The issue at bar was the constitutionality of Act No 66 of the Louisiana legislature.The act read as follows The act reads as follows: 'Be it enacted by the general assembly of the state of Louisiana, that any person, firm or corporation who shall fill up, sign or issue in this state any certificate of insurance under an open marine policy, or who in any manner whatever does any act in this state to effect for himself, or for another, insurance on property then in this state, in any marine insurance company which has not complied in all respects with the laws of this state, shall be subject to a fine of one thousand dollars for each offense, which shall be sued for in any competent court by the attorney general for the benefit of the charity hospitals in New Orleans and Shreveport.
' (Allgeyer v. Louisiana 165)E. Allegeyer and Co. violated the provisions of the statue by mailing a letter of advice to the Atlantic Mutual Insurance Company in New York for certain bales of cotton.
The defendant averred that the said law was unconstitutional because it deprived them of property without due process of the law and denied them their right to due process.The court of first instance decided in favor of the defendants and an appeal was taken from the judgement to the State Supreme Court which reversed the lower court’s decision. The Louisiana Supreme court decided in favor of the plaintiff for $1000 (18 South 904). The plaintiff’s thus bring the case before the high court questioning the consitutionality of the LawThe Supreme Court held that No 66, laws La. 1894 was repugnant to the federal constitution and afforded no justification for the judgement granted by the courts against the plaintiffs. The Judgment was reversed and the case remanded to the Louisiana Supreme Court for further proceedings.
The Supreme Court anchored its decision on jurisprudence showing that ‘liberty’ does not provide unlimited action on the part of citizens. Rather the state has the right to exercise a determinable level of police power. The issue at hand then is how far suhc power can be legitimately exercised. The Court held that the mere fact that a citizen may be within the limits of a particular state does not prevent his making a contract outside its limits for as long as he himself is within the state.(Milliken v.
Pratt 125 Mass. 374 and Tilson v. Blair, 21 Wall. 241).
In this case the contract was validly made outside the state, to be performed outside the state albeit the subject property was at the moment temporarily within the State.The contract was valid at the place where it was perfected and the place where it was to be performed, the party upon whom it is devolved the right or duty to send the notification in order that the insurance provided by the contract may attach to the property specified in the shipment in the notice must have the liberty to do the act.The giving of notice is merely a collateral matter not the contract itself although it is performed in pursuance of a valid contract and can not be subject to regulation.In summary, the Supreme Court held Allgeyer’s liberty to contract as constitutionally protected and valid. While the law’s raised to abridge it are held to be invalid.
Since then the case has been frequently citied in cases regarding deprivation of property both here and abroad. Economic right’s cases have also found this case cited.SourcesALLGEYER v. STATE OF LOUISIANA, 165 U.S.
578 (1897)Justia.com available at http://supreme.justia.com/us/165/578/case.html
