§ 4404. Regulations applicable only to corporations. Regulations applicable only to corporations, and excluding individuals. violate the equal protection clause where there is no basis for the discrimination.80 The question then is whether there actually is any reasonable basis for discrimination, and in answering this some of the courts have gone far to find a basis for discrimination so as to uphold the regulation, while other courts have strictly applied the constitutional limitation. In a proper case, it is settled that a regulation may apply only to corporations without being a denial of the equal protection of the laws.81 In regard to this matter, the governing rule is well stated by Justice Pitney in a late federal decision as follows: "Of course, corporations may not arbitrarily be selected in order to be subjected to a burden to which individuals would as appropriately be subject. Classification must be reasonable; that is to say, it must be based upon some real and substantial distinction having a just relation to the legislative object in view. But here, as in other questions of alleged conflict with constitutional requirements, every reasonable intendment is in favor of the validity of the legislation under attack. Corporations, unlike individuals derive their very right to exist from the laws of the State; they have perpetual succession; and they act only by agents, and often under circumstances where the agency is not manifest. The legislature may reasonably have concluded that, for these and other reasons, corporations are peculiarly apt instruments for establishing and effectuating those trusts and combinations against which the prohibition of the statute is directed, and that their business affiliations are not so easily discovered and traced as those of individuals, and that there was therefore a peculiar necessity and fitness in annually requiring from each corporation a solemn assurance of its non-participation in the prohibited practices."' 82 So it is held proper for a regulation to

80 Louisville & N. R. Co. v. Railroad Commission of Tennessee, 19 Fed. 679.

81 Hammond Packing Co. v. Arkansas, 212 U. S. 322, 343, 53 L. Ed. 530, 15 Ann. Cas. 645, aff'g 81 Ark. 519, 126 Am. St. Rep. 1047, 100 S. W. 407, 1199; Pittsburgh, C., C. & St. L. R. Co. v. Montgomery, 152 Ind. 1, 69 L. R. A. 875, 71 Am. St. Rep. 301, 49 N. E. 582.

Rule was applied to income tax on corporations in Flint v. Stone Tracy

Co., 220 U. S. 107, 158-167, 55 L. Ed. 389, Ann. Cas. 1912 B 1312.

For note on "Validity of statutes regulating time. of payment of wages,'' see Ann. Cas. 1916 B 135.

82 Mallinckrodt Chemical Works v. Missouri, 238 U. S. 41, 55, 59 L. Ed. 1192, aff'g 249 Mo. 702, 156 S. W. 967, holding statute requiring officers of corporations to file annually an affidavit that the corporation has not participated in any pool, trust or combination, under penalty of forfeiture

apply only to railroad "corporations" without regard to whether a regulation applicable to all corporations deprives them of the equal protection of the laws because not applicable to natural persons and individuals, 83

Requiring corporations to pay their employees semimonthly, or like regulations, have been held not to deprive them of the equal protection of the laws although the regulation is not extended to natural persons,84 on the theory that "persons performing labor for individuals usually maintain some degree of personal acquaintance with their employers and know their business ability and reputation for paying their debts" while employees of corporations "frequently do not know who the shareholders are" and they, in some states, have nothing but the corporate property to look to for payment.85 But a statute forbidding, under penalty, "joint-stock companies, associations and corporations," but not individuals, from discharging, or threatening to discharge, employees for voting or not voting at any election, or for trading or not trading with any particular person or class of persons, has been held by the Tennessee Supreme Court to be invalid as class legislation. In this case, the court said: "New burdens and restrictions are placed upon corporations, the property of which belongs to individual shareholders, which are not placed upon natural persons engaged in the same business, conducted in the same way, and at the same place. We can see no good reason or natural and reasonable basis for this discrimination. None has been suggested or can be suggested, for they do not exist. The application of the statute is made to depend solely upon whether the employer

of charter or right to do business in the state, does not deprive corporations of the equal protection of the laws.

"The placing of corporations in a class by themselves and requiring them to file the anti-trust affidavit, leaving individuals and partnerships simply liable to the penalties provided for by the act, is not an illegal or arbitrary classification." People v. Butler St. Foundry & Iron Co., 201 Ill. 236, 256, 66 N. E. 349.

83 Aluminum Co. v. Ramsey, 222 U. S. 251, 56 L. Ed. 185, aff'g 89 Ark. 522, 117 S. W. 568. See also Tullis v. Lake Erie & W. R. Co., 175 U. S. 348, 44 L. Ed. 192.

84 Arkansas Stave Co. v. State, 94

Ark. 27, 27 L. R. A. (N. S.) 255, 140 Am. St. Rep. 103, 125 S. W. 1001; State v. Missouri Pac. R. Co., 242 Mo. 339, 147 S. W. 118; Wynne v. Seaboard Air Line Ry., 96 S. C. 1, Ann. Cas. 1916 B 133 with note, 79 S. E. 521. Contra, Smith v. Ohio Oil Co., 43 Ind. App. 735, 86 N. E. 1027, following Toledo, St. L. & W. R. Co. v. Long, 169 Ind. 316, 124 Am. St. Rep. 226, 82 N. E. 757, and see Cleveland, C., C. & St. L. R. Co. v. Schuler, 182 Ind. 57, L. R. A. 1915 A 884, 105 N. E. 567, holding a like statute applicable only to railroad companies to be invalid as class legislation.

85 State v. Missouri Pac. R. Co., 242 Mo. 339, 370, 147 S. W. 118.

is a natural or artificial person, between which, within the protection of the constitutional provisions invoked, there is no distinction. The distinction made is in the character of the employer, and not in that of the employment or business conducted.

We do not hold that there may not be a classification of corporations, or of employers, for that question is not here involved. Where such classification is natural and reasonable, and based upon some distinctive difference in the business of the several classes, a difference peculiar to and inhering in its very nature, it is valid, and will be sustained." 86

Statutes creating enlarged liability on the part of corporations for injuries to employees but which exclude employees of individuals and copartnerships from their operation have been held unconstitutional because they impose new burdens upon private corporations, while natural persons carrying on a like business and under like circumstances and conditions are left without any such burden, and hence corporations are denied the equal protection of the laws.87 However, statutes making every railroad "corporation" liable for damages sustained by employees or others, have been construed as applicable to "persons" operating railroads as well as corporations, so that the question does not arise as to their validity if they applied only to corporations.88

The fact that the remedy given by a statute for the production of books and papers and the examination of witnesses is confined to corporations and joint stock associations, and does not extend to individuals, has been held not to deprive corporations of the equal protection of the laws.89 But a statute prohibiting the employment of aliens by corporations, but which makes no such prohibition as to individuals, has been held to violate the equality clause,90 as have provisions as to liability for attorney's fees, made applicable only in suits against corporations.9

91

86 State v. Nashville, C. & St. L. R. Co., 124 Tenn. 1, Ann. Cas. 1912 D 805, 135 S. W. 773.

87 Bedford Quarries Co. v. Bough, 168 Ind. 671, 674, 14 L. R. A. (N. S.) 418, 80 N. E. 529; Lavallee v. St. Paul, M. & M. Ry. Co., 40 Minn. 249, 41 N. W. 974; Ballard v. Mississippi Cotton Oil Co., 81 Miss. 507, 62 L. R. A. 407, 95 Am. St. Rep. 476, 34 So. 533.

88 Pittsburgh, C., C. & St. L. Ry. Co. v. Lightheiser, 168 Ind. 438, 467, 78 N. E. 1033; Bucklew v. Central Iowa

Ry. Co., 64 Iowa 603, 21 N. W. 103; Schus v. Powers-Simpson Co., 85 Minn. 447, 452, 69 L. R. A. 887, 89 N. W. 68.

89 Hammond Packing Co. v. Arkansas, 212 U. S. 322, 349, 53 L. Ed. 530, 15 Ann. Cas. 645, aff'g 81 Ark. 519, 126 Am. St. Rep. 1047, 100 S. W. 407, 1199.

90 In re Case, 20 Idaho 128, 116 Pac. 1037.

91 Chicago, St. L. & N. O. R. Co. v. Moss & Co., 60 Miss. 641, and see § 4425, infra.

11

In California, a statute applicable only to corporations which gave
a lien for wages on all the corporate property in preference to all
other liens in case of the failure of a corporation to pay its employees
monthly was held unconstitutional and the court said: "It is claimed
that corporations are a class, and that classifications can be made, and
that a law is not unconstitutional if it affects all of a class. While
this is true, yet the classification must be founded upon differences
either defined by the Constitution or natural, or which will suggest
a reason which might naturally be held to justify the diversity of
legislation.
Arbitrary selection can never be justified by
In this case there can be no reason

calling it classification.
why a corporation doing business in this state should have its prop-
erty subjected to a lien unless the property of other persons in the
state under like circumstances is subjected to the same kind of a
lien.'' 92 In a federal court, however, the same California statute
was upheld as not a denial of the equal protection of the laws.93

§ 4405. Regulations applicable only to certain class of corporations. Legislation may be directed to a particular class of corporations, and liabilities may be imposed upon them not imposed upon any other person or corporation, if the conditions applicable to them do not apply to all others, or if there is some special reason why they should be subjected to the particular restraint or liability imposed.94 Thus, it is held that a statute imposing liability on stockholders of corporations for the debts of the company is not a denial of the equal protection of the laws because it excepts from its operation corporations organized "for the purpose of carrying on any kind of manufacturing or mechanical business." 95 But a statute providing for the weekly payment of wages by certain corporations therein named, and not applicable to all corporations for pecuniary profits and to individuals, has been held invalid where not based upon any existing distinction or reason not applicable to employers not included within its provisions.96

The application of this rule to regulations of particular compa

92 Johnson v. Goodyear Min. Co., 127 Cal. 4, 47 L. R. A. 338, 78 Am. St. Rep. 17, 59 Pac. 304.

93 Skinner v. Garnett Gold Min. Co., 96 Fed. 735.

94 This statement is so well worded that it is reproduced from a note in 62 Am. St. Rep. 165, 169.

95 Way v. Barney, 116 Minn. 285, 38 L. R. A. (N. S.) 648, Ann. Cas. 1913 A 719, 133 N. W. 801.

96 Braceville Coal Co. v. People, 147 Ill. 66, 22 L. R. A. 340, 37 Am. St. Rep. 206, 35 N. E. 62.

nies, such as railroad companies, mining companies, telegraph companies and the like is stated in following sections.97

§ 4406. Regulations applicable only to certain corporations of a particular class. If there is a reasonable basis for the classification, regulations may be made so as to be applicable only to certain kinds of a particular class of corporations. Thus, a statute in South Carolina requiring fenders on street cars operating north of a line ten miles north of and parallel to the thirty-first meridian has been upheld.98 So a classification of railroads so as to exclude from the operation of the regulation certain roads,99 or a classification of mining companies so as to exclude certain mining companies,1 is upheld where the classification is reasonable.

66

§ 4407. Regulations of common carriers. Regulations are sometimes made applicable only to "common carriers." Whether they violate the equality clause depends largely upon the nature of the regulation. In a federal court, a statute making 'common carriers" liable for injuries to employees although caused by the negligence of a fellow-servant was held unconstitutional as a denial of the equal protection of the laws,2 but the contrary is held in Minnesota on the theory that the classification is not "palpably arbitrary" but is within "the wide range of discretion" which state legislatures are held to possess. 3 In Oklahoma, a provision abrogating the common-law doctrine of fellow-servants in the cases of employees of railroad, street railway, interurban railway and mining companies has been upheld. However, many of the decisions upon this subject of enlarged liability to employees are made to depend upon whether the regulation limits the liability to such employees as are engaged in dangerous work.5 Statutes making "common carriers" liable for a penalty for not promptly paying damage claims are held not a denial of the equal protection of the laws although no other individual or corporation is thus punished.

97 See §§ 4436-4463, infra.

98 Thomas v. Spartanburg Railway, Gas & Electric Co., 100 S. C. 478, 85 S. E. 50.

99 See § 4408, infra. 1 See

4409, infra.

2 Chicago, M. & St. P. Ry. Co. v. Westby, 178 Fed. 619, 47 L. R. A. (N. S.) 97.

121 Minn. 431, 438, 141 N. W. 806. 4 Kreps v. Brady, 37 Okla. 754, 47 L. R. A. (N. S.) 106, 133 Pac. 216.

5 See note in 47 L. R. A. (N. S.) 84 on "Constitutionality of statutes abrogating the fellow-servant rule.''

6 Seaboard Air Line R. R. v. Seegers, 207 U. S. 73, 52 L. Ed. 108, aff'g 73 S. C. 71, 121 Am. St. Rep. 921, 52 3 Majavis v. Great Northern R. Co., S. E. 797. See also Yazoo & M. V.