135

court Lolds unconstitutional was passed, was and in December, *1917, the company did witlethis: draw from it and thereafter was allowed to The company owned three classes of tracks, charge, on other than its three-cent franchise viz.: lines, a cash fare of five cents, but with eight tickets for twenty-five cents, good for one and a half hours in the morning and for one hour in the evening. Universal transfers were allowed for these fares.

*438

(a) Those in the business and residence streets most productive of traffic, constituting the greater part of the lines of the company. Its authority to maintain these tracks expired in 1909-1910, and they are designated in the record as "non-franchise lines." It will be convenient to refer to the streets in which these lines are located as "non-franchise streets."

This arrangement continued until August 2, 1918, when, not satisfied, the company proposed to the city a five-cent fare with a charge of one cent for a transfer over all lines in the city one-fare zone, or, in the alternative, a six-cent fare with ten tickets for fifty-five cents and universal transfers, the franchise rates on the three-cent lines to continue, except that for the fares last named universal transfers would be given.

This proposal the city rejected, and thereupon the company, without any authority from the city, put into operation the second proposal above stated, allowing transfers over any connecting or intersecting line within the city limits. In response to this action of the railway company the city passed the ordinance which, for two reasons, the court has held invalid, viz.:

(1) Over certain of the franchise lines a five-cent rate of fare without transfers was

(c) Disconnected sections of track, of small mileage, in streets remote from the business parts of the city. For these lines the company had unexpired franchises granted by villages and townships before the extension of the city limits included them, which allow-provided for in the grants, and because seced a fare of five cents, in some places, in oth- tion 4 of the ordinance required transportaers five cents with transportation to the City tion "where the trip is over two or more lines, Hall. The mileage of these grants varied whether franchise lines or not," without from five miles to "six blocks" in length; they transfer charge, it is held that, if this proare described in the bill as lying, some to the vision were enforced, the effect would be to north, others to the south, others to the east impair such five-cent franchise contracts and and others to the west of the city, as it was that the ordinance is therefore void. when the grants were made and, thus widely separated, they had no connection one with the other, except over non-franchise or three cent franchise tracks. These are designated

as "five-cent franchise lines."

It was stated at the bar by counsel for the city, and not questioned, that there were about 150 miles of non-franchise lines, about

65 miles of the three-cent franchise lines, and only 55 miles of five-cent franchise lines.

(b) Tracks designated as "three-cent franchise lines" (Exhibit T), also largely in business and important residence streets. The company had franchises for these lines under which it was obliged to sell eight tickets for twenty-five cents good from 5:45 a. m. to 8 o'clock p. m. and six tickets for twenty-five cents good during the *remainder of the twenty-four hours. Such tickets entitled the holders to transfer privileges only on all three cent lines.

In their brief counsel for the company say that the larger part of the company's lines had been operated for several years prior to

December, 1917, on what was known as the "day-to-day agreement" (and see Detroit United Railway v. Detroit, 229 U. S. 39, 42, 33 Sup. Ct. 697, 57 L. Ed. 1056), under which a rental was paid to the city for the use of the streets and the company was allowed to charge a cash fare of five cents or seven tickets for twenty-five cents, except during an hour and a half in the morning and one hour in the evening, when tickets sold eight for twenty-five cents were accepted. For these fares transfers were given over the entire lines of the company. Either party could withdraw from this arrangement at any time,

(2) Interpreting the ordinance as a grant to the company of the right to operate its lines, franchise and non-franchise, at rates which the bill alleges to be non-compensatory,

the court holds it invalid because it would

deprive the company of its property without due process of law.

The case must be considered on the allegations of the *bill as if on demurrer and my reasons for dissenting from both of these conclusions of the court are as follows:

the bill that the "five-cent franchise lines" (no As to the first. It is not anywhere alleged in complaint is made as to the three-cent lines) can be operated separately and profitably or that less income would be realized from them

if operated under the terms of section 4 in conjunction with the non-franchise lines than if they were operated as separate properties, if such thing be possible, charging the fivecent franchise rate without transfers. Without such an allegation it is pure conjecture to say that the company would suffer loss and that its contract would be impaired by giving effect to section 4. He who would strike down a law must show that the alleged unconstitutional feature injures him and operates to deprive him of rights protected by the

Section 3 provides for the special or "work-es, ingmen's" tickets, but carefully excepts from its application "all lines * * where such sale would be contrary to the terms of the franchise contract."

*

Section 5 in terms declares:

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$443

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 ed. It is obvious and elementary that no of the act, as it clearly is in this case. 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.

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 in the non-franchise streets, in which it has no rights, in conjunction with its other lines at what is alleged to be a non-compensatory rate for the entire system. The right of the company to operate the five-cent and threecent lines was complete without the ordinance 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.

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, except upon terms as favorable to the company as it would be entitled to if it had a valid and continuing grant to operate in them. The utmost that can be claimed for the ordinance is that it suffers the company to use streets which it could not use at all without

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.

*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.

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 pany, which promptly rejected them. It underestimated the difficulties in the way of 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:

"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 Sup. Ct. 697, 57 L. Ed. 1058]. * * * In view of that right of the city, which, if exercised, would make the company's whole plant valueless as such, the question recurs whether the fixing 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. 45S)

J. HOMER FRITCH, Inc., et al. v. UNITED of view.

STATES.

*When the United States made claims

(Argued and Submitted Nov. 19, 1918. Decided against it justiciable by conferring authorJan. 20, 1919.)

No. 64.

COURTS

385(1)-DISTRICT COURTS-DIRECT REVIEW BY SUPREME COURT AGAINST UNITED STATES.

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.

CLAIMS

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.

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. for one period and rejected it for the other and the court below affirmed its action. The case is here because of alleged error committed in not allowing for both. The government insists that we have no jurisdiction 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

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 rendered as the result of the new power would be subject to be reviewed only by the exclusive method theretofore provided for the Court of Claims. Applying the principle of interpretation thus announced to the Tucker Act, it was held that judgments of 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

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.

460