equal protection of the laws where there is a reasonable basis for the classification.40 For instance, statutes imposing additional liability upon insurance companies for failure to promptly pay claims on policies, either by way of increased damages or as a penalty, or the imposition of attorney's fees, have been almost uniformly upheld in a long line of cases as against the objection that the company was thereby denied the equal protection of the laws.41 Furthermore, regulations applicable only to life insurance companies have been upheld as not violating the equality clause,42 and regulations may, in a proper case, be made applicable to fire insurance companies only as distinguished from life insurance or other companies. So life insurance companies and fraternal associations may be regulated separately without being objectionable as class legislation.44 § 4411. Regulations of telegraph companies. Regulations applicable only to telegraph companies have been upheld as not a denial of the equal protection of the laws. For instance, statutes imposing upon telegraph companies liability for mental anguish resulting from negligence of their servants in handling messages do nois, 185 U. S. 203, 46 L. Ed. 872. 40 Schuermann v. Union Cent. Life Ins. Co., 165 Mo. 641, 653, 65 S. W. 723. 41 German Alliance Ins. Co. v. Hale, 219 U. S. 307, 55 L. Ed. 229; Continental Fire Ins. Co. v. Whitaker, 112 Tenn. 151, 64 L. R. A. 451, 105 Am. St. Rep. 916, 79 S. W. 119. The only case to the contrary which has been discovered is New York Life Ins. Co. v. Smith (Tex. Civ. App.), 41 S. W. 680. 42 Northwestern Nat. Life Ins. Co. v. Riggs, 203 U. S. 243, 51 L. Ed. 168, 7 Ann. Cas. 1104. "The business of life insurance is of such a peculiar character, affects so many people, and is so intimately connected with the common good, that the state creating the insurance corporations and giving them authority to engage in that business may, without transcending the limits of legislative power, regulate their affairs, so far, at least, as to prevent them from committing wrong or injustice in the exercise of their corporate func- 43 Carroll v. Greenwich Ins. Co., 199 U. S. 401, 50 L. Ed. 246, holding constitutional an Iowa statute prohibiting combinations of fire insurance companies as to rates, commissions, and manner of transacting business, on the theory that if the legislature deems it desirable artificially to prevent the substitution of combination for competition, "this court cannot say that fire insurance may not present so conspicuous an example of what that legislature thinks an evil as to justify special treatment." Orient Ins. Co. v. Daggs, 172 U. S. 557, 561, 43 L. Ed. 552, aff'g 136 Mo. 382, 35 L. R. A. 227, 58 Am. St. Rep. 638, 38 S. W. 85. 44 People v. Commercial Life Ins. Co., 247 Ill. 92, 100, 93 N. E. 90. 45 Simmons v. Western U. Tel. Co., 63 S. C. 425, 57 L. R. A. 607, 41 S. E. 521. not deny the equal protection of the laws.46 So the equal protection of the laws is not denied by prohibiting telegraph companies from limiting their liability for negligent failure to deliver a telegram notwithstanding express companies and other common carriers are not so regulated.47 § 4412. Regulations of banks. Regulations of banks are usually sustained where attacked as amounting to a denial of the equal protection of the laws, 48 since the business of banking is so different from other lines of business. Moreover, statutes applicable only to certain kinds of banks are usually upheld upon the theory that there is a valid basis for the discrimination. For instance, regulations may apply, in a proper case, to state banks and not to national banks.49 So there is nothing unequal or discriminatory, it is held, in making regulations as to abandoned deposits applicable only to savings banks as distinguished from other banks.50 The § 4413. Regulations of building and loan associations. placing of building and loan associations in a class by themselves is a natural and not arbitrary classification,51 although there is some conflict in the authorities as to the constitutionality of statutes exempting them from the operation of usury laws.52 § 4414. Excluding receivers of corporations. The fact that a regulation does not apply to a receiver of a company does not, it seems, make it void as a violation of the equal protection clause.53 46 Ivy v. Western U. Tel. Co., 165 Fed. 371, rev'd on other grounds in 177 Fed. 63; Stewart v. Western U. Tel. Co., 93 S. C. 119, 76 S. E. 111; Simmons v. Western U. Tel. Co., 63 S. C. 425, 57 L. R. A. 607, 41 S. E. 521; Nitka v. Western U. Tel. Co., 149 Wis. 106, 49 L. R. A. (N. S.) 337 with note, Ann. Cas. 1913 C 863 with note, 135 N. W. 492. 47 Western U. Tel. Co. v. Commercial Milling Co., 218 U. S. 406, 54 L. Ed. 1088, 36 L. R. A. (N. S.) 220, 21 Ann. Cas. 815. 48 Youngblood v. Birmingham Trust & Savings Co., 95 Ala. 521, 20 L. R. A. 58, 36 Am. St. Rep. 245, 12 So. 579, where statute fixed rate of interest as to bankers only. See also State v. Hurlburt, 82 Conn. 232, 72 Atl. 1079; State v. Wickenhoefer, 6 Pennew. (Del.) 120, 64 Atl. 273; State v. Sher- 49 Dolley v. Abilene Nat. Bank of 50 Provident Inst. for Savings v. Malone, 221 U. S. 660, 55 L. Ed. 899, 34 L. R. A. (N. S.) 1129. 51 Mechanics' Building & Loan Ass'n v. Coffman, 110 Ark. 269, 279, 162 S. W. 1090; People v. Butler St. Foundry & Iron Co., 201 Ill. 236, 256, 66 N. E. 349; Spithover v. Jefferson Building & Loan Ass'n, 225 Mo. 660, 26 L. R. A. (N. S.) 1135, 20 Ann. Cas. 1248, 125 S. W. 766. 52 See textbooks on the subject of building and loan associations. 53 Atlantic Coast Line R. Co. v. 84415. Regulations as to remedies, procedure or punishment. Regulations of corporations as to remedies and procedure may differ from those applicable to natural persons provided there is a reasonable basis for the difference.54 Thus, anti-trust statutes are not unconstitutional because they provide that an individual violating them may be punished by fine and imprisonment and a corporation by fine and forfeiture of its charter.55 And it is held that a statute which gives a remedy for the death of a minor child, against "any private association of persons" or "any corporation," but not against persons in their individual capacity, does not deny the equal protection of the laws, since "there is a reasonable and practicable basis," in the particular case, "for a legislative classification that includes all corporations and all private associations of persons, and does not include individuals acting severally." 56 So statutes may provide different rules as to change of venue when a corporation is a party than when an individual is both plaintiff and defendant,57 and a statute providing that "all railroad and electric companies" shall be sued in the county where the cause of action originated, for damages from injuries to the person or property, has been upheld.58 But mechanics' lien legislation applicable only to public service corporations has been held unconstitutional.59 § 4416. Regulations prohibiting the granting of special privileges or immunities. Some of the state constitutions prohibit the granting of special privileges or immunities. Such provisions, it has been said, "are the antithesis of the Fourteenth Amendment to the Federal Constitution, for while the latter operates to prevent abridgement by State, 135 Ga. 545, 32 L. R. A. (N. S.) 20, 69 S. E. 725. 54 Standard Oil Co. v. Tennessee, 217 U. S. 413, 54 L. Ed. 817, aff'g 120 Tenn. 86, 110 S. W. 565, applying rule to anti-trust statute of Tennessee in so far as it provides for its enforcement against corporations by bill in equity for ouster while individuals are proceeded against as criminals by indictment, etc. ishing corporations for acts tending to establish a monopoly, by fine and dissolution, while individuals committing the same acts are merely fined. State v. Central Lumber Co., 24 S. D. 136, 42 L. R. A. (N. S.) 804, 123 N. W. 504. 56 Davis v. Florida Power Co., 64 Fla. 246, 5 N. C. C. A. 926, Ann. Cas. 1914 B 965 with note, 60 So. 759. 57 Snell v. Cincinnati St. Ry. Co., 60 Ohio St. 256, 54 N. E. 270. 55 State v. Standard Oil Co., 218 Mo. 1, 368, 116 S. W. 902. To same effect see State v. Standard Oil Co. of Kentucky, 120 Tenn. 86, 139, 110 S. W. 565, aff'd 217 U. S. 413, 54 L. Ed. 817. There is no denial of the equal protection of the laws by a statute pun 58 Central Georgia Power Co. v. Stubbs, 141 Ga. 172, 80 S. E. 636. 59 Vulcanite Paving Co. v. Philadelphia Rapid Transit Co., 220 Pa. 603, 17 L. R. A. (N. S.) 884, 69 Atl. 1117. the states of constitutional rights of citizens of the United States, the former prevents the state from granting privileges or immunities— that is, exemptions from otherwise common burdens-or advantages to any citizens or class of citizens which, upon the same terms-that is under like circumstances and conditions-shall not equally belong to all citizens. One section prevents the curtailment of the constitutional rights of citizens, and the other prohibits the enlargement of the rights of some in discrimination against others; but so long as all are treated alike, under like circumstances, neither section is violated." 60 The governing rules applicable to this constitutional provision should be sought in the preceding sections relating to equal protection of the laws. VI. PARTICULAR REGULATIONS OTHER THAN THOSE RELATING TO RATES § 4417. General considerations. Whether particular regulations are authorized, within the rules already set forth in this chapter, can only be referred to in a brief and very general way, without attempting to go into details or to include all the decisions as to whether particular regulations of railroad, street railroad, telegraph, telephone, gas, etc., companies by the legislature, public service commission, or municipality, are valid. However, sufficient of the law is stated herein to show the general tendency of the law and the general scope of its application to particular regulations. Some of the regulations set forth herein are a part of the statutes in the various states creating public service commissions, other regulations are those imposed by general statutes, while still other regulations noticed are those imposed by a public service commission or by a municipal corporation. But without regard to what body makes the regulation, the basis therefor is the police power of the state, either exercised by the legislature itself, or, such power being delegated to the public service commission or to the municipal corporation, by such commission or municipality.61 Among police regulations which have been sustained are those forbidding contracts by a public service company limiting their liability for their own negligence.62 60 Hammer v. State, 173 Ind. 199, 24 L. R. A. (N. S.) 795, 140 Am. St. Rep. 248, 21 Ann. Cas. 1034, 89 N. E. 850. See also §§ 173, 230, 236, supra. The legislature has no power to exempt any particular corporation from the operation of the general law, statutory or common. Milton V. Bangor R. & Elec. Co., 103 Me. 218, 15 L. R. A. (N. S.) 203, 125 Am. St. Rep. 293, 68 Atl. 826. 61 Municipalities, in granting street franchises, cannot divest themselves of this power to regulate. 3 McQuillin, Municipal Corporations, § 953. 62 Western U. Tel. Co. v. Commercial Milling Co., 218 U. S. 406, 54 L. Ed. 1088, 36 L. R. A. (N. S.) 220, 21 § 4418. Requiring certificate of public convenience and necessity. The statutes in many states require all or certain public service corporations, or at least railroad companies, as a condition precedent to the exercise of the powers conferred upon them or to the right to commence construction of the road or plant, to first procure a certificate of public convenience and necessity. Such a provision is contained in most of the public utility acts, including those of California, Idaho, New York, Ohio and Wisconsin.63 Such requirement is often extended not only to railroad companies but also to telegraph, telephone, gas, water and electric light companies.64 In Idaho, such a provision was upheld as constitutional as against the objections that the legislature has no power to restrict competition of public utilities through such a commission, that legislative power was thereby delegated, and that it impaired contract rights secured by a franchise.65 Whether the public convenience and necessity requires the construction of the proposed utility is a question of fact depending upon a great variety of facts and circumstances.66 § 4419. Requiring consent of board or commission to issuance of stock or securities by public service corporation. Statutes requiring the consent or authority of a certain board or commission to the issuance of stock and securities by public service corporations have already been treated of in a preceding volume, so far as the issuance of bonds is concerned, and also so far as the general nature of such regulations is concerned.67 Such statutes have been held applicable, inter alia, to an increase of capital stock.68 § 4420. Requiring consent of commission to transfer of property of public service corporation or consolidation of corporations. In some states, a transfer of all the property of a public service corpora Ann. Cas. 815, aff 'g 151 Mich. 425, 115 63 See review of statutes in Idaho Power & Light Co. v. Blomquist, 26 Idaho 222, 238, Ann. Cas. 1916 E 282, 141 Pac. 1083. 64 See Inhabitants of Weston v. Board of Railroad Com 'rs, 205 Mass. 94, 91 N. E. 303, street railway company. 65 Idaho Power & Light Co. v. Blomquist, 26 Idaho 222, Ann. Cas. 1916 E 282 with note, 141 Pac. 1083, applying rule to electric light company. VII Priv. Corp.-25 |