State ex rel. Hickman v. Preferred Tontine Mercantile Company

• Decision Date: 27 October 1904
• Parties: THE STATE ex rel. HICKMAN, Supervisor of Building and Loan Associations, Appellant, v. PREFERRED TONTINE MERCANTILE COMPANY et al
• Court: Missouri Supreme Court

82 S.W. 1075

184 Mo. 160

THE STATE ex rel. HICKMAN, Supervisor of Building and Loan Associations, Appellant, v. PREFERRED TONTINE MERCANTILE COMPANY et al

Supreme Court of Missouri

October 27, 1904

Appeal from Jackson Circuit Court. -- Hon. W. B. Teasdale, Judge.

Reversed and remanded (with directions).

Edward C. Crow, Attorney-General, J. W. Suddath, Charles E. Morrow and C. D. Corum for appellant.

(1) The respondent company is subject to and has violated the provisions of the act regulating cooperative companies. Laws 1903, p. 110. (2) Before declaring an act of the Legislature void as conflicting with a constitutional provision the court must have no reasonable doubt on the subject; the doubt is to be resolved in favor of the law. State v. Able, 65 Mo. 357; Ewing v. Hoblitzelle, 85 Mo. 64; Kelley v. Meeks, 87 Mo. 396. (3) The business of persons and corporations may be regulated, for the public good, under the police power of a State. All property is held subject to those general regulations, which are necessary to the common good and general welfare. This does not impair the obligations of contracts. The obligation of contracts by no means extends so far. Cooley's Constitutional Limitations, secs. 572 to 579; Constitution, Mo. art. 11 sec. 5. (4) The title of the acts is sufficient. The penal section did not have to be mentioned in the title. It is only necessary that the title indicate the subject in a general way. State v. Whitaker, 160 Mo. 59; State v Brostark, 136 Mo. 335; State ex rel. v Bronson, 115 Mo. 271; State ex rel. v. Marion Co. Ct., 128 Mo. 427; De Both v. Rich Hill Coal Mining Co., 141 Mo. 497; Senn v. Railroad, 124 Mo. 627; Elting v. Hickman, 72 S.W. 700. (a) The fact that it is made a penalty to violate the act does not render the title bad which did not state the crime created. State v. Whitaker, 160 Mo. 59. (b) All auxiliary provisions properly attaching to the main subject, and constituting with it one whole, may be embraced within the enactment. State v. Whitaker, 160 Mo. 59. (c) The act does not contain two distinct subjects. It is all germane to the main subject. State v. Bixman, 162 Mo. 1; State v. Bennett, 102 Mo. 364. (5) No judicial or legislative powers are placed in an executive officer. State v. Hathaway, 115 Mo. 36; St. Louis v. Meyrose Lamp Mfg. Co., 139 Mo. 560. The provision is similar to the insurance statute, section 7979, Revised Statutes 1899. The supervisor simply examines to see if the law has been complied with, before he issues a certificate. There is no question about the authority of the Legislature to pass the law. Daggs v. Ins. Co., 136 Mo. 382. (6) The act is not in violation of article 1, section 8, U. S. Constitution. The business regulated is not a transaction of "commerce." Daggs v. Ins. Co., 136 Mo. 382; Paul v. Virginia, 8 Wall. (U.S.) 168. Though police regulations may incidentally affect "commerce" carried on by citizens of different States, yet they are not an attempt to regulate commerce among the States. Wilson v. Railroad, 60 Mo. 184; Kenney v. Railroad, 62 Mo. 467; Gilman v. Railroad, 67 Mo. 323. (7) The Legislature may provide for winding up insolvent corporations although their original charter reserved no power in the Legislature to alter same. 4 Thompson on Corps., p. 4104, sec. 5392; Railroad v. Ballard, 2 Met. (Ky.) 165; Ward v. Farrell, 97 Ill. 593; State v. Am. Savs. & L. Assn., 67 N.W. 1. (8) Under article 12, section 5, State Constitution, the Legislature has the right to make new police regulations. Matthews v. Railroad, 121 Mo. 312, 165 U.S. 20; Cooley on Const. Lim. (6 Ed.), sec. 577, p. 707; Ward v. Farrell, 97 Ill. 593. (a) The Legislature has a general right to supervise and superintend the acts of corporations and to make such reasonable regulations as the public may require. This doctrine has been applied to the business of banks, insurance companies, lotteries, railroad companies, street railroads, and turnpike companies. Inasmuch as the regulations here sought to be established are identical with those of insurance companies, we only cite authorities applicable to insurance companies. 8 Cyc. 971; Word v. Ins. Co., 112 Ga. 585; Atty.-Gen. v. Looker, 11 Mich. 898; People v. Ins. Co., 19 Mich. 392; State v. Matthews, 44 Mo. 523; Price v. Ins. Co., 3 Mo.App. 262; Grobe v. Ins. Co., 169 N.Y. 613; State v. Ins. Co., 50 Ohio St. 252; S. C. (affirmed), 133 U.S. 446; Com. v. Mut. Ben. Assn., 10 Phila. 554; Ins. Co. v. Levy, 12 Tex. Civ. App. 45; Ins. Co. v. Levy, 33 S.W. 996; Ins. Co. v. Ohio, 153 U.S. 466; Ins. Co. v. Meedles, 113 U.S. 574; Dupuy v. Ins. Co., 63 F. 680. (b) "Police power is the name given to that inherent sovereignty which it is the right and duty of the government or its agents to exercise, whenever public policy in a broad sense demands, for the benefit of society at large, regulations to guard its morals, safety, health, order, or to insure in any respect such economic conditions as an advanced civilization of a high complex character requires." 8 Cyc. 863. (c) "The power of the Legislature to subserve the general welfare of the people by all needful and proper regulations, in the interest of health and safety, is inherent in the sovereignty of the State and can not be bartered away by contract or otherwise." Boston Beer Co. v. Mass., 97 U.S. 25; New Orleans Gas. L. Co. v. Mfg. Co., 115 U.S. 650; Birmingham Min. R. Co. v. Parsons, 100 Ala. 662; Railroad v. State, 47 Neb. 549; Thorpe v. Railroad, 27 Vt. (1 Williams) 140. (d) "The power of prescribing general police regulations is resident in the Legislature, and inalienable even by express grant." Boston Beef Co. v. Mass., 97 U.S. 25; Thorpe v. Railroad, 27 Vt. (1 Williams) 140. (e) The exercise of police regulations does not impair the obligations of contracts, and does not violate the Constitution. A corporation must submit to proper police regulations in the interest of society even though such regulations operate to injure the business authorized by its charter and diminish the value of its property. 8 Cyc. 974, 975; Fert. Co. v. Hyde Park, 97 U.S. 659; Cantini v. Tillman, 54 F. 969; Barlow v. Bregory, 31 Conn. 261; People v. Hawley, 3 Mich. 330; State v. Paul, 5 R. I. 185. (f) The plaintiff's contention is that the Act of 1903 is authorized by the police power of the State. "All natural persons within the State and all corporations doing business within the State or created thereby, hold their property and engage in their business subject to the police power of the State." Am. Union Tel. Co. v. West. Union Tel. Co., 67 Ala. 26; Northwestern Fer. Co. v. Hyde Park, 70 Ill. 634; Singer v. State, 72 Md. 464; State v. Gardner, 58 Ohio St. 599; Dent v. W. Va., 129 U.S. 112; Minneapolis, etc. Co. v. Beckwith, 129 U.S. 26; Powell v. Penn, 172 U.S. 678; Mugler v. Kansas, 123 U.S. 623. (9) The act in question is not local or special; it does not discriminate against persons of the same class, nor does it deny the equal protection of the law. Commonwealth v. Vrooman, 30 A. 217; State v. Stone, 118 Mo. 388; Cravens v. Ins. Co., 148 Mo. 614; People v. Gay, 30 L. R. A. 464; State ex rel. v. Woodman, 11 L. R. A. 420; Austin v. State, 10 Mo. 591; State v. Hathaway, 115 Mo. 36; Masonic Aid Ass'n v. Wadill, 138 Mo. 628; Powell v. Sherwood, 162 Mo. 605; Haynie v. Knights Templars & Masons Indm. Co., 139 Mo. 416; Cooley, Const. Lim. (3 Ed.), 390. (10) The appointment of a receiver does not take property without due process of law. 20 Am. and Eng. Enc. Law (1 Ed.), 18.

Dwight P. Dilworth and Harkless, Crysler & Histed for respondents.

(1) The Act of 1903 applies alike to individuals, partnerships and corporations. (2) It singles out and makes an arbitrary distinction between contracts which shall come within the statute, from those beyond its scope without any reasonable basis for such distinction. (3) It likewise discriminates between those employing identically the same kind of contracts in their business, bringing one class within the statute and excluding the other from its operation. (4) It requires a deposit of $ 25,000 with the Treasurer of the State at the outset, and additions to such deposit to keep pace with liabilities. Such deposits must be from funds other than those derived from payments by the contract holders notwithstanding that in many cases such payments constitute the only source of revenue. It thus imposes the burden not only of making the particular business profitable and of safely keeping and conserving the income derived therefrom, but of conducting and earning from an independent business enough money to keep this deposit up to the limit. (5) There is thus required to be constantly kept on hand $ 2 in cash for every $ 1 of liability, no matter how remote in point of time the maturity of such liability may be or dependent upon what contingencies. Of this fund one dollar at least must be accumulated from some source other than that derived from the operation of the business itself. (6) There must likewise be filed with the Supervisor of Building and Loan Associations a detailed variety of information and data. (7) There must be submitted to the Supervisor an itemized statement of the plans for doing business, together with all forms of contracts or agreements proposed to be used in connection therewith. The Supervisor, through the negative power of rejecting contracts and plans submitted, is in practical effect given the right to prescribe the plans and details and the contracts under which alone the business may be transacted at all. (8) The Supervisor is vested with an absolute and unrestricted power in prescribing the method of business and the terms of contracts which may be used; discretionary in its nature and hence not reviewable by any court. No right of review of the...