Case Name: Allgeyer v. Louisiana
Citation: 165 U.S. 578 (1897)
Issue: Whether a Louisiana law which required foreign corporations to have a place of business within the state in order to do business within the state violated the due process clause of the 14th amendment.
Key Facts: Louisiana had a law prohibiting a foreign corporation from doing business in the state unless it has at least one known place of business within the state and has an authorized agent in the state (“upon whom process may be served”). The defendant sent a letter through the mail notifying a current client. The insurance contract with the client was made in New York, the premiums were to be paid in New York, and, if necessary, the insurance adjustment was to be made in New York. The letter did not create a new contract but notified the insured that their current contract with the insurance company would cover their property located in Louisiana.
Procedural History: The supreme court of Louisiana ruled that writing the letter within the state was a violation of its law.
Holding: The statute violates the 14th amendment as it deprives the defendants of their liberty without due process of law. A citizen of Louisiana has the right to enter into a contract in New York with an insurance company in New York.
Reasoning: Any act by the state legislature to prevent a contract such as this (or the mailing of a notification within the state of Louisiana) is an improper and illegal interference with the conduct of the citizen. Although the citizen resides in the state, his right to contract outside the state is beyond the jurisdiction of the state.
Liberty means not only the right of the citizen to be free in the enjoyment of all his faculties; to be free to use them in all lawful ways; to live and work where he will; to earn his livelihood by any lawful calling; to pursue any livelihood or vocation; and for that purpose to enter into all contracts which may be proper, necessary, and essential to his carrying out to a successful conclusion the purposes above mentioned.