Atlantic Insurance Agency, Inc., a Corporation v. Albert F. Jordan, Superintendent of Insurance of the District of Columbia

229 F.2d 758

• Court: Court of Appeals for the D.C. Circuit
• Decided: December 15, 1955
• Docket: 19-7042
• Status: Published

Opinions

DANAHER, Circuit Judge.

Atlantic Insurance Agency, Inc., (hereinafter called Atlantic) and S. F. and G., Inc., vainly sought summary judgment in their joint action to compel the Superintendent of Insurance to renew their respective 1955 licenses as insurance broker. The District Court granted the Superintendent’s motion and dismissed the complaint. The appeal presents a problem in the application of certain sections of the District of Columbia Code to the facts as stipulated before the Superintendent at a consolidated hearing, the record of which was attached to and made part of the complaint.

It appears that Atlantic was organized in August 1950, and that year received its license as broker. Each year its license was renewed until 1954. So with S. F. and G., Inc., organized in March 1949, which in 1951 applied for and received a broker’s license, annually renewed until 1954, when the Superintendent served notice on both companies that he was not “satisfied that you are trustworthy, or that you intend to act in good faith in the capacity involved by the license applied for, or that you are worthy of a license.” ¹

In 1954 the Superintendent changed the renewal application forms, for the first time requiring information as to the stock ownership of corporate applicants. Upon learning from such sources “that Atlantic Insurance Agency, Inc., is under the control of S. F. and G., Inc., which in turn is controlled by the same S. Dewey Gottlieb who was president and controlling stockholder of Columbia Auto Loan, Inc.,” the Superintendent refused to grant the renewals. His present position may be restated thus: that he would not have issued the original 1950 and 1951 licenses to the appellants, had he then known of Gottlieb’s interest, in S. F. and G., Inc., which, in turn, controls Atlantic, because a different, corporation controlled by Gottlieb in 1950 had run afoul of the law.

D.C.Code, § 35-1339 (1951) provides: “Renewal of all expiring licenses shall be issued by the Superintendent upon application in writing by the applicant for any such license, subject to the conditions of section 35-1340, and subject also to the provisions for examination as set forth in section 35-1336. ..” ²

D.C.Code, § 35-1340 (1951) provides in pertinent part:

“The Superintendent may revoke, suspend, or refuse to renew the license of any policy-writing agent, soliciting agent, broker, or salaried company employee when and if, after investigation, it appears conclusively to the Superintendent that any license issued to such person was obtained by fraud or misrepresentation, or that such person has —(a) Violated any of the provisions of the insurance laws of the District; or . . ..” has been guilty of any of a series of enumerated, proscribed acts.

The Superintendent made no -claim that either corporate appellant had been guilty of any improper insurance practice or had violated any of the specific proscriptions. There was no suggestion that either obtained its license by fraud or misrepresentation or that ■either failed in any prior year to supply •whatever information was then required by the Superintendent. The latter did not say that it appeared to him “conclusively,” as is required by § 35-1340, that there had been established a predicate, spelled out from that section, for a refusal to renew. The Superintendent must have realized, accordingly, that § 35-1339 provided that renewal was required unless language in the latter section reading “subject also to the provisions for examination as set forth in section 35-1336 . . ..” in 1954 could be related back to 1950 and 1951.³ In short, he would now argue that his authority to refuse to renew and the considerations to govern his action are the same, and to be exercised for the same reasons, as his authority to deny an original application. Congress has not gone that far, and however desirable it may be for the Superintendent to be ■empowered to act at all times in the public interest in the insurance field, neither the Superintendent nor the courts may supply powers which the Congress has never conferred.

Justice Holmes made the point in Gegiow v. Uhl, 1915, 239 U.S. 3, 9, 36 S.Ct. 2, 60 L.Ed. 114, noted otherwise in Waite v. Macy, 1918, 246 U.S. 606, 610, 38 S.Ct. 395, 62 L.Ed. 892; Interstate Commerce Comm. v. Nor. Pac. Ry., 1910, 216 U.S. 538, 544-545, 30 S.Ct. 417, 54 L.Ed. 608; Proctor & Gamble Co. v. Coe, 1938, 68 App.D.C. 246, 249-250, 96 F.2d 518, 521-522, certiorari denied, 1938, 305 U.S. 604, 59 S.Ct. 65, 83 L.Ed. 384, that when an administrator is specifically authorized to act under particular and enumerated conditions, his authority is limited to the granted circumstances ; indeed spelling out the respects in which he may act is tantamount to a denial of his right to an exercise of his power in non-specified particulars.

It is clear enough that the provisions of D.C.Code § 35-1336 (1951) govern an original application for a license to be issued, either to an individual policy-writing agent, soliciting agent, salaried company employee, or resident broker, or to a corporation which will act through such personnel. Each such person shall be subjected “to a personal written examination relating to such person’s knowledge of the kind or kinds of business to which the license may extend and his competency to act” in the capacity for which the license is sought. To the extent that a corporation is to act, not the corporate entity but its personnel who will actually perform the functions in the status named are to be examined. The scheme of the statute contemplates that when capacity of the individual personnel has been demonstrated by the “personal written examination,” the Superintendent must satisfy himself that the person to be licensed qualifies, as to trustworthiness and otherwise, whereupon he “shall issue such license as may be applied for.” ⁴ If a license is to be issued to a corporation, the.names of the individual, competent, qualified personnel must appear thereon if they are to solicit insurance or countersign policies. § 35-1336 expressly provides that “no officer or employee of such organizations other than those specifically named in such license shall be required to comply with this section, unless the duties of such officers or employees include soliciting or the countersigning of policies.” (Emphasis supplied.) It was specifically stipulated here that neither corporate appellant had listed the name of S. Dewey Gottlieb as an officer or employee who solicits insurance or who countersigns policies, indeed it was agreed that he was not an officer of either company.

Our present problem, then, involves § 1340, governing revocations, suspensions, and refusals to renew, not § 1336 which governs, except as specified in note 4, original-issue licenses. Section 1340 says nothing whatever about “lack of trustworthiness,” as a ground for refusal to renew. It requires a finding after investigation that “it appears conclusively to the Superintendent” that the original license, or a renewal thereof, “was obtained by fraud or misrepresentation” or that any of several named grounds exist for such refusal to renew. A renewal, after all, differs in many ways from an original grant. Property rights have become vested. See Columbia Auto Loan v. Jordan, 1952, 90 U.S.App.D.C. 222, 223, 196 F.2d 568, 570, citing, In re Carter, 1951, 89 U.S.App.D.C. 310, 192 F.2d 15; same case on rehearing, 89 U.S.App.D.C. 320, 192 F.2d 25, certiorari denied, 1951, 342 U.S. 862, 72 S.Ct. 89, 96 L.Ed. 648, and especially cases cited in Judge Miller’s concurring opinion, 89 U.S.App.D.C. 320-324, 192 F.2d 25-29.

The Superintendent really has asked us to read the statute as though it authorizes him to deny renewal to a corporation which in every respect has originally been found by him to be qualified under and to have complied with the statutes if it should later develop that an ownership interest in the corporation shall have been acquired by a person deemed by the Superintendent to be untrustworthy. Perhaps Congress should have said that much; the plain fact is that it did not do so. The Superintendent must be held to his statutory authority.

. The judgment of the District Court is reversed, and the case is remanded for further proceedings in accordance with this opinion.

1 . His letter to each appellant read as follows:

“Gentlemen:

“Consideration is being given to your application for a license.

“Section 35-1336, D.C.Code, 1951 edition, provides that the Superintendent of Insurance shall issue such a license when he is satisfied that the applicant is trustworthy, will act in good faith in the capacity involved by the license applied for, and is worthy of a license.

“It appears that Atlantic Insurance Agency, Inc., is under the control of S. F. and G., Inc., which in turn is controlled by the same S. Dewey Gottlieb who was president and controlling stockholder of Columbia Auto Loan, Inc. In the case of Columbia Auto Loan, Inc., v. Jordan, decided September 21, 1950, the United States District Court for the District of Columbia held as conclusions of law that:

“ ‘The plaintiff used the insurance license previously issued to it in a manner contrary to the public interest and contrary to law by treating insurance as a device for cheating its customers by charging them for insurance without furnishing the customers either the policies or the protection for which they were pay-In o* # ¥ V

“ ‘On the basis of the evidence adduced! before it, the Court concludes that the plaintiff as represented before it by its president and controlling stockholder, is not trustworthy, is not worthy of an insurance license, and would not act in good faith in the capacity of an insurance agent.’

“In view of the foregoing facts, I am not satisfied that you are trustworthy, or that you intend to act in good faith in the capacity involved by the license applied for, or that you are worthy of a license.

“At your request, in writing, within, ten days from this date, an opportunity will be given to you to appear in this, office and present any evidence or argument which you may have tending to show that your license should be issued, notwithstanding the facts herein cited.”

2 . In ruling on the crossmotions for summary judgment, the District judge pardonably understated: “When we turn to the pertinent statutes we must come to the conclusion that they are not as felicitously and artistically drafted, or as clear, as might be wished.”

3 . See his letter, supra note 1.

4 . In the case of a corporation, the Superintendent when passing upon an original application, must satisfy himself that the corporation is trustworthy, taking into account such factors as its financial solvency, its standing with tax authorities, its relationship with the insurance companies it will represent, their standing to do business in the District, and similar criteria upon which his judgment may be based. Once the Superintendent shall have found the corporation trustworthy and shall have issued a license under § 1336, the presumption of trustworthiness continues. But the corporation’s license renewal application shall be “subject to the conditions of section 35-1340,” and its named personnel shall be subject to the written examination provision set forth' in § 1336. This is the plain meaning of § 1339.