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by such an attorney, of the retirement solicitor and representative of the of a member of a partnership with Savings & Loan Association, but that which his clients are doing business, is this was done in an independent and not imputable to the clients, where it separate transaction in which he repdoes not appear that such knowledge resented other clients in the performhad any relation to the business in ance of an accustomed service of an which the attorney was at any time attorney. It is further stated that if employed by the clients.98 The court it had been a part and parcel of the stated :98 "If he had been employed transaction between the parties for to ascertain in advance who were par- whom the contract was drawn, that one ties to whom credit might safely be of the parties thereto was to apply to given, and who were the responsible

the Savings & Loan Association, repmembers of firms, they [his clients] resented by him as a general attorney would have been bound by his knowl

for a loan which was to be secured by edge on this subject. But a general

land, in which the equitable interest retainer to do business as an attorney

had been created, a different case at law does not include this kind of

might be presented. It is further addservice." A savings and loan associa

ed that a different question would be tion is not chargeable with the knowledge of an attorney regularly employed

presented if it were made to appear

by the proof that knowledge was presto pass upon titles to property offered

ent in the mind of the attorney at as security for loans, of an equitable interest in such a property created by

the time he passed upon the abstract a contract which the attorney drafted

of title for the Savings & Loan Assofor other clients, in an independent

ciation. The court adds: "It will separate transaction, a few days be- not do, in the opinion of the writer, to fore.99 The Tennessee court 99 states

establish the rule that a busy attorney, that in the drafting of this contract called on in his office by two strangers the attorney was, in no sense, the to him, to write executory agreements tice to a client, must be made in re- tween the insured and a lighterman, spect of some pending matter, and because of the fact that knowledge of be such that the solicitor was bound this arrangement had been disclosed to communicate them to the client; the to the defendant's solicitor, the court mere circumstance of being the or- states: “It seems to me that such a dinary solicitor of a party amounting

disclosure has no effect at all. A soto nothing.

licitor is not a standing agent for one It is stated by Bramwell, L. J., in who has been or may be his client, to Saffron Walden Second Ben. Bldg. Soc. receive a mercantile notice in respect v. Rayner (1880) L. R. 14 Ch. Div. of mercantile business.' (Eng.) 406, that "there is no such In Akers v. Rowan (1890) 33 S. C. thing as a standing relation of a so- 451, 10 L.R.A. 705, 11 S. E. 389, 12 S. licitor to a man. A solicitor does not E. 165, it is held that, though an atstand in a permanent relation to his torney of a bank may be its agent, yet client, as a chaplain does to a noble- the knowledge which such an officer man, or body, having a chaplain. A has acquired while acting for himself man is a solicitor for another only or for a third person, not for the bank, when that other has occasion to em

cannot be imputed to the bank, espeploy him as such. That employment cially where such knowledge cannot may be either to conduct a suit or to

be communicated without a breach of advise him about some matter in which

confidence on the part of the attorney. legal advice is required; but there is

98 Vietor v. Spalding (1908) 199 no such general relationship as that

Mass. 52, 127 Am. St. Rep. 472, 84 N. of solicitor and client, of a standing

E. 1016, approved on 2d appeal in

(1909) 202 Mass. 234, 88 N. E. 846. It and permanent character, upon all oc

is stated that there was nothing to incasions and for all purposes.” As to

dicate that the attorney knew that his facts in this case, see supra, note 28. client was dealing with the partner

In Tate v. Hyslop (1885) L. R. 15 ship until a long time after the sale of Q. B. Div. (Eng.) 368, where it was goods for which recovery was sought. sought to affect an insurance company 99 Kirklin v. Atlas Sav. & L. Asso. with notice of an arrangement be- (1900) – Tenn. 60 S. W. 149.

was

to exchange their real estate when one covered by the papers he, as attorney of them gets to a court to ratify the for the parties, drew days, or weeks, trade, and during the time he is en- or perhaps months, before." gaged in securing this ratification the Notice to the general attorney of a other is to mortgage his farm to se- railroad company of the assignment cure a loan, must remember and com- of a land claim, before any actio municate the fact to a regular client, pending with reference thereto, is not who is thereafter applied to for the notice to the company unless, prior to loan, when his client submits to him such notice, the attorney had been for his opinion the abstract of title directed to take charge of the subjectto the property offered as security for matter thereof.10 the loan, and, moreover, that he is But notice to the general counsel called on to remember that the proper- for a company, respecting a matter in ty offered as security for the loan is which he was authorized to act for the same property embraced in and his employer, is notice to the client.101

100 Atchison, T. & S. F. R. Co. v. E. 1105, holding notice to the attorney Benton (1889) 42 Kan. 698, 22 Pac. for a company which stood in the re698.

lation of indemnitors, of a suit against 101 Vogemann v. American Dock & the indemnitees, notice to the client. Trust Co. (1909) 131 App. Div. 216, Cochburn v. Hawkeye Commercial 115 N. Y. Supp. 741, affirmed without Men's Asso. (1913) 163 Iowa, 28, 143 opinion in (1910) 198 N. Y. 586, 92 N. N. W. 1006, supra, note 16. W. A. E.

a

DAKOTA CENTRAL TELEPHONE COMPANY et al., Plffs. in Err.,

V. STATE OF SOUTH DAKOTA EX REL. BYRON S. PAYNE, Attorney

General, et al.

United States Supreme Court - June 2, 1919.

(250 U. S. 163, 63 L. ed. 910, P.U.R.1919D, 717, 39 Sup. Ct. Rep. 507.) Telephones — intrastate rates - state control.

1. State control over intrastate telephone rates ceased with the exercise by the President of his authority under the joint resolution of July 16, 1918, as a war emergency measure, to take complete possession and exclusive control, with the right to the entire operating revenues, of the telephone and telegraph systems, notwithstanding the proviso in such resolution that nothing therein contained shall be construed “to amend, repeal, impair, or affect existing laws or powers of the states in relation to taxation or the lawful police regulations of the several states, except wherein such laws, powers, or regulations may affect the transmission of government communications, or the issue of stocks and bonds by such system or systems."

[See note on this question beginning on page 1680.] Federal operation war measure.

Courts relation to other depart2. Congress possessed the right un- ments Executive discretion. der the war power to confer upon the 3. The courts may not inquire into President by joint resolution of July an asserted excess or abuse of discre16, 1918, the power to take over and tion by the President in exerting the operate telephone and telegraph sys- authority conferred upon him by joint tems as a war emergency measure. resolution of July 16, 1918, to take over

and operate telephone and telegraph measure, "to supervise or to take possystems as a war emergency measure. session and assume control of any tele[See 7 R. C. L. 1048.]

graph, telephone, marine cable, or radio

system or systems, or any part thereof, Telephones – Federal operation

and to operate the same in such manner right to revenues.

as may be needful or desirable for the 4. Authority to take complete pos- duration of the war, which supervision, session and exclusive control, with the possession, control, or operation shall right to the entire operating revenues, not extend beyond the date of the procwas conferred upon the President by lamation by the President of the exthe joint resolution of July 16, 1918, change of ratifications of the treaty of empowering him, as a war emergency peace.'

(Mr. Justice Brandeis dissents.)

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ERROR to the Supreme Court of the State of South Dakota to review a decree enjoining defendants from putting into effect a schedule of rates for telephone service alleged to have been prepared by the Postmaster General. Reversed.

The facts are stated in the opinion of the court.

Mr. Alexander C. King, Solicitor United States acquiring a right of temGeneral, for plaintiffs in error: porary possession, control, and operaThe purpose and effect of the joint tion of the telegraph, telephone, etc.

, resolution and proclamation was com- systems for which it should pay. This pletely and exclusively to vest the pos

still left the then owners of the propsession and control of defendants' tele- erty as owners; and as between themphone systems in the President through selves and the United States, as a quasi the Postmaster General as his appointee tenant, the owners are responsible to on behalf of the United States.

the state for, and bound to pay, the Public Service Commission v. New taxes thereon. England Teleph. & Teleg. Co. 232 Taylor, Land & T. 3d ed. 8 341; CoolMass. 465, post, 1662, P.U.R.1919D, 49, ey, Taxn. 3d ed. 822; East Tennessee, 122 N. E. 567, affirmed in 250 U. S. 195, V. & G. R. Co. v. Morristown, Tenn. 63 L. ed. 934, 39 Sup. Ct. Rep. 511.

35 S. W. 771. The taking possession and assuming Where police power is conferred in control and operation by the President general terms upon municipalities in under the joint resolution of July 16, their charters, such delegations of pow1918, constituted such systems public er are uniformly held not to embrace utilities operated by the government, the power to regulate rates of even and made it the right and duty of the strictly local public occupations or President and his representative to fix utilities. the charge to be paid for service.

State ex rel. Wisconsin Teleph. Co. Ex parte Milligan, 4 Wall. 2, 18 L.

v. Sheboygan, 111 Wis. 23, 86 N. W. ed. 281; Legal Tender Cases, 12 Wall.

657; St Louis v. Bell Teleph. Co. 96 457, 20 L. ed. 287; Stewart v. Kahn

Mo. 623, 2 L.R.A. 278, 9 Am. St. Rep. (Stewart v. Bloom) 11 Wall. 493, 20

370, 10 S. W. 197; Bluefield WaterL. ed. 176; Atchison, T. & S. F. R. Co.

works & Improv. Co. v. Bluefield, 69 v. United States, 225 U. S. 640, 649, 56

W. Va. 1, 33 L.R.A.(N.S.) 759, 70 S. E. L. ed. 1236, 1239, 32 Sup. Ct. Rep. 702;

Jacksonville v. State ex rel. Smith v. Burleson,

772;

Southern Bell

Ala. -, P.U.R.1919F, 1, 82 So. 458; Pen

Teleph. & Teleg. Co. 57 Fla. 374, 49 So. sacola Teleg. Co. v. Western U. Teleg.

509. Co. 96 U. S. 1, 9, 10, 24 L. ed. 708, 710,

A state or its local government, when 712; Atty. Gen. v. Edison Teleph. Co. so empowered, may make a binding L. R. 6 Q. B. Div. 244, 50 L. J. Q. B. contract devesting itself for a substanN. S. 145, 43 L. T. N. S. 697, 29 Week. tial period of time of the power to Rep. 428; Railroad Commission v. Cum- regulate rates. berland Teleph. & Teleg. Co. (La. Sup. Home Teleph. & Teleg. Co. v. Los Ct.)

Angeles, 211 U. S. 273, 53 L. ed. 182, The utmost which the resolution pur- 29 Sup. Ct. Rep. 50; Minneapolis v. ported to do was to provide for the Minneapolis Street R. Co. 215 U. S.

.

(250 U. 8. 163, 63 L, ed. 910, P.U.R.1919D, 717, 59 Sup. Ot. Rep. 507.) 417, 54 L. ed. 259, 30 Sup. Ct. Rep. of wire lines is a power which cannot 118.

be inferred from any language used in The power to regulate rates is sub- the joint resolution, but must be posiject to the limitation that it must af- tively conferred by unambiguous lanford to a private owner of the utility guage. a reasonable return on his property de- Reagan v. Mercantile Trust Co. suvoted to the public use.

pra; Omaha & C. B. Street R. Co. v. Smyth v. Ames, 169 U. S. 466, 42 L. Interstate Commerce Commission, 230 ed. 819, 18 Sup. Ct. Rep. 418; Stanis- U. S. 324, 57 L. ed. 1501, 46 L.R.A. laus County v. San Joaquin & K. River (N.S.) 385, 33 Sup. Ct. Rep. 890; InCanal & Irrig. Co. 192 U. S. 201, 48 L. terstate Commerce Commission v. ed. 406, 24 Sup. Ct. Rep. 241.

Louisville & N. R. Co. 227 U. S. 88, The provisions of state statutes for 57 L. ed. 431, 33 Sup. Ct. Rep. 185; the regulation of rates charged by pri- Georgia R. & Bkg. Co. v. Smith, 128 vate persons and corporations opera- U. S. 174, 182, 32 L. ed. 377, 381, 9 ting public utilities do not by their Sup. Ct. Rep. 47; Milwaukee Electric terms apply to rates charged by agents R. & Light Co. v. Railroad Commission, of the government in the operation of 238 U. S. 174, 180, 49 L. ed. 1254, 1260, such utilities.

P.U.R.1915D, 591, 35 Sup. Ct. Rep. Railroad Commission v. Cumberland 820; Home Teleph. & Teleg. Co. v. Los Teleph. & Teleg. Co. (La. Sup. Ct.) Angeles, 211 U. S. 265, 53 L. ed. 176,

Messrs. Oliver E. Sweet and Byron 29 Sup. Ct. Rep. 50; Interstate ComS. Payne, Attorney General of South merce Commission v. Cincinnati, N. O. Dakota, for defendants in error: & T. P. R. Co. 167 U. S. 479, 494, 42

The making and regulating of the L. ed. 243, 251, 17 Sup. Ct. Rep. 896. rates of common carriers with respect The police powers of the states have to their intrastate operations has al- never been conferred upon the Federal ways been upheld by the courts as an government, and have never been partexercise of the police powers of the ed with by the states; they remain states.

under the exclusive jurisdiction of the Union Dry Goods Co. v. Georgia Pub. states. Service Corp. 248 U. S. 372, 63 L. ed. Cooley, Const. Lim. 7th ed. p. 831; 309, A.L.R. P.U.R.1919C, 60, 39 12 C. J. 910; 20 Am. & Eng. Enc. Law, Sup. Ct. Rep. 117; Atty. Gen. v. Chi- 919; 2 Words & Phrases, p. 1066; cago & N. W. R. Co. 35 Wis. 559; Munn Munn v. Illinois, 94 U. S. 113, 24 L. v. Illinois 94 U. S. 113, 24 L. ed. 77; ed. 77; Civil Rights Cases, 109 U. S. Arkansas Rate Cases, 187 Fed. 290; 3, 27 L. ed. 835, 3 Sup. Ct. Rep. 18; Reagan v. Mercantile Trust Co. 154 U. Minnesota Rate Cases (Simpson V. S. 413, 38 L. ed. 1028, 4 Inters. Com. Shepard) 230 U. S. 352, 57 L. ed. 1511, Rep. 575, 14 Sup. Ct. Rep. 1060; Wil- 48 L.R.A.N.S.) 1151, 33 Sup. Ct. Rep. liams v. State, 85 Ark. 464, 26 L.R.A. 729, Ann. Cas. 1916A, 18; 1 Roberts, (N.S.) 482, 122 Am. St. Rep. 47, 108

Federal Liabilities of Carriers, p. 36. S. W. 838; Minnesota Rate Cases Congress cannot control intrastate (Simpson v. Shepard) 230 U. S. 352, rates under the commerce clause. 57 L. ed. 1511, 48 L.R.A.(N.S.) 1151, Minnesota Rate Cases (Simpson v. 33 Sup. Ct. Rep. 729, Ann. Cas. 1916A, Shepard) 230 U. S. 352, 57 L. ed. 1511, 18; Railroad Commission Cases, 116 U. 48 L.R.A.(N.S.) 1151, 33 Sup. Ct. Rep. S. 307, 29 L. ed. 636, 6 Sup. Ct. Rep. 729, Ann. Cas. 1916A, 18; Houston, E. 334, 388, 1191; Freund, Pol. Power, pp. & W. T. R. Co. v. United States, 234 65, 378, 385.

U. S. 342, 58 L. ed. 1341, 34 Sup. Ct. There is the same need of local rate Rep. 833. regulation and supervision by local au- As in the case of enactments of Conthorities when the business is carried gress, so in the case of official acts of on by the Federal government as when the President, it lies within the juriscarried on by telegraph or telephone diction of the courts to determine companies whose properties extend whether the same are necessary and over the entire nation.

proper for carrying into execution any Smyth v. Ames, 169 U. S. 466, 42 of his constitutional authority. L. ed. 819, 18 Sup. Ct. Rep. 418; Rea- Mitchell v. Harmony, 13 How. 115, gan v. Mercantile Trust Co. 154 U. S. 14 L, ed. 75. 413, 38 L. ed. 1028, 4 Inters. Com. Rep. Even if an administrative officer 575, 14 Sup. Ct. Rep. 1060.

should act in entire good faith in deThe power to make and regulate rates claring the possession of authority which he did not possess, it would lie not be constitutionally conferred upon within the jurisdiction of the courts the President. to enjoin him if, in fact, he did not Milwaukee Electric R. & Light Co. v. possess the authority claimed.

Railroad Commission, 238 U. S. 174, American School v. McAnnulty, 187 180, 59 L. ed. 1254, 1260, P.U.R.1915D, U. S. 94, 47 L. ed. 90, 23 Sup. Ct. Rep. 591, 35 Sup. Ct. Rep. 820; Marshall 33; Philadelphia Co. v. Stimson, 223 Ů. Field & Co. v. Clark, 143 U. S. 649, 692, S. 605, 620, 56 L. ed. 570, 576, 32 Sup. 36 L. ed. 294, 309, 12 Sup. Ct. Rep. Ct. Rep. 340; United States v. Lee, 106 495. U. S. 196, 27 L. ed. 171, 1 Sup. Ct. The police power of the state has Rep. 240; Degge v. Hitchcock, 229 U. never been surrendered to the Federal S. 162, 171, 57 L. ed. 1135, 1137, 33 government, and therefore there was Sup. Ct. Rep. 639.

no need for Congress to authorize its Any condition making intrastate continued exercise. rate control by the President neces- South Carolina v. United States, 199 sary and proper as a war measure did U. S. 437, 50 L. ed. 261, 26 Sup. Ct. not exist when Order 2495 was made Rep. 110, 4 Ann. Cas. 737; Keller v. December 13, 1918.

United States, 213 U. S. 138, 53 L. ed. Pacific Lumber Co. v. Northwestern 737, 29 Sup. Ct. Rep. 470, 16 Ann. & P. R. Co. 51 Inters. Com. Rep. 738; Cas. 1066. United States v. Hicks (U. S. Dist. Ct. Railroad regulatory legislation was Ky.).

an exercise of the police power. Congress cannot confer legislative Chicago & N. W. R. Co. v. Fuller, power upon the President to make rates 17 Wall. 560, 21 L. ed. 710. for the future.

If it be held that the railroads are Marshall Field & Co. v. Clark, 143 operated by the government, they are U. S. 649, 36 L. ed. 294, 12 Sup. Ct. operated by a corporation, and if they Rep. 495.

are held to be operated by the PresiCourts will restrain unauthorized dent, then they are being operated by and unlawful acts of the officers and an individual. In either case the operagents of the Federal government. ation comes within the provision of the

United States v. Lee, 106 U. S. 196, state law. 27 L. ed. 171, 1 Sup. Ct. Rep. 240; Smyth v. Ames, 169 U. S. 466, 42 L. Cunningham v. Macon & B. R. Co. 109 ed. 819, 18 Sup. Ct. Rep. 418; Reagan U. S. 446, 27 L. ed. 992, 3 Sup. Ct. Rep. v. Mercantile Trust Co. 154 U. S. 413, 292, 609; Hopkins v. Clemson Agri. 38 L. ed. 1028, 4 Inters. Com. Rep. 575, College, 221 U. S. 636, 643, 644, 55 L. 14 Sup. Ct. Rep. 1060. ed. 890, 894, 895, 35 L.R.A.(N.S.) 243, Messrs. John J. Blaine, Attorney 31 Sup. Ct. Rep. 654; Philadelphia Co. General of Wisconsin, M. B. Olbrich, v. Stimson, 223 U. S. 605, 619, 620, 56 and Joseph E. Messerschmidt, also as L. ed. 570, 576, 577, 32 Sup. Ct. Rep. amici curiæ: 340; Noble v. Union River Logging R. Congress could not constitutionally Co. 147 U. S. 165, 37 L. ed. 123, 13 Sup. delegate, and by the joint resolution Ct. Rep. 271; Caldwell v. Robinson, 59 did not attempt to delegate, to the Fed. 653; American School v. McAn- President arbitrary power. nulty, 187 U. S. 94, 47 L. ed. 90, 23

Yick Wo v. Hopkins, 118 U. S. 356, Sup. Ct. Rep. 33; Board of Liquidation 369, 370, 30 L. ed. 220, 226, 6 Sup. Ct. v. McComb, 92 U. S. 531, 541, 23 L.

Rep. 1064; Marshall Field & Co. v. ed. 623, 628.

Clark, 143 U. S. 649, 36 L. ed. 12 Messrs. Charles E. Elmquist, Henry

Sup. Ct. Rep. 495; Buttfield v. StranaC. Flannery, J. H. Henderson, R. P.

han, 192 U. S. 470, 48 L. ed. 525, 24

Sup. Ct. Rep. 349; Union Bridge Co. Thompson, F. S. Jackson, Hugh La

v. United States, 204 U. S. 364, 51 L. Master, R. P. Spencer, George F. Short,

ed. 523, 27 Sup. Ct. Rep. 367; Lewis James K. Hines, W. V. Tanner, W. W.

v. Frick, 233 U. S. 291, 297, 58 L. ed. Barrow, Ledyard P. Hale, J. Q. Smith,

967, 971, 34 Sup. Ct. Rep. 488; Gegiow Attorney General of Alabama, Clifford

v. Uhl, 239 U. S. 3, 60 L. ed. 114, 36 L. Hilton, Attorney General of Min

Sup. Ct. Rep. 2; American School v. nesota, John R. Saunders, Attorney McAnnulty, 187 U. S. 94, 47 L. ed. 90, General of Virginia, and E. C. Stans- 23 Sup. Ct. Rep. 33; Philadelphia Co. bury, Attorney General of Indiana, as v. Stimson, 223 U. S. 605, 620, 56 L. amici curiæ :

ed. 570, 576, 32 Sup. Ct. Rep. 340; The power of rate regulation could Degge v. Hitchcock, 229 U. S. 162, 171,

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