Messrs. W. E. Hemingway and E. B. Kinsworthy for plaintiff in error.[ St Louis, I M & S R Co v. Wynne 224 U.S. 354 (1912) ]
[224 U.S. 354, 356] Messrs. Robert E. Wiley and Powell Clayton for defendant in error.
Mr. Justice Van Devanter delivered the opinion of the court:
A statute of the state of Arkansas (Laws of 1907, act 61), relating to the liability of carriers by railroad for live stock killed, wounded, or injured by their trains, contains this provision:
It will be perceived that, while before the suit the owner demanded $ 500 as damages, which the company refused to pay, he did not in his suit either claim or establish that he was entitled to that amount. On the contrary, by the allegations in his complaint he confessed, and by the verdict of the jury it was found, that his damages were but $400. Evidently, therefore, the prior demand was excessive and the company rightfully refused to pay it. And yet, the statute was construed as penalizing that refusal and requiring a judgment for double damages and an attorneys' fee. In other words, the application made of the statute was such that the company was subjected to this extraordinary liability for refusing to pay the excessive demand made before the suit.
We think the conclusion is unavoidable that the statute, as so construed and applied, is an arbitrary exercise of the powers of government and violative of the fund-amental rights embraced within the conception of due process of law. It does not merely provide a reasonable [224 U.S. 354, 360] incentive for the prompt settlement, without suit, of just demands of a class admitting of special treatment by the legislature, as was the case with the statute considered in Seaboard Air Line R. Co. v. Seegers, 207 U.S. 73 , 52 L. ed. 108, 28 Sup. Ct. 28, but attaches onerous penalties to the nonpayment of extravagant demands, thereby making submission to them the preferable alternative. Thus, it takes property from one and gives it to another, not because of a breach by the former of a duty to the latter or to the public, but because of a lawful exercise of an undoubted right. Plainly this cannot be done consistently with due process of law. And, in principle, the supreme court of the state has so held since its decision in this case. In Pacific Mut. L. Ins. Co. v. Carter, 92 Ark. 378, 123 S. W. 384, 124 S. W. 764, that court had occasion to consider a statute of the state providing that if a loss under a policy of insurance was not paid within the time specified, 'after demand made therefor,' the company should be liable, in addition to the amount of the loss, to 12 per cent damages and a reasonable attorneys' fee An insured demanded in payment of a loss under such a policy the sum of $1,666.66, which the insurance company refused to pay, and in a suit on the policy, wherein it was found that the loss was but $1,444.44, the insured was awarded the statutory damages and an attorneys' fee. That part of the judgment was reversed, and it was said:
In the brief for the railway company the contention is advanced that the statute would still be wanting in due process of law were it construed as imposing double liability, with an attorneys' fee, only where the prior demand is fully established in the suit following the refusal to pay; but that question does not necessarily arise upon the facts of this case, and we purposely refrain from considering it.
Confining ourselves to what is necessary for the decision of the case in hand, we hold that the statute, as construed and applied by the state courts, is wanting in due process of law, and repugnant to the 14th Amendment of the Constitution of the United States.
The judgment is accordingly reversed, and the case is remanded for further proceedings not inconsistent with this opinion.