author: Eberhardt, J.:—

text:
      {Municipal Court of Chicago. First District.)

    Equitable Mutual Fire Insurance Company, a corporation, vs. A. L. McCrea.
    (February, 1908.)
    1. Fibe Insurance — Foreign Insurance Corporations — Effect of Surplus Line Act of 1903. The law of 1903, in relation to the placing of surplus line insurance with foreign insurance corporations not licensed to do business in the state, not merely permits the agent to act when the conditions provided by the law exist and procure a policy from the unauthorized company but sanctions the issuance of the policy in this state by which the transaction is completed. Thus, all claims arising out of such a policy are enforcible in this state not only by one but by all the parties to it.
    2. Principal and Agent — Duty of Agent in Regard to Money Received on Behalf of Principal Which Has Arisen out of Illegal Transactions. An agent who has received money on behalf of his principal cannot defend against an action brought by the principal to recover such money by setting up that the transaction out of which it arose was illegal.
    3. Maxims — In Pari Delicto — Meaning. The maxim in pari delicto does not mean that parties cannot recover who are both guilty but such as are guilty in equal degree.

      Motion for new trial. Case No. 752. Heard before Judge Max Eberhardt. The facts are stated in the opinion.

      Frederick A. Brown, for plaintiff.

      Ossiaan Cameron, for defendant.
   Eberhardt, J.:—

This ease is pending in this court on a motion for a new trial. The plaintiff obtained a verdict for $2,688.25, representing the amount of premiums collected by the defendant as the agent of the plaintiff, an insurance company organized and doing business under the laws of the Dominion of Canada and which amount the defendant had failed to pay over to said company. The policies were issued by the plaintiff in the course of what is commonly known as the surplus line business, and apparently under and in compliance with an act passed by our general assembly on, etc., and entitled “An act providing for licenses to agents to procure fire policies in unauthorized corporations, providing for a bond to be given by such agents, and for a tax upon the receipts of premiums received for policies so issued within the state. ’ ’

The motion, which, according to the last attitude taken by •counsel for the defendant, is virtually a motion to set aside the verdict of the jury and dismiss the case — is urged upon the principal ground that notwithstanding the act in question, the plaintiff’s claim is based upon, or grows out of, an illegal transaction or a contract made invalid and inhibited by the laws of the state of Illinois. It is contended with much emphasis and vigor by the defense, that the plaintiff in issuing its policies and having a recognized agent, the defendant, in the state of Illinois, the business done comes within the provisions and the inhibition of the general insurance law of the state, and not having previously complied with these provisions, the plaintiff has no standing in this ■court and cannot recover.

It is further urged on behalf of the defense, that the business done and the policies issued by the plaintiff are not rendered lawful by the act of 1903, and do not take the plaintiff’s ease out of -the operation of the previous act passed by our legislature regulating the conduct and providing for the admission into this state of so-called outside or foreign insurance companies for the purpose of doing a general insurance business. It is said that the Act of 1903 simply provides that citizens of this state may on certain conditions obtain a license to act as agents, and that they, after diligent effort by them made to obtain sufficient insurance from authorized companies, may procure surplus insurance from such companies as are by the general insurance law prohibited from doing business in this state; and that such agents, when they procure such surplus insurance for another, are the agents of the insured and can do no act whereby the insurance company itself can be exempted from the inhibition of the statute, inasmuch as they carry on the insurance business, with an established agency, in this state. Although the policies issued and the contracts made may, by the insured, be enforcible in Canada, they are, when made in contravention of our law, not enforcible by the insured in the courts of this state whose laws may have been violated and set at defiance.

The proposition that the general insurance law, before the act of 1903, renders invalid all contracts made and business done in this state by outside insurance companies not complying with the provisions of the law and the conditions the law imposes upon them, and the force and general application of the long line of cases cited by defendant in support of his contention, is conceded.

But let us see whether the construction applied by the defense to the act of 1903 is correct, and whether the proposition holds good that all contracts made by the' plaintiff are unlawful and not enforcible in this state, notwithstanding the provisions of this act, permitting so-called surplus insurance by outside or unauthorized companies.

It is necessary for the purpose of this inquiry to quote the act in full.

“An act providing for licenses to agents to procure fire policies in unauthorized corporations, providing for a bond to be given by such agents, and for a tax upon the receipts of premiums received for policies so issued within the state. (Approved May 14, 1903. In force July 1, 1903. L. 1903, p. 221; Legal News Ed. p. 182.)

1180h. License to agents to procure fire policies in unauthorized corporations — Account kept — Bond). Sec. 1. Be it enacted Toy the people of the state of Illinois represented in the general assembly. That the superintendent of insurance, in consideration of the yearly payment of two hundred dollars, except in counties having less than one hundred thousand inhabitants, in which case the fee shall not exceed twenty-five dollars, may issue to citizens of this state a license, revocable at any time, permitting the party named in such license to act as agents to procure policies of fire insurance from corporations, persons, partnerships and associations which are not authorized to do business in this state. Before any insurance shall be procured under or by virtue of said license, there shall be executed by the licensed agent an affidavit, which shall be filed in the insurance department of this state within thirty days after the procuring of such insurance. Such affidavits shall set forth that the licensed agent is after diligent effort, unable to procure the amount of insurance required to protect the property described in said affidavit, from the insurance corporations duly authorized and licensed to transact in this state.

“The agent procuring policies in such unauthorized corporations or with persons, partnerships and associations, shall keep a separate account thereof, open at all times to the inspection of the insurance superintendent, showing first, the amount of such insurance placed for any party; second, the gross premiums charged thereon; third, in what corporation or with what persons, partnerships or associations the insurance is placed; fourth, the date of the policy; fifth, the term thereof, and sixth, the cities, towns and villages in which the insured property is located. Each party receiving such license shall, before transacting business thereunder, execute and deliver to the superintendent a bond to the people of the state, in the penal sum of two thousand dollars, with such sureties as the superintendent shall approve, conditioned that " the said agent will faithfully comply with all the requirements of this act and will pay to the insurance superintendent of the state of Illinois, for the use and benefit of said state, a sum equal to two (2) per cent upon the amount of the gross premiums received from policy holders upon all policies procured by him or issued by him during the preceding six months pursuant to this act, and in default of "the payment to said insurance superintendent of any sum to which he is entitled under this act, he, the said insurance superintendent, may sue for the same in any court of record in this state.” (Hurd’s R. S., 1905, p. 1187.)

Under the act, the right of the agent who is unable after diligent effort to obtain sufficient insurance from companies authorized to do a general insurance business in the state, to procure so-called surplus insurance from an outside or unauthorized company, is unquestioned. It will at once become apparent that it could not have been the intention of the legislature to authorize a citizen of this state, who for the purposes of the law is called an agent, to procure that which is condemned as illegal and upon which the law has placed its ban. It is surplus insurance which may be procured. Can It be procured without the making of a contract binding upon the parties? "Without the issuing of a policy by the insurer, the acceptance of such policy and the payment of the premium by the insured?

It does not require more than a mere reference to the most elementary principles of the law to show that this is impossible. But it is not only impossible in the law; it is also impossible in actual practice. If an agent desires to procure surplus insurance from an outside insurance company, that company would certainly not be willing to make that insurance except under a contract valid to all intents and purposes in the state where the law permits such insurance to be procured.

Would such, insurance company issue its policies to be delivered by the agent to the insured, permit him to collect — the only thing practical in this instance — the premium from the insured upon the delivery of the policies, and thus in lawmaking the agent its agent, without a right of action in this state to compel the agent to account for the premiums thus received?

It is not reasonable and consistent with logic to contend that the law permits only certain acts of the agent without at the same time sanctioning the entire transaction, in other words, a contract towards whose execution and procuring the acts of the agent are expressly authorized by the very terms of the law. Then, again, the act requires, among other things, the payment to the state of an amount equivalent to two per cent of the premiums collected by the agent. This is not in the nature of a forfeiture or confiscation of proceeds, in whole or in part, gotten from an illegal transaction or from a contract under the ban of the law; it is a tax levied by the state upon what it recognizes as property involving a property right. Taxes are defined to be burdens or charges imposed by the legislative power upon person or property, to raise money for public purposes. Cooley, Const. Lim. 587.

The state may, of course, levy a tax upon property without thereby sanctioning a previous illegal transaction, out of . which such property may have been obtained; but the state will not and cannot, consistently with justice, expressly permit the doing of a thing, while at the same time declaring the transaction illegal, and, furthermore, with knowledge of nil the facts, place a tax, as an instrument of its own support, upon the proceeds of such transaction. We repeat, the placing of a tax upon property recognizes the legal character of that property and a property right attaching to it.

This property right, however, inheres in the plaintiff.

We have no hesitancy in saying that the legislature never intended consequences, involved in the theory of the defense, so utterly at war with all principles of justice; that it did not intend to legalize the acts of a mere agent resulting in a contract made in good faith, and then condemn such contract, and order the doors of our courts closed to the party who seeks to enforce it. The denial of all remedy for the enforcement of an obligation or a right is unknown to our law.

We cannot quote apter language applicable to the foregoing discussion than that employed by the court in the case of Kellogg v. Larkin, 3 Pinney, 123 (Wis.) :

“Before a court should determine a transaction which has been entered into in good faith, stipulating for nothing that is malum in se, * * * to be void as contravening the policy of the state, it should be satisfied that the advantage to accrue to the public for so holding is certain and substantial, not theoretical or problematical.”

And Judge Caldwell said in a more recent case:

“No court ought to refuse its aid to enforce such a contract on doubtful and uncertain grounds. The burden is on the defendant to show that its enforcement would be in violation of the settled public policy of this state, or injurious to the morals of its people.” Swann v. Swann (U. S. C. C. E. D. Ark.) 12 Fed. 299.

The defendant says that an unauthorized insurance company cannot, under the guise of making insurance along the surplus insurance line, transact a general insurance business in the state. So say we. But as to whether the plaintiff transacted a general insurance business, going outside the surplus insurance business, is by no means apparent from the evidence in this ease, and the verdict of the jury, as upon a question of fact, is conclusive upon this point.

We, moreover, call attention to the language of the act which contemplates policies not only as procured but also issued by an agent in the state. This shows that it sanctions the making in this state of a contract of insurance along the surplus line as valid. Issuing means executing an instrument, as well as delivering it, as counsel for the plaintiff aptly remarks, referring to the case of Pease v. Ritchie, 132 Illinois, 638-645.

Issued as used in reference to the issuance of a life insurance policy means that when the policy is made and delivered in pursuance with the laws of the state legalizing such policies, and is in full effect and operation, it is to be regarded as issued. Spencer v. Myers, 26 N. Y. S. 371, 73 Hun, 274.

Hence when the act of 1903 speaks of policies procured or issued by the agent, it is, in view of the entire act, and a proper construction of it, equivalent to saying that such policies were made and delivered in pursuance with the laws of the state legalizing such policies, i. e. sanctioning such policies to be issued within the state, and that such policies are in full effect and operation within its entire jurisdiction.

We might well stop here by saying that the act of 1903 not merely permits an agent to act, but sanctions the completion of a transaction, in other words, a contract, towards the consummation of which the acts of the agent are directed; that it not only permits a surplus policy to be procured from an unauthorized company, i. e. one not permitted to do a general insurance business, but also to be issued, that is, executed in this state; and that, therefore, the contract is a legal contract, and all claims arising out of it, are enforcible in this state not only by one but by all parties to it.

Much time has been spent by counsel in this case in discussing the possible consequences which would be involved in the conclusion that the contracts under which the plaintiff claims were illegal and invalid in this state, notwithstanding the act of 1903. Counsel have cited a vast array of authorities for and against the proposition which holds that an agent cannot, after an alleged illegal contract has been fully executed, or an unlawful transaction been completed, refuse to account for and pay over money — the proceeds of such transaction- — received by him for his principal.

Some of the authorities holding that the principal may recover money or property received by the agent on account of his principal, or money or property received by one standing in a fiduciary relation, though such money or property may have been the proceeds of an illegal transaction, may be noticed in the following review:

“An agent who has received money from, or in behalf of his principal, cannot defeat an action brought by the principal to recover it, upon the ground that the contract under which the money was paid, or the transaction from which it was realized, or the purpose for which it was to be devoted, was illegal.” Mechem on Agency, sec. 526, and authorities cited.

If money had been actually paid to an agent, for the use of his principal, the legality of the transaction, of which it is the fruit, does not affect the right of the principal to recover it out of the agent’s hands. For though the law would not have assisted the principal by enforcing the recovery of it from the party by whom it was paid, because it is the policy of the law not to aid the completion of an illegal contract for another’s use, this can confer no right upon the agent to retain it.

This doctrine was recognized by the court of common pleas in a case where a broker having effected an insurance upon a ship engaged in a trade to the East Indies, contrary to the 7 Geo. I, st. 1, c. 21. s. 2, and having received the loss from the underwriters refused to pay it over to his employer, alleging the illegality of the transaction as a defense to the action for money had and received to his use. The plaintiff, however, had a verdict; and the court, upon a motion for a new trial, thought the verdict right. And in a subsequent case, when the defendants had received money for the plaintiff, as the price of' counterfeit coin, which they had been employed to carry and procure payment for, from the parties who purchased it, it was held that the illegality of the transaction furnished no defense to them in an action for money had and received.

And, in both these cases, the court considered the original transaction as forming no part of that implied contract arising from the receipt of the money which formed the ground of the action. Dunlap’s Paley on Agency, pp. 61, 62.

In the ease of Brooks v. Martin, 2 Wall. 70, the supreme court of the United States held, that after a partnership contract confessedly against public policy has been carried out, and money contributed by one of the partners has passed into other forms, the results of the contemplated operation completed, a partner, in whose hands the profits are, cannot refuse to account for and divide them on the ground of the illegal character of the original contract; especially where the facts appearing are such as to charge such partner with a fiduciary relation, and the law governing such relations applies.

The money and other property for which suit was brought were clearly the proceeds of an illegal transaction. Justice Miller, speaking for the court, said: “We think that, in point of fact, the allegation of the answer — that the traffic in which this firm engaged was the buying up of the soldiers’ claims, before any scrip or land warrants were issued, and not the purchase and sale of bounty land warrants and scrips —is true. We have as little doubt that the traffic was illegal. ’ ’

“It is,” the court further says, “to have an account of these funds, and a division of these proceeds, that this bill is filed. Does it lie in the mouth of the partner who has, by fraudulent means, obtained possession and control of all these funds, to refuse to do equity to his other partners, because of the wrong originally done or intended to the soldier? It is difficult to perceive, how the statute, enacted for the benefit of the soldier, is to be rendered any more effective by leaving all this in the hands of Brooks, instead of requiring him to execute justice as between himself and his partner; or what rule of public morals will be weakened by compelling him to do so. * * * The transactions which were illegal have become accomplished facts and cannot be affected by any action of the court in this case.”

The court goes on to quote the language of Lord Chancellor Cottenham in deciding a similar case (Sharp v. Taylor, 2 Phillips, Chancery, 801) which is as follows: “The answer to the objection (the illegality of the transaction out of which the present suit arose) appears to me to be this,- — • that the plaintiff does not ask to enforce any agreement adverse to the provisions of the act of parliament. He is not seeking compensation and payment for an illegal voyage. That matter was disposed of, when Taylor (the defendant) received the money; and plaintiff is now only seeldng payment for his share of the realized profits. * * * As between these two, can this supposed evasion of the law be set up as a defense by one against the otherwise clear title of the other. * * * The answer to this, as to the former case, will be that the transaction alleged to be illegal is completed and closed, and will not in any manner be affected by what the court is asked to do between the parties. * # * The difference between enforcing illegal contracts, and asserting title to money which has arisen from them, is distinctly taken in Tenant v. Elliott and Farmer v. REussell (already quoted) and recognized and approved by Sir William Grant in Thomson v. Thomson.

“These eases,” Justice Miller further says, “were all reviewed in the opinion of this court in the case of McBlair v. Gibbs (17 Howard, 232) and the language here quoted from the principal ease is there referred to with approbation. We are quite satisfied that the doctrine thus announced is sound.”

This doctrine was recognized and applied in the following cases: Planters’ Bank v. Union Bank, 16 Wall. 483, to a case of money received from the sale of “Confederate Bonds;” Armstrong v. American Bank, 133 U. S. 433, and Lehman v. Strassberg, 2 Woods, 563, Fed. Cas. No. 8216 both holding a person who loans money to another to pay losses sustained in illegal transaction may recover same; Western Union Tel. Co. v. Union Pacific Co., 1 McCrary, 563, 3 Fed. 417, holding property acquired under void contract must be distributed according to equity; Wann v. Kelly, 2 McCrary, 630, 5 Fed. 584, where joint owner was held liable to account to his associates for money paid under an illegal but completed contract, and in Cook v. Sherman, 4 McCrary, 26, 20 Fed. 167, where the precise question as presented in the ease of Brooks v. Martin was presented.

In the ease of Penn Mutual Life Insurance Co. v. Bradley ct al., 21 N. Y. S. 876, in which the facts were almost identical with the present case, the court, after stating the action was brought to recover for money had and received by the defendants for the plaintiff while they were acting as plaintiff’s agent in procuring life insurance and collecting premiums, said: 11 * * * the appellant contends that the plaintiff was not entitled to recover the premiums for the reason that the company was not authorized to do an insurance business in the state of New York.” And the court, deciding the case, said: * * the defendants having received the money as plaintiff’s agent, they are not at liberty, when called upon for payment, to set up such a defense.”

In the case of Snell, Taylor & Co. v. Pells, 113 Ill. 150, our -own supreme court said: “Whatever may be thought as to the legality.of such a contract or subscription, its illegality, if any, rests solely upon the suggestion that the same is merely against public policy, and not upon the ground that there is anything immoral or criminal in such a contract. In such ease, an agent who has received money for his principal cannot by law set up such supposed illegality as a reason why he should not pay over the same to his principal. The law in such a ease does not permit the agent to make such a defense. He is estopped by the relation of agency, and the receipt of the money.”

We admit that the authorities do not all agree. There seems to be a tendency in some jurisdictions to deny the ■ principal the right to recover in a case based upon a transaction involving criminality or moral turpitude, or in a case where both the agent and the principal have directly partieipated in the unlawful transaction. Todd v. Rafferty, 30 N. J. Eq. 254; Farley v. St. Paul, etc., Ry. Co., 4 McCrary, 141, 142, 14 Fed. 115; Jackson v. McLean, 36 Fed. 213; Morrison v. Bennett, 20 Mont. 560, 52 Pac, 553; Booth v. Hodgson, 6-T. R. 405; Kirk v. Morron, 6 Heisk. (Tenn.) 445; Lemon v. Grosskopf, 22 Wis. 447; Bishop v. American Preservers Co., 157 Id. 284; Gregory v. Wilson, 36 N. J. L. 315; King v. Winants, 71 N. C. 469; Columbia Carriage Co. v. Hatch, 19 Texas Civ. App. 120, 47 S. W. 288; Wiggins v. Bisso, 92. Tex. 219, 47 S. W. 637; Mexican Banking Co. v. Lichtenstein, 10 Utah, 343; Watson v. Murray, 23 N. J. Eq. 257 ; Thorne v. Travelers’ Ins. Co., 80 Pa. St. 15; McMullen v. Hoffman, 174 U. S. 639.

But it is difficult, as far as the cases are concerned in which the maxim in pari delicto is applied, to conceive it' more consistent with justice to require an innocent agent receiving for his principal the proceeds of an illegal transaction fully completed and a thing of the past, to disgorge and pay over such proceeds to his principal, .than to require a. man to do the same thing whose acts are as odious as, or even more so, than the principal’s. This distinction can be only accounted for by placing too much stress upon and giving-unlimited scope to a mere abstract legal maxim, such as that in pari delicto potior est conditio defendentis.

The danger resulting from a too wide application of abstract legal maxims, and the injustice or even absurdities it sometimes leads to, is forcibly pointed out by Justice Christiancy, who was one of the ablest judges that eveb sat on the bench of any supreme court. In the case of Quirk v. Thomas, 6 Mich. 76, 110, he says: “One qualification of the rule is that the rule itself shall not be made an engine of wrong and injustice in the hands of the wrongdoer. * * * The rule in question is the same which. declares that a party ‘must come into court with clean hands’ — ‘that no polluted hand shall touch the pure fountain of justice’ — that the court will not aid a party seeking the reward of his iniquity. * * *

“Not only is it incompetent to set up such a defense-against an innocent party, but the law will discriminate as to the degrees of guilt, as between the immediate parties; and it is well settled, both at law and equity, that to enable a party to a transaction merely illegal as against public policy, to show his own fraud in his own defense, the plaintiff must not only be in delicto but in pari delicto. And it is in this class of cases that the rule in pan delicto especially applies; and'though the plaintiff may, to some extent, have participated in the illegal transaction, yet, if not equally guilty with the defendant, (or at least if there be strong mitigating circumstances in his favor) the latter will not be allowed to avail himself of the defense.”

In addition to this, we may point out more especially that the maxim in pari delicto does not mean that parties cannot recover, who are both guilty, but such as are guilty in equal degree.

It may be said, in view of what appears from the evidence in this case, that the defendant, a resident and citizen of Illinois,,was in all respects better advised as to the laws of his own state than the plaintiff; having repeatedly assured plaintiff that by writing insurance on property of citizens located in this state, it was not violating any law, he lulled the plaintiff into a state of security; by his endorsement on every policy issued, that it was issued in compliance with the act of 1903, and assuring the plaintiff of that fact, he obtained from the plaintiff in the shape of its policies the means of collecting large amounts of money as premiums paid by the insured to him, the agent of the plaintiff, — that in view of all these facts, his degree of guilt, if any, is greater than the plaintiff’s, and he should, on that account, be es-topped from pleading the illegality of these entire transactions as a defense in this case.

There is, however, still another view to be taken in the consideration of this question, and this is with special reference to the act of 1903. Admitting, for the sake of argument, that the several contracts of insurance were illegal, as being in contravention of the general insurance law, yet the act cited expressly permits and sanctions the act of the agent in procuring the several contracts, and hence the agent in so doing is not placed even in delicto, much less in pari delicto.

In this event the law, as settled by numerous decisions, requires him to account for and pay over the money received by him on account of his principal. Especially in view of the general law of this state, regulating insurance companies, which does not expressly prohibit the bringing of a suit, either in law or equity, on any claim, legal or equitable, whether arising out of contract or tort, in case the statute for the admission of outside or foreign corporations be not complied with.

Is there, in view of what has been said, any reason in the claim, that we must adopt a construction of the act which would allow an agent, and make it perfectly lawful for him, to procure so-called surplus insurance from an unauthorized insurance company; allow him to receive its policies, and, upon delivery of such policies to the insured, collect the premiums; then permit him simply to put the money into his pockets and refuse to pay it over to his principal? And all this on the plea that what he, the agent, had done was perfectly right and sanctioned by the law, while what the insurer and the insured had done was absolutely void, and odious in the eye of the law. We do- not think reason and justice would require us to adopt such a construction.

In view of what we hold to be the law and for the reason that all disputed questions of fact have been properly settled by the verdict of the jury, the court must deny the motion for a new trial and orders that judgment be entered on the verdict.

Judgment on verdict.

       Affirmed 150 N. 269, 44 N. E. 974. — Ed.

       Bosanquet & Puller, 3. — Ed.

       Id. 29 — Ed.

       7 Vesey, 473. — Ed.

       Affd 142 N. Y. 660. — Ed.


source: Caselaw Access Project

author: Brentano, J.: — -

license: Public Domain

text:
      (Superior Court of Cook County.)

    People, ex rel. George Frank, Louis Stein and Robert C. Davis vs. James Pease, Sheriff.
    (April 15, 1899.)
    1. Habeas Corpus Based on Unconstitutional Statute — Jurisdiction of Circuit Courts. The circuit courts have jurisdiction to determine the constitutionality of acts of the legislature in a habeas corpus proceeding.
    2. Habeas Corpus — Effect of Decisions of the Supreme Court as to the Jurisdiction of Circuit Courts. Upon a review of the decisions of the Supreme Court to the effect that constitutional questions are to be eliminated in habeas corpus proceedings held that they lay down a rule of practice for eases of applications for the writ of habeas corpus in the Supreme Court and not for cases in the circuit courts. People v. Jonas, 173 111. 316, considered and distinguished.

    3. Constitutional Law. Act of April 9, 1875, Prohibiting Sales of Railroad Tickets by Unauthorized Persons is Unconstitutional. The act of April 9, 1875', prohibiting sales of railroad tickets by unauthorized persons is unconstitutional and void, because it amounts to a deprivation of property without due process of law and is an unwarranted interference with trade and personal liberty and freedom of occupation. People ex rel. Tyroler v.

      Warden, 157 N. Y. 116, 51 N. E. 1006, approved and followed.

    4. Habeas Corpus to Secure Discharge of Relators Indicted under an Unconstitutional Statute. The relators were indicted for violation of the Act of April 9, 1875, entitled “An act to prevent frauds upon travelers and owner or owners of any railroad, steamboat, or other conveyance of passengers.” Upon habeas corpus proceedings to obtain the discharge of the relators, the act held unconstitutional and the relators discharged.

      Habeas corpus on relation of George Frank, Louis Stein and Robert C. Davis. Superior Court of Cook County.
    Heard before Judge Theodore Brentano, April 15, 1899. The facts are stated in the opinion.

      R. Prendergast and John R. McFee, attorneys for relators.

      Charles S. Deneen, state’s attorney, Willard McFwen, and Wm. S. Forrest, attorneys for defendant.
   Brentano, J.: — -

The relators were indicted at the April term, 1898, of the •criminal court of Cook county, for violation of an act of the legislature enacted in 1875. The act purports to be for the prevention of frauds upon travelers and owners of railroads, steamboats or other conveyances for the transportation of passengers.

The first section of the act makes it the duty of the owner of any railroad or steamboat for the transportation of passengers to provide each agent who may be authorized to sell tickets or other certificates entitling the holder to travel upon any railroad or steamboat with a certificate setting forth the authority of such agent to make such sales. Section two of this act makes it unlawful for any person not possessed of such authority so evidenced from a railroad company, to sell, barter, or transfer for any consideration whatever, the whole or any part of any ticket or tickets, passes or other evidence of the holder’s title to travel on any railroad or steamboat. Section 3 provides that any person violating the provisions of section 22 shall be liable to be punished by a fine not exceeding five hundred dollars ($500) and by imprisonment not exceeding one (1) year, or either, or both, in the discretion of the court.

The relators sued out these writs of habeas corpus alleging the unconstitutionality of the act, especially in so far as the validity of said section two is concerned, it being maintained that the act is in conflict with the constitution of the United States and of the state of Illinois in that it deprives the relators of property, and is an unwarranted interference with trade and personal liberty and freedom of occupation without due process of law, and in that it makes penal or criminal, an act harmless in itself and not hurtful to the community.

Counsel for relators and the special counsel appearing for the state have exhaustively and elaborately argued their respective sides of the propositions involved, and are entitled to great credit for the careful study and analysis of the questions submitted. In addition to the consideration I have given to the oral and written arguments of counsel, I have considered the opinions of Judges Gibbons and Dunne of the circuit court, rendered in cases similar to the one at bar. These judges hold the statute unconstitutional, and I am not disposed to disagree with them.

Counsel for the state in discussing the question as to whether the statute is a valid and legitimate exercise of the police power says on page 27 of his brief: “Burdick v. People, 149 111. 600. is authority that settles every question at issue in this case except the contention on behalf of the defendants which arises out of the claim that the statute is a regulation of interstate commerce. The Burdick Case is controlling authority until it is reversed or annulled,” and asks “Will your honor expunge the opinion of the supreme court on grounds expressly held by the supreme court to be insufficient ? ’ ’

This court does not feel bound to accept the decision of that case as reported as final upon the questions here involved, and in doing so I feel justified by reason of the novel and significant announcement made by the supreme court in the ease of In re Burdick v. People, 162 111. 48, that “the judgments of affirmance in the Burdick Cases and the opinions of the court in deciding them are conclusive only as between the parties to those eases, viz: the people of the state of Illinois and Burdick.” In view of this statement that case is enveloped with an atmosphere of doubt which detracts from its value as an authority, and I therefore do not feel bound by that decision, and am not precluded from passing upon the questions involved, unless I am without jurisdiction to do so.

The decision of the supreme court in case of People v. Jones, 173 111. 316, is cited by the special counsel for the state as presenting an insuperable barrier to the power of this court to discharge the relators on writ of habeas corpus even though the court should be of the opinion that the act under consideration is unconstitutional. It is claimed that the decision in that case has determined that constitutional questions will not be decided on habeas corpus. I have considered that decision and have weighed carefully the elaborate discussion of counsel concerning the same. In that case the relator, after conviction of the offense with which he had been charged, filed an original petition for a writ of habeas corpus in the supreme court. He had been convicted and was being held by virtue of a certain mittimus for his arrest and commitment issued by a competent court, and the avowed purpose of the petition in that case was to test the constitutionality of the act under which he had been convicted.

"The question presented to the supreme court was, whether or not, under the statute of this state regulating the subject of habeas corpus, the petitioner, who had been regularly imprisoned by virtue of a mittimus, after judgment, could, in the mode there pursued, test the constitutionality of the act under which the conviction was had. In deciding’ the question adversely to the petitioner, the court held that the proper remedy of the petitioner was an appeal from the judgment under which he was imprisoned. In that case the court concedes to the justice of the peace full power and jurisdiction-to decide all questions in the ease, including the question whether the law under which the prosecution was instituted was constitutional. Therefore, if the petitioner in that case had argued the question of the constitutionality of the ordinance involved in that case before the justice, the latter would have had the power to discharge the defendant had he come to . the conclusion that the ordinance contravened the fundamental law of the state.

It seems to me manifest that the distinguishing feature of that case, and which moved the court to hold that the mode there pursued of. bringing the case to the supreme court for review was erroneous and came too late, was to be found in the fact that a conviction had properly been had after a trial in which the question of constitutionality had not been raised. Unquestionably the oi'dinary remedy available after conviction is by appeal or writ of error. If there (after having been charged with the violation of an ordinance) the prisoner was found to have been in fault for not having raised the question of constitutionality, how can it reasonably be contended in the case at bar that the relators are precluded from raising this question while they merely stand charged with the offense and before conviction?

If the effect of the Jonas decision is that constitutional questions are to be eliminated in habeas corpus proceedings, then it would follow that the writ itself would be suspended in cases wherein it was most urgently needed. A citizen deprived of his liberty under a law in contravention of the federal constitution or "the constitution of this state, and in defiance of the provisions of either of these constitutions, is outraged to the same extent as if he were held under no color of authority whatsoever. It can not be assumed, in the absence of an expressed and unequivocal ruling, that the supreme court of Illinois intended to suspend the writ of habeas corpus in all cases where commitments were held under void statutes. To hold this would in effect be in defiance of the federal and state constitutions, and an attempt of the courts to suspend habeas corpus.

In the following cases our supreme court determined the validity of statutes on habeas corpus eases brought originally in that court: People v. Turner, 55 Ill. 280; People v. Illinois State Reformatory, 148 Ill. 413. Moreover, the United States supreme court has determined this question differently from the Jonas Case, and such is the overwhelming weight of authority. Ex parte Siebold, 100 U. S. 371; Ex parte Clarke, 100 U. S. 399; Ex parte Smith, 36 S. W. 628, 135 Mo. 223.

The proper view of the Jonas decision seems to me to be that the supreme court of Illinois intended by that decision to lay down a rule of practice for cases of applications for the writ of habeas corpus in that court. The jurisdiction of the supreme court of Illinois, and of the circuity court and of the superior court of this county, is concurrent in habeas corpus. It is moreover true that the supreme court of Illinois has the right to decline to assume jurisdiction in habeas corpus, whereas a judge of a nisi prius court must issue the writ under severe penalties. The supreme court did not intend by the Jonas decision to fix any practice applicable to the circuit courts or to the superior court of this county, for the good reason that that subject was not before the court. That statutes relating to habeas corpus and to mandamus, though in terms applicable to both the supreme court and the circuit courts, may only be enforced in one court, is shown by repeated decisions of our supreme court, in which it declines to be controlled by the mandamus statute as in the Jonas Case it declined to grant the application for the writ of habeas corpus. People ex rel. Cunningham v. Thistlewood, 103 Ill. 139; Hawkins v. Harding, 35 Ill. App. 25.

The writ of habeas corpus is the last resort of the citizen oppressed by wrongful imprisonment, wholly regardless of the person or power by whose act the imprisonment is brought about and wholly regardless of the pretense under which such illegal imprisonment is had. From time immemorial the right of a court, such as this to inquire into unlawful imprisonment, has been boundless as the instances of such imprisonment. The .law has never recognized a limit as to the cases in which this court will or will not inquire into illegal restraint or imprisonment. So great is the dignity of this writ that each court and each judge exercising authority under it is responsible only to his own conscience and to his own judgment of what the law is. The law commands the court and the judge to exercise this power to the end that no man may be illegally imprisoned. The supreme court of this state in the case of The People v. Bradley, 60 Ill. 390, 401, says: “The circuit courts of this state possess an original common law jurisdiction in criminal cases answering to that of the king’s bench. Consequently, if our habeas corpus act had never been passed, jurisdiction of the writ would have devolved upon the circuit courts by the common law.’’ It has been held in the case of People v. Bradley, that the circuit courts possess original common-law jurisdiction in habeas corpus, independently of the habeas corpus statute. In the Bradley Case the supreme court, quoting from ancient books on the law say, at page 398: “The habeas corpus ad subjiciendum (so termed from the language of the writ, to undergo and receive all such things as the court shall consider of the party in that behalf) is that which issues in criminal cases, and is deemed a prerogative writ which the king may issue to any place, he having a right to be informed of the state and condition of the prisoner, and for what, reasons he is confined. It is also, in regard to the subject, deemed a writ of right, that is, such an one as he is entitled to ex debito justitice, and is in the nature of a writ of error to examine the legality of the commitment, and therefore commands the day, the caption and cause of detention to be returned. ’ ’ 1 Chit. Crim. Law, 120; 2 Tomlin’s Law Diet., 63, 64. To the same effect is 4 Bacon’s Abridgment, 564.

In the ease of The People v. Turner, 15 Ill. 280, the supreme court of this state delivered an opinion which is one of the land marks of the law, and in which that court held, not only that it had authority in habeas corpus causes to pass on the validity of statutes, but held two statutes therein mentioned to be unconstitutional and void.

I am constrained to administer the law in these cases according to the wise principles announced by the supreme court in the case of People v. Turner. In that case the supreme court says (pp. 287-8) : “It is a grave responsibility to pronounce upon the acts of the legislative department. It is, however, the solemn duty of the courts to adjudge the law, and guard, when assailed, the liberty of the citizen. The constitution is the highest law; it commands and protects all. Its declaration of rights is an express limitation of legislative power, and as the laws under which the detention is had, are in conflict with its provisions, we must so declare.”

As late as 1894 the supreme court, in the case of People v. Illinois State Reformatory, 148 Ill. 413, on habeas corpus, passed upon the validity and constitutionality of a state statute. So it is manifest that from the foundation of the state down to the decision of the Jonas Case, it was the law of this state that the supreme court, as well as the circuit courts, might pass on the validity of statutes in habeas corpus proceedings. It will be noticed in the case of The People v. Jonas, 173 Ill. 316, that one of the reasons for the rendition of such an opinion is found in the closing sentences of the opinion, where the court says: “The effect of granting writs in cases of this kind would be to allow defendants in all convictions under ordinances or statutes, the validity of which might be questioned, to come directly to this court by a proceeding in habeas corpus instead of appealing or prosecuting writs of error as the law contemplates. ’ ’ I therefore am of opinion that the Jonas Case in no manner affects the power of this court to determine the constitutionality of the acts of the legislature in a habeas corpus proceeding.

I have then to consider how the question stands on principle and authority. The law now under consideration is familiarly known as the “anti-scalping” law, and its object is to prevent by penalty of fine or imprisonment or both, any person not an authorized agent of a common carrier from selling, bartering or transferring for any consideration whatever, the whole or any part of any ticket or other evidence of transportation.

The court of appeals of New York in a recent case, People v. Warden of City Prison, etc., 51 N. E. 1006, 157 N. Y. 116, was called upon to decide the constitutionality of an act similar to the act under which relators are held. Under the New York law as under this law, the buying and selling of passage tickets is not abolished. It is only condemned where the seller has not authority from some one of the transportation companies to act as its agent. What the New York court say is applicable here. “But this act simply turns over to the transportation companies the selection of those who are hereafter to be permitted to sell tickets. It imposes no restraints whatever upon the appointing power, nor upon the agents selected, other than that, in the purchase of tickets, he must confine himself to the properly authorized agents of the transportation companies. The business of buying and selling tickets, as to such agents, continues to be a legitimate business, but to all citizens other than those who may be selected by the transportation companies the right to buy and sell tickets is denied, and an actual sale by them constitutes a felony.”

Here, as there, “It is asserted by counsel that the traveling public and the transportation companies have been so defrauded by the acts of the brokers in the selling of unused or alleged to be unused passage tickets as to call for legislation of a protective character, of which this statute is the outcome. * * * It is novel legislation, indeed, that attempts to take away from all the people the right to conduct a given business, because there are wrong-doers in it, from whose conduct the people suffer. But where in the statute is to be found the evidence that its purpose is to prevent fraud ? “In the title of the act” answers counsel, and with that answer he has to be content; for while the act is entitled “Frauds in the sale of passage tickets” the body of the statute does not contain any reference to forged, altered, used or stolen tickets. The sale of such tickets is made a punishable offense under other sections of the Penal Code. The provisions of the act, therefore, have reference to the selling of valid tickets, regularly issued by a transportation company. Can the legislature declare such sales to be fraudulent or prohibit them on the ground that it tends to prevent fraud? If the act prohibited is fraudulent, there can be no doubt that the legislature, under its police power, may provide for its punishment; but whether it may, under such power, interdict the sale of a valid ticket by one person to another, upon the pretext that fraud will thus be prevented, presents a very different question. I confess that I am unable to see how such a sale defrauds a transportation company. If a transportation company sells a ticket from New York to San Francisco, it undertakes to carry the holder from one place to the other. It costs the company no more to carry one person than it does the other. How then can it be defrauded or in any way prejudiced by the transfer of such ticket by the purchaser to another person.

“It is said that the prohibition of such a sale tends to protect the traveler from being defrauded. If it is a sale of a valid ticket no fraud can possibly result, and if it is not a sale of a valid ticket, then the sale is fraudulent and is prohibited by other provisions of the Penal Code.”

What the Court of Appeals further say is also applicable to this ease, to wit: “It is not contended that the business of ticket brokerage is in itself of a fraudulent character.The business can be honestly conducted; it has been so conducted in the past by honest men engaged in it, and the most that is asserted is that there are some men engaged in the business who have imposed on the public. .The same assertion can be made with equal truth of every business, trade and profession. * * * Whatever the legislature’s mor tive, the fact that it has passed an act which does not declare ticket brokerage unlawful, for it allows any person who may be fortunate enough to secure an appointment] as agent -for a transportation company to engage in ticket brokerage but the act does declare that if any person, other than an agent of a transportation company, undertakes to engage in the passenger ticket brokerage business, he shall be guilty of a felony; in other words that it is unlawful for all citizens of New York to engage in the buying and selling of passage tickets unless empowered to do so by the written appointment of a transportation company.”

The court then asks itself the question whether the organic law prohibits legislation of this character. It admits that it is within the power of the legislature to regulate the manner in which certain kinds of business may be conducted; but denies the power of the legislature to deprive every citizen, engaged in the ticket brokerage business, of the “liberty” to further conduct such business, because forsooth,■ there have been some dishonest persons engaged in it with the result that frauds have been perpetrated on both travelers and transportation companies, and “to cut up root and branch, a business that may be honestly conducted to the convenience of the public and the profit of the persons engaged in it is beyond legislative power. If the law were otherwise, no trade, business or profession could escape destruction at the hands of the legislature if a situation should arise that would stimulate it to exercise its power, for in every field of endeavor can be found men that seek profit by fraudulent processes.” The court thereupon pronounces the statute to be in contravention of the constitution and void, and discharged the relator who had brought habeas corpus proceedings to test the constitutionality of the law under which he was being deprived of his liberty.

I can not escape the sound reasoning and convincing logip of that decision, and feel bound to follow it as a guide and an authority.

The order therefore is that the relators be discharged

       Reported in this volume. — Ed.