Page:The Green Bag (1889–1914), Volume 18.pdf/166

 INSURANCE AS A COMMODITY interstate. There could be no contract among the several states. A contract al ways has a situs and is a local transaction. When a drummer from one state comes into another and solicits orders for goods on behalf of his principal in the other state he makes a contract for his non-resident principal. The making of the contract is not an act of commerce; the exchange which will follow that contract is commerce; and if the exchange involves crossing state lines it is interstate commerce. If, as a result of a contract between persons of different states, something tangible must pass between states or a service or intercourse must take place between states, such as a telephone message or the carriage of goods, interstate commerce has taken place. The contract, however, which has brought about the result has its situs in one state and is itself not the subject of "trade or barter offered in the market" and is not a commodity "to be shipped from one state to another." It would seem to be well settled by Robbins v. Shelby County Taxing District, 120 U. S. 489 (1887); Brennan v. Titusville, 153 U.S. 289 (1893); Stockard v. Morgan, 185 U. S. 27 (1902), and similar cases, that a state cannot tax or prohibit the occupa tion of one who comes within its borders, or who resides there permanently, for the purpose of making contracts on behalf of a non-resident principal, the performance of which contract will require the exchange of tangible property or the rendering of a ser vice across state lines. This criticism on the reasoning of Paul v. Virginia seems beside the point, because a contract of insurance is essentially different from a contract for merchandise. To bring insurance contracts within the principle of the Robbins and similar cases it is necessary to show that a contract of insurance, while itself not the subject of sale, results in inter state traffic or exchange of a commodity, using that word in its narrow sense as meaning something tangible, or in its broader sense, as any convenience, profit, or

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privilege. Is it possible to treat insurance as a commodity in any sense? There is very little support to be found in the deci sions. There is, however, one case which by giving the word commodity a broad mean ing includes insurance within its limits. A recent decision of the Supreme Court of the United States (Carroll v. Greenwich Insur ance Co., 26 Sup. Ct. Rep. 66, Nov. 27, 1905) while not at all deciding the question, did take notice of the fact that a state might, as a part of its general scheme for the regu lation of monopolies and combinations in restraint of trade, regard insurance as a commodity. The decision involved the va lidity of the "anti-compact" law of Iowa, forbidding combinations among insurance companies as to rates, commissions, etc. In answer to the contention that the statute was invalid because it applied only to insur ance companies, and therefore denied them the equal protection of the law, the Court called attention to the fact that the particu lar statute in question must be considered as a part of a general plan of legislation in that state regulating combinations in all businesses, and that it could not be said that insurance companies had been singled out for regulation. To show this, the Court calls attention to a decision of the Supreme Court of Iowa [Beechley v. Mulville, 102 Iowa 602 (1897)] where it was decided that a general statute of Iowa forbidding combinations "to regulate or fix the price of oil, lumber, coal, grain, flour, provisions, or any other commodity or article what ever" would include insurance. The Iowa Court says: "Insurance is a commodity. ' Commodity ' is defined to be that which affords advantage or profit. Mr. Anderson, in his Law Dictionary, defines the word as 'convenience, privilege, profit, gain; popu larly, goods, wares, merchandise. ' We see no reason why, in the act, the word should be restricted to its popular use. It is com mon to speak of ' selling insurance. ' It is a term used in insurance business. " The word commodity undoubtedly is used in a