AETNA LIFE INSURANCE COMPANY v. DAVEY was a case heard by the United States Supreme Court in which the Court was asked to determine whether a state law that prohibited insurance companies from issuing life insurance policies to minors was constitutional. The Court held that the law was constitutional, as it did not violate the Contract Clause of the United States Constitution. The case arose when Aetna Life Insurance Company attempted to issue a life insurance policy to a minor, John Davey, who was under the age of 21. Davey's father, who was the policy's beneficiary, had signed the policy on behalf of his son. However, the state of Ohio had a law that prohibited insurance companies from issuing life insurance policies to minors. Aetna sued, arguing that the law violated the Contract Clause of the United States Constitution, which prohibits states from passing laws that impair the obligation of contracts. The Supreme Court held that the law was constitutional, as it did not violate the Contract Clause. The Court reasoned that the law did not impair the obligation of any existing contract, as the contract between Aetna and Davey had not yet been formed. The Court also noted that the law was a valid exercise of the state's police power, as it was designed to protect minors from entering into contracts that they may not fully understand. In conclusion, the Supreme Court held that the state law prohibiting insurance companies from issuing life insurance policies to minors was constitutional, as it did not violate the Contract Clause of the United States Constitution.

In Aetna Life Insurance Company v. Davey, the Supreme Court was tasked with determining whether a contract of life insurance issued by an out-of-state company to an in-state resident was subject to state taxation. The majority opinion held that such contracts were not taxable under the Commerce Clause of the Constitution and thus could not be taxed by states. Justice Field dissented from this decision, arguing that while Congress had authority over interstate commerce, it did not have exclusive power over all commercial transactions between citizens of different states; rather, he argued that each state retained its right to tax certain activities within its borders unless prohibited by Congress or otherwise unconstitutional. He further noted that since there was no federal law prohibiting such taxes on life insurance policies issued outside a state but taken out within it, then those policies should be subject to taxation as any other property would be if owned within a particular state's boundaries.