Northwestern Improvement Co.1 in 1911. In the lower court the right of the auditor to collect the assessments provided for by the act was challenged by a coal mining company and it refused to pay the sums due, whereupon the auditor brought action in the court below on an agreed statement of facts. The sole question involved was the constitutionality of the act. The act was sustained by the district court, whereupon the Northwestern Improvement Co. appealed. This appeal resulted in the reversal of the judgment of the lower court, the law being declared unconstitutional on the ground that, in permitting employés to waive their rights under the insurance act and sue an employer who had made the required contributions to the insurance fund, there was not given to the employer that equal protection of the law which is his constitutional right.

§ 61. Questions presented to the court.-In this case the questions considered were: 1. Can the statute be upheld as a proper exercise of the police power of the State? 2. Is the act an example of class legislation, in that it singles out one particularly hazardous employment and subjects it to burdens not placed upon other extra-hazardous employments within the State? 3. Is the right to trial by jury denied? 4. Does the system and machinery provided in the act constitute due process of law? 5. Is the contention that the provision for payment to an injured employé of his compensation in a lump sum defeats the purpose of the act, viewed as a police regulation, tenable? 6. Is the argument that the act does not differentiate between a careful and a careless employer, valid? 7. Is the claim that the act lodges judicial powers in the State auditor, valid?

§ 62. The constitutionality of the act.-The court sustained the constitutionality of the act in respect to 1 44 Mont. 108, 119 Pac. 554.

all of the foregoing questions except the one raised in the fourth. The court, in answering question No. 4, held the act unconstitutional because it violated the "due process of law" clause of the constitution of the United States. The court, speaking through Mr. Justice Smith, said: "It is therein contended that in reserving to the employé his right to an action at law, the act denies to the mine operator the equal protection of the laws. We have decided that the fact that actions at law are not abolished by the act is not, of itself, a sufficient reason for declaring the statute unconstitutional. We do not believe that for the purpose of determining the validity of the tax it is necessary to find an immediate specific benefit to the individual taxed,' as is maintained by some writers on the subject. We think we have already shown that if the act can be justified at all it must be upon a much broader principle than that above indicated. The duty to make payments as provided in section 2 is absolute and unconditional. It can be enforced by appropriate action. But after full compliance with the terms of the act, the employer is not exonerated from liability. He may still be sued and compelled to pay damages in a proper case. No provision is made for reimbursement in whole or in part. The injured employés of one operator may all resort to the indemnity fund, while those of another may elect to appeal to the courts. The result is that the employer against whom an action is successfully prosecuted, is compelled to pay twice. He has fully paid his assessments under the act and is also obliged to pay damages. This fact is so palpable as to be needless of discussion. The act in this regard is not only inequitable and unjust, but clearly illegal and void as not affording to such employer the equal protection of the laws. The Legislature of the State of Washington guarded against this contingency by abolishing all actions for negligence. (Ch. 74, Session

Laws, Washington, 1911.) The General Assembly of Maryland, in an act somewhat similar to ours (see Laws of Maryland, 1910, ch. 153) provided: 'If any suit or action be brought against any operator for or in respect of any injury or disability received by an employé while in the discharge of his duty or for death resulting therefrom and said operator shall appear and defend such suit or action and a judgment shall be rendered against him, he shall, after satisfying said judgment * * * be entitled thereafter to deduct from the payments required to be made by him sum equal to the amount of said judgment and costs.'

a

"The manner in which the equal protection of the laws shall be afforded to the operator is, of course, for the legislative body to determine; but some method must assuredly be provided to protect him from double payments. The act in its present form, is, in this regard, so repugnant to all ideas of equity and equality that it must, we think, appeal to every right-thinking person, on the most cursory examination, as unjust. It was to guard against such legislation as this, as we apprehend, that the framers of all American constitutions guaranteed to the citizen the equal protection of the laws."

On the question of the exercise of judicial power by the auditor it was observed by the court:

"The fact that one who has a cause of action at common law may elect to take under the act, and the suggestion that as to him the auditor may be called upon to exercise judicial power, has no persuasive force when we consider that such election is altogether voluntary, and he may resort to the courts if he so desires. If the tax provided for in the act can legally be exacted from the employer, and, as is the case, the acceptance of its benefits by the claimant ipso facto operates to release the employer from liability, it is difficult to see how the latter has any further concern in the matter

* *

of distribution of the fund than to be assured, as the act provides he may be, that it is not paid out on improper or fraudulent claims. If the summary method of administration provided may not be resorted to, then one of the paramount reasons for this class of legislation must be entirely eliminated from consideration. It seems to us that the opinion of the Supreme Court of the United States * effectually disposes of this question, as well as of some others which we have considered. As this opinion is already too long, however, we shall content ourselves with a single quotation therefrom: "Though, generally, both public and private wrongs are redressed through judicial action, there are more summary extrajudicial remedies for both.'

§ 63. The effect of the decision.-This decision and the earlier New York decision2 establish conclusively that a compulsory workmen's industrial insurance or workmen's compensation act can not contain a provision that will give the injured worker the option of suing his employer or of accepting the compensation provided by the act.

This decision leaves Montana without an operative workmen's compensation act. However, since the court sustained all of the provisions of the law, except that giving the injured worker the right to elect to sue his employer at law as heretofore or to accept the compensations given him under the compensation act, it may be cured and made operative by an amendment which takes away this option to sue and makes it obligatory upon him to accept the compensations made and provided in the act.

§ 64. Text of the Montana Insurance Act.-The act is entitled an act to create a state accident insurance, and total permanent disability fund, for coal miners and

2 Ives v. South Buffalo Railway Co., 201 N. Y. 271, 94 N. E. 431, 34 L. R. A. (N. S.) 162 n.

10-BOYD W C

employés at coal washers in the state of Montana, and providing for the maintenance and management of the same; extending and defining the duties of the state auditor; and fixing penalties for the violation of its provisions. It provides:

Section 121. (Section 1.)-To whom act applies.All workmen, laborers, and employés employed in and around any coal mines, or in and around any coal washers in which coal is treated, except office employés, superintendents and general managers, shall be insured in accordance with the provisions of this act, against accidents occurring in the course of their occupations.

Section 122. (Section 2.)-How fund raised-To whom paid. All corporations, partnerships, associations or persons engaged in the business of operating any coal mine or coal washers in the State of Montana shall pay to the auditor of the State, within five days after the monthly wages at the particular mine shall have been paid, one cent per ton on the tonnage of coal mined and shipped, or sold locally, or having been mined is ready for shipment or sale during the month for which the wages were paid, and all persons mentioned in section 1 employed in and about coal mines shall allow to be deducted from their gross monthly earnings one per cent. thereof, the deduction to be made by the agent, manager, or foreman of any corporation, association, partnership, person or persons engaged in the business of operating any coal mine or coal washer, and paid to the State auditor within five days after such monthly wages. have been paid.

Section 123. (Section 3.)—Agents to report tonnage mined-Contracts waiving effect of act void.-The agent, manager, foreman or accountant of any corporation, partnership, association, person or persons engaged in mining coal in Montana, shall on or before the