“BERYL F. CARROLL, Auditor of State of

the State of Iowa, Appt., v.

GREENWICH INSURANCE COMPANY OF NEW YORK et al.

(See S. C. Reporter’s ed. 401-414.)

Constitutional law— validity of state legislation to insnre competition be¬ tween insurance companies. — Insurance companies doing business in Iowa cannot claim to be deprived of their rights under U. S. Const. 14th Amend, by Iowa Code 1897,

§ 1754, making it unlawful for them or their officers, agents, or employees to make or en¬ ter into any combination or agreement re¬ lating to the rates to be charged, the amount of commissions to be allowed agents, or the manner of transacting their business within the state, in the absence of any judicial construction of such statute as having any other than the single object to insure com¬ petition.

[No. 50.]

Argued November 7, 8, 1905. Decided

November 27, 1905.

\ PPEAL from the Circuit Court of the United States for the Southern District of Iowa to review a decree enjoining the enforcement, as against fire insurance com-

Note. — On illegal trusts under modern anti¬ trust laws — see note to Whitwell v. Contin¬ ental Tobacco Co. 64 L.R.A. 689.

199 U. S.

Carroll v. Greenwich Ins. Co.

panies doing business in that state, of legis¬ lation to insure competition. Reversed..

See same case below, 125 Fed. 121.

The facts are stated in the opinion.

Mr. Charles W. Mullan argued the cause and filed a brief for appellant:

The Iowa statute does not deprive any person of liberty or property, and does not restrict or abridge the liberty of contract; nor does any provision of such statute in any manner violate or infringe any pro¬ vision of the 14th Amendment to the Fed¬ eral Constitution.

Gibbons v. Ogden, 9 Wheat. 1, 6 L. ed. 23: Morris Run Goal Co. v. Barclay Coal Co. 68 Pa. 173, 8 Am. Rep. 159; Arnot v. Pittston & E. Coal Co. 68 N. Y. 558, 23 Am. Rep. 190; Central Ohio Salt Co. v. Guthrie, 35 Ohio St. 666; Craft v. McConoughy, 79 Ill. 346, 22 Am. Rep. 171; People ex rel. Peabody v. Chicago Gas Trust Co. 130 Ill.

N. E. 798; Richardson v. Buhl, 77 Mich. 632, 6 L.R.A. 457, 43 N. W. 1102; Santa Clara Mill & Lumber Co. v. Hayes, 76 Cal. 387, 9 Am. St. Rep. 211, 18 Pac. 391; India Bagging Asso. v. Hock, 14 La. Ann. 164; Horthern Secrities Co. v. United States, 193 U. S. 197, 339, 48 L. ed. 679, 701, 24 Sup. Ct. Rep. 436; People v. Sheldon, 139 N. Y. 251, 23 L.R.A. 221, 36 Am. St. Rep. 690, 34 N. E. 785; State ex rel. Crow v. Firemen’s Fund Ins. Co. 152 Mo. 45, 45 L.R.A. 363, 52 S. W. 595; State ex rel. Monnett v. Buckeye Pipe Line Co. 61 Ohio St. 520, 56 N. E. 464; Stanton v. Allen, 5 Denio, 434, 49 Am. Dec. 282; Watson v. Harlem d N. Y. Nav. Co. 52 How. Pr. 348 ; Anderson v. Jett, 89 Ky. 375, 6 L.R.A. 390, 12 S. W. 670; Hester v. Continental Brew¬ ing Co. 161 Pa. 473, 24 L.R.A. 247, 41 Am. St. Rep. 894, 29 Atl. 102; Texas Standard Oil Co. v. Adoue, 83 Tex. 650, 15 L.R.A. 598, 29 Am. St. Rep. 690, 19 S. W. 274; John D. Park & Sons Co. v. Rational Wholesale Druggists’ Asso. 50 N. Y. Supp. 1064; People v. Milk Exchange, 145 N. Y. 267. 27 L.R.A. 437, 45 Am. St. Rep. 609, 39 N. E. 1062; Emery v. Ohio Candle Co. 47 Ohio St. 320, 21 Am. St. Rep. 819, 24 N. E. 660; Chapin v. Broion Bros. 83 Iowa, 156, 12 L.R.A. 428, 32 Am. St. Rep. 297, 48 N. W. 1074; DeWitt Wire-Cloth Co. v. New Jer¬ sey ■ Wire-Cloth Co. 16 Daly, 529, 14 N. Y. Supp. 277; United States v. E. C. Knight Co. 156 U. S. 1, 39 L. ed. 325, 15 Sup. Ct. Rep. 249; United States v. Trans-Missouri Freight Asso. 166 U. S. 290, 41 L. ed 1007, 17 Sup. Ct. Rep. 540; United States v. Joint Traffic Asso. 171 U. S. 505, 43 L. ed. 259, 19 Sup. Ct. Rep. 25 ; Addyston Pipe & Steel Go. v. United States, 175 U. S. 228, 44 L. ed. 143, 20 Sup. Ct. Rep. 96; Barron v. Baltimore, 7 Pet. 247, 8 L. ed. 674; Fox 199 U. S.

v. Ohio, 5 How. 434, 12 L. ed. 224 ; Withers v. Buckley, 20 How. 90, 15 L. ed. 819; Tivitchell v. Pennsylvania, 7 Wall. 326, 19 L. ed. 224; Pumpelly v. Green Bay & M. Canal Co. 13 Wall. 176, 20 L. ed. 560; Spies v. Illinois (Ex parte Spies) 123 U. S. 166, 31 L. ed. 86, 8 Sup. Ct. Rep. 21; West River Bridge Co. v. Dix, 6 How. 531, 12 L. ed. 545; State v. Phipps, 50 Kan. 609, 18 L.R.A. 657, 4 Inters. Com. Rep. 299, 34 Am. St. Rep. 152, 31 Pac. 1097; Paul v. Virginia, 8 Wall. 168, 19 L. ed. 357 ; Mis¬ souri P. R. Co. v. Mackey, 127 U. S. 205, 32 L. ed. 107, 8 Sup. Ct. Rep. 1161; Orient Ins. Co. v. Daggs, 172 U. S. 557, 43 L. ed. 552, 19 Sup. Ct. Rep. 281; Hooper v. Cali¬ fornia, 155 U. S. 648, 39 L. ed. 297, 5 Inters. Com. Rep. 610, 15 Sup. Ct. Rep. 207.

Mr. Charles A. Clark also argued the cause and filed a brief for appellant:

A statute prescribing regulations for actions on insurance policies different from those on other contracts is valid.

Christie v. Life Indemnity d Invest. Co. 82 Iowa, 360, 48 N. W. 94.

A method of assessing railway companies different from the method of assessing other taxpayers is valid.

Central Iowa R. Co. v. Wright County, 67 Iowa, 199, 25 N. W. 128.

The same is true as to express and tele¬ graph companies.

United States Exp. Co. v. Ellyson, 28 Iowa, 370.

A statute establishing the liability of railroad companies to employees for negli¬ gence of coemployees is valid.

McAunich v. Mississippi d M. R. Co. 20 Iowa, 338; Deppe v. Chicago, R. I. d P. R. Co. 36 Iowa, 52.

State banks may be assessed for taxation differently from national banks.

Primghar State Bank v. Rerick, 96 Iowa, 238, 64 N. W. 801.

The classification in the statute assailed is not such as to be open to the objection of such want of uniformity as to deny the equal protection of the law.

Field v. Barber Asphalt Paving Co. 194 U. S. 621, 622, 48 L. ed. 1153, 1154, 24 Sup. Ct. Rep. 784; Kentucky Railroad Tax Cases, 115 U. S. 321, 29 L. ed. 414, 6 Sup. Ct. Rep. 57; Hayes v. Missouri, 120 U. S. 68, 30 L. ed. 578, 7 Sup. Ct. Rep. 350; Gulf, C. d S. F. R. Co. v. Ellis, 165 U. S. 150,

41 L. ed. 666, 17 Sup. Ct. Rep. 255; Magoun v. Illinois Trust d Sav. Bank, 170 U. S. 283,

42 L. ed. 1^37, 18 Sup. Ct. Rep. 594.

Messrs. John G. Johnson and Janies

C. Davis argued the cause, and, with Mr. George H. Carr, filed a brief for appellees:

The legislature of a state may not, under the guise of protecting public interests, arbi¬ trarily interfere with private business, or

247

407

Supreme Court of the United States.

Oct. Term,

impose unusual and unnecessary restrictions upon lawful occupations.

Lawton v. Steele , 152 U. S. 133, 38 L. ed. 385, 14 Sup. Ct. Rep. 499; Allgeyer v. Louisiana, 165 U. S. 578, 41 L. ed. 832, 17 Sup- Ct. Rep. 427; Lochner v. New York, 198 U. S. 45, 49 L. ed. 937, 25 Sup. Ct. Rep. 539; State ex rel. Zillmer v. Kreutzberg, 114 Wis. 530, 58 L.R.A. 748, 91 Am. St. Rep. 934, 90 N. W. 1098.

Under the guise of police regulation, the rights of persons and property cannot be in¬ vaded by legislative action; and, when such action takes away the property of a citizen, or interferes with his personal liberty, it is the province of the courts to determine whether it is an appropriate remedy for the preservation of the safety and welfare of society.

Ritchie v. People, 155 Ill. 98, 29 L.R.A. 79, 46 Am. St. Rep. 315, 40 N. E. 454; Bessette v. People, 193 Ill. 334, 56 L.R.A. 558, 62 N. E. 219; Re Jacobs, 98 N. Y. 98, 50 Am. Rep. 636; People v. Marx, 99 N. Y. 377, 52 Am. Rep. 34, 2 N. E. 29; People v. Oillson, 109 N. Y. 389, 4 Am. St. Rep. 465, 17 N. E. 343.

Reasonable contracts in restraint of trade are not void or against public policy. This is especially true where the subject of the contract is not a prime necessity or staple of commerce.

Oregon Steam Nav. Co. v. Winsor, 20 Wall. 69, 22 L. ed. 319; Fowle v. Park, 131 U. S. 97, 33 L. ed. 74, 9 Sup. Ct. Rep. 658; Chicago, St. L. d N . 0. R. Co. v. Pullman Southern Car Co. 139 U. S. 89, 35 L. ed. 101, 11 Sup. Ct. Rep. 490; Northern Se¬ curities Co. v. United States, 193 U. S. 361, 48 L. ed. 710, 24 Sup. Ct. Rep. 436; Smiley v. Kansas, 196 U. S. 454, 49 L. ed. 550, 25 Sup. Ct. Rep. 289; Central Shade Roller Co. v. Cushman, 143 Mass. 353, 9 N. E. 629 ; Herriman v. Menzies, 115 Cal. 16, 35 L.R.A. 318, 56 Am. St. Rep. 82, 44 Pac. 660, 46 Pac. 730; Manchester d L. R. Co. v. Con¬ cord R. Corp. 66 N. H. 100, 9 L.R.A. 689,

3 Inters. Com. Rep. 319, 49 Am. St. Rep. 582, 20 Atl. 385.

Cases in which legislation has been held to be in contravention of the 14th Amend¬ ment of the Constitution of the United States are, (a) where the classification has been one of arbitrary selection; (b) where the liberty of contract has been invaded arbitrarily and without just cause.

Cooley, Const. Lim. 5th ed. §§ 484-486, 6th ed. pp. 481-483; Allgeyer v. Louisiana, 165 U. S. 578, 41 L. ed. 832, 17 Sup. Ct. Rep. 427; Gulf, C. d S. F. R. Co. v. Ellis, 165 U. S. 150, 41 L. ed. 666, 17 Sup. Ct. Rep. 255; Cotting v. Kansas City Stock Yards Co. (Cotting v. Godard) 183 U. S. 79, 46 L. ed. 92, 22 Sup. Ct. Rep. 30; Connolly v. 248

Union Sewer Pipe Co. 184 U. S. 540, 46 L. ed. 679, 22 Sup. Ct. Rep. 431; Lochner v. New York, supra; State v. Haun, 61 Kan. 146, 47 L.R.A. 369, 59 Pac. 341; Frorer v. People, 141 Ill. 171, 16 L.R.A. 495, 31 N. E. 397; State v. GooduAll, 33 W. Va. 179, 6 L.R.A. 623, 25 Am. St. Rep. 863, 10 S. E. 285; State v. Loomis, 115 Mo. 307, 21 L.R.A. 789, 22 S. W. 350; Godcharles v. Wigeman, 113 Pa. 431, 6 Atl. 354; Stratton Claimants v. Morris Claimants ( Dibrell v. Lanier ) 89 Tenn. 497, 12 L.R.A. 70, 15 S. W. 87 ; State ex rel. Zillmer v. Kreutzberg, supra; Republic Iron ct Steel Co. v. State, 160 Ind. 379, 62 L.R.A. 136, 66 N. E. 1006; Vanzant v. Waddel, 2 Yerg. 260; Millett v. People, 117 Ill. 294, 57 Am. Rep. 869, 7 K. E, 631; Ritchie v. People, supra; Harding v. People, 160 Ill. 459, 32 L.R.A. 445, 52 Am. St. Rep. 344, 43 N. E. 624; Eden v. People, 161 Ill. 296, 32 L.R.A. 659, 52 Am. St. Rep. 365, 43 N. E. 1108; Chicago v. Netchcr, 183 Ill. 104, 48 LJl.A. 261, 75 Am. St. Rep. 93, 55 N. E. 707; Bailey v. People, 190 Ill. 28, 54 L.R.A. 838, 83 Am. St. Rep. 116, 60 N. E. 98; Johnson v. St. Paul d D. R. Co. 43 Minn. 222, 8 L.R.A. 419, 45 N. W. 156; Sutton v. State, 96 Tenn. 696, 33 L.R.A. 589, 36 S. W. 697 ; State v. Gar- broski, 111 Iowa, 498, 56 L.R.A. 570, 82 Am. St. Rep. 524, 82 N. W. 959; State v. Jack- man, 69 N. H. 318, 42 L.R.A. 438, 41 Atl. 347 ; South d North Ala. R. Co. v. Morris, 65 Ala. 193; Chicago, St. L. d N. O. R. Co. v. Moss, 60 Miss. 641 ; Wilder v. Chicago d W. M. R. Co. 70 Mich. 382, 38 N. W. 289; St. Louis, I. M. d S. R. Co. v. Williams, 49 Ark. 492, 5 S. W. 883; San Antonio d A. P. R. Co. v. Wilson, 4 Tex. App. Civ. Cas. (Willson) § 323, 19 S. W. 910; Wallace v. Georgia, C. d N. R. Co. 94 Ga. 732, 22 S. E.' 579; Neio York L. I\ns. Co. v. Smith, (Tex. Civ. App.) 41 S. W. 680; Street v. Varney Electrical Supply Co. 160 Ind. 338, 61 L.R.A. 155, 98 Am. St. Rep. 325, 66 N. E. 895; People ex rel. Rodgers v. Coler, 166 N. Y. 1, 52 L.R.A. 814, 82 Am. St. Rep. 605, 59 N. E. 716; State v. Fire Creek Coal d Coke Co. 33 W. Va. 188, 6 L.R.A. 359, 25 Am. St. Rep. 891, 10 S. E. 288.

Mr. Justice Holmes delivered the opinion of the court:

This is a bill brought by a number of fire insurance companies, incorporated in states other than Iowa, to enjoin the auditor of that state from enforcing §§ 1754, 1755, and 1756 of the Iowa Code, 1897. The ground of the bill is that these sections are invalid under the state Constitution and the 14th Amendment of the Constitution of the Unit¬ ed States. There is a reference also to arti¬ cle 1, § 10, and an oblique suggestion that the law impairs the obligation of contracts.

199 U. S.

Cabkoix y. Geeenwich Ins. Co.

407-409

The defendant demurred, and the circuit court issued an injunction as prayed, which was made perpetual by final decree. 125 Fed. 121. Thereupon the defendant ap¬ pealed to this court.

By § 1754 “it shall be unlawful for two or more fire insurance companies doing busi¬ ness in this state, or for the officers, agents, or employees of such companies, to make or enter into any combination or agreement re¬ lating to the rates to be charged for insur¬ ance, the amount of commissions to be al¬ lowed agents for procuring the same, or the manner of transacting the fire insurance business within this state; and any such company, officer, agent, or employee violat-

ing this provision ‘shall be guilty of a mis¬ demeanor,” and a fine is imposed for each of¬ fense. By § 1755 it is made the duty of the auditor of state to summon for examination, under oath, any officer, agent, or employee suspected of violating § 1754, and if he de¬ termines that the company is guilty, or if the officer or agent fails to appear, to re¬ voke the authority of the company to do business in the state for one year. By § 1756 an appeal is given from the decision of the auditor to the district court, the case to be tried de novo, as equitable causes are tried. By § 1757 the statements made upon the examination before the auditor or coun¬ ty court shall not be used in any criminal prosecution against the person making them.

The bill sets forth the necessity for every insurance company to gather all the experi¬ ence available into one mass, and to analyze and classify it scientifically in order to as¬ certain the true value of risks, and that it will add greatly to the expense if each com¬ pany is required to employ a separate person to do the work. It charges, upon informa¬ tion and belief, that if the plaintiffs at¬ tempt to combine their experience and to employ the same person to analyze it, the auditor will summon them and revoke their authority to do business in the state. It further alleges that the plaintiffs desire not only to do what has been stated for their guidance in establishing rates, but to agree what classes of risks are noninsurable, how various risks shall be classified, and as to other matters relating to the manner of do¬ ing business. It repeats the charge, upon information and belief, that if the plaintiffs proceed in this manner the auditor will or¬ der an examination and revoke their li¬ censes, and prays for an injunction against enforcing in any manner the above-men¬ tioned sections of the Iowa Code. The cir¬ cuit court considered that the statute was not invalid under the Constitution of Iowa, but held that the prohibitions of agreements as to the amount of commissions to be al¬ lowed, or as to the manner of transacting 199 U. S.

the fire insurance business in the state, were contrary to the 14th Amendment.

While waiving a discussion of the clause against combinations *as to rates, it seem-

ingly regarded the provisions of § 1754 as inseparable, and issued a general injunction forbidding the enforcement against the plaintiffs of §§ 1754, 1755, and 1756.

We assume, for purposes of decision, that the bill means that the auditor threatens and intends to enforce the act in case the plaintiffs do what they desire to do, and that if § 1754 is contrary to the Constitu¬ tion of the United States, a proper case for an injunction is made out. Osborn v. Bank of United States, 9 Wheat. 738, 839, 840, 6 L. ed. 204, 228. See Cleveland v. Cleveland City R. Co. 194 U. S. 517, 531, 48 L. ed.

1102, 1106, 24 Sup. Ct. Rep. 756; Detroit v. Detroit Citizens’ Street R. Co. 184 U. S. 368,

378, 46 L. ed. 592, 600, 22 Sup. Ct. Rep. 410.

We assume further that the position of the plaintiffs is not affected by the fact that they are foreign corporations. The act is in general terms, and hits all insurance companies. If it is invalid as to some, it is invalid as to all. United States v. Ju Toy,

198 U. S. 253, 262, 263, 49 L. ed. 1040, 1043,

1044, 25 Sup. Ct. Rep. 644. That the re¬ quirements of the act might have been made conditions to foreign companies’ doing busi¬ ness in the state (Fidelity Mut. Life A sso. v. Mettler, 185 U. S. 308, 46 L. ed. 922, 22 Sup. Ct. Rep. 662; Waters-Pierce Oil Co. v. Texas, 177 U. S. 28, 44 L. ed. 657, 20 Sup.

Ct. Rep. 518) is immaterial, since as we understand the statute, the legislature did not attempt to reach the result in that way.

A company lawfully doing business in the state is no more bound by a general uncon¬ stitutional enactment than a citizen of the state. W. W. Cargill Co. v. Minnesota, 180 U. S. 452, 45 L. ed. 619, 21 Sup. Ct. Rep.

We pass to the question upon which the circuit court decided the case; namely, the constitutionality of § 1754, the only section which we find it necessary to consider. Whatever may be thought of the policy of such attempts, it cannot be denied in this court, unless some of its decisions are to be overruled, that statutes prohibiting combi¬ nations between possible rivals in trade may be constitutional. The decisions concern not only statutes of the United States (Northern Securities Co. v. United States,

193 U. S. 197, 48 L. ed. 679, 24 Sup. Ct. Rep.

436; Swift & Co. v. United States, 196 U.

S. 375, 49 L. ed. 518, 25 Sup. Ct. Rep. 276), but also state laws of similar import (Smiley v. Kansas , 196 U. S. 447, 49 L. ed.

546, 25 Sup. Ct. Rep. 289; National Cotton Oil Co. v. Texas, 197 U. S. 115, 49 L. ed.

689, 25 Sup. Ct. Rep. 379).

249

410-412

Supreme Court of the United States.

Oct. Term,

*In view of these cases further discussion is unnecessary; but we will add a few words. While we need not affirm that in no instance could a distinction be taken, ordi¬ narily if an act of Congress is valid under the 5th Amendment it would be hard to say that a state law in like terms was void un¬ der the 14th. It is true that, by the pro¬ vision in the body of the instrument, Con¬ gress has power to regulate commerce, and that the act of Congress referred to in the cases cited was passed in pursuance of that power. But even if the 5th Amendment were read as contemporaneous with the original Constitution, the power given in the commerce clause would not be taken to over¬ ride it so far as the 5th Amendment pro¬ tects fundamental personal rights. It is only on the ground that the right to combine at will is a fundamental personal right that it can be held to be protected by the 14th Amendment, from any abridgment by the states. Cincinnati Street R. Co. v. Snell, 193 U. S. 30, 30, 48 L. ed. 604, 607, 24 Sup Ct. Rep. 319. Many state laws which limit the freedom of contract have been sustained by this court, and therefore an objection to this law on the general ground that it limits that freedom cannot be upheld. There is no greater sanctity in the right to combine than in the right to make other contracts. In¬ deed, Mr. Dicey, in his recent work on Law and Public Opinion in England during the Nineteenth Century, indicates that it is out of the very right to make what contracts one chooses, so strenuously advocated by Bentham, that combinations have arisen which restrict the very freedom that Ben¬ tham sought to attain, and which even might menace the authority of the state. If, then, the statute before us is to be over¬ thrown, more special reasons must be as¬ signed.

At the argument before us more special reasons were assigned. It was pressed that there is no justification for the particular selection of fire insurance companies for the prohibitions discussed. With regard to this it should be observed, as is noticed by the appellees, that a general statute of Iowa prohibits all contracts or combinations to fix the price of any article of merchandise or commodity, or to limit the quantity of

*the same produced or sold in the state ( Code of 1897, § 5060), and that this section cov¬ ers fire insurance ( Beechley v. Mulville, 102 Iowa, 602, 63 Am. St. Rep. 479, 70 N. W. 107, 71 N. W. 428). Therefore the act in question does little if anything more than apply and work out the policy of the general law in a particular case. Again, if an evil is specially experienced in a particular branch of business, the Constitution em¬ bodies no prohibition of laws confined to the 250

evil, or doctrinaire requirement that they should be couched in all-embracing terms.

It does not forbid the cautious advance, step by step, and the distrust of generalities which sometimes have 'been the weakness, but often the strength, of English legisla¬ tion. Otis v. Parker, 187 U. S. 606, 610,

611, 47 L. ed. 323, 328, 23 Sup. Ct. Rep.

the possible teachings to be drawn from a practical knowledge of the business con¬ cerned, it is proper that courts should be very cautious in condemning what legisla¬ tures have approved.

If the legislature of the state of Iowa deems it desirable artificially to prevent, so far as it can, the substitution of combina¬ tion for competition, this court cannot say that fire insurance may not present so con¬ spicuous an example of what that legisla¬ ture thinks an evil as to justify special treatment. The imposition of a more spe¬ cific liability upon life and, health insurance companies was held valid in Fidelity Mut.

Life Asso. v. Mettler, 185 U. S. 308, 46 L. ed. 922, 22 Sup. Ct. Rep. 662. See also Mis¬ souri P. R. Co. v. Maclcey, 127 U. S. 205, 32 L. ed. 107, 8 Sup. Ct. Rep. 1161; Orient Ins.

Co. v. Daggs, 172 U. S. 557, 43 L. ed. 552, 19 Sup. Ct. Rep. 281; Otis v. Parker, 187 U. S.

606, 47 L. ed. 323, 23 Sup. Ct. Rep. 168;

Home L. Ins. Co. v. Fisher, 188 U. S. 726,

727, 47 L. ed. 667, 668, 23 Sup. Ct. Rep. 380.

But it is said that, however it may be as to some regulations of fire insurance, these, or at least the last two of them, forbidding agreements as to agents’ commissions and the manner of transacting business, are not to be justified. In order to make this out the scope of the provisions was exaggerated both in the argument and in the bill. The bill seems to assume that the statute forbids insurance companies to obtain and use each other’s experience, or to employ the same person to work up the results. It does not.

It simply forbids an agreement between *the

companies relating to the rates which may be based upon those results. No doubt an agreement between the companies readily would be inferred if they were found all to charge the same rates ; but an agreement be¬ tween the companies is the only thing aimed at, and if they avoid that they escape the law. So it was suggested in argument that they could not employ the same adjuster in case of loss. We do not perceive anything to hinder their doing so, although it may be that they would have to be careful about the terms of his authority. The object of the law, we assume, until the Iowa court shall decide otherwise, is single, — to keep up competition, — and the general language is to be restricted by the specific provisions and to the particular end. Limited as wre

199 U. S

United States v. Utah, N. <fc C. Stage Co.

412-414

understand it to be limited, the statute goes no further than others which have been sus¬ tained, and does not contravene the Consti¬ tution of the United States.

The argument before us very properly was rested on the 14th Amendment. Therefore it is unnecessary to discuss the other ob¬ jections suggested in the bill.

Although we have conceded that the bill makes a case for an injunction if its prem¬ ises are true, it cannot be understood to charge that the auditor will go further than to enforce the act as properly construed. The allegations upon information and be¬ lief, which we have stated, probably mean no more than that the plaintiffs reasonably sup¬ pose that the auditor will do his duty. They are pressed to the verge when they are taken to set forth a threat to do that. They cer¬ tainly do not show that he threatens to do more.

Decree reversed.

Mr. Justice Harlan, concurring:

It is clear from the averments of the bill that the insurance companies had not, prior to the institution of this suit, made any combination or agreement, among them¬ selves, relating to the rates to be charged for insurance, or to the, amount of commis-

sions *to be allowed agents for procuring in¬ surance, or to the manner of transacting fire insurance business within the state. They expressed a desire to make such a combina¬ tion or agreement, but were apprehensive that by doing so they would come into con¬ flict with the state authorities. The auditor had done nothing under the statute, and will have nothing to do in execution of its pro¬ visions unless the insurance companies en¬ ter into the forbidden combination or agree¬ ment. Nevertheless, the plaintiffs came in¬ to court, avowed that they had not as yet violated the statute, but asked to be in¬ formed whether, in the event they conclud¬ ed to do so, their officers, agents, or em¬ ployees could be legally summoned before the state auditor for examination, as pre¬ scribed in § 1755. In other words, in ad¬ vance of anything being done in violation of the statute, or of any steps being taken by the auditor in execution of its provisions, the opinion of the court was asked and ob¬ tained as to its constitutionality. This is a very convenient — and, in my judgment, a mischievous — mode of obtaining the opinion of a court upon an abstract question of the constitutionality of a statute which has not been and may never be violated, and under which no case may ever arise calling for ju¬ dicial interference. It is as if the plain¬ tiffs had addressed a personal communica¬ tion to the court, asking to be informed as to what they might safely do. It seems to me 199 U. S.

that the suit has been prematurely brought.

If the plaintiffs should make such a combi¬ nation as is forbidden by the statute, the time to seek judicial interference in their behalf would be when the state auditor pro¬ ceeds, or in some definite way indicates his purpose to proceed, under § 1755. I think the decree below should be reversed and the bill ordered to be dismissed, upon the ground that no facts existed, at the time the suit was brought, to justify a judicial tribunal in delivering a judgment as to the constitu¬ tionality of the state statute.

As, however, the court considered the case upon the merits, it is appropriate to say that I concur with the court in holding that the section of the statute which is assailed is not invalid. *The business of fire insur-

ance is of such a peculiar character, so in¬ timately connected with the prosperity of the whole community, and so vital to the security of property owners, that it is .com¬ petent for the state to forbid combinations and agreements among fire insurance com¬ panies doing business within its limits, in reference to rates, agents’ commissions, and the manner of transacting their business.

If, in the judgment of the state, the people who desire insurance upon their property are put at a disadvantage when confronted by a combination or agreement among in¬ surance companies, I do not perceive any sound reason why, preserving the individual right of contracting, it may not forbid such combinations and agreements, and thereby enable the insured and insurer to meet on terms of equality. Surely, the state could enact such a regulation with reference to companies organized under its own laws.

If that be so, it cannot be that such a regu¬ lation may not be made applicable to foreign insurance companies doing business in tho state only by its consent.