Drake v. United States ex rel. Bates ( 1908 )

Mr. Chief Justice Shepard

delivered the opinion of the Court:

The right of the petitioners is founded on sec. 654 of the Code [31 Stat. at L. 1292, chap. 854], which is part of the subchapter 5 of chapter 18, relating to corporations. So much of the same as is pertinent is here given:

“Sec. 654. Insurance Agents. — No person, firm, or corporation shall act as agent for any insurance company or association, or act as insurance broker or agent for procuring or placing insurance for commissions, compensation, gain, or profit, without first having obtained a license as an insurance agent or broker from the superintendent of insurancce of the District. Every such license certificate shall have printed conspicuously upon its face the words ‘general insurance license,* and for such license the sum of fifty dollars shall be paid annually in the month of' March to the collector of taxes of said District. * * * No person, firm or corporation, or association shall allow or pay any commission, rebate, or compensation whatever, directly or indirectly, to, for, or in behalf of any person, firm, or corporation doing business in the District of Columbia, not licensed as herein provided Any violation of this section shall bo a misdemeanor, and, on conviction in the police court of said District, be subject to the penalties provided in •sec. 648 aforesaid for the misdemeanors therein described: Provided, That licenses to firms, corporations, or associations shall be held to extend only to the bona fide copartners, not exceeding two in one firm, and to the secretary and one assistant secretary of each corporation or association so licensed any one of whom may be held and dealt with on behalf of such firm, corporation, or association for any violation of the provisions hereof.”

The respondent, as superintendent of insurance, relies upon the power to make regulations relating to the licenses required by sec. 654, as conferred by other sections. Sec. 645, which creates the oifice of superintendent, contains this clause: “Said superintendent shall have supervision of all matters pertaining to insurance companies and beneficial orders and associations, subject only to the general supervision of the commissioners.” Sec. 646 provides in its first clause: “It shall be the duty of the said superintendent to see that all laws of the United States relating to insurance or insurance companies, benefit orders, and associations doing business in the District are faithfully executed.” The section then proceeds to make regulations for the permission of such companies to do business in the District. The concluding sentence of the section reads: “Said superintendent shall have power to make such rules and regulations, subject to the general supervision of the commissioners, not inconsistent with law, as to make the conduct of each company in the same line of insurance to conform in doing business in the District.” A number of other sections prescribe many requirements to be complied with by companies doing business in said District, which relate to their reports, capital required, deposits of money by foreign companies, and so forth, besides similar reports to be made by local companies. Sec. 645 to 653 inclusive.

O'1 January 30, 1902, the superintendent addressed a com munication to the commissioners, in which he said: “It being the duty of the superintendent of insurance to interpret and apply the Code of law of the District * * * relating to insurance companies and insurance agents, I therefore, concurring in the opinion of the city solicitor, beg leave to submit to you for your approval the following rulings on secs. 646, 654, and 655 in regard to licenses, viz." His first ruling was that sec. 646, so far as it refers to licenses, relates to the insurance company itself. 'Second, secs. 654 and 655 refer to agencies, and not to' companies, unless acting as agents. He then proceeds to enumerate the distinguishing features of his ruling in respect to companies, agents, licenses, and fees to be paid, classifying them as follows: (2) Each local and foreign company desiring to act as agent for receiving business for another company, or from agents or superintendents thereof, is required to procure a “general insurance license,”- — fee to be paid $56. (3) Foreign companies must be licensed under sec. 646 before they can .in any way do business in the District. Issuing its own policies not required to be represented by a general agent. If it has such representative' he must hold a “general insurance license,” and pay a fee of $50. (4) The “general insurance license” may be issued to persons, or firms of two persons, or to a corporation; and under this form of license an-unlimited number of companies may be represented by an agent; and power is granted to the licensee to appoint solicitors for each company he represents. Policy-writing agent may. also act as broker. Fee, $50. (5) Broker’s “general insurance'license.” This carries with it all the privileges granted to a policy-writing agent, except that the licensee cannot issue policies nor appoint solicitors. A broker represents no company, but places the business he contracts wherever he elects in companies licensed to do business in the District. Fee, $50. (6) Solicitor’s license. A solicitor must be employed in some capacity by a company or its principal agént. License privilege limited to one company.'

It is quite clear that no provision of the law conferred or attempted to confer upon the superintendent of insurance the power to make and enforce an interpretation of the laws relating to insurance companies, agents, or brokers. Such power is a judicial one, that can be exercised by the courts alone. If the rulings aforesaid, approved by the commissioners, are intended as regulations for the proper enforcement of the law, they find no support in the provisions before stated as relied on by the superintendent. Whatever the power in regard to the enforcement of the law and the making of regulations that was conferred by the provisions of sec. 646, it does not embrace the-power to make regulations for the classification of persons required to take out a “general insurance license” by the provisions of sec. 654. That section makes no such classification as that declared by the superintendent. It embraces those who act as agents for any insurance company, and as brokers or agents, requiring one fee and one form of license, which must have printed conspicuously on its face the words “general insurance license.” The solicitors for general insurance and that known as “industrial” are provided for separately in sec. 655. Sec. 654 imposes the duty upon every broker or agent to obtain this license, and when so licensed there is nothing to prevent him from acting as the agent of any company or companies, or from procuring insurance in any company, provided the same shall be authorized to do business in the District. If he, while doing business under said license, shall violate any provision of the law in respect of the payment of commissions, rebates, or compensation, he is amenable to the punishment for the offense that is prescribed in the same section.

All insurance companies are compelled to comply with the provisions of the several sections relating to them before they can carry on business through, or issue insurance at the request of, any licensed agent or broker. The companies are-under no obligation' to apply for licenses for their agents or brokers. They must apply for their own licenses, and, if located outside the District, must appoint some suitable person as attorney upon whom legal process may be served. Sec. 646.. All that persons who propose to take out the “general insurance-license” are required to do is to apply therefor to he superintendent and pay the statutory fee. They have then the power to make arrangements for insurance with any company authorized to do business in the District, upon such terms and with such general or special authority as may be agreed upon. No power is given the superintendent to impose any conditions upon them such as were imposed upon the petitioners in this ■case, as conditions precedent to the issue of the license. The regulatory powers of the superintendent are limited by law to the companies, and do not extend to persons seeking to engage in business as agents and brokers under a “general insurance license.” His charge to see that the laws are executed authorizes him, upon information received of violations of the law by such licensed agents and brokers, to cause them to be prosecuted therefor. In respect of issuing the license to such applicants, the superintendent is a ministerial officer vested with no discretionary power in the premises. The calling of agents and brokers is a legitimate and lawful one, though subject to the power of the government to compel them to pay a license therefor. As to them, the imposition of the fee is apparently for the purpose of raising revenue. It is the right, therefore, of any citizen to engage in the calling at will, upon tendering the fee required by law to the officer charged with the ■duty of receiving it and issuing the license. With no power to add to the requirements of the law, it is his plain duty to receive the fee when tendered and issue the formal license required hy the law. Macfarland v. United States, 18 App. D. C. 554, 564.

Believing that the court was right in ordering the mandamus to issue, the judgment is affirmed, with costs.

Affirmed.