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ceiving a rebate for all goods he may ship | ing them public defined in the statute. If over the road for an indefinite time in the the rates are subject to secret alteration by future. It is almost needless to say that special agreement, then the statute will fail such a contract could not be supported. of its purpose to establish a rate duly pubThere is no doubt of the general proposition lished, known to all, and from which neither that the release of an unliquidated claim for shipper nor carrier may depart." So, in damages is a good consideration for a prom- Adams Exp. Co. v. United States, 212 U. ise, as between the parties, and if no one else S. 522, 532, 533, 53 L. ed. 635, 640, 29 Sup. were interested in the transaction, that rule | Ct. Rep. 315: "But the power of Congress might apply here; but the legislature, upon | over interstate transportation embraces all grounds of public policy, and for the pro- manner of carriage of that character, wheth tection of third parties, has made certain er gratuitous or otherwise; and, in the abrequirements with regard to equality of sence of express exceptions, we think it was rates, which, in their practical application, the intention of Congress to prevent a dewould be rendered nugatory if this rule parture from the published rates and schedwere given full effect." That Congress had ules in any manner whatsoever. If this the constitutional power to adopt such a be not so, a wide door is opened to favoritpolicy and to prescribe appropriate means ism in the carriage of property in the into give it effect, we do not doubt. stances mentioned, free of charge. If it is lawful, in view of the provisions of the∞ interstate commerce act, to*issue franks of the character under consideration in this case, then this right must be founded upon some exception incorporated in the act.”

It is further said that the passes con. templated by the parties were not strictly free passes; for, it is argued, the railroad company would receive a valuable considera. tion for each one issued by it. This view is more plausible than sound, and does not meet the difficulty. Suffice it to say, in this case, that such passes, when issued, would be illegal under the act of Congress, by reason of their not being paid for in money, according to the company's schedule of rates, but in consideration only of the release by Mottley and wife of their claim for damages on account of the collision in question.

It is said, however, that, as the contract of Mottley and wife with the railroad company was originally valid, it cannot be supposed that Congress intended by the act of 1906 to annul or prevent its enforcement. But the purpose of Congress was to cut up by the roots every form of discrimination, favoritism, and inequality, except in the cases of certain excepted classes to which Mottley and his wife did not belong, and which exceptions rested upon peculiar grounds. Manifestly, from the face of the commerce act itself, Congress, before taking final action, considered the question as to what exceptions, if any, should be made in respect of the prohibition of free tickets, free passes, and free transportation. It solved the question when, without making any exceptions of existing contracts, it forbade by broad, explicit words any carrier to charge, demand, collect, or re- We now come to the question whether, asceive a "greater or less or different com- suming that the agreement of 1871 was pensation" for any services in connection valid when made, could Congress, by any with the transportation of passengers or statute subsequently enacted, make its enproperty than was specified in its published forcement by suit impossible. There are cerschedules of rates. The court cannot add tain propositions at the base of this inan exception based on equitable grounds quiry which we need not discuss at large, when Congress forbore to make such an because they have become thoroughly estabexception. Yturbide v. United States, 22 lished in our constitutional jurisprudence. How. 290, 293, 16 L. ed. 342, 343. The One is, that the power granted to Congress words of the act, therefore, must be taken to regulate commerce among the states and to mean that a carrier engaged in inter- with foreign nations is complete in itself, state commerce cannot charge, collect, or and is unrestricted except by the limitations receive for transportation on its road any upon its authority to be found in the Conthing but money. In Armour Packing Co. stitution. Gibbons v. Ogden, 9 Wheat. 1, v. United States, 209 U. S. 56, 81, 52 L. ed. 6 L. ed. 23; Brown v. Maryland, 12 Wheat. 681, 694, 28 Sup. Ct. Rep. 428, this court 419, 6 L. ed. 678; Addyston Pipe & Steel said: "There is no provision excepting Co. v. United States, 175 U. S. 211, 229, special contracts from the operation of the 44 L. ed. 136, 143, 20 Sup. Ct. Rep. 96; law. One rate is to be charged, and that Scranton v. Wheeler, 179 U. S. 141, 162, the one fixed and published in the manner 163, 45 L. ed. 126, 137, 21 Sup. Ct. Rep. 48; pointed out in the statute, and subject to Chicago B. & Q. R. Co. v. Illinois, 200 U. S. change in the only way open by the statute. 561, 50 L. ed. 596, 26 Sup. Ct. Rep. 341, 4 There is no provision for the filing of con- A. & E. Ann. Cas. 1175; Union Bridge Co. tracts with shippers, and no method of mak-v. United States, 204 U. S. 364, 400, 51 L.

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ed. 523, 539, 27 Sup. Ct. Rep. 367; Atlantic | by the state, did so with knowledge of the Coast Line R. Co. v. Riverside Mills, 219 U. paramount authority of Congress to regu. S. 186, 202, 55 L. ed., 31 Sup.Ct.Rep. 164. late commerce among the states, but that In the Addyston Pipe Case, this court it erected the bridge subject to the possi said that, under its power to regulate com- bility that Congress might, at some future merce, Congress "may enact such legisla- time, when the public interest demanded, tion as shall declare void and prohibit the exert its power by appropriate legislation performance of any contract between in- to protect navigation against unreasonable dividuals or corporations where the natural obstructions." and direct effect of such a contract will be, when carried out, to directly, and not as a mere incident to other and innocent purposes, regulate to any substantial extent interstate commerce."

In the Scranton Case, where a riparian owner sought compensation from the government because his access to navigability had been materially obstructed by a pier constructed by the government on the submerged grounds in front of his land, this court said: "The riparian owner acquired the right of access to navigability subject to the contingency that such right might become valueless in consequence of the erection under competent authority of structures on the submerged lands in front of his property, for the purpose of improving navigation. When erecting the pier in question, the government had no object in view except, in the interest of the public, to improve navigation. It was not designed arbitrarily or capriciously to destroy rights belonging to any riparian owner. What was done was manifestly necessary to meet the demands of international and interstate commerce."

Long before the above cases were decided it was said in Legal Tender Cases, 12 Wall. 550, 551, 20 L. ed. 311, 312, that "as, in a state of civil society, property of a citizen or subject is ownership, subject to the lawful demands of the sovereign, so contracts must be understood as made in reference to the possible exercise of the rightful authority of the government, and no obligation of a contract can extend to the defeat of legitimate government authority."

These principles control the decision of the present question. The agreement be|tween the railroad company and the Mottleys must necessarily be regarded as having been made subject to the possibility that, at some future time, Congress might so exert its whole constitutional power in regu lating interstate commerce as to render that agreement unenforceable, or to impair its value. That the exercise of such power may be hampered or restricted to any extent by contracts previously made between individuals or corporations is inconceivable. The framers of the Constitution never intended any such state of things to exist.

It is said that if Congress intended by the commerce act to embrace such a case as this, then the act is repugnant to the Constitution. Does the act infringe upon the constitutional liberty of the citizen to make contracts? Manifestly not. In the Addyston Pipe Case (p. 228), above cited, the court said: "We do not assent to the correctness of the proposition that the constitutional guaranty of liberty to the individual to enter into private contracts limits the power of Congress, and prevents it from legislating upon the subject of con

In the Union Bridge Co. the question was as to the constitutional authority of the government to require the bridge company to make certain changes or alterations in a bridge across a navigable river of the United States, in Pennsylvania, and which bridge the company owned and constantly used. It was admitted that the bridge had been lawfully erected. But ulimately, in view of the necessities of interstate commerce, it had become an unreasonable obstruction to free, open navigation by vessels and boats then in use, and, for that reason tracts" relating to interstate commerce. alone, the government, by its constituted | Again: "But it has never been, and in our authorities, proceeding under an act of Con- opinion ought not to be, held that the word gress, ordered the bridge company, at its [liberty] included the right of an individual own cost, to make certain changes and alter- to enter into private contracts upon all ations in the structure. This court held subjects, no matter what their nature, and that there was no taking of property for wholly irrespective (among other things) public use in the constitutional sense, and of the fact that they would, if performed, that although the bridge, when erected un- result in the regulation of interstate com. der the authority of Pennsylvania, may have merce, and in the violation of an act of been a lawful structure, and although it Congress upon that subject. The provision may not have been an unreasonable obstruc- in the Constitution does not, as we believe, tion to commerce, as then carried on, "it exclude Congress from legislating with remust be taken, under the cases cited and gard to contracts of the above nature, while upon principle, not only that the company, in the exercise of its constitutional right when exerting the power conferred upon it' to regulate commerce among the states

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Anything which directly obstructs | thority." 63 Vt. 169, 173, 13 L.R.A. 70, and thus regulates that commerce which is 3 Inters. Com. Rep. 633, 22 Atl. 76. carried on among the states, whether it is state legislation or private contracts between individuals or corporations, should be subject to the power of Congress in the regulation of that commerce."

These authorities and principles condemn the proposition that the defendants in error had the constitutional right, pursuant to or because of the agreement of 1871, and during their respective lives, to accept and use free transportation for themselves, as passengers, on an interstate train, after Congress forbade, under penalty, any interstate carrier to demand, collect, or receive compensation for transportation, or any interstate passenger not within the classes excepted by the act, to use transportation tickets, except upon the basis fixed by the carrier's published schedule of rates. After the commerce act came into effect, no contract that was inconsistent with the regu. lations established by the act of Congress could be enforced in any court. The rule upon this subject is thoroughly established. It is not determinative of the present question that the commerce act, as now con. strued, will render the contract of no value for the purposes for which it was made. In Legal Tender Cases, above cited, the court, referring to the 5th Amendment, which forbids the taking of private prop erty for public use without just compensation or due process of law, said: "That provision has always been understood as referring only to a direct appropriation, and not to consequential injuries resulting from the exercise of lawful power. It has never been supposed to have any bearing upon or to inhibit laws that indirectly work harm and loss to individuals. A new tariff, an embargo, a draft, or a war, may inevitably bring upon individuals great losses; may, indeed, render valuable property almost valueless. They may destroy the worth of

contracts."

In Fitzgerald v. Grand Trunk R. Co., which was the case of a contract for the transportation of lumber through several states, the supreme court of Vermont said: "Such commerce is solely regulated by Congress, and when parties make contracts to engage in interstate commerce, they are held to do so upon the basis and with the understanding that changes in the law applicable to their contracts may be made. There can, in the nature of things, be no vested right in an existing law which preeludes its change or repeal, nor vested right in the omission to legislate upon a particular subject which exempts a contract from the effect of subsequent legislation upon its subject-matter by competent legislative au

In Pomeroy on Contracts, § 280 (Specific Performance), after observing that an illegal contract cannot be made the basis of any judicial proceeding, and that no action in law or equity could be maintained upon it, it was said: "This impossibility of enforcement exists, whether the agree ment is illegal in its inception, or whether, being valid when *made, the illegality has been created by a subsequent statute." Among the cases cited by the author in support of that view was Atkinson v. Ritchie, 10 East, 530, 534, in which the Chief Jus tice, Lord Ellenborough, delivering the opinion of the court, said: "That no contract can properly be carried into effect, which was originally made contrary to the provisions of law, or which, being made consistently with the rules of law at the time, has become illegal in virtue of some subsequent law, are propositions which admit of no doubt." In Kentucky & I. Bridge Co. v. Louisville & N. R. Co. 2 Inters. Com. Rep. 102, 34 Am. & Eng. R. Cas. 630, Judge Cooley said: "But the act to regulate commerce is a general law, and contracts are always liable to be more or less affected by general laws, even when in no way referred to. But this incidental ef fect of the general law is not understood to make it a law imparing the obligation of contracts. It is a necessary effect of any considerable change in the public laws. If the legislature had no power to alter its police laws when contracts would be affected, then the most important and valuable reforms might be precluded by the simple device of entering into contracts for the purpose. No doctrine to that effect would be even plausible, much less sound and tenable."

"If one agrees,” said Mr. Parsons, "to do a thing which it is lawful for him to do, and it becomes unlawful by an act of the legislature, the act avoids the promise." Parsons, Contr. 6th ed. 675.

We forbear any further citation of authorities. They are numerous and are all one way. They support the view that, as the contract in question would have been illegal if made after the passage of the commerce act, it cannot now be enforced against the railroad company, even though valid when made. If that principle be not sound, the result would be that individuals and corporations could, by contracts between themselves, in anticipation* of legis lation, render of no avail the exercise by Congress, to the full extent authorized by the Constitution, of its power to regulate commerce. No power of Congress can be thus restricted. The mischiefs that would

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*486

The petition alleged that on the 24th day of January, 1907, the defendant made a written contract with the Frank A. Munsey Company, publisher, at New York, of Munsey's Magazine, which contained, among other provisions, the following: "Agreement between the Monon Route Decided (Chicago, Indianapolis, & Louisville Railway Company) and...... Frank A Mun

*For other cases see same topic & § NUMBER in Dec. & Am. Digs. 1907 to date, & Rep'r Indexes

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Bey Company......publisher. Entered in- | rates, amounted to $145.10, while the only to this......24 day of January, 1907. compensation received by it for transpor"Whereas, the said publisher issues.... tation previous to May 10th, 1907, was the Munsey's Magazine...... a ....publica-publication in the March issue of the Muntion, published at New York City, Newsey Magazine of one fourth of a page adYork, Chicago office 423 Marquette Build- vertisement of the Monon Route, which the ing, and which has a regular circulation parties valued at $125; of......643,000...... each issue.

* "And whereas, the said Monon Route desires to advertise in said publication, which advertising the said publisher agrees to do upon the following terms and conditions, which are mutually agreed upon:

"1st. The said publisher agrees to publish in said publication an advertisement of the Monon Route as follows:......One page 'ad' (divided as desired)

said advertisement to appear...... Favorably......and occupy a space of not less than......one page......and to be published as desired issues of said publication. "2d. In full consideration of the foregoing advertising, the Monon Route agrees to issue the following nontransferable transportation based on regular published

rate:

.Trip tickets or mileage.

To the value of...... Five hundred... Dollars ($500....) for the personal use of the publisher, his employees or immediate members of his or their families, which said transportation shall be limited for use not later than December 31, 1907.

"3d. Under no circumstances must the transportation issued under this contract be sold or transferred to or used by any other than the person to whom issued, as such sale, transfer, or use would be a misdemeanor under the law.

.

That while the railroad company was thus transporting the Munsey employees, it contemporaneously transported over its lines between the same points other persons, and exacted and received in money from them, in each instance, the full amount of its published rates and fares, the conditions and circumstances of the transportation being the same in the cases of employees and others;

That in accordance with the contract in question the railway company was, at the date of this suit, still furnishing interstate transportation to the publisher of Munsey's Magazine and the members of his family, and to his employees and the members of their families;

That the railway company had entered into like contracts with other publishers of magazines, newspapers, and similar pericdicals to the number of 251, under the terms of which latter contracts the company, at the date this suit was commenced, was furnishing interstate transportation over its lines to such persons as were from time to time designated by the publishers last above mentioned, but not receiving compensation in money in any instance when furnishing* transportation under those contracts for the services rendered by it; and

That the above contracts between the railway company and the publishers of "4th. It is understood and agreed that magazines and newspapers are in violathe transportation issued under this con- tion of the act of Congress regulating comtract shall be read to points on the Monon merce, particularly §§ 2 and 6, and also § 3 Route, and not to points on any other road. of the above act, approved February 19th, Further, should said publisher or 1903, in this: that those contracts require any person named on said tickets allow the furnishing of interstate transportation any other person to use same, or offer to at rates which, in each instance, "are less sell, sell or transfer the same, then said than and different" from the rates contempublisher agrees to pay the said Monon poraneously exacted from the general pubRoute as a penalty the full rate of fare | lic under substantially similar circumstanwhich would have been paid for regular ces and conditions. tickets. This contract expires December 31, 1907, unless otherwise stipulated."

The company, in its answer, averred that the money value of the space purchased from the Munsey Company under the contract was $500, as determined and fixed by the rate to the public, and that it was to pay therefor $500 in value of passenger transportation issued and based on regularly published rates, SO that the money value of the advertising space purchased and the money value of the transportation furnished was the same; and that its arrangements for advertising space with other publications were based on the "regular published rate." The answer con

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