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JUSTICES HABLAN and BROWN, dissenting.

United States of a jurisdiction conferred upon them by the Constitution, but because it created an obstruction to the exercise of a right granted by that instrument. The court said: “Every citizen is entitled to resort to all the courts of the country, and to invoke the protection which all the laws or all those courts may afford.” The court further said that the right of the insurance company to remove the suit was “denied to it by the state court on the ground that it had made the agreement referred to, and that the statute of the State authorized and required the making of the agreement. We are not able to distinguish this agreement and this requisition, on principle, from a similar one made in the case of an individual citizen of New York. A corporation has the same right to the protection of the laws as a natural citizen, and the same right to appeal to all the courts of the country. The rights of an individual are not superior, in this respect, to that of a corporation. The State of Wisconsin can regulate its own corporations and the affairs of its own citizens, in subordination, however, to the Constitution of the United States. The requirement of an agreement like this from their own corporations would be brutum fulmen, because they possess no such right under the Constitution of the United States. A foreign citizen, whether natural or corporate, in this respect possesses a right not pertaining to one of her own citizens. There must necessarily be a difference between the statutes of the two in this respect.”

This question was presented in somewhat different form in W. W. Cargill Co. v. Minnesota, 180 U. S. 452, 468. That was an action by the State to prevent a Wisconsin corporation from operating a warehouse owned by it until it should have obtained a license from the Railroad and Warehouse Commission of Minnesota organized under a statute of that State, and relating to elevators and warehouses. That statute provided : “It shall be unlawful to receive, ship, store or handle any grain in any such elevator or warehouse, unless the owner or owners thereof shall have procured a license therefor from the state Railroad and Warehouse Commission, which license shall be issued for the fee of one dollar per year, and only upon written application under oath, specifying the location of such elevator or

JUSTICES HARLAN and BROWN, dissonting.

warehouse and the name of the person, firm or corporation owning and operating such elevator or warehouse, and the names of all the members of the firm or the names of all the officers of the corporation owning and operating such elevator or warehouse, and all moneys received for such licenses shall be turned over to the state grain inspection fund. Such license shall confer upon the licensee full authority to operate such warehouse or elevator in accordance with the laws of this State and the rules and regulations prescribed by said Commission, and every person, company or corporation receiving such license shall be held to have accepted the provisions of this act, and thereby to have agreed to have complied with the same.

The Wisconsin corporation defended the suit brought against it upon the ground that the statute there involved was repugwant to the Constitution of the United States. This court said : “We cannot question the power of the State, so far as the Constitution of the United States is concerned, to require a license for the privilege of carrying on business of that character within its limits-such a license not being required for the purpose of forbidding a business lawful or harmless in itself, but only for purposes of regulation.” Again--and this is most pertinent here--the court said: “The defendant however insists that some of the provisions of the statute are in violation of the Constitution of the United States, and is it obtained the required license, it would be held to have accepted all of its provisions, and in the words of the statute) thereby to have agreed to comply with the same.' The answer to this suggestion is that the acceptance of a license, in whatever form, will not impose upon the licensee an obligation to respect or comply with any provisions of the statute or with any regulations prescribed by the state Railroad and Warehouse Commission that are repugnant to the Constitution of the United States. A license will give the defendant full authority to carry on its business in accordance with the valid laws of the State and the valid rules and regulations prescribed by the Commission. If the Commission refused to grant a license, or if it sought to revoke one granted, because the applicant in the one case, or the licensee in the other, refused to comply with statutory provisions or

JUSTICES HARLAN and BROWN, dissenting.

with rules or regulations inconsistent with the Constitution of the United States, the rights of the applicant or the licensee could be protected and enforced by appropriate judicial proceedings."

In the case before us, the defendant company was doing business in Texas under a license issued by the State. By accepting such license, the company did not agree to submit to any local regulation that was repugnant to the Constitution of the United States. It could resist the enforcement of any regulation or statutory provision that was inconsistent with rights secured to it by that instrument.

The court says that the ground for placing life and health insurance companies in a different class from fire, marine and inland insurance companies is obvious. The only reason assigned for that statement is “the necessity of the prompt payment of the insurance money in very many cases in order to provide the means of living of which the beneficiaries had been deprived by the death of the insured.” But the same reasons exist for prompt payment by a fire insurance company when The house which shelters the insured and his family is destroyed by fire. And yet, under the statute, a fire, marine or inland insurance company, if it resists a claim for loss, is not liable, when its defence is unsuccessful, to pay any special damages or special attorney's fee. It can defend any suit brought against it under the same conditions accorded to individual citizens or to corporate bodies generally. But a different and most arbitrary rule is prescribed for life and health insurance companies. Their good faith in refusing to pay a claim for loss, or in defending an action brought to enforce payment of such a claim, is not taken into account. If, in any case, they do not, within a specified time, pay the amount demanded of them, no matter what may be the reason for their refusal to pay, and if they do not succeed in their defence, they must pay not only the principal sum, with ordinary interest, but, in addition, twelve per cent damages on the amount of the principal, and all reasonable attorney's fees for the prosecution and collection of the loss. Thus the State, in effect, forbids a life or health insurance company to appear in a court of justice and defend a suit brought

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Statement of the Case.

against it, except subject to the harsh condition that if the jury does not sustain the defence, the company must pay special damages and special attorney's fees that are not exacted from any other defendant, corporate or individual, who may be sued for money.

This is such an arbitrary classification of corporations and such a discrimination against life and health insurance companies as brings the statute within the decision in the Ellis case, which has been often referred to by this court with approval. Magoun v. Illinois Trust and Savings Bank, 170 U. S. 294; St. Louis, Iron Mountain &c. R. R. Co. v. Paul, 173 U. S. 409; Nicol v. Ames, 173 U. S. 521; W. W. Cargill Co. v. Minnesota, above cited.

In my opinion, the statute in question comes within the constitutional prohibition of the denial by a State of the equal protection of the laws and should be held void.






No. 590. Submitted March 10, 1902.—Decided May 5, 1902.

In order to warrant the exercise by this court of jurisdiction over the judg.

ments of state courts, there must be some fair ground for asserting the existence of a Federal question, and in the absence thereof a writ of error will be dismissed, although the claim of a Federal question was plainly set up; and where by the record it appears that such a claim, although set up, had no substance or foundation, the fact that it was raisod was

not sufficient to give this court jurisdiction. That the State has power to forfeit the charter of a corporation for an abuse

of its privileges, is recognized as law in Louisiana. In Louisiana a corporation is liable to be proceeded against for taking ille

gal rates by quo warranto at the suit of the State. Upon a careful review of all the questions, the court is of opinion that no

Federal question exists in this record, and that the court is without jurisdiction in this case.

This is a proceeding in the nature of a quo warranto, brought by the attorney general of the State of Louisiana, in the name

Statement of the Case.

of the State, to obtain a forfeiture of the charter of the defendant, the waterworks company. Upon the trial there was judgment in favor of the company, but upon appeal to the Supreme Court of the State that judgment was reversed, and judgment in favor of the State and against the company was entered, decreeing the forfeiture of the charter and of all the franchises heretofore conferred upon the defendant. The company has brought the case here by writ of error for review.

It appears from the petition filed in behalf of the State, through its attorney general, that in June, 1898, the general assembly of the State adopted a concurrent resolution providing for the appointment of a committee, with instructions to investigate the complaints against the methods of operation of the New Orleans Waterworks Company, and to report back to the general assembly such action as it might deem necessary to the public interests in the premises. The committee was duly appointed, made the investigation, and having submitted two reports thereon, the legislature on July 14, 1898, adopted the following:

“Whereas, the majority and minority reports of the joint committee of the house and senate, appointed to investigate the affairs, administration and condition of the New Orleans Waterworks Company, have been submitted to the general assembly, together with the testimony and evidence adduced at the various sessions of the said committee; and

Whereas, the subject-matter of the said reports involves the consideration and the determination of intricate questions of law and fact; and

Whereas, it is impossible, in view of the limited time at its disposal, for the general assembly to give the matter the examination and consideration necessary for a proper determination thereof;

Be it, therefore, resolved by the senate, the house of Representatives concurring, That the whole subject-matter of the said report, together with the testimony and evidence upon which they are based, be respectfully referred to the attorney general of the State for such action in the premises as he may deem proper.”




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