To the contention that the statute unduly burdens interstate commerce, the court replied: "A statute may indirectly or incidentally affect interstate commerce, as local police measures frequently do, without offending the commerce clause. The defendant is a Minnesota corporation. The product which it purchased might have gone as well to a point in Minnesota for manufacture or resale. It so happened that it went to Iowa. The statute is not unconstitutional as an interference with interstate commerce.'

Counsel for the State concede that the statute requires buyers to pay the same price for like commodities at all points of purchase, after proper allowances for transportation. Also, that it inhibits plaintiff in error from meeting local competition by increasing the price only at that place; also, from varying purchase prices to meet normal trade conditions.

They further admit that the State may not arbitrarily interfere with the right of one conducting a lawful business to contract at will; but they say that the federal Constitution does not guarantee absolute freedom of contract and the State may prohibit transactions not in themselves objectionable when within reason this may seem necessary in order to suppress substantial evil.

It seems plain enough that the real evil supposed to threaten the cream business was payment of excessive prices by powerful buyers for the purpose of destroying competition. To prevent this the statute undertook to require every buyer to adhere to a uniform price fixed by a single transaction.

As the inhibition of the statute applies irrespective of motive, we have an obvious attempt to destroy plaintiff in error's liberty to enter into normal contracts long regarded not only as essential to the freedom of trade and commerce but also as beneficial to the public. Buyers in competitive markets must accommodate their bids to

prices offered by others, and the payment of different prices at different places is the ordinary consequent. Enforcement of the statute would amount to fixing the price at which plaintiff in error may buy, since one purchase would establish this for all points without regard to ordinary trade conditions.

The real question comes to this May the State, in order to prevent some strong buyers of cream from doing things which may tend to monopoly, inhibit plaintiff in error from carrying on its business in the usual way heretofore regarded as both moral and beneficial to the public and not shown now to be accompanied by evil results as ordinary incidents? Former decisions here require a negative answer. We think the inhibition of the statute has no reasonable relation to the anticipated evil-high bidding by some with purpose to monopolize or destroy competition. Looking through form to substance, it clearly and unmistakably infringes private rights whose exercise does not ordinarily produce evil consequences, but the reverse.

In Adams v. Tanner, 244 U. S. 590, 594, this court said: Because abuses may, and probably do, grow up in connection with this business, is adequate reason for hedging it about by proper regulations. But this is not enough to justify destruction of one's right to follow a distinctly useful calling in an upright way. Certainly there is no profession, possibly no business, which does not offer peculiar opportunities for reprehensible practices; and as to every one of them, no doubt, some can be found quite ready earnestly to maintain that its suppression would be in the public interest. Skilfully directed agitation might also bring about apparent condemnation of any one of them by the public. Happily for all, the fundamental guaranties of the Constitution cannot be freely submerged if and whenever some ostensible justification is advanced and the police power invoked.”

Concerning a price-fixing statute, Tyson and Brother v. Banton et al., 273 U. S. 418, recently declared: "It is urged that the statutory provision under review may be upheld as an appropriate method of preventing fraud, extortion, collusive arrangements between the management and those engaged in reselling tickets, and the like. That such evils exist in some degree in connection with the theatrical business and its ally, the ticket broker, is undoubtedly true, as it unfortunately is true in respect of the same or similar evils in other kinds of business. But evils are to be suppressed or prevented by legislation which comports with the Constitution, and not by such as strikes down those essential rights of private property protected by that instrument against undue governmental interference. One vice of the contention is that the statute itself ignores the righteous distinction between guilt and innocence, since it applies wholly irrespective of the existence of fraud, collusion or extortion (if that word can have any legal significance as applied to transactions of the kind here dealt with-Commonwealth v. O'Brien & others, 12 Cush. 84, 90), and fixes the resale price as well where the evils are absent as where they are present. It is not permissible to enact a law which, in effect, spreads an all-inclusive net for the feet of everybody upon the chance that, while the innocent will surely be entangled in its meshes, some wrong-doers also may be caught." And see Adkins v. Children's Hospital, 261 U. S. 525; Wolff Co. v. Industrial Court, 262 U. S. 522, 537.

Booth v. Illinois, 184 U. S. 425, much relied upon by counsel for the State, sustained the validity of an Act forbidding options to sell or buy property at a future time, ultimate delivery being intended. The evident purpose was to prevent gambling contracts. The Supreme Court of Illinois pointed out that gambling was commonly incidental to dealings in futures, and held the Legislature

might properly conclude that the public interest demanded their suppression as a class in order to avert this evil. This court said: "A calling may not in itself be immoral, and yet the tendency of what is generally or ordinarily or often done in pursuing that calling may be towards that which is admittedly immoral or pernicious. If, looking at all the circumstances that attend, or which may ordinarily attend, the pursuit of a particular calling, the State thinks that certain admitted evils cannot be successfully reached unless that calling be actually prohibited, the courts cannot interfere, unless, looking through mere forms and at the substance of the matter, they can say that the statute enacted professedly to protect the public morals has no real or substantial relation to that object, but is a clear, unmistakable infringement of rights secured by the fundamental law."

The State also relies upon Otis v. Parker, 187 U. S. 606; Purity Extract Co. v. Lynch, 226 U. S. 192; Rast v. Van Deman & Lewis, 240 U. S. 342; and Merrick v. Halsey & Co., 242 U. S. 568. But all those cases recognize the duty of the court to inquire into the real effect of any statute duly challenged because of interference with freedom of contract guaranteed by the Fourteenth Amendment, and to declare it invalid when without substantial relation to some evil within the power of the State to suppress and a clear infringement of private rights.

We need not consider other points advanced by plaintiff in error.

The judgment of the court below must be reversed and the cause remanded for further proceedings not inconsistent with this opinion.

Reversed.

MR. JUSTICE HOLMES, MR. JUSTICE BRANDEIS, and MR. JUSTICE STONE dissent.

OHIO PUBLIC SERVICE COMPANY v. OHIO EX REL.

FRITZ.

ERROR TO THE SUPREME COURT OF THE STATE OF OHIO.

Nos. 210, 264. Argued March 10, 1927-Decided April 11, 1927.

1. Of two writs of error to a state court, the one sued out pending motion for rehearing and the other after rehearing denied, the second may be relied on and the other dismissed. P. 12. 2. An ordinance of an Ohio village, in 1892, authorizing persons named to use the streets, etc., for the purpose of erecting, maintaining and operating electric light wire mains and apparatus complete for the distribution of electricity for light, heat and power, granted an assignable franchise for an unlimited time and not subject to termination at the mere will of the grantor. P. 13. 3. Subsequent legislation of the State destroying the assignability of the franchise would be invalid under the Contract Clause of the Federal Constitution. P. 14.

113 Oh. St. 325, reversed.

ERROR to a judgment of the Supreme Court of Ohio which affirmed a judgment in quo warranto ousting the Public Service Company from use of the streets in the Village of Orrville under a franchise to transmit and distribute electricity.

Messrs. C. H. Henkel and Frank M. Cobb, with whom Mr. Franklin L. Maier was on the brief, for plaintiff in

error.

Messrs. Lyman R. Critchfield and Alton H. Etling, with whom Mr. Joseph O. Fritz, Prosecuting Attorney, was on the brief, for defendant in error.

MR. JUSTICE MCREYNOLDS delivered the opinion of the Court.

These two writs of error were sued out at different stages of the same cause; the first while a timely application for rehearing was pending; the second after this