ed. 772, 38 Sup. Ct. Rep. 337, Ann. Cas. 1918E, 593; Allgeyer v. Louisiana, 165 U. S. 578, 41 L. ed. 832, 17 Sup. Ct. Rep.


Neither Ohio Gen. Code, § 1465-69, nor § 1465-101, as amended in 1917, was intended to apply, and neither does apply, to contracts theretofore made by employers.

Sturges v. Carter, 114 U. S. 511, 29 L. ed. 240, 5 Sup. Ct. Rep. 1014; Bernier v. Becker, 37 Ohio St. 72; Kelley v. Kelso, 5 Ohio St. 198; State ex rel. Yaple v. Creamer, 85 Ohio St. 349, 39 L.R.A. (N.S.) 694, 97 N. E. 602, 1 N. C. C. A. 30; Hathaway v. Mutual L. Ins. Co. 99 Fed. 534; Burridge v. New York L. Ins. Co. 211 Mo. 158, 109 S. W. 560; Black, Const. Law, 3d ed. § 296; Lewis's Sutherland, Stat. Constr. 2d ed. § 642.

Mr. B. W. Gearheart argued the cause, and, with Mr. John G. Price, Attorney General of Ohio, filed a brief for defendants in error:

¡lature to require all employers to contribute to the state insurance fund, or to place limitations upon the privilege of carrying their own risks, and of the further right and duty of the industrial commission to change and modify its findings when warranted by its best judgment. Said contracts are not within the provisions of art. 1, § 10, or the 14th Amendment, § 1, of the Constitution of the United States.

Hudson County Water Co. v. McCarter, 209 U. S. 349, 52 L. ed. 828, 28 Sup. Ct. Rep. 529, 14 Ann. Cas. 560; Louisville & N. R. Co. v. Mottley, 219 U. S. 467, 55 L. ed. 297, 34 L.R.A. (N.S.) 671, 31 Sup. Ct. Rep. 265; Green v. Appleton Woolen Mills, 162 Wis. 145, 155 N. W. 958; Union Dry Goods Co. v. Georgia Pub. Serv. Corp. 142 Ga. 841, L.R.A.1916E, 358, 83 S. E. 946; Manigault v. Springs, 199 U. S. 473, 50 L. ed. 274, 26 Sup. Ct. Rep. 127; State ex rel. Pratt v. Seattle, 73 Wash. 396, 132 Pac. 45; German Ins. Co. v. Com. 141 Ky. Granting, for the sake of argument, that the legislation complained of 606, 133 N. W. 793; Hammond Packing amounts to a classification of employers, ed. 530, 29 Sup. Ct. Rep. 370, 15 Ann. Co. v. Arkansas, 212 U. S. 322, 53 L. reasons may be found justifying such classification. Unless the action of the Cas. 645; Missouri P. R. Co. v. Kansas, legislature in making such classification 216 U. S. 262, 54 L. ed. 472, 30 Sup. was arbitrary and wholly unreasonable, Ct. Rep. 330; Texas & N. O. R. Co. v. it will not be disturbed by the courts. Miller, 221 U. S. 408, 55 L. ed. 789, 31 Chicago, B. & Q. R. Co. v. McGuire, Sup. Ct. Rep. 534; Louisville & N. R. 219 U. S. 549, 55 L. ed. 328, 31 Sup. Ct. Co. v. Garrett, 231 U. S. 298, 58 L. ed. Rep. 259; Missouri, K. & T. R. Co. v. 229, 34 Sup. Ct. Rep. 48; Re College May, 194 U. S. 267, 48 L. ed. 971, 24 Hill Land Assn. 157 Cal. 596, 108 Pac. Sup. Ct. Rep. 638; Carroll v. Greenwich 681; Venner v. Chicago City R. Co. 246 Ins. Co. 199 U. S. 401, 50 L. ed. 246, 26. 170, 138 Am. St. Rep. 229, 92 N. Sup. Ct. Rep. 66; Bachtel v. Wilson, 204 U. S. 36, 51 L. ed. 357, 27 Sup. Ct. Rep. 243; McLean v. Arkansas, 211 U. S. 539, 53 L. ed. 315, 29 Sup. Ct. Rep.

206; German Alliance Ins. Co. v. Lewis, 233 U. S. 389, 58 L. ed. 1011, L.R.A. 1915C, 1189, 34 Sup. Ct. Rep. 612; State

ex rel. Turner v. United States Fidelity & G. Co. 96 Ohio St. 250, 117 N. E. 232: Hunter v. Colfax Consol. Coal Co. 175 Iowa, 245, L.R.A.1917D, 15, 154 N. W. 1037, 157 N. W. 145, Ann. Cas. 1917E, 803, 11 N. C. C. A. 886; New York, C. & H. R. R. Co. v. Williams, 199 N. Y. 108, 35 L.R.A.(N.S.) 549, 139 Am. St. Rep. 850, 92 N. E. 404; Second Employers' Liability Cases (Mondou v. New York, N. H. & H. R. Co.) 223 U. S. 1,56 L. ed. 327, 38 L.R.A. (N.S.) 44, 32 Sup. Ct. Rep. 169, 1 N. C. C. A. 875; Mackin v. Detroit-Timkin Axle Co. 187 Mich. 8, 153 N. W. 49.

The contracts referred to in the petition and cross petition herein were made subject to the right of the legis

E. 643, 20 Ann. Cas. 607; Sherman v. Smith, 1 Black, 587, 17 L. ed. 163; Looker v. Maynard, 179 U. S. 46, 45 L. ed. 79, 21 Sup. Ct. Rep. 21; McGowan v. McDonald, 111 Cal. 57, 52 Am. St. Rep. 149, 43 Pac. 418; Smathers v. 47 S. E. 893; West Wisconsin R. Co. v. Western Carolina Bank, 135 N. C. 410, Trempealeau County, 35 Wis. 257; Gardner v. Hope Ins. Co. 9 R. I. 194, 11 Am. Rep. 238; Barnes v. Arnold, 45 App. Div. 314, 61 N. Y. Supp. 85, affirmed in 169 N. Y. 611, 62 N. E. 1093; People v. Hawley, 3 Mich. 330; Philadelphia, B. & W. R. Co. v. Schubert, 224 U. S. 603, 56 L. ed. 911, 32 Sup. Ct. Rep. 589, 1 N. C. C. A. 892; Sturges v. Crowninshield, 4 Wheat. 122, 4 L. ed. 529; Hunt v. Hunt, 131 U. S. clxv. and 24 L. ed. 1109; Northern Indiana & S. M. Teleph. Teleg. & Cable Co. v. People's Mut. Teleph. Co. 187 Ind. 496, P.U.R. 1918D, 548, 119 N. E. 212.

Mr. Timothy S. Hogan also argued the

cause and filed a brief for defendants, 1913, and comprised in §§ 1465-41 A to in error:

The authority to pay workmen's compensation directly is a license. Reetz v. Michigan, 188 U. S. 505, 47 L. ed. 563, 23 Sup. Ct. Rep. 390; Simmons v. State, 12 Mo. 268, 49 Am. Dec. 131.

The police power of the state cannot be bartered away.

1465-106, General Code of Ohio, that he was of sufficient financial ability to render certain the payment of compensation to injured employees, the benefits provided by that act. He, on the day of January, 1914, elected to accept the act and proceed under it, has since complied with its provisions, has abided by the rules of the commission and all that is required of him by the act.

January, 1914, he made a written contract with the Etna Insurance Company of Hartford, Connecticut, a duly licensed company, wherein that company agreed to pay to his injured employees the compensations required by the act of the assembly for injuries or upon death, and agreed to indemnify him against the liabilities and requirements of the act.

December 1, 1917, the commission adopted a resolution which recited the act of the assembly of the state of February 16, 1917, amending § 1465-101, General Code of Ohio, and an act of the general assembly passed [365] March 20, 1917, amending § 1465-69, General Code of the state, and an act passed March 21, 1917, and resolved and declared that no employers should be or furnish directpermitted to pay

Louisville & N. R. Co. v. Mottley, 219 U. S. 467, 55 L. ed. 297, 34 L.R.A.(N.S.) 671, 31 Sup. Ct. Rep. 265; Fitzgerald v. Grand Trunk R. Co. 63 Vt. 169, 13 L.R.A. 70, 3 Inters. Com. Rep. 633, 22 Atl. 76; Boyd v. Alabama, 94 U. S. 645, 24 L. ed. 302; Boston Beer Co. v. Massachusetts, 97 U. S. 25, 24 L. ed. 989; Stone v. Mississippi, 101 U. S. 814, 25 L. ed. 1079; Butchers' Union S. H. & L. S. L. Co. v. Crescent City L. S. L. & S. H. Co. 111 U. S. 746, 28 L. ed. 585, 4 Sup. Ct. Rep. 652; Atkinson v. Ritchie, 10 East, 530, 103 Eng. Reprint, 877, 10 Revised Rep. 372; People ex rel. New York Electric Lines Co. v. Squire, 107 N. Y. 606, 1 Am. St. Rep. 893, 14 N. E. 820; Douglas v. Kentucky, 168 U. S. 488, 42 L. ed. 553, 18 Sup. Ct. Rep. 199; Chicago, B. & Q. R. Co. v. Nebraska, 170 U. S. 58, 42 L. ed. 948, 18 Sup. Ct. Rep. 513; Northern P. R. Co. v. Minne-ly to injured employees, or the desota, 208 U. S. 583, 52 L. ed. 630, 28 pendents of killed employees, the compensation and benefits provided for Sup. Ct. Rep. 341. in §§ 1465-41 A to 1465-106, General Code of Ohio, if such employers, by contract or otherwise, shall provide for This suit was brought by the plaintiff the insurance of the payment by them of in error Thornton against defendants in such compensation and benefits, or shall error, hereinafter called defendants, indemnify themselves against loss sus[364] composing the Industrial Com-tained by the direct payment thereof. mission of Ohio. The Cleveland Stamp- The commission revoked its previous ing & Tool Company filed an answer findings and authorizations, the revocaand cross petition. From a judgment tion to stand as of January 10, 1918, sustaining demurrers to the petition and directed notices of the revocation of Thornton, and to the answer and and the resolution of the commission to cross petition of the Cleveland Stamp-be given to all employers, including Thornton, and these notices will be sent ing & Tool Company, there was appeal to the court of appeals, and unless restrained. The resolution of the commission, the thence by proceeding in error to the supreme court of the state, by which revocation of its previous action, and the court the judgment was affirmed. These notices which it threatens to send, are writs of error are prosecuted by Thorn-based upon the sole ground that it is its ton and the Cleveland Company.

Mr. Justice McKenna delivered the opinion of the court:


Thornton's petition and the pleadings of the Cleveland Company are substantially the same. We use, for convenience, Thornton's petition, and state its allegations narratively as follows: He is a manufacturer at Cleveland, Ohio, employing more than forty men. The Industrial Commission determined, as required by the act of the general assembly of the state, passed February 26,

duty so to do under the laws of the state, indicated above.

The contract of Thornton with the Etna Company is a valid, subsisting contract, and he has a right to continue it until it be canceled, and that the sending of the notices as above stated, and the revocation of the findings of fact that the commission had made, and its refusal to certify to Thornton its findings of fact, as provided for in § 1465


69, will cause him irreparable injury | the 14th Amendment of the Constitution and damage, for which he has no ade- of the United States. New York C. R. quate remedy at law. Further, that Co. v. White, 243 U. S. 188, 61 L. ed. there are more than 675 employers situated as Thornton is, and that, therefore, the questions involved are of common and general interest, and as it is impractical to bring them all into court, he sues for the benefit of all.

667, L.R.A.1917D, 1, 37 Sup. Ct. Rep. 247, Ann. Cas. 1917D, 629, 13 N. C. C. A. 943; Mountain Timber Co. v. Washington, 243 U. S. 219, 61 L. ed. 685, 37 Sup. Ct. Rep. 260, Ann. Cas. 1917D, 642, 13 N. C. C. A. 927. (2) [367] The law that was passed provided that every employer (there were exceptions not necessary to mention) in the month of January, 1914, and semiannually thereafter, should pay into the state insurance fund the amount of premium determined and fixed by the state liability board of awards for the particular employment or oc

The laws invoked by the commission do not justify its action, and if it be determined that they do, then they, and the acts of the commission under them, are in contravention of the 14th Amendment of the Constitution [366] of the United States, and of article 1, § 10, of that Constitution, and also of the Constitution of the state of Ohio. An injunction, temporary and per-cupation of the employer. It was, howmanent, against the action of the commission, was prayed, and a temporary restraining order granted, but it was subsequently dissolved, and, as we have said, a demurrer was sustained to the petition, and judgment entered dismissing the suit. It, as we have also said, was affirmed by the supreme court of the state.

The various acts of legislation of the state were sustained by the courts of the state, and hence their validity under the Constitution of the state is removed from the controversy, and our inquiry is confined to the effect upon them of the Constitution of the United States.

In support of the contention that the Constitution of the United States makes the legislation and the action under it illegal, it is said that insurance against loss is the right of everybody, and specifically it is the right of employers to indemnify themselves against their liability to employees, and that the right is so fixed and inherent as to be an attribute of liberty removed from the interference of the state.

ever, also provided (we quote from the opinion of the supreme court) "that certain employers under certain conditions might elect to pay individually, or from a benefit fund, department, or association, compensation to workmen and their dependents for death or injuries received in the course of employment." [99 Ohio St. 126, 124 N. E. 54.] This was an alternative granted, and its conditions were fulfilled, it was contended, and that upon the faith of the fulfilment of it, and in indemnity against contingencies, plaintiff entered into a contract of insurance with the Etna Company. It was further contended that the alternative and the insurance against its requirements became property, and inviolable, became contracts, with immunity from impairment. To the contention the supreme court replied that the alternative to contribution to the state fund, of dealing with the employees directly, was a privilege that need not have been granted, and that, therefore, to effect the purpose of the Constitution and law, could be withdrawn; that the right to withdraw the privilege depended not merely upon the police power of the state, "but rather directly upon the constitutional grant of power;" and that, besides, the right was reserved in that provision of § 22 of the original act which gave to the commission power to "at any time change or modify its find

The provisions of the legislation are necessary elements in the consideration of the contention: (1) The Constitution of Ohio authorizes Workmen's Compensation Laws. Explicitly it provides for the passage of laws establishing a state fund to be created by compulsory contributions thereto by employers, the fund to be administered by the state. Things of fact . . if in its judgment constitutionality of a law passed under that authorization was sustained by this court in Jeffrey Mfg. Co. v. Blagg, 235 U. S. 571, 59 L. ed. 364, 35 Sup. Ct. Rep. 167, 7 N. C. C. A. 570, against the charge that its classifications were arbitrary and unreasonable. And Work-fore, it was made. men's Compensation Laws of other [368] The meaning thus ascribed to states have been declared inoffensive to § 22 we must accept. It expressed a

such action is necessary or desirable to secure or assure a strict compliance with all of the provisions of the law. . . ?" And it was said that the experience of four years demonstrated the necessity or desirability of a change, and that, there



continuing condition upon the conces-
sion to employers to deal directly with
their employees, and the Industrial Com-
mission, by the power reserved, could
terminate the concession at any time.
There was,
besides, subsequent and
empowering legislation in the amend-
ment of March 20, 1917, as the supreme
court pointed out. That act specifically
limits the privilege of electing between
directly dealing with employees and con-
tribution to the state fund to those
employers "who do not desire to insure
the payment thereof or indemnify them-
selves against loss sustained by direct
payment thereof." The court hence de-
cided that it became the duty of the com-
mission to change or modify its findings.
And it was also decided that the act was
not only clearly within the power of the
state, but was "in furtherance of the
purpose and intention of the Constitu-
tion and the law, to create and main-
tain one insurance fund, to be admin-
istered by the state."

first steps of a policy make it im-
mutable is to assert that imperfections
and errors in legislation become consti-
tutional rights. This is a narrow con-
ception of sovereignty. It is, however,
not new, and we have heretofore been in-
voked to pronounce judgment upon it.
Complying, we said that an exercise of
public policy cannot be resisted because
of conduct or contracts done or made
upon the faith of former exercises of it,
upon the ground that its later exercises
deprive of property or invalidate those
contracts. Louisville & N. R. Co. v.
Mottley, 219 U. S. 467, 55 L. ed. 297, 34
L.R.A. (N.S.) 671, 31 Sup. Ct. Rep. 265.

We are not disposed to extend the dis-
cussion. Indeed, we think the case is in
narrow compass. We are not called
upon to controvert the right to insure
against contingent losses or liabilities, or
to minimize the value of insurance to
business activities and enterprises, or
discuss the general power or want of
power of the state over it. We are only
called upon to consider its relation to
and possible effect upon the policy of a
workmen's compensation law, and we
can readily see that it may be, as it is
said the experience of Ohio demonstrat-
ed, inimical to that policy to permit the
erection of an interest or a power that
may be exerted against it or its subsid-
iary provisions. This was the view of
the supreme court of the state, and by it
the court justified the power conferred
upon and exercised by the commission.
See Mountain Timber Co. v. Washing-
ton, supra.

Judgment affirmed.

[370] The CHIEF JUSTICE, concurring:

We repeat, we must accept the deci-
sion of the court as the declaration of
the legislation and the requirement of
the Constitution of the state, as much a
part of both as if expressed in them
(Douglass v. Pike County, 101 U. S. 677,
25 L. ed. 968), and we are unable to
yield to the contention that the legisla-
tion or the requirement transcends the
power of the state, or in any way vio-
lates the Constitution of the United
States. The law expressed the constitu-
tional and legislative policy of the state
to be that the compensation to workmen
for injuries received in their employ-
ment was a matter of public concern,
and should not be left to the individual
employer or employee, or be dependent
upon or influenced by the hazards of
controversy or litigation, or inequality
of conditions. There was an attempt at
the accommodation of the new policy to
old conditions in the concession to em-
ployers to deal directly with their em-
ployees, but there was precaution
against failure in the [369] provision
of § 22, giving discretion to the com-
mission to withdraw the concession.
After a few years' experience, that
discretion was turned into a duty,
and by the amendment of March 20, But, in view of the decision in Moun-
1917, the concession was taken away tain Timber Co. v. Washington, 243 U.
from those employers who indemnified S. 219, 61 L. ed. 685, 37 Sup. Ct. Rep.
themselves by insurance. This was 260, Ann. Cas. 1917D, 642, 13 C. C. C.
considered necessary to execute the A. 927, sustaining the constitutionality
policy of the state, and we are un- of a law of the state of Washington
able to yield to the contention that which necessarily excluded the possibil-
property rights or contract rights had ity of the insurance by the employer of
accrued against it. To assert that the the burden in favor of his employees,

To compel an employer to insure his employee against loss from injury sustained in the course of the employment without reference to the negligence of the employee, and at the same time to prohibit the employer from insuring himself against the burden thus imposed, it seems to me, if originally considered, would be a typical illustration of the taking of property without due process, and a violation of the equal protection of the law.

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which the statute in that case imposed, I do not think I am at liberty to consider the subject as an original question, but am constrained to accept and apply the ruling in that case made, and for that reason I concur in the judgment now announced.

Mr. Justice McReynolds dissents.

Plff. in Err.,



(See S. C. Reporter's ed. 370-375.) .

charges in addition to what was demanded and paid when the service was rendered. Dismissed for want of jurisdiction.

See same case below in supreme court, 40 N. D. 69, 12 A.L.R. 744, 168 N. W. 684.

The facts are stated in the opinion. Mr. John L. Erdall argued the cause, and, with Messrs. A. H. Bright and H. B. Dike, filed a brief for plaintiff in


Messrs. Andrew Miller and Alfred Zuger argued the cause, and, with Mr. B. F. Tillotson, filed a brief for defendant in error.

Mr. Justice Van Devanter delivered the opinion of the court:

Error to state court · Federal question - decision on non-Federal grounds. This was an action by a railroad comA decision of the highest court of a pany against a shipper, for whom it had state which rests upon grounds independ- carried many carloads of coal between ent of the only Federal question involved points in the state of North Dakota, to that would serve as the basis of a writ of recover for that service a compensation error from the Federal Supreme Court, and in addition to what was demanded and which appeared to the state court to pre-paid when the service was rendered. clude any recovery, is not reviewable in the Federal Supreme Court on writ of error, Judgment went against the carrier in where such independent grounds are broad the court of first instance, and again in enough to sustain the judgment, and, if not well taken, are not without substantial support, and, while possibly involving Federal questions, are not such as, since the Act of September 6, 1916, will support such

a writ of error.

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IN ERROR to the District Court for

the Sixth Judicial District of the State of North Dakota to review an order affirmed by the Supreme Court of the state, which sustained a demurrer to the complaint in an action by a carrier against a shipper to recover freight

Note. On the general subject of writs | of error from the United States Supreme Court to state courts-see notes to Martin v. Hunter, 4 L. ed. U. S. 97; Hamblin v. Western Land Co. 37 L. ed. U. S. 267; Re Buchanan, 39 L. ed. U. S. 884, and Kipley v. Illinois, 42 L. ed. U. S. 998.

On what adjudications of state courts can be brought up for review in the Supreme Court of the United States by writ of error to those courts-see note to Apex Transp. Co. v. Garbade, 62 L.R.A. 513.

On how and when questions must be

the supreme court of the state (40 N. D. 69, 12 A.L.R. 744, 168 N. W. 684); and this writ of error was sued out on the theory that the judgment upheld and gave effect to a local rate statute which the carrier was contending was repugnant to the due process of law clause of the 14th Amendment. If this theory is not right, the writ of error must be dismissed, for it is without other support. See § 237, Judicial Code, as amended September 6, 1916, chap. 448, 39 Stat. at L. 726, Comp. Stat. § 1214.

To show what was involved and decided, it is necessary to refer with some particularity to a prior litigation out of which the present case arose.

In 1907 the state of North Dakota, by an act of its legislature, prescribed a raised and decided in a state court in order to make a case for a writ of error from the Supreme Court of the United States-see note to Mutual L. Ins. Co. v. McGrew, 63 L.R.A. 33.

On what the record must show respecting the presentation and decision of a Federal question in order to confer jurisdiction on the Supreme Court of the United States of a writ of error to a state court-see note to Hooker v. Los Angeles, 63 L.R.A. 471.

And see note to this case in the state court as reported in 12 A.L.R. 758.

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