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Capitol Mutual Benefit Association v. State

Decided: December 6, 1937.

CAPITOL MUTUAL BENEFIT ASSOCIATION, A CORPORATION, PROSECUTOR,
v.
THE STATE OF NEW JERSEY, ON COMPLAINT OF THE COMMISSIONER OF BANKING AND INSURANCE, RESPONDENT



On certiorari.

For the prosecutor, William A. Moore, Robert Carey, Jr., R. Wayne Kraft, William Harris and John H. Switzer.

For the respondent, David T. Wilentz, attorney-general (Louis J. Cohen, assistant attorney-general, of counsel).

Before Justices Bodine, Heher and Perskie.

Perskie

The opinion of the court was delivered by

PERSKIE, J. The determinative question, therefore, is whether the provisions of chapter 187, Pamph. L. 1936, p. 445, arbitrarily discriminates between prosecutor and other associations carrying on or doing a similar business. We do not think so.

The applicable test is well settled.

"It is within the competency of the legislature to classify objects of legislation; and in the exercise of this power it possesses a large measure of discretion. But the classification, to have the virtue of constitutional generality, must rest upon distinctions that are substantial and not merely illusory. The test is whether he statutory class has a logical and reasonable basis, free from artificiality and arbitrariness, embracing all and omitting none naturally falling into that category. Is it legislation of such a character as is equally appropriate to all forming the statutory class, and is that class embracive of all in like situation and circumstances, and therefore natural members of the class so created? If, viewed in the light of the legislative design, the necessity of propriety of the classification reasonably appears, it is not within the constitutional interdict." Raymond v. Township of Teaneck, 118 N.J.L. 109 (at p. 111), and cases there cited; 191 A. 480. (Compare Gulf C. & S.F.R. Co. v. Ellis, 165 U.S. 150, 155; 41 L. Ed. 666, 668; Smith v. Cahoon, 283 U.S. 553, 566, 567; 75 L. Ed. 1264, 1274.)

That the legislature has the power to supervise and regulate mutual benefit associations, and that it also has the power to make classifications in the exercise of its power to supervise and regulate such associations so long as the classifications are not arbitrary but are in fact based on a real and substantial difference having a real relation to the subject of the particular legislation, is not subject to challenge; here, it is in fact conceded.

Prosecutor, however, contends in substance, that the act of 1936, supra, must fall because the classification is not reasonable; because it is clearly an attempt to make "a distinction between corporations identically alike in organization, capital and all other powers and privileges conferred by law" (Cf. Cotting v. Godard, 183 U.S. 79, 108, 109; 46 L. Ed. 92, 108); and because it is special legislation. These contentions are without merit both as to the law and the facts.

First: As to the law. In the case of Sproles v. Binford, 286 U.S. 374, 396; 76 L. Ed. 1167, ...


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