COOPER COMPANY OF GAINESVILLE v. THE STATE

Supreme Court of Georgia1939-02-14No. No. 12667

187 Ga. 497

Summary · law.co

Holding. The court affirmed the judgment, holding that Georgia's statute prohibiting non-admitted insurance companies from engaging in business within the state is constitutional under the Due Process Clause because it regulates only intrastate transactions, and that Cooper lacks standing to raise an equal protection challenge concerning discrimination among non-resident classes.

Cooper Company challenged a Georgia statute regulating foreign insurance companies, arguing the law violated the Due Process and Equal Protection Clauses of the Fourteenth Amendment. The statute prohibited non-admitted insurance companies from doing business within Georgia and made it illegal for state residents to accept policies issued by such companies. The court upheld the statute, finding it constitutional because it applied only to transactions occurring within Georgia's borders, not to contracts made outside the state where citizens retain protection under the Fourteenth Amendment.

The court also rejected Cooper's equal protection argument. Because Cooper is a Georgia resident, it lacks standing to challenge alleged discrimination between two classes of non-residents, neither of which includes the company itself. The statute's restrictions on foreign insurers do not harm the resident corporation, so it cannot invoke the equal protection guarantee on behalf of other classes.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

Whether a state statute regulating foreign insurance companies violates due process by restricting intrastate transactions
Whether a state may impose conditions on foreign corporations seeking to do business within its borders
Whether a resident corporation has standing to challenge equal protection violations affecting only non-resident classes

Procedural posture

Cooper Company appealed from a judgment dismissing or upholding dismissal of its constitutional challenge to Georgia's insurance regulation statute.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion · public domain

majority opinion

Jenkins, Justice.

1. “It is well settled by its decisions that this court will not declare an act of the legislature unconstitutional and void unless the repugnancy between the act and the constitution is clear and palpable.” Wright v. Fulton County, 169 Ga. 354 (150 S. E. 262); Wright v. Hirsch, 155 Ga. 229 (116 S. E. 795). 2. The business of insurance is one so clothed with a public interest, affecting the community at large, as to render it peculiarly subject to proper governmental regulation. German Alliance Insurance Co. v. Lewis, 233 U. S. 389 (34 Sup. Ct. 612, 58 L. ed. 1011, L. R. A. 1915C, 1189).

3. The general rule has long been settled, that “the right of a foreign corporation to engage in business within a State other than that of its creation depends solely on the will of such other State.” Therefore such other State “has the power, if she allows any such [foreign insurance] companies to enter her confines, to determine the conditions on which the entry shall be made. And, as a necessary consequence of her possession of these powers, she has the right to enforce any conditions imposed by her laws as preliminary to the transaction of business within her confines by a foreign corporation, . . and she has also the further right to prohibit a citizen from contracting within her own jurisdiction with any foreign company which has not acquired the privilege of engaging in business therein, either in his own behalf or through an agent empowered to that end.” Such an intrastate transaction does not fall within the guaranty of the fourteenth amendment of the Federal constitution. Hooper v. California, 155 U. S. 647, 652, 655, 658 (15 Sup. Ct. 207, 39 L. ed. 297). But there is a vital distinction between acts done within and acts done without the jurisdiction of the State; and since under such amendment a citizen of a State has “a right to contractoutside of the State for insurance on his property,” the power of the State does not extend to such extraterritorial transactions, and a statute imposing restrictions thereon is in violation of the due-process provision of that amendment. Allgeyer v. Louisiana, 165 U. S. 578, 588, 590, 593 (17 Sup. Ct. 427, 41 L. ed. 832); St. Louis Compress Co. v. Arkansas, 260 U. S. 346, 349 (43 Sup. Ct. 125, 67 L. ed. 297).

4. Since the Code, § 56-529, prohibits the acceptance of policies of insurance issued by n on-admitted companies in violation of the preceding section, and since that section prohibits non-admitted companies from engaging in such business only “within the limits of this State,” and “does not apply to the issuance and acceptance of a policy.without the limits of this State” (Pacolet Mfg. Co. v. Weiss, 185 Ga. 287 (2) (194 S. E. 568)), under the rules set forth in division 3 of this syllabus the act is not unconstitutional as violative of the “due-process” clause of the Federal and State constitutions.

5. Since the plaintiff in error states in its brief that the only question in the case is whether the legislative act is unconstitutional, and since the ground of general demurrer that the petition states no cause of action is not argued or insisted on, it does not devolve upon this court to determine from the allegations of the petition whether, in issuing the policy, the insurance company did “engage in such business within the limits of this State.” Without making any ruling or intimation on that question, see Bothwell v. Buckbee-Mears Co., 275 U. S. 274 (48 Sup. Ct. 124, 77 L. ed. 277); Pacolet Mfg. Co. v. Weiss, supra.

6. It is the general rule that where the class including the complaining party is not prejudiced by the alleged discrimination, he will not be heard to attack the constitutionality of a statute under the “equal-protection” clause of the fourteenth amendment of the Federal constitution on the ground that it discriminates and denies equal protection between other classes. Southern Ry. Co. v. King, 217 U. S. 524, 534 (30 Sup. Ct. 594, 54 L. ed. 868); Aluminum Co. v. Ramsey, 222 U. S. 251, 255 (32 Sup. Ct. 76, 56 L. ed. 185); Collins v. Texas, 223 U. S. 288, 295 (32 Sup. Ct. 286, 56 L. ed. 439); Murphy v. California, 225 U. S. 623, 630 (32 Sup. Ct. 697, 56 L. ed. 1229, 41 L. R. A. (N. S.) 153); Hatch v. Reardon, 204 U. S. 152, 160 (27 Sup. Ct. 188, 51 L. ed. 415, 9 Ann. Cas. 736); 6 R. C. L. 90, § 88; 32 L. R. A. (N. S.) 954-968, note and cit. Accordingly, the defendant corporation, being a resident of Georgia, will not be permitted to complain of the alleged discrimination between two classes of non-residents, to neither of which it belongs. Cooper v. Rollins, 152 Ga. 588, 593 (110 S. E. 726, 20 A. L. R. 1105). Judgment affirmed.

All the Justices concur.

Atkinson, P. J., concurs in the result.