JUSTICES HARLAN and BROWN, dissenting.

MR. JUSTICE HARLAN (with whom concurred MR. JUSTICE BROWN) dissenting.

I cannot assent to that part of the opinion of the court relating to the constitutionality of the statute of Texas of 1895 which provides that a life or health insurance company, failing to pay a loss within the time specified in the policy, after demand therefor, shall be liable, in addition to the amount of the loss, to pay the holder of the policy "twelve per cent damages on the amount of such loss, together with all reasonable attorney's fees for the prosecution and collection of such loss."

The operation of the statute is well illustrated in the present case; for, the verdict of the jury was for $15,000 as principal, $2250 as interest, $5175 as twelve per cent damages, (of which the plaintiff remitted $3375), and $2500 as special attorney's fees for the plaintiff.

The rule embodied in the statute is not made applicable to fire or marine insurance companies, or to any other companies or corporations doing business in Texas. Does not the State by that statute deny to life and health insurance companies, doing business within its limits, the equal protection of the laws which is secured by the Fourteenth Amendment of the Constitution of the United States?

It seems to me that this question must be answered in the affirmative if any regard whatever be had to the principles announced in Gulf, Colorado & Santa Fé Railway v. Ellis, 165 U. S. 150, 153, 154.

In that case we had before us a statute, declaring that any person in Texas having "a valid bona fide claim for personal services rendered or labor done, or for damages, or for overcharges on freight, or claims for stock killed or injured by the train of any railway company, provided that such claim for stock killed or injured shall be presented to the agent of the company nearest to the point where such stock was killed or injured, against any railroad corporation operating a railroad in this State, and the amount of such claim does not exceed $50, may present the same, verified by his affidavit, for payment to such corporation, by filing it with any station agent of such

JUSTICES HARLAN and BROWN, dissenting.

corporation in any county where suit may be instituted for the same, and if, at the expiration of thirty days after such presentation, such claim has not been paid or satisfied, he may inmediately institute suit thereon in the proper court; and if he shall finally establish his claim, and obtain judgment for the full amount thereof, as presented for payment to such corporation in such court, or any court to which the suit may have been appealed, he shall be entitled to recover the amount of such claim and all costs of suit, and in addition thereto all reasonable attorney's fees, provided he has an attorney employed in his case, not to exceed $10, to be assessed and awarded by the court and the jury trying the issue."

That statute being in force, an action was brought to recover $50 for a colt killed by the railway company. There was a judgment against the company for the amount claimed, and a special attorney's fee of $10 in favor of the plaintiff was added, as required by the above statute.

The contention in that case was that the statute made such an arbitrary discrimination against railroad companies embraced by its provisions as 'to bring it within the prohibition of the Fourteenth Amendment. That view was sustained. This court said: "It is simply a statute imposing a penalty upon railroad corporations for a failure to pay certain debts. No individuals are thus punished, and no other corporations. The act singles out a certain class of debtors and punishes them, when for like delinquencies it punishes no others. They are not treated as other debtors. They cannot appeal to the courts as other liti gants under like conditions and with like protection. If litigation terminates adversely to them they are mulcted in the attorney's fees of the successful plaintiff; if it terminates in their favor, they recover no attorney's fees. It is no sufficient answer to say that they are punished only when adjudged to be in the wrong. They do not enter the courts upon equal terms. They must pay attorney's fees if wrong; they do not recover any if right; while their adversaries recover if right and pay nothing if wrong. In the suits, therefore, to which they are parties they are discriminated against, and are not treated as others. They do not stand equal before the law.

JUSTICES HARLAN and BROWN, dissenting.

They do not receive its equal protection. All this is obvious from a mere inspection of the statute." Referring to the Fourteenth Amendment of the Constitution, the court said: "The rights and securities guaranteed to persons by that instrument cannot be disregarded in respect to these artificial entities called corporations any more than they can be in respect to the individuals who are the equitable owners of the property belonging to such corporations. A State has no more power to deny to corporations the equal protection of the laws than it has to individual citizens." Again: "Neither can it be sustained as a proper means of enforcing the payment of small debts and preventing any unnecessary litigation in respect to them, because it does not impose the penalty in all cases where the amount in controversy is within the limit named in the statute. Indeed, the statute arbitrarily singles out one class of debtors and punishes it for a failure to perform certain duties-duties which are equally obligatory upon all debtors; a punishment not visited by reason of the failure to comply with any proper police regulations, or for the protection of the laboring classes or to prevent litigation about trifling matters, or in consequence of any special corporate privileges bestowed by the State. Unless the legislature may arbitrarily select one corporation or one class of corporations, one individual or one class of individuals, and visit a penalty upon them which is not imposed upon others guilty of like delinquency, this statute cannot be sustained. But arbitrary selection can never be justified by calling it classification. The equal protection demanded by the Fourteenth Amendment forbids this."

I do not perceive how the present decision can be upheld without disregarding the principles of the Ellis case. If a railroad company sued in Texas upon a claim of less than $50 for killing or injuring stock, cannot be required, when unsuccessful in its defence, to pay a special attorney's fee-no such rule being established in reference to other corporations or individuals, sued for a like amount of money-I cannot understand how life and health insurance companies, alone of all corporations or companies doing business in Texas, can be required to pay special damages and special attorney's fees when unsuccess

JUSTICES HARLAN and BROWN, dissenting.

ful in defending suits brought against them. The two statutes are alike in this, that the defendant company or corporation, whether a railroad corporation or a life or health insurance. company, even if successful in an action brought against it, could not recover special attorney's fees or special damages against its adversary. Thus the defendant company in a suit brought under either statute is not permitted to appear in court upon terms of equality with the party suing it, and is subjected to special burdens not imposed upon other companies or other corporations refusing to pay money demanded of them.

We are informed by the opinion of this court that the courts in Texas have held that the Ellis case was distinguishable from the present case, and we are referred to Union Central Life Ins. Co. v. Chowning, 86 Texas, 654; Fidelity and Casualty Company v. Allibone, 39 S. W. Rep. 632, affirmed in Fidelity &c. Company v. Allibone, 90 Tex. 660, and New York Life Ins. Co. v. Orlopp, 61 S. W. Rep. 336. The first named of those cases was decided more than two years before the Ellis case was determined by this court. The first case in Texas in which the Ellis case was referred to was that of Fidelity &c. Company v. Allibone. In that case the Court of Civil Appeals of Texas, after referring to certain prior decisions in that State sustaining the constitutionality of the statute here in question, said: "A late decision of the Supreme Court of the United States, Railway Co. v. Ellis, construing a somewhat analogous statute of this State, and reversing the decision of our Supreme Court approving its validity, may be at variance with the cases just cited; but, until it is expressly so held either by our own Supreme Court or that of the United States, we will adhere to the decisions already made." The judgment in the last case was affirmed, the Supreme Court of Texas observing nothing more than that the case was "distinguishable" from the Ellis case. Upon what grounds the two cases were distinguishable was not stated. It is a very convenient mode for distinguishing two cases, apparently in conflict, to say nothing more than that they are distinguishable. In New York Life Ins. Co. v. Orlopp, the statute was sustained upon the ground that the State could prescribe the terms on which foreign insurance companies might do business within its limits.

JUSTICES HARLAN and BROWN, dissenting.

This court says that the particular liability imposed by the statute in question "amounted to one of the conditions on which life and health insurance companies were permitted to do business in Texas, and the power of the State in the matter of the imposition of conditions of its own and foreign corporations has been repeatedly recognized by this court."

Of course, speaking generally, a State may impose conditions on its own and foreign corporations. But will any one say, or has this court ever directly held, that a provision of a state enactment relating to corporations, foreign or domestic, was legally operative or binding if such provision be inconsistent with the Constitution of the United States?

It is one thing for a State to forbid a particular foreign corporation, or a particular class of foreign corporations, from doing business at all within its limits. It is quite another thing for a State to admit or license foreign corporations to do business within its limits and then subject them to some statutory provision that is repugnant to the Constitution of the United States. If a corporation, doing business in Texas under its license or with its consent, insists that a particular statute or regulation is in violation of the Constitution of the United States, and cannot therefore be enforced against it, the State need only reply-such seems to be the logical result of the present decision that the statute or regulation is a condition of the right of the corporation to do business in the State, and, whether constitutional or not, must be respected by the corporation. Corporations created by the several States are necessary to the conduct of the business of the country; and it is a startling proposition that a State may permit a corporation to do business within its limits, and by that act acquire the right to subject the corporation to regulations that may be inconsistent with the supreme law of the land.

In Insurance Company v. Morse, 20 Wall. 445, 455, 456, a statute of Wisconsin, requiring insurance companies of other States to stipulate, as a condition of their right to do business in that State, that they would not remove into the Federal court any suit brought against them in the state courts, was held invalid not only because it tended to oust the courts of the