Court Opinion

ID: 5591057
Source: CourtListenerOpinion
Date Created: 2022-01-11 02:09:52.091641+00
Date Added: 2024-06-11T08:36:26.897890
License: Public Domain

Hutcheson,
Justice, dissenting. An act of .the General Assembly approved March 28, 1935 (Ga. L. 1935, p. 139, sec. 1), provides as follows: “No licensed fire or casualty insurance company or company writing fidelity or surety bonds shall write or issue any policy or indemnity contract on any risk in this State, except through a resident agent licensed by the insurance commissioner. . . The words ‘resident agent’ as used in this section are deemed to mean resident agents engaged in the solicitation of such business from the public generally, and shall not include any salaried employee of any insurance company doing business in this State; but shall include any agents of mutual insurance companies however compensated.” The Hartford Steam Boiler Inspection and Insurance Company, a stock company duly authorized to do a casualty insurance business in this State, and W. M. Francis, a salaried employee of such company, applied to the insurance commissioner for a license to be issued to such employee as an agent of the company to write or issue policies of insurance in its behalf. The commissioner refused to issue the license, upon the sole ground that under the act of 1935 a license could not be issued to any salaried employee of such company. Whereupon the applicants filed a suit for the writ of mandamus to compel the commissioner to issue a license to such employee in accordance with the application, contending that the provision of this statute which prohibits the licensing of a salaried employee, as distinguished from an employee who is compensated on a commission basis, is repugnant to the due-process clauses of the State and Federal constitutions, and also that the exemption of agents of mutual insurance companies, however compensated, results in an unreasonable and arbitrary discrimination against the plaintiffs, causing the act to offend the equal-protection clauses of such constitutions. Upon the trial of the mandamus case the court held that the provisions in question were unconstitutional on both grounds, and granted a mandamus absolute. To this judgment the insurance commissioner excepted.
1. The statute does not attempt to prescribe the amount of compensation to be paid to agents of insurance companies (cf. O’Gorman v. Hartford Ins. Co., 282 U. S. 251, 51 Sup. Ct. 130, 75 L. ed. 324), but as to stock companies places a restraint upon the manner of compensation to the extent of prohibiting license *29to any employee who is compensated by salary instead of by commissions. The mere mode of compensation as between salary and commissions is a matter which does not bear any reasonable relation to the public interest or welfare, and therefore the statute deprives the plaintiff insurance company, which is authorized to do business in this State, as well as its salaried employee, of liberty and property without due process of law, in violation of the constitution of this State and the constitution of the United States. Article 3, section 7, paragraph 22, of the constitution of Georgia (Code, § 2-1822); Smith v. Atlanta, 161 Ga. 769, 775 (132 S. E. 66, 54 A. L. R. 1001); Gregory v. Quarles, 172 Ga. 45 (supra); Liggett Co. v. Baldridge, 278 U. S. 105 (supra); Adair v. United States, 208 U. S. 161 (supra); Coppage v. Kansas, 236 U. S. 1 (supra); Burns Baking Co. v. Bryan, 264 U. S. 504 (44 Sup. Ct. 412, 68 L. ed. 813); People v. Ringe, 197 N. Y. 143 (90 N. E. 451, 27 L. R. A. (N. S.) 528, 18 Ann. Cas. 474); Hauser v. North British & Mercantile Ins. Co., 206 N. Y. 455 (100 N. E. 52, 42 L. R. A. (N. S.) 1139, Ann. Cas. 1914B, 263); Franklin Fire Ins. Co. v. Montoya, 32 N. Mex. 88 (251 Pac. 390); Northwestern National Ins. Co. v. Fishback, 130 Wash. 490 (228 Pac. 516, 36 A. L. R. 1507).
2. While there is a difference between stock companies and mutual companies engaged in the insurance business, the difference is not such as bears any reasonable relationship to the mere manner of compensating agents, and thus does not afford a sufficient basis for classifying such companies for the purpose of providing that the one may not compensate its agents by salary, while the other may remunerate its agents either by salary or commissions. It follows that the exemption as to agents of mutual companies contains an arbitrary and unwarranted discrimination against stock companies and their salaried agents, and renders the challenged provisions of the statute contrary to the equal-protection clauses of the State and the Federal constitutions. Gregory v. Quarles, supra; Louisville Gas & Electric Co. v. Coleman, 277 U. S. 32 (48 Sup. Ct. 423, 72 L. ed. 770); Quaker City Cab Co. v. Pennsylvania, 277 U. S. 389 (48 Sup. Ct. 553, 72 L. ed. 927). It is my opinion that the judgment should be affirmed.