Court Opinion

ID: 8016947
Source: CourtListenerOpinion
Date Created: 2022-09-09 02:05:49.40784+00
Date Added: 2024-06-11T16:36:24.047456
License: Public Domain

DISSENTING OPINION.
GRAVES, J.
I do not concur in the majority opinion herein for reasons which I will in due order-state. First, however, I deem it advisable to eliminate from consideration several questions which I do not dispute, and which questions eliminate the greatest portion of the opinion from consideration.
I do not claim and have never claimed that a mere license to a foreign corporation to do business in this State is an irrevocable contract between such corporation and the State, so that the State is precluded from changing the terms and conditions of its admission into the State by duly enacted laws which are not violative of constitutional provisions. I concede and have always conceded the right of the State, by. valid and constitutional provisions, both to absolutely exclude foreign corporations, and to regulate the business of such corporations in the State. To the contention of relator that there is an inviolable contract between itself and the State I do not now and never have given my assent, but there is nevertheless some force in the contention and some authority to support it. The weight of authority is strongly the other way,
To my mind there are but two questions necessary to be discussed in- this case, and they are (1) is *243this Act of 1907 violative of either State or Federal constitutional provisions, and (2) if so, then is relator in a position to raise the question of the constitutionality of the statute? Of-these in inverse order.
I. The right of the relator to raise the question of the constitutionality of the Act of 1907 seems to be conceded in the majority opinion, although not discussed. But at the threshold of this case the respondent, through the Attorney-General, challenges the right of the relator to assert the unconstitutionality of the Act of 1907, supra, and we feel that it merits consideration. The contention is that at the time this writ was sued out, March 12, 1908, the relator was not licensed to do business in the State, and hence was not within the jurisdiction of this State so as to entitle it to invoke the provisions of the Federal Constitution or of the State Constitution. In other words, the respondent contends that relator was simply knocking at the door for admission, and as a foreigner can not question the constitutionality of our laws. This requires a close study of our statutes. Statutes from other states lend but little light.
By section 7842, Revised Statutes 1899, it is provided: “It shall be the duty of the superintendent of the insurance department .... to issue certificate of authority to transact insurance business in this State to any companies who have fully complied with the laws of this State.”
Section 7989 provides: “No company shall transact in this State any insurance business, unless it shall first procure from the superintendent of the insurance department of this State a certificate stating that the requirements of the insurance laws of this State have been complied with, authorizing it to do business; a copy of which certificate, certified by the superintendent, and issued only upon the request of the president or secretary, or other chief officer *244of the company, or of a general agent of the company for this State, notice of -whose appointment has been filed in this department, shall be held by every agent or solicitor for such company doing business for such company within this State, and such copy shall, in some convenient and distinct manner, set forth the name of the person, agent or solicitor for whose use it is issued. Every such company shall be required to procure annually, for the use of its agents and solicitors, copies of the renewal certificate of authority, provided for by law. ’ ’
It will be noticed that this section provides for the issuance of an original certificate of authority. But before getting the original certificate certain requirements are made of foreign insurance companies, and these we find in sections 7883, 7884 and 7885, which read:
“No insurance company not incorporated by, or organized under the laws of this State shall transact any insurance business by an agent or agents in this State, unless it shall first file in the office of the superintendent of the insurance department a duly certified copy of its charter or act of incorporation, together with a statement, under the oath of the president and secretary of such company, showing the condition of the affairs of said company on the first day of January next preceding the date of such oath. The statement shall be in the same form, and shall set forth the same particulars as the annual statement required of companies organized under the laws of this State. Such company shall also file a copy of its last annual report, made in compliance with any law of the state or county by which said company was incorporated, if any such report shall have been made.
“It shall not be lawful for any such company organized or incorporated under the laws of the United States, or of any other state of the United States, to transact in this State any business men*245tioned in section 7852, unless one hundred thousand dollars of the capital or assets of such company he invested in treasury notes or bonds of the United States, ob in bonds of the State of Missouri, or of the State under the laws of which such company is incorporated, or loaned on notes or bonds secured by mortgage or deeds of trust on unencumbered real estate, .worth at least double the amount loaned thereon, nor unless securities of the kind or kinds aforesaid to the actual value of one hundred thousand dollars shall have been-deposited for the security of its policyholders, with the superintendent or commissioner- of insurance or chief financial officer of the State, and under and by the laws of the State, in which such company- is incorporated, or, if such company is incorporated under the laws of the United States, with some financial officer of the United States, or with the superintendent of the insurance department of this State, or with the officer in charge of like insurance deposits in any other State of the United States: Provided, that any such company not having such deposit made in the State in which it is organized, or with some officer of the United States, may make such deposit in this State in the manner and subject to the provisions set forth in this article.
“It shall not he lawful for any such company mentioned in the preceding section, unless such company have made a deposit in this State, as in said section provided, to transact in this State any business mentioned in section 7852, until it shall have filed with the superintendent of the insurance department of this State the certificate of the commissioner or superintendent or chief financial officer aforesaid, under his hand and official seal, certifying that he holds in trust and on deposit, for the benefit of all policy-holders of such company, the- notes, bonds and securities before mentioned, and stating the kind of such notes, bonds and securities, and the amount of *246each, and that he is satisfied they are worth one hundred thousand dollars.”
When these three sections have been complied with, then it becomes the duty of the Superintendent of Insurance to issue the origina^ certificate of authority to do business in this State, and the company becomes a citizen of the State, with full right to challenge the constitutionality of laws thereafter passed during the time of its citizenship.
By section 7880 both domestic and foreign companies doing business in this State are required to file in the office of the Superintendent of Insurance a certain detailed sworn report of their business, which report must be filed on January 1st or within sixty days thereafter, for the year ending December 31st next preceding. In the case at bar relator had obtained the original certificate under the requirements of sections 7883, 7884 and 7885, supra, which had been renewed from year to year up to and including the renewal of date March 1, 1907.
These renewal certificates are specifically provided for by section 7888, which reads:
“If the said annual statements mentioned in sections 7880 and 7887 shall have been made in conformity with the requirements of said section, and the superintendent, after deducting from said statement all worthless and doubtful assets, shall be satisfied as to the solvency or condition of the company filing the same, and its ability to meet all its engagements at maturity, he shall issue a renewed certificate of authority to such company to continue business; and no company, not incorporated under the laws of this State, shall continue to do business until a renewed certificate is issued.”
It should be noted that the commissioner “shall issue a renewal certificate.” The statute is mandatory. When once satisfied of the solvency, which is *247admitted in this ease, the further act of issuing the license is purely ministerial.
Section 7887 mentioned in the above section refers to companies organized in foreign countries and not to companies organized under the national laws, or the laws of other States of the Union. So that up to the Act of 1907, upon the filing of the report as required by section 7880, if the Superintendent of Insurance was satisfied with the solvency and condition of the company, then he was obliged to issue the renewal certificate. Going to the facts of the case at bar it appears that prior to March 1, 1908, and during the life of the renewed certificate of date March 1, 1907, relator filed the report required by section 7880. Under the admitted facts the respondent in this case was satisfied with the report and the thorough solvency of relator. All this was done whilst relator was domiciled in the State, and at a' time when it had a right to challenge the constitutionality of the Act of 1907. It further appears from the admitted facts that the only reason for a refusal of the renewed certificate by respondent was this Act of 1907, supra.
It will be observed that the right to this renewed certificate is made to depend solely upon the report required by section 7880. In this respect it differs materially from the original, certificate. An entirely different showing is required for the original certificate, as will be seen by a reading of the statutes. This report was made during the life of the renewed certificate for 1907. With this report the respondent was fully satisfied. At that time the relator was legally domiciled in Missouri, if we be permitted to use that expression, and had full right to challenge this law on constitutional grounds. When relator filed this report under section 7880, prior to March 1, 1908, it amounted in law to an application for a renewal certificate, for such is the purpose of the report. The *248law makes no provision for another or different application for a renewed certificate. This application was at a time when relator had the right to question the constitutionality of a law passed subsequent to its entrance into the State. Then when it filed this petition March 12; 1908, it simply soug’ht to enforce rights held by it on the date of filing the report prior to March 1, 1908, and sought in this court to enforce such rights, and among others the right to challenge this Act of 1907. If the act is void it was the duty of respondent to have issued the renewed certificate upon the application being made in the manner aforesaid. This petition for mandamus relates back to the ■time when relator was entitled to have its report passed upon and approved or rejected at which time relator was legally domiciled in this State, although a foreign corporation. By this statement we mean that it was so domiciled in the State as to give it the right to challenge unconstitutional laws. It acquired that right by virtue of the original certificate, and the renewed certificate is but to the effect that it was still in good standing under the original certificate, which original gave to it admission to the State. Under the facts in this record we are of opinion that relator is in position to question the constitutionality of the law now under consideration. And in this we heartily concur in what we take to be an acquiescence in this position by the majority opinion.
II. Grant it to be true that the State by constitutional laws can wholly prohibit, or in any manner regulate the business methods of foreign corporations by law, yet it does not follow that, after the corporation has been admitted, and is in fact doing business in the State, it can be precluded therefrom, or have its business regulated by an unconstitutional act. In Carroll v. Greenwich Insurance Co., 199 U. S. l. c. 409; Mr. Justice Holmes says: “A company lawfully *249doing business in the State is no more bound by a general unconstitutional enactment than a citizen of the State. [W. W. Cargill Co. v. Minnesota.]” And grant it further for sake of argument only that the State can even exclude by an unconstitutional law any or all foreign corporations from first coming into the State, and that such applicants for admission cannot challenge the law upon constitutional grounds,' either State or Federal, yet, such rule does not apply to the facts of the case at bar. By certain sections of the law, fully quoted, supra, foreign insurance companies were required to do certain things before being admitted to do business in the State, among others to file copies of their articles of association, and either make a deposit of one hundred thousand dollars in solvent securities here, or satisfy the Superintendent of Insurance that such deposit had been made elsewhere. Under the showing required by these sections relator procured the original certificate to do business in the State. This certificate has long been held by relator. This conferred the right to do business and the renewed certificate provided for in section 7888 conferred the right “to continue business in the State.”
It may be true (a question we do not decide, because unnecessary in this case) that a foreign corporation, not domiciled in the State but simply applying for admission, cannot even question a law upon the statutes at the time of its proposed entry in the State, yet that does not affect this case, because the Act of 1907 was passed whilst relator was actually in the State doing business.
We think, however, the rule is well stated in 3 Clark & Marshall on Private Corporations, sec. 844a, wherein it is said: “While a corporation may be recognized and permitted to exercise its powers in another State than that by which it was created, this, we have seen, is not a matter of absolute right, but *250is a matter of comity. It is well settled therefore that a State may exclude a foreign corporation altogether from doing business or acquiring property within its limits, or it may impose any conditions or restrictions which it may see fit to impose, provided that it doés not thereby violate any provisions of its own constitution or of the Constitution of the United States.”
III. Under the conceded right of the relator to challenge the constitutionality of this, new law, as clearly indicated by the opinion of my brothers, I proceed now to the real question in this case, i. e., the constitutionality of the Law of 1907. This question my brothers in the majority touch -only slightly, but devote nine-tenths of their opinion to matters about which there is but little question in the books and decided cases, and no question in my mind. Now to the real question in the case. The Act of 1907 must be considered from a double standpoint in determining its constitutionality. First, is the act one of exclusion as applied to foreign insurance companies and if so is.it impregnable as against constitutional darts ? Second, is the act the mere exercise of the police power of the State, and if so is it valid? In .this paragraph we take the first question, leaving the other for a succeeding paragraph.
It is urged by counsel that the act does not apply to foreign insurance companies at all. For the present at least, this question will be put aside.
Grant it that the body of the act so far as foreign insurance companies are concerned, was intended as an exclusion statute, then it is urged that the act is invalid and void as violative of article 4, section 28, of our State Constitution, which in so far as applicable to this discussion, reads: “No bill . . . shall contain more than one subject, which shall be clearly expressed in the title.” The title of this act *251reads: “An Act relating to the Salaries and Compensation of Officers and Agents of Life Insurance Companies.” One reading this .title, without looking at the body of the bill, would hardly suppose that the bill had any reference to foreign companies, and this for the reason that the Legislature of this State have no concern with the internal workings of foreign corporations. Our laws cannot affect them except by way of absolutely excluding them, or regulating them whilst here under the general police power of the State. Had there been added to the title above quoted the words, “and Excluding from this State Foreign Insurance Companies Paying Salaries in Excess of those Provided for in This Act,” then the title would have been clearly expressive of the meaning of the act itself as contended for by respondent. But if the act is an exclusion statute, and that is the sole subject of the act (for under the Constitution there can be but one subject) then is that subject clearly expressed in the title? "We think not. Who, reading this title without seeing the body of the bill, would for a moment suppose that the bill was dealing with the exclusion of foreign insurance companies from the State? Yet that is the purpose of the constitutional limitation. If the idea of excluding foreign insurance companies is clearly expressed in this title to the Act of 1907, then we confess we are 'and for many years have been in the dark, as to the meaning of the words “clearly expressed.” That the subject of a bill “shall be clearly expressed in its title” is just as mandatory as that “no bill . . . shall contain more than one subject,” is well recognized.
As said in State v. Burgdoerfer, 107 Mo. l. c. 30: “The title must express the subject of the act in such terms that the members of the General Assembly and the people may not be left in doubt as to what matter is treated of.”
*252In State v. Great Western Coffee and Tea Co., 171 Mo. l. c. 643, after quoting the above from the Burgdoerfer case, it was said: “And it is elsewhere said very aptly ‘that to be clearly expressed certainly does not mean something that is dubious and therefore is not clearly expressed.’ ”
In this case, Fox, J., reviews many authorities from this and other jurisdictions. Among others the case of the City of Kansas City v. Payne, 71 Mo. wherein, at l. c. 162, the following language from Judge Cooley is quoted with approval: “The Constitution has made the title the conclusive index to the legislative intent. It is no answer to say that the title might have been more comprehensive, if, in fact, the Legislature has not seen fit to so make it.”
The act is not only void because the subject thereof is not clearly expressed in the title, but- for the further reason that the bill itself deals with two subjects, i. e. (1) a regulation as to the management of the internal affairs of domestic insurance companies, and (2) the exclusion of foreign insurance companies.
That there are two subjects is made clearly manifest, when we consider the act and the applicable law. The Legislature had the power, within- reasonable bounds, to regulate the internal management and affairs o-f domestic corporations. Whether this act is within reasonable bounds as to such corporations, we will not discuss here, because not in this case. But it is equally clear that the Legislature has no power or right to regulate the internal affairs of foreign companies. As to foreign corporations our laws extend to the State lines and no further. That we cannot regulate the internal management of foreign companies is axiomatic and needs no citation of authority. As to them, our Legislature can do but two things: (1) pass laws to regulate the conduct and character of their business in this State, if they enter the State *253with the permission of the State, and (2) laws excluding' them entirely.
It is presumed that the Legislature, knew the limitation of its powers, and in this act was not attempting to regulate the internal affairs of foreign insurance companies, but as to them intended the act as one of exclusion, and as to domestic companies as an act of regulation with reference to the internal management of such companies. Viewing it in this light there are two subjects covered by this act, and if so it is violative of the constitutional mandate, supra.
As said by Burgess, J., in Witzmann v. Railroad, 131 Mo. l. c. 618: “Adjudicated cases do not as a general rule afford as much assistance in passing upon questions of this character, other than in a general way, as each case must be adjudged according to its own peculiar facts and the directness or remoteness, as the case, may be, of its provisions to matters in consonance with its title.” And in the same case and on the same page in discussing an act of the Legislature pertaining to street railways, it was said: “By the title of the act in question its provisions are restricted to tickets, fares, taxes and licenses as applicable to street railroads in the city of St. Louis, and subjects germane thereto, and by no rule of construction which can reasonably and fairly be given to it can it be held that the provisions of section 4 in regard to gates and guards on such cars are germane to the title of the act, which contains no intimation whatever that any such provisions are to be found in it. The very facts that the words tickets, fares, taxes and licenses are used in the title, indicates that the act contains no provision with respect to guards and gates on the platforms of the cars, matters that are entirely foreign to the purpose and intention of the act as shown by its title, hence the act relates to more than one subject, and is in conflict with the Con*254stitution. Taking the title of the act as a guide to its provisions, no one would think of' finding' in it a provision pertaining to attachments or appurtenances to the cars.”
The above is cited with approval by Fox, J., in State v. Great Western Coffee & Tea Co., supra.
So in this ease when it is remembered that the Legislature can legislate as to the internal management of domestic corporations and cannot so legislate as to foreign corporations, who by reading the title to this act, would infer for a moment that the bill covered the subject of excluding foreign corporations from doing business in this State? Nor is the subject of excluding foreign corporations germane to the subject of regulating. the internal government and management of domestic corporations.
We are therefore of the opinion, that, if the act in‘question was intended for an exclusion statute, it is violative of section 28 of article 4 of our State Constitution, and this for two reasons (1), that the subject is not clearly expressed in the title, and (2) that the act itself deals with two separate and distinct , subjects.
IV. But treating the act as the exercise of the police powers of the State, and not as an exclusion statute, can it stand? We think not, and in so saying, we are considering it from the standpoint of domestic corporations, as well as foreign corporations. The police powers of the State cannot reach the internal-government and management of foreign.corporations. The fixing of salaries for its agents and officers is a part of the internal management of the corporation.The foreign corporation has the right to manage its internal affairs as it sees fit' under the laws of the State giving it birth. This State can exclude a foreign corporation by law, but it cannot regulate its internal management in the State of its creation. Laws in the *255exercise of police powers, like other laws, lose their force when the State lines are reached. That such laws apply to the foreign corporations in this State and to its public business transacted in the State, there can be no question, provided that the law is the reasonable exercise of the police powers of the State. All such laws, to be valid, must be the reasonable exercise of the police- powers. This law as a police regulation attempts to interfere with the rights of .contract, and as such can it be upheld? It not only says to the foreign insurance company, “You shall be excluded, if you make a private contract with an employee, by which you agree to pay him more than $50,000 per year for his services,” but it likewise says to the domestic corporation that it can’t so contract.
In 22 Am. and Eng. Ency. Law (2 Ed.), 938, 939, it is said: “In order that a statute or ordinance may be sustained as an exercise of the police power, the courts must be able to see (1) that the enactment has for its object the prevention of some offense or manifest evil or the preservation of the public health, safety, morals, or general welfare, and (2) that there is some clear, real, and substantial connection between the assumed purpose of the enactment and the actual provisions thereof, and that the latter do in some plain, appreciable and appropriate manner tend toward the accomplishment of the object for which the power is exercised. The police power cannot be used as a cloak for the invasion of personal rights or private property, neither can it be exercised for private purposes, or for the exclusive benefit of particular individuals or classes. . . . The police power must be so exercised as not to infringe arbitrarily or unreasonably upon personal or property rights.”
An unreasonable exercise of this power has been-held to be violative of the Fourteenth Amendment to the Federal Constitution, and in our judgment is violative of the Federal Constitution. [Lochner v. New *256York, 198 U. S. 45; Adair v. U. S., 28 Sup. Ct. Rep. 277.]
In the first case, Mr. Justice Peckham says: ‘ ‘ The State, therefore, has power to prevent the individual from making certain kinds of contracts, and in regard to them the Federal Constitution offers no protection. If the contract he one which the State, in the legitimate exercise of its police power, has the right to prohibit, it is not prevented from prohibiting it by the Fourteenth Amendment. Contracts in violation of a statute, either of the Federal or State government, or a contract to let one’s property for immoral purposes, or to do any other unlawful act, could obtain no protection from the Federal Constitution as coming under the liberty of persons or of free contract. Therefore, when the State, by its Legislature, in the assumed exercise of its police powers, has passed an act which seriously limits the right to labor or the right of contract in regard to their means of livelihood between persons who are sui juris (both employer and employee) it becomes of great importance to determine which shall prevail — the right of the individual to labor for such time as he may choose, or the right of the State to.prevent the individual from laboring or from entering into any contract to labor, beyond a certain time prescribed by the State. . . . ■ We think the limit of the police power has been reached and passed in this case. There is in our judgment no - reasonable foundation for holding this to be necessary or appropriate as a health law to safeguard the public health, or the health of individuals who are following the trade of a baker. If this statute be valid, and if, therefore, a proper case is made out in which to deny the right of an individual, sui juris, as employer or employee to make contracts for the labor of the latter under the protection of the provisions of the Federal Constitution there would seem to be no length to which legislation of this nature might not *257go ... . This interference on the part of the legislatures of the several States with the ordinary trades and occupations of the people seems to he on the increase ... It is impossible for us to shut our eyes to the fact that many of the laws of this character, while passed under what is claimed to be the police power for the purpose of protecting the public health or welfare, are, in reality, passed from other motives. We are justified in saying so when, from the character of the law and the subject upon which it legislates, it is apparent that the public health or welfare bears out the most remote relations of the law. The purpose of a statute must be determined from the natural and legal effect of the language employed; and whether it is or it not repugnant to the Constitution of the United States must be determined from the natural effect of such statutes when put into operation, and not from their proclaimed purpose .... It is manifest to us that the limitation of the hours of labor as provided for in this section of the statute under which the indictment is found, and the plaintiff in error convicted, has no such direct relation to, and no such substantial effect upon, the health of the employee, as to justify us in regarding the section as really a health law. It seems to us that the real object and purpose were simply to regulate the hours of labor between the master and his employees (all being men, sui juris) in a private business, not dangerous in any degree to morals, or in any real or substantial degree to the health of employees. Under such circumstances the freedom of master and employee to contract with each other in relation to their employment, and in defining the same, cannot be prohibited or interfered with without violating the Federal Constitution. ”
And in the latter case of Adair v. United States, supra, the opinion of Mr. Justice Harlan is to the same effect.
*258In the well-considered case of Brick Co. v. Perry, 69 Kan. l. c. 299, it is said: “Besides, the Legislature has no power to impair or limit the reasonable and lawful exercise of a right guaranteed by the Constitution, under the guise of a police regulation. It must also be remembered that the right which the plaintiff claims is violated did not originate in contract, but was purely statutory; therefore, the determination of the question whether he has any remedy depends entirely upon the validity of this statute. The right to follow any lawful vocation and to make contracts is as completely within the protection of the Constitution as the right to hold property free from unwarranted seizure, or the liberty to go when and where one will. One of the ways of obtaining property is by contract. The right, therefore, to contract cannot be infringed by the Legislature without violating the letter and spirit of the Constitution.” And further on page 301-2 of the same report, and in the same case, it was further said: “It is at liberty to contract for the services of persons in any manner that is satisfactory to both. No legislative restrictions can be imposed upon the lawful exercise of these rights. Within the past two decades there has been an epidem-. ic of this class of legislation. New York, New Jersey, Pennsylvania, Ohio, Indiana, Illinois, Missouri, Wisconsin, Colorado and California have similar statutox-y provisions, and in such States where the constitutionality of these statutes has been before the courts the law has been universally held to be a denial of the rights guaranteed by the provisions of the National and State constitutions.”
In a review of the cases, the Kansas court reviews and approves State v. Julow, 129 Mo. 163.
Tiedeman in his work on Limitations of Police Powers, sec. 178, says: “Laws, therefore, which are designed to regulate the terms of hiring in strictly private employments, are unconstitutional, because *259they operate as an interference with one’s natural liberty, in a case in which there is no trespass on private rights, and no threatening injury to the public. And this conclusion not only applies to laws regulating the rate of wages of private workmen, but also any other law, whose object is to regulate any of the terms of hiring, such as the number of hours of labor per day, which the employer may demand. There can be no constitutional interference by the State in the private relation of master and servant except for the purpose of preventing frauds and trespasses.”
It must throughout be borne in mind that the right to contract involved in this case is as to the private management of the corporation. No contract with the public is here involved. It may be granted that an insurance company is so much of a quasi-public corporation as will justify and permit the lawmakers to impose certain conditions upon the contracts made with the general public, but that is not the question here.
The contract here involved is the private contract between an employer and employee. The law says to the domestic corporation, You shall not make a private contract of this character, no matter how valuable the services of the employee may be. If this law is valid, a violation thereof would forfeit the charter. To the foreign corporation doing business in this State, this law says, If you make or have made such a contract we will exclude you. With such contract the State has nothing to do. We regulate contracts with public service corporations, when the contracts are between the corporation and members of the general public, and pertain to public business, but it does not follow that the State can fix terms as to wages to be paid on the contract made by the corporation as an employer with those whom- it, in its private capacity, employs to do the public service. If it can fix the price of wages to be paid, it can with equal propriety say *260that, the right is in the State to say what price shall be paid for a horse, a house or a vehicle, necessary for the private use of the corporation in the prosecution of its business.
Burgess, J., in State v. Tie and Timber Co., 181 Mo. l. c. 559, after a review of many cases, reaches this conclusion: ‘ ‘ The right to labor or employ labor, and make contracts with respect thereto, upon such terms as may be agreed upon, is both a liberty and property right, and is included in the guaranty of the Constitution which provides ‘that no person shall be deprived of life, liberty or property without due process of law.’ [See. 30, art. 2, Constitution.] Nor can such right to contract be arbitrarily interfered with, but may be subject to limitations growing out óf duties which the individual owes to society, but such limitation must be upon some reasonable basis, and not arbitrarily. [Ritchie v. People, 155 Ill. 98.]”
So that we say that, in so far as the insurance company makes contracts with the general public, the State, in the exercise of its police powers, can put reasonable restrictions upon the terms of the contract. It can even prescribe the form of the contract, and this for the reason that the unsuspecting public may be fully protected in dealings with the corporation. Contracts of insurance are oftentimes too intricate for general public understanding. So, too, the State in the exercise of its police powers may regulate other matters as between such corporations and the general public. However, the case before us is quite different. The contract involved is not one with the general public, but is the private contract between employer and employee.
In Godcharles & Co. v. Wigeman, 113 Pa. St. l. c. 437, the court says: “The . . . sections are utterly unconstitutional and void inasmuch as by them an attempt has been made by the Legislature to do what in this country cannot be done; that is, prevent per*261sons who are sui juris from making their own con-contracts. The act is an infringement alike of the right of the employer and the employee. ’ ’
In discussing certain mining statutes of this State, which in effect limited the right of contract between employer and employee, Judge Black, in the case of State v. Loomis, 115 Mo. l. c. 320, said: “The constitutional declaration, that no person shall be deprived of life, liberty or property without due process of law, was designed to protect and preserve their existing rights against arbitrary legislation as well as against arbitrary executive and judicial acts. The sections of our statute in question deprive a class of persons of the right to make and enforce ordinary contracts and they introduce a system of State paternalism which is at war with the fundamental principles of our government, and, as we have before said, are not due process of law.”
Many other cases might be cited, but these will suffice to indicate our views. We are of opinion that this act, construed as a police regulation and as the exercise of the police power of the State, can not stand, because violative of the right to make private contracts, a right guaranteed alike by the State and Federal Constitutions.
But it has been suggested that the right to make private contracts is not involved in this case. This might be true if the statute is to be treated as an exclusion statute solely, and applied to foreign corporations only. If, however, it is a statute enacted under the police powers of the State and applies to both domestic and foreign corporations, then the right of private contract is involved in this case. The State steps in and says to the domestic corporation, “You cannot make a private contract, except you permit the State to dictate and prescribe the terms and price to be paid.” We say the terms and price, because once conceded that the State in the exercise of its police power can *262say to two parties sui juris, “Ton can contract as to employment, but tbe employer shall not pay the employee more than so much per day, per week or per year for specified services,” there is no end to the matter. If the State can fix a price beyond which the parties cannot go, it can fix a price below which they cannot go. There is no difference between the two, either in principle or law. If the State can fix a maximum or minimum, or both, which the majority opinion in effect holds, then by the same token it can fix the exact price to be paid by an insurance company to each of its employees. If the State can fix the terms of a contract as to price, why can’t it go further and fix other terms of the contract? Under the majority opinion no valid reason can be assigned.
One step further, if the State, in the exercise of that great but indefinable power, called the police power, can regulate the private contracts between an insurance company organized under the laws of this State, and its employees, then it can take every corporation which transacts a public business, and fix a schedule of rates for each class of employees. With the insurance companies, the schedule would run from office boy to president. With the railroads, it would run from section laborer to president. With the hotels, from bell boy to manager. Great indeed would be the powers of the Legislature, when the logical conclusions are legitimately drawn from the opinion of the majority. Seekers of employment would no longer go to those desiring to employ, with a view to agreeing upon a contract of employment, but they would flock to the Legislature and have the terms of their respective contracts fixed, and the only thing for the employer to do would be to assent to the employee entering upon the contract thus made by the Legislature. If this law is a rightful exercise of the police powers of Missouri, as held by my brothers, then the right of private contract, held to be a property right, *263has received its death knell in the State. That the question of the right to make private contracts is involved in this case is as certain as it is that the question whether or not this law is the proper exercise of the police power is involved. The majority opinion recognizes that the law is the product of this reserved power of the State, and in holding the law valid, has held that the State can intermeddle with the private contracts of its citizens. You can’t say that the law involves the question as to whether or not there has been a proper exercise of the police power, without further saying that in determining that question is involved an investigation a§ to whether or not the right of contract has been infringed upon by the law.
V. The question of solvency is not in this case. It is admitted that relator is solvent and in financial shape to meet its obligations. The only reason assigned for refusing this license to relator is that said relator, in the exercise of a right guaranteed to it by the Constitution of this State, the Constitution of the Government and every State in the Union, has seen fit to enter into a private contract with one of its employees, wherein it has agreed to pay one employee more than $50,000 per annum for services. It is not contended in the record that such services are not worth the price, nor that the relator had no need in its business for a man whose services were worth to it that price. In this connection it would he well to note that this law says not a word about solvency. The general public is interested in the solvency of insurance companies, hut they are not interested in the price paid to employees unless it has some relation to the question of solvency. Had this Act of 1907 precluded such insurance companies from doing business in this State, which were paying such salaries and expenses, as would affect their solvency, and placed the regulation on that ground, then we might have a different proposition before us. But *264such, is not the case before us and we need not go further than to consider what is in fact before us.
There is, however, another question as to this law. As suggested, the law does not make solvency a basis of its classification of insurance companies, whether they be domestic or foreign. The law adopts as an arbitrary basis of classification of acceptable and non-acceptable companies, the salaries paid their officials. This is an arbitrary and unreasonable basis of classification. [Darlington Lumber Co. v. Railroad, 216 Mo. 658.]
In the above cited case this court quoted with approval the following from the pen of Justice Brewer in Railroad v. Ellis, 165 U. S. l. c. 155: “But it is said that it is not within the scope of the Fourteenth Amendment to withhold from States the power of classification, and that if the law deals alike .with all of a certain class it is not obnoxious to the charge of a denial of equal protection. While, as a general proposition, this is undeniably true (Hayes v. Missouri, 120 U. S. 68; Railroad v. Mackey, 127 U. S. 205; Walston v. Nevin, 128 U. S. 578; Railroad v. Pennsylvania, 134 U. S. 232; Pacific Express Co. v. Seibert, 142 U. S. 339; Giozza v. Tiernan, 148 U. S. 657; Columbia Southern Railway v. Wright, 151 U. S. 470; Marchant v. Railroad, 153 U. S. 380; Railroad v. Matthews, 165 U. S. 1), yet it is equally true that such classification cannot be made arbitrarily. The State may not say that all white men shall be subjected to the payment of the attorney’s fees of parties successfully suing them and all black men not. It may not say that all men beyond a certain age shall be alone thus subjected, or all men possessed of a certain wealth. These are distinctions which do not furnish any proper basis for the attempted classification. That must always rest upon some difference which bears a reasonable. and just relation to the act in respect to which the classification is pro*265posed, and can never, be made arbitrarily and without any such basis.”
In State v. Loomis, 115 Mo. l. c. 314, this court said: ‘ ‘ But classification for legislative purposes must have some reasonable basis upon which to stand. It must be evident that differences which would serve for a classification for some purposes furnish no rea- . son whatever for a classification for legislative purposes. The differences which will support class legislation must be such as in the nature of things furnish a reasonable basis for separate laws and regulations. Thus the Legislature may fix the age at which persons may be deemed competent to contract for them- . selves, but no one will claim the competency to contract can he made to depend upon stature or color of the hair. Such a classification for such purpose.would be arbitrary and a piece of legislative despotism, and therefore not the law of the land.”
See the Darlington case, supra, for a full list of authorities and a review thereof upon this question of an arbitrary basis for a classification.
This law selects the salaries paid to officials as a basis of classification. Under its terms our people may be precluded from the more reliable insurance and have forced upon them the less reliable companies. But this is really beside the question. The law in our opinion is invalid in having an arbitrary and unreasonable basis for the classification of insurance companies.
Nor do we think there is anything in the question that the law only fixes these provisions in the nature of penalties as suggested in the majority opinion. There is not a line in the whole act from title to the last word therein indicating that it is a penal statute.
To our mind this law is violative of both State and Federal constitutional provisions, and relator is entitled to the peremptory writ of mandamus.
Fox, and Lamm, JJ., concur in these views.