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(146 N.E.) act the business of fire insurance in this state, sential element of scientific rate fixing. The the privilege of membership in such an or- amounts paid for premiums as divided beganization. The privilege is a valuable one. tween the insurance company and agents and Both as a matter of range of experience and brokers have a direct connection with the of expense it is impracticable for one com- rate itself. It may well be that voluntary pany to maintain a rating organization. rating associations have in the past been con

The Merritt Legislative Report (Report, trolling such subjects. But the distinction is Merritt Com, Assembly Doc. 1911, p. 40) says: obvious between a rating association exist

The practical result (of the dif- ing under the statute and one existing sole. ficulty of the problem of rating) is that it is | ly by agreement of members. The latter may impossible to make rates properly on the basis -pick and choose; the former must furnish its of a single company's experience. The experi- service to any corporation authorized to ence even of the largest companies is not ex- transact the business of fire insurance withtensive enough to insure the proper working in the state which agrees to be bound by the of the law of averages on all classes. It is rules affecting rates to be paid for insurance. very natural then, and from this point of view desirable, that the companies should for this The latter may extend the scope of its rules purpose, combine; for not only can they thus according to its own will. The former may make rates more effectively, but since rates on not exclude eligibles by adopting rules which the same classes are needed by all, it would be go beyond the fixing of rates to be charged a useless expense to have the work duplicated." by the companies. Information as to the

amounts allowed for commissions and broThe Lockwood Legislative Report (Report kerage may be valuable. The fixing of such Housing Committee, Legislative Document, sums by the rating commission is another 1922, p. 224) says:

matter. A combination of companies to fix “Rate making upon the endless items of rates without express authority may be of property that enter into the insurance business questionable legality. Respondent exists by is exceedingly difficult and expensive. It re- virtue of law. quires a large organization and expert knowl

We must read into the act a legislative edge and experience. No single company, however large, can afford to make rates for itself purpose indirectly but effectively to limit alone. That and the fact that the business commissions in fire insurance as it has in was one peculiarly affected with a public trust, life insurance (Insurance Law [Cons. Laws, have always been the burden of the arguments ch. 28] § 97) in order to uphold the power advanced by the insurance companies for being of the rating organization to regulate these permitted to combine in these rate-making matters. It is no answer to say that the combodies. Refusal of access to the rates virtual- panies are not bound to seek the services of ly means exclusion of the company from com

a rating organization and may act independpetition."

ently of it. They may do so only at a disadThe respondent, as an incident to its rule vantage which the law does not contemplate. making power, refuses to furnish its service if the rating organization is in effect to be to appellant unless it will agree to the terms clothed with the revolutionary attributes of imposed on members signatory to its mem a state agency to regulate commissions, the bership agreement and maintain and observe legislative authority should be explicit in rules of the rating organization not only as terms and the court should not smuggle such to the rules employed in making rates but a grant into the law under the guise of libalso as to commissions, brokerages, and numeral construction. ber of agencies. Appellant refuses to sign The question is not altogether one of disan agreement to be bound by such rules, for crimination, although the learned justice at the reason that it desires the benefit of the Special Term properly says that the rule in rating organization without assenting to the controversy constitutes an illegal discriminacontrol of its business methods thereby. It tion against those companies which, claiming has been held below that commissions, bro- the right to service under the statute, prefer kerages, and number of agencies are so in- to run their business in a different way than timately allied with the general scheme of that made mandatory on members. If such "making rates for fire insurance upon risks companies have the right to the service of within the state” as to be an integral part the rating organization, the plea of equality thereof; that the rule to be employed in com- and fairness in matters ultra vires the orputing a rate essentially depends on the netganization should not prevail. People ex rel. return to the company. The rates, however, New York Fire Exch. v. Phillips, 237 N. Y. are the charges to be made by the insurer to 167, 142 N. E. 574. The question is one of the insured for fire insurance. Information the statutory power of the rating organizaas to the net returns to the companies on tion to make rules. If we assume that the the insurance written by them may be an es- Legislature, if it had seen fit to do so, might

have included in its grant of power to regu-, the authority granted. By this test, we fail late rates the further power as a condition of to find in the statute the far-reaching pow. service to regulate agents' and brokers' com er which the respondent assumes to exercise. missions, the next logical step would be to If the language of the statute does not reach include, limit, and regulate as factors in rate the case, the court has no jurisdiction to en. making all. expenses of the insurance com- large its scope beyond what the Legislature panies, such as salaries and office expenses. has permitted. The rule of equity and fairThe question would then arise whether such i ness to all entitled to the benefits of the rata delegation of legislative power was for the ing organization is found in the statute. It benefit and protection of the public (German may not be made more irksome than the Leg. Alliance Ins. Co. v. Lewis, 233 U. S. 389, 34 islature has made it, even though all are S. Ct. 612, 58 L. Ed. 1011, L. R. A. 1915C, treated alike. 1189), or whether it interfered with the right The order of the Appellate Division should of fire insurance companies to regulate their be reversed and that of the Special Term afown business in regard to agents and bro-firmed, with costs in this court and in the kers' commissions, and the number of agen- Appellate Division. cies they should establish, and other matters of internal management—a question which HISCOCK, C. J., and CARDOZO, CRANE, we need not consider at this time. North- and ANDREWS, JJ., concur. western Nat. Ins. Co. v. Fishback (Wash.) LEHMAN, J., not sitting. 228 P. 516.

MCLAUGHLIN, J., absent. The rules of the rating organization must be lawful, proper, and within the scope of Order reversed, etc.

(146 N.E.)

9. Licenses Owl-Fee required in exercise of Opinion of the JUSTICES.

police power is distinct from tax depending

on constitutional limitations governing taxa(Supreme Judicial Court of Massachusetts. tion. January, 1925.)

A fee which lawfully may be required in ex1. Highways Om99 - Power to lay out, con

ercise of police power is distinct from a tax struct, and maintain high ways is vested in

which epends for its validity on constitutional general court under general powers,

limitations governing taxation. There is no constitutional mandate requir- | 10. Licenses 7(8) - When assessment of ing commonwealth or any of its territorial sub- two excise taxes on same commodity would divisions to establish and maintain highways be unreasonable stated. for public travel, whole subject of laying out, Assessment of two excise taxes, even constructing, and repairing them being vested though each be on separate basis and collected in general court under its general powers. by different officers, for enjoyment or use of 2. Licenses Owl-Power to take instrumen

one commodity for same period of time would talities for public travel and charge toll does

be unreasonable. not involve power of taxation.

11. Licenses Om7(8)-Excise on use of auto. Power of government to take, acquire, and

mobile on highway held sufficiently different construct instrumentalities for public travel

as to commodity from excise on registration and to charge toll, rental, or other recompense as not to be invalid. therefor, in so far as tolls or rentals are based

While excise on use of motor vehicles on on fair recompense for public moneys expended highways is closely akin to excise of registrafor construction and maintenance, does not tion thereof, under G. L. c. 90, it is sufficiently involve power of taxation.

different as to commodity on which it is levied 3. Evidence Om5(2)-Common knowledge that to avoid constitutional inhibition, it not being

number of motor vehicles exceeds all others obnoxious to principle against double taxation. and different highway construction is required 12. Licenses Em7(1)-Excise on use of autofor their convenience.

mobile on highway held not invalid within It is matter of common knowledge that

federal Constitution. number of motor vehicles exceeds all others

Act providing excise on use of public ways and that different highway construction as to durability and smoothness is required for their by motor vehicles held not to violate United

States Constitution. convenience. 4. Licenses 7(2)-Apparent inequalities of Answers to question propounded to the

excise tax held not so great as to invalidate Justices of the Supreme Judicial Court by act licensing use of automobiles on highways. resolution of the House of Representatives,

That act requiring annual fee for privilege of operating motor vehicles on public ways To the Honorable the House of Representacharges no toll for use of highways by other tives of the Commonwealth of Massavehicles and contains no general provision as chusetts: to foreign owned motor vehicles, does not, as matter of law, invalidate classification.

The Justices of the Supreme Judicial Court

respectfully submit this answer to the ques5. Licenses Om5-General court may levy ex- tion set forth in the order of May 9, 1924,

cise as toll for use of public ways by motor and transmitted on May 14, 1924. That quesvehicles

tion is in these words: It is within constitutional power of general court to levy excise as toll for use of public "May the General Court, under the provisions ways by motor vehicles.

of the Constitution empowering it to impose

and levy reasonable duties and excises, or un6. Licenses Om7(1)-Excise on motor vehicles, der any other provision of the Constitution, based on maker's price list, held not invalid. impose and levy an excise upon the use of pub

Excise based in part on value of motor ve- lic ways by motor vehicles, measured in part hicle using highway which made maker's cur- by the value of such motor vehicles, and subrent price list basis of excise, held not to in- ject to a deduction on account of the value volve infraction of constitutional guaranties. locally assessed on such motor vehicles?” 7. Licenses 7(8)—Levying of tax for ownership of motor vehicles held not to invalidate

Our opinion is required with reference to excise for use thereof.

a proposed statute, copy of which accompaLevying property tax on motor vehicles, un

nies the order. It is entitled, "An act to der G. L. c. 59, $ 2, Const. pt. 2, c. 1, § 1, art. provide an excise on the use of the public 4, does not prevent levy of excise concerning ways by motor vehicles.” It is provided by use by motor vehicles of high ways.

section 1 that every inhabitant of the com8. Licenses 3—License fee may be exacted monwealth shall pay annually for each cal

as part of or incidental to exercise of police endar year with respect to each motor vehicle power.

owned by him, twenty mills, if less than thirty A licensa fee may be exacted as part of horse-power, and twenty-five mills, if over or incidental to regulations established in exer- thirty horse-power, on each dollar of its value cise of police power.

as ascertained from the maker's current price For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

list, with specified deductions therefrom ac-f rights of the commonwealth as proprietor of cording to the age of the motor vehicle and the instrumentalities used. As a sovereign with deduction also of its valuation made power the commonwealth may do as it will for purposes of local taxation, the minimum with its own, provided its action can be said excise in any event to be not less than two to be in the public interest and not violative dollars. The sum thus to be paid is termed of constitutional guarantees. Boston Fish an excise "for the privilege of operating each Market Corp. v. Boston, 224 Mass. 31, 112 N. such motor-vehicles upon the public ways.” E, 616; Treasurer and Receiver General v. Provision is made in other sections of the pro-Revere Sugar Refinery, 247 Mass. 483, 142 N. posed statute for the issuance of a permit as E. 909; Carson v. Sewerage Commissioners prerequisite to the registration of such mo- of Brockton, 175 Mass. 242, 56 N. E. 1, 48 tor vehicle, for the enforcement of the terms L. R. A. 277. A familiar illustration of the of the statute by local officers of each city exercise of such rights is the establishment and town, and for the disposition of moneys and collection of rates for the use of water collected under the act. Its provisions need furnished by government. Ladd v. Boston, not be further described.

170 Mass. 332, 49 N. E. 627, 40 L R. A. 171; ?[1] The manifest design to be accomplished Souther v. Gloucester, 187 Mass. 552, 73 N. E. by the proposed act is the collection of a tax 558, 69 L. R. A. 309; Shaw Stocking ...v. for the use of the highways by motor vehi- Lowell, 199 Mass. 118, 83 N. E. 90, 18 L. R. cles. There is no constitutional mandate A. (N. S.) 746, 15 Ann. Cas. 377; Merrill v. which requires the commonwealth or any of Revere, 211 Mass. 468, 98 N. E. 99; Brand v. its territorial subdivisions to establish and Water Commissioners of Billerica, 242 Mass. maintain highways for public travel. The 223, 136 N. E. 389. whole subject of laying out, constructing and The power proposed to be exercised in the repairing highways is vested in the General present bill is not of that nature. Avowedly Court under the power and authority to en- an excise tax is established. The declaraact “all manner of wholesome and reasonable tion to that effect is explicit. Such statuorders, laws, statutes, and ordinances” not tory statement is to be accepted as true unrepugnant to the Constitution “as they shall less incompatible with the meaning and efjudge to be for” the common good and gener- fect of the act as a whole. Lajoie v. Millial welfare, In the early days of the common- ken, 242 Mass. 508, 521, 136 N. E. 419. Morewealth many, if not most, of the highways over, the revenue to be obtained is not to be were built and maintained by private enter- applied to the maintenance and repair of prise through turnpike corporations estab- highways but is to be retained by the several lished by law. and dependent for their sup- cities and towns without restriction. It thus port upon tolls charged to travelers. Bridges will become applicable to general public uses. were built and maintained in the same way. That factor is not decisive but is entitled to Ferries were operated either in the same weight in determining the nature of the exway or by municipalities, which collected action. tolls for their use. All highways and bridg. The words of the Constitution granting the es, so far as we are aware, and some of the power to levy an excise are these: ferries, have been acquired by the common

"Full power and authority are hereby given wealth or by counties, cities or towns. They and granted to the said general court. * thus have become the property of the com to impose and levy, reasonable duties and exmonwealth either directly or through its cises, upon any produce, goods, wares, mergovernmental subdivisions. The free use of chandise, and commodities, whatsoever, brought all highways has been provided at the ex- into, produced, manufactured, or being within

the same." Chapter 1, § 1, art. 4. pense of the public treasury for many years in this commonwealth. This has not always

The nature of an excise on "commodities" been the custom. It is comparatively modern. in this connection has been discussed in sev[2] The power of government to take, ac

eral decisions. In Portland Bank V. Ap quire or construct instrumentalities for pub- thorp, 12 Mass. 252, 256, it was said: lic travel and to charge toll, rental or other recompense therefor is illustrated in several “The term excise is of very general significadecisions. Commonwealth v. Wilkinson, 16 tion, meaning tribute, custom, tax, tollage, or Pick, 175, 26 Am. Dec. 654; George G. Fox assessment." Co. v. Boston & Northern Street Railway, Toll--at that time a word in common use 217 Mass. 140, 142, 104 N. E. 356; Boston v. in connection with turnpikes and bridges Treasurer and Receiver General, 237 Mass. thus was mentioned more than one hundred 403, 414, 130 N. E. 390, and cases there re- years ago in the first decision requiring a viewed.

critical consideration of the meaning of the If and so far as such tolls or rentals are word "commodities” in the Constitution as based on fair recompense for the public mon- an illustration of an excise. That definition eys expended for initial construction and for of excise was quoted in an important connecadequate maintenance, they do not involve tion in Minot v. Winthrop, 162 Mass. 113, the power of taxation. They rest on the 119, 120, where it was said that that com

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(146 N.E.) modity "will perhaps embrace everything cago, 235 Ill. 58, 85 N. E. 245, 14 Ann. Cas. which may be a subject of taxation. * 536; Ogilvie v. Hailey, 141 Tenn. 392, 210 It

signifies convenience, privilege. S. W. 645; State v. Lawrence, 108 Miss. 291,

All public ways are acquired and 66 So. 745, Ann. Cas. 1917E, 322; Ex parte maintained for the use of the public. We Schuler, 167 Cal. 282, 139 P. 685, Ann. Cas. are not here concerned with attempts by 1915C, 706; Terre Haute v. Kersey, 159 Ind. eities or towns to charge a toll for the use of 300, 64 N. E. 469, 95 Am. St. Rep. 298; Jackhighways, but with the commonwealth itself son v. Neff, 64 Fla. 326, 60 So. 350; Park v. acting in its sovereign capacity with refer- Duluth, 134 Minn. 296, 159 N. W. 627; Lil. ence to a strictly public matter. See Bolster lard v. Melton, 103 S. C. 10, 87 S. E. 421; v. Lawrence, 225 Mass. 387, 389, 114 N. E. State v. Becker, 288 Mo. 607, 233 S. W. 54; 722, L. R. A. 1917B, 1285. The power of the State v. Ingalls, 18 N. M. 211, 135 P. 1177. General Court to enact general and equal See Opinion of the Justices, 123 Me. 573, 121 laws on such a subject is very broad. "Toll" | A. 902. As matter of abstract principle we is the apt word to describe the collection of are of opinion that it is within the constitumoney for the use of a highway or bridge. tional power of the General Court to levy an

[3, 4] There are appearances of inequality excise as a toll for the use of public ways about a toll upon the use of highways by mo- by motor vehicles. tor vehicles. The fact that no toll is charged The method of collection and distribution for the use of highways by other kinds of of the excise proposed in the bill is not vehicles bears a superficial likeness to dis- open to sound objections on constitutional crimination against motor vehicles. It is grounds. Duffy v. Treasurer and Receiver matter of common knowledge that the num- General, 234 Mass. 42, 125 N. E. 135; Knights ber of motor vehicles vastly exceeds all oth-v. Treasurer and Receiver General, 237 Mass. ers and that a different highway construction 493, 130 N. E. 60. as to durability and smoothness is required The proposed bill plainly is a revenue for their convenience. It is understood gener-measure. It is not enacted in the exercise of ally that the use of motor vehicles is highly the police power. Cases involving consideradestructive of highways and requires large ex- tion of that power, like Commonwealth v. penditures for original construction or recon- Slocum, 230 Mass. 180, 119 N. E. 687 ; Burgess struction and annual maintenance. The use

V. Mayor and Aldermen of Brockton, 235 of highways by other vehicles may be found Mass. 95, 126 N. E. 456, and Pawloski v. by the General Court to be so small in quan

Hess, 250 Mass. -, 144 N. E. 760, have no tity and so little destructive in quality, com- relevancy to the present question. pared with that by motor vehicles, as to be

[6] The proposed bill imposes an excise tax negligible. There is no general provision in based in part upon value of the motor vehicle the proposed bill for charging toll for motor

using the highway. We assume that the vehicles owneå hy non-residents when used "maker's current price list,” which by sec

tion 1 of the proposed bill is made the basis upon the higbways of the commonwealth. That, too, may be found to be small in com

of the excise, is equivalent to the cost price parison with domestic use.

and that it affords a standard substantially The expense of

the same in respect to real value with refcollection and difficulty of enforcement of the

erence to all makes of motor vehicles. If law concerning foreign owned motor vehicles that assumption should turn out to be inmay be found to be probibitive. In any event correct difficulties might arise. Excises these apparent inequalities cannot be said founded in part upon the value of the prop to be so great, as matter of law, as to invali-erty utilized in the exercise of the privilege date the classification established by the pro- thereby taxed are common. They involve no posed bill.

infraction of constitutional guarantees pro[5] A modern instance of the collection of vided in other respects they are genuine extoll by way of excise tax is found in G. L. C. cise taxes. Farr Alpaca Co. v. Common63, 88 62–66, for the operation of street rail. wealth, 212 Mass. 156, 98 N. E. 1078, and Ways in public ways. Collector of Taxes v.

cases there reviewed. Judson Freight ForBay State Street Railway, 234 Mass. 336, 125 warding Co. v. Commonwealth, 242 Mass. N. E. 614. The collection of a tax by way of 47, 53, 136 N. E. 375, 27 A. L. R. 1131; tollage or license for the use of public ways Alpha Portland Cement Co. v. Commonby motor vehicles has been upheld in other wealth, 244 Mass. 530, 546, 139 N. E. 158. jurisdictions. Kane v. State, 81 N. J. Law, The deduction of assessed valuation from 594, 80 A. 453, L. R. A, 1917B, 553, Ann. Cas. the list price provided in section 1 of the 1912D, 237; Kane v. New Jersey, 242 U. S. proposed act, in principle stands on the same 160, 37 S. Ct. 30, 61 L. Ed. 222; Pierce Oil footing as the deduction of tangible property Corp. v. Hopkins, 264 U. S. 137, 44 S. Ct. 251, taxed locally under the corporation tax law 68 L, Ed. 593; Hendrick v. Maryland, 235 U. of St. 1909, c. 490, part 3, & 41, Third, the S. 610, 35 S. Ct. 140, 59 L. Ed. 385; Opinion constitutionality of which was settled by of the Justices, 81 N. H. 120 A. 629; numerous decisions. Commonwealth v. HamStandard Oil Co. v. Brodie, 153 Ark. 114, ilton Manuf. Co., 12 Allen, 298; Common239 S. W. 753; Harder's Storage Co. v. Chi- / wealth v. Cary Improvement Co., 98 Mass.

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