NO. 85-55 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1985 

MOUNTAIN STATES INSURANCE COMPANY, 

Plaintiff and Appellant, 

STATE OF MONTANA, acting by and through 

the BOARD OF HAIL INSURANCE, DEPT. OF 

AGRICULTURE, et al., 

Defendants and Respondents. 

APPEAL FROM: District Court of the First Judicial District, 

In and for the County of Lewis & Clark, 

The Honorable Henry Loble, Judge presiding. 

COUNSEL OF RECORD: 

For A.ppellant: 

Philip W. Strope argued, Helena, Montana 

Roger Tippy argued, Helena, Montana 

For Respondent: 

Garth Jacobson argued, Bd. of Hail Insurance, Helena, 

Montana 

Robert Throssell, State Auditor's Office, Helena, 

Montana 

For Amicus Curiae: 

John J. Oitzinger, Governor's Council on Management, 

Helena, Montana 

Submitted: September 24, 1985 

Decided: November 4, 1985 

Filed: 

NOV~ - 1985 

p. 8 

&;f~ 257( %ddd 

Clerk 
Mr. Justice John C. Sheehy delivered the Opinion of the 

Court. 

Mountain States Insurance Company brought this action 

for a declaratory judgment in the First Judicial District, 

Lewis and Clark County, seeking an order declaring the Eoard 

of Hail- Insurance to be unconstitutional. Both plaintiff and 

defendants filed motions for summary judgment. The District 

Court granted defendants ' motion for summary judgment. 

Plaintiff appeals. We affirm the District Court. 

Appellant Mountain States Insurance raises three issues 

on appeal. First, does the statutory duty of the State 

Auditor to serve on the Board of Hail Insurance violate the 

constitutional prohibition against dual office holding? 

Second, is there a conflict of interest between the State 

Auditor's duties as a member of the Hail Board and the 

Auditor's duties as ex officio insurance commissioner? 

Third, assuming arquendo the presence of the State Auditor on 

the Hail Board is illegal, does the entire act creating the 

Hail Board fail for lack of a severability cia-use? 

In 1917, the Montana legislature established the Hail 

Insurance Roard to administer Montana's hail insurance 

program for agricul-tural crops. The hail insurance program 

provides low cost hail insurance to farmers. Five persons 

serve on the Hail Board which administers the program: the 

State Auditor, the director of the Department of Agriculture, 

and three persons appointed by the Governor. Section 

2-15-3003, MCA. 

The State Auditor and the Director of the Department of 

Agriculture are not compensated for their service on the Hail 

Roard. Section 80-2-202 (3), MCA. The State Auditor is an 
elected official who serves as ex officio Commissj.oner of 

Insurance pursuant to section 2-15-1903, MCA. As ex officio 

insurance commissioner, the State Auditor is required by law 

to approve the form of all hail insurance policies written in 

Montana and at the same time is required by statute to sit as 

a member of the Board of Hail Insurance which establishes the 

form, substance and rates of all hail policies issued. 

Appellant, Mountain States Insurance contends the 

statutory appointment of the State Auditor to the Hail Board 

violates the constitutional prohibition against dual office 

holding in Art. VI, $ 5, 1972 Mont. Const. That section 

provides : 

During his term, no elected officer of the 

executive branch may hold another public office or 

receive compensation for services from any other 

governmental agency. He may be a ca.ndidate for any 

public office during his term. 

The State Auditor is an elected officer of the executive 

branch whose duties are prescribed by law. Art. VI, S 4(5), 

1972 Mont. Const. 

In this case, appellant contends the State Auditor is 

violating the constitutional prohibition against dual office 

holding by virtue of the legislatively-assigned duty to be a 

member of the Hail Board. This Court has already held the 

State Auditor could. be a member of the Industrial. Accident 

Board without violating the constitutional prohibition 

against dual office holding. Shea v. North-Butte Mining Co. 

(1919), 55 Mont. 522, 179 P. 499. We stated in Shea: 

The next contention made by counsel is that the 

board is an unlawful body because the state 

auditor, one member of it, holds two offices. By 

this we presume counsel mean that because the 

auditor is made a member of the board and. is 

required to execute a bond to guarantee the 

faithful performance of his duties, this 
constitutes him a public officer, in a capacity 

other than as state auditor. A complete answer to 

this contention is found in section 1 of Article 

VII of the Constitutj.on. This section enumerates 

the state executive officers. It then provides 

that they shall perform such duties as are 

prescribed in the Constitution and by the Laws of 

the State. It is not necessary to refer to the 

constitutional duties enumerated appertaining to 

the auditor's office. The only limitation imposed 

upon the legislature in imposing duties upon the 

auditor is found in section 1 of Article IV. This 

prohibi-ts the imposition of duties upon him that 

appertain to the legislative or judicial 

departments of the government. So long as this 

limitation is not violated, the legislature is at 

liberty to impose any governmental duty upon this 

officer. 

- Id. at 538-39, 179 P. at 504-05. 

In the case at hand, the legislature chose to impose 

upon the State Auditor the governmental duty of being a 

member of the Hail Board. The State Auditor d.oes not hold 

dual offices by carrying out his duties. 

Appellant contends that State ex rel. Barney v. Hawkins 

(1927), 79 Mont. 506, 257 P. 411 controls. In Barney, a. 

state legislator was hired as an auditor for the Board of 

Railroad Commissioners. The issue before this Court was: 

Did a legislator who was hired as an auditor violate the 

constitutional prohibition against legislators holding public 

off ices? 

In Barney, we adopted a five-part test to determine if a 

position of public employment was a public office. However, 

that test is inapplicable here because Barney is clearly 

distinguishable on its facts. Barney dealt with a legislator 

who sought another governmental position while in office. 

However in the case at hand, the State Auditor was assigned 

ex officio duties by the legislature. As we held in Shea, 

the only limit upon the duties which may be assigned by the 

legislature to an officer of the executive branch is that the 
duties may not pertain to the legislative or judicial 

departments of government. We conclude that the statutory 

appointment of the State Auditor to the Hail Board is 

constitutional. 

11. 

The second issue appellant raises on appeal is whether 

there is a conflict of interest between the State Auditor's 

du-ties as Hail Board member and the Auditor's duties as ex 

officio insurance commissioner. Appellant contends two 

conflicts exist: a statutory conflict and an incompatibility 

between the two offices. The appellant contends the 

statutory conflict arises because section 33-1-305, MCA 

prohibits the insurance commissioner from having any 

financial interest in an insurer or insurance transaction. 

"Financi-a1 interest" is defined in section 2-2-102(4) as "an 

interest held by an individual, his spouse, or minor children 

which is: . . . (f) a directorship or officership in a 

business." Appellant contends the Hail Board is the business 

in which the State Auditor is financially interested. We 

find the State Auditor as ex officio insurance commissioner 

is not financially interested in the Hail. Board within the 

meaning of section 2-2-102(4), MCA. That section is a part 

of the Code of Ethics. The Code of Ethics was 

constitutionally mandated by Art. XITI, 5 4, 1972 Mont. 

Const., which states, "The legislature shall provide a code 

of ethics prohibiting conflict between public duty and 

private interest for members of the legislature and all state 

and local officers and employees. " When the Code of Ethics 

was passed by the legislature, a statement of purpose was 

enacted in section 2-2-101, MCA. "The purpose of this part 

is to set forth a code of ethics prohibiting conflict between 
public duty and private interest as required by the 

constitution of Montana." The State Auditor has no private 

interest in the Hail Board. He derives no compensation for 

his service on the Hail Board. The State Auditor has 

affirmatively alleged and it is not denied that he has never 

received any compensation, benefit, or gain from the Hail 

Insurance Program or from any other source for the 

performance of his d.uties as a Hail Board member. We 

conclude there is no statutory conflict of interest that 

would preclude the State Auditor from serving on the Hail 

Board. 

Appellant next contends the two offices of Insurance 

Commissioner and Hail Board member are incompatible offices 

which create a conflict of interest. Appellant relies on 

Bath Club, Inc. v. Dad.e County (Fla. 19811, 394 So.2d 110. 

In the Bath -- Club case, the Florida legislature created a real 

property tax equalization board made up of three county 

commissioners and two school board members. The board was 

challenged as being constitutionally defective in light of 

the Florida provision against dual office holding. The 

appellant contended an inherent conflict of interest existed 

between the board's duty to grant impartial hearings on tax 

assessments, and the board members' desire to secure adequate 

revenues for their agencies. The Florida Court held that 

there was no conflict of interest between the duty of county 

commissioners and school board members to levy the ad valorem 

taxes on real property and the "limited function of Board 

members to review and correct individual assessments made by 

the county tax appraiser." -- Bath Club, 394 So.2d at 112. 

Likewise, in this case, there is no conflict of interest 
between the duty of the Haii Board members to set hail 

insurance rates and the limited function of the State Auditor 

as insurance commissioner to review those rates. We conclude 

the District Court was correct in holding no conflict of 

interest exists. Because we have held the State Auditor may 

be a member of the Hail Eoard, we do not reach the issue of 

whether the entire act creating the Hail Board must fall due 

to the lack of the severability clause. 

We also do not reach the issue presented by amicus 

curiae in a brief submitted in this case, as to whether the 

Hail Insurance Program violates economic due process. In 

State ex rel. Bennett v. Bonner (1950), 123 Mont. 414, 214 

P.2d 747, we held that an amicus has no right to question the 

constitutionality of an act because he is not a party, and 

his rights are not being affected. This Court "will not pass 

on grounds of invalidity urged by an amicus curiae but not 

presented by the parties." - Id. at 421, 214 P.2d at 751. 

Therefore, the judgment of the District Court is 

affirmed. 

We Concur: 
dz5. /fi'YIP--9 

The Hon. C. B. McNeil, 

District Judge, Sitting 

for the Hon. William E. 

Hunt, Sr.