The herald. [microfilm reel] (Los Angeles [Calif.]) 1893-1900, 1898-01-07
OFFICE OF THE HERALD,
LOS ANGELES, January 6. 1898.
diversity of opinion proves that things
are only what we think them.'


are only what we think them"
+ 4 +
The attitude taken by Commissioner
Clunie In his demand upon the general
agents representing foreign fire insurance
agents In this state Is bound to create no
little disturbance. 1t appears that the
commissioner has made written demand
on each of the thirty-four European fire
insurance companies doing business in
California for unpaid license fees aggre-
eating $279, $685.
In the majority of cases the claims run
back twelve years. They are based upon
section Of the act of March 8, 1885, re-
curing foreign insurance companies to
pay annually per cent on their premiums
10 the treasurer of every county or city
and county In the state, for the use and
oeneft of the firemens relief fund Of such
county or city and county. The law has
been dead letter, for the reason thai
decision was obtained from the state SUI
preme court soon after its enactment hold
ing that 1t imposed municipal tax, which
could be levied only by municipality. The
commissioner, however. contends that the
state has a right to impose license,
and that 1t Is the duty of the insurance
commissioner to withhold permission to
do business from such companies as neg
lect to pay it. He says he shall enforce the
law in case his demands are not complied
with by the first of February.
In his letter to the European fire insur-
arce companies Commissioner Clunie thus
presents his side of the case:
On February ~, 1886, suit was instituted
by the city and county Of San Francisco
against the Liverpool and London and
Globe Insurance company. a foreign cor
poration, to recover $i41.36, the amount due
under the above act to said city and coun-
ty. on premiums received by said COM
pany In said city and county for the year
1885. This action was decided in favor of
the city and county Of San Francisco by
James G. Mcguire. then one of the judges
of the superior court. From the decision
of Judge Mcguire an appeal was tken 10
the supreme court of this state and in an
opinion found in the "a Cal. Reports, at
page 1l3, that tribunal reversed the judg-
ment of the lower court. and held that
the act involved a tax for municipal pur-
poses, and that all such taxes must be
imposed by the municipality itself. and
not directly by the legislature, and that
therefore, under the constitution of this
state, the tax could not be collected as a
tax. The various foreign insurance COM
panies doing business in this state have as
been to relieve them from compliance with
the aforesaid law of this state. and each
and all of them have failed and neglected |
to make the payments therein directed to
be made, and by this means have withheld
from the various cities and cities and
counties of this state large sums of money,
aggregating in the amounts due from such
foreign companies now doing business in
California the sum of over $1,000
/ emphatically dissent from the con- |
Struction placed upon this decision of the |
supreme court by these companies. The
case was an agreed one, to which neither
the state of California nor its insurance
commissioner was party. 1t was not the
intention of the supreme court to decide, |
and it did not decide that foreign insur- |
ance corporations were entitled to a GER |
tificate of authority to transact insurance
business in this state without a compli-
ance with this law. On the contrary, 1t
was admitted by counsel for the insurance
company that the legislature would have
had the power to have made compliance
with this act the condition of the contin- |
uance of the transaction of its insurance |
business in the state of California. This |
is shown from the brief of one of its coun- |
sell at page 5, where 1t is said: THE rule |
that we deduce from this case is: That |
foreign corporations do business in a state |
only by permission express or implied; |
that the state has an absolute right of eX- |
clusion of such corporations; that it may |
impose any conditions 1t sees fit upon its |
permission to exist within the state; that |
II the conditions imposed by the state re-
Quire the performance or non-performance /
of an act the requirement of which would |
be unconstitutional in the case of pri- |
waite citizen, such performance or ron-per-
Torrance cannot be specifically enforced.
but the penalty for noncompliance with |
the unconstitutional law, to-wlt: forfit- /
ure of the privilege to do business within
the state may be exacted and enforced by
the state
Commissioner Clunie goes on to say that
although the principle thus enunciated is
much broader than is essential to sustain
his decision he believes he is fully sus-
tanned by numerous cases. 1t is pointed
out that it is made the duty of the nsur-
ance commissioner to issue certificates of
authority to transact insurance business
in this state only to those who have fully
complied with the law in this state and are
in no wise in arrears to the state or any
county of the state for fees, licenses,
taxes or penalties accrued upon business
transacted in the state
This provision of the law it is declared
was not noticed by the supreme court In
Its decision, and in Clunie's opinion, its
effect Is to make compliance with all the
laws Of the state, and the payment of all
sums required by them, prerequisites to
the carrying on in California by any for
eign insurance company of an insurance
business.
1t Is a notorious fact that while all
American insurance companies doing bust
ness in California contribute largely in
taxes to the state treasury, the non-Amer-
lean companies escape in most cases with
the payment of the paltry sum OF $50, re-
uuired of all insurance companies at the
time of making their annual statements.
The following table has been prepared by l.
the state insurance department, showing
the profits and the amount of license fees
demanded from each of the thirty-four
European fire insurance companies: