544, 546, 38 Sup. Ct. 359, 62 L. Ed. 875; Moss. v. Ramey, 239 U. S. 538, 546, 36 Sup. Ct. 183, 60 L. Ed. 425; Gasquet v. Lapeyre, 242 U. S. 367, 369, 37 Sup. Ct. 165, 61 L. Ed. 367. Whether there was any substantial change in decision we need not inquire.

There is no other ground which tends even remotely to sustain the writ of error. Writ of error dismissed.

(261 U. B. 149)

DURHAM PUBLIC SERVICE CO. v. CITY
OF DURHAM.

(Argued Jan. 19, 1923. Decided Feb. 19,
1923.)
No. 251.

1. Municipal corporations 434 (6)-Contract held not to grant exemption from liability for paving.

A contract with a street railroad company, providing that the company would be required to bring its roadbed and track to surface grade at its own expense and costs, whenever required, and that nothing therein should be construed to require the company to pave its roadbed, but that it should be required to restore the roadbed to the condition in which it was at the time of laying its track, while imposing no liability for paving, granted no exemption from liability otherwise imposed.

2. Municipal corporations 434 (6)-Exemptions from liability for assessments for improvements must plainly appear.

Exemptions, such as an exemption of a street railroad from liability for paving, must plainly appear, and doubts as to provisions in respect to them must be resolved in favor of

the municipality or the state.

3. Constitutional law 233, 284(1)—Municipal corporations 472-Assessment against street railroad for paving held not to deny due process or the equal protection of the laws.

An assessment of $102.942.30 against a street railway for paving between, and for 18 inches outside, its tracks, as authorized by Pub. Laws N. C. 1915, c. 56, on failure of the company to make the improvement, was not arbitrary or wholly unreasonable, so as to constitute a taking of property without due process of law or a denial of the equal protection of the laws, in violation of the Fourteenth Amendment, though the company's property on the street had a value of only $100,000, while abutting property, against which an assess ment of $89,909.58 was made on a front-foot basis, had an assessed value of $5.083,250, and though the company was put to an expense of $75,108.85 in taking up and relaying its track, and though its railway was being operated at a loss.

*150

rari.

151

Plaintiff in error was incorporated by the Legislature of North Carolina in 1901 (Priv. Laws 1901, c. 25) and empowered to operate car lines in the streets of Durham when so authorized by the municipal authorities. Shortly thereafter and in pursuance of an agreement they granted the necessary authority. The Supreme Court of North Carolina (Durham v. Durham Public Service Co., 182 N. C. *333, 109 S. E. 40) affirmed a judgment of the superior court which sustained an assessment of $102,942.30 made in 1920 against the corporation for the cost of paving that portion of Main street occupied by its tracks. It refused to make the improvement as required by an ordinance; thereupon the city caused the work to be done and assessed the cost against it. The formality of the proceeding is not questioned.

Recovery is resisted upon two grounds: (1) That the original contract under which

the railway lines were constructed and operated exempts the corporation from liability to pave the roadbed. Constitution, § 10, art. 1. (2) That the assessment is excessive, unreasonable and wholly arbitrary and to enforce it would deprive plaintiff in error of property without due process of law and deny it the equal protection of the laws, contrary to the Fourteenth Amendment.

[1, 2] The original contract with the city is dated February 4, 1901, and the claim of exemption rests upon the following clause therein:

The said Durham Traction Company [now the Durham Public Service Company] whenever it shall be required so to do, shall cause its roadbed and track to be brought to surface grade at its own expense and costs, but nothing herein contained shall be construed to quire said Durham Traction Company to pave its roadbed, but it shall be required to restore the roadbed to the condition in which it was at the time of laying said track, provided, however, that if the said city decides to put in or

re

The court below held that while this con

*152

tract imposes *no liability for paving, neither does it grant exemption therefrom. And we agree with their conclusion. Such exemptions must plainly appear. The general rule is that doubts as to provisions in respect of them must be resolved in favor of the municipality or state. Cleveland Electric Ry. Co. v. Cleveland, 204 U. S. 116, 130, 27 Sup. Ct. 202, 51 L. Ed. 399.

Purporting to proceed under "An act relating to local improvements in municipalities," ratified by the General Assembly of North Carolina, February 27, 1915-chapter 56 the governing body of Durham by resolution provided for improving Main street and directed plaintiff in error to pave between and for 18 inches outside its tracks. The company refused to comply and the challenged assessment followed. Among other things the act of 1915 provides:

"Sec. 4. Every municipality shall have power, by resolution of its governing body, upon petition made as provided in the next succeeding section, to cause local improvements to be made and to defray the expense of such improvements by local assessment, by general taxation, and by borrowing, as herein provided. *

"Sec. 6. * * * If the resolution shall provide for a street improvement, it shall direct that any street railway company or other railroad company having tracks on the street or streets or part thereof to be improved shall make such street improvement with such material and of such a character as may be approved by the governing body, in that part of such street or streets or part thereof which the governing body may prescribe, not to exceed. however, the space between the tracks, the rails of the tracks, and eighteen inches in width outside of the tracks of such company, and that unless such improvement shall be made on or before a day specified in such resolution, the governing body will cause such improvement to be made: Provided, however, that where any such company shall occupy such street or streets under a franchise or contract which

*153

*otherwise provided, such franchise or contract shall not be affected by this act, except in so far as this act may be consistent with the provisions of such franchise or contract.

*

*

By agreement of parties, the cause was tried without a jury and the court found the facts. Those so found and presently relied upon to show the arbitrary and unreasonable character of the assessment follow: That the section of Main street over which the assessment extends is 2.02 miles in length and including double tracks there are 2.65 miles of track on Main street; that there are 154 abutting property owners upon this portion of

That the cost to the Traction Company of furnishing new rails and new cross-ties, of taking up and relaying its track on Main street and doing other work preparatory to the plac$75,108.85, which has been paid by the Tracing of the pavement upon Main street was tion Company and which said outlay and expenditure was made at the order of the city of Durham; that during the twelve months ending May 31, 1921, the company's railway showed a loss of $17,388.73 of meeting the operating expense and allowance for depreciation and if the company is required to pay the paving assessment of the city of Durham as demanded, to wit, one-tenth of said assessment each year, with interest, then there will be an additional est and depreciation on same; that the gross expense of one-tenth of $102,942.30 plus interearnings of said company from all sources for

$154

the year ending De*cember 31, 1920, were approximately $540,000, the net earnings $147,000, the company having other valuable property and business not on Main street, including other railway not on Main street.

[3] The court below held the recited facts

insufficient to show that the municipal authorities acted unreasonably or arbitrarily, and we are unable to say that this was error. Counsel concede that the Constitution of North Carolina reserves to the Legislature power to alter or repeal corporate charters; also that, in general, the Legislature either directly or through recognized governmental agencies may impose assessments for local improvements and prescribe the basis of apportionment. But the claim is that the Legislature undertook arbitrarily to direct plaintiff in error to pave more than one-third of the street, while the owners of more valuable property fronting thereon are required to pay out much less and are assessed upon the front-foot basis.

Gast Realty & Investment Co. v. Schneider Granite Co., 240 U. S. 55, 36 Sup. Ct. 254, 60 L. Ed. 523; Hancock v. City of Muskogee, 250 U. S. 454, 39 Sup. Ct. 528, 63 L. Ed. 1081; and Kansas City Southern Ry. Co. v. Road Improvement District, 256 U. S. 658, 41 Sup. Ct. 604, 65 L. Ed. 1151-are cited in support of this insistence; but they do not go so far. The power of the Legislature to make reasonable classifications and to impose a different burden upon the several classes cannot be denied. There are obvious reasons for imposing peculiar obligations upon a railway in respect of streets occupied by its tracks. The facts and circumstances disclosed by the present record are not sufficient to justify us in overruling the judgment of the state court, which held that the assessment

was Lot the result of arbitrary or wholly unreasonable legislative action. Sioux City Street Ry. Co. v. Sioux City, 138 U. S. 98, 107, 108, 11 Sup. Ct. 226, 34 L. Ed. 898; Fair Haven & Westville Ry. Co. v. New Haven, 203 U. S. 379, 388, 389, 27 Sup. Ct. 74, 51 L. Ed. 237; Southern Wisconsin Ry. Co. v. Madison, 240 U. S. 457, 461, 36 Sup. Ct. 400, 60 L. Ed. 739; Great Northern Ry. Co. v. Clara City, 246 U. S. *434, 436, 437, 38 Sup. Ct. 346, 62 L. Ed. 817; Pacific Gas & Elec. Co. v. Police Court, 251 U. S. 22, 25, 26, 40 Sup. Ct. 79, 64 L. Ed. 112; Milwaukee Elec. Ry. Co. v. Milwaukee, 252 U. S. 100, 104, 40 Sup. Ct. 306, 64 L. Ed. 476, 10 A. L. R. 892. Affirmed.

(261 U. S. 146)

#155

UNITED STATES SHIPPING BOARD EMERGENCY FLEET CORPORATION v. SULLIVAN (two cases). (Argued Jan. 4, 1923. Decided Feb. 19, 1923.) Nos. 93, 124.

Courts 394(3)-Proceeding in which state tribunals held there was no evidence to support claim of immunity under federal Constitution and laws not reviewable on writ of error.

In a workmen's compensation proceeding, in which defendant claimed immunity under the Constitution and laws of the United States, on the ground that its employés were employés of the United States, but the state tribunals held that there was no evidence to establish the facts necessary to show that defendant was within the class to which exemption might extend, no controversy over the validity of any treaty, statute, or authority, federal or state, was involved, so as to support a writ of error from the United States Supreme Court under Judicial Code, 8 237, as amended by Act Sept. 6, 1916 (Comp. St. § 1214).

On Petition for Writ of Certiorari to and Writ of Error to the Superior Court of the State of Pennsylvania.

Proceeding under the Workmen's Compensation Law of Pennsylvania by John E. Sullivan for compensation for injuries, opposed by the United States Shipping Board Emergency Fleet Corporation. Compensation was awarded, and appeals were dismissed by the court of common pleas and the Superior Court of Pennsylvania (76 Pa. Super. Ct. 30), and defendant brings error and petitions for certiorari. Writ of error dismissed, and petition denied.

Mr. Solicitor General Beck, of Washington, D. C., for petitioner and plaintiff in error. Mr. Samuel Scoville, Jr., of Philadelphia, Pa., for defendant in error and respondent. Mr. Justice McREYNOLDS delivered the opinion of the Court.

*147

Shipping Board Emergency Fleet Corporation as a motor truck driver, defendant in error Sullivan presented a claim for compensation to the Workmen's Compensation Bureau, Pennsylvania *Department of Labor and Industry. The corporation answered; denied that the injury was of a permanent nature, and asserted that it was not liable for the further reason "that claimant was a direct employee of the United States Shipping Board Emergency Fleet Corporation, and accordingly is a civil employee of the United States of America, and will be compensated for injury under the federal Workmen's Compensation Act, subject to sustaining proof of disability."

The referee found that, while employed by the Fleet Corporation as a chauffeur, Sullivan suffered injuries from a collision in Philadelphia; that neither party had served notice rejecting article 3 of the Compensation Act (Pa. St. 1920, §§ 21924-21927); and awarded compensation.

The Bureau heard the matter de novo, and

affirmed the referee's findings of fact and conclusions of law and dismissed the appeal. It said:

"In the case at bar there is no evidence that claimant was a civil employee of the United States or that he received his wages through the United States Treasury. We cannot infer that such was the case. * While it might be difficult to draw the exact line of demarcation as to when the defendant is acting as a private corporation or is acting for the United States, the burden would be on the defendant to prove if it were acting for the United States that it would be exempt-there is no defense of this kind interposed in this case. We only have the question of law raised by defendant that the Pennsylvania workmen's compensation board has no jurisdiction. We cannot agree with this. In conclusion we hold: That we have jurisdiction, on the ground that the defendant doing business as a corporation in the state of Pennsylvania, an employer of labor in the state of Pennsylvania, is liable for compensation to the claimant in this case under our act. It is neither our duty nor privi*lege to make a collateral investigation as to the ownership of the defendant's capital stock."

*148

Successive appeals, limited by statute to matters of law, were dismissed by the court of common pleas and the Superior Court of Pennsylvania. Sullivan v. United States Shipping Board Emergency Fleet Corporation, 76 Pa. Super. Ct. 30. The latter court-the highest where decision in the proceeding could be had-said

(261 U. S. 140)

MINNESOTA COMMERCIAL MEN'S ASS'N V. BENN.

No. 103.

I. Insurance 125(1)-Contract with mutual company having home office In Minnesota, where application accepted and dues payable, held a Minnesota contract.

The writ of error (No. 124) must be dismissed. The record fails affirmatively to disclose that there was drawn in question the validity of a treaty or statute of, or an authority exercised under, the United States, or the validity of a statute of or an authority exercised under any state, on the ground of their being repugnant to the Constitution, treaties, or laws of the United States within the requirements of section 237 of the Judi

*149

cial Code, as amended by the Act of Sep tember 6, 1916 (Comp. St. § 1214).1 Considering the whole record, it is clear that there was no controversy over the validity of any treaty, statute, or authority, federal or state. Plaintiff in error by its answer claimed a right or immunity under the Constitution and laws of the United States. The state tribunals held that there was no evidence to establish the facts necessary to show that it was within the class to which exemption might extend. Champion Lumber Co. v. Fisher, 227 U. S. 445, 451, 452, 33 Sup. Ct. 329, 57 L. Ed. 591; St. Louis, Iron Mountain & Southern Ry. Co. v. McWhirter, 229 U. S. 265, 276, 33 Sup. Ct. 858, 57 L. Ed. 1179; Straus v. American Publishers' Association, 231 U. S. 222, 233, 34 Sup. Ct. 84, 58 L. Ed. 192, L. R. A. 1915A, 1099, Ann. Cas. 1915A, 369.

Considering the character of the record, we think it unwise to bring up the cause by certiorari with a view to considering the questions said to be involved. The petition therefor (No. 93) is accordingly denied. Writ of error dismissed. Petition for certiorari denied.

1 Section 237: "A final judgment or decree in any suit in the highest court of a State in which a decision in the suit could be had, where is drawn in question the validity of a treaty or statute of, or an authority exercised under the United States, and the decision is against their validity; or where is drawn in question the validity of a statute of, or an authority exercised under any state, on the ground of their being repugnant to the Constitution, treaties, or laws of the United States, and the decision is in favor of their validity, may be re

examined and reversed or affirmed in the Supreme Court upon a writ of error.

Where an application for insurance in a Minnesota mutual insurance company was solicited and recommended by a member not authorized to bind the association, and sent by mail from Kalispel, Mont., where the applicant and the soliciting member resided, to the company's home office in Minneapolis, where the application was accepted, and where assessments and dues were payable, the agreement was a Minnesota contract, made and to be performed there. 2. Courts 12(3)-Court without Jurisdiction to render judgment against foreign company on service on secretary of state, unless company doing business in the state.

A Montana court was without jurisdiction to render judgment against a Minnesota mutual insurance company on service of the summons and complaint on the secretary of state and insurance commissioner, unless the company by doing business in Montana impliedly assented that process might be served upon the secretary of state as its agent.

3. Insurance 16-Foreign mutual insurance company held not doing business in state, so as to be subject to suit.

A Minnesota mutual insurance association was not doing business in Montana, so as to be suable there, merely because one or more members without authority to obligate it solicited

new members, or because it insured lives of persons living in Montana, and mailed notices addressed to beneficiaries at their homes therein, and paid losses by checks from its home office.

On Writ of Certiorari to the Supreme Court of the State of Minnesota.

Action by Minnie Mae Benn, as executrix of Robert J. Benn, deceased, against the Minnesota Commercial Men's Association. A judgment for plaintiff was affirmed by the Supreme Court of Minnesota (149 Minn. 497, 182 N. W. 999), and defendant brings certiorari. Reversed.

Messrs. David F. Simpson and A. V. Rieke, both of Minneapolis, Minn., for petitioner. *Mr. A. A. Tenner, of Minneapolis, Minn., for respondent.

•141

Mr. Justice McREYNOLDS delivered the opinion of the Court.

Petitioner is a mutual assessment, accident, and health insurance company, incorporated under the laws of Minnesota, with many members scattered throughout the Union. It issued a certificate of membership to Robert