545 (246 U. S. 544) STADELMAN et al. v. MINER et al. 1918.) Publication was made in conformity to the order, the first publication being on June 17, 1902. Under the statute, the state court finds that the hearing on the petition should not have been held before July 24th. It was actually held on July 17th; and an order of sale was then entered by the county court under A judgment of the Oregon court of last re- which the property was sold to Nelson, sort, holding that an order of the county court through whom Miner and Worden claim title directing the sale of lands of a decedent to pay by mesne conveyances. The deceased had debts, made under L. O. L. §§ 1252-1270, was not subject to collateral attack by nonresident left surviving two children who were nonheirs of the decedent, though the statutory re- residents, Mrs. Stadelman and Henry H. quirement as to the time of hearing was not Fletcher. Thereafter, these two and one observed, and the heirs asserted that to sustain the validity of the sale would deprive them of Motley (a grantee from them of a part intheir property without due process of law, in terest in the property) brought, in an approviolation of Const. U. S. Amend. 14, does not priate state court of Oregon, an independent involve the validity of a treaty or statute of the suit to quiet title and claimed to own the United States, or a statute of or authority exercised under the state; hence a writ of error property on the ground that the order of the to review such judgment will not lie under Judi- county court and the sale to Nelson thereunder cial Code (Act March 3, 1911, c. 231, § 237, were void. 36 Stat. 1156), as amended by Act Sept. 6, 1916. c. 448, § 2, 39 Stat. 726 (Comp. St. 1916, § 1214). In Error to the Supreme Court of the State of Oregon. Suit by Minnie Evvia Stadelman and others against W. H. Miner and another. A decree for plaintiffs, affirmed on defendant's appeal (83 Or. 348, 155 Pac. 708), was reversed on rehearing (83 Or. 348, 163 Pac. 585), and the conclusion being confirmed on a second petition for rehearing (83 Or. 348, 163 Pac. 983), plaintiffs bring error. Writ dismissed. trial court in their favor; and it was affirmed A decree was rendered by the on appeal by the Supreme Court of the state, where two curative acts were unsuccessfully invoked to sustain the validity of the Miner and Worden title. 83 Or. 348, 355, 155 Pac. 708, 163 Pac. 585, 983. A petition for rehearing was filed; and on January 30, 1917, the Supreme Court reversed its decision and the decree of the lower court and dismissed. the suit. It held that failure to observe the statutory requirement as to time for hear ing was a defect rendering the order voidable merely and not void; that the defect did See, also, 246 U. S. 311, 38 Sup. Ct. 189, not operate to deprive the county court of 62 L. Ed. Mr. Justice BRANDEIS delivered the opinion of the Court. The statutes of Oregon provide that, when it becomes necessary to sell real estate of a decedent in order to pay his debts (L. O. L. §§ 1252-1270), the administrator shall file a petition therefor, and that a citation shall issue to heirs known and unknown "to appear at a term of court therein mentioned, not less than ten days after the service of such citation, to show cause, if any exist, why an order of sale should not be made as in jurisdiction; that the defects could have that it afforded no basis for a collateral atbeen availed of only in a direct attack; and tack, in an independent suit, upon the order and the sale thereunder. 83 Or. 379, 155 Pac. 708, 163 Pac. 585, 983. This conclusion was confirmed by the same court upon a second petition for a rehearing. 83 Or. 388, 155 Pac. 708, 163 Pac. 585, 983. At the first argument of the case in the Supreme Court of Oregon, plaintiffs contended that to sustain the validity of the sale under the order of the county court would of law guaranteed by the Fourteenth Amend deprive them of their right to due process ment. See memorandum opinion of this court, 246 U. S. 311, 38 Sup. Ct. 189, 62 L. Ed. -, March 18, 1918. Upon this contention the case was brought here under section 237 of the Judicial Code. But under that section, as amended by Act of September 6, 1916, c. 448, § 2, 39 Stat. 726 (Comp. St. 1916, § 1214), a final decree of a state court of last resort can be reviewed here on In 1897 Charles W. Fletcher died intestate writ of error only in a suit "where is drawn in Oregon. His administrator filed in the in question the validity of a treaty or statute county court a petition for the sale of the of, or an authority exercised under the decedent's real estate in order to pay debts; United States, and the decision is against and the citation was ordered to be served their validity, or where is drawn in question upon the unknown or nonresident heirs by the validity of a statute of, or an authority publication in a newspaper for four weeks. exercised under any state, on the ground of For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes the petition prayed for." Section 1254. The statutes also provide for the service of unknown or nonresident heirs by publication for "not less than four weeks, or for such further time as the court or judge may prescribe." Section 1255. 546 [1] Plaintiff in error seeks reversal of a judgment of the Supreme Court of Appeals of Virginia (118 Va. 301, 87 S. E. 598) which affirmed an order of the Corporation Commission imposing a fine upon it for doing business within the state without first obtaining proper authority. their being repugnant to the Constitution, Mr. Justice McREYNOLDS delivered the treaties, or laws of the United States, and opinion of the Court. the decision is in favor of their validity." The judgment here involved was entered after the act of September 6, 1916, took effect. There was not drawn in question the validity of any treaty or statute. And challenging the power of the court to proceed to a decision did not draw in question the validity of any authority exercised under the state. Philadelphia & Reading Coal & Iron Co. v. Gilbert, 245 U. S. 162, 38 Sup. Ct. 58, 62 L. -; Ireland v. Woods (March 18, 1918) 246 U. S. 323, 38 Sup. Ct. 319, 62 L. Ed. The writ of error is therefore Ed. 2. COMMERCE BURDEN UPON. The essential facts concerning business done as found by the Commission and approved by Supreme Court are these: "The defendant is a corporation of the state of New York, having an authorized capital of $5,000,000. Its principal office and factory is at Rochester, N. Y., where it owns and operates a large manufacturing plant devoted to the manufacture of materials chiefly used in the construction of railway signals which it sells and constructs all over the world. It has a branch factory at Montreal, Canada, and maintains branch offices in New York City, Chicago, and San Francisco. "By contract dated the 5th day of May, 1914, with the Southern Railway Company, the defendant agreed to furnish certain materials, supplies, machinery, devices and equipment, as well as all necessary labor, and to install, erect, and put in place certain signals and apparatus shown on the plans described in the specifications, from Amherst to Whittles, Virginia, fiftyeight miles, and to 'complete the entire system and turn same over to the railway company as a finished job,' subject to inspection and acceptance, for $85,597. Similar contracts had been previously made and fully performed, one dated September 6, 1911, covering the lines of the Southern Railway in Virginia from Monroe to Montview, Virginia, 13 miles, for $16,015, and one dated July 18, 1913, from Orange to Seminary, Virginia, 76 miles, for $112,428. The aggregate distance in this state covered by these contracts being 147 miles, and the total consideration being $214,040. "The purpose of these signals is to promote safety of railway operation and they operate 69-INTERSTATE COMMERCE-automatically. Acts Va. 1910, c. 53, § 38a, requiring foreign corporations, when obtaining a certificate of authority to do business in the state, to pay an entrance fee, though on the border line, is not invalid as placing a burden on interstate commerce, although the fees prescribed range from $30 for a corporation whose maximum capital stock is $50,000 or under to $1,000 for a corporation with a capital of over $1,000,000 and not exceeding $10,000,000; it not appearing that the fees varied in direct proportion to the capital stock, or that the amounts prescribed were arbitrary or unreasonable. "In order to construct these signals as required by the contract it was necessary to employ in this state labor, skilled and unskilled, to dig ditches in which conduits for the wires are placed, to construct concrete foundations, and to paint the completed structures. The completed structures are along the side of the railway track, about 2 miles apart, and are 22 or 23 feet high. In the language of the witness, Moffett: It is necessary to erect the signal mechanism, the masts supporting the mechanism, the houses for protecting the relays, reac tors, reactants and other similar electrical devic es protected from the weather, then the transformers, high tension line arresters and low tenare permanently attached to the freehold upon concrete bases." In Error to the Supreme Court of Appeals sion line arrestors.' The completed structures of the State of Virginia. On order of the Corporation Commission We think the recited facts clearly show of Virginia the General Railway Signal Com-local business separate and distinct from inpany was fined for doing business within terstate commerce within the doctrine anthe state without first obtaining the proper nounced and applied in Browning v. Wayauthority, and, the order being affirmed on appeal (118 Va. 301, 87 S. E. 598), defendant Cross, 233 U. S. 16, 34 Sup. Ct. 578, 58 L. Ed. brings error. Affirmed. Messrs. Hugh Satterlee and McGuire & Wood, all of Rochester, N. Y., for plaintiff in error. Mr. J. D. Hank, Jr., Atty. Gen., of Richmond, Va., for defendant in error. 828. [2] It is further insisted that as the amount of prescribed entrance fee is based upon maximum capital stock it constitutes a burden on interstate commerce, contrary to the Federal Constitution. For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes *508 609 *511 (246 U. S. 498) rel. DALTON ADDING MACH. CO. v. COM- ed April 15, 1918.) No. 176. Section 38a, c. 53, Acts of Virginia 1910 (copied in margin),1 requires every foreign corporation with capital over one million and not exceeding ten million dollars when it obtains a certificate of authority to do local | (Argued and Submitted March 11, 1918. Decidbusiness to pay a fee of one thousand dollars. Inspection of the statute shows that prescribed fees do not vary in direct proportion to capital stock and that a maximum is fixed. In the class to which plaintiff in error belongs the amount specified is one thousand dollars and, under all the circumstances, we cannot say this is wholly arbitrary or unreasonable. Considering what we said in Baltic Mining Co. v. Massachusetts, 231 U. S. 68, 34 Sup. Ct. 15, 58 L. Ed. 127; St. Louis S. W. Ry. v. Arkansas, 235 U. S. 350, 35 Sup. Ct. 99, 59 L. Ed. 265; Kansas City Ry. v. Kansas, 240 U. S. 227, 36 Sup. Ct. 261, 60 L. Ed. 617; Kansas City, etc., R. R. Co. v. Stiles, 242 U. S. 111, 37 Sup. Ct. 58, 61 L. Ed. 176 the two characteristices of the statute just referred to must be regarded as sufficient to save its validity. It seems proper, however, to add that the case is on the border line. See Looney v. Crane Co., 245 U. S. 178, 38 Sup. Ct. 85, 62 L. Ed. International Paper Co. v. Commonwealth of Massachusetts, 246 U. S. 135, 38 Sup. Ct. 292, 62 L. Ed. and Locomobile Co. v. Massachusetts, 246 U. S. 146, 38 Sup. Ct. 298, 62 L. Ed. cided March 4, 1918. The judgment of the court below is de 1 "Sec. 38a. Every foreign corporation, when it obtains from the State Corporation Commission a certificate of authority to do business in this state, shall pay an entrance fee into the treasury of Virginia, to be ascertained and fixed as follows: "For a company whose maximum capital stock is fifty thousand dollars or less, thirty dollars; for a company whose capital stock is over fifty thousand dollars, and not to exceed one million dollars, sixty cents for each one thousand dollars or fraction COMMERCE 40(3)—“INTERSTATE COMMERCE" -WHAT CONSTITUTES. A foreign corporation, which had not procured the certificate of authority required by law, brought into the state of Virginia its adding machines before selling them, maintained in the state a stock of machines for exhibition and trial, and sold those machines in the state after their transportation in interstate commerce had with the general mass of property in the state. been concluded and they had become mingled Such corporation rented its machines to customers within the state, and exchanged them for machines of other makes, selling the machines so received and exchanged at will. It also employed a mechanic in the state, and entered into contracts for the repair of its machines, and sold supplies in the state suitable terial part of the business of the corporation Held, that a mafor use upon the machines. was intrastate, so that it was subject to fine for failure to procure the certificate of authority. and Phrases, First and Second Series, Inter[Ed. Note. For other definitions, see Words state Commerce.] In Error to the Supreme Court of Appeals of the State of Virginia. The Dalton Adding Machine Company was fined by order of the Virginia State Corporation Commission for transacting business in the state without a certificate of authority as required by law, and, the order being affirmed (118 Va. 563, 88 S. E. 167), the Adding Machine Company brings error. Affirmed. Mr. Thomas A. Banning, of Chicago, Ill., for plaintiff in error. Mr. J. D. Hank, Jr., Atty. Gen., of Rich1ond, Va., for defendant in error. *Mr. Justice McREYNOLDS delivered the opinion of the Court. the Corporation Commission assessing a fine against it for transacting business in the state without certificate of authority required by law. 118 Va. 563, 88 S. E. 167. That court adopted and approved the Commission's opinion, which, among other things, declared: thereof; over one million dollars, and not to exceed ten million dollars, one thousand dollars; over ten Plaintiff in error, an Ohio corporation, million dollars, and not to exceed twenty million complains that the Supreme Court of Appeals dollars, one thousand two hundred and fifty dollars of Virginia improperly affirmed an order by over twenty million dollars, and not to exceed thirty million dollars, one thousand five hundred dollars; over thirty million dollars, and not to exceed forty million dollars, one thousand seven hundred and fifty dollars; over forty million dollars, and not to exceed fifty million dollars, two thousand dollars; over fifty million dollars, and not to exceed sixty million dollars, two thousand two hundred and fifty dollars; over sixty million dollars, and not to exceed seventy million dollars, two thousand five hundred dollars; over seventy million dollars, and not to exceed eighty million dollars, two thousand seven hundred and fifty dollars; over eighty million dollars, and not to exceed ninety million dollars, three thousand dollars; over ninety million dollars, five thousand dollars: Provided, however, that foreign corporations without capital stock shall pay fifty dollars only for such certificate of authority to do business in this state. "For the purpose of this act the amount to which the company is authorized by the terms of its charter to increase its capital stock shall be considered its maximum capital stock." "We are of the opinion that the facts of this case_demonstrate beyond a peradventure that the Dalton Adding Machine Company is doing a substantial part of its business in this state in the following particulars: "(a) In bringing its machines into this state before selling them, and in maintaining a stock of machines for exhibition and trial, and in selling such machines in this state, after their transportation in interstate commerce has been concluded and they have become mingled with the general mass of property in this state; "(b) In renting such machines and collecting rents therefor from its customers in this state at will; For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes *500 "(c) In buying and exchanging machines for Appeal from the District Court of the machines made by other manufacturers, and United States for the District of South in selling such machines so received in exchange Dakota. at will; "(d) In employing a mechanic in this state and entering into contracts for repairing of machines owned by persons in this state from time to time and collecting the charges therefor; "(e) In keeping on hand in this state certain parts of machines and a stock of paper and ribbons suitable for use upon the machines, which are freely sold from time to time by its agent in Richmond to its customers. "We think it perfectly apparent that in these particulars the business of the company in this state is not 'commerce among the states,' the freedom of which is guaranteed by the United States Constitution, but that such business, in every essential particular, is business which has been transacted by the company in this state in violation of the statutes referred to." Beyond serious doubt the above specifications concerning the business carried on in Virginia are supported by the record. A material part of it was intrastate. The judgment of the court below is (246 U. S. 396) Suit by the Dakota Central Telephone Company against the City of Mitchell. There was a decree for complainant, and defendant appeals. Reversed, with directions. *The Dakota Central Telephone Company, herein called the telephone company, brought suit against the city of Mitchell, herein called the city, to enjoin it from enforcing or attempting to enforce a resolution or ordinance of the city passed March 17, 1913, terminating the right of the telephone company to maintain and operate the company's system of telephones, and requiring the removal of its poles, etc., from the streets, and to declare the resolution or ordinance unconstitutional and void. The bill alleges the following facts, which are the basis of the contentions of appellant. We state them narratively: The telephone company is a South Dakota corporation, and under section 554 of the Civil Code of the state has been given the power to operate telegraph and telephone CITY OF MITCHELL v. DAKOTA CEN- lines within the towns and cities of the state Where complainant invoked rights under the Constitution of the United States, which were combated by defendant, and federal District Court decided cause on constitutional grounds raised, jurisdiction was shown, though the parties were citizens of the same state. 2. JUDGMENT 720 CONCLUSIVENESS MATTERS CONCLUDED. Where, in a suit in state court by a municipality against a telephone company to recover a percentage of the gross receipts required to be paid by the ordinance under which it was alleged the telephone company was doing business, the company presented its contention that the ordinance had by implication been repealed by a later ordinance, a decision adverse to that contention is a conclusive adjudication against such contention, binding on the company in subsequent litigation concerning its franchises. 8. TELEGRAPHS AND TELEPHONES 10(6) FRANCHISES - ORDINANCES - IMPLIED REPEAL. and to use the public grounds, streets, alleys and highways subject to control of the proper municipal authorities as to which of them the lines shall run over and across, and the places where the poles to support the wires shall be located. Since its incorporation the company has acquired by purchase and construction certain lines of telephone and certain telephone exchanges and has been engaged as a common carrier in transmitting telephone messages, is so engaged in about 85 cities, and has about 265*telephone stations, other than exchanges, situated in South Dakota, North Dakota, and Minnesota, and has also, outside of the lines situated in cities and towns, about 85 exchanges, about 265 stations and about 5,000 miles of telephone lines. May 11, 1898, the city granted by ordinance to F. E. Elce and his associates, heirs and assigns, a right to use the streets and alleys of the city for the maintenance of a public telephone system. The right granted was not exclusive. Elce duly accepted the terms and conditions of the ordinance and installed a local telephone system and conducted and operated it until on or about July 8, 1904. The Dakota Central Telephone Lines, a South Dakota corporation, was given by ordinance dated March 21, 1904, and numbered 174, authority to use the streets of the city Where a telephone company operating under a franchise to use city streets for long distance lines within and through the state obtained a subsequent franchise to use the streets for its long distance telephone system so as to supply the citizens and the public in general with facilities to communicate by long distance with parties residing in, near, or at a distance from the city, the latter ordinance, in view of the rule that grants of rights and privileges by the state or any of its municipalities are strictly construed, and that whatever is not equivocally for the purpose of operating long distance granted is withheld, cannot be deemed to have telephone lines within and through the city given the telephone company the right to main- "for supplying the citizens of Mitchell, and tain a local telephone exchange, and by impli- the public in general, facilities to communication to have repealed an earlier franchise, giving that right under which the company was cate by lond distance or other electrical deoperating a local exchange. vices with parties residing near or at a dis For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes *397 tance from Mitchell." In consideration of the, permanent underground ways in which to ordinance the city was given the right to place the wires and cables and otherwise string wires on the poles of the company for construct and install expensive instruments, fire alarm purposes. and in order to be secure in making such The ordinance proved insufficient for its extensive improvements the company applied purpose and on June 6, 1904, a new ordinance for and obtained permission by ordinance was passed. The latter ordinance amended "to place, construct and maintain through section 1 of the other so as to enable com- and under the streets and alleys, and pubmunication "with parties residing in, near lic grounds of said city, all conduits, manor at a distance from Mitchell." The word holes and cables proper and necessary for in italics was the amendment. And the supplying to the citizens of said city and word "lines" in ordinance No. 174 was the public in general communication by telechanged to the word "system" in ordinance phone and other improved appliances." (This No. 180. is referred to hereafter as the resolution of April 10, 1907.) At the time the last ordinances (Nos. 174 and 180) were passed the telephone instruments then in general use could not be used successfully for long distance conversations, but there had been developed instruments for such conversations. Such telephones were then known as "long distance telephones" and were only supplied to subscribers at telephone exchanges by special arrangement with the individual subscribers, who desired an instrument efficient for both local and long distance conversations. At said time, however, the art had so far advanced that the public in general were demanding the installation of "long distance telephones" in local telephone exchanges. Relying on the ordinance (resolution) and the other ordinances, the company began to reconstruct and extend its telephone exchange in the city, and continued such work until the plant was thoroughly prepared for the installation of the "Automatic System." As part of the improvements the company erected a fireproof exchange building, it and the system causing an expenditure of $100,000. The system is now in operation and has about 1,100 subscribers, all of whom are in direct communication and can communicate with persons at all the exchanges and stations of the company's telephone system in South Dakota and Minnesota. Long prior to the adoption of ordinances The company has complied with all of the 174 and 180 the Southern Dakota Telephone requirements of the ordinance and has acCompany had constructed in the city of Mit-quired a vested right to maintain and operate chell and other towns and cities of the the exchange and lines described. state and had secured the consent of Mit chell to the construction in that city of such lines, commonly known as "toll lines" as distinguished from telephone exchanges. In 1903 the Dakota Central Telephone Lines purchased those toll lines and was operating them at the time of and long prior to the adoption of ordinances 174 and 180. The company owns and operates lines from the city to other cities and other states than South Dakota (these are all mentioned in the bill) and the tolls for such interstate communication amount to more than $4,000 a month. It has also contracted with the United States government whereby it receives and transmits and delivers the mesThat company, relying upon the consent sages of the officers of the Weather Bureau of the city as expressed in ordinance 174, to 32 cities and towns situated on its lines purchased from Elce the property then and in South Dakota. It also furnishes telenow known as the Mitchell Telephone Ex-phone service to other officers of the governchange, consisting of the poles and other ment in various towns and cities and places, property as well as certain real property and that this service may not be interfered used in connection therewith. After enter- with it seeks relief. ing into the contract to purchase and upon discovering the insufficiency of ordinance 174, the company applied to the city for ordinance 180, and when it was passed completed the purchase from Elce and took possession of the property and owned and operated the exchange with all other exchanges until October 2, 1904, when it sold all of its rights to complainant, Dakota Central Telephone Company, and the latter company has since continuously operated the exchange and toll lines. Thereafter there was such improvement in telephone instruments and appliances that it became desirable to reconstruct the telephone exchange in the city, and in order to install a telephone system known as the "Automatic" it became necessary to put in The city, assuming it had the right to require the removal of the company's lines and exchange from the city and from the streets and alleys therein, and assuming that the rights of the company would expire May 11, 1913, and further assuming the right to terminate the company's rights, did, on March 17, 1913, notify and request it to remove from the city its poles, wires, cables, fixtures and apparatus of every kind and description used by it in the construction, maintenance and operation of its local telephone exchange or system in the city and that if it failed to do so, the city would take steps to secure the immediate removal of the described instruments. At the same meeting the city adopted two other resolutions, one called "Telephone Res 668. |