# California Physicians' Service v. Garrison

> California Supreme Court · August 27, 1946 · 28 Cal. 2d 790

URL: https://www.frixlaw.com/law-library/cases/9531854

## Case

- **Full name:** CALIFORNIA PHYSICIANS’ SERVICE (A Nonprofit Corporation), Respondent, v. MAYNARD GARRISON, as Insurance Commissioner, Etc., Appellant
- **Court:** California Supreme Court
- **Decided:** August 27, 1946
- **Citations:** 28 Cal. 2d 790; 172 P.2d 4; 167 A.L.R. 306; 1946 Cal. LEXIS 263
- **Precedential status:** Published
- **Opinion:** Concurrence by Gibson
- **Judges:** Edmonds, Gibson
- **Cited by:** 76 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/9531854

## Opinion text

GIBSON, C. J.
I concur in the judgment solely on the ground that the Legislature, by the enactment of section 593a of the Civil Code, exempted organizations coming within its scope from regulation by the Insurance Commissioner. By providing for supervision by a professional board and by the attorney general (Civ. Code, §§ 593a, 605e), the Legislature has evidenced an intention to free such organizations from other regulation and from the necessity of complying with the various requirements, such as the maintenance of reserves, which are imposed on regular insurance companies. The need for regulation or supervision, the amount thereof and the persons, bodies or officers who should supervise or regulate are all matters which are confided to the Legislature, and it was within the legislative discretion to provide that a limited regulation of such nonprofit organizations was sufficient.
I cannot, however, concur in that portion of the opinion declaring that the plaintiff is exempted from regulation by the Insurance Commissioner because it is not engaged in the business of transacting insurance, but is merely agreeing to render service. The true test is not the character of the consideration agreed to be furnished, but whether or not the contract is aleatory in nature. A contract still partakes of the nature of insurance, whether the consideration agreed to be furnished is money, property or services, if the agreement is aleatory and the duty to furnish such consideration is dependent upon chance or the happening of some fortuitous event. (See Rest., *812 Contracts, § 291.) In the present case, the agreement is to make payments to member doctors for medical services to the beneficial members, and the duty to make such payments is obviously dependent upon chance or the happening of a fortuitous event, since the necessity for the services, and also for the agreed payment, is dependent upon the members’ sickness or accidental injury. ■

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9531854. Public record. Not legal advice.