to establish and put into operation a state bonding department. It is designed to test the constitutionality of chapter 194 of the Laws of 1913, entitled, “An Act Establishing a State Bonding Department in the Office of the Commissioner of Insurance, Providing for the Maintenance Thereof, and Creating a Reserve Therefor; Prescribing the Duties of Officers Connected Therewith, Providing for the Payment of Premiums and of Indemnities for Losses, and Providing for the Disposal of the Surplus after Said Reserve Has Been Created.”
Section 1 of such act reads: “A bonding department of the state
Many grounds are presented by the applicant upon which he claims the statute is in conflict with the Constitution. It will not be necessary
On behalf of the state, among other things, it is contended thát the law is not obnoxious to the Constitution, because there is no express provision in the Constitution prohibiting the state from establishing a bonding department or conducting a bonding business. There is no question of the correctness of this rule as a general principle, when to it are added implied prohibitions; and it may be necessary to take other things into consideration besides those found on the face of the Constitution. Courts must often determine what the object of a provision of that instrument is, and to do this, apply it to conditions existing at the time of its adoption, and thereby determine from the facts, as well as the language of the instrument, whether it has relation to a given condition or law.
It is also urged by the state under this head, that the state has the broadest powers imaginable to engage in any business or occupation, not in terms prohibited by the Constitution. It seeks also to justify this law by the assertion that surety companies were charging excessive rates of premium when it was enacted, for furnishing bonds for public officials, and that the state can do the business at less expense to the municipalities or communities required to bond their officials. On the other hand, it is urged that figures presented on argument show the rates charged by the surety companies, if correctly quoted, and those under this statute, do not harmonize. The surety companies charge different rates on bonds for different officials, the rate depending largely upon the character of the risk, it being highest for those offices where the opportunity and temptation for peculation and the skill required are greatest, while the state rate is the same regardless of the risk. Naturally this results, according to the tables presented, in a number of officers being required by the surety companies to pay a higher rate than is contemplated by the flat rate established by the statute in question, while some officers pay a lower rate to surety companies than to the state. All such comparisons, however, are beside the issue.
The state was not organized as an institution to engage in any line of private business, whenever, in the judgment of some legislative
From the total fund the commissioner is authorized to arbitrarily determine how much will be necessary to pay deputies, clerks, and the other expenses of his department, and is required to set aside from such fund the amount so decided upon by him. No limit is placed by the act in question upon the amount which may be used for these purposes. It is left solely with the commissioner, and only the remaining part of the fund is available to pay liabilities incurred during each year. The separation of this fund into two parts, one for the payment of expenses and the other for the payment of losses, is a legislative act, and the very least that the legislature can do and have the act valid in this respect is to place a limit upon the amount of the fund to be used in the payment of expenses.
The people, through their Constitution, have very jealously guarded the functions of the respective departments of government. The legislative assembly has been given the sole power to legislate. While it is true that it is often difficult to determine whether a specific act falls within the legislative function or the executive, we are not hampered by any uncertainty in the case at bar. This court recently passed upon a very important case, as nearly identical with this as two cases can well be. In State ex rel. Rusk v. Budge, 14 N. D. 532, 105 N. W. 724, known as the Capitol Commission Case, this court passed upon an act providing for the erection of capitol buildings at the seat of government. That act dealt with an indefinite fund, authorized a commission appointed by the governor to construct two buildings, a capitol and an executive mansion, and left it to the determination of the commission
In Minnesota, Pennsylvania, and Wisconsin, it has been held that the legislature cannot delegate to a state insurance commissioner the preparation of a printed form in blank of a contract or policy of fire insurance, together with such provisions, agreements, or conditions as may be indorsed thereon, or added thereto, and to which all subsequent insurance contracts must conform, as this is a delegation of legislative power. Anderson v. Manchester F. Assur. Co. 59 Minn. 182, 28 L.R.A. 609, 50 Am. St. Rep. 400, 60 N. W. 1095, 63 N. W. 241; O’Neil v. American F. Ins. Co. 166 Pa. 72, 26 L.R.A. 715, 45 Am. St. Rep. 650, 30 Atl. 943; Dowling v. Lancashire Ins. Co. 92 Wis. 63, 31 L.R.A. 112, 65 N. W. 738.
The bonds required of most, if not all, the officials enumerated in the act, are conditioned for the faithful and impartial discharge of the duties of the office, in addition to the condition requiring a true account of all moneys and property of every kind that may come into the official’s hands. Some of the officials named received no money in an official capacity, and the condition of the bond only relates in such cases to the faithful and impartial performance of the duties. It is too evident to permit discussion that before a recovery can be had upon a bond of this nature, or that part of the bond of a treasurer or other official who does receive money, which relates to the faithful and impartial discharge of the duties of his office, someone must determine whether the conditions of the bond have been violated, and if so, the extent of the injury resulting therefrom to the county or subdivision of which he is an official. Would anyone contend that the determination of such liability and the extent of the injury, if any, is not a judicial act, rather than an administrative or executive duty? It involves not simply a computation in dollars and cents, and thereby the ascertainment of a fact, but the determination of legal questions relating to the duties of an official, the finding of facts, and the application of the law to the facts, and in effect the rendition of a judgment on the facts so found and the law as ascertained and applied, and it seems to .us as clearly a judicial act as devolves upon any court in the determination of the issues m any form of action.
We have had so recently under consideration a statute, in most of these respects and in principle, parallel with this, that no extended discussion of the subject or citation of authorities is necessary. If anything, this act more clearly delegates judicial powers than did the one to which we refer. In State ex rel. Standard Oil Co. v. Blaisdell, 22 N. D. 86, 132 N. W. 769, Ann. Cas. 1913E, 1089, we had xmder consideration a statute giving the secretary of state powers similar to
The terms of the statute under consideration bring the duties sought to be imposed upon the commissioner of insurance and auditing board squarely within that definition. Judicial power determines what the law is, and what the rights of the parties are with reference to transactions already had, and wherever an act undertakes to determine a question of right or obligation or property, as the foundation ripon which it proceeds, such act is to that extent a judicial one. Sinking Fund Cases, 99 U. S. 761, 25 L. ed. 516; Wulzen v. San Francisco County, 101 Cal. 15, 40 Am. St. Rep. 17, 35 Pac. 353. It is also defined as “the province of deciding private disputes between or concerning persons.” Merrill v. Sherburne, 1 N. H. 199, 8 Am. Dec. 52, and authorities cited in note 5, 6 Am. & Eng. Enc. Law, 1032.
A constitutional grant of judicial power to one department carries the whole judicial power of the state, and excludes any exercise thereof by other departments. 6 Am. & Eng. Enc. Law, 1053. To assume to vest judicial functions elsewhere than in the tribunal established by the Constitution is clearly without the sphere of legislative action, and statutes which attempt to confer judicial powers upon executive or ministerial officers are invalid. State ex rel. Hovey v. Noble, 118 Ind. 350, 4 L.R.A. 101, 10 Am. St. Rep. 143, 21 N. E. 244; United States v. Rider, 50 Fed. 406; People ex rel. Kern v. Chase, 165 Ill. 527, 36 L.R.A. 105, 46 N. E. 454; State ex rel. Monnett v. Guilbert, 56 Ohio St. 575, 38 L.R.A. 519, 60 Am. St. Rep. 756, 47 N. E. 551. These principles are so strictly adhered to that it is held in states where law and equity are separately administered, that no interference can be had in the respective jurisdictions of courts of law and of equity. Indeed, it is also held that the legislature cannot transfer to an inferior court any of the established powers of the supreme court created by the Con
It is fundamental in all civilized governments, at least in those where the people have any conception of justice and of its administration, that no person or institution can he deprived of property without due notice and an opportunity to be heard, and a law which fails to provide these,, and places it in the power of any official to arbitrarily determine a right, without affording the person or the municipality or other organization interested any opportunity for preparation and hearing by a body constituted for such purpose, when there are such bodies provided by the Constitution, deprives that person or community of property without due process of law, and no right of an American, whether an individual or a community, is more sacred than the right thus attempted to he protected through the organic law of the state and of the nation.
The definitions of due process of law are various, and it is extremely difficult to formulate any definition which is applicable in all cases or to all proceedings. One of the most frequently quoted definitions was-given by Mr. Webster in the celebrated Dartmouth College Case, and has been cited by many courts with approval, as coming probably as-near to a general definition as any that has been announced. It is: “By The law of the land’ is most clearly intended the general law; a law which hears before it condemns; which proceeds upon inquiry, and.
One essential to due process of law, one, perhaps, which is applicable to as large a class of cases as any we find, is given in McGehee on Due Process of Law, p. 1, and is substantially the same as found in Chicago, B. & Q. R. Co. v. Chicago, 166 U. S. 226, 41 L. ed. 919, 17 Sup. Ct. Rep. 581. “ 'Due process of law,’ as the meaning of the words has been developed in American decisions, implies the administration of equal laws according to established rules not violative of the fundamental principles of private right, by a competent tribunal having jurisdiction of the case and proceeding upon notice and hearing.” And that author makes the following observations: ''The basis of due process, orderly proceedings, and an opportunity to defend, must be inherent in every body of law or custom, as soon as it advances beyond the state of uncontrolled vengeance; indeed, the emphasis placed on a literal adherence to customary rules of procedure is one of the most marked features of primitive law, and with the advance of civilization and the application of reflection to old collections of custom, the principle of notice and an opportunity to defend would take its place, as a part of the jus gentium, to become later the law of nature or the law of God.”
It was said in Hurtado v. California, 110 U. S. 516, 28 L. ed. 232, 4 Sup. Ct. Rep. 111, 292: “In this country written Constitutions were deemed essential to protect the rights and liberties of the people against the encroachments of power delegated to their governments, and the provisions of Magna Charta were incorporated into Bills of Bights. They were limitations upon all the powers of government, legislative as well as executive and judicial. It necessarily happened
In Bank of Columbia v. Okely, 4 Wheat. 235, 4 L. ed. 559, it was said: “As to the words from Magna Charta incorporated into the Constitution of Maryland, after volumes spoken and written with a view to their exposition, the good sense of mankind has at length settled down to this, that they were intended to secure the individual from the arbitrary exercise of the powers of government, unrestrained by the established principles of private rights and distributive justice.”
Chancellor Kent says in vol. 2 of his Commentaries, p. 13, that “ ‘due process of law’ means law in its regular course of administration through courts of justice.” While it is true that the proceedings need only be appropriate to the case, and just to the parties to be affected, in Hagar v. Reclamation Dist. 111 U. S. 101, 28 L. ed. 569, 4 Sup. Ct. Rep. 663, it is deemed essential that there must be notice and an opportunity to be heard before some official board or court, whenever life, liberty, or the title or possession of property are involved. Fortescue, J., in Dr. Bentley’s Case, Rex v. University of Cambridge, 1 Strange, 567, said: “The laws of God and man both give the party an opportunity to make his defense, if he has any. I remember to have heard it observed by a very learned man, upon such an occasion, that even God himself did not pass sentence upon Adam before he was called upon to make his defense. ‘Adam’ (says God) ‘where art thou? Hast thou not eaten of the tree whereof I commanded thee that thou shouldst not eat?’ And the same question was put to Eve also. This doctrine was adopted into American jurisprudence to the fullest extent, and was referred to the principles either of natural justice, of international law, or of the common law.” McGehee, Due Process of Law, 15. Judge Story said: “It is a rule founded upon the first principles of natural justice, that a party shall have an opportunity to be heard in his defense, before his property is condemnedand the Supreme Court of the United States in Galpin v. Page, 18 Wall. 350, 21 L. ed. 959, and
Under the terms of the act we are considering, the insurance commissioner is the judge and the jury, as well as the custodian of the fund, .and to him it is attempted to impart the power to serve in all these capacities, and determine the validity of the claims made by any subdivisions of the state to a part of the fund. It will thus be seen that it is serving in substantially conflicting capacities. There is no contract on the part of the state to pay. There is no one whom the municipality can sue to enforce the so-called bond. If a claim of liability is made, the state cannot be sued, because it has not contracted or been made liable, and further, if it could be sued, no judgment obtained by a municipality could be enforced, because the only manner provided by statute for enforcing a money judgment against the state is by means of a tax, and no judgment can be paid, and no action can be maintained, until the state auditor has rejected a claim; but the state auditor
Dissenting Opinion
(dissenting). Am unable to concur in the majority opinion, because it ignores the principal question sought to be raised, and misstates the contention of the state.
’ The parties to this litigation wished to have settled the right of the state to enact this class of legislation, and not whether there were minor defects in the bill itself. The majority opinion fails to give any light upon this question, and the next legislature will be totally in the dark as to its powers in the premises. While there are minor defects in the law as pointed out in the majority opinion, I think they can be remedied by amendment.