1920. THORNTON v. DUFFY. 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. 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. Minnesota, 208 U. S. 583, 52 L. ed. 630, 28 Sup. Ct. Rep. 341. Mr. Justice McKenna delivered the opinion of the court: 1465-106, General Code of Ohio, that he 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 permitted to pay or furnish directly to injured employees, or the dependents of killed employees, the compensation and benefits provided for 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 answer findings and authorizations, the revocaing & Tool Company filed an and cross petition. From a judgment tion to stand as of January 10, 1918, sustaining demurrers to the petition of Thornton, and to the answer and cross petition of the Cleveland Stamping & Tool Company, there was appeal to the court of appeals, and thence by proceeding in error to the supreme court of the state, by which court the judgment was affirmed. These writs of error are prosecuted by Thornton and the Cleveland Company. an He and directed notices of the revocation and the resolution of the commission to be given to all employers, including Thornton, and these notices will be sent unless restrained. The resolution of the commission, the revocation of its previous action, and the notices which it threatens to send, are based upon the sole ground that it is its duty so to do under the laws of the state, indicated above. Thornton's petition and the pleadings The contract of Thornton with the of the Cleveland Company are substanEtna Company is a valid, subsisting conWe use, for conventially the same. ience, Thornton's petition, and state its tract, and he has a right to continue it until it be canceled, and that the sendallegations narratively as follows: is a manufacturer at Cleveland, Ohio, ing of the notices as above stated, and The the revocation of the findings of fact employing more than forty men. as that the commission had made, and its Industrial Commission determined, required by the act of the general assem- refusal to certify to Thornton its findbly of the state, passed February 26, ings of fact, as provided for in § 1465 307 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. ex 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 laws invoked by the commission The law that was passed provided do not justify its action, and if it be de- that every employer (there were termined that they do, then they, and ceptions not necessary to mention) in the acts of the commission under them, the month of January, 1914, and semiare in contravention of the 14th Amend- annually thereafter, should pay into ment of the Constitution [366] of the the state insurance fund the amount United States, and of article 1, § 10, of premium determined and fixed by of that Constitution, and also of the the state liability board of awards Constitution of the state of Ohio. for the particular employment or oc 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. This An injunction, temporary and per-cupation of the employer. It was, howmanent, against the action of the com- ever, also provided (we quote from mission, was prayed, and a temporary the opinion of the supreme court) "that restraining order granted, but it was certain employers under certain condisubsequently dissolved, and, as we have tions might elect to pay individually, or said, a demurrer was sustained to the pe- from a benefit fund, department, or assotition, and judgment entered dismissing ciation, compensation to workmen and the suit. It, as we have also said, was their dependents for death or injuries affirmed by the supreme court of the received in the course of employment." state. [99 Ohio St. 126, 124 N. E. 54.] 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 The provisions of the legislation are withdraw the privilege depended not necessary elements in the consideration | merely upon the police power of the of the contention: (1) The Constitution state, "but rather directly upon the conof Ohio authorizes Workmen's Compen- stitutional grant of power;" and that, sation Laws. Explicitly it provides for besides, the right was reserved in that the passage of laws establishing a state provision of § 22 of the original act fund to be created by compulsory contri- which gave to the commission power to butions thereto by employers, the fund "at any time change or modify its findto 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 Workmen'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, therefore, it was made. continuing condition upon the concession to employers to deal directly with their employees, and the Industrial Commission, by the power reserved, could terminate the concession at any time. There was, besides, subsequent and empowering legislation in the amendment of March 20, 1917, as the supreme court pointed out. That act specifically limits the privilege of electing between directly dealing with employees and contribution to the state fund to those employers "who do not desire to insure the payment thereof or indemnify themselves against loss sustained by direct payment thereof." The court hence decided that it became the duty of the commission 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 Constitution and the law, to create and maintain one insurance fund, to be administered by the state." first steps of a policy make it immutable is to assert that imperfections and errors in legislation become constitutional rights. This is a narrow conception of sovereignty. It is, however, not new, and we have heretofore been invoked 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 discussion. 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 demonstrated, inimical to that policy to permit the erection of an interest or a power that may be exerted against it or its subsidiary 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. Washington, supra. Judgment affirmed. [370] The CHIEF JUSTICE, concurring: We repeat, we must accept the decision 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 legislation or the requirement transcends the power of the state, or in any way violates the Constitution of the United States. The law expressed the constitutional and legislative policy of the state to be that the compensation to workmen for injuries received in their employment 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 employers to deal directly with their employees, but there was precaution against failure in the [369] provision of 22, giving discretion to the commission 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 Moun1917, 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 possibilproperty 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. 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. MINNEAPOLIS, ST. PAUL, & SAULT V. (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 error. 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 the supreme court of the state (40 N. D. well taken, are not without substantial 69, 12 A.L.R. 744, 168 N. W. 684); and support, and, while possibly involving Federal questions, are not such as, since the Act of September 6, 1916, will support such [For other cases, see Appeal and Error, 1465 a writ of error. 1528, in Digest Sup. Ct. 1908.] [No. 55.] 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. Argued January 29, 1920. Decided Decem- See § 237, Judicial Code, as amended ין ber 20, 1920. N 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 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 Note. On the general subject of writs | raised and decided in a state court in of error from the United States Su- order to make a case for a writ of error preme Court to state courts-see notes from the Supreme Court of the United to Martin v. Hunter, 4 L. ed. U. S. 97; States-see note to Mutual L. Ins. Co. Hamblin v. Western Land Co. 37 L. ed. v. McGrew, 63 L.R.A. 33. U. S. 267; Re Buchanan, 39 L. ed. U. S. 884, and Kipley v. Illinois, 42 L. ed. U. S. 998. On what the record must show respecting the presentation and decision On what adjudications of state courts of a Federal question in order to confer can be brought up for review in the jurisdiction on the Supreme Court of Supreme Court of the United States by the United States of a writ of error to writ of error to those courts-see note a state court-see note to Hooker v. Los to Apex Transp. Co. v. Garbade, 62 Angeles, 63 L.R.A. 471. L.R.A. 513. On how and when questions must be And see note to this case in the state court as reported in 12 A.L.R. 758. were against this carrier was in force; that is to say, after the schedule was sustained by the first judgments, and before it was adjudged unremunerative as a result of the attack made after it had been in effect for a year or more. At the time of the shipments the carrier demanded and the shipper paid the maximum rate named in the schedule, it being the duly filed and published rate. The carrier did not then protest that it was entitled to more; nor did the shipper engage to pay more. schedule of maximum rates for carrying schedule after subjecting it to a fair [372] coal in carload lots between trial. When this right was exercised, points within the state (chap. 51, Laws the carriers did not ask a suspension 1907); and this and other carriers re- of the injunctions pending a hearing fused to put the schedule into effect. and decision, and the injunctions reSuits for injunctions against further mained in force until the cases disobedience were brought by the state dismissed. Neither at the time of the in its supreme court, and the car- dismissal nor at any prior stage of riers defended on the ground that the the proceedings was there any order schedule was confiscatory, and there- saving or securing to the carriers a fore in conflict with the due process right to demand or collect additional of law clause of the 14th Amendment. compensation in respect of shipments On the hearing, that court sustained whereon the schedule rate was demanded the schedule and directed that the in- and paid while the injunctions were ef junctions issue. 19 N. D. 45, 25 L.R.A. fective. (N.S.) 1001, 120 N. W. 869, and 19 The shipments as to which additional N. D. 57, 120 N. W. 874. The car- compensation is sought in the present riers brought the cases to this court on case were made while the injunction writs of error, and it affirmed the judgments, but did so without prejudice to the right of the carriers to reopen the cases if an adequate trial of the schedule in the future enabled them to prove that it was confiscatory. 216 U. S. 579 and 581, 54 L. ed. 624, 625, 30 Sup. Ct. Rep. 423. Mandates to that effect issued and the state court modified its judgments accordingly. In obedience to the injunctions the carriers then put the schedule into effect in accordance with local laws (Rev. Codes 1905, §§ 4339-4342); that is to say, they printed and filed coal tariffs based on the maximum rates named in the schedule, and gave public notice of their purpose to apply those tariffs. After trying the schedule for a year or more, the carriers presented in the state court petitions wherein they told of the trial made, asserted their ability and readiness to prove that the schedule was confiscatory, and prayed permission to do so. The petitions were entertained, proofs were taken, and on a hearing the schedule was sustained and the existing injunctions continued. 26 N. D. 438, 145 N. W. 135. On writs of error prosecuted by the carriers those judgments were reversed by this court, because the proofs satisfied it that the [374] 1. There was no contract, exschedule was not adequately remunera- press or implied, on the part of the tive, and the cases were remanded for shipper, to pay any rate other than further proceedings not inconsistent with that shown in the tariff filed and the opinion. 236 U. S. 585, 59 L. ed. published according to law, the court 735, L.R.A.1917F, 1148, P.U.R.1915C, saying on this point: "Manifestly, 277, 35 Sup. Ct. Rep. 429, Ann. Cas. if shippers cannot rely upon the rates 1916A, 1. On receiving the mandates, as so published and filed, the rethe state court set aside its judgments and dismissed the cases. The injunctions in those cases were awarded without [373] taking any bond, and without imposing any terms or conditions other than reserving to the carriers, as before shown, a right to reopen the cases and again attack the In suing for further compensation, the carrier took the position that the schedule was confiscatory, and therefore invalid under the 14th Amendment; that the coal was carried at the schedule rate because the injunction in the prior litigation compelled it; that the schedule ultimately was adjudged unremunerative and invalid, and the injunction dissolved; and that, in these circumstances, there arose an obligation on the part of the shipper to pay an additional sum, such as, with that already paid, would amount to a reasonable compensation. The supreme court of the state put its judgment against the carrier on the following grounds: quirement of publication becomes a mere trap for the unwary. In our judgment, it is wholly improper, in the absence of clear allegations of the rendition of services under a distinct protest, for a court to find that a shipper had, in effect, undertaken conditionally to pay according to a rate different from |
