State ex rel. Payne v. Dakota Central Telephone Co.

171 N.W. 277 | S.D. | 1919

Lead Opinion

GATES, J.

This is an original action brought by the state, on the relation of the Attorney General and Board of Railroad Commissioners, against four telephone companies operating/ in South Dakota, viz. the Dakota Ceneral Telephone Company, the Northwestern Telephone Exchange Company, the Nebraska Telephone 'Company, and the South Dakota State Telephone Company. The complaint alleged, in substance, that the defendants threatened, and were about to put into effect certain tariffs and schedules of rates, charges, and regulations governing the transmission of long-distance telephone messages between points wholly within the state, contrary to and without compliance with, the laws of this state in that behalf, and sought injunction. The answer of the defendants admitted the substantial allegations of the complaint, but alleged that‘they were proceeding in accordance with order No. 2495, issued by the Postmaster General of the United States on December 13, 19x8, referred to. as Bulletin 22, made pursuant lo the joint resolution of Congress of July 16, 1918 (U. S. Comp. St. 1918, § 3ii5?4x), and the proclamation' of the President of the United States'of July 23, 19x8. The cause was submitted for judgment upon the pleadings.

Much has been said in the briefs about the war powers of Congress and of the President, but we are of the opinion that those questions are beside the issues of this case. In our opinion the determination of this case depends entirely upon the meaning of the second proviso in the joint resolution of July 16, 19x8. The parts of the resolution, material to this case are as follows:

“That the President during the continuance of the present war is authorized and empowered, whenever he shall deem it necessary for the national security or defense, to supervise or to take possession and assume control of any telegraph, telephone, marine cable, or radio system or systems, or any part thereof, and to operate the same in such manner as may be needful or desirable for the duration of the war. * * *

“Provided, that just compensation shall be made. * * *

“Provided further, that nothing in this act 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.”

[1] It is contended by plaintiff that the term “lawful police regulations” is there used in its broad sense, which includes the power of rate regulation. Chesapeake & Potomac Telephone Co. v. Manning, 186 U. S. 238, 22 Sup. Ct. 881, 46 L. Ed. 1144. It is contended by the defendants that such tenn is there used in its narrow sense as referring simply to the public safety, health, and morals.

Leaving out of consideration for the moment the two exceptions mentioned therein, we may observe that if by that proviso the Congress intended that the states should continue to exercise their undoubted powers to reasonably regulate the intrastate rates and1 charges of telephone companies, then the power to fix such rates did not pass to the President nor to his representative, the Postmaster General. If by that proviso Congress intended to deprive the states of the power to regulate rates for intrastate messages, .then, but not until then, we would have to consider the power and authority of Congress so to do.

In our opinion Congress intended the former. The act and the proviso should be so construed unless the contrary clearly appears. The contrary should not be assumed by mere implication.

[2] In Reagan v. Mercantile Trust Co., 154 U. S. 413, 14 Sup. Ct. 1060, 38 L. Ed. 1028, the court said:

“It must have been known that, in the nature of things, the control of that business would be exercised by the state, and if it deemed that the interests of the nation and the discharge of the duties required on behalf of the nation from this corporation demanded exemption in all things from state control, it would unquestionably have expressed such intention in language whose meaning would 'be clear. Its silence in this respect is satisfactory assurance that, in so far as this corporation should engage in business wholly within the state, it intended that it should be subjected to the ordinaiy control exercised by the state over such business.”

In Reid v. People of the State of Colorado, 187 U. S. 137, 23 Sup. Ct. 92, 47 L. Ed. 108, the court said:

“It should never be 'hel-d that Congress intends to supersede or by its legislation suspend the exercise of the police powers of the states, even when it may do s.o, unless its purpose to effect that result is clearly manifested.”

[3] S'o that, if the clause in the proviso is ambiguous and needs interpretation, the doubt should be resolved in favor of the reserved power of the state. But a consideration of the second exception in the proviso removes, in our opinion, all possible doubt as to the intention of Congress. The material parts of the proviso applicable to the point in question are:

“Nothing in 'this act shall be construed to amend, repeal, impair, or affect * * * the lawful police regulations of the several states, except wherein such * * * regulations may affect the * * * issue of stocks and bonds by such system or systems.”

It cannot be doubted that the power of a state to regulate the issuance of stocks and bonds by corporations created under its authority is a power entirely foreign to and outside of those powers included in the term “police- power” when such term is used in its narrow sense as referring to the power to preserve public safety, 'health, and morals. Therefore, when -Congress declared that the “police regulations of the several states” left to the states should not “affect the issue of stocks and bonds” of telegraph and telephone companies, it is clear that it had in mind reserving to the states “police regulations” which, if unrestricted, might affect the issue of stocks and bonds. Thus Congress has, by the very wording.of this proviso, declared that it'reserved to the states, subject to two limitations, the full police powers that the states possess as sovereign states. The term “lawful police regulations” is therefore self-interpreted by Congress and needs no interpretation by the -courts.

[4] It is further urged that the assumption of control and operation imply the taking over of all revenues, and that by reason of the taking over of the revenues of the companies Congress intended to assume authority to fix all rates, interstate and intrastate. That contention ignores the second proviso .of the resolution. The resolution says nothing about the taking over of the revenues. The provisions of the contracts entered into between the Postmaster General and the telephone -company are not -persuasive of the correct interpretation of the proviso; but, even if the act -does contemplate the taking over of -all revenues, interstate and intrastate, that fact is not entitled to weight in- construing the terms of the proviso, because that fact would not at all be inconsistent with its dependency on the right of the states to continue to regulate intrastate rates. ’ Intrastate rates, as well as interstate rates, established under the authority of law are entitled to the benefit of a presumption that they are fair and reasonable. How can it be said to be inconsistent with the assumption of the revenues for Congress to declare that such assumption was subject to the reasonable rates lawfully established?

[5] It is-further urged that, by the several steps taken by Congress, by the President, and by the Postmaster General, the properties taken over have become the properties of the United States government unshackled from state authority, and that this ■ action is in reality one against the United States, which cannot -be -maintained- in this court because Congress -has not- -given its ■ assent thereto. The answer is that, even if the property has become the property of the United States government, the govern- ■ ment’s title thereto is incumbered by the reserved power of -the State to regulate intrastate rates. When, therefore, the Postmaster General seeks to promulgate rates, and the defendant telephone company seeks to carry them out, in definance of the state laws, they are wrongdoers, and are amenable to the laws of this state The action is not one against the United States or its property, but is one seeking to restrain the commission of an unauthorized act.

In the Minnesota Rate Cases the Supreme 'Court of the United States very fully went into the question of what- were and what were not suits against the state. Ex parte Young, 209 U. S. 123, 28 Sup. Ct. 441, 52 L. Ed. 714, 13 L. R. A. (N. S.) 932, 14 Ann. Cas. 764. That decision is authority for .the position which we assert.

We are-of the opinion that the injunction sought should be granted, but that it shall provide that it in no wise affects the transmission of governmental communications or the issue of stocks and bonds by the defendants or either of them. ' '

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Dissenting Opinion

MaOOY, J.

(dissenting). For reasons hereafter stated I am unable to concur in the majority opinion. The majority opinion .■states that:

“Much has been said in the briefs, about the war powers of Congress and of the President, but we are of the opinion that those questions are beside the issues in this case.”

All the decisions and authorities cited by the majority are •applicable only to ordinary normal peace conditions. As I view the situation, in the interpretation of the said resolution and the ■effect of the proviso therein, my Associates have entirely lost ■sight of the fact that we have been and now are engaged in a war, and that the President and Postmaster General have been and now are exercising discretionary executive war power for the common defense of our. country. The whole meat of the interpretation of said resolution should be based upon'the war powers of Congress, and the purposes, spirit, .and intent, and the object and ends sought to be accomplished by its enactment. 36 Cyc. 1110. Much of the argument of plaintiffs, as disclosed by their briefs, is to the effect that the war, for all legal purposes, closed with the signing of the armistice on November it,- 1918. The resolution of Congress in question expressly provides that the government may retain possession, and control of such telephone systems until the ratification of peace treaties shall have been proclaimed by the President. We should take judicial notice that no-such treaties yet have been proclaimed. Aside from the provisions-of the resolution, the general common-law rule seems to be that it is the province of the political and not the judicial department of government to determine when war, as a legal status binding upon the courts, commences and ends; that courts cannot take judicial cognizance of the fact that war has commenced or ended until there has been some act or declaration by that department of government clothed with war-making power. Conley v. Calhoun Co., 2 W. Va. 416; Bishop v. Jones, 28 Tex. 319; United States v. Palmer, 3 Wheat. 610, 4 L. Ed. 471; 40 Cyc. 393. As a matter of notorious common knowledge we should take judicial notice that at the present time no proclamation declaring war at an end has been made by the President or other -political department of our federal government clothe-d with such power. We should also take judicial notice that this nation now has on foreign-soil a large army; that it is now being supplied at enormous cost; that it is as essential now as before the armistice that our government have funds necessary to care for its army, transport the-same home, and- dem-obolize the same in orderly course. Revenues and other war service equipment are as necessary now as-before the armistice.

It will be observed that the resolution of Congress, partially quoted in the majority opinion, in substance provided that the President, during the continuance of the present war, was authorized and empowered, whenever he should deem it necessary for national security or national defense, to take possession and control of any telephone or telegraph systems and operate the same in such manner as might be needful. Needful for what? The only answer is for war purposes. On July 22, 19x8, acting under said resolution, the President by proclamation took over into war service the possession and control of each and every telephone system within the jurisdiction of the United -States, and placed them under the immediate supervision and control of the Postmaster General, who was thereby authorized and empowered to act in the premises for and on behalf of the President. Thereafter, on July 31, 1918, the President,. acting by and through the Postmaster General, took actual physical possession and control of ■all sai-cl telegraph and telephone systems, including the properties theretofore owned, controlled, and operated by the defendants within this state, and from thence thereafter the possession, control, and operation of said telephone systems have been and now are under exclusive federal control, and defendants have not now any pecuniary interest in the revenues, disbursements, profits, or losses of said defendant corporations. Thereafter, on December 13, 1918, the Postmaster General, by order, prescribed the intrastate rates to be in force during the period of federal control on all telephone systems, including those of defendants, which materially increased the intrastate rates theretofore existing within this state. The defendants claim that they intend to apply said proposed intrastate rates only because ordered arid directed so to do by. the Postmaster General. In promulgating and establishing said order prescribing said increased intrastate rates, the President, through the Postmaster General, claims to be exercising an executive discretion legally confided in him by the laws of the United States, during the war, as a war measure, and which discretion is not subject to judicial control or interference, and to all which the powers and authorities of the several states and their officers are subordinate. By said resolution, it clearly appears that discretionary executive power was confided in the President to take over for war purposes the entire system of the telephone corporations, including the appurtenant rights to fix rates of compensation that should be paid by the public for service or use thereof; in other words, the President, if he deemed it needful, was empowered to impress into war service, not only the entire equipment, property, officers, agents, and employees of said corporations, but also the use and revenues thereof, and any and all other means of every nature appertaining to and possessed by said telephone systems, whereby the common defense of the country ' might be benefited and made more secure. When said telephone systems were taken .over 'by the government for such war purposes, incidentally, and as an inherent part thereof, the capacity of said systems to produce revenues was also taken over to be used by the President as he might deem, needful for coihmon defense. The power of impressment is defined to be that possessed by a government in talcing persons or property to aid in defense of the nation with or without the consent of the persons concerned. In this instance, after said taking, many of the telephone corporations consented to the said impressment into war service by contracts made with the government, while some did not consent thereto; but whether such corporations so consented or not, the effect of the taking over was the same in either case. The impressment into such war service of the use, and the means to thereby obtain revenues from the public, were just as needful and as essential for war purposes as any other use to which the government might desire to put said telephone systems. From the time of so taking over of. said telephone systems they became to all legal intents and purposes the same as if the government of the. United States was and always had been the sole and absolute owner thereof, together with all the incident appurtenant powers of such ownership. When they were so taken over they ¡became completely unshackled from state authority, and thereafter neither the state nor its board of railway commissioners had axiy further power or jurisdiction over the same, any more than they had over any other solely owned, operated, and controlled federal property. When said telephone systems so went into the hands of the Postmaster General, the same and all their various powers and functions ceased completely to be subject to the police power of this state, otherwise the federal government might thereby be hindered and delayed in what it deemed proper and needful war purpose measures. The laws of this state relating to the fixing of intrastate telephone rates never did, and do not now, apply to United States owned, operated, and controlled property. The fact of so taking over said telephone systems and the fixing of increased intrastate rates in no manner conflicts with, repeals or impairs the force and effect of the police power of this state, but such taking over had the effect of removing said systems entirely out of and from undei the jurisdiction of the state civil law. The state civil law is as effective now as ever as to property and , persons, over which it has jurisdiction, but property which has passed under the military jurisdiction of the President is not a subject of police regulation under the state civil law. If Federal ¡Selective Draft Act, May 18, 1917, c. 15, 40 Stat. 76 (U. S. >Comp. St. 1918, §§ 2044a-2c>44k), had contained a proviso that nothing in that act should be construed to amend, repeal, or impair or affect existing laws or power of the states in lawful police regulation, could, any one successfully contend that individuals who had been drafted into war service, on the eve of battle or embarkation, might be imprisoned for violating some civil state police regulation1; would it not be held that the drafted person had been taken out of the jurisdiction of the civil law, and, for the time being, made amenable only to military law; that no state law had been thereby repealed or impaired as to persons not drafted into federal war service — would it not be properly held that any other holding would thwart, hinder, or delay the very war object for which the soldier had been impressed or drafted into service? Now- the government has impressed private property for the same war purposes. Is it not for the executive department, whose duty it is to prosecute the war, to determine what particular use shall be made of the impressed private property just the same as it may determine when use shall be made of the impressed soldier? Efficient war service was the purpose — the primary object for which the said resolution of Congress was enacted. It authorized the complete taking over of telephone systems. After the same were so taken over it was the province and the duty of the éxecutive department, clothed with power to prosecute the war, to determine what war purpose use should be made thereof. If such executive department in its discretion determined that it was a necessary and needful war measure to increase the intrastate rates, it was within its executive discretion to do so, otherwise the very war object for which it was taken over might be hindered and delayed and entirely thwarted by civil law courts. The power to determine what use or purpose should -be made of said telephone systems and whether or not this thing, that, or the other was a proper war measure was within the discretionary- military executive jurisdiction of the President as commander-in-ohief of the army and navy. When discretionary military power to take over telephone systems, as a part of the process of conducting the war, was so placed in the hands of the President, it then -became his lawful province to interpret those powers. Now, in interpreting and construing said power the President, through the Postmaster General, has decided and determined that the said increase in intrastate telephone rates is a proper war measure. I am -of the view that such interpretation is supreme and paramount to any other interpretation that -might be made by any civil -court. It seems to be well settled that when a state of war exists the exercise of discretionary military power and authority cannot 'be controlled or interfered with by civil courts, unless where it is clearly made to appear that the acts, assumed to be done by virtue of such military power, are in excess and entirely outside of any reasonable military purpose for which the power was given or might be exercised. State v. Burton (R. I.) 103 Atl. 962, L. R. A. 1918F, 559; In re Wulzen (D. C.) 235 Fed. 362, Ann. Cas. 1917A, 274; Druecker v. Salomon, 21 Wis. 631, 94 Am. Dec. 571; Manbury v. Madison, 1 Cranch, 137, 2 L. Ed. 60. Within its sphere each particular department of the federal government, legislative, executive, and judicial, is supreme and paramount. In re Quarles, 158 U. S. 535, 15 Sup. Ct. 959, 39 L. Ed. 1080. These telephone systems having become, during the period, of the war, federal property, in tlte hands and under the control of the executive department, the decisions of that department with reference thereto are paramount to that of any other department. In speaking of the exercise of authority essential to be exercised in relation to the common defense, at the time of the creation of our federal Constitution, Hamilton most appropriately said:

“The authorities essential to the common defense are these: To raise armies; to build and equip fleets; to prescribe rules for the government of both; to direct their operations; to provide for their support. These powers ought to exist without limitation, because it is impossible to foresee or define the extent and variety of national exigencies, or the correspondent extent and variety of the means which may be necessary to satisfy them. The circumstances that endanger the safety of nations are infinite, and for this reason no constitutional shackles can wisely be imposed on the power to which the care of it is committed. This power ought to be coextensive with all the possible combinations of such circumstances, and ought to be under the direction of the same councils which are appointed tc preside over the common defense.” 10 Fed. Stats. Ann. (2d. Ed.) p. 300.

Under well-known general rules statutes should be construed in the light of, and so as to give full force and effect to, the purposes and objects which brought about their enactment.

“Every statute must be construed with reference to the object intended to be accomplished 'by it. In order to ascertain this object it is proper to consider the occasion and necessity of its enactment, * * * and the statute should be given that construction which is best calculated to advance its object.” 36 iCyc. .1110.

The President having been authorized to completely take over said telephone systems for military purposes, it would seem to necessarily follow that he alone, as the person appointed to preside over the common defense, should determine what war uses should be made thereof. I am of the view that the general rule announced by this court in State v. Express Co., 170 N. W. 570, to the effect that an executive officer of state, such as the President or Governor, is not subject to the control or interference of the judiciary in the performance of discretionary duties belonging to him as such officer, and that no act done or threatened to 'be done by him in his official executive capacity can be brought under judicial control or interfered with by mandamus or injunction.

Therefore I am of the view that the application of plaintiffs for injunction should be denied.

SMITH, P. J., concurs in this dissent.