
    The New York Board of Fire Underwriters, Respondent, v. Whipple & Co., as Chief Executive Officer of The South and North American Lloyds, Performing Corresponding Functions of a Treasurer Thereof, Appellant.
    
      Insurance—firepatrol act of Hew Yorlcoity is a private and local act and is constitutional— its subject is expressed in its title—insurance is a business of a public nature and mazy be assessed under the police power — Laws 1867, chazp. 846.
    Chapter 846 of the Laws of 1867, entitled "An act to incorporate the New York board of fire underwriters,” and requiring all persons who are engaged in the business of insurance in the city of New York to render to the corporation, organized by the act, a return of the amount of premiums received by them, and authorizing, the corporation to charge upon all persons engaged in the insurance business such sum as may be necessary to pay the expenses of the fire patrol, not exceeding two per cent of the amount of the premiums received by them, is constitutional.
    The act is private and local, but its subject is sufficiently expressed in its title.
    Where the title of a local or private act expresses a general purpose or object, all matters fairly and reasonably connected with it, and all measures which will or may facilitate its accomplishment, are proper to be incorporated in the act and are germane to its title.
    
      The act does not take private property without due process of law. Although the act authorizes the corporation to levy an assessment upon persons engaged in the business of insurance in the city of New York who are not members of the.corporation, this does not constitute the levying of a tax and is to be sustained as an exercise of the police power in the regulation of the business.
    The levying of such an assessment is not forbidden by the Constitution; it is legislative in its nature, and as such the presumption is' that it. is valid especially where for along period of time the assessments.have been levied under the act without any objection being made.
    The police power, though not easily defined, authorizes .the State to regulate the conduct of citizens towards each other; and, when necessary for the public good, the manner in which each shall use His own property.
    Where a citizen engages in a business of a public nature, like insurance, he must submit for public purposes to the regulation of his business by the authority of the State.
    The business of insurance is now regulated -by law "and its pursuit is forbidden except to those who are licensed and authorized for that purpose and who receive from the State a privilege to pursue it, apart from all other persons; and inasmuch as the persons who exercise the business of insurance have a virtual monopoly under the grant of the State, the insurance business is within the control of the police power, and the Legislature may authorize the organization of a fire patrol, as a valuable adjunct to the business, and the levying of an assessment upon the persons engaged in the business of insurance as a means for supporting the fire patrol.
    
      Semble, that property becomes clothed with a public interest when used in a manner to make it of public consequence and to affect the community at large.
    Appeal by the defendant, Whipple & Co., as chief executive officer of the South and North American Lloyds, performing corresponding functions of a treasurer thereof,, from an interlocutory -judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of New York on the 26th day of November, 1895, upon the decision of the court, rendered after a trial at the New York Special Term, overruling the defendant’s demurrer to the plaintiff’s complaint.
    
      John T. B'enlon, for the appellant.
    
      John Berry, for the respondent.
   Rumsey, J.:

. The action is brought pursuant to chapter 846 of the Laws of 1861, to recover a certain assessment levied upon the premiums received by the defendants for insurance issued in the city of New York. The defendant demurs to the complaint upon three grounds: First, that it does not state 'facts sufficient to constitute a cause of action, and that there is axlefect of parties defendant, for two reasons more particularly stated in the demurrer. As to the second and third grounds of demurrer, neither of them is well taken, for it does not 'appear upon the face of the complaint that the objection therein urged exists.'

As to the first ground of demurrer, the questions raised upon it,' with one exception, have been disposed of by the case of this plaintiff against the Metropolitan Lloyds of New York city, reported in 11 Misc. Rep. 646. This decision was affirmed by the General. Term without opinion. (87 Hun, 619.) That case differs from this in only one respect, which is entirely unimportant. In the complaint in that case the statute under which the plaintiff was organized and by which the liability sued upon was created, was not pleaded. Here it is pleaded. But the distinction is of no importance for the purposes of this demurrer. So far as the questions presented were passed upon by the court in that case, it is authoritative and must be held to sustain the complaint here. In that case, however, at the Special Term, the court declined, for reasons which were sufficient, to pass upon the constitutionality of the statute under which the plaintiff was created, and by which the liabilities sought to be enforced in that action, as in this, were brought into existence. The General Term in the exercise of a wise discretion, thought it was advisable to affirm the judgment without passing upon that question. But in view of the fact that numerous actions have been commenced since that time to enforce the same liability, three of which have been presented to us at this time, it has been thought best to examine the question of constitutionality and to decide it.

The act in question is chapter 846 of .the Laws of 1867, entitled “ An act to incorporate the New York Board of Fire Underwriters.” By the 1st section a large number of officers of different fire insurance companies and associations and all other persons, the presidents or other officers for the time being of any incorporated'company or associations, and any agent doing the business of fire insurance in the city of New York, who may become associated with them, are hereby created a body corporate by the name of The New York Board of Fire Underwriters.’ ’ The remaining sections prescribe the.purposes for which.the' corporation is organized; ■ 'specify its officers and generally • the manner of pérformance of its business and the powers which it shall have. The 7th, 8th, 9th and . 10th sections give power to the corporation to create a fire patrol as it is called, and regulate the powers to' be given to that patrol, ' and prescribe the manner in which the money to pay the expenses .of that patrol shall be raised and collected.. . These sections will be more fully referred to later.

The first objection to the constitutionality of the act, is that being a private and local act it contains more than one subject and the subject'is not sufficiently expressed in the title. That this act is a private and local act must be conceded. (People ex rel. Lee v. Supervisors of Chautauqua, 43 N. Y. 10.) The fact that certain provisions of the act may be public in their nature does not make the whole act public so that ft ceases to be jwithin the article of the Constitution mentioned above. The title of the act has been quoted above. It is certainly germane, so far as it goes, to the object for which the act was passed, and we think within rules which are now well settled it complies with the requirements of the Constitution. The rule now as settled is that where the title of a local or private act expresses a general purpose or object, all matters fairly and reasonably connected with it, and all measures which will or may facilitate its accomplishment are proper to be incorporated in the act and are germane to the title. (People ex rel. City of Rochester v. Briggs, 50 N. Y. 553; Matter of Knaust, 101 id. 189; Sweet v. City of Syracuse, 129 id. 316, 330.) Thé objection referred to we think is clearly not well taken.

But a further objection is suggested which requires more examination. It is claiméd that the provisions of this act are such as in effect to authorize the corporation created by it to levy a tax upon the premiums received by persons engaged in the business of insurance in the city of New York, whether they are members of the ■corporation, or not, and that this is 'substantially .taking private property without' due process of law, and that'the power to do it neither exists in the Legislature nor can be. delegated by it. Undoubtedly, if the conclusion drawn from the provisions of this .act is correct, the act Violates the Constitution and is invalid, but we d'o not think that it is susceptible of such construction. ' The right to levy this assessment for the purposes provided for in this act is not the levying of a tax, but it is to be sustained as an exercise by the Legislature of its police power in the regulation of business. In' examining the question of the constitutionality of an act of the Legislature of the State, it must be borne in mind that .all the legislative power is vested in "the Legislature. Unless the Constitution forbids the act, it is within the power of the Legislature, if it is legislative in its nature, and in every case the presumption is that the act is valid. (People ex rel. Carter v. Rice, 135 N. Y. 473.) The-presumption in this case is strengthened because of the fact that this, act having been upon the statute book for nearly thirty years, business having been done under it and assessments levied pursuant to it during all that time, without objection so far as appears, it is not. lightly to be overthrown, and certainly ought not to be overthrown, in any doubtful case. The existence of what is known as the police power in the Legislature by which it is authorized to exercise a regulating and controlling power over the internal affairs of the State,- is Avell settled. It is equally well settled that such a power is far reaching. (Cooley on Const. Lim. [4th ed.] 713, et seqi) In the nature of things, of course, it is difficult to define it and it isahnost impracticable in general words to set any limit to its exercise or to lay down any general rules within which it must, be brought before the exercise of it can be sustained.- It-has been said, and such appears to be the current of authority, that' it authorizes the government of the State to regulate the conduct of its citizens toivards each other, and when necessary for the public good, the manner in which each shall use his own property. (Munn v. Illinois, 94 U. S. 113.) The rules laid down in that case, although meeting with strong dissent- from a portion of the court'when the case was decided, have been, we think, now fully adopted by many of the courts of the United States as an accurate statement of the extent to which the courts may go in regulating and controlling the use of property under the police power. The rule as settled by that case and other cases may be said to be that when the owner of property devotes it to a use' in which the public has an interest, he in effect grants to the public an interest in that use and must, to the extent of that interest, submit to be controlled. by the public for the common good,, so long as he maintains the use. Within' the same principle, if a business in which the citizen engages is one of a public, nature, or in which the public have an interest, he must submit for the public purposes to' the regulation of his business by the authority of the State. This, we think, 'cannot be denied. ■ '

The question then is presented what constitutes a public interest in any business, which will authorize the State .to make regulations concerning it.' This question was considered at large in the case of Munn v. Illinois, cited above. The chief justice in delivering the opinion of the court in that case, says : Under the police power the government regulates the conduct of its citizens, one towards another and the manner in which each shall use his own property, when such regulation becomes necessary for the public good.” And lie says that under that power it has, been customary from time immemorial in England and in this country to regulate ferries, common carriers, hackmen, bakers, millers, innkeepers and people exercising business of that nature.

It is said that property becomes clothed with a public interest when used in a manner to make it of public consequence,- and . affect the community at large. Many cases and instances are cited in the prevailing opinion in that case, in which the legislature in various States has regulated the conduct of business of different kinds, all of which have been sustained upon the ground that the business was one which affected public interest and, therefore, was amenable to control by the public authorities. The question of the power of the State to regulate business has been presented in many cases in this State, and the case of Munn v. Illinois (supra) has been ■ followed as laying down the true rule under which the exercise of police power could be sustained. (People v. Budd, 117 N. Y. 1, and cases cited; People v. King, 110 id. 418.) The question of the extent of the police power is considered fully by .Judge Cooley in-his learned work on Constitutional Limitations, and he comes to the conclusion that any property or business which is affected with .the public interest is amenable to the police power of the State, and that any business is said to be affected with the public interest where either the following of it was not as of right, but was permitted by the State as a privilege or franchise, or where exclusive privileges are.granted in consideration of some S23ecial return to be made to the public. (Cooley on Const. Lim. [4th ed.] 746.) It is not necessary to pursue the examination of this branch of the subject further, because we are satisfied that the conclusions of Judge Cooley are fully sustained by principle and authority. Although at one time the business of insurance in this State was one which might be followed by anybody, and with regard to which no restrictions were inqrosed, yet that for many years has ceased to be the case. Not only is that business now regulated by many laws, but the pursuing of it is forbidden, exce2)t by certain persons who are licensed and authorized for that puiqiose, and who thereby receive from the State a privilege to pursue it a23art from other persons. (Ins. Law [Laws of 1892, cha23. 690], §§ 9,34, 54.) It has been the policy of' the State for many years to regulate and control this business in view of its great extent; the great interests involved in it, and the serious damage to the great body of citizens which might result if the business was entirely without control. The right to thus control it can hardly be questioned at this day. For that reason people exercising the business of insurance in this State are clearly within the control of the police 230wer, because," as is.said in the cases above cited, they have a virtual monopoly of the business by the grant of the State.

The act in question authorizes this corporation to establish a fire patrol, having for its object to preserve life and 2>i’Of>erty at and after a fire, and to enable the patrol so organized to act with promptness and efficiency, certain powers almost public in their nature are given to them. It will be seen at once that this 2>atrol may render great service to persons authorized to pursue the business of insurance within this city where the powers of the patrol are to be exercised. It is a valuable adjunct to this business, and one which might well be created by the j3t.ate as a means of benefit, not only to citizens, but to those 2>ersons who have contracted to furnish indemnity to citizens in case of the destruction of their property by fire.

The act requires all 23ersons who are engaged in the business of insurance in .the city of New York to render to the corporation organized by it a return of the amount of premiums received by them during certain months of the year, and authorizes the coloration to charge upon all persons engaged in that business such sum as may be necessary to pay the expenses of the fire patrol, not exceeding two. per . cent of the amount of the premiums received hy them. It affixes a penalty for a refusal to make the returns, and makes the sum assessed collectible by action.

■ Within the principles laid down above we think the power of the Legislature to impose upon persons authorized to issue insurance in this city the duty of taking this step to preserve life and property at fires, cannot be questioned. These persons have the exclusive ' privilege of entering into such contracts. The nature of the contract is one which renders it peculiarly proper that they should not only have the privilege, but be charged with the duty, of protecting property and life also when in danger from conflagrations. We think there can be no; doubt that this duty may properly be imposed upon them and that they may be required to pay the expenses of it.. For these reasons the act, in our judgment, is constitutional, and as it is so, it creates a good cause of action, and a complaint brought under it, if otherwise based upon’ the proper facts, does state facts sufficient to constitute a cause of action and is not demurrable.

For the reasons above given we think this complaint is good, and the judgment overruling the demurrer should be affirm'ed, with costs.

Judgment affirmed, with costs, with leave to the appellant to withdraw the demurrer in twenty days and answer, on payment of the cósts in this court, and of the costs in the court below.

Van Brunt, P. J., Barrett and O’Brien, JJ., concurred.

Judgment affirmed, with costs, with leave to appellant to withdraw demurrer in twenty days and answer, on payment of costs in this court and in the court below.  