[1] That the policy when issued to Dodge became a Missouri contract, subject to its statutes, so far as valid and applicable, is undisputed and clear. The controlling doctrine in that regard was announced and ap4. That said loan shall become due and pay-plied in Equitable Life Assurance Society able

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actually consummated was one which the, visions of law evidenced a sound and just govcompany had legally obligated itself to ernmental policy, and wrote into every policy of life insurance, coming within its purview, a make upon demand. mandate not to be abrogated in whole, or hedged about or lopped off in detail, by policy provisions, nor to be contracted away otherwise than as prescribed by statute."

Treating the loan to Dodge as made under a New York agreement which Missouri lacked power directly to control, the question presented becomes similar in principle to the one decided in New York Life Insurance Co. v. Head, 234 U. S. 149, 34 Sup. Ct. 879, 58 L. Ed. 1259. There suit was instituted in Missouri upon a policy personally applied for and received while in that state by a citizen of

[3] In Allgeyer v. Louisiana, 165 U. S. 578, 17 Sup. Ct. 427, 41 L. Ed. 832, we held a Louisiana statute invalid which undertook to restrict the right of a citizen while within that state to place insurance upon property located there by contract made and to be performed beyond its borders. We said, "The mere fact that a citizen may be within the limits of a particular state does not prevent his making a contract outside its limits while he himself remains within it," and ruled that under the Fourteenth Amendment the right to contract outside for insurance | New Mexico. Nine years afterwards, having on property within a state is one which cannot be taken away by state legislation. So to contract is a part of the liberty guaranteed to every citizen. The doctrine of this case has been often reaffirmed and must be accepted as established. Nutting v. Mass., 183 U. S. 553, 557, 22 Sup. Ct. 238, 46 L. Ed. 324; Delamater v. South Dakota, 205 U. S. 93, 102, 27 Sup. Ct. 447, 51 L. Ed. 724, 10 Ann. Cas. 733; Provident Savings Ass'n v. Kentucky, 239 U. S. 103, 114, 36 Sup. Ct. 34, 60 L. Ed. 167, L. R. A. 1916C, 572; Adams v. Tanner, 244 U. S. 590, 595, 37 Sup. Ct. 662, 61 L. Ed. 1336, L. R. A. 1917F, 1163, Ann. Cas. 1917D, 973.

duly acquired the policy in New Mexico, the transferee wrote from there to the insurer in New York and effected a loan under an agreement like the one now before us. The state courts held the policy a Missouri contract and the loan agreement controlled by its non-forfeiture statute.

Assuming the policy to be a Missouri contract, we declared that state without power to extend its authority over citizens of New Mexico and into New York and forbid the later agreement there made simply because it modified the first one. We said:

"It would be impossible to permit the statutes of Missouri to operate beyond the jurisdiction of that state and in the state of New Yorke de-and there destroy freedom of contract without throwing down the constitutional barriers by which all the states are restricted within the orbits of their lawful authority and upon the preservation of which the government under the Constitution depends."

In them

The court below rested its judgment nying full effect to the loan agreement upon Smith v. Mut. Ben. Life Ins. Co., supra, and Burridge v. Insurance Co., supra. the Supreme Court distinctly held section 7897 controlling and the insurer liable upon policies actually issued in Missouri notwithstanding any subsequent stipulation directing different disposition of reserve after default. In the latter it expressly approved the doctrine of the first and, among other things (211 Mo. 171, 109 S. W. 564), said:

"Attending to that section [No. 7897] as it read when the policy issued and when the insured died, it will be observed that the net value of the policy is to be computed. Then from three-fourths of such net value there is to be taken away-what? All indebtedness? Not at all. There shall be taken away any notes or other evidence of indebtedness to the company, given on account of past premium payments on said policies.' The residue, if any, then goes automatically to the purchase of temporary or extended insurance. In that [the Smith] case, therefore, the scope and meaning of that clause of our non-forfeiting insurance statute was held in judgment in the stiffest sense and this court decided that the statute was mandatory; that the character of the indebtedness to be deducted from the net value before applying the residue to the purchase of temporary or extended insurance must be looked to and was limited by the clear words of the statute to notes or other evidences of indebtedness to the company, given on account of past premium payments' on the policy issued to the insured; and did not include notes and evidences of indebtedness arising in other ways. It is not apparent, assuming the statute be constitutional, how, giving heed to the hornbook maxim, expressio unius, etc., any other conclusion could have been arrived at in reason. It was held furthermore, in effect, that such pro

"As foreign insurance companies have no right to come into the state and there do business except as the result of a license from the state and as the state exacts as a condition of a license that all foreign insurance companies shall be subject to the laws of the state as if they were domestic corporations, it follows that the limitations of the state law resting upon domestic corporations also rest upon foreign companies and therefore deprive them of any power which a domestic company could not enjoy, thus rendering void or inoperative any provision of their charter or condition in policies issued by them or contracts made by them inconsistent with the Missouri law."

And this argument we declared unsound since the "proposition cannot be maintained without holding that because a state has power to license a foreign insurance company to do business within its borders and the authority to regulate such business, therefore a state has power to regulate the business of such company outside its borders and which would otherwise be beyond the state's authority-a distinction which brings the contention right back to the primor dial conception upon which alone it would be possible to sanction the doctrine contended for, that is, that because a state has power to regulate its domestic concerns, therefore it has the right to control the domestic concerns of other states.'

Under the laws of New York, where the parties made the loan agreement now before

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us, it was valid; also it was one which the Missouri Legislature could not destroy or prevent a citizen within its borders from making beyond them by direct inhibition; and applying the principles accepted and enforced in Insurance Co. v. Head, we think the necessary conclusion is that such a contract could not be indirectly brought into subjection to statutes of the state and rendered ineffective through a license authorizing the insurance company there to do business. As construed and applied by the Springfield Court of Appeals, section 7897 transcends the power of the state. To hold otherwise would permit destruction of the right-often of great value-freely to borrow money upon a policy from the issuing company at its home office and would, moreover, sanction the impairment of that liberty of contract guaranteed to all by the Fourteenth Amend

ment.

Reversed.

Mr. Justice BRANDEIS, dissenting.

A statute of Missouri (Rev. Stats. 1899, 7897) prohibited life insurance companies authorized to do business within the state from forfeiting a policy for default in the payment of premiums, if three full years' premiums had been paid thereon. The act provided further that in case of such default the policy should be automatically extended and commuted into paid-up term insurance. And it determined mathematically the length of the term, as that for which insurance could, at a rate prescribed, be purchased with a single premium equal in amount to three-fourths of the reserve or net value less any indebtedness to the company "on account of past premium payments." The obligation imposed upon the company by this statute, as construed by the highest court of the state, could not be modified by contract with the insured whether entered into at the time the policy was written or subsequently. Equitable Life Assurance Society v. Clements, 140 U. S. 226, 11 Sup. Ct. 822, 35 L. Ed. 497; Smith v. Mutual Benefit Life Insurance Co., 173 Mo. 329, 72 S. W. 935. Such non-forfeiture laws are an exercise of the police power; and, as insurance is not interstate commerce, the state's power in this respect is as great over foreign as over domestic corporations. Orient Insurance Co. v. Daggs, 172 U. S. 557, 566, 19 Sup. Ct. 281, 43 L. Ed. 552; New York Life Insurance Co. v. Cravens, 178 U. S. 389, 401, 20 Sup. Ct. 962, 44 L Ed. 1116; Northwestern Life Insurance Co. v. Riggs, 203 U. S. 243, 27 Sup. Ct. 126, 51 Ed. 168, 7 Ann. Cas. 1104.

souri statute to do business; and there the first and later premiums were paid and, until his death, Dodge and the beneficiary lived and the company continued so to do business.

In 1906 Dodge entered into a supplemental agreement with the company by which he nominally borrowed $1,350, pledged his policy as collateral, and agreed that, in case of default in repaying the loan, the company might discharge it by applying thereto the reserve of the policy. In 1907 Dodge made default in payment both of the premium and of the loan. The reserve of the policy was then less than the amount due on the whole loan; but three-fourths of the reserve exceeded that part of the loan which had been applied to the payment of past premiums by $275.79. This excess, if applied in commutation for term insurance, would have extended the policy to December 23, 1912. The company claimed the right to use the whole of the reserve to satisfy the whole of the loan, so applied it, and notified the assured, on December 17, 1907, that its obligation on the policy ceased. Dodge died February 12, 1912. The beneficiary, insisting that by reason of the Missouri statute the policy was still in force when her husband died, brought suit thereon in a state court of Missouri and recovered judgment, which was affirmed by the Springfield Court of Appeals (189*S. W. 609), and the Supreme Court of the state refused a review. The case comes here on writ of error under section 237 of the Judicial Code. The company asserts that the loan agreement was made in New York, and relying upon New York Life Insurance Co. v. Head, 234 U. S. 149, 34 Sup. Ct. 879, 58 L. Ed. 1259, contends that the state court, in denying full effect to that contract, deprived it of liberty, property, and equal protection of the laws in violation of the Fourteenth Amendment.

First. Was the loan agreement in fact made in New York?

The policy was confessedly a Missouri contract. Dodge, so far as appears, was never out of Missouri. Physically every act done by Dodge and the beneficiary in connection with the loan agreement, as with the policy, was done in Missouri: (a) They signed there the application for the loan. (b) They signed there the loan agreement. (c) They signed there the request upon the company to pay itself, out of the $1,350 nominally borrowed, the amount of an earlier loan with interest to October, 1907, and of the premiLum. (d) He delivered there (at the Missouri Clearing House branch office) the policy given as collateral and these three papers, which were forwarded by that office November 9, 1906, and received in New York three days later. (e) He paid there the balance of the premium, $116.40 in cash; for the sum of $1,350, nominally advanced then, was insufficient to pay off the then existing loan with

In 1900 Dodge, a citizen and resident of Missouri, applied in that state to the New York Life Insurance Company, a New York corporation, for a policy on his life in favor of his wife. The policy was delivered to the assured in Missouri where the company had an office and was authorized by the Mis

1 Act March 3, 1911, c. 231, 36 Stat. 1156 (Comp. St. 1916, § 1214).

interest and the accrued premium. Through- the original contract. It was an act contemout these transactions the company was au- plated by the policy and was subsidiary to it, thorized to do business in Missouri and was, as an incident thereof. What was done by in these transactions, actually doing business the officials at the home ouice was not makthere. International Harvester Co. v. Ken- ing a New York contract, but performing tucky, 234 U. S. 579, 34 Sup. Ct. 944, 58 L. acts under a Missouri contract. Ed. 1479.

Second. What is the effect of the provision in the loan agreement that it shall be deemed to have been made in New York?

The provision "that the application for said loan was made to said company at its home office in the city of New York, was accepted, the money paid by it, and this agreement made and delivered there; that said principal and interest are payable at said home office, and that this contract is made under and pursuant to the laws of the state of New York, the place of said contract being said home office of said company" is inoperative. For acts essential to the making of any agreement involving a pledge of the policy were done by Dodge, by the beneficiary, and by the company's agent in Missouri and were subject to the prohibition of a statute of that state which prevented the operation there of inconsistent New York laws. If the laws of Missouri and of New

Nothing was done in New York then except this: The papers received from the Missouri Clearing House branch office were examined and filed in the home office; and certain calculations and appropriate entries in the books and on the papers were made there. No money was paid then to Dodge. The nominal advance was less than the amount, including accrued premium, then due by him to the company; and Dodge balanced the account by paying in Missouri $116.40. In 1903, when a similar loan agreement was made, the nominal amount of the loan exceeded the sum due for premiums by $486.91; and a check for that sum was drawn by the company in New York and sent by mail from there to Dodge in Missouri. In 1904 a further check for $92.10 was sent from New York by the company to Dodge under a similar loan agreement. Under the 1903 agree-York had left the parties free to contract inment the policy was delivered to the company and it had remained in the company's possession at the home office. But when the loan agreement here in question was made, nothing was done in New York except to examine and file the papers and to make the calculations and entries. No discretion was exercised there by the company's official. By the terms of the policy the company had already assented to the amount nominally advanced as a loan and to the rate of interest to be charged. The functions exercised by the officials at New York were limited to determining whether the calculations were correct and whether papers were properly executed and filed.

These acts so done by the company at its home office in connection with the loan agreement were similar in character to those performed when the policy was written. The application for the policy addressed to the company at its home office was likewise delivered at the Missouri Clearing House and forwarded to the home office. The application was considered and accepted in New York. The policy was executed there. It provided that the premiums and the insurance should be payable there. But such acts did not prevent the policy being held to be a Missouri contract. Equitable Life Assurance Society v. Clements, supra; Northwestern Life Insurance Co. v. McCue, 223 U. S. 234, 32 Sup. Ct. 220, 56 L. Ed. 419, 38 L. R. A. (N. S.) 57. Even if the loan agreement be treated as an independent contract, it should, if facts are allowed to control, be held to have been made in Missouri. But the loan agreement was not an independent contract; nor is it to be treated as a modification of

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surance on such terms as they pleased, they might with effect have elected to be bound by the law of the state of their preference, whatever the place of the contract; in doing so, they would in effect have specified terms of the contract. But provisions in contracts for incorporating the laws of a particular state are inoperative, so far as the law agreed upon is inconsistent with the law of the state in which the contract is actually made. Mutual Life Insurance Co. v. Hill, 193 U. S. 551, 554, 24 Sup. Ct. 538, 48 L. Ed. 788; Knights of Pythias v. Meyer, 198 U. S. 508, 25 Sup. Ct. 754, 49 L. Ed. 1146. Where the validity of a provision is dependent upon the place in which the contract is made, the actual facts alone are significant. Persons resident in Missouri, who enter there into a contract which is specifically controlled by the laws of that state, cannot, by agreeing that a modification inconsistent with the requirements of the Missouri law shall be deemed to have been made elsewhere, escape the prohibition of the Missouri statute. The fact that one of the parties to the contract is a corporation and hence capable of having a residence also in another state, and that some acts in connection with the contract were done by it there, does not affect the result. The company, although a foreign corporation, was, for this purpose, a resident of Missouri, or at least, was present in Missouri. Barrow Steamship Co. v. Kane, 170 U. S. 100, 18 Sup. Ct. 526, 42 L. Ed. 964; Dunlop Pneumatic Tyre Co. v. Actien-Gesellschaft, etc., 1 K. B. (1902) 342.

Third. Even if the rules ordinarily applied in determining the place of a contract, required this court to hold, as a matter of

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