federal Constitution. Plymouth Coal Co. v. Pennsylvania, 232 U. S. 531, 534, 34 Sup. Ct. 359, 58 L. Ed. 713. But the bill not only fails to allege that the railway company would suffer loss from giving effect to section 4, but it states facts which render it highly probable, if not entire ly clear, that it would benefit by it. council is intending to deal with non-franchise lines only, and that the ordinance shall not be so construed as to impair franchise contracts. To this we must add that, it is clear that, excluding the five-cent franchise lines, this section 4 would still have a large and indisputably valid application to both non-franAll five-cent franchise lines appear from the chise and franchise lines. The ordinance bill to be as we have said, outlying, of limited was designed to apply to 150 miles of nonmileage, and so wholly disconnected one from franchise lines, extending in all directions the other that it would not be practicable to throughout the city, and to regulate transoperate them profitably, if at all, except in fers between various parts of these lines. In connection with non-franchise lines. The rec- addition to this, the three-cent franchise lines ord shows that in the past they have been are greater in extent and much more imporso operated, with mutual transfers, and both tant than the five-cent franchise lines. From of the proposals of the company made to the December, 1917, to August 2, 1918, transfers city on August 2, 1918, contemplated such were allowed over all of the non-franchise operation. In the absence of allegation to lines and between the five-cent and threethe contrary, the reasonable inference from cent franchise lines and the non-franchise this description of the five-cent franchise lines upon payment of the fare prescribed in lines and this practice with respect to them section 4-five-cent fare, or six tickets for is, that it is not practicable to operate them twenty-five cents-and it was plainly the priprofitably as separate properties and that mary purpose of the section to continue this whatever value there is in them must be real- rate and practice and not to permit the ized by operating them jointly with the non- charge to be increased to six cents, as confranchise lines, with mutual transfers, and templated in the proposal of the company that the company would be benefited, and to the city of August 2, 1918. No complaint not injured, by being permitted to so operate is made of the application of the section to them under section 4. the three-cent franchise lines. But, should this section 4 be construed to prescribe a rate for transfer over franchise lines? The first section, as printed in the margin of the court's opinion prescribes a charge "for one continuous trip within the city over any line which is now operated or shall hereafter be operated, without a franchise fixing the rates of fare." Clearly this is intended not to apply to the franchise lines. The second section declares that the charge over franchise lines shall not be greater than is fixed in the franchise. All of this is overlooked by the court, and, laying hold of the possible loss to the company (wholly improbable as we have seen) through the application of the section to the five-cent lines, the entire ordinance is struck down as unconstitutional. This judicial power of declaring laws unconstitutional is of so high and delicate a character that it has been often declared by this court that it would exercise it only in clear cases. Fletcher v. Peck, 6 Cranch, 87, 128, 3 L. Ed. 162; Fairbank v. United States, 181 U. S. 283, 21 Sup. Ct. 648, 45 L. Ed. 862. Every possible presumption is in favor of a statute, and this continues until the contrary is shown beyond a rational doubt. Sinking Fund CasSection 3 provides for the special or "work-es, 99 U. S. 700, 718, 25 L. Ed. 496. The vioingmen's" tickets, but carefully excepts from its application "all lines * * where such sale would be contrary to the terms of the franchise contract." This plainly contemplates allowing the full franchise rate where one exists. Section 5 in terms declares: "The provisions of this ordinance shall not be construed as an attempt to impair the obligation of any valid contract, but shall apply to and govern all such street railway passenger traffic in the city, except where the same is governed by the provisions of such contract." Thus we have in the ordinance a declaration that the rate prescribed shall apply only to non-franchise lines, that the franchise rate shall apply on all franchise lines, that special ticket rates shall not apply where they conflict with franchise rates, and in addition there is the general declaration that the city lation of the Constitution must be "proved beyond all reasonable doubt." Ogden v. Saunders, 12 Wheat. 213, 270, 6 L. Ed. 606; Nicol v. Ames, 173 U. S. 509, 515, 19 Sup. Ct. 522, 43 L. Ed. 786. But if it be assumed that the application of section 4 would result in loss to the company and would impair *its five-cent franchise contracts, even then it would seem that the section should be annulled only in so far as it might be applied to such grants and that the remainder, which is not assailed, should be permitted to stand, under the rule of this court applied from Bank of Hamilton v. Dudley, 2 Pet. 492, 526, 7 L. Ed. 496, to St. Louis & Southwestern Ry. Co. v. Arkansas, 235 U. S. 350, 35 Sup. Ct. 99, 59 L. Ed. 265, that if only part of an act be unconstitutional the ed. It is obvious and elementary that no person or corporation can be made a grantee against his or its will. Kent, Commentaries (13th Ed.) vol. 4, p. 455, note (b). Thus, again, even on the assumption of the court, it would seem that the ordinance failed to change the relations of the parties from what they were before. provisions of that part may be disregard- [ and requires a grantee, when the company reed and full effect given to the remainder, fused to accept it the grant necessarily failif severable from the unconstitutional part of the act, as it clearly is in this case. Coming now to the second and more fundamental ground, on which the court proceeds to its conclusion. It is held that the ordinance contemplates the continued operation of the non-franchise lines, and therefore, applying the novel doctrine of the Denver Union Water Company Case, 246 U. S. 178, 38 Sup. Ct. 278, 62 L. Ed. 649, that it is a grant which, if given effect, would necessarily deprive the company of its property without due process of law, since the allegations of the bill are that it would be non-compensatory. We are now dealing, not with an alleged attempt on the part of the city to require the company to operate its five-cent and its three-cent franchise lines at a loss, but with an offer to it of a right to operate the lines The conclusion of the District Court that this case can be distinguished from the Denver Water Company Case, and therefore is not to be ruled by it, seems sound, but the distinction need not be discussed. The application of the principle of that case to this one must result in depriving the city of the power to treat with the company for terms for the operation of the tracks which it owns in the streets in which its franchises have expired and in which this court has decided it has no rights whatever, in the non-franchise streets, in which it has except upon terms as favorable to the comno rights, in conjunction with its other lines pany as it would be entitled to if it had a at what is alleged to be a non-compensatory valid and continuing grant to operate in them. rate for the entire system. The right of the The utmost that can be claimed for the orcompany to operate the five-cent and three-dinance is that it suffers the company to use cent lines was complete without the ordinance streets which it could not use at all without and the operation of them, as separate prop-it-for the company to use them in any other erties, was quite unaffected by it. In defining the relation between the city and the company as it was before the ordinance, which is declared invalid, was passed, the court holds, as it must (229 U. S. 39, 33 Sup. Ct. 697, 57 L. Ed. 1056), that the company had no rights in the non-franchise streets, and that the city had the right to order its tracks taken out of them. This being the legal relation between the two parties, the company, on August 2, 1918, made its proposal for increased fares, which was rejected by the city. This proposal, when followed by rejection, obviously did not change the relation of the parties from what they were before it was made. way than as thus permitted would be unlawful. Yet this mere offer of this naked privilege, in terms revocable at will, and rejected by the company, is held to give a constitutional right and at the same time to so violate that right as to render the ordinance invalid. I cannot bring myself to understand how, except by sheer assertion of power, even the apparent justice of the result which it is hoped thus to obtain can be made the basis for creating a constitutional right where no right whatever existed before the passing of this rejected ordinance. If the management of the company was misinformed as to the effect of the expiring Thereupon the city made its counterpropos- of its franchises, as seems probable (229 U. S. al by tendering the ordinance rates to the com- 39, 33 Sup. Ct. 697, 57 L. Ed. 1056), or if it underestimated the difficulties in the way of pany, which promptly rejected them. It seems equally clear that this proposal and securing an extension of them, the result, as the rejection of it did not change the rela- declared by this court in the case just cited, tions of the parties and that they continued was to deprive the company of all legal rights precisely as they were before and as they in the non-franchise streets, and while its were defined in the opinion of the court-the misfortune may be regretted the apparent railway company without any rights what- hardship of the situation is no valid ground ever in the non-franchise streets. But not for raising a constitutional right in favor of so says the court, for the reason that the orone of the parties, which will result in dedinance implies that the lines are to be oper- priving the other party of an advantage ated and, under the Denver Case, it must which has lawfully come to it. Substantial therefore be interpreted as a grant (contrary justice is more likely to result from trusting it would seem to Blair v. Chicago, 201 U. S. to the sense of fairness of a community in 400, 463, 26 Sup. Ct. 427, 50 L. Ed. 801), and, dealing with such cases than from imposing since it is alleged that the rates prescribed upon a city a contract which a court shall are non-compensatory, it is an invalid grant. make for them. The language used by Mr. If it be conceded that the ordinance is in Justice Holmes, when dissenting in the Denterms a grant, yet since every grant implies ver Case, 246 U. S. 196, 38 Sup. Ct. 284, 62 L $445 #446 Ed. 649, is sharply applicable to this case, mutatis mutandis: * * Mr Chief Justice WHITE delivered the opinion of the Court. Liability of the United States for the hire of a ship for two charter periods was asThe trial court allowed recovery serted. "We must assume that the Water Company *may be required, within a reasonable time, to remove its pipes from the streets. Detroit United Railway v. Detroit, 229 U. S. 39, 46 [33 for one period and rejected it for the other Sup. Ct. 697, 57 L. Ed. 1056]. * In view and the court below affirmed its action. The of that right of the city, which, if exercised, case is here because of alleged error comwould make the company's whole plant value- mitted in not allowing for both. The govless as such, the question recurs whether the fix-ernment insists that we have no jurisdicing of any rate by the city could be said to confiscate property on the ground that the return was too low. The ordinance of the city could mean no more than that the company must accept the city's rates or stop-and as it could be stopped by the city out and out, the general principle is that it could be stopped unless a certain price should be paid." * For the reasons thus stated, I think that the ordinance is valid, and that the judgment of the District Court should be affirmed, and therefore I am compelled to dissent from the opinion and judgment of the court. I am authorized to say that Mr. Justice HOLMES and Mr. Justice BRANDEIS concur in this opinion. (248 U. S. 458) tion because the judgment of the trial court was exclusively susceptible of being reviewed directly by this court; hence, that the court below had no jurisdiction and we must reverse and remand with directions to dismiss for want of jurisdiction. The contention is well founded, and we might content ourselves with referring to the authorities by which its correctness is conclusively established. As, however, some contrariety of opinion on the question is manifested in the decisions of the lower federal courts resulting either from a misconception of the governing principle upon which the right of direct review rests, or, it may be, caused by previous decisions of this court which if unexplained may continue to be the source of misconception, we briefly review and dispose of the subject from an original point J. HOMER FRITCH, Inc., et al. v. UNITED of view. *When the United States made claims (Argued and Submitted Nov. 19, 1918. Decided against it justiciable by conferring author COURTS Jan. 20, 1919.) No. 64. CLAIMS 385(1)—DISTRICT COURTS-DIRECT REVIEW BY SUPREME COURT AGAINST UNITED STATES. Judgments of the District Courts, in the exercise of the power conferred on them, concurrently with the Court of Claims, by the Tucker Act of March 3, 1887, to decide claims against the United States, are reviewable exclusively and directly by the Supreme Court, and this remedy is unaffected by the general distribution of appellate power by Judiciary Act 1891, or by the Judicial Code; implications of repeal being prevented by sections 294, 295, thereof (Comp. St. §§ 1271, 1272), and Tucker Act, § 4 (Comp. St. § 1574), being excepted from the repealing clause. In Error to the United States Circuit Court of Appeals for the Ninth Circuit. Action by J. Homer Fritch, Incorporated, and others, against the United States. Judgment for the United States was affirmed by the Circuit Court of Appeals (234 Fed. 608, 148 C. C. A. 374; 236 Fed. 133, 149 C. C. A. 343), and plaintiffs bring error. Reversed and remanded, with directions. Mr. Assistant Attorney General Frierson, for the United States. * Messrs. Edward J. McCutchen, Ira A. Campbell, and A. Crawford Greene, all of San Francisco, for plaintiff in error. ity upon the Court of Claims to entertain and decide, them, the grant was accompanied by a provision giving this court direct and exclusive jurisdiction to review the judgments of the Court of Claims rendered in the exercise of the new power given. When by the Tucker Act (Act March 3, 1887, c. 359, 24 Stat. 505) authority was conferred upon the Circuit and District Courts of the United States to exert, concurrently with the Court of Claims, the power to decide claims against the United States, the question arose whether the judgments of those courts rendered in the exercise of such jurisdiction were reviewable exclusively and directly by this court. Determining the principle by which the question was to be solved, it was decided that in the absence of express provision or necessary implication to the contrary, the judgments of courts of the United States would be subject to be reviewed only by the rendered as the result of the new power exclusive method theretofore provided for the Court of Claims. Applying the princiTucker Act, it was held that judgments of ple of interpretation thus announced to the the courts of the United States in suits against the United States under that act were reviewable only directly by this court. United States v. Davis, 131 U. S. 36, 9 Sup. Ct. 657, 33 L. Ed. 93. Early after the adoption of the Judiciary Act of 1891 (Act March 3, 1891, c. 517, 26 For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes *460 ments of the courts of the United States acting as courts of claims, a case was brought directly to this court under the assumed authority of the act of 1891, which case, because of its amount, would not have been susceptible of being brought here under the right to review as existing prior to the act of 1891. The case therefore rendered it necessary to decide whether the general distribution of appellate power made by the act of 1891 had replaced the right to review previously existing as to judgments of the courts of the United States rendered under the power to dispose of claims against the United States. It was decided that it had not, and that the exceptional remedy by direct and exclusive review as to the exceptional jurisdiction to entertain claims against the United States remained unaffected by the general distribution of appellate power made by the act of 1891. Stat. 826) it was settled that the purpose the previously existing right to review judg of that act was to generally provide for and distribute the appellate power of the courts of the United States. McLish v. Roff, 141 U. S. 661, 12 Sup. Ct. 118, 35 L. Ed. 893; Lau Ow Bew v. United States, 144 U. S. 47, 12 Sup. Ct. 517, 36 L. Ed. 340; Bank v. Peters, 144 U. S. 570, 12 Sup. Ct. 767, 36 L. Ed. 545; Hubbard v. Soby, 146 U. S. 56, 13 Sup. Ct. 13, 36 L. Ed. 886. Subsequent to such decisions there was pending in this court a case brought by the plaintiff below by direct appellate proceedings to review the judgment of a Circuit Court of the United States, rejecting a claim against the United States sued upon in that court as a court of claims. On submission of a motion to dismiss or affirm, made by the United States without brief or argument by the appellant, the case was dismissed for want of jurisdiction, based upon authorities which were cited, establishing that the purpose of the act of 1891 was to distribute the appellate power of the courts of the United States a ruling which implied that direct review by this court of judgments in suits against the United States rendered by the courts of the United States as courts of claims was taken away by the Act of 1891. Ogden v. United States, 148 U. S. 390, 13 Sup. Ct. 602, 37 L. Ed. 493. It is true, indeed, that in the Reid Case, as it was also true in the Chase Case, no reference was made to the previous ruling in Ogden v. United States, virtually holding to the contrary; but, as we have previously pointed out, there was nothing on the face of the opinion in that case to direct attention to the fact that it concerned the continued existence of the exceptional juIn the next year the case of Chase v. risdiction to review judgments resulting United States, 155 U. S. 489, 15 Sup. Ct. from the exercise of the exceptional power 174, 39 L. Ed. 234, was decided. It came to to entertain claims against the United this court on a direct writ of error to a States, since on the face of the opinion and Circuit Court of the United States, acting the authorities which were referred to, that as a court of claims, to review a judgment case dealt only with the operation of the act rendered against the United States. Juris- of 1891 upon the general distribution of apdiction was disputed, not upon the ground pellate power. And when the subject is that the power to review such a judgment | scrutinized, there can be no room whatever by direct appeal no longer existed because for difference of opinion that the effect of of the act of 1891, but upon the sole ground that procedure by writ of error instead of appeal had been mistakably resorted to. The contention was held unsound, jurisdiction was taken, and the case was decided. It is to be conceded that, either because of the implication resulting from the ruling in Ogden v. United States, supra, or because of what was deemed to be the controlling force of the accepted doctrine of the distribution of appellate power made by the act of 1891, the opinion obtained in some of the lower federal courts that the direct review by this court of judgments of courts of the United States acting as courts of claims, which prevailed under the Tucker Act, no longer existed, and that possibly these impressions continued to make themselves manifest until the error upon which they rested was demonstrated by the decision of this court in Reid v. United States, 211 U. S. 529, 29 Sup. Ct. 171, 53 L. Ed. 313. the ruling in Reid v. United States was to overrule the Ogden Case. That result is made, if possible, more clearly manifest by the application of the ruling in the Reid Case made by this court in subsequent cases. Atchison, Topeka & Santa Fé Railway Co. v. United States, 225 U. S. 640, 32 Sup. Ct. 702, 56 L. Ed. 1236; United States v. Hvoslef, 237 U. S. 1, 35 Sup. Ct. 459, 59 L. Ed. 813, Ann. Cas. 1916A, 286; Thames & Mersey M. I. Co. v. United States, 237 U. S. 19, 35 Sup. Ct. 496, 59 L. Ed. 821, Ann. Cas. 1915D, 1087; United States v. Emery, Bird, Thayer Realty Co., 237 U. S. 28, 35 Sup. Ct. 499, 59 L. Ed. 825; United States v. W. R. Cress, 243 U. S. 316, 37 Sup. Ct. 380, 61 L. Ed. 746; United States v. Achilles Kelly, 243 U. S. 316, 37 Sup. Ct. 380, 61 L. Ed. 746; Tweedie Trading Co. v. United States, 245 U. S. 645, 38 Sup. Ct. 9, 62 L. Ed. 529. But it is true to say that in the case of United States v. Buffalo Pitts Co., 234 U. In that case, acting upon the theory that S. 228, 34 Sup. Ct. 840, 58 L. Ed. 1290, dethe effect of the distribution of appellate cided subsequent to the decision of the power made by the act of 1891 controlled Reid Case, the jurisdiction of the Circuit *463 Reversed and the cause remanded to that court with directions to dismiss for want of jurisdiction. (248 U. S. 465) Court of Appeals to review the action of a District Court when sitting as a court of claims was recognized by entertaining and deciding appellate proceedings to review the action of the Circuit Court of Appeals in such case. It is to be observed, however, that in that case no question whatever was LA TOURETTE v. McMASTER, State Ins. raised as to the jurisdiction, and in view of the ruling in the Reid Case, to which no reference was made, the action of this court in the Buffalo Pitts Case must be regarded as a mere inadvertent assumption of jurisdiction rather than as a decision that such jurisdiction existed. It is now insisted however that, granting the conclusive effect of the Reid Case, it is here inapplicable because decided before the adoption of the Judicial Code by which, it is contended, a change was made taking away the exceptional power to directly review which is here in question. The contention disregards the necessary result of the rulings in the cases just referred to, decided since the Reid Case, some of which disposed of controversies governed by the Judicial Code, and where the proposition now relied upon as to the assumed operation of that act was directly pressed in argument. 746. Aside from this view, however, the proposition disregards the plain context of sections 294 and 295 of the Judicial Code (Act March 3, 1911, c. 231, 36 Stat. 1167 [Comp. St. 88 1271, 1272]), which were clearly intended to prevent implica*tions of repeal, or change of legislative intent, like the one here relied upon. United States v. Cress, 243 U. S. 316, 331, 37 Sup. Ct. 380, 61 L. Ed. But it is said that the contention as to the change made by the Code is not based upon implication but upon the fact that section 9 of the Tucker Act (Comp. St. § 1172) was expressly repealed by the Judicial Code, thus removing the very groundwork upon which the continued right in this court to exclusively review judgments of the courts of the United States when sitting as courts of claims was held to continue after the Tucker Act. The assumption however is fallacious, since it overlooks the fact that section 4 of the Tucker Act (Comp. St. § 1574) was excepted from the repealing clause and that its provisions are wholly incompatible with the proposition now relied upon. And this again brings the proposition back to the mere assertion that the ruling as to the Tucker Act made in United States v. Davis, and that as to the act of 1891 made in the Reid Case, must now be disregarded. As it results that the contention of the United States as to the want of jurisdiction in the court below was well founded, the judgment of the Circuit Court of Appeals must be and it is Com'r. (Submitted Dec. 19, 1918. Decided Jan. 20, 1. INSURANCE 3-INSURANCE BROKERS- An insurance broker who by Act S. C. March 2, 1916 (29 St. at Large, p. 676), is made representative of insured, and who is also representative of the insurer, is, like the business of insurance of which he is an instrument of consummation, clothed with a public interest, and so subject to the regulating power of the state. 2. CONSTITUTIONAL LAW 275(1)-INSUR For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes |