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Jersey, in transmitting the commission's report to the State legislature urges such a measure as the commission recommends as one that “will work right and justice in the place of the present inequalities and unjust results,” and thus secure “a great advance in the economic problem of solving the questions between labor and capital.”' Assuming these points, and acknowledging the economic need of a different mode of providing for the results of industrial accidents, the question of constitutionality remains. As already indicated, the systems of insurance and compensation each have their supporters on the ground of constitutionality. In this connection attention may be called to the attitude of a number of students of the question at a recent meeting of the American Academy of Political and Social Science, where, in a discussion of the decision of the court of appeals of New York holding the compulsory compensation law of that State unconstitutional, there was a very considerable expression in favor of compulsory State insurance. The opinion of the court in the case referred to is reproduced at pages 253 to 275. It can not be regarded as determinative universally of the principles set forth as controlling in that State, since, as stated by the court itself, they might receive a different construction elsewhere, but, in the view held of the provisions of the State constitution, that could not affect conditions in New York. The question of elective systems of either compensation or insurance would remain open, even if compulsory systems are regarded as in conflict with controlling constitutional principles. Recommendations have been made of bills formally elective but in practical effect compulsory, rendered so by the withdrawal of the employers' customary defenses, which is constitutional. While this action is in a sense coercive, it is pointed out that the employer will prefer to accept a limited liability in a wider range of cases if he is at the same time relieved of the danger of harassing lawsuits for excessive damages, that he will be readily able to insure his liability, and that he can in large measure add the expense to cost of manufacture and distribute the burden among consumers.
As to this last point, objection is made on behalf of street railway companies or others who like them are restricted by their charters or otherwise to a fixed rate of charges. It is assumed that the employee will accept the substitute for damage suits because of its certainty of results as against the uncertainty of the action for damages, because of the promptness with which relief will be afforded, and because the full amount will reach him instead of being in large part consumed in attorneys' fees and court expenses. It is also suggested that a system which would necessarily be elective as to the employer might be constitutionally compulsory to the employee, since by it he was granted new benefits to which the enacting power might lawfully attach the condition of exclusiveness as a remedy. It would appear, however, that a law
making compensation an exclusive remedy and depriving the employee of the power to sue, would take away as valid a right as that which an employer has to have the questions involved determined by due process of law. By election, of course, the parties adopt the provisions of the statutes as a part of the contract of employment, in the exercise of their right to contract freely. It may here be noted that in continental Europe the right to sue is entirely superseded by the provisions of the compensation or insurance systems adopted; and that in Great Britain, while the right to sue is retained, it is of small practical importance, the great majority of injury cases being taken up under the compensation law. It may also be remarked that no country having once adopted a compensation or insurance system has ever returned to the liability system.
The arguments for constitutionality are supported in the reports by citations to cases a considerable number of which are mentioned in the article in Bulletin No. 90, previously referred to. A case not there mentioned but referred to with considerable emphasis in some of the reports is that of Bertholf v. O'Reilly (74 N. Y. 509), in which a law of the State of New York giving redress against owners of saloon property for damages resulting from the sale of liquor by a tenant was upheld as constitutional. This was cited to show that personal fault is not necessary to charge liability, and that new liabilities might be created by statute. The recent opinion of the Supreme Court in the case of Noble State Bank v. Haskell (219 U. S. 104; 31 Sup. Ct. 186), is also cited as setting forth the rights of the State in the exercise of its police power. The law under consideration in this case was that of Oklahoma creating a depositors' guaranty fund to which State banks were to contribute as a means of guaranteeing deposits in banks that may become insolvent. The bank contended that the statute deprived it of property without due process of law in requiring payments for the ultimate or possible benefit of depositors in other banks, thus violating the provisions of the fourteenth amendment to the Federal Constitution. Justice Holmes, speaking for a united court, said:
In answering that question, we must be cautious about pressing the broad words of the fourteenth amendment to a drily logical extreme. Many laws which it would be vain to ask the court to overthrow could be shown, easily enough, to transgress a scholastic interpretation of one or another of the great guaranties in the Bill of Rights. They more or less limit the liberty of the individual, or they diminish property to a certain extent. We have few scientifically certain criteria of legislation, and as it often is difficult to mark the line where what is called the police power of the States is limited by the Constitution of the United States, judges should be slow to read into the latter a nolumus mutare as against the lawmaking power.
The substance of the plaintiff's argument is that the assessment takes private property for private use without compensation. And while we should assume that the plaintiff would retain a reversionary interest in its contribution to the fund, so as to be entitled to a return of what remained of it if the purpose were given up (see Danby Bank v. State Treasurer, 39 Vt., 92, 98), still there is no denying that by this law a portion of its property might be taken without return to pay debts of a failing rival in business. Nevertheless, notwithstanding the logical form of the objection, there are more powerful considerations on the other side. In the first place, it is established by a series of cases that an ulterior public advantage may justify a comparatively insignificant taking of private property for what, in its immediate purpose, is a private use. (Cases cited.) And in the next it would seem that there may be other cases beside the everyday one of taxation, in which the share of each party in the benefit of a scheme of mutual protection is sufficient compensation for the correlative burden that it is compelled to assume. At least, if we have a case within the reasonable exercise of the police power as above explained, no more need be said.
It may be said in a general way that the police power extends to all the great public needs. (Camfield v. United States, 167 U. S., 518;
. 17 Sup. Ct., 864.) It may be put forth in aid of what is sanctioned by usage, or held by the prevailing morality or strong and preponderant opinion to be greatly and immediately necessary to the public welfare. If, then, the legislature of the State thinks that the public welfare requires the measure under consideration, analogy and principle are in favor of the power to enact it.
We can not say that the public interests to which we have adverted, and others, are not suflicient to warrant the State in taking the whole business of banking under its control. On the contrary, we are of opinion that it may go on from regulation to prohibition except upon such conditions as it may prescribe. In short, when the Oklahoma Legislature declares by implication that free banking is a public danger, and that incorporation, inspection, and the above-described cooperation are necessary safeguards, this court certainly can not say that it is wrong.
It has been stated that the court of appeals of New York declared the compulsory compensation law of that State covering designated dangerous employments (Acts of 1910, ch. 674; see Bulletin No. 90, pp. 713, 714) unconstitutional. The case was first heard in the supreme court (Erie County), in which the statute was held to be a valid exercise of the police power of the State, quoting from an opinion of the United States Supreme Court to the effect that the Federal Constitution, “which is necessarily and to a large extent inflexible and exceedingly difficult of amendment, should not be so construed as to deprive the States of the power to so amend their laws as to make them conform to the wishes of the citizens as they may deem best for the public welfare without bringing them into conflict with the supreme law of the land.” (Holden v. Hardy, 169 U. S. 366; 18 Sup. Ct. 383.) The right to classify and legislate for dangerous employments was supported by reference to the decision in the case
Missouri P. R. Co. v. Mackey (127 U. S. 205, 8 Sup. Ct. 1161). Judgment was therefore rendered in favor of the plaintiff (Ives v. South Buffalo Railway Co., 124 N. Y. Supp. 920), whereupon the company appealed, securing a reversal of this judgment. The court of appeals in its opinion (pp. 253 to 275) admits “the cogent economic and sociological arguments which are urged in the support of the statute," but finds itself powerless, under its conception of the limitations set by the State constitution, to do other than hold the law invalid as taking the property of the employer without due process of law. The cases cited by the supporters of the law are considered and the conclusion reached that they do not in fact sustain it as valid.
The conclusion that in considering the question of constitutionality the weight of economic reasoning can not control is of interest in comparing this discussion with the efforts of the courts to justify their departure from the doctrine of respondeat superior in accepting the defense of fellow service. The reasons offered by the courts for this rule have been various, one being found in the view that the master's responsibilty is at an end when he has used ordinary care to employ competent servants. It is held that the employee assumes the risk of the possible negligence of a coemployee as one of the incidents of employment. (Hough v. Texas & P. R. Co., 100 U: S. 213; 25 L. Ed. 612.) In another opinion of our Supreme Court it was said that the obvious reason for exempting the employer from liability is that the employee has or is supposed to have such risks in contemplation when he engaged in the service, and his compensation is arranged accordingly, so that he can not in reason complain if he suffers from a risk which he has voluntarily assumed, and for the assumption of which he is paid. (Chicago, M. & St. P. R. Co. v. Ross, 112 U. S. 377; 5 Sup. Ct. 184.) Another reason is found in alleged grounds of public policy as tending to make the employees more watchful over their own conduct and that of their fellows, thus benefiting employers, employees, and the public alike by the greater care with which they perform their duties. (Chicago, M. & St. P. R. Co. v. Ross, supra.) In close connection herewith is the claim that any marked enlargement of liability to capital would lead to the withdrawal of capital from industrial enterprise, thus reducing the opportunities of employment and inflicting damage upon the whole community. (New Pittsburg Coal & C. Co. v. Peterson, 136 Ind. 398; 35 N. E. 7.) The last two reasons have perhaps been most frequently relied on as supporting the customary rule, though no such results as are therein indicated have followed the adoption of statutes greatly enlarging the rights of employees to recover for injuries following upon industrial accidents.
The finding of unconstitutionality as to the compulsory statute has of course no effect on the elective statute previously enacted; nor