State v. Gateway Mortuaries, Inc. , 87 Mont. 225 ( 1930 )

I agree with the general principles of law laid down by the learned Chief Justice, but I cannot agree with his treatment of the case or fact conclusions reached. In my opinion, the majority of the court have brushed aside the fundamental principles governing the consideration of the constitutionality of a statute; have applied the rules applicable to an Act suppressing a lawful business to a mere regulatory statute, and have usurped legislative functions by substituting their individual judgment for that of the legislature.

In addition to the rule announced, that a statute will not be condemned unless its invalidity is shown beyond a reasonable doubt, this court is firmly committed to the rule that it is not concerned with the wisdom, policy or expediency of a law declared by the legislature, and when an Act is challenged, the inquiry is not whether it can be condemned, but whether it can be upheld. (State ex rel. Fenner v. Keating, 53 Mont. 371,163 P. 1156; Wheeler Motter Merc. Co. v. Moon, 49 Mont. 307,141 P. 665; State ex rel. Board v. District Court, 62 Mont. 275,204 P. 600.)

These rules should be borne in mind when we come to consider in what manner we may test the validity and reasonableness of a particular Act.

The principles of public policy and the police power of the state were recognized in government long prior to the adoption of our Constitution, and as the constitutional prohibitions against deprivation of life, liberty or property, without due process of law, from which is deduced the constitutional right to contract, are incorporated in the federal and state "Bill of Rights" by which it was not intended to lay down any novel principles of government, but simply to embody in the Constitution certain guaranties and immunities which we inherited from our English ancestors and which had, from time immemorial, been subject to certain well-recognized exceptions, arising from necessity. (6 R.C.L. 246.) It is clear that the framers of the constitutional guaranties intended that they should be subject to these necessary restrictions for the good of the state, and that a law framed in the proper exercise of the police power constitutes "due process of law." (See State v. Redmon, cited in the majority opinion.)

I take it, as conceded by the majority, that when it is apparent that an evil exists from which the public should be protected, the legislature has power to make reasonable regulatory provisions for its eradication and that the constitutional provisions considered mean no more than that "a state may not, under the guise of protecting the public, arbitrarily interfere with private business or prohibit lawful occupations or impose unreasonable and unnecessary restrictions upon them." (Jay Burns Baking Co. v. Bryan, 246 U.S. 504, 32 A.L.R. 661,68 L. Ed. 813, 44 Sup. Ct. Rep. 412, 413.)

The Act under consideration manifestly does not prohibit the lawful and necessary business of undertaking, nor does it, in any manner, interfere with such business as it has been conducted from time immemorial and as other business enterprises are usually conducted; it does not suppress contracts generally used in the conduct of such a business, but merely prohibits one function of such business and one species of contract. If it may be said that suppression can be read into the Act, it can only be said that it suppresses that exotic, parasitical, recent growth upon the business patterned after Octavus Roy Cohen's fictitious and farcical "Over the River Buryin' Sassiety," making a business, not of burying the dead, but of inducing the credulous to enter into contracts for their burial, at that vague and indefinite time, when the "grim reaper" shall have, at last, gathered them in.

"By prohibition is understood that legislative policy which renders illegal some entire sphere of action or business, and not merely some particular mode or form of it, or merely its exercise at a particular time or in a particular place, so that it would still be possible to engage in the pursuit by an accommodation to the legal requirements. With reference to any particular subject-matter, therefore, partial prohibition constitutes regulation." (Freund on Police Power, 52.)

It seems to me that our question is: Was the legislature faced with a real, not a fanciful, evil to be eradicated, and, if so, was the method adopted so unreasonable as to condemn the Act?

"The question of reasonableness usually resolves itself into this: Is the regulation carried to a point where it becomes prohibition, destruction, or confiscation?" (Freund on Police Power, 61.)

With the law as we have declared it, commanding us not to declare an Act unconstitutional unless it is shown to be "beyond a reasonable doubt," and that the inquiry is not as to whether it can be condemned, but whether it can be upheld, I do not believe that we are justified in coursing far afield to discover situations in which the Act may work a hardship on individuals, or to frame contracts which may be free from some of the evils which the legislature sought to prevent.

It seems to me that, as a guide to approach, the pronouncements of the supreme court of the United States should be at least persuasive. In Munn v. Illinois, 94 U.S. 113,132, 24 L. Ed. 77, it is said: "For our purposes we must assume that, if a state of facts could exist that would justify such legislation, it actually did exist. * * * For us the question is one of power, not of expediency. If no state of circumstances could exist to justify such a statute, then we may declare this one void, * * * but if it could, we must presume that it did. Of the propriety of legislative interference within the scope of legislative power, the legislature is the exclusive judge." I do not advocate going as far as did the court in that case; it seems to me that such a pronouncement is abdicating the right of the courts to determine the reasonableness of the Act, to a great extent, and that, as the modern trend is more liberal, that court may at some future time modify its declaration. However, declarations almost as strong were made in Otis v. Parker,187 U.S. 606, 47 L. Ed. 323, 23 Sup. Ct. Rep. 168, 170, andCentral Lumber Co. v. South Dakota, 226 U.S. 157,57 L. Ed. 164, 33 Sup. Ct. Rep. 66, 67; and in Home Telephone Co. v. LosAngeles, 211 U.S. 265, 53 L. Ed. 176, 29 Sup. Ct. Rep. 50, 55, it is declared that it is "a well-settled rule of constitutional exposition that, if a statute may or may not be, according to circumstances, within the limits of legislative authority, the existence of the circumstances necessary to support it must be presumed."

This last rule, in my opinion, is sound and in conformity with our own declarations quoted above and in the majority opinion.

"Legislation cannot be judged by theoretical standards. It must be tested by the concrete conditions which induced it." (Mutual Loan Co. v. Martell, 222 U.S. 225, Ann. Cas. 1913B, 529, 56 L. Ed. 175, 32 Sup. Ct. Rep. 74, 75; see, also, Tanner v. Little, 240 U.S. 369, 60 L. Ed. 691, 36 Sup. Ct. Rep. 379,384, and Yeiser v. Dysart, 267 U.S. 540, 69 L. Ed. 775,45 Sup. Ct. Rep. 399.)

In the instant case, on account of the short time intervening between the passage of the Act and the writing of the contract in evidence by the defendants then incorporated under the laws of the state, we may reasonably presume that the members of the legislature knew of the existence of this corporation and its purpose to solicit and write such contracts. I venture to say that the instant contract would be declared against public policy by any court in an action brought upon it, and that a business based solely upon the writing of such contracts would be suppressed.

But aside from the instant contract, which is unimportant here, such contracts as are described in the Act have, whenever and wherever they have come to the attention of courts of last resort, been declared, in no uncertain terms, to be contrary to sound public policy. (State ex rel. Attorney General v.Wichita Burial Assn., 73 Kan. 179, 84 P. 757; State v.National Burial Assn., 79 Kan. 28, 98 P. 1134; State ex rel.Fishback v. Globe Casket Co., 82 Wash. 124, L.R.A. 1915B, 976, 143 P. 878, 879; State v. Willett, 171 Ind. 296, 23 L.R.A. (n.s.) 197, 86 N.E. 68, 71; Southwestern Burial Assn. v.Read, (1929) 135 Okla. 151, 63 A.L.R. 704, 274 P. 642; Fikes v. State, 87 Miss. 251, 39 So. 783; Renschler v. State,90 Ohio St. 363, Ann. Cas. 1916C, 114, L.R.A. 1915D, 501, 107 N.E. 758.) May this fact not also have been known to our legislature?

In the Indiana case the court said: "The whole system is, in real design, but the scheme of an undertaker to promote his private business, largely at the expense of persons of small means. A wise public policy demands that the laws be liberally construed to circumvent any attempt, by such bodies, to evade the reasonable and beneficent restraints of the statute."

In the Washington case the court declared: "The contract is not one that the courts will strain the laws to uphold. It is freighted with the greatest possibilities for fraud. The corporation * * * is not required to have or keep any paid-up capital. Its duration is limited * * * the officers * * * may handle and dispose of the funds received * * * in any manner they please. It is certain that many of these certificates will not be ripe for redemption for a number of years, and it is reasonably certain that some of them will survive the life of the corporation itself. If, therefore, the company were permitted to continue the business, and all or any considerable proportion of these certificates were ever redeemed, it will be a consummation unique in human experience."

It seems to me that the reasoning in these cases amply demonstrates that our legislature was faced with a real evil to be combated, and the mere fact that we can conjure up contracts which might not, in our private opinions, be objectionable is no ground for condemning the Act designed to eradicate that evil, or that the Act does not cover the whole field, exempting, as it does, from its provisions oral contracts of like nature.

"A legislature [state] * * * may direct its law against what it deems the evil as it actually exists without covering the whole field of possible abuses, and it may do so none the less that the forbidden act does not differ in kind from those that are allowed. * * * If a class is deemed to present a conspicuous example of what the legislature seeks to prevent, the 14th Amendment allows it to be dealt with, although otherwise and merely logically not distinguishable from others not embraced in the law." (Central Lumber Co. v. South Dakota, above.)

In the exercise of the police power, citizens may, for the public good, be constrained in their conduct with reference to matters in themselves lawful and right. (City of Butte v.Paltrovich, 30 Mont. 18, 104 Am. St. Rep. 698, 75 P. 521; see, also, Rifle Potato Growers' Assn. v. Smith,78 Colo. 171, 240 P. 937; Pohl v. State, 102 Ohio St. 474,132 N.E. 20; Des Moines v. Manhattan Oil Co., 193 Iowa, 1096, 23 A.L.R. 1372, 184 N.W. 823, 188 N.W. 921.)

The choice of method for the eradication of an acknowledged evil lies with the legislature and, although we may disagree as to the wisdom of the choice, we should not for that reason alone condemn the law.

"It by no means is true that every law is void which may seem to the judges who pass upon it excessive, unsuited to its ostensible end, or based upon conceptions of morality with which they disagree" (Otis v. Parker, above); or as put by Mr. Justice Holmes in Arizona Employers' Liability Cases,250 U.S. 400, 432, 6 A.L.R. 1537, 63 L. Ed. 1058, 39 Sup. Ct. Rep. 553,560: "If it is thought to be public policy to put certain voluntary conduct at the peril of those pursuing it, whether in the interest of safety or upon economic or other grounds, I know nothing to hinder." This broad view of public policy might appear to "draw everything into its maw" and prevent judicial interference with legislative action (40 Harvard Law Review, 966), but this situation is prevented by the exercise of the power to declare Acts arbitrary and unreasonable and, therefore, void.

However, when it appears that the legislature was confronted by an actual evil, and has adopted a method of preventing injury therefrom, even though it incidentally condemns certain apparently innocuous transactions, the Act of regulation does not violate any of the constitutional guaranties and a court interferes only by the employment of strong-arm methods, for "as to what extent legislation should interfere in affairs political philosophers have disputed and always will dispute. It is not in our province to engage on either side." (Tanner v. Little, above.)

"The power which the legislature has to promote the general welfare is very great, and [its] discretion * * * in the employment of means to that end, is very large." It is not within the functions of the court "to conduct investigations of facts entering into questions of public policy merely, and to sustain or frustrate the legislative will, embodied in statutes, as they may happen to approve or disapprove its determination of such questions. * * * If all that can be said of this legislation is that it is unwise, or unnecessarily oppressive * * * their appeal must be to the Legislature, or to the ballot-box, not to the judiciary. The latter cannot interfere without usurping powers committed to another department of government." (Powell v. Pennsylvania, 127 U.S. 678, 32 L. Ed. 253,8 Sup. Ct. Rep. 992, 996, 1257.)

On the precise question before us, in discussing "Due Process, Police Power and the Supreme Court," Ray A. Brown (40 Harvard Law Review, 956) says: "It must be apparent that the criteria under which the court proceeds in all of these cases are almost wholly subjective and that no assistance is to be gained from the words of the [Fourteenth] Amendment itself. But if the standards of the court in determining what means are justifiable thus seem to be subjective, what shall be said of the requirement that the statute must not be beyond the boundaries of the police power, subversive of constitutional rights, arbitrary or unreasonable? Whence is the judge to obtain his knowledge of what is for the ``public good,' ``general prosperity' or ``the greatest welfare of the people'? In the main he must either accept the legislative judgment or substitute his own. The Constitution is silent on the subject, save in the due process clause, and here the standard turns back upon itself and becomes a futile whirligig wound up for eternity. The adjectives ``arbitrary, ``unreasonable' and ``oppressive' find no definition in the written law but must be applied in the light of the judge's own mental processes; often the court must content itself with the mere statement that the purpose of the subject-matter of the law is beyond the state's power." This, in my opinion, is a clear exposition of the maze into which the court enters when it attempts to balance the conceivable injury that may be done by permitting a statute to stand against the clear benefit that will accrue to the people, after finding that an evil does exist, and that the method adopted will correct that evil. I am convinced that this power to substitute the judgment of the court for that of the legislature should only be exercised when, as in the GasProducts Case, an Act is "beyond a reasonable doubt" arbitrary, and unreasonable, and strikes at clear fundamental constitutional rights.

Here the legislature, in effect, said: "We have before us a species of contract, coming into use in our state, which has everywhere been declared against public policy; we will, therefore, declare all such contracts illegal and void and fix a penalty for soliciting them." The majority of the court say: "Although the evil may be apparent, we disapprove of the method adopted for eradicating the evil and, therefore, condemn the law."

In the cases cited above, showing the evil of such contracts and declaring them against public policy, the courts, in the absence of legislative action "liberally construed" the law in order to prevent those writing such contracts from operating, by declaring them, in effect, insurance companies operating without complying with the insurance regulations. Whether our state officials and courts will follow this precedent or not is problematical, but the concession that they might is an admission that legislative action was proper.

Freund, in his work on Police Power, justifies the regulation of insurance companies by likening insurance policies to "wagering contracts" and declares that the insurance business becomes legitimate only when undertaken on a large scale by organized capital, and properly restricted. To my mind, the contracts in the Act declared illegal partake more of the nature of wagering contracts than do the ordinary insurance contracts; they are akin to the contracts and transactions prohibited in the regulation of the sale of stocks; (sec. 4032, Rev. Codes 1921); such sales on margin for future delivery (Parker v. Otis,130 Cal. 322, 92 Am. St. Rep. 56, 62 P. 571, 927, affirmed 187 U.S. 606, 47 L. Ed. 323,23 Sup. Ct. Rep. 168; Booth v. People, 186 Ill. 43, 78 Am. St. Rep. 229, 50 L.R.A. 762, 57 N.E. 798, affirmed 184 U.S. 425,46 L. Ed. 623, 22 Sup. Ct. Rep. 425); lotteries, raffles and gift enterprises (secs. 11149, 11150, Rev. Codes 1921); gambling (sec. 11159, Id.); betting on races (sec. 11180, Id.), and confidence games (sec. 11411, Id.). All of these, with the Act under consideration, are in my opinion, statutes "designed in part to protect credulous persons against their own inherent weakness, a weakness akin to the gambler's hope of winning a prize," as was said with reference to the "Blue Sky" Law of Oklahoma. (Hornaday v. State, 21 Okla. Crim. 354, 208 P. 228.)

I cannot agree that the regulation of the undertaking business contained in the Act is "beyond a reasonable doubt" arbitrary or unreasonable; on the contrary, I believe it to be a reasonable regulation within the constitutional power of the state and am firmly convinced that the judgment of the trial court should be affirmed.