Court Opinion

ID: 5591056
Source: CourtListenerOpinion
Date Created: 2022-01-11 02:09:52.088239+00
Date Added: 2024-06-11T08:36:26.847040
License: Public Domain

Gilbert,
Justice, dissenting. It is settled that the business of insurance is affected with the public interest. Therefore it may be regulated by the State; but it is equally well settled that such regulation must not be arbitrary and must operate constitutionally. “No duty rests more imperatively upon the courts than the enforcement of those constitutional provisions intended to secure that equality of rights which is the foundation of free government. . . It is apparent that the mere fact of classification is not sufficient to relieve a statute from the reach of the equality clause of the fourteenth amendment, and that in all cases it must appear not only that a classification has been made, but also that it is one based upon some reasonable ground — some difference which bears a just and proper relation to the attempted classification, — and is not a mere arbitrary selection.” Gulf &c. Ry. Co. v. Ellis, 165 U. S. 150, 160 (17 Sup. Ct. 255, 41 L. ed. 666). In Louisville Gas & Electric Co. v. Coleman, 277 U. S. 32 (48 Sup. Ct. 423, 72 L. ed. 770), it was said: “The classification ‘must be reasonable, not arbitrary, and must rest upon some ground of difference having a fair and substantial relation to the object of the legislation, so that all persons similarly circumstanced shall be treated alike' Royster Guano Co. v. Virginia, 253 U. S. 412, 415 [40 Sup. Ct. 560, 64 L. ed. 989]; Air-Way Corp. v. Day, 266 U. S. 71, 85 [45 Sup. Ct. 12, 69 L. ed. 169]; Schlesinger v. Wisconsin, 270 U. S. 230, 240 [46 Sup. Ct. 260, 70 L. ed. 557]. That is to say, mere difference is not enough; the attempted classification ‘must always rest upon some difference which bears a reasonable and just relation to the act in respect to which the classification is proposed, and can never be made arbitrarily and without any such basis' Gulf, Colorado and Santa Fe Ry. v. Ellis, 165 U. S. 150, 155 [17 Sup. Ct. 255, 41 L. ed. 666]. Discriminations of an unusual character especially suggest careful consideration to determine whether they are obnoxious to the constitutional provision.” In Gregory v. Quarles, 172 Ga. 45, 48 (157 S. E. 306), Mr. Justice Atkinson discussed a similar question, and spoke for the entire court on the subject of reasonable classification of business. It was there stated that “There should be some reasonable ground for such subclassification, some difference which bears a just and proper relation to the attempted classification; . . some reason connected with or growing out of that paramount cause (public health) relied on for *27justification of the ordinance.” Numerous authorities supporting these principles might be cited.
It is readily conceded that a just classification for some purposes might be made as between mutual companies and stock companies, but it does not follow that the same classification may be legally made as between mere employees of such companies. It is a matter of common knowledge that insurance agencies accept business subject to approval by the companies which they represent. It is not apparent, either from the statute or the brief of the plaintiff in error, how or in what manner the employee who accepts applications for insurance may affect the rights of those who aTe insured, or how the duties of the one affect the public interest differently from the other. The mere fact that one is an employee of a stock company, and therefore receives compensation from such company, does not stand upon any substantially different footing towards the insured than an employee doing the same business and employed by a mutual company. Neither of them can affect the rates or the terms of the contract. The terms of the statute apply not only to such employees of stock companies as may be paid a stipulated salary, but apparently apply to all such employees who receive any compensation, whether by salary or otherwise, from the company. Any such employee can not, under the statute, be licensed to do the business of an insurance agent. The statute does not undertake to regulate insurance agents. At one stroke it puts out of business one class. It restricts all such business to the competitor who is an employee of a mutual company. The only difference is that in one case the employee receives compensation from a stock company, and is forbidden to carry on the business, whereas if such an employee is an employee of a mutual company, he may be legally licensed to do business. It clearly is intended to impose a handicap on stock companies, so that the competitor will not be on even terms. If this may be constitutionally done, then the next step may easily follow — the actual outlawing of stock insurance companies. If this may be done in the case of insurance companies, it may be done in the case of any business affected with a public interest. I think the statute is unconstitutional and subject to the attacks made by the defendant iri error, because there is no just and proper relation to the object sought. The classification is wholly unreasonable and arbitrary.