Moore v. Webb

California Supreme Court Oct 27, 1933 No. Docket No. S.F. 14781.Published

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Holding. The court held that the Motor Club Service Act is constitutional, finding that the exemptions provided in Section 13 for attorneys and insurance companies do not constitute unreasonable or unlawful discrimination.

Issues

Whether Section 13 of the Motor Club Service Act creates an unconstitutional and unreasonable classification by exempting attorneys and insurance companies from its provisions.
Whether the requirement of a $100,000 cash or bond deposit is an arbitrary or excessive exercise of legislative power.

Disposition. affirmed

Quotations verified verbatim against the opinion

“We conclude that the appropriate language used in the present act does not create an unreasonable discrimination as to attorneys.”

“The specific inquiry, outside of any showing that the exercise of the power is arbitrary or unreasonable, is one of economics for the legislature and not subject to review.”

THE COURT.

Appeal from a judgment entered on an order sustaining without leave to amend the several demurrers of the defendants to the plaintiff’s complaint.

The plaintiff furnishes a motor club service under the name of Pacific National Automobile Association. In 1929 (Stats. 1929, chap. 818, amended 1931, chap. 165), the legislature passed an act defining and regulating so-called motor club service. By section 1 of the act such service is defined as the “rendering, furnishing, or procuring of towing service, emergency road service, insurance service, bail bond service, discount service, financial service, buying and selling service, theft service, map service and touring service, or any one or more thereof, as herein defined, to any person or persons in connection with the ownership, operation, use or maintenance of a motor vehicle by such other person or persons in consideration of such other person or persons being or becoming a member or members of any company, rendering, procuring or furnishing the same, or being or becoming in any manner affiliated therewith, or being or becoming entitled to receive membership or other motor club service therefrom by virtue of any agreement or understanding with any such company”.

Section 2 requires the deposit with the insurance commissioner of the sum of $100,000 in cash or securities approved by the insurance commissioner, or a bond with a corporate surety approved by the commissioner, -to insure faithful performance in the sale or rendering of motor club service and the payment of any fines or penalties levied for failure to comply with the act. A certificate to be issued by the commissioner is required, for which an annual license fee of $10 is exacted.

[306]

The commissioner is given the power for cause shown and after a hearing and determination that a company has violated the provisions of the act, or that it is insolvent, or that its assets are less than its liabilities, or that it or its officers refuse to submit to an examination, or that it is transacting business fraudulently, to revoke or suspend its certificate.

A provision required to be inserted in every service contract is that the contract may be canceled at any time by either party and the holder be entitled upon cancellation to a refund of the unused portion of the consideration paid calculated on a

Moore v. Webb

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THE COURT.

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