However, a statute which prohibits the assured from contracting directly with a marine insurance company outside the State for coverage of property within the State is invalid as a deprivation of liberty without due process of law.[328] For the same reason, a State may not prevent a citizen from concluding with a foreign life insurance company at its home office a policy loan agreement whereby the policy of his life is pledged as collateral security for a cash loan to become due upon default in payment of premiums, in which case the entire policy reserve might be applied to discharge the indebtedness. Authority to subject such an agreement to the conflicting provisions of domestic law is not deducible from the power of a State to license a foreign insurance company as a condition of its doing business therein.[329]
A stipulation that policies of hail insurance shall take effect and become binding twenty-four hours after the hour in which an application is taken and further requiring notice by telegram of rejection of an application is not invalid.[330] Nor is any arbitrary restraint upon their liberty of contract imposed upon surety companies by a statute providing that any bond executed after its enactment for the faithful performance of a building contract shall inure to the benefit of materialmen and laborers, notwithstanding any provision of the bond to the contrary.[331] Likewise constitutional is a law requiring that a policy, indemnifying a motor vehicle owner against liability to persons injured through negligent operation, shall provide that bankruptcy of the insured shall not release the insurer from liability to an injured person.[332]
If fire insurance companies, in case of total loss, are compelled to pay the amount for which the property was insured, less depreciation between the time of issuing the policy and the time of the loss, such insurers are not deprived of their property without due process of law.[333] Moreover, even though it has its attorney-in-fact located in Illinois, signs all its contracts there, and forwards therefrom all checks in payment of losses, a reciprocal insurance association, if it covers real property located in New York, may be compelled to comply with New York regulations which require maintenance of an office in that State and the countersigning of policies by an agent resident therein.[334] Also, to discourage monopolies and to encourage competition in the matter of rates, a State constitutionally may impose on all fire insurance companies connected with a tariff association fixing rates a liability or penalty to be collected by the insured of 25% in excess of actual loss or damage, stipulations in the insurance contract to the contrary notwithstanding.[335]
A State statute by which a life insurance company, if it fails to pay upon demand the amount due under a policy after death of the insured, is made liable in addition for fixed damages, reasonable in amount, and for a reasonable attorney's fee is not unconstitutional even though payment is resisted in good faith and upon reasonable grounds.[336] It is also proper by law to cut off a defense by a life insurance company based on false and fraudulent statements in the application, unless the matter misrepresented actually contributed to the death of the insured.[337] A provision that suicide, unless contemplated when the application for a policy was made, shall be no defense is equally valid.[338] When a cooperative life insurance association is reorganized so as to permit it to do a life insurance business of every kind, policyholders are not deprived of their property without due process of law.[339] Similarly, when the method of liquidation provided by a plan of rehabilitation of a mutual life insurance company is as favorable to dissenting policyholders as would have been the sale of assets and pro rata distribution to all creditors, the dissenters are unable to show any taking without due process. Dissenters have no constitutional right to a particular form of remedy.[340]
Professions, Trades, Occupations
Employment Agencies.—An act imposing license fees for operating such agencies and prohibiting them from sending applicants to an employer who has not applied for labor does not deny due process of law.[341]
Pharmacies.—A Pennsylvania law forbidding a corporation to own therein any drug store, excepting those owned and operated at the time of the enactment, unless all its stockholders are licensed pharmacists, violates the due process clause as applied to a foreign corporation, all of whose stockholders are not pharmacists, which sought to extend its business in Pennsylvania by acquiring and operating therein two additional stores.[342]
Miscellaneous Business, Professions, Trades, and Occupations.—The practice of medicine, using this word in its most general sense, has long been the subject of regulation;[343] and in pursuance of its power a State may exclude osteopathic physicians from hospitals maintained by it or its municipalities;[344] and may regulate the practice of dentistry by prescribing qualifications that are reasonably necessary, requiring licenses, establishing a supervisory administrative board, and by prohibiting certain advertising regardless of its truthfulness.[345] But while statutes requiring pilots to be licensed[346] and railroad engineers to pass color blindness tests[347] have been sustained, an act making it a misdemeanor for a person to act as a railway passenger conductor without having had two years' experience as a freight conductor or brakeman is invalid.[348]
Legislation has been upheld which regulated or required licenses for admissions to places of amusement,[349] grain elevators,[350] detective agencies,[351] sale of cigarettes,[352] or cosmetics,[353] and the resale of theatre tickets;[354] or which absolutely forbade the advertising of cigarettes,[355] or the use of a representation of the United States flag on an advertising medium,[356] the solicitation by a layman of business of collecting and adjusting claims,[357] the keeping of private markets within six squares of a public market,[358] the keeping of billiard halls except in hotels,[359] or the purchase by junk dealers of wire, copper, etc., without ascertaining the sellers' right to sell.[360]