259 U.S. 530 (1922), 149, Prudential Ins. Co. v. Cheek

Docket Nº:No. 149
Citation:259 U.S. 530, 42 S.Ct. 516, 66 L.Ed. 1044
Party Name:Prudential Ins. Co. v. Cheek
Case Date:June 05, 1922
Court:United States Supreme Court
 
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Page 530

259 U.S. 530 (1922)

42 S.Ct. 516, 66 L.Ed. 1044

Prudential Ins. Co.

v.

Cheek

No. 149

United States Supreme Court

June 5, 1922

Argued March 6, 1922

ERROR TO THE ST. LOUIS COURT OF APPEALS,

STATE OF MISSOURI

Syllabus

1. The Service Letter Law of Missouri, requiring every corporation doing business in the state to furnish, upon request, to any employee, when discharged or leaving its service, a letter, signed by the superintendent or manager, setting forth the nature and duration of his service to the corporation and stating truly the cause of his leaving, is not an arbitrary interference with freedom of contract amounting to a deprivation of liberty or property without due process of law. P. 534.

2. This requirement is within the regulatory power of the state over foreign and domestic corporations. Pp. 536, 544.

3. The requirement does not deny the equal protection of the laws in being made of corporations and not of individuals. P. 546.

4. The federal Constitution imposes no restriction on the states protective of freedom of speech, or liberty of silence, or the privacy of individuals or corporations. P. 543.

5. A decision of a state court holding that an agreement of several insurance companies having a monopoly of a line of insurance business in a city that neither would employ within two years any man who had been discharged from or left the service of either of the others was unlawful, and sustaining an action against one of the companies by its former employee for damages resulting from the agreement, does not deprive the defendant of property without due process of law in violation of the Fourteenth Amendment. P. 547.

6. Under Jud.Code § 237, as amended 1916, when a case is properly here on writ of error because involving the constitutionality of a statute, other federal questions which in themselves warrant review only by certiorari will be determined also. P. 547.

223 S.W. 754 affirmed.

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Error to a judgment affirming a judgment on verdict for the plaintiff, Cheek, in his action for damages against the Insurance Company.

PITNEY, J., lead opinion

MR. JUSTICE PITNEY delivered the opinion of the Court.

Robert T. Cheek sued the Prudential Insurance Company of America in the Circuit Court of St. Louis to recover damages upon a cause of action set forth in two counts: first, that the company, being a New Jersey corporation conducting a life insurance business in Missouri under license of the insurance department of that state, and plaintiff having been for more than ten years continuously employed in its service, and having resigned said employment and left the company's service, plaintiff demanded of defendant's superintendent a letter setting forth the nature and character of the services rendered by him to said corporation and the duration thereof, and truly stating for what cause plaintiff had quit said service; that defendant, acting through its superintendent, without just cause refused to give to plaintiff such a letter as provided by statute, and, because of this, plaintiff had been unable to secure employment and had suffered substantial damages. The second count was based upon an alleged unlawful agreement between defendant and two other companies, the Metropolitan Life Insurance Company and the John Hancock Mutual Life Insurance Company, said companies having a monopoly of the industrial life insurance business in St. Louis, to the effect that

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neither would, for a period of two years after his leaving the employ of either company, employ any man who for any reason had left the service of or had been discharged by either of the other companies, by which means plaintiff had been rendered unable to secure employment and had sustained substantial damages.

The first count was based upon § 3020, Missouri Revised Statutes of 1909, which reads as follows:

Whenever any employee of any corporation doing business in this state shall be discharged or voluntarily quit the service of such corporation, it shall be the duty of the superintendent or manager of said corporation, upon the request of such employee (if such employee shall have been in the service of said corporation for a period of at least ninety days), to issue to such employee a letter, duly signed by such superintendent or manager, setting forth the nature and character of service rendered by such employee to such corporation and the duration thereof and truly stating for what cause, if any, such employee has quit such service, and if any such superintendent or manager shall fail or refuse to issue such letter to such employee when so requested by such employee, such superintendent or manager shall be deemed guilty of a misdemeanor, and shall be punished by a fine in any sum not exceeding five hundred dollars, or by imprisonment in the county jail for a period not exceeding one year, or by both such fine and imprisonment.

A general demurrer interposed to each count was sustained by the trial court, and, plaintiff declining to plead further, judgment was rendered for defendant, from which plaintiff appealed to the supreme court of the state. That court, construing § 3020, held that it imposed a duty not upon the superintendent or manager personally, but upon the corporation, acting through its superintendent or other proper officer, to issue the letter; that, the statute having imposed his duty for the public benefit

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and also for the benefit of the employees of corporations, the public remedy by fine or other penalty was not exclusive, and the plaintiff as a party injured was entitled to recover his damages; overruled various constitutional objections raised by defendant to the validity of § 3020, among others that it deprived the corporation of liberty of contract without due process of law and denied it the equal protection of the laws in violation of the Fourteenth Amendment; held that the agreement or combination alleged in the second count gave the corporations a monopoly in their business, contrary to the law and public policy of the state, and, if it prevented plaintiff from obtaining employment, entitled him to recover his damages caused thereby; sustained both counts on all points; reversed the judgment, and remanded the cause for trial. Cheek v. Prudential Ins. Co. of America, 192 S.W. 387.

Defendant thereupon answered the petition, reiterating in its plea to the first count the constitutional objections to § 3020, and in its plea to the second count averring that to permit a recovery against it by reason of the alleged agreement between the companies would deprive defendant of its property and its right to contract without due process of law in violation of the Fourteenth Amendment.

On the issues so made up, the case went to trial and resulted in a verdict in favor of plaintiff upon both counts. Defendant, having reserved its constitutional points, appealed from the resulting judgment to the Supreme Court, which, however, refused to take jurisdiction on the ground that all constitutional questions had been decided on the former appeal, and that the verdict, being for only $1,500, was less than the jurisdictional amount required by statute, and hence transferred the cause to the St. Louis Court of Appeals for final disposition. Cheek v. Prudential Ins. Co. of America, 209 S.W. 928. Defendant, treating this decision of the Supreme Court as a final judgment reviewable by writ of error from this Court, sued out such a writ, and, upon the ground that the judgment

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was not final under the state law, the cause was dismissed March 8, 1920. 252 U.S. 567. Thereafter it was submitted to the St. Louis Court of Appeals, which, in conformity to the former opinion of the Supreme Court, [42 S.Ct. 519] affirmed the judgment (223 S.W. 754), overruled a motion for rehearing, and refused an application for certification of the case to the supreme court. A writ of error from this Court to the St. Louis Court of Appeals followed, under § 237, Judicial Code, as amended by Act Sept. 6, 1916, c. 448, 39 Stat. 726.

A motion to dismiss the latter writ, based upon the ground that the judgment of the court of appeals is not that of the highest court of the state in which a decision in the suit could be had, because the first decision of the supreme court rendered the constitutional questions res adjudicata, and that, under the state constitution, the court of appeals has no jurisdiction to pass upon questions of that character, manifestly must be denied, and the case considered on its merits.

The argument in support of the contention that the Service Letter Act is repugnant to the due process of law clause of the Fourteenth Amendment, in brief, is that, at common law, an employer is under no obligation to give a testimonial of character or clearance card to his employee; that no man is compelled to enter into business relations with another unless he desires to do so, and, upon the dissolution of such relations, no man can be compelled to divulge to the public his reasons for such dissolution; that it is a part of every man's civil rights that he be at liberty to refuse business relations with any other person, whether the refusal rests upon reason or is the result of whim, caprice, or malice, and with his reasons neither the public nor third persons have any legal concern, and that, in the absence of a contract, either employer or employee may sever the relation existing between them for any reason, or without reason, and may not be compelled to divulge

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the reason without material interference with his fundamental rights. Assuming the rules of the common law to be as stated, it is obvious that to say they have an unqualified and universal application, unalterable by statute, begs the...

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