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through the Postmaster General, in the exertion of the duty imposed upon him by the resolution of Congress to make compensation, concluded a contract with the telephone companies of the most comprehensive character, covering the whole field while the possession, control, and operation by the United States continued. By its terms stipulated amounts were to be paid as consideration for the possession, control, and operation by the United States, and the earnings resulting from such operation became the property of the United States. Although concluded in October, 1918, by stipulation the contract related back to the time when the President took over the property.

Following this, by authority of the President, the Postmaster General fixed a general schedule of rates, and it was the order to put this schedule in effect which gave rise to the suit, the trial, and the resulting judgment which we have now under consideration.



That, under its war power, Congress possessed the right to confer upon the President the authority which it gave him, we think needs operation-war nothing here but statement, as we have disposed of that subject in the North Dakota Railroad Rate Case. And the completeness of the war power under which the authority was exerted and by which completeness its exercise is to be tested suffices, we think, to dispose of the many other contentions urged as to the want of power in Congress to confer upon the President the authority which it gave him.

The proposition that the President, in exercising the power, exceeded the authority given him, is based upon two considerations: First, because there was nothing in the conditions at the time the power was exercised which justified the calling into play of the authority; indeed, the contention goes further and assails the motives which it is asserted induced the exercise of the

power. But as the contention at best concerns not a want of power, but a mere excess or abuse of discretion in exerting a power given, it is clear that it involves considera- Courts-relation tions which are be- departmentsyond the reach of discretion. judicial power. This

to other


must be, since, as this court has often pointed out, the judicial may not invade the legislative or executive departments so as to correct alleged mistakes or wrongs arising from asserted abuse of discretion.

The second contention, although it apparently rests upon the assertion that there was an absence of power in the President to exert the authority to the extent to which he did exert it, when it is correctly understood, amounts only to an asserted limitation on the power granted, based upon a plain misconception of the terms of the resolution of Congress by which the power was given. In other words, it assumed that by the resolution only a limited power as to the tele phone lines was conferred upon the President, and hence that the assumption by him of complete possession and control was beyond the authority possessed. But although it may be conceded that there is some ground for contending, in view of the elements of authority enumerated in the resolution of Congress, that there was power given to take less than the whole if the President deemed it best to do so, we are of opinion that authority was conferred as to all the enumer ated elements, and that there was hence a right in the . President to take Federal operacomplete possession tion-right to and control to enable the full operation of the lines embraced in the authority. The contemporaneous official steps taken to give effect to the resolution, "the proclamation of the President, the action of the Postmaster General under the authority of the President, the contracts made with the telephone companies in pursuance of



(250 U. S. 163, 63 L. ed. 910, P.U.R.1919D, 717, 39 Sup. Ct. Rep. 507.)

authority to fix their compensation, all establish the accuracy of this view, since they all make it clear that it was assumed that power to take full control was conferred, and that it was exerted so as to embrace the entire business and the right to the entire revenues to arise from the act of the United States in carrying it out. Indeed, Congress, in subsequently dealing with the situation thus produced, would seem to have entertained the same conception as to the scope of the power conveyed by the resolution, and dealt with it from that point of view. Act of October 30, 1918, 40 Stat. at L. 1017.

This brings us to the proposition upon which the court based its conclusion; that is, that although complete possession, exclusive control, and the right to all the revenues derived from the operation of the business, were in the United States as the result of the resolution, the proclamation, and the contracts, yet, as to intrastate earnings, the state power remained to "encumber" the authority of the United States, because that situation necessarily resulted from the terms of the congressional resolution.

This superficially was based on an interpretation of the resolution, but in substance was caused by the application to the clause of the resolution interpreted, of the erroneous presumption as to the continuance of state power dealt with in the North Dakota Case, 250 U. S. 135, 63 L. ed. 897, P.U.R.1919D, 705, 39 Sup. Ct. Rep. 502. Let us see if this is not necessarily so. The provision dealt with was the proviso of the resolution which in the first place saved "the lawful police regulations of the several states," and therefore subjected the control of the United States to the operation of such power; and, in the second place, prohibited the states, during the United States control, from exerting authority as to the issue of stocks and bonds.

It was conceded that the words "police power" were susceptible of

4 A.L.R.-103.

two significations, a comprehensive one embracing in substance the whole field of state authority, and the other a narrower one, including only state power to deal with the health, safety, and morals of the people. Although it was admitted that the reservation, considered intrinsically, was not susceptible of being interpreted in the broader of the two lights, it was held that it was necessary to so interpret it because of the clause of the proviso prohibiting the states from legislating concerning the issue of stocks and bonds by the companies during the United States control. The reasoning was this: It was inconceivable, it was said, that the subject-stocks and bonds-should have been withdrawn from state control by an express prohibition unless that subject would have been under state control in the absence of the prohibition,-a result which could only exist by giving the saving clause as to police power its widest significance. But the fact that the rule of construction applied had the result of incorporating in the act of Congress unlimited state authority merely as the result of a prohibition by Congress against the exertion of state power in a specific instance, in and of itself admonishes of the incorrectness of the rule. But its want of foundation is established by two fur. ther considerations: (1) because it causes the provision as to stocks and bonds, which was plainly enacted to preserve the financial control of the United States over the corporations, to limit if not destroy such control; (2) because by converting the prohibition against state power into an affirmative and comprehensive grant of that power, it so interprets the act as to limit the grant of authority which the act beyond doubt gave to the United States. These considerations not only show the mistake of the interpretation, but also point out the confusion and conflict which must necessarily arise from giving effect to the mistaken presumption of the continu

ance of state power to which we have previously referred.

Inherently the power of a state to fix rates to be charged for intrastate carriage or transmission is in its nature but derivative, since it arises from and depends upon the duty of those engaged in intrastate commerce to charge only reasonable rates for the services by them rendered, and the authority possessed by the state to exact a compliance with that duty. Conceding that it was within the power of Congress, subject to constitutional limitations, to transplant the state power as to intrastate rates into a sphere where it, Congress, had complete control over telephone lines because it had taken possession of them and was operating them as a governmental agency, it must follow that in such sphere there would be nothing upon which the state power could be exerted except upon the power of the United States; that is, its authority to fix rates for the services which it was rendering through its governmental agencies. The anomaly resulting from such conditions adds cogency to the reasons by which, in the North Dakota Case, the error in presuming the continuance of state power in such a situation was pointed out, and makes it certain that such a result could be brought about only by clear expression, or at least from the most convincing implication.

-intrastate rates-state control.

This disposes of the case; but before leaving it we observe that we have not overlooked in its consideration the references made to proceedings in Congress concerning the resolution at the time of its

passage, and further, that we have also considered all the suggestions made in the many and voluminous briefs filed on behalf of various state authorities and individuals having interests in suits pending elsewhere, concerning the construction of the resolution. In saying this, however, we must except suggestions as to want of wisdom or necessity for conferring the power given, or as to the precipitate or uncalled-for exertion of the power as conferred, from all of which we have turned aside because the right to consider them was wholly beyond the sphere of judicial authority.

In view of our conclusion we shall in this case, as we did in the previous one, and for the reasons therein stated, content ourselves with reversing the judgment below upon the merits, with directions for such further proceedings as may be not inconsistent with this opinion.

And it is so ordered.

Mr. Justice Brandeis dissents.


The reported case (DAKOTA CENT. TELEPH. Co. v. SOUTH DAKOTA, ante, 1623), authoritatively established as a matter of substantive law that state control over intrastate telephone rates ceased with the exercise by the President of his authority under the joint resolution of July 16, 1918, to take control of the telephone companies. The general subject of Federal control of public utilities is treated in the annotation beginning at page 1680, post.

(N. D. -, 172 N. W. 841.)

JOHN MCGREGOR, Admr., etc., of Christ Hanson, Deceased, Appt.,

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1. General Order No. 50, promulgated by the Director General of Railroads, which requires that suits upon causes of action arising subsequent to December 31, 1917, shall be brought against the Director General of Railroads, and not otherwise, and which authorizes the substitution of the Director General for the carrier company as party defendant and the dismissal of the action as to the company, is not warranted by the Rail Control Act of March 21, 1918, in so far as it purports to be applicable to causes of action already vested.

[See note on this question beginning on page 1680.]

-right of action against when vested.

2. In an action by an administrator brought under the Federal Employers' Liability Act to recover damages occasioned by the death of the plaintiff's intestate through alleged negligence of the defendant railway company, where the cause of action arose and the action was begun subsequent to the assumption of Federal control and before the passage of the Rail Control Act of March 21, 1918, it is held:

Under the Act Cong. Aug. 29, 1916, § 1, authorizing the assumption, in time of war, of control by the President of systems of transportation, and under the proclamation of the President issued in pursuance thereof, prima facie a cause of action for the alleged negligence arose and became vested in the plaintiff prior to the passage of the Rail Control Act. -railroad as defendant.

3. Section 10 of the Rail Control Act is construed and held to authorize the bringing of actions against the carrier corporations during the period of Federal control.

-right of Director General to defend.

4. Under the Rail Control Act, the Director General is charged with administering the transportation systems owned by the various carrier corporations, but he is not authorized to appear and defend suits brought against them.

--status under Federal control.

5. The carrier corporations, during Headnotes 1-7 by BIRDZELL, J.

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APPEAL by plaintiff from an order of the District Court for Ward County (Leighton, J.) substituting the Director General as defendant in the place of the defendant company and dismissing the action as to it, in an action brought under the Federal Employers' Liability Act to recover damages for the death of plaintiff's intestate alleged to have been caused by defendant's negligence. Reversed.

The facts are stated in the opinion of the court.
Messrs. E. R. Sinkler and M. O.
Eide, for appellant:

The power to determine what shall be the law cannot be conferred. Nor can the power be conferred to rescind or repeal any law existing.

State ex rel. Hahn v. Young, 29 Minn. 474, 9 N. W. 737; State ex rel. Railroad & Warehouse Commission v. Chicago, M. & St. P. R. Co. 38 Minn. 281, 37 N. W. 782; State v. Great Northern R. Co. 100 Minn. 445, 10 L.R.A.(N.S.) 250, 111 N. W. 289; Re Wilson, 32 Minn. 145, 19 N. W. 723; United States v. United Verde Copper Co. 196 U. S. 207, 49 L. ed. 449, 25 Sup. Ct. Rep. 222; Thornton v. Territory, 3 Wash. Terr. 482, 17 Pac. 896; United States v. Grimaud, 220 U. S. 506, 55 L. ed. 563, 31 Sup. Ct. Rep. 480.

Messrs. Murphy & Toner and Bradford & Nash for respondent.

Birdzell, J., delivered the opinion

of the court:

This action is brought by an administrator to recover damages occasioned by the alleged negligence of the defendant in causing the death of one Christ Hanson, an employee. The Federal Employers' Liability Act (chap. 149, 35 Stat. at L. 65, Comp. Stat. §§ 8657-8665, 8 Fed. Stat. Anno. 2d ed. p. 1208) and amendments are relied upon. The injury resulting in the death of the

plaintiff's intestate is alleged to have been inflicted on January 22, 1918. In December, 1918, the district court of Ward county, upon motion of the defendant's attor neys, entered an order substituting William G. McAdoo, Director General of Railroads of the United States, as defendant in the place and stead of the Great Northern Railway Company, and dismissed the action as to the latter. This appeal is from the order of substitution and dismissal.

Accompanying the notice of motion was an affidavit by one of the defendant's attorneys, stating, in substance, that the railway company was under Federal control, and was in every way subject to the jurisdiction, management, and pos session of the government of the United States, acting through the Director General of Railroads, which control commenced on the 1st

day of January, 1918, prior to the accrual of the alleged cause of action; and that on or about November 1, 1918, William G. McAdoo, as Director General of Railroads, promulgated General Order No. 50, ordering that all actions subsequently brought based upon certain

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