Hoadley v. Purifoy

COLEMAN, J. The appellants applied to the auditor for license to engage in the fire insurance' business within the State of Alabama. License having been refused by the auditor, they petitioned the city court for mandamus, to compel the issuance of the license. The court sustained the demurrer to the petition and from this ruling, appellants appeal to this court. The petition and grounds of demurrer require a consideration of the character in which appellants propose to do an insurance business, as well as the meaning and extent of the statutes of this state, regulating the insurance business within its limits. According to the showing made by the petition, the business was to be carried on in the manner of the ancient Lloyds. The respective liabilities and limitations of liability of the individual members to each other, and the rights, interests and privileges defined and preserved to each other and the limitation upon their respective liability fixed and declared in the policies of insurance, to be issued, in accordance with the instrument of organization as shown by exhibit A to the petition, which exhibit is in the statement of facts by the reporter, are such, that the business of insurance thus carried on may be included within the scope of the term “company,” “association,” or individuals.” Each underwriter is individually liable for a fixed amount, but not for the whole, or for any part of another underwriters liability, yet all act together to effect the contract of insurance. In the former respect it is an individual undertaking which becomes binding by the separate action of all. In the latter respect, the policy is also the contract of a “company” or “association.” It is not a partnership in a legal sense, and in no sense can it be considered a corporation. It is an association or company of individuals, organized to do an insurance business upon certain stipulations and conditions evidenced by their written agreement. It is generally con [290] ceded, and in this conclusion we concur, that each state has ample power to regulate the business of insurance within its boundary. Whether a state has the authority under the power to regulate, to exclude all individuals, companies, partnerships, organizations and associations of persons from engaging in the business of fire insurance, and permit or empower corporations to monopolize the business, we need not consider. We have no statute which requires the consideration of this question. It seems there is a statute of this kind in Pennsylvania. — Commonwealth v. Vrooman, 25 L. R. A., 250. The petitioners are non-residents of Alabama, and are citizens of the state of New York, and the question we feel bound to determine, under the constitutional provisions of the United States, and of this State, is, whether if the petitioners were citizens of the State of Alabama, seeking to engage in the fire insurance business, upon the same terms and conditions as petitioners, there is any statute or principle of public policy to prohibit them ; and whether there is any statutory regulations for engaging in the business applicable, and if so, what do they require. — Part 1, Oh. 5, title 12, article 2, of the Code of 1886, includes all the statutory provisions regulating fire insurance, material in this connection. The caption to this article is as follows: “Fire, inland and marine insurance companies not incorporated by this State.” Trace these provisions back through the Code of 1876 and 1867, and to the legislative enactments from which they were respectively codified, and it is evident they were intended to apply to and govern foreign corporations engaged in fire insurance in this State. The sections of the Code of 1886 originally codified from the act of Februaiy 24th, 1860— see acts of 1859-60, p. 113, and the act of March 8th, 1875 (Acts of 1874-5. p. 142) — fairly interpreted require this construction. Section 120Ó of the Code- of 1886, with its subdivisions, was taken from the act of 8th of March, 1875, supra, and'was enacted originally purely do regulate the business of foreign corporations, doing business in this State. This was our conclusion in the case of Noble v. Mitchell, 100 Ala., 519 ; 14 So. Rep., 581; 25 L. R. A., 238, and notes. Under this view of the law, and which we think is undoubtedly correct., the [291] sections of the Code of 1886 invoked by appellee, can have no application to the petioners. No such terms-or conditions were imposed upon domestic corporations chartered by the legislature during the long period that corporations were chartered by the legislature On the 23th of February, 1887, the legislature enacted two separate acts in relation to fire insurance ; the first is on page 85, and the last on page 105 of the acts of' 1886-87. These statutes have not been codified. By the first of these acts, p. 85, it is provided “that all insurance companies doing business as such in the State of Alabama, whether chartered by the State, or admitted from other states, shall have an actual capital, fully paid up in cash, of not less than one hundred thousand dollars, no portion of which shall be represented by stock notes, or loans on the stock of said company or companies as collateral.” It is further provided in section 2, “that all insurance companies doing business in this State, both foreign and domestic, shall be required to make annual sworn statements to the auditor, of their assets, condition, business of the previous year, in premiums, losses and expenses, in the State, and as a whole.” It will be observed that the act applies wholly and solely to insurance companies, domestic and foreign, and construing the two sections together, we are of opinion that the act applies only to chartered companies. This conclusion would seem to follow from the caption, and the body ’ of the act. It says all insurance companies “whether chartered by the State, or admitted from other states.” This construction places the act beyond the objection, that it is discriminating legislation. If we were to hold that it applied to companies not incorporated, a burden would be placed upon companies, not imposed upon an individual engaged in the same business. We do not doubt that an individual in this State, may engage in and carry on a fire insurance business. There is nothing in such a contract that is unlawful or against public policy. This proposition requires neither argument nor authority to support it. Where then is the constitutional authority for the legislature to impose a burden upon two or more persons who may prefer to associate together as a partnership or company to engage in the insurance business, and exempt the individual from such burden ? We are [292] constrained to the conclusion, that the act cited includes only chartered companies', and has no application to the case made by the petition. The other act of February 28th, 1887, page 105, reads' as follows : “An act to require all, insurance companies not organized under the laws of this State, to pay a uniform license tax of one hundred dollars per annum into the State treasury for the privilege of doing business in this State. Section 1. Be it enacted by the General Assembly of Alabama, That from aud after the passage of this act, each arid every insurance company not organized under the laws of this State, whether doing business as a fire, marine or inland insurance company, and every life insurance company doing business upon any plan, whether mutual, co-operative assessment or otherwise, and every accident or guarantee company, and every other style or class of insurance company engaged in any business of insurance of any kind whatsoever, shall, before doing any business of insurance in this State, pay into the State treasury the sum of one hundred dollars per annum, for the privilege of carrying on such business in the State of Alabama. Sec. 2. Be it further enacted, That nothing in this act contained shall be construed to apply to any secret or benevolent society, such as Masons, Odd Fellows, Knights of Pythias, Knights of Honor, Iron Hall, or orders of like kind. Sec. 3. Be it further enacted, That all laws or parts of laws in conflict with the provisions of this act, be, and the same are hereby repealed.” It is clear that this act refers only to foreign incorporated insurance companies. Its caption shows that only foreign insurance companies are to be. embraced in the act. To apply the body to domestic corporations, would render the act obnoxious to section 2, article 4, of the constitution, which declares that “each law shall contain but one subject, which shall be clearly’expressed in its title, etc.” To apply the act to companies organized in other states, not incorporated, would impose upon citizens of other states a tax not imposed upon citizens of this State, engaged in the. same .kind of business, and it exempts individuals altogether. We are of opinion that this act applies only to foreign corpora [293] tions, and does not apply to petitioners. Our conclusion is : 1st. That there is no statute law in this State, nor principle of public policy which prohibits the citizens of this State, acting as individuals, associations, partnerships or companies from engaging m the business of fire insurance without first being incorporated, and that the citizens of each of the United States are entitled to like “privileges and immunities.” 2d. That the State has the right to adopt all needful rules and regulations which are reasonable to regulate the business of fire insurance in this State. 3d. That the statutory regulations which are in force in this State, apply to and govern only those companies, or associations which have been incorporated either by the authority of thi§ State, • or some foreign State or country. 4th. That petitoners are citizens of New York, not incorporated, and are entitled to engage in the fire insurance business with the same privileges and immunities as unincorporated citizens of this State. 5th. That there is no law which requires that they shall be licensed to do business in this State, and that the auditor has no authority to issue such license. It follows, although irom difíeient .piinciples that the city court did not err in refusing to grant the writ of mandamus. Affirmed.