Superior Lodge v. Van Camp

GATES, J. Application far peremptory writ of mandamus to compel the -commissioner of insurance to renew the certificate of authority of -the plaintiff to do- business in South Dakota as a fraternal insurance organization for the year ending February 28, 19x9. By his return .to the order to show cause, the commissioner [147] of insurance raises three issues of law and none of fact, viz.: (i) That plaintiff is not a corporation; (2) that if it is a corporation it did not comply with the requirement of section 707, C. C., that the articles of incorporation “shall show the plan of business;” (3) that, if it is a corporation, its articles of incorporation are not comprehensive enough to authorize it to do an insurance business. [ 1 ] Our conclusion is : (1) That plaintiff is a corporation duly incorporated under the .provisions of article 18 of the Civil Cotdle chapiter relative to corporations, viz. sections 706-738, C. C., inclusive; (2) that in the absence of any more detailed requirement as to the articles showing the plan of business other than is mentioned in section 707, C. C., the action of the commissioner of insurance and of the Attorney General in approving the article's in 1907, at .the time of the mcoirpiolr'altibn, renders that matter a closed incident; (3) that the corporate powers mentioned in paragraphs 3 and 4 of the “General Purposes and Objects of the Corporation,” as disclosed by its articles, are a sufficient basis to authorize the adoption of by-laws for the transaction of the business of insurance now being conducted by plaintiff as disclosed by the record. Said paragraphs are as follows r “(3) To create funds in aid of the members during sickness or other disability, and for the erection of homes for the widows and orphans of its members or for such other purposes as the Superior Lodge may determine, and generally to care for the living and bury the dead. “(4) To pledge the members to the payment of a stipulated sum to such beneficiary as a deceased member may have designated while living, under such restrictions and upon conditions as the laws of the order may prescribe. The Superior Lodge, Degree of Honor, shall be composed of officers and representatives as follows:” [2] We think the only matter that requires further discussion) is issue No. 1. The dlefenidanifc conltenids that said1 article 18 is not an incorporation statute, hut is merely a regulatory statute •and assigns as his reasons the matters hereinafter specified. He contends that, if it is an incorporation statute, it is the exclusive incorporation statute for domestic Corporations Operating under it. There would1 be force in the contention if section 706, [148] C. C., contained the only provision in regard thereto. That section says: “Every corporation or association organized * * * shall, * * * comply wlith the provisions of tihiis article.” But section 738, C. C., also says: “Fraternal, benevolent and secret societies * * ~ organized or operated for the purpose of paying death benefits * * * must comply with the provisions of this article.” Manifestly as to the domestic incorporations mentioned in the latter section article 18 is merely regulatory. He next contends that section 707, C. C., does not specify what the articles of incorporation, shall contain. In the absence of specific provision therefor, -in article 18, the general requirements of section 408, C. C., would obtain. [3-5] He next contends that there is no provision in article 18 that upon compliance with the required steps the organization. shall be a corporation, as is mentioned in section 411, C. C., wlith reference to other -couporations. Such declaration -is unnecessary, and was entirely absent from many of the incorpora ation acts of the state and territory. At the time of the incorporation of plaintiff it was absent from articles 14 and 15 of the chapter of the Civil Code relative to corporatioinsi He next contends that there is no provision for the amendment of the articles. Such a provision, while wise and useful, is unnecessary to the act of incorporation. He next contends that section 707, C. C., does not require the, filing of the articles in his office, merely their recording. Even if “recording” does not -comprehend “filing,” section 154 Pol. Code, subd. 2, does require their filing in his -office. He next contends that chapter 51 of the Laws -of- 1890, which was the parent law o-f articles 17 and 18, was not an incorporation statute, because its title was simply that ’of a regulatory act. We are of the opinion that the word "control” in the title was sufficient to indicate a broader scope of the act than mere regulation.. [6-8] Finally he asserts that the domestic insurance companies mentioned in section 706, C. C., got their corporate life through the secretary o-f state, and that compliance with article 18 was simply necessary to entitle them to transact an in-sur [149] anee 'business, and this, in the face of section 67, Pol. Code, which provides: “Tibe secretary of state shall have a general supervision of the incorporation of all private corporations organized under the laws of this state, except insurance companies.” After the enactment ictf that section, which first appeared • as .a part of chapter 105, Laws 1891, and until the enactment of chapter 268, Laws 1917, the secretary of state had no authority to pass upon the articles of incorporation of insurance 'Companies, except in the case of insurance corporation's organized under chapter 125 of the laws 1905, and possibly other statutes. The determination of the methods by which corporations, may be form eld! is unquestionably a mlaltter of legisfeitivie policy. The his.tory of incorporation legislation in South Dakota and in the terrtitory of Dakota shows a great variety of methods of incorporation and an entire feck of uniformity in the designation of the officer with whom the articles of incorporation should be lodged. We are of 'the opinion that sections 707 and 708, C. C., relate to the matter of incorporation. They contain provisions inconsistent wl'tlb tire idea that they aire merely regulatory. Sections 708 and 709, C. C., contain the words “organized under this act.” Sections 712 and 713, C. C., contain the words, “organized or operating under this article.” If organized under article 18, they could only be organized under the provisions of sections 707 and 708, C. C. We are therefore of the opinion that -the word “organized” is -there used synonymously with the word “incorporated.” [9] Finally, after the passage of chapter 105 of the Laws of 1891 (now section 67, Pol. Code), it was the opinion of Attorney General Crawford in 1893 and of Assistant Attorney General Taylor in igoo that chapter 51 of the Laws of 1890 was an incorporation statute. So far as is disclosed by the volumes of the opinions of Attorneys General, no contrary opinion was- ever expressed until after the incorporation of this plaintiff in 1907. Such contemporaneous interpretation is entitled to weight in arriving at the present time a't what was the legislative intent in the enactment of chapter 51, Laws 1890, and of article 18 of the Civil Code, relative to corporations. Attorney [150] General Crawford said in answer to an inquiry from the secretary of state as follows (A. G. Op. 1894, p. 20). “That it appears from the articles of incorporation submitted that one of the purposes of the incorporation is the payment of death benefits, and under the provisions of section 52, and of section 3 of chapter 51, Laws of 1890, it is the opinion of this office that said corporation belongs under the insurance department of the state, and -that these articles should be filed with the auditor of the state, and not in your office.” Assistant Attorney General' Taylor said (A. G. Op. 1900, P- 175): “Chapter 51 of the Session Laws of 1890 provides for the incorporation and regulation of life insurance companies.” No’ other reason being assigned by defendant for his refusal to renew plaintiff's certificate of authority, we are elf the opinion that the writ prayed for should issue.