Wallace & Co. v. Ferguson

Mr. Justice Burnett

delivered the opinion of the court.

Accompanying the pleadings in the case are sundry exhibits, and what seems to be testimony taken before a stenographer and notary public; but these were not presented to the court at the hearing, although Section 625, L. O. L., states that “in the Supreme Court the writ may be allowed by the court or any judge thereof, but shall only be tried and determined by the court; and all issues of either fact or law therein shall be tried by the court.” The case, however, may be determined upon the pleadings, and will be so treated.

The act (Laws 1911, p. 376) under which the petitioner professes to be operating provides as follows:

“Section 1. That the making of contracts between individuals, firms or corporations, providing indemnity among each other from fire loss or other damage to their own property shall constitute the business of insurance but shall not be subject to the laws of this state relating to insurance corporations or associations except as provided in this act.

“Sec. 2. The attorney, agent, or other representative acting for such individuals, firms or corporations shall file with the insurance commissioner of this state before transacting business therein a declaration in writing verified by the oath of such attorney, agent or other representative setting forth : (a) The name or title of the office through which such individuals, firms or corporations exchange such contracts; (b) a copy of the form of contract, power of attorney and rules under and by which such indemnity is to be effected; (c) the location of the office or offices through which such contracts are to be issued; (d) a statement showing the joint cash assets and liabilities.

“Sec. 3. Such attorney, agent or other representative acting for such individuals, firms or corporations shall also file with the insurance commissioner a power of attorney authorizing the insurance commissioner to make and accept service in any proceeding in any of the courts of justice in the State of Oregon or any of the United States courts therein, which shall stipulate and agree on the part of such attorney, agent or other representative acting for such individuals, firms or corporations that any legal process which is served on the insurance commissioner shall be of the same legal force and validity as if served on the individuals, firms or corporations contracting for the exchange of indemnity among themselves.”

Section 4 provides, in substance, that the representatives through whom insurance contracts of the character described in the act are issued or negotiated shall procure from the insurance commissioner a certificate of authority containing certain provisions therein named, which credential shall be renewed annually during the month of December for the ensuing calendar year on proper application to the insurance commissioner,.and prescribes a fee of $15 in connection therewith.

After stating that the plaintiff is a corporation organized for the purpose of acting as attorney or agent for those desiring to exchange insurance among themselves, the return alleges:

“That the business in which Gruy L. "Wallace & Co., plaintiff, is engaged, is subject to a reasonable regulation by the insurance department of this state, and the insurance commissioner is authorized and empowered by law to prescribe and enforce such reasonable conditions as he may deem advisable to be observed by such companies as plaintiff herein, before permission is given to engage in such business in this state. ’ ’

This allegation is nothing else than a conclusion of law, and states no facts affecting the case. The return further sets out certain regulations which the commissioner has prescribed to be observed in such cases as this, but which are not found in the statute already quoted. Finally, the defendant bases his refusal to issue the certificate solely upon the neglect of the plaintiff to comply with these rules which he has established. The commissioner, being a creature of the statute and not a common-law officer, must find his authority in the statute establishing his office and prescribing his duties. It is the law of his official being and the boundary of his official activities. The enactment already quoted states explicitly that insurance of the kind mentioned therein ‘ ‘ shall not be subject to the laws of this state relating to insurance corporations or associations except as provided in this act.”

In Bankers’ Deposit etc. Co. v. Barnes, 81 Kan. 422 (105 Pac. 697), it is said:

“Whether the regulation proposed by the superintendent of insurance be or be not desirable as a safeguard to the people of the state, we cannot, considering the provisions of these statutes, reasonably infer that the legislature intended to leave anything to his discretion in the matter. On the other hand, it seems that the legislature has prescribed every step and requirement to be taken by or demanded of the applicant to entitle it to a certificate of authority to do business, and has provided that upon the taking of these steps it shall be the duty-of the superintendent of insurance to issue a certificate of authority. The statute seems indeed to be an express negation of any further requirement. ’ ’

Legislation in this state has gone far along the path of paternalism in relation to insurance, and the conditions laid down by the commissioner to which reference has been made might possibly be effectual progress in the same direction; but the sanction for such action rests alone with the legislative power, and cannot be assumed by a mere administrative officer. The case is analogous to the situation described in State v. Des Chuttes Land Co., 64 Or. 167 (129 Pac. 764) where the state land board incorporated in the contract with the defendant certain conditions not authorized by the statute under which the stipulation was made, and it was there held that the agent of the state, acting ■under a public law, must find sanction for bis doings in the statute itself. The unauthorized provisions were held not to be binding.

The record here shows a full compliance by the petitioner with the requirements of the statute, leaving no alternative to the defendant except to furnish the certificate; and a peremptory writ will be issued to that end.

Writ Allowed.

On Rehearing Opinion Sustained.