165 U.S. 578 (1897)
The defendants, citizens of Louisiana, procured an open policy of marine insurance from the Atlantic Mutual Insurance Company of New York, a foreign company not doing business within the State and having no agent therein.1 The open policy was conceded to be a New York contract entered into at New York City.2
While in Louisiana the defendants mailed a letter or sent a telegram to the insurance company in New York notifying it of cotton shipments so that coverage would attach under the existing open policy.3 The instant the letter or communication was mailed or telegraphed, the property was insured.4
Louisiana prosecuted the defendants under Act No. 66 of the Laws of Louisiana of 1894 for the notification act, claiming that it effected insurance on property located in the state with a non-compliant foreign company.5
The Supreme Court of Louisiana affirmed the conviction.6 It held that the mailing occurred within the state and related to property within its limits, even though the contract itself was formed outside the state.7
Whether a Louisiana statute that prohibits a citizen from mailing a notification within the state, in order to attach coverage under an out-of-state insurance contract with a foreign company that has not complied with state laws, violates the Due Process Clause of the Fourteenth Amendment?8
The liberty protected by the Due Process Clause of the Fourteenth Amendment embraces the right of a citizen to enter into all contracts which are proper, necessary, and essential to carrying out lawful purposes, including the right to contract outside the state for insurance on property and to perform acts necessary to effectuate such contracts such as mailing a notification letter, and a state statute that prohibits such an act violates the Fourteenth Amendment because it deprives the citizen of liberty without due process of law.9
Yes. The facts of this case demonstrate that the Louisiana statute impermissibly interfered with the defendants' protected liberty to perform an act necessary to a valid out-of-state contract.10
The only act performed within Louisiana was the mailing of the notification letter after the principal contract had already been made and was to be performed in New York.11 This mailing constituted a mere collateral act pursuant to a valid contract formed outside the state's jurisdiction rather than the making of a new contract within the state.12
The statute as construed by the Louisiana court therefore deprived the defendants of their liberty without due process of law by prohibiting an act that the Fourteenth Amendment protects.13 The court reached this result by first recognizing that the open policy and each special insurance effected under it were New York contracts.14 It then determined that the notification letter did not transform those contracts into Louisiana contracts.15 Finally, it concluded that the state could not criminalize the performance of a necessary step under an out-of-state agreement without violating the liberty interest in pursuing ordinary callings and entering essential contracts.16
The Louisiana statute violates the Due Process Clause of the Fourteenth Amendment.17