« ForrigeFortsett »
risdiction of the state of New York, and that the imposition of a tax upon *them under the authority of the state of New Jersey would deprive appellant of his property without due process of law in contravention of the Fourteenth Amendment to the Constitution of the United States; third, that the lands were not within the taxing district of Jersey City; and, fourth, that the lien of the taxes had expired.
Jersey City and the city collector to remove | 126), made subject to the governmental jua cloud upon the title held by Leary in certain lands lying beneath the waters of New York Bay adjacent to the New Jersey shore, arising from the lien asserted by the city to secure payment of certain taxes assessed against those lands and alleged by complainant to be invalid under the constitution and laws of the state and repugnant to the Constitution of the United States. The Circuit Court dismissed the bill (189 Fed. 419), the Circuit Court of Appeals for the Third Circuit affirmed its decree (208 Fed. 854, 126 C. C. A. 12), and an appeal to this court was allowed.
The lands in question were granted or leased April 30, 1881, by the state of New Jersey, acting by its riparian commissioners appointed under an Act of March 31, 1869 (P. L. p. 1017), supplementary to an Act of April 11, *1864 (P. L. p. 681). The recipient of the grant was the Morris & Cumings Dredging Company, a corporation of the state of New York, and this company on February 24, 1904, assigned its interest to appellant. The taxes in question were assessed annually for the years 1883 to 1905, inclusive, amounted in all to $163,392.24, and remain unpaid. The lands having been advertised for sale by the city collector to pay them, the original bill was filed to restrain such sale. Afterwards the city under an act of the Legislature known as the Martin Act, approved March 30, 1886 (P. L. p. 149), and its supplements, caused an adjustment of the taxes to be made, which was confirmed by a circuit judge, pursuant to the act. The assessment resulted in a large reduction in the amount of the taxes, fixing the aggregate burden upon appellant's land at about $108,000, including the taxes for the years 1904, 1905, 1906, and 1907, which were included in the adjustment. The adjusted taxes were made the basis of a supplemental bill herein. At the same time they were reviewed by the Supreme Court of the state upon a writ of certiorari prosecuted by the city, and were sustained by that court and by the Court of Errors and Appeals. Jersey City v. Speer, 78 N. J. Law, 34, 72 Atl. 448; Id., 79 N. J. Law, 598, 76 Atl. 1037. That review, however, did not involve the questions now
In the present suit the validity of the taxes was assailed principally upon four grounds: First, that the lands were not owned by the Morris & Cumings Dredging Company or by appellant in such a sense as to make them taxable in their hands under the state laws, but on the contrary remained the property of the state; second, that the lands, .although within the territorial limits of the state of New Jersey, were, by the compact made in the year 1833 between that state and the state of New York, approved by Act of Congress of June 28, 1834 (4 Stat. 708, c.
Since the suit was commenced the second contention, which raised the only substantial federal question, has been decided adversely to appellant by this court in Central R. R. Co. v. Jersey City, 209 U. S. 473, 28 Sup. Ct. 592, 52 L. Ed. 896.
The third and fourth points are satisfactorily dealt with in the opinions of the Circuit Court and Circuit Court of Appeals.
The first point-whether the interest of appellant and of his predecessor in title were taxable under the laws of the state-is the one chiefly relied on in this court. It is insisted, and for the purposes of the decision we assume, that the state laws provide for taxing lands only against the owner, and not against a lessee. Hence, the crucial question on this branch of the case is whether the riparian grant under which appellant derives his title is a mere lease, as contended by him, or confers such an ownership as is taxable under the state laws; in short, whether the state or the grantee is the owner..
The legislation by which the powers of the riparian commissioners are defined is set forth in the opinion of the Circuit Court (189 Fed. 422-425), and need not be here repeated. Suffice it to say that it authorizes the making, in the name and behalf of the state, of such a grant or lease as that which was made to the Morris & Cumings Dredging Company, and which that company assigned to appellant. The instrument recites that the company, being the owner of lands fronting on New York Bay, and desirous of obtaining a lease for the lands under water lying in front of them, had applied to the | riparian commissioners and the governor for such a lease, and in com*pliance with the application the commissioners had agreed to lease the submerged lands in question, and had fixed the sum of $4,233.60 as the annual rental to be paid for them, and the sum of $60,480 as the price on payment of which a conveyance of the lands free from rent would be made; the instrument proceeds in the name of the state to "bargain, sell, lease, and convey unto the said the Morris & Cumings Dredging Company and to its successors and assigns forever" the submerged lands in question (describing them), “and also the right, liberty, privilege, and franchise to exclude the tide water from so much of the lands above described as lie
by the subsequent decision of the same court in Burkhard v. Heinz Co., 71 N. J. Law, 562, 564, 60 Atl. 191, where it was pointed out that the judgment in the Polhemus Case was not as far-reaching as the opinion; that its legal effect was simply that such common rights as the right to fish in the sea were not annulled by a riparian grant until the grantee made some appropriation of the property inconsistent with them. We do not regard this as conclusive upon the present question.
under tide water by filling in or otherwise | upon to support this contention. But the auimproving the same and to appropriate the thority of that case has been much restricted land above described to their exclusive private use." There follows an habendum clause to the effect that the lands granted and all rights and privileges exercisable within and over or with reference to the same in manner and form as granted are to be held by the company and its successors and assigns forever, subject to the payment of the rent specified in semi-annual instalments. There is an express covenant for the payment of the rent at the times appointed, with the right on the part of the state to reënter for nonpayment; and there is a covenant by the state to convey the lands or any part thereof to the company, its successors or assigns, free and discharged of the rent, upon payment to the state of the sum of $60,480, or an equitable portion thereof.
With respect to a similar grant, made under the same statutory authority and containing like provisions, the court of last resort of New Jersey has held that it transmitted the entire estate of the grantor to the grantee; that the interest remaining in the state was not an actual estate but a right of entry for nonpayment of rent, and the mere possibility of a reverter for condition broken did not amount to an estate in reversion; and that the lands covered by the grant were not lands belonging to the *state within the meaning of a section of the general railroad act which limited the power of corporations created thereunder to condemn lands for the uses contemplated by the act. Hudson Tunnel Co. v. Attorney General, 27 N. J. Eq. 573, 578. In Cook v. Bayonne, 80 N. J. Law, 596, 77 Atl. 1048, the Supreme Court of the state held that a riparian grant
The other cases particularly relied upon, Long Dock Co. *v. Board of Equalization of Taxes, 87 N. J. Law, 22, 93 Atl. 111, and Long Dock Co. v. State Board of Assessors, 89 N. J. Law, 108, 97 Atl. 900, and 90 N. J. Law, 701, 101 Atl. 367, so far as they touch the point at all, are based upon the language of the charter of the Long Dock Company (P. L. 1856, p. 67), and are not inconsistent with Hudson Tunnel Co. v. Attorney General, Cook v. Bayonne, and Ocean Front Imp. Co. v. Ocean City Gardens Co., supra. Under the doctrine of these cases, which we accept as well founded in reason, to say nothing of authority, appellant's estate is taxable under the New Jersey laws.
Other points are raised, but none that seems to require mention. Decree affirmed.
(248 U. S. 372)
UNION DRY GOODS CO. v. GEORGIA
of the same character amounted to a convey- (Argued and Submitted Dec. 18, 1918. Decided
ance in fee subject to a rent charge, and that the lands were taxable in the hands of the grantee. A similar view as to the nature of the estate which passes under a "riparian lease" was taken by Vice Chancellor Leaming in the recent case of Ocean Front Imp. Co. v. Ocean City Gardens Co. (N. J. Ch.) 103 Atl. 419. The last two cases do not appear to have been reviewed by the court of last
Appellant refers to that part of the lease which grants the right to exclude the tide water from the lands described by filling in or otherwise improving the same and to appropriate the lands described to private use, and upon the strength of this insists that the instrument, whether by way of lease or in fee, confers a mere license to reclaim, and does not constitute the licensee the owner of the land or extinguish public rights therein unless and until the license is executed by actual reclamation. Polhemus v. Bateman, 60 N. J. Law, 163, 37 Atl. 1015, a decision by the Court of Errors and Appeals, is relied
Jan. 7, 1919.)
1. CONSTITUTIONAL LAW 154(2) ELECTRICITY 11-OBLIGATION OF CONTRACT— RATES OF PUBLIC SERVICE CORPORATION.
Private contract with public service electric company, fixing rates, is subject to the police power of regulation, so that exercise thereof, by fixing a higher rate, does not impair obligation of contract.
2. CONSTITUTIONAL LAW 298(7) DUE PROCESS OF LAW-RATES OF PUBLIC SERVICE CORPORATION.
One having a contract with a public service electric company fixing rates is not deprived of property without due process by the fixing of higher rates in the exercise of the state's police power of regulation.
In Error to the Supreme Court of the State of Georgia.
Suit by the Union Dry Goods Company against the Georgia Public Service Corporation. Judgment for defendant was affirmed
For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes
by the Supreme Court of Georgia (142 Ga. [ligation of the contract of July 18, 1912, was 841, 83 S. E. 946, L. R. A. 1916E, 358), and plaintiff brings error. Affirmed..
ion of the Court.
The Georgia Public Service Corporation and the Union Dry Goods Company, both corporations organized under Georgia law and doing business in Macon on July 18, 1912,
contracted together in writing for the term of five years, the former to supply electric light and power to the latter, which agreed to pay stipulated rates for the service.
The contract was performed for almost two years until in April, 1914, when the Dry Goods Company refused to pay a bill for service rendered during March, in which a rate higher than that of the contract was charged. The Service Corporation claimed that this rate was authorized and required by an order of the Railroad Commission of Georgia, entered after investigation and hearing.
Soon thereafter the Dry Goods Company commenced this suit to compel specific performance of its contract, which had three years yet to run; to enjoin the Service Corporation from charging the higher rate, and from executing a threat to cut it off from a supply of electricity, because of failure to pay the increased rate.
The trial court and the Supreme Court of Georgia both held against the claims, of the Dry Goods Company, and the case is here for review on writ of error.
The order of the Railroad Commission of Georgia, entered on February 24, 1914, reads: "Ordered: That on and after March 1, 1914, and until the further order of the Commission, the following schedule of rates shall be the maximum schedule of rates to be charged by the Georgia Public Service Corporation."
Then follow the rates complained of. No opinion was rendered in this case, but on the same date, in prescribing the same rates in a proceeding instituted by the Macon Railway & Light Company, also of Macon, the Commission said:
"The rates prescribed herein are in the opinion of the Commission at this time just and reasonable. We have no power to compel the company to accept less, except as implied in the power to prevent unlawful discrimination. All special rates, whether in the form of contracts for definite periods, or informal, in excess of these prescribed rates are illegal."
[1, 2] Of the several claims pressed in argument, we need notice only two: That the ob
impaired, and that the plaintiff in error was deprived of its property without due process of law, by the decision of the Supreme Court of Georgia, holding that the rates prescribed by the Railroad Commission were valid and superseded those of the contract between the parties.
Long prior to the contract of 1912 the Railroad Commission was given jurisdiction over, and power to regulate, the rates of electric
light and power companies by statutes in other states, and, since no reason is assignform not greatly different from those of many ed for assailing their validity, other than the result in this case, they must be accepted
as valid laws.
The presumption of law is in favor of the validity of the order, and the plaintiff in error did not deny, as it could not successfully, that capital invested in an electric light and power plant to supply electricity to the inhabitants of a city is devoted to a use in which the public has an interest which justifies rate regulation by a state in the exercise of its police power. Munn v. Illinois, 94 U. S. 113, 24 L. Ed. 77; Budd v. New York, 143 U. S. 517, 12 Sup. Ct. 468, 36 L. Ed. 247; German Alliance Ins. Co. v. Lewis, Superintendent of Insurance of the State of Kansas, 233 U. S. 389, 407, 34 Sup. Ct. 612, 58 L. Ed. 1011, L. R. A. 1915C. 1189.
Thus it will be seen that the case of the plaintiff in error is narrowed to the claim that reasonable rates, fixed by a state in an appropriate exercise of its police power, are invalid for the reason that if given effect. they will supersede the rates designated in the private contract between the parties to the suit, entered into prior to the making of the order by the Railroad Commission.
Except for the seriousness with which this claim has been asserted and is now pursued into this court, the law with respect to it would be regarded as so settled as not to merit further discussion.
That private contract rights must yield to the public welfare, where the latter is appropriately declared and defined and the two conflict, has been often decided by this court. Thus in Manigault v. Springs, 199 U. S. 473, 480, 26 Sup. Ct. 127, 130 (50 L. Ed. 274), it was declared that:
"It is the settled law of this court that the interdiction of statutes impairing the obligation of contracts does not prevent the state from" properly exercising its police powers "for the general good of the public, though contracts
previously entered into between individuals may thereby be affected."
*These decisions, a few from many to like effect, should suffice to satisfy the most skeptical or belated investigator that the right of private contract must yield to the mined in an appropriate manner by the auexigencies of the public welfare when deterthority of the state, and the judgment of the
This on authority of many cases which are Supreme Court of Georgia must be cited.
In Hudson Water Co. v. McCarter, 209 U. S. 349, 357, 28 Sup. Ct. 529, 531 (52 L. Ed. 828, 14 Ann. Cas. 560), it is said that:
"One whose rights, such as they are, are subJect to state restriction, cannot remove them from the power of the state by making a contract about them. The contract will carry with it the infirmity of the subject-matter."
*In L. & N. R. R. Co. v. Mottley, 219 U. S. 467, 482, 31 Sup. Ct. 265, 270 (55 L. Ed. 297, 34 L. R. A. [N. S.] 671), this is quoted with approval from Knox v. Lee, 12 Wall. 457, 550, 551, 20 L. Ed. 287, viz.:
"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."
In the same report, in Chicago, B. & Q. R.
"There is no absolute freedom to do as one wills or to contract as one chooses. The guaranty of liberty does not withdraw from legislative supervision that wide department of activity which consists of the making of contracts, or deny to government the power to provide restrictive safeguards. Liberty implies the absence of arbitrary restraint, not immunity from reasonable regulations and prohibitions imposed in the interests of the community."
In Atlantic Coast Line R. R. Co. v. Goldsboro, 232 U. S. 548, 558, 34 Sup. Ct. 364, 368 (58 L. Ed. 721), the court said:
(248 U. S. 319)
DANCIGER et al. v. COOLEY.
(Submitted Nov. 14, 1918.
1919.) No. 37.
Decided Jan. 7,
1. INTOXICATING LIQUORS 167-OFFENSES. INTERSTATE SHIPMENT - COLLECTION PRICE "OTHER PERSON."
"Other person," within Criminal Code, § 239 (Comp. St. § 10409), declaring a punishment for any railroad company, express company, or other common carrier, "or any other person" who, in connection with interstate transportation of liquor, shall collect the purchase price, is not limited to an agent of a common carrier, but includes all persons doing the prescribed act; the practice of collecting the purchase price at destination as a condition to delivery being the thing aimed at, and the rule of ejusdem generis never being applied when it will defeat the intention of the legislative body.
and Phrases, First and Second Series, Other.] [Ed. Note.-For other definitions, see Words 2.
INTOXICATING LIQUORS 138 - OFFENSES
- INTERSTATE SHIPMENT - COLLECTION PRICE "IN CONNECTION WITH" TRANSPORTATION.
Collection of purchase price of liquor is "in connection with" transportation of interstate Criminal Code, § 239 (Comp. St. § 10409), where shipment of liquor, within the denouncement of shipper's agent at destination, according to shipper's instructions, required payment before bill of lading passed to purchaser.
[Ed. Note.-For other definitions, see Words and Phrases, In Connection With.]
"It is settled that neither the 'contract' clause nor the 'due process' clause has the effect of overriding the power of the state to establish all regulations that are reasonably necessary to secure the health, safety, good order, comfort, or general welfare of the community; that 3. COURTS 366(27) - REVIEW OF STATE this power can neither be abdicated nor bargainCOURT-LOCAL LAW. ed away, and is inalienable even by express Ruling of state court, on right of principal grant; and that all contract and property to recover from agent money received by him rights are held subject to its fair exercise." in carrying out arrangement between them involving violation of criminal statute, turning And in Rail & River Coal Co. v. Ohio In-on question of local law, cannot be re-examined dustrial Commission, 236 U. S. 338, 349, 35 by national court. Sup. Ct. 359, 362 (59 L. Ed. 607), the state of the law upon the subject is thus aptly described:
"This court has so often affirmed the right of the state in the exercise of its police power to place reasonable restraints, like that here involved, upon the freedom of contract, that we need only to refer to some of the cases in passing."
In Error to the Supreme Court of the State of Kansas.
Action by Abe Danciger and others against D. G. Cooley. Judgment for defendant was affirmed by the Supreme Court of Kansas (98 Kan. 38, 157 Pac. 453; 98 Kan. 484, 158 Pac. 1119), and plaintiffs bring error. Affirmed.
For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes
Mr. Edwin A. Krauthoff, of Washington, [ now before this court for the first time. Of D. C., for plaintiffs in error. course, the chief factor in its solution must Mr. Edwin A. Austin, of Topeka, Kan., for be the words of the statute. Omitting what defendant in error. is irrelevant here, they are:
*Mr. Justice VAN DEVANTER delivered the opinion of the Court.
"Sec. 239. Any railroad company, express company, or other common carrier, or any other person who, in connection with the transDanciger Bros., who conducted a mail-or-portation of any * intoxicating liquor der liquor business in Kansas City, Missouri, │* from one state * * into another brought this suit in a Kansas court to recov-state, shall collect the purchase price er from Cooley certain moneys collected by or any part thereof, before, on, or after deliv him, under an arrangement with them, as ery, from the consignee, or from any other perthe purchase price of intoxicating liquors Son, or shall in any manner act as the agent of sold by them in interstate commerce, and al- the buyer or seller of any such liquor, for the so to enforce a similar claim assigned to sale thereof, saving only in the actual transpurpose of buying or selling or completing the them by another liquor dealer. After issue portation and delivery of the same, shall be and trial Cooley prevailed and the judgment fined," etc. was affirmed; the appellate court holding that the arrangement under which the moneys were collected involved a violation of section 239 of the Criminal Code of the United States (Act March 4, 1909, c. 321, 35 Stat. 1136 [Comp. St. § 10409]), and that, applying the settled rule of the Kansas courts, a principal who employs an agent to make collections in violation of a criminal law cannot compel the agent to account for what he collects. 98 Kan. 38, 484, 157 Pac. 453, 158 Pac. 1119. The case is here on writ of error sued out prior to the Act of September 6, 1916, c.hibitory laws did not reach sales or trans448, 39 Stat. 726.
A reference to the conditions existing when the section was enacted, in 1909, will, together with its words, conduce to a right understanding of the evil at which it is aimed and the relief it is intended to afford. The condi*tions were these: In some of the states there were state-wide laws prohibiting the manufacture and sale of intoxicating liquor; in some there was a like prohibition operative only in particular districts, and in other states the business was lawful. But the pro
portation in interstate commerce, for under the Constitution of the United States that was a matter which only Congress could regulate. True, there was a regulation by Congress, known as the Wilson Act Aug. 8, 1890, c. 728, 26 Stat. 313 (Comp. St. § 8738), which subjected liquor transported into a state to the operation of the laws of the state enacted in the exercise of its police power, but the time when the liquor was thus to come within the operation of those laws was after the shipment arrived at the point of destination and was there delivered by the carrier. Rhodes v. Iowa, 170 U. S. 412, 426, 18 Sup. Ct. 664, 42 L. Ed. 1088. Thus a state, although able effectively to prohibit the manufacture and sale of liquor within its own ter
These are the facts: During the year 1910 Danciger Bros. received through the mails several orders for whisky from customers in Topeka, Kansas, and in each instance shipped the liquor from Kansas City, Missouri, to Topeka as freight. Each package was consigned to the shipper's order and was to be delivered by the carrier only on the surrender of the bill of lading properly indorsed. A sight draft was drawn on the customer for the purchase price and this with the bill of lading attached was sent to Cooley under an arrangement whereby he was to collect the draft, was then to hand the bill of lad*ing suitably indorsed to the customer to enable the latter to get the package from the carrier, and ultimately was to remit to Dancigerritory, was unable to prevent its introduction Bros. the amount collected less a commission for the service rendered. Before this arrangement was made the banks had refused to make such collections.
The assigned claim need not be separately described, for it was essentially like the other.
As the transactions occurred before the passage of the Webb-Kenyon Act, March 1, 1913, c. 90, 37 Stat. 699 (Comp. St. § 8739), we are not concerned with it, but only with the situation theretofore existing.
Whether section 239 of the Criminal Code reaches and embraces acts done by an agent such as Cooley was in this instance, or is confined to acts of common carriers and their agents, is a question about which there has been some contrariety of opinion, and it is
from other states through the channels of interstate commerce. Of course, the real purpose of the prohibitory laws was to prevent the use of liquor by cutting off the means of obtaining it. But with the channels of interstate commerce open those laws were failing in their purpose, for dealers in states where it was lawful to sell were supplying the wants of intending users in states where manufacture and sale were prohibited. This interstate business generally was carried on by means of orders transmitted through the mails and of shipments made according to some plan whereby ultimate delivery was dependent on payment of the purchase price. The plans varied in detail, but not in principle or result. All included the collection of the purchase price at the point