striction applies to the foreign corporation. Iron Silver &c. Co. v. Cowie, 31 Colorado, 450. Counsel for the state concedes that the corporation was admitted for a period of twenty years, but subject to the power of the state to tax. During that time, therefore, the contract lasts. This is the only legitimate, and we think it is the necessary implication arising from the statute.

This is not an exemption from taxation, it is simply a limitation of the power to tax beyond the rate of taxation imposed upon a domestic corporation. Instead of such a limitation the act of 1902, already referred to, imposes a tax or fee upon or exacts from the foreign corporation double the amount which is imposed upon or exacted from the domestic one. The latter is granted the right to continue to do business upon the annual payment of two cents upon each one thousand dollars of its capital stock, while the former must pay four cents for the same right. This cannot be done while the right to remain exists. existing valid contract.

430.

It is a violation of the obligation of an Home of the Friendless v. Rouse, 8 Wall.

Nor is this a case where the power given by the state constitution to the general assembly to alter, amend or annul a charter is applicable. The act does not alter the charter or annul or amend it. It simply increases the taxation which up to the time of its enactment had been imposed on all foreign corporations doing business in the state.

A discussion as to the name or nature of the tax imposed by the act of 1902, or the former acts, is wholly unimportant with reference to the view we take of this case. After the payment of the money and the receipt of the permit to enter and do business in the state the corporation could not, as we have said, be thereafter further taxed than was the domestic one. The tax on the latter under that act is the same in substance and effect as that upon the foreign corporation, but it is for only one-half thereof in amount. The domestic must pay "an annual state corporation license tax," while the foreign corporation must pay " a state license tax" annually. The means of enforcing payment are not different, and such means are stated in section 66 of the act of 1902.

Whatever be the name or nature of the tax, it must be measured in amount by the same rate as is provided for the domestic institution, and if the latter is not taxed in that way neither can the state thus tax the foreign corporation.

It is unnecessary to refer to the many cases cited by both parties hereto. Some of them refer to the question as to the nature of such

a tax, while others decide, upon the facts appearing in them whether there was a contract or not. As already stated, the name of the tax or its kind is not important so long as it is plain that the act of 1902 increases the liabilities of the foreign corporation over those which obtain in the case of the domestic. And in regard to the cases of contract, while the principle that a contract may arise from a legislative enactment has been reiterated times without number, it must always rest for its support in the particular case upon the construction to be given the act, and in this case we are not greatly aided by the former cases regarding taxation and legislative contract. We may, however, refer to the following out of many cases, regarding contracts as to taxation: Miller v. The State, 15 Wall. 478; New York, Lake Erie & Western Railroad Co. v. Pennsylvania, 153 U. S. 628; Power, Auditor, v. Detroit &c. Railway Co., 201 U. S. 543. . .

Reversed.

FULLER, C. J., HARLAN, HOLMES, and MOODY, JJ., dissented. биниане a provenow fa a penalty ow dusmance too Palley Halow in event of and faces ump anwent of $10.

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FRATERNAL MYSTIC CIRCLE v. SNYDER.

SUPREME COURT OF THE UNITED STATES. 1913.

[227 United States, 497.]1

ERROR to the Supreme Court of Tennessee.

Suit was brought in the Chancery Court of Tennessee to enforce payment of an insurance policy issued in 1887 on the life of C. C. Snyder, who died in 1908. In 1901 the legislature of Tennessee enacted (Acts of 1901, c. 141) that insurers "in all cases when a loss occurs and they refuse to pay the same within sixty days after a demand shall have been made, . . shall be liable to pay the holder of said policy, in addition to the loss and interest thereon, a sum not exceeding twenty-five per cent on the liability for said loss; Provided, that it shall be made to appear to the court or jury trying the case that the refusal to pay said loss was not in good faith, and that such failure to pay inflicted additional expense, loss or injury upon the holder; . . . and, provided, further, that such

1 A statement has been framed upon the opinion. — ED.

...

additional liability within the limit prescribed shall, in the discretion of the court or jury, . . . be measured by the additional expense, loss and injury thus entailed." The statute further enacted that if "it shall be made clear . . . that the action of said policy holder in bringing said suit was not in good faith, and recovery . . . shall not be had, said policy holder shall be liable to such insurance companies, corporations, firms or persons in a sum not exceeding twenty-five per cent of the amount of the loss claimed under said policy; Provided, that such liability, within the limits prescribed, shall, in the discretion of the court or jury, ... be measured by the additional expense, loss or injury inflicted . . . by reason of such suit." The court gave judgment

for the holder of the policy, and, finding that the refusal to pay had not been in good faith, added to the recovery twenty-five per cent, in accordance with the statute, as "reasonable compensation and reimbursement" for the "additional loss, expense and injury." The Supreme Court of Tennessee affirmed the judgment (122 Tenn. 248). affid

F. Zimmerman, for plaintiff in error; and J. B. Sizer and Robert Pritchard, contra.

HUGHES, J., delivered the opinion of the court.....

The contention is that the provision for added liability placed a burden upon the assertion of the rights which the contract secured and thus in effect changed the contract by allowing a recovery to which the parties had not agreed and which was not sanctioned by the law as it existed at the time the contract was made. Bronson v. Kinzie, 1 How. 311, 317; Barnitz v. Beverly, 163 U. S. 118; Bedford v. Eastern Building & Loan Ass'n, 181 U. S. 227; Oshkosh Water Works Co. v. Oshkosh, 187 U. S. 437, 439. It is pointed out that in the cases in which statutes have been sustained providing for the addition to the recovery of attorney's fees or damages, or penalties, the question arose under the Fourteenth Amendment, and that, so far as they applied to suits upon contracts, the latter had been made after the enactments. Atchison, T. & S. F. R. R. Co. v. Matthews, 174 U. S. 96; Fidelity Mutual Life Ass'n v. Mettler, 185 U. S. 308, 322; Iowa Life Insurance Co. v. Lewis, 187 U. S. 335, 355; Farmers' &c. Insurance Co. v. Dobney, 189 U. S. 301, 304, 305; Seaboard Air Line Railway v. Seegers, 207 U. S. 73; Yazoo & Miss. Valley R. R. Co. v. Jackson Vinegar Co., 226 U. S. 217.

What, then, is the effect of the statute with respect to pre-existing contracts? It is at once apparent that it does not purport to

affect the obligation of the contract in any way. It does not attempt to change or to render nugatory any of the terms or conditions of the policy of insurance, or to relieve the insured from compliance with any stipulation it contained. It does not seek to give a right of action where none would otherwise exist or to deprive the company of any defense it might have. If the company is not liable according to its contract, it is not required to pay. Nor does the statute permit a recovery of expenses or added damages as a mere consequence of success in the suit. The question whether the state may so provide as to prior contracts is not before us, and we express no opinion upon it.

The statute is aimed not at the rights secured by the contract but at dishonest methods employed to defeat them. The additional liability is attached to bad faith alone. This is the necessary effect of the proviso. It is only when it is "made to appear to the court or jury trying the case that the refusal to pay said loss was not in good faith" that the added recovery may be had. It must also appear that such refusal inflicted “additional expense, loss or injury" upon the policy holder, and it is this further expense, loss or injury that measures the amount to be allowed, which is not to exceed twenty-five per cent of the liability on the policy.

It cannot be said that this effort to give indemnity for the injuries which would be sustained through perverse methods and through an abuse of the privileges accorded to honest litigants imposed a burden upon the enforcement of the contract. Neither the contract, nor the existing law which entered into it, contemplated contests promoted in bad faith or justified the infliction of loss by such means. The state was entitled at all times to take proper measures to prevent the perversion of its legal machinery, and there was no denial or burdening in any proper sense, of the existing remedies applicable to the contract by the demand that they be availed of bona fide.

Judgment affirmed.

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CHAPTER II.

EX POST FACTO LAWS.

CALDER and Wife v. BULL and Wife.

SUPREME COURT OF THE UNITED STATES. 1798.

[3 Dallas, 386.]

In error from the State of Connecticut. The cause was argued at the last term (in the absence of the Chief Justice 1) and now the court delivered their opinions seriatim.

CHASE, J. The decision of one question determines (in my opinion) the present dispute. I shall, therefore, state from the record no more of the case, than I think necessary for the consideration of that question only.

The Legislature of Connecticut, on the 2d Thursday of May 1795, passed a resolution or law, which, for the reasons assigned, set aside a decree of the court of Probate for Hartford, on the 21st of March 1793, which decree disapproved of the will of Normand Morrison (the grandson) made the 21st of August 1779, and refused to record the said will; and granted a new hearing by the said Court of Probate, with liberty of appeal therefrom, in six months. A new hearing was had, in virtue of this resolution, or law, before the said Court of Probate, who, on the 27th of July 1795, approved the said will, and ordered it to be recorded. At August 1795, appeal was then had to the superior court at Hartford, who at February term 1796, affirmed the decree of the Court of Probate. Appeal was had to the Supreme Court of Errors of Connecticut, who, in June 1796, adjudged, that there were no errors. More than 18 months elasped from the decree of the Court of Probate (on the 1st of March 1793) and thereby Caleb Bull and wife were barred of all right of appeal, by a statute of Connecticut. There was no law of that state whereby a new hearing, or trial, before the said Court of Probate might be obtained. Calder and wife claim the premises in question, in right of his wife, as heiress of N. Morrison, physician; Bull and wife claim under the will of N. Morrison, the grandson.